                                                                                                                           Opinions of the United
1995 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


9-1-1995

Brader v Alghny Gen Hosp
Precedential or Non-Precedential:

Docket 94-3578




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      UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT



                              No. 94-3578


                          ALAN H. BRADER,
                                            Appellant

                                  v.

         ALLEGHENY GENERAL HOSPITAL; GEORGE J. MAGOVERN
                      and DANIEL L. DIAMOND



         On Appeal from the United States District Court
            for the Western District of Pennsylvania
                      (D.C. No. 93-cv-01920)



                         Argued May 2, 1995

           Before:    SLOVITER, Chief Judge, ALITO and
                       McKEE, Circuit Judges

                     (Filed    September 1, 1995)

Michael A. Cassidy (Argued)
Kabala & Geeseman
Pittsburgh, PA 15222

Melvin L. Vatz
Grossinger, Gordon & Vatz
Pittsburgh, PA 15219

               Attorneys for Appellant

David L. McClenahan (Argued)
Paul K. Stockman
Kirkpatrick & Lockhart
Pittsburgh, PA 15222

               Attorneys for Appellees




                                  1
                         OPINION OF THE COURT



SLOVITER, Chief Judge.


                                  I.

                  Facts and Procedural History
          Appellant Dr. Alan H. Brader challenges the district

court's dismissal of his antitrust and breach of contract claims

against defendants Allegheny General Hospital, Allegheny Surgical

Associates ("ASA"), Cardio-Thoracic Surgical Associates ("CTSA"),

Dr. George J. Magovern, and Dr. Daniel L. Diamond.      Because the

district court dismissed the complaint, the only facts before us

are those alleged in the complaint itself.

          Allegheny General, a hospital located in Pittsburgh,

Pennsylvania, also serves as a regional referral hospital

treating patients referred to it from Western Pennsylvania,

Eastern Ohio and West Virginia.       ASA, a Pennsylvania corporation

with offices in Pittsburgh, engages in the practice of general

surgery, with principal emphasis in trauma and vascular surgery.

Dr. Diamond is the President of ASA and Division Director for

General Surgery at Allegheny General.      ASA obtains its patients

through referrals from other physicians; Allegheny General uses

ASA exclusively to perform its trauma service.      CTSA, a

Pennsylvania corporation that also maintains its offices in

Pittsburgh, practices in the field of cardio-thoracic surgery.

Dr. Magovern is the President of CTSA and Chairman of the



                                  2
Department of Surgery at Allegheny General.   CTSA obtains its

patients through physician referrals and from on-call trauma

referrals.

            In July 1988, Brader, a physician licensed to practice

in Pennsylvania and North Carolina, became a provisional staff

member of Allegheny General and an employee of ASA.   In June

1989, Magovern accused Brader of incompetence and of having

improperly rendered trauma treatment to a patient who was on the

call service of CTSA (Magovern's group) although the details of

Magovern's displeasure are not spelled out in the complaint.

According to Brader's complaint, Magovern had no factual basis to

support his accusations.   Nonetheless, shortly thereafter, when

the issue of Brader's advancement from provisional to regular

staff status at Allegheny General arose, it was opposed by

Magovern.    Solely as a result of Magovern's opinion and based on

this single issue, Diamond told Brader that he should look

elsewhere for employment, that he would not support him for staff

membership, that his prior support for Brader had jeopardized his

"political" career at Allegheny General, and that Brader could

not practice medicine at Allegheny General if he was not employed

with ASA.

            Sometime after this conversation, Diamond conducted an

informal quality assurance study of (presumably Brader's)

ruptured abdominal aortic aneurysm (AAA) procedures, which Brader

contends was not performed in accordance with Allegheny General's

medical staff bylaws.   In May 1990 after the study was completed,

at a meeting between Brader, Diamond and representatives of


                                 3
Allegheny General, Diamond tried to suspend Brader, allegedly in

violation of the bylaws and for no reasonable basis related to

the quality of plaintiff's performance.

            Later in May, at a meeting of Brader, Magovern and

Diamond, Brader agreed to an independent review of his surgical

record on AAA procedures.    Magovern selected Dr. John Ochsner to

conduct it.    Brader alleges that Ochsner was a personal friend of

Magovern.    According to Brader, Diamond, Magovern and Allegheny

General submitted inadequate and misleading information to

Ochsner for his review.    In addition, Brader contends that he was

prevented from having an informal conference with Ochsner in

violation of the medical staff bylaws.

            Ochsner concluded, as a result of the inadequate and

misleading information, that Brader's mortality experience was

not surprising or unexpected but recommended that his performance

of ruptured AAA procedures should be supervised due to excessive

morbidity.    In October 1990 Magovern summarily suspended Brader's

privileges to perform AAA procedures at the hospital without any

factual basis.    Later that month, Brader's application for

advancement to attending staff status at Allegheny General was

denied on the recommendations of Diamond and Magovern, and in

part at Magovern's recommendation all of Brader's clinical

privileges at the hospital were suspended.    App. at 58.

             Brader appealed all of these adverse actions in

accordance with the medical staff bylaws.    On October 9, 1991, a

hearing panel recommended that the suspension of Brader's

ruptured and elective AAA privileges be lifted, but on October


                                  4
25, 1992 a hearing panel recommended that the decision not to

advance Brader to attending staff status be sustained, and

concluded that Brader's challenge to the suspension of his

clinical privileges was moot.   App. at 59.   According to Brader's

complaint, the decision not to advance him to attending staff

status violated the medical staff bylaws because it was based on

hearsay and he had no opportunity to confront the witnesses

against him.   App. at 60.

          Brader appealed the adverse October 25, 1992 decision

to an Appellate Review Panel, which on January 7, 1993 affirmed

the recommendation not to advance Brader but concluded that there

was no evidence to warrant the continuation of the suspension of

Brader's clinical privileges.   On February 26, 1993, however, the

Allegheny General Board of Directors, allegedly in violation of

the medical staff bylaws, reimposed the suspension of Brader's

AAA procedures at the hospital.

          Brader tried to obtain staff privileges at other

hospitals in Allegheny County and Washington County, but he was

unable to do so due to his suspension from Allegheny General.

Brader contends that defendants' actions have prevented him from

practicing medicine in any location within the market area served

by the defendants and forced him to relocate his practice to

North Carolina.

          On November 18, 1993, Brader filed a three-count

complaint against defendants alleging claims for violations of

sections 1 and 2 of the Sherman Act as well as a claim for breach

of contract arising from the alleged violations of the medical


                                  5
staff bylaws.   Shortly thereafter, Brader filed an Amended

Complaint in order to correct the spelling of Magovern's name.

          Defendants moved to dismiss Brader's Amended Complaint

arguing that the complaint failed to allege facts sufficient to

support the conclusion that Brader had suffered an "antitrust

injury" so as to confer standing and that the complaint failed to

allege various facts, such as the existence of a conspiracy and

the relevant market power of the defendants, to support Brader's

claims under the Sherman Act.   The defendants also sought to

dismiss Brader's claim of breach of contract because the

complaint failed to allege which sections of the medical staff

bylaws, if any, had been breached, and failed to allege facts

sufficient to show that any of the alleged infractions were not

merely de minimus violations.   Finally, defendants argued that

they were immune from suit with respect to all of Brader's claims

under the Health Care Quality Improvement Act (HCQIA), 42 U.S.C.

§§ 11101-11152.   Brader sought leave to amend the complaint, and

submitted a proposed Second Amended Complaint, and defendants

renewed their motion to dismiss, relying upon the same grounds

raised in the earlier motion.

          By order dated September 14, 1994, the district court

dismissed the Amended Complaint, granted Brader leave to amend,

ordered the Second Amended Complaint to be filed, and granted

defendants' motion to dismiss the Second Amended Complaint.     In

its accompanying opinion, the district court stated that the

Second Amended Complaint contained sufficient allegations

regarding a conspiracy and defendants' market power, but "failed


                                6
to adequately plead that there was an unlawful purpose for the

defendants' conduct or that there was an actual anticompetitive

effect as a result of plaintiff being denied staff privileges."

App. at 13.    The district court dismissed Brader's claims under

both section 1 and section 2 of the Sherman Act on the ground

that the complaint "does not suggest that [the defendants']

action did, or could have, effected [sic] interstate commerce in

an anticompetitive manner."     App. at 13.   The court also

dismissed Brader's breach of contract claim, holding that the

Second Amended Complaint contained sufficient specific

allegations of the bylaw sections allegedly breached by the

defendants, but that it failed to allege facts sufficient to

support a causal link between those alleged breaches and the

injuries suffered by Brader.     The district court's opinion did

not address the defendants' claim of immunity to Brader's suit

under HCQIA.

          Brader now appeals the district court's dismissal of

his Second Amended Complaint.    This court has jurisdiction of

Brader's appeal pursuant to 28 U.S.C. § 1291.     We have plenary

review over a district court's grant of a motion to dismiss.

Malia v. General Elec. Co., 23 F.3d 828, 830 (3d Cir.), cert.

denied, 115 S. Ct. 377 (1994).    In conducting our review, we

accept as true all facts alleged in the complaint and all

reasonable inferences that can be drawn therefrom.     Id.

                                 II.

                              Discussion
                                  A.


                                  7
            Brader first contends that the district court erred in

concluding that his complaint failed to allege the requisite

nexus between the defendants' activities and interstate commerce

to support his antitrust claims.     There is no dispute that both

of Brader's antitrust claims require a showing that the

defendants' actions affect interstate commerce.     Section 1 of the

Sherman Act provides that "[e]very contract, combination . . .,

or conspiracy, in restraint of trade or commerce among the

several States, or with foreign nations, is declared to be

illegal."    15 U.S.C. § 1 (emphasis added).   Section 2 provides

that "[e]very person who shall monopolize, or attempt to

monopolize, or combine or conspire with any other person or

persons, to monopolize any part of the trade or commerce among

the several states, or with foreign nations, shall be deemed

guilty of a misdemeanor . . . ."     15 U.S.C. § 2 (emphasis added).

Moreover, the parties agree that for the purposes of the

interstate commerce requirement, there is no distinction between

section 1 and section 2 of the Sherman Act.     See Weiss v. York

Hosp., 745 F.2d 786, 825 n.67 (3d Cir. 1984), cert. denied, 470

U.S. 1060 (1985).

            Although the "interstate commerce requirement" of the

Sherman Act is often referred to as "jurisdictional," the Supreme

Court has held that there is no practical distinction between the

"jurisdictional" interstate commerce inquiry and consideration of

whether a complaint pleads an effect on interstate commerce

sufficient to state a claim for relief under the Sherman Act.       In

Hospital Bldg. Co. v. Trustees of Rex Hosp., 425 U.S. 738, 742 &


                                 8
n.1 (1976), the Court stated that an analysis of challenges to

antitrust claims based on the interstate commerce element under

either Federal Rule of Civil Procedure 12(b)(1) or 12(b)(6) leads

to the same result.   Similarly, in Weiss we noted that "[the]

interstate impact requirement has been construed as an element of

both jurisdiction and the substantive offense under the Sherman

Act," and that "[t]he inquiry is the same for both elements." 745

F.2d at 824 n.67 (citations omitted); see also Note, Sherman Act

"Jurisdiction" in Hospital Staff Exclusion Cases, 132 U. Pa. L.

Rev. 121, 126-29 (1983).

          Moreover, the Supreme Court has held that the reach of

the Sherman Act is as broad as Congress's power under the

Commerce Clause.   McLain v. Real Estate Bd. of New Orleans, 444

U.S. 232, 241-42 (1980); see also Hospital Bldg. Co., 425 U.S. at

743 n.2; United States v. Frankfort Distilleries, Inc., 324 U.S.

293, 298 (1945).   Thus, the interstate commerce requirement of

the Sherman Act may be satisfied by demonstrating that

defendant's activities either are in interstate commerce or

affect interstate commerce.   McLain, 444 U.S. at 242.

          In Summit Health, Ltd. v. Pinhas, 500 U.S. 322 (1991),
the Supreme Court addressed the interstate commerce requirement

of the Sherman Act with respect to the attempted exclusion of a

physician from a particular geographic market.   Pinhas, an

ophthalmologist, alleged that a hospital, its corporate owner and

its medical staff conspired in violation of section 1 of the

Sherman Act to prevent him from providing ophthalmological

services in the Los Angeles market by, inter alia, initiating


                                9
peer review proceedings against him, summarily suspending and

terminating his medical staff privileges, and threatening to

distribute an adverse report about him to all hospitals in the

market area.    Id. at 324, 326-27.

            The defendants moved to dismiss the complaint,

contending that there was no "factual nexus between the restraint

on this one surgeon's practice and interstate commerce."       Id. at

330.   The Supreme Court rejected this argument, stating that the

alleged conspiracy, if successful, would cause "a reduction in

the provision of ophthalmological services in the Los Angeles

market."    Id. at 331.   The Court reasoned that the "competitive

significance of [the single physician's] exclusion from the

market must be measured, not just by a particularized evaluation

of his own practice, but rather, by a general evaluation of the

impact of the restraint on other participants and potential

participants in the market from which he has been excluded."      Id.

at 332.    The Court concluded that the complaint satisfied the

interstate commerce requirement of the Sherman Act.     Id. at 333.

            Brader argues that the facts of this case are

essentially identical to the facts of Summit Health.    In a

graphic side-by-side column analysis in his brief, Brader

demonstrates that like Pinhas in Summit Health he has alleged

that the defendants conspired to suspend his medical privileges

through a biased and unfair peer review process.     In addition, as

in Summit Health, the alleged effect of the defendants' actions

was to deny Brader access to the relevant geographic market, as

the hospital's dissemination of the report of his suspension has


                                  10
allegedly prevented him from obtaining another position, causing

a reduction in the provision of medical services to the

Pittsburgh market.     Brader then argues that the district court's

conclusion that his complaint failed to allege a sufficient

effect on interstate commerce is fundamentally inconsistent with

Summit Health.

          The district court attempted to distinguish Summit

Health on the ground that the dispute in that case arose from the

physician's objection to the hospital's costly requirement that

eye surgeons absorb the cost of an assistant surgeon during

surgical procedures.    See Summit Health, 500 U.S. at 326.   The

district court reasoned that this case involved no similar

"systemic anticompetitive effect on interstate commerce," and

that because Brader alleges no "market-wide" harm, Summit Health

was inapplicable.

          The Summit Health opinion is somewhat unclear on

whether the interstate commerce nexus was satisfied merely by the

defendants' attempt to exclude the plaintiff from the relevant

market, or by the fact that the attempted exclusion was coupled

with an allegation regarding the defendants' "insist[ence] upon

adhering to an unnecessarily costly procedure."     Summit Health,
500 U.S. at 332.     However, our decision in Fuentes v. South Hills

Cardiology, 946 F.2d 196 (3d Cir. 1991), resolved this ambiguity

by holding that the mere exclusion of a single physician from a

market is sufficient.     In Fuentes, a plaintiff physician brought

a Sherman Act claim against a hospital and medical group due to

the termination of the physician's medical privileges.    Fuentes,


                                  11
946 F.2d at 197.   When the plaintiff could not obtain another

position within or outside of Pennsylvania, he alleged that the

defendants were acting in concert to effect an interstate boycott

of his services.   Id. at 198.   There is no suggestion in the

Fuentes opinion that Fuentes alleged that the defendants were

engaged in anti-competitive pricing practices similar to those

alleged in Summit Health; the only alleged anti-competitive

effect referred to in Fuentes was the exclusion of the plaintiff

physician from the relevant market.    Notably, the termination in

Fuentes, like the termination in this case, apparently arose over

"a disagreement concerning patient care."    Id. at 197.

          Despite the lack of broader allegations regarding the

defendants' anticompetitive motive, we inferred from Fuentes'

allegations that he was excluded from practicing in the relevant

market and that out-of-state patients who travelled to Pittsburgh

would be deprived of Fuentes' services.    Id. at 200.     Thus, the

plaintiff in Fuentes had alleged a sufficient effect on

interstate commerce to support his Sherman Act claim.      Id. at

201.

          The Fuentes opinion forecloses the district court's
restrictive reading of Summit Health and controls the "interstate

commerce" issue in this case.    Brader, like Fuentes, has alleged

that the defendants wrongfully terminated his staff privileges at

Allegheny General and that such denial limited his ability to

serve patients in the relevant market.    At the complaint stage no

more is required, as defendants conceded at oral argument.       Under




                                 12
Fuentes, this allegation is sufficient to satisfy the "interstate

commerce requirement" of the Sherman Act.

                                  B.

             Defendants next contend that we may affirm the

dismissal on any ground presented to the district court, see

Langer v. Monarch Life Ins. Co., 966 F.2d 786, 807-08 (3d Cir.

1992), and that we may do so here because Brader failed to plead

facts sufficient to support the conclusion that he suffered an

"antitrust injury."     They state that while the district court may

have erroneously used the "interstate commerce" label, in effect

it concluded that no antitrust injury was pled because Brader's

complaint did not allege that defendants' actions had any

measurable impact on any market.1

            Defendants' argument proceeds along the following

steps:     Brader's right to maintain a private cause of action for

damages flows from section 4 of the Clayton Act, which provides

for suits by "any person who shall be injured in his business or

property by reason of anything forbidden in the antitrust laws

. . . ."    15 U.S.C. § 15(a).   This requires proof that the

plaintiff suffered an "antitrust injury" before recovering


1
  Judge Alito would not reach the question addressed in part IIB
of this opinion. He does not think that the district court's
decision was based on the question of antitrust injury. Thus, in
his view, part IIB addresses a possible alternative ground for
affirmance and, as a discretionary matter, he would not reach
that question now. The question is a difficult one --compare
part IIB with BCB Anesthesia Care v. Passavant Memorial Area
Hosp., 36 F.3d 664, 669 (7th Cir. 1994); Lie v. St. Joseph Hosp.,
964 F.2d 567, 570 (6th Cir. 1992) -- and he thinks that it would
be preferable for the question to be decided in the first
instance by the district court.


                                  13
damages for that violation.    See Atlantic Richfield Co. v. USA

Petroleum Co, 495 U.S. 328, 339 (1990); Brunswick Corp. v. Pueblo

Bowl-o-Mat, Inc., 429 U.S. 477, 489 (1977).   According to

defendants, this "antitrust injury" rule requires that Brader

plead facts to support the inference that defendants caused an

injury to competition, which in turn injured Brader.   Defendants

contend that this requirement is far more stringent than the mere

"jurisdictional" requirement of the interstate commerce test, and

that therefore Summit Health and Fuentes do not resolve the issue

in this case.

          Defendants' argument, even if not implausible, appears

to be flatly inconsistent with Fuentes.    There too we considered

whether the complaint of a physician whose hospital privileges

were allegedly terminated at the request of physicians with whom

he had been associated stated a claim for relief under the

Sherman Act.    Fuentes had alleged that "the defendants acted in

concert to deny Fuentes, a provider of cardiological services,

access to the Pittsburgh cardiological market," and that "by

eliminating him as a competitor, the boycott successfully reduced

competition for the defendants' cardiological services." Fuentes,
946 F.2d at 202.   Accepting as true Fuentes' allegations and all

reasonable inferences therefrom we concluded that these

allegations were sufficient to survive a motion to dismiss, as

"such an exclusion constitutes an unlawful restraint of trade."

Id.; see also Boczar v. Manatee Hosps. & Health Sys., Inc., 993

F.2d 1514, 1519 (11th Cir. 1993) (hospital's actions in




                                 14
suspending the plaintiff's privileges "had the effect of

restraining trade").

          Brader's Second Amended Complaint alleges that the

defendants' activities "prevent[ed] the Plaintiff and others from

engaging in the practice of general vascular trauma surgery in

the relevant market, and . . . prevent[ed] other hospitals in the

relevant market from employing or granting medical staff

privileges to the Plaintiff for the purpose of competing with

defendants."   App. at 64.   This conduct, Brader alleges, has

"prevent[ed] competition in the relevant product market within

the relevant geographic market."      App. at 64.   Under Fuentes,

these allegations are sufficient to state a claim for an

antitrust injury.

          We are not in a position to predict whether Brader will

ultimately be able to sustain his burden of proof on this issue

since Brader has not yet had an opportunity to obtain evidence.

After Summit Health, the adequacy of a physician's contentions

regarding the effect on competition is typically resolved after

discovery, either on summary judgment or after trial.      See, e.g.,

Lie v. St. Joseph Hosp., 964 F.2d 567, 570 (6th Cir. 1992)
(affirming summary judgment where physician failed to show "an

injury to competition in the form of increased cost or reduced

supply of services or harm to the consumer"); Tarabashi v.

McAlester Regional Hosp., 951 F.2d 1558, 1571 (10th Cir. 1991)

(affirming judgment against physician after trial in part because

physician "failed to establish the required impact upon

competition") (emphasis in original), cert. denied, 112 S. Ct.


                                 15
2996 (1992); Oksanen v. Page Memorial Hosp., 945 F.2d 696 (4th

Cir. 1991) (in banc) (affirming summary judgment for hospital and

medical staff after physician had "received adequate discovery on

the key issues" on his claim of antitrust violations arising from

alleged misuse of peer review process), cert. denied, 502 U.S.

1074 (1992).

            Even the antitrust cases cited by defendants that do

not involve physicians suggest that the existence of an

"antitrust injury" is not typically resolved through motions to

dismiss.    See, e.g., Atlantic Richfield Co., 495 U.S. at 346

(finding plaintiff had "failed to demonstrate that it has

suffered any antitrust injury" at summary judgment stage); Town

Sound & Custom Tops, Inc. v. Chrysler Motors Corp., 959 F.2d 468,

495 (3d Cir.) (in banc) (addressing "antitrust injury" issue in

summary judgment context), cert. denied, 113 S. Ct. 196 (1992);

Tunis Bros. Co. v. Ford Motor Co., 952 F.2d 715, 727-28 (3d Cir.

1991) (resolving "antitrust injury" issue on appeal of denial of

motion for judgment notwithstanding the verdict), cert. denied,

112 S. Ct. 3034 (1992).

            We recognize that one court of appeals has upheld the

dismissal for failure to state a claim in an antitrust complaint

filed by nurse anesthetists alleging a conspiracy between a

hospital and physicians to terminate plaintiffs' contract for

services.   See BCB Anesthesia Care, Ltd. v. Passavant Memorial
Area Hosp. Ass'n, 36 F.3d 664, 668-69 (7th Cir. 1994).    The

district court based the dismissal on plaintiffs' failure to

allege a sufficient nexus with interstate commerce, a rationale


                                 16
that the appellate court did not accept.   Instead, the court of

appeals, in a divided opinion, upheld dismissal of the complaint

stating that "[a] staffing decision does not itself constitute an

antitrust injury," id. at 669, notwithstanding that the hospital

was the only acute care general hospital within twenty-five

miles, which substantially limited plaintiffs' options.    Id. at

668.   The court recognized that the substitution of medical

physician anesthetists might cause "the prices the hospital

charges [to] be somewhat higher now than they were."    Id.   The

BCB majority even acknowledged that the antitrust injury issue is

one that is typically reserved for summary judgment.    Id.   As the

dissent in BCB noted, it is difficult to reconcile the majority's

conclusion with Summit Health.   Id. at 669 (Cudahy, dissenting).

          The BCB majority stressed the inconvenience to the

courts of proceeding beyond the pleading stage and noted the

"hundreds or thousands of pages" of decisions in antitrust cases

decided after discovery in which the plaintiff physicians have

ultimately been unsuccessful.    Id. at 667.   We believe that such

impatience with the notice pleading embodied in the Federal Rules

is foreclosed by the Supreme Court's decision in Leatherman v.
Tarrant County Narcotics Intelligence & Coordination Unit, 113 S.

Ct. 1160, 1163 (1993) (rejecting a "heightened pleading standard"

in a case arising under 42 U.S.C. § 1983), and is an issue to be

addressed, if needed, by Congress.    We decline to adopt the BCB

majority approach here.

          Defendants' argument that Brader is a "poor champion of

consumers" is essentially the same argument.    They take the quote


                                 17
from a case decided after discovery in which we upheld the

judgment because of the plaintiff's failure to show that its loss

of sales was sufficiently related to the anticompetitive activity

alleged.   See Alberta Gas Chems. Ltd. v. E.I. du Pont de Nemours

& Co., 826 F.2d 1235, 1239 (3d Cir. 1987)(quoting Ball Memorial

Hosp. v. Mutual Hosp. Ins., Inc., 784 F.2d 1325, 1334 (7th Cir.

1986)), cert. denied, 486 U.S. 1059 (1988).   They also rely on

Todorov v. DCH Healthcare Auth., 921 F.2d 1438, 1454 (11th Cir.

1991), which affirmed summary judgment against the plaintiff

physician who had not even argued that his exclusion from the

market hurt competition and increased prices for consumers, but

instead sought an injunction so that he could join a virtual

monopoly and share in the physicians' supercompetitive profits.

In contrast, the type of injury alleged by Brader (the loss of

income due to an inability to practice in the relevant market

area) is directly related to the illegal activity in which the

defendant allegedly engaged: a conspiracy to exclude Brader from

the relevant market.

           Under Summit Health and Fuentes, Brader's pleading

requirement on this issue is satisfied by his allegation that the

defendants unreasonably restricted his ability to practice in the

Pittsburgh area and thereby "successfully reduced competition"

for the defendants' services.   See Fuentes, 946 F.2d at 202.   We

therefore reject defendants' argument regarding the adequacy of

Brader's pleading of an "antitrust injury" and decline to affirm

the dismissal of his claim on this ground at this stage of the

litigation.


                                18
                                  C.

           Defendants contend that we should affirm the decision

of the district court on the alternative ground that the Second

Amended Complaint fails to contain sufficient allegations

regarding the defendants' market power.       Market power may be

relevant in some Sherman Act section 1 claims but it is an

essential factor to be considered in all Sherman Act section 2

claims.   Neither the parties nor the district court make the

distinctions necessary to analyze those two sections, and we are

unwilling to affirm on this ground in the absence of any

consideration by the district court.       We briefly set forth the

distinctions, as the issue will inevitably arise on remand.

           Under section 2 of the Sherman Act, Brader must show,

at a minimum, that defendants have "a dangerous probability of

achieving monopoly power" in the relevant market.       Spectrum

Sports, Inc. v. McQuillan, 113 S. Ct. 884, 890-91 (1993); see

also Pastore v. Bell Telephone Co., 24 F.3d 508, 512 (3d Cir.

1994).    Although disposition of that question is typically one

that is not resolved at the pleading stage unless it is clear on

the face of the complaint that the "dangerous probability"

standard cannot be met as a matter of law, the complaint should

allege viable relevant markets.    Brader's complaint is not

specific as to either the product market or the relevant

geographic market.   In his count alleging violation of section 2,

he refers to the product market as "the practice of certain

specialized vascular and trauma surgery and cardio-thoracic

surgery at [Allegheny General]."       App. at 66.   Elsewhere the


                                  19
complaint states that "the geographic extent of [the market from

which he was excluded] is co-existent with the area from which

the defendants attract their patients which will be further

defined through discovery."    App. at 63.   It appears that Brader

suggests two geographic markets, one confined to the hospital and

the other encompassing a portion of the tri-state area.

          We do not decide whether under these circumstances

Allegheny General is an appropriate geographic market, but we

note that every court that has addressed this issue has held or

suggested that, absent an allegation that the hospital is the

only one serving a particular area or offers a unique set of

services, a physician may not limit the relevant geographic

market to a single hospital.    See, e.g., Collins v. Associated

Pathologists, Ltd., 844 F.2d 473, 480 n.5 (7th Cir.) (physician

was "slicing the geographic market much too thin" in limiting

market to one hospital), cert. denied, 488 U.S. 852 (1988);

Seidenstein v. National Medical Enterprises, Inc., 769 F.2d 1100,

1106 (5th Cir. 1985) (no evidence that the hospital "is

recognized as a separate and distinct market, or that unique

services or facilities existed there"); Dos Santos v. Columbus-
Cuneo-Cabrini Medical Ctr., 684 F.2d 1346, 1353 (7th Cir. 1982)

(noting that "we have reason to doubt whether the relevant market

can be sliced so small as to embrace only a single hospital");

Flegel v. Christian Hosp. Northeast-Northwest, 804 F. Supp. 1165,

1174 (E.D. Mo. 1992) (limiting the relevant geographic market to

one hospital lacked any "reasonable legal or factual basis"),

aff'd, 4 F.3d 682 (8th Cir. 1993); Drs. Steuer & Latham P.A. v.


                                 20
National Medical Enterprises, Inc., 672 F. Supp. 1489, 1514

(D.S.C. 1987), aff'd, 846 F.2d 70 (4th Cir. 1988); Friedman v.

Delaware County Memorial Hosp., 672 F. Supp. 171, 195 (E.D. Pa.

1987), aff'd, 849 F.2d 600 (3d Cir. 1988).

             On the other hand, there is some suggestion in the

complaint and in the briefs that Allegheny General may offer

unique trauma and vascular surgery services in the broader

geographic tri-state area served by Allegheny General.       We leave

for the district court whether the complaint makes a colorable

claim that the defendants have "a dangerous probability of

achieving monopoly power" over the relevant product in that area.

             In contrast, under section 1 of the Sherman Act the

defendants' "market power" is relevant only to the extent that it

is a factor in the determination of the reasonableness of the

restraint.    See e.g., Oksanen, 945 F.2d at 709.   Defendants have

not presented any case holding that the precise scope of that

"market power" must be specifically pled in the complaint to

support the type of section 1 claim at issue here.     Neither

Summit Health nor Fuentes so suggested.     Therefore, we decline to

accept defendants' suggestion that we affirm on this alternative

ground.

                                  D.

             Brader alleged a breach of contract claim asserting a

series of violations by the defendants of the medical staff

bylaws.   The district court dismissed this claim on the ground

that the complaint failed to allege a connection between the

alleged breaches and the losses suffered by Brader.     In


                                  21
particular, the district court found that Ochsner's independent

review of Brader's record superseded the alleged breach committed

by Diamond in conducting the informal quality assurance review,

that Diamond's unsuccessful attempts to suspend Brader

unilaterally could not have caused Brader any damage, and that

Brader had relocated to North Carolina before the reimposition of

his suspension by the hospital in February 1993, and therefore

the reimposed suspension could not have caused his losses.

            Brader argues that the district court erred in assuming

that he would have been suspended regardless of any breach of the

bylaws and that he has not suffered any economic damages as a

result.   These conclusions, Brader reasons, are factual and

should not be the basis of a dismissal order under Rule 12(b)(6).

            The parties agree that, under Pennsylvania law, the

Allegheny General medical staff by-laws constitute an enforceable

contract between a hospital and members of its medical staff. See

Miller v. Indiana Hosp., 419 A.2d 1191, 1193 (Pa. Super. Ct.

1980).    In order to state a claim for damages arising from a

breach of contract, a plaintiff must also plead damages resulting

from the alleged breach.   See General State Auth. v. Coleman
Cable & Wire Co., 365 A.2d 1347, 1349 (Pa. Commw. Ct. 1976). This

is a natural extension of the general rule that damages for

breach of contract are not recoverable unless there is a "causal

relationship between the breach and the loss."    See Robinson

Protective Alarm Co. v. Bolger & Picker, 516 A.2d 299, 303 n.9

(Pa. 1986).




                                 22
           Brader's complaint adequately alleges the requisite

causal connection.   The complaint alleges that the defendants'

breach of the bylaws caused him to suffer damages such as the

loss of income that he would have had at Allegheny General, loss

of personal and professional reputation, emotional distress,

expenses for a new job search and the costs of appeals.     We

cannot assume that if Brader had been given the benefit of the

protections of the bylaws and been able, for example, to confront

the witnesses against him, he would not have been able to

successfully demonstrate the inadequacies of the case against

him.   In fact, he did convince the Appellate Review Panel that

there was no evidence to warrant the continued suspension of his

clinical privileges.

           The district court apparently assumed that, absent the

alleged breaches, Brader still would have lost his position at

Allegheny General.   Its discussion on this issue is cursory, but

if the court based its conclusion on the results of Ochsner's

allegedly independent review, the court failed to take into

account that Brader has pled that Ochsner's review also failed to

comply with the bylaws.

           We therefore will reverse the district court's

dismissal of Brader's breach of contract claims.   The allegations

in the complaint allege a sufficient causal nexus between the

alleged breaches and the damages suffered by Brader to support a

cause of action under Pennsylvania law.

                                E.




                                23
             Finally, defendants contend that this court should

affirm the district court's order of dismissal due to Brader's

failure to allege properly that defendants are not immune from

suit under the Health Care Quality Improvement Act (HCQIA), 42

U.S.C. §§ 11101-11151.    The HCQIA provides that parties to a

professional review body shall not be liable for damages where

the actions are taken "(1) in the reasonable belief that the

action was in the furtherance of quality health care, (2) after a

reasonable effort to obtain the facts of the matter, (3) after

adequate notice and hearing procedures are afforded to the

physician involved or after such procedures as are fair to the

physician under the circumstances, and (4) in the reasonable

belief that the action was warranted by the facts known after

such reasonable effort to obtain facts and after meeting the

requirements of paragraph (3)."     42 U.S.C. §§ 11111(a)(1),

11112(a).

             Under the HCQIA, professional review actions are

presumed to meet the required standard unless that presumption is

"rebutted by a preponderance of the evidence."     42 U.S.C.

§11112(a).    This provision necessarily implies that plaintiffs

bear the burden of proving noncompliance with these standards.

See Bryan v. James E. Holmes Regional Medical Ctr., 33 F.3d 1318,

1333 (11th Cir. 1994) (reviewing district court's denial of

defendants' motion for judgment as a matter of law on the issue

of HCQIA immunity), cert. denied, 115 S. Ct. 1363 (1995).       It

also implies some opportunity to discover relevant evidence.         See
Smith v. Ricks, 31 F.3d 1478, 1485 (9th Cir. 1994) (suggesting


                                  24
that the "reasonableness" requirements of HCQIA may be addressed

through a motion for summary judgment), cert. denied, 115 S. Ct.

1400 (1995).

           On appeal, defendants focus on the adequacy of Brader's

pleadings regarding defendants' HCQIA immunity, arguing that the

complaint's recitation of the language of HCQIA is insufficient

to support an absence of HCQIA immunity.   However, Brader made

extensive allegations regarding alleged improprieties by

physicians participating in Allegheny General's peer review

process.   If Brader's allegations, such as the alleged failure to

provide Brader with fair hearing procedures, are true, the

defendants would not be entitled to HCQIA immunity.    We therefore

decline to affirm the district court's dismissal of Brader's

claims on the alternative grounds of HCQIA immunity.

           We understand that the HCQIA was enacted at least in

part to protect hospitals and other care providers from the type

of frivolous suit complaining about staffing decisions that

concerned the court in BCB.   Moreover, we also are concerned that

health care providers may be deterred by the expense of

litigation from promptly terminating the privileges of physicians

and other employees who the hospital believes are not competent

to discharge the life and death decisions for which they have

responsibility.   On the other hand, these considerations cannot

justify the judiciary in pretermitting consideration of the

application of the antitrust laws to the health care field,

particularly now that the provision of health services is

becoming increasingly concentrated and the opportunities for


                                25
physicians more limited.   Once the plaintiff has alleged that the

defendants have failed to satisfy the requirements of HCQIA

immunity, we can only rely on the Federal Rules of Civil

Procedure, particularly the obligations of parties and attorneys

under Rule 11, to stem the tide of lawsuits subsequently held to

be without factual or legal foundation.

                                III.

                            Conclusion

          For the foregoing reasons, we will reverse the district

court's dismissal of Brader's claims and remand for proceedings

consistent with this opinion.




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