UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

CHARLES STEVINSON; MUHAMMAD
ALI; ALLANAH CLEARY; ANNE COORS;
ITAF DAOU; GRETCHEN HEINRICH;
BARBARA KELLER; PATRICIA HAWLEY;
JOHN MCKEE; NORMAN KUHL,
Plaintiffs-Appellees,

and

FRANK BARNETT; CHARLES KROPP;                                  No. 95-2619
EDMUND HOURIGAN,
Plaintiffs,

v.

DANIEL J. HOWLEY, M.D.;
ALFRED C. HIGGINS, M.D.; JANE A.
GEHLSEN, M.D.,
Defendants-Appellants.

Appeal from the United States District Court
for the District of South Carolina, at Beaufort.
Cameron McGowan Currie, District Judge.
(CA-93-1215-9-22)

Argued: September 27, 1996

Decided: October 29, 1996

Before NIEMEYER, MICHAEL, and MOTZ, Circuit Judges.

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Affirmed by unpublished per curiam opinion.

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COUNSEL

ARGUED: Joel Wyman Collins, Jr., COLLINS & LACY, P.C.,
Columbia, South Carolina; Albert Parker Barnes, Jr., PARKER A.
BARNES, JR. & ASSOCIATES, Beaufort, South Carolina, for
Appellants. Arthur Camden Lewis, LEWIS, BABCOCK & HAW-
KINS, L.L.P., Columbia, South Carolina, for Appellees. ON BRIEF:
Rebecca M. Monroy, COLLINS & LACY, P.C., Columbia, South
Carolina; David S. Black, PARKER A. BARNES, JR. & ASSO-
CIATES, Beaufort, South Carolina, for Appellants. Elmer P. Kul-
mala, Thomas A. Pendarvis, Anne D. Zuckerman, LEWIS,
BABCOCK & HAWKINS, L.L.P., Columbia, South Carolina, for
Appellees.

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Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

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OPINION

PER CURIAM:

The plaintiffs, who are patients of Dr. Rajko D. Medenica, sued
three other doctors associated with Hilton Head Hospital (the "Hospi-
tal"), alleging among other things that the three defendant doctors
engaged in unfair and unreasonable peer review of Dr. Medenica in
order to provoke the withdrawal of his privileges at the Hospital.
After the district court granted the plaintiffs' motion to dismiss their
action with prejudice, the court denied the motion of the three defen-
dant doctors for attorneys' fees under Fed. R. Civ. P. 41(a)(2) and the
Health Care Quality Improvement Act, 42 U.S.C. § 11101 et seq. (the
"Act"). The defendants appeal the fee denial, and we affirm.

I.

According to the district court, Dr. Medenica used"controversial
medical techniques" (intra-arterial therapy and plasmapheresis), JA

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176, 172, and "[b]y the fall of 1990 criticism of Dr. Medenica's prac-
tices was a sensitive issue at the hospital," id. at 176. The Hospital's
Medical Executive Committee appointed the three defendant doctors
in this case, Daniel J. Howley, Alfred C. Higgins and Jane A. Gehl-
sen, as a "peer review" committee to evaluate Dr. Medenica's profes-
sional competence and conduct.

Certain actions by the defendants during peer review led several
devoted patients of Dr. Medenica to conclude that the defendants
were unfairly attempting to discredit him and deprive him of privi-
leges at the Hospital. The result, the patients feared, would be that
they could no longer be treated by Dr. Medenica. As a result of these
concerns, several patients sued the three defendants, seeking damages
for interference with the doctor-patient relationship and seeking to
enjoin the defendants from interfering with Dr. Medenica's privileges
at the Hospital. After discovery the defendants moved for summary
judgment on the ground that they were immune from suit under the
Act because they were simply undertaking a fair and reasonable peer
review. See 42 U.S.C. §§ 11111, 11112. The district court, however,
denied the summary judgment motion, noting that"several question-
able acts of Defendants . . . raised a genuine issue of material fact as
to the bona fides of Defendants in their purported peer review activi-
ties." JA 174.

In the meantime, there were other developments that affected this
case. The Hospital came under new ownership and administration.
Thereafter, the Hospital and Dr. Medenica negotiated an agreement
that "allowed Dr. Medenica to continue treating his patients under
certain prescribed conditions." Id. at 179. This satisfied the main con-
cern of the plaintiffs and mooted their claim for injunctive relief. The
plaintiffs therefore moved for a voluntary dismissal of their action
with prejudice, and the defendants countered with a motion for attor-
neys' fees under Fed. R. Civ. P. 41(a)(2) (voluntary dismissal "at the
plaintiff's instance" to be "upon such terms and conditions as the
court deems proper") and section 11113 of the Act (allowing fees if,
among other things, "the claim or the claimant's conduct during the
litigation of the claim was frivolous, unreasonable, without founda-
tion, or in bad faith").

The district court granted the motion to dismiss immediately, and
the decision on the defendants' motion for attorneys' fees came after

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further consideration. The district court's key factual determinations
on the motion for fees may be summarized as follows:

          - One defendant, Dr. Gehlsen, wrote a derogatory letter to the
          American Cancer Society about Dr. Medenica. The letter con-
          tained "confidential medical information gained from Dr. Gehl-
          sen's nighttime review of Dr. Medenica's patient files. Dr.
          Gehlsen had not secured the patients' permission to share this
          information." JA 177.

          - Another defendant, Dr. Howley, did the following: "As part of
          Dr. Howley's purported peer review of Dr. Medenica, Dr.
          Howley in 1990 telephoned certain of Dr. Medenica's patients
          and lied about his identity, calling himself `Dr. Smith' of Hilton
          Head Hospital." Id. at 179. The Medical Executive committee
          sharply reprimanded Dr. Howley for this conduct.

          - Another defendant, Dr. Higgins, wrote letters to several agen-
          cies and a health insurance company, "charg[ing] Dr. Medenica
          with `a variety of questionable medical and ethical practices.'"
          Id. at 180. Dr. Higgins improperly enclosed confidential peer
          review reports about Dr. Medenica with the letters.

          - The plaintiffs were aware of these activities by the defendants,
          and the plaintiffs "were faced with termination of their treat-
          ments by Dr. Medenica at the hospital." Id. at 183.1

The district court denied the defendants' motion for fees on the fol-
lowing grounds: (1) because of the plaintiffs' good faith and the fac-
tual support for their claims, an award of fees to the defendants would
not be a proper term and condition of dismissal under Fed. R. Civ. P.
41(a)(2); (2) the Act does not bar damage suits by patients, it bars
suits by doctors against those conducting fair and reasonable peer
review; (3) even if the Act applies, the defendants were not entitled
_________________________________________________________________
1 The district court recognized that serious questions about Dr. Medeni-
ca's medical practices had been raised. But the court correctly noted that
on the fees question, "Dr. Medenica's competence[was] not the issue."
Id. at 184. Rather, "the focus [was] on whether Plaintiffs' claims were
frivolous or asserted in bad faith." Id.

                    4
to attorneys' fees because their peer review activities did not meet the
fairness and reasonableness requirements of section 11112(a) of the
Act; (4) even if the Act applies and the defendants met the require-
ments of section 11112(a), the defendants were still not entitled to
attorneys' fees because the plaintiffs' action was not "frivolous,
unreasonable, without foundation, or in bad faith" (see section
11113); and (5) the defendants failed to submit a fair estimate of the
amount of fees sought, as required by Fed. R. Civ. P. 54(d)(2)(B).

The defendants now appeal the fee denial.

II.

After reviewing the briefs and the joint appendix and considering
the arguments of counsel, we affirm on the reasoning of the district
court in its determination that the defendant doctors are not entitled
to attorneys' fees under either Fed. R. Civ. P. 41(a)(2) or under sec-
tion 11113 of the Act, assuming the Act applies. See Stevinson v.
Howley, No. 9:93-1215-22 (D.S.C. August 11, 1995).2

AFFIRMED
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2 Because fees are denied in any event, we do not decide whether the
Act applies, whether the defendants met the fairness and reasonableness
requirements of section 11112(a) of the Act or whether the defendants'
motion for fees was deficient under Fed. R. Civ. P. 54(d)(2)(B) for fail-
ing to provide a fair estimate of the amount of fees sought.

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