Dan A. MORGENSTERN, M.D., Plaintiff-Appellee, v. Charles S. WILSON, M.D.; Deepak Gangahar, M.D.; Herbert E. Reese, M.D.; Walt F. Weaver, M.D.; Christopher C. Caudill, M.D.; Joseph R. Gard, M.D.; Sabyasachi Mahapatra, M.D.; Robert J. Buchman, M.D.; Michael A. Breiner, M.D.; Alan D. Forker, M.D.; Stephen W. Carveth, M.D., Defendants-Appellants. Cardiovascular & Thoracic Surgery, P.C.; Cardiology Consultants, P.C., Defendants. Nebraska Heart Institute, P.C., Defendant-Appellant.
No. 93-2446
United States Court of Appeals, Eighth Circuit
July 20, 1994
29 F.3d 1291 | 1994-1 Trade Cases P 70,645
Daniel Klaus, Lincoln, NE, argued, for appellee.
Before McMILLIAN and WOLLMAN, Circuit Judges, and VIETOR,s District Judge.
McMILLIAN, Circuit Judge.
Charles S. Wilson, M.D., and others, (hereinafter referred to as defendants), appeal from an interlocutory order entered in the United States District Court for the District of Nebraska compelling either the dissolution or the restructuring of the Nebraska Heart Institute (NHI). Morgenstern v. Wilson, Civ. No. 90-L-34 (D.Neb. Apr. 26, 1993). For reversal, defendants argue the district court erred in granting an injunction because (1) several legal theories of anti-competitive conduct that were presented to the jury were erroneous as a matter of law, and (2) there was insufficient evidence to support the jury‘s verdict that Wilson, along with the associated cardiac surgeons, thoracic and vascular surgeons, and cardiologists who comprised NHI, violated Sec. 2 of the Sherman Antitrust Act,
I.
In 1987, NHI, a professional corporation, was formed in Lincoln, Nebraska, to provide administrative, clinical and marketing services to its members. The members of NHI were Cardiology Consultants, P.C. (CCPC), a group cardiology practice consisting of six cardiologists, and Cardiovascular & Thoracic Surgery, P.C. (CVTS), a cardiac surgical group practice comprised of three cardiac surgeons and two thoracic and vascular surgeons. The cardiologists of CCPC referred their patients in need of open-heart surgery, angioplasty, and other cardiac surgical procedures to the surgeons of CVTS.
In July 1987 CVTS employed Morgenstern as a cardiac surgeon. After practicing one year with CVTS, CVTS informed Morgenstern that he would not be made a partner with the group. However, at Morgenstern‘s request, his employment contract with CVTS was extended for a second year during which he continued to perform cardiac surgical procedures on patients referred to CVTS by CCPC. While associated with NHI as a member of CVTS, Morgenstern performed approximately 180 cardiac surgeries.
Upon leaving CVTS in 1989, Morgenstern opened his own cardiac surgery practice in Lincoln. Although the thoracic and vascular aspects of Morgenstern‘s practice thrived, Morgenstern‘s cardiac surgery practice failed. During the nine months he practiced cardiac surgery after leaving CVTS, he performed only six surgeries. None of the six patients was referred to Morgenstern by CCPC.
Following the second trial, the jury exonerated CCPC and CVTS of liability, but found the individual physicians and NHI liable for monopolizing the “adult cardiac surgery market.” The jury found that Morgenstern had suffered $1,467,000 in damages as a result of the formation of NHI and the failure of the cardiologists to refer patients to Morgenstern, or their referral of patients only to the surgeons associated with NHI. The district court, denying defendants’ renewed motion for judgment as a matter of law, upheld the jury‘s verdict on a theory of “monopolization by combination of individuals and corporations, acting in concert.” However, the district court found insufficient evidence to support the jury‘s award of damages and granted a new trial on that issue. The district court, implementing the jury‘s verdict on liability, granted injunctive relief to Morgenstern pursuant to Sec. 16 of the Clayton Act,
II.
We consider first our appellate jurisdiction. Morgenstern argues that the injunction in question, implementing the jury‘s verdict, is not an appealable interlocutory decision within the provisions of
Section 1292(a) provides, in pertinent part, that “the courts of appeal shall have jurisdiction of appeals from: (1) [i]nterlocutory orders of the district courts ... granting, continuing, modifying, refusing or dissolving injunctions.” Thus, by the plain language of Sec. 1292(a), interlocutory orders granting “injunctions” are appealable. Nevertheless, Morgenstern argues that, under Carson v. American Brands, Inc., 450 U.S. 79 (1981) (Carson), unless a litigant is able to show that an interlocutory order of the district court (1) will have serious, perhaps irreparable, consequences, and (2) the order can be effectually challenged only by immediate appeal, the general congressional policy against piecemeal review will preclude interlocutory appeal. Morgenstern contends that, because the order at issue in the present case does not require defendants to take any action until sixty days “following completion of the appellate process,” it fails both prongs of the Carson test.
We believe Morgenstern misunderstands the law developed on Sec. 1292(a) appeals. Section 1292(a) invokes two separate avenues of analysis. The United States Supreme Court has stated that Sec. 1292(a)(1) provides appellate jurisdiction for “orders that grant or deny injunctions” as well as those “orders that merely have the practical effect of granting or denying injunctions and have ‘serious, perhaps irreparable, consequence.‘” Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 287-88 (1988), quoting Carson, 450 U.S. at 84. Thus, the first question that must be addressed “is whether the order appealed from specifically [granted or] denied an injunction or merely had the practical effect of doing so.” Kausler v. Campey, 989 F.2d 296, 298 (8th Cir. 1993) (Kausler). We are in accord with the majority of circuits which have held that, if an interlocutory order expressly grants or denies a request for injunctive relief, the Carson requirements need not be met and the order is immediately appealable as of right under Sec. 1292(a)(1). See, e.g., MAI Basic Four, Inc. v. Basic, Inc., 962 F.2d 978, 982 (10th Cir. 1992); Sherri A.D. v. Kirby, 975 F.2d 193, 203 (5th Cir. 1992); United States v. Bayshore Assocs., 934 F.2d 1391, 1395-96 (6th Cir. 1991); Cohen v. Board of Trustees, 867 F.2d 1455, 1466 (3d Cir. 1989);
In determining whether the district court acted specifically to grant injunctive relief, we examine “the language of the order, the grounds on which it rests, [and] the circumstances in which it was entered.” Kausler, 989 F.2d at 299. An examination of the district court‘s order reveals that the district court explicitly granted Morgenstern injunctive relief, and, thus, Carson is inapposite. The district court order, styled as “Order for Injunctive Relief,” expressly granted the specific injunctive relief prayed for in Morgenstern‘s complaint. The district court stated that, in accordance with its “equitable powers” under
III.
We now turn to the merits of defendants’ appeal. For reversal, defendants argue that several of the legal theories of anti-competitive conduct that were presented to the jury were erroneous as a matter of law, and that there was insufficient evidence to support the jury‘s verdict that NHI, and the individual physicians who comprise NHI, violated Sec. 2 of the Sherman Antitrust Act,
To establish that defendants have the market power required for monopolization liability, Morgenstern had to establish that defendants have “a dominant market share in a well-defined relevant market.” Flegel v. Christian Hosp., Northeast-Northwest, 4 F.3d 682, 689 (8th Cir. 1993) (quoting Assam Drug Co. v. Miller Brewing Co., 798 F.2d 311, 318 (8th Cir. 1986)). The “relevant market” is defined in terms of both product market (here, adult cardiac surgery) and geographic market. An actual monopolization claim often succeeds or fails strictly on the definition of the product or geographic market. Alexander v. National Farmers Organization, 687 F.2d 1173, 1181 (8th Cir. 1982) (citing Julian O. von Kalinowski, Antitrust Laws and Trade Regulation, Secs. 8.02c, 9.01 (1982) (collecting cases)), cert. denied, 461 U.S. 937 (1983).
The geographic market encompasses the geographic area to which consumers can practically turn for alternative sources of the product and in which the antitrust defendants face competition. Baxley-DeLamar Monuments, Inc., v. American Cemetery Ass‘n, 938 F.2d 846, 850 (8th Cir. 1991). The burden of establishing that a specified area constitutes a relevant geographic market in a particular case rests with the plaintiff. United States v. Empire Gas Corp., 537 F.2d 296 (8th Cir. 1976), cert. denied, 429 U.S. 1122 (1977).
A close examination of the record reveals that Morgenstern‘s evidence regarding the relevant geographic market failed to address a critical legal question: where could consumers of the product (adult cardiac surgery) practicably turn for alternative sources of the product. See Tampa Electric Co. v. Nashville Coal Co., 365 U.S. 320, 331-32 (1961) (defining the relevant geographic area as “the market area in which the seller operates, and to which the purchaser can practicably turn for supplies“). The evidence provided by Morgenstern to support his geographic market definition consisted primarily of expert testimony regarding the residences of the cardiac surgery patients in the Lincoln and Omaha heart surgery programs, and the Nebraska counties that supplied the largest number of patients to each program. Morgenstern‘s proposed geographic market was also based upon evidence that cardiologists in Lincoln seldom refer their patients to cardiac surgeons in Omaha. Joint Appendix Vol. IV at 1692, 1791. Morgenstern‘s expert focused upon where Lincoln and Omaha residents actually went, as opposed to where they could practicably go, for their cardiac surgery services, and specifically presented insufficient evidence regarding whether or not CVTS patients could practicably turn for alternative sources of the product to Omaha or other more distant heart programs. Morgenstern‘s expert concluded that Lincoln and Omaha must be in different geographic markets “[b]ecause patients overwhelmingly went to the closest hospital.” Brief for Appellee at 20. Morgenstern further provided no evidence that patients viewed Lincoln as a market separate from Omaha, located only fifty-eight miles from Lincoln.
The evidence produced in the present case falls far short of establishing Lincoln and surrounding counties, to the exclusion of Omaha, as the relevant geographic market. By contrast, the record shows that Omaha should have been included in the relevant geographic market definition. The Supreme Court has recognized the importance of distance and its counterpart convenience in determining the relevant geographic market. See United States v. Philadelphia Nat‘l Bank, 374 U.S. 321, 358 (1963). Defendants’ evidence showed that Lincoln residents need travel only fifty-eight miles by main highway to receive cardiac surgical care in Omaha. Morgenstern himself traveled from Lincoln to Omaha on more than thirty occasions in a single year to assist in performing cardiac surgery. The defendants also provided testimony from health care providers in various professions throughout Nebraska who uniformly confirmed the existence of vigorous competition between Lincoln and Omaha. Lincoln cardiologists and cardiac surgeons testified to strong competition between them and the six Omaha heart programs. Joint Appendix Vol. II at 810-18, 904, 979-80; Vol. III at 1174-76, 1215-17, 1466-68. Omaha cardiac surgeons and hospital administrators testified to strong competition from CVTS and the cardiologists of CCPC. Moreover, the evidence showed that, throughout Nebraska, primary care physicians considered both Lincoln and Omaha as feasible sources of healthcare when making recommendations to their patients in need of cardiac surgery services. Joint Appendix Vol. II at 766-72, 775, 935; Vol. III at 1079-83, 1227-28. In Lincoln itself, physicians would refer patients to Omaha if, in their medical judgment, better treatment was available there. Joint Appendix Vol. II at 777-80. Defendants’ expert provided further corroborative evidence consisting of three distinct economic studies designed to determine reasonable, practicable substitutes for Lincoln‘s residents in need of cardiac surgery services. Each analysis concluded that the relevant geographic market consisted of, at a minimum, Lincoln and Omaha.
Accordingly, we reverse the judgment of the district court.