LESLIE E. KOBAYASHI, District Judge.
On January 27, 2012, Plaintiffs Pacific Radiation Oncology, LLC, a Hawai'i Limited Liability Corporation ("PRO"), PRO Associates, LLC, a Hawai'i Limited Liability Corporation ("PROA", together with PRO "the LLCs"), and John Lederer, M.D., Individually and as a Manager of the LLCs appearing for the Pacific Radiation Oncology Physicians (collectively "Plaintiffs")
This matter came on for hearing on February 14, 2012. Appearing on behalf of Plaintiffs were Mark Davis, Esq., Loretta Sheehan, Esq., and Clare Connors, Esq. Dr. Lederer was also present. Appearing on behalf of Defendants were Paul Alston, Esq., Claire Wong Black, Esq., and Daniel Mulholland, III, Esq.
The factual and procedural background of this case, as well as the parties' arguments in the Motion and Memorandum in Opposition, are set forth in this Court's TRO Order. 2012 WL 381209, at *1-4. This Court granted Plaintiffs' request for a TRO to the extent that the Court ordered
Id. at *8-9.
The following is a summary of the relevant portions of the parties' submissions filed after the Court issued the TRO Order.
Plaintiffs emphasize that the scope of the preliminary injunction that they seek is very limited. They seek an order requiring Defendants to allow Plaintiffs to perform the Listed Procedures at The Queen's Medical Center ("Queen's" or "QMC"), but only until Plaintiffs complete their efforts to move their practice out of Queen's facilities. Plaintiffs have already begun the process of securing the necessary equipment and clinical privileges at alternate facilities, and Plaintiffs estimate they will be able to perform some of the Listed Procedures at another facility within four months, but the remaining procedures may take as long as ten months. [Reply at 1 (citing Decl. of John Lederer, M.D. at ¶ 32).] Plaintiffs, however, state that it is not possible for Plaintiffs to give a definite time frame when the services will be available at the alternate facilities. Plaintiffs emphasize that, until the services can be safely performed elsewhere, Queen's is the only facility where the Listed Procedures can be performed. Further, the procedures are a matter of life and death for Plaintiffs' patients.
Plaintiffs argue that, without a preliminary injunction allowing Plaintiffs to use Queen's facilities to perform the Listed Procedures on their patients, irreparable harm will result. Plaintiffs also argue that the public interest weighs in favor of a preliminary injunction because the Listed Procedures can only be performed at Queen's and because there are certain therapies which only the PRO physicians are qualified to perform. Thus, without a preliminary injunction, any patient requiring one of those therapies will not be able to receive that treatment from a qualified physician in Hawai'i. Plaintiffs argue that Defendants will not suffer any harm if the Court enters a preliminary injunction because Queen's will be paid in full for all of Queen's charges associated with procedures that Plaintiffs perform at Queen's facilities.
Plaintiffs therefore urge the Court to grant a preliminary injunction allowing Plaintiffs to perform the Listed Procedures at Queen's until those procedures are available at alternative facilities.
Defendants submitted Affidavits for Direct Examination from the following witnesses: 1) Darlena Chadwick; 2) Peter Bryant Greenwood, M.D.; 3) Emily Hirata; 4) Scott Moon, M.D.; 5) Randy Talavera; and 6) Arthur Ushijima. [Dkt. nos. 29-1 to 29-5, 29-8.]
Ms. Chadwick is the Vice President of Patient Care for Oncology, Women's Health, Neuroscience, Pathology and Professional Services at Queen's. She, inter alia, oversees Queen's patient care programs, policies, and procedures. [Def.'s Direct Evid., Attch. A (Aff. for Direct Exam. of Darlena Chadwick ("Chadwick Aff.")), at ¶¶ 1-2.] Ms. Chadwick testified that, in recent years, Queen's received numerous complaints from patients that PRO physicians were transferring patients they initially saw at Queen's to PRO affiliated facilities for no apparent medical reason and without an affirmative request from the patient. These patients reported that they were dissatisfied with certain aspects of the post-transfer services. In addition, Queen's received complaints from referring physicians who were not notified when the PRO physicians transferred patients. Ms. Chadwick asserts that this jeopardized the continuity of patient care. [Id. at ¶¶ 12-13.]
At least in part due to these complaints, Queen's convened the task force which ultimately recommended that Queen's transition to a closed-department model for its radiation oncology department. In the process, the task force identified several concerns raised by the practice of transferring Queen's patients for no medical reason. [Id. at ¶¶ 14-15, 19.] These concerns included: "QMC patients that are transferred to PRO facilities no longer receive the benefit of QMC's stringent quality control measures and safety precautions[;]" [id. at ¶ 17;] the practice "caused confusion and discord on the part of both patients and referring physicians[,] disrupting the continuity of care"; [id. at ¶ 18;] and Queen's ancillary services are not available to patients who have been transferred to
Peter Bryant-Greenwood, M.D., is a physician who has been the Chairman of Queen's Credentialing Committee for physicians since January 2011. [Def.'s Direct Evid., Attch. B (Aff. for Direct Exam. of Peter Bryant-Greenwood, M.D. ("Greenwood Aff.")), at ¶¶ 1-2.] He was part of the Queen's task force and, through the task force investigation, he learned that PRO physicians had been consulting with some patients at Queen's initially but then transferring the patients to a PRO affiliated facility for treatment. Dr. Greenwood states that he was greatly concerned about this practice because some of these patients would return for other treatment at Queen's after treatments at the PRO affiliated facility, but Queen's would not always receive the pertinent medical records from the PRO facilities. This could detrimentally affect the patients' subsequent treatment at Queen's. [Id. at ¶¶ 3-4.] Dr. Greenwood also points out that PRO physicians refused to participate in the PAAROT program that Queen's implemented for its radiation oncologists.
Emily Hirata is the Chief Medical Physicist of the Radiation Therapy Department at Queen's Cancer Center. She is board certified in Therapeutic Radiologic Physics by the American Board of Radiology. [Def.'s Direct Evid., Attch. C (Aff. for Direct Exam. of Emily Hirata ("Hirata Aff.")), at ¶¶ 1-2.] She states that, after a physician approves a patient's treatment plan, she or another physicist reviews the plan to ensure that it is correct, and the Queen's physicists can also take measurements from the machines to verify that the output matches the plan. [Id. at ¶ 4.]
Scott Moon, M.D., is the Medical Director of the Queen's Radiation Therapy Department. [Moon Aff. at ¶ 1.] Dr. Moon was a radiation oncologist with PRO and PROA from approximately July 2003 to June 2008. [Id. at ¶ 3.] He states that, during his employment with PRO, the PRO physicians discussed ways to divert Queen's patients to PRO affiliated facilities to increase PRO's revenue from insurance reimbursements, but there was no discussion about telling the patients that they were being transferred to a facility that was partially owned by PRO. He also states that he heard a PRO physician give a patient false information that Queen's would not pay for transportation to its facility, but that PRO would do so. Dr. Moon also states that when patients received some of their treatments at a PRO
Randy Talavera is the Manager of Radiation Therapy and Medical Physics at Queen's Radiation Therapy Department. As the department's manager, he is responsible for its daily operations. [Def.'s Direct Evid., Attch. E (Aff. for Direct Exam. of Randy Talavera ("Talavera Aff.")), at ¶¶ 1-2.] He also discussed patient complaints about being transferred to PRO affiliated facilities after receiving an initial consultation at Queen's. [Id. at ¶¶ 4-6.] Mr. Talavera presented data about the treatments received by and insurance coverage for Queen's radiation oncology patients who were transferred to PRO affiliated facilities. [Id. at ¶¶ 9-10, Exhs. A & B.]
Arthur A. Ushijima is the President and Chief Executive Officer ("CEO") of Queen's. [Def.'s Direct Evid., Attch. F (Aff. for Direct Exam. of Arthur A. Ushijima ("Ushijima Aff.")), at ¶ 2.] He also states that the Queen's task force noted the transfer of Queen's patients to non-Queen's facilities and found that the practice raised concerns about quality and continuity of patient care. The task force concluded that the closed-department model "would effectively address concerns regarding quality, patient safety and continuity of care." [Id. at ¶ 13.] He also states that the closed-department policy that Queen's ultimately adopted has one exception:
[Id. at ¶ 17.]
Defendants also presented an affidavit from Barry Bittman, M.D., the Chief Innovations Officer of Meadville Medical Center in Pennsylvania, and an affidavit from Richard O. Schmidt, Jr., J.D., LL.M., the President, CEO and General Counsel of United Hospital System in Wisconsin. Both affidavits discuss the benefits of a closed-department model. [Def.'s Direct Evid., Attch. G (Aff. of Barry Bittman, M.D.), Attch. H (Aff. of Richard O. Schmidt, Jr., J.D., LL.M.).]
Plaintiffs submitted affidavits or declarations from the following persons in lieu of direct examination: 1) Dr. Lederer; 2) Cancer Patient 1; 3) Eva Bieniek, M.D.; 4) Cancer Patient B.J.; and 5) Cancer Patient D.S. [Dkt. nos. 31-1 to 31-6.]
Plaintiffs submitted an affidavit by Dr. Lederer dated January 27, 2012 ("Lederer Affidavit") and a declaration by Dr. Lederer dated February 8, 2012 ("Lederer Declaration").
[Lederer Aff. at ¶ 6, Exh. G (letter dated 11/18/11 to PRO Physician Group from Darlena Chadwick explaining standard conditions imposed on physicians employed by Queen's).] He also states that, in addition to the therapies which the PRO physicians perform at PRO affiliated facilities, they perform other therapies which require either a hospital operating room or patient admission, and these therapies must be performed at a facility which is licensed by the Nuclear Regulatory Commission ("NRC"). With the closure of Hawaii Medical Center-East ("HMC East") and Hawaii Medical Center-West ("HMC West"), Queen's became the only NRC-licensed facility with an operating room that the PRO physicians had privileges to use for these treatments. [Lederer Aff. at ¶ 9.] Thus, once Queen's closed-department policy takes full effect, the PRO physicians will not be able to perform those procedures. Queen's also informed PRO that PRO physicians will not be allowed to attend to PRO patients who receive treatment at Queen's during the patients' post-operative stays. [Id. at ¶ 16.] He asserts that Queen's has improperly "attempt[ed] to exclude [PRO] from continuing its practice" and that Queen's actions "will have important and severely adverse impacts on our physician-patient relationships and on our patients, all of whom are cancer patients in desperate need of lifesaving treatment." [Id. at ¶ 17.]
Dr. Lederer states that, under the terms of the TRO Order, PRO has "had to refuse referrals from treating physicians who have inpatients at QMC and yet want PRO services." [Lederer Decl. at ¶ 4.] The Lederer Declaration also describes a typical course of treatment for patients in need of radiation therapy, from referral to seed implantation, and a typical course for higher risk treatment, from referral to high dose rate ("HDR") brachytherapy. [Id. at ¶¶ 6-7.] Dr. Lederer described examples of his patients who would be affected if the Court denies a preliminary injunction. [Id. at ¶¶ 8-10.] Further, he states that Queen's radiation oncology department staff is not as qualified to perform the procedures relevant to this Motion. [Id. at ¶¶ 11-15.] Dr. Lederer also discussed examples of some of the other PRO physicians' patients, [id. at ¶¶ 17-18,] and refuted several points in Ms. Chadwick's affidavit, including her contention that Kuakini Medical Center ("Kuakini") is a viable alternative location for the procedures at issue in this Motion [id. at ¶¶ 19-25]. Dr. Lederer describes problems that he and the other PRO physicians have had accessing their patients' medical records at Queen's, [id. at ¶¶ 26-28,] and he discusses Plaintiffs' ongoing efforts to secure alternative sites to perform the procedures at issue in this Motion [id. at ¶¶ 32.a-c].
Attached to the Lederer Declaration and the Lederer Affidavit are several exhibits, including correspondence between PRO, and/or its physicians, and Queen's.
Dr. Bieniek's declaration, the affidavit of Cancer Patient 1, and the declarations of cancer patient B.J. and D.S. all discuss individual cases in which Plaintiffs allege the patients will be denied necessary treatment in the absence of a preliminary injunction. [Pltfs.' Direct Evid., Decl. of Eva Bieniek, M.D. ("Bieniek Decl."), Aff. of Cancer Patient 1, Decl. of Cancer Patient B.J., Decl. of Cancer Patient D.S.]
Defendants submitted Supplemental Affidavits for Direct Examination from the
In pertinent part, Ms. Chadwick asserts that Queen's can maintain continuity of care for PRO patients, even if the PRO physicians are no longer able to perform procedures at Queen's. [Defs.' Suppl. Evid., Attch. A (Suppl. Aff. for Direct Exam. of Darlena Chadwick ("Suppl. Chadwick Aff.")), at ¶¶ 2-4.] She also presents further testimony about Queen's concerns about the PRO physicians' practice of transferring patients to PRO affiliated facilities. [Id. at ¶¶ 5-9.] She states, "[t]he task force committee was convened in large part to address these concerns.... The task force considered feedback, including the complaints above, and concluded that the transfers confused patients, caused discord among referring physicians, and jeopardized patient safety and continuity of care." [Id. at ¶ 10.]
Ms. Hirata testified, inter alia, that all of the Listed Procedures can be delivered at other facilities besides Queen's. [Defs.' Suppl. Evid., Attch. B (Suppl. Aff. for Direct Exam. of Emily Hirata ("Suppl. Hirata Aff.")), at ¶¶ 2-2.i.] She also states that "[f]rom a technical perspective, all radiation oncologists who are listed on a facility's Nuclear Regulatory Commission (NRC) license are able to perform high dose rate radiation brachytherapy, regardless of the site of treatment." [Id. at ¶ 3.] Queen's has five radiation oncologists, who are not affiliated with PRO, listed on its NRC license.
Dr. Moon states that HDR Brachytherapy can be performed at "any facility that has an HDR suite", and he believes the PRO affiliated facility on Liliha Street has an HDR suite. [Defs.' Suppl. Evid., Attch. C (Suppl. Aff. for Direct Exam. of Scott Moon, M.D. ("Suppl. Moon Aff.")), at ¶ 3.] He states that Kuakini's NRC license authorizes it to use radioactive materials, including brachytherapy and prostate seeds. [Id. at ¶ 7, Exh. B (Kuakini's NRC license).] PRO physicians Vincent Brown and Thanh Huynh have active privileges at Kuakini. [Suppl. Moon Aff. at ¶ 7.] He also emphasizes that prostate brachytherapy is never "the single best option for curative therapy. Rather, it is simply one of a number of treatment options that a patient may choose." [Id. at ¶ 9 (citation omitted).] He also contests Plaintiffs'
Marilyn Hata, office manager for Island Urology, and Queen's oncologist Kaye Kawahara testified regarding referring physician complaints that Dr. Lederer, and PRO physicians in general, transferred their patients from Queen's to PRO affiliated facilities for procedures. [Defs.' Suppl. Evid., Attch. F (Aff. for Direct Exam. of Marilyn Hata ("Hata Aff.")), Attch. G (Aff. for Direct Exam. of Kaye Kawahara, M.D. ("Kawahara Aff.")).]
Plaintiffs submitted an affidavit by urologist Todd Miller who testified that he refers all of his patients who require HDR brachytherapy to Dr. Lederer, who Dr. Miller believes has the most skill and experience in brachytherapy of any physician on the island. Dr. Miller testified that he would not feel comfortable referring his patients to any other physician. [Pltfs.' Suppl. Evid, Aff. of Todd Miller, M.D. ("Miller Aff."), at ¶¶ 1, 5.] He states that Queen's is the only facility where his patients could receive HDR brachytherapy, and that he needs to be able to refer his patients needing brachytherapy to Dr. Lederer for treatment at Queen's. [Id. at ¶¶ 6-7.]
Plaintiffs also submitted a rebuttal affidavit by Dr. Lederer. [Pltfs.' Suppl. Evid, Rebuttal Aff. of John Lederer, M.D. ("Rebuttal Lederer Aff.").] Dr. Lederer contests Queen's allegations that PRO physicians have unnecessarily transferred Queen's patients to PRO affiliated facilities. [Id. at ¶¶ 4-5.] He states that neither he nor any other physicians were aware that PRO affiliated facilities failed to provide Queen's with medical records upon request. Further, the PRO physicians have not refused to participate in the PAAROT program or attend multi-disciplinary team meetings. [Id. at ¶¶ 7-8.] He also denied that the transfers of Queen's patients to PRO affiliated facilities were based on the patient's ability to pay for treatments. [Id. at ¶¶ 10-11.] Finally, Dr. Lederer contests Ms. Hirata's testimony that the Listed Procedures can be performed at other facilities besides Queen's. [Id. at ¶¶ 12-12.n.]
In the Court's February 22, 2012 Preliminary Ruling, the Court informed the parties that it was going to grant a preliminary injunction in favor of Dr. Lederer, but that the preliminary injunction would be limited to certain patients and would only apply to the Listed Procedures which Dr. Lederer cannot reasonably perform at other facilities besides Queen's. The Court ordered the parties to submit supplemental briefing on the issues of: 1) which of the Listed Procedures, if any, Dr. Lederer can reasonably perform at facilities other than Queen's; and 2) what procedures must be implemented to allow Dr. Lederer sufficient access to Queen's to perform those procedures.
In their supplemental memorandum, Plaintiffs state that the PRO physicians
As to the administrative procedures necessary to allow Dr. Lederer to perform the Listed Procedures at Queen's, Plaintiffs argue that Dr. Lederer "needs to be able to exercise his QMC privileges fully", including having access to a consultation room, necessary equipment, dosimetry staff, and other hospital personnel. [Id. at 7.] He also needs to be able to conduct necessary follow up examinations, and Plaintiffs argue that, in the event that Dr. Lederer himself is not available for any follow up examinations, another one of the PRO physicians should be able to exercise his or her privileges to examine the patient. [Id. at 7-8.] In addition, Plaintiffs state that, "[t]o the extent that a patient of Dr. Lederer, or any of the Plaintiff physicians, happens to be an inpatient at QMC, Plaintiffs request that they be allowed to exercise their privileges with respect to that patient, including consulting with and examining the patient." [Id. at 8.] Finally, Plaintiffs argue that "Dr. Lederer and all the Plaintiff physicians need full and unfettered access to the medical records of their patients .... in perpetuity[.]" [Id.]
Plaintiffs suggest the filing of quarterly status reports and the referral of this matter to the magistrate judge for the resolution of any ongoing disputes related to the preliminary injunction or to Plaintiffs' transition of their services off of Queen's campus. [Id. at 8-9.]
In their supplemental memorandum, Defendants state that Queen's will permit Dr. Lederer to perform the following procedures at Queen's: 1) permanent seed implants for prostate cancer; 2) HDR brachytherapy for prostate cancer; 3) volume studies related to permanent seed implants or HDR brachytherapy; 4) external beam radiation therapy related to permanent seed implants or HDR brachytherapy; 5) procedures requiring general anesthesia, including pediatric external beam radiation; and 6) endoluminal trachea, bile duct (brachytherapy) radiation therapy. [Defs.' Suppl. Mem. at 2-4.] Defendants argue that the following procedures, or a comparable procedure which meets the applicable standard of care, can reasonably be performed at other facilities besides Queen's: 1) tomotherapy; 2) 4D CT scans; and 3) SBRT. [Id. at 4-6.]
As to the alleged denial of access to patients' medical records, Queen's states:
[Id. at 7 (footnote omitted).] Further, although the ruling on the Motion will be limited to Dr. Lederer, Queen's affirms that all "PRO-affiliated radiation oncologists will also be provided access to the medical records of their patients consistent with QMC's existing procedural and administrative
As to the administrative procedures necessary to allow Dr. Lederer to perform the procedures covered by the preliminary injunction, Defendants emphasizes that Queen's should not be forced to relax its existing administrative procedures, bylaws, policies, and procedures, including scheduling procedures. The Court also notes that Queen's argues Dr. Lederer does not need a consultation room at Queen's because he can conduct all consultations at his office and, in the event Dr. Lederer cannot perform a necessary follow-up examination, a Queen's physician should provide any necessary coverage. [Id. at 7-9.]
Defendants argue that the Court should require Dr. Lederer to: 1) within ninety days, stop taking patients who Dr. Lederer believes may require treatment at Queen's; [id. at 2;] 2) within 180 days, complete all treatments of all patients at Queen's; [id.] 3) "submit a detailed plan and timeline specifying the equipment, approvals and licenses necessary for Dr. Lederer to provide the procedures at non-QMC facilities"; [id. at 10;] and submit "detailed monthly updates describing the status of Plaintiffs' license, approval and equipment acquisition efforts" [id.].
Before turning to the merits of Plaintiffs' Motion, the Court notes that Plaintiffs have not complied with the Court's deadlines and the applicable Local Rules.
First, Plaintiffs' affidavits in lieu of direct testimony were due on February 8, 2012. [1/31/12 Hrg. Trans., filed 1/31/12 (dkt. no. 8), at 31.] Plaintiffs, however, did not file Plaintiffs' Direct Evidence until February 9, 2012. Prior to the hearing on the Motion, the Court granted the parties' request for leave to file supplemental declarations. The Court ordered the parties to file their respective declarations by Monday morning, February 13, 2012, and to deliver the courtesy copies, which are required by the Local Rules, to the Court by noon that day. [Minutes, filed 2/10/12 (dkt. no. 34).] Plaintiffs, however, did not file Plaintiffs' Second Submission of Affidavits until 7:18 p.m. on February 13, 2012, and Plaintiffs did not submit their courtesy copies of that document.
In light of the importance of the issues raised in the instant Motion, this Court will not penalize Plaintiffs. The Court, however, emphasizes that it does not condone the failure to comply with the applicable rules and the deadlines that the Court imposes. The Court CAUTIONS Plaintiffs and their counsel that the failure to comply with court rules and deadlines in the future may result in sanctions, including, inter alia, the striking of the document and/or the imposition of attorneys' fees.
Defendants' RJN asks this Court to take judicial notice of the contents of six pages from the website of The Cancer Center of Hawai'i ("CCH"). [Dkt. nos. 39-2 to 39-7.] According to the website, CCH has two locations, Liliha and Leeward, and the six PRO physicians are CCH's physicians. [Dkt. nos. 39-2, 39-5.] At the hearing on the Motion, Plaintiffs' counsel stated that Plaintiffs own one-third of CCH. Plaintiffs' counsel noted that the website "was prepared in mid-2011, and the only update that's been on there after 2011 was a statement that we're still open even though [HMC West and HMC East] closed." [2/14/12 Hrg. Trans., filed 3/9/12 (dkt. no. 57), at 5.] Although he noted some evidentiary issues associated with the content, Plaintiffs' counsel stated that he did not did object to the Court's taking judicial notice of the website. [Id.]
Fed.R.Evid. 201(b).
In light of the foregoing, Defendants' RJN is HEREBY GRANTED.
The applicable standard in light of Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7, 20, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008), and Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir.2011), is set forth in this Court's TRO Order. See Brown Jordan Int'l, Inc. v. Mind's Eye Interiors, Inc., 236 F.Supp.2d 1152, 1154 (D.Haw.2002) ("The standard for issuing a temporary restraining order is identical to the standard for issuing a preliminary injunction.").
At the outset, the Court notes that it must distinguish between Dr. Lederer's request for a preliminary injunction and the LLCs' request.
Dr. Lederer is a plaintiff in his individual capacity and in his capacity as a manager of the LLCs. He purports to act on behalf of all of the PRO physicians. The Ninth Circuit has recognized that a court may deny standing to a party because of prudential limitations on the standing doctrine. "The prudential limitations include a requirement that the plaintiff assert his own rights, rather than rely on the rights or interests of a third party[.]" Wedges/Ledges of Cal., Inc. v. City of Phoenix, 24 F.3d 56, 61 (9th Cir.1994) (citation and internal quotation marks omitted). The Court therefore FINDS that Dr. Lederer does not have standing to pursue claims on behalf of the other five physicians who are either equity members or employees of PRO ("Other PRO Physicians"). The Court now turns to the Winter analysis of Dr. Lederer's claims.
Plaintiffs' due process claim is based on Silver v. Castle Memorial Hospital, 53 Haw. 475, 479-80, 497 P.2d 564, 568 (1972), in which the Hawai'i Supreme Court recognized that a licensed doctor who is denied staff hospital privileges is entitled to judicial review on the issue "whether the doctor excluded was afforded procedural due process, and as to whether an abuse of discretion by the hospital board occurred, resulting in an arbitrary, capricious or unreasonable exclusion."
In the discussion of whether there is federal jurisdiction over the instant case, the TRO Order stated:
2012 WL 381209, at *5. The Court clarifies that the TRO Order's statement that it could not find that Queen's was a quasi-public hospital was limited to Queen's status in relation to the federal government for purposes of a due process claim under the United States Constitution.
Under Silver, "`quasi public' status is achieved if what would otherwise be a truly private hospital was constructed with public funds, is presently receiving public benefits or has been sufficiently incorporated into a governmental plan for providing hospital facilities to the public." 53 Haw. at 481-82, 497 P.2d at 569 (footnotes omitted). The Hawai'i Supreme Court held that Castle Memorial Hospital was quasi-public because it "was the recipient of state and federal funding during its construction." Id. at 483, 497 P.2d at 570. In the present case, Plaintiffs have submitted evidence that Queen's was established by King Kamehameha IV and Queen Emma in 1859, and it was "THE FIRST HOSPITAL IN THE UNITED STATES FOUNDED BY ROYALTY
Having determined that Dr. Lederer is likely to succeed on the issue whether
2012 WL 381209, at *8.
Throughout these proceedings, Defendants have taken the position that Queen's adopted the closed-department model based on a legitimate policy decision that it is the model which is best suited for providing optimal patient care and which also is in Queen's bests interests from an economic standpoint. They have steadfastly denied that the decision was based on concerns about the PRO physicians' competence or qualifications. Defendants' own affidavits, however, belie their claim that the decision was unrelated to the qualifications of the PRO physicians.
Ms. Chadwick testified that patient and referring physician complaints were one of the primary reasons why Queen's convened the task force which recommended adopting the closed-department model. [Chadwick Aff. at ¶¶ 14, 19; Suppl. Chadwick Aff. at ¶ 10.] Further, in the course of making that recommendation, the task force investigated the complaints and "found that the PRO radiation oncologists' practice of transferring patients for no apparent medical reason raised a number of concerns." [Chadwick Aff. at ¶ 15.] Dr. Bryant-Greenwood, a member of the task force, testified that, during the task force's investigation, he learned that PRO physicians were transferring patients who had their initial consultation at Queen's to a PRO affiliated facility for treatment. [Greenwood Aff. at ¶ 4.] Prior to stating that the closed-department model was in the best interests of radiation oncology patients, [id. at ¶ 8,] Dr. Bryant-Greenwood noted that the PRO physicians have refused to participate in the PAAROT program and that some PRO physicians failed to regularly attend patients' multi-disciplinary team meetings [id. at ¶¶ 6-7]. Other defense witnesses, including Dr. Moon — the Medical Director, and Mr. Talavera-the Manager of the Radiation Therapy and Medical Physics, of the Queen's Radiation Therapy Department, also discussed the PRO transfer issue. [Moon Aff. at ¶¶ 1, 6; Talavera Aff. at ¶¶ 1, 4-6.] Queen's President and CEO also noted the task force's findings and conclusions about the PRO transfer issue: "The task force found that this practice raised quality and continuity of care concerns, and concluded that a closed department model with employed physicians would effectively address concerns regarding quality, patient safety and continuity of care." [Ushijima Aff. at ¶ 13.]
The resolution itself states, in pertinent part:
[Lederer Aff., Exh. F at 1 (emphases in original).] Thus, although the resolution itself does not name PRO or any of the PRO physicians, taken in the context of the current record as a whole, it is clear that the "transferring of patients" in the resolution refers to what Queen's perceived was a problem with the PRO physicians' referral practices.
It is undisputed that Queen's gave the PRO physicians the opportunity to join the Queen's staff, an indication, perhaps, that Queen's had no concerns about the clinical competence of the PRO physicians. The evidence currently before this Court, however, establishes that Queen's viewed the PRO physicians' referral practices as a serious problem and that this problem was a substantial motivating factor in Queen's decision to adopt the closed-department model. The referral practice — which, based on the current record, was common to all PRO physicians — is arguably an issue of the PRO physicians' professional qualifications because it concerns the manner in which they were conducting their practice at Queen's.
Count VI alleges, in pertinent part:
[Complaint at pgs. 22-23.]
Unfair methods of competition are unlawful under Haw.Rev.Stat. § 480-2(a) and, under § 480-2(e), any person may bring an unfair methods of competition
The Hawai'i Supreme Court has stated that there are "three elements essential to recovery under HRS § 480-13:(1) a violation of HRS chapter 480; (2) which causes an injury to the plaintiff's business or property; and (3) proof of the amount of damages." Davis v. Four Seasons Hotel Ltd., 122 Haw. 423, 435, 228 P.3d 303, 315 (2010) (footnote and citations omitted). Further, the Hawai'i Supreme Court has held:
Id. at 439, 228 P.3d at 319 (some citations omitted) (some alterations in original).
In the same letter informing PRO physicians of Queen's adoption of the closed-department model, Ms. Chadwick stated that Queen's intended "to offer employment to all of the current radiation oncologists on the QMC Medical Staff who satisfactorily meet the qualifications for and conditions of employment." [Lederer Aff., Exh. E (9/15/11 letter to Thanh Huynh, M.D., from Ms. Chadwick)
Further, although it is not possible to determine based on the current record what Defendants knew about the status of HMC-West and HMC-East when they adopted the resolution, the facilities' closures were publicly announced during the period in which PRO continued to negotiate with Queen's regarding the transition to a closed department. [Lederer Aff., Exh. H (12/21/11 letter to Dr. Lederer from Mark H. Yamakawa, Queen's Executive Vice President and Chief Operating Officer), Exh. I (12/28/11 Pacific Business News article, "Hawaii Medical Center West closed to public", stating that HMC officials announced the impending closure of its facilities on December 26); Lederer Decl. at ¶¶ 29-31, Exhs. Q, R, S (correspondence between PRO physicians and Queen's with dates from November 3, 2011 to January 23, 2012).] With the closure of HMC-West and HMC-East, Queen's is the only NRC licensed facility with an operating room where certain procedures can be, or at least currently are being, performed. [Lederer Aff. at ¶¶ 16-17; Defs.' Suppl. Mem. at 2.]
After the Court entered the TRO Order, Dr. Lederer was allowed to continue performing the Listed Procedures for existing patients at Queen's, but he had to refuse new referrals from treating physicians who wanted to refer Queen's inpatients to him for services. [Lederer Decl. at ¶¶ 4, 10.] PRO, of which Dr. Lederer is a partner and member, generated almost fifty percent of its gross business revenue from its relationship with Queen's prior to September 15, 2011. [Lederer Aff. at ¶¶ 1, 8.]
Based upon the current record, the Court FINDS that Dr. Lederer has shown that he is likely too succeed on the merits of Count VI. Dr. Lederer is likely to succeed on the merits of each element of the § 480-13 claim: 1) the manner and timing in which Queen's implemented its new closed-department policy was an unfair method of competition under the circumstances; 2) Queen's actions caused an injury to Dr. Lederer's professional practice that is the type of injury that antitrust laws were intended to prevent; and 3) Dr. Lederer suffered damages.
Dr. Lederer must also show that he is likely to suffer irreparable harm in the absence of a preliminary injunction. As this Court noted in the TRO Order, monetary harm alone is generally not considered irreparable. 2012 WL 381209, at *6 n. 6 (citing Los Angeles Mem'l Coliseum Comm'n v. Nat'l Football League, 634 F.2d 1197, 1202 (9th Cir.1980); Cal. Pharmacists Ass'n v. Maxwell-Jolly, 563 F.3d 847, 852 (9th Cir.2009)). In contrast, if Queen's implementation of the closed-department model would harm either Dr.
The first category consists of Dr. Lederer's patients who, prior to February 1, 2012, began receiving radiation therapy treatments at Queen's ("Dr. Lederer's Group One Patients"). Mr. Ushijima, Queen's President and CEO, testified that Queen's will allow Dr. Lederer's Group One Patients to complete their radiation treatments at Queen's, including follow-up appointments. [Ushijima Aff. at ¶¶ 2, 17.] Insofar as Dr. Lederer is able to continue treating his Group One Patients at Queen's, the doctor-patient relationships between Dr. Lederer and his Group One Patients, and Dr. Lederer's relationships with the physicians who referred his Group One Patients to him, are not jeopardized by Queen's current transition to a closed radiation oncology department. The Court FINDS that Dr. Lederer is not likely to suffer irreparable harm as to his Group One Patients in the absence of a preliminary injunction, and therefore the Court CONCLUDES that Dr. Lederer is not entitled to a preliminary injunction as to his Group One Patients.
The second category consists of Dr. Lederer's patients for whom Dr. Lederer developed a treatment plan prior to February 1, 2012 which included one or more of the Listed Procedures, but who had not begun any of the Listed Procedures prior to February 1, 2012 ("Dr. Lederer's Group Two Patients"). When Dr. Lederer's Group Two Patients require procedures that can only be performed at Queen's, under Queen's closed-department policy, Dr. Lederer would have to refer those patients to a Queen's radiation oncologist for those procedures. The patients, however, likely expected Dr. Lederer to perform the procedures and having another radiation oncologist, with whom the patients have not established relationships of professional confidence and trust, perform the procedures is likely to cause the patients significant anxiety during an already stressful and vulnerable period in their lives. This, in turn, is likely to cause distrust and unease when Dr. Lederer resumes the patients' treatments, impairing the doctor-patient relationships that Dr. Lederer has with those patients. The Court also notes that this type of disruption in patient care is likely to dissuade the physicians who referred Dr. Lederer's Group Two Patients from referring future patients to him. The Court therefore FINDS that Dr. Lederer is likely to suffer irreparable harm to his relationships with his Group Two Patients and their referring physicians in the absence of a preliminary injunction, and that this harm cannot be remedied through monetary damages.
The final category of patients consists of new patients who were referred, or who would have been referred, to Dr. Lederer after February 1, 2012, but who Dr. Lederer could not accept as patients pursuant to Queen's closed-department policy ("Dr. Lederer's Group Three Potential Patients"). Dr. Lederer does not have doctor-patient relationships with his Group Three Potential Patients and, as previously noted, the economic harm that Dr. Lederer will suffer because of the loss of income that he would have received if he had been able to accept his Group Three Potential Patients is not considered irreparable for purposes of a preliminary injunction.
Defendants themselves presented testimony regarding physicians who have referred patients to Dr. Lederer but who only want him to treat their referred patients at Queen's. Marilyn Hata, the office manager for Island Urology — a practice group led by William J. Yarborough, M.D., testified that both she and Dr. Yarborough have informed Dr. Lederer that "Dr. Yarborough expects and wants all Island Urology patients that are referred to PRO for radiation therapy to be treated at QMC rather than PRO-affiliated facilities." [Hata Aff. at ¶¶ 1, 3.] Dr. Kawahara, an oncologist affiliated with Queen's, gave similar testimony regarding referral to PRO in general. [Kawahara Aff. at ¶¶ 1, 3.]
The evidence presented establishes that Dr. Lederer relies on referrals for a significant number of his clients. Both parties' evidence establishes that Queen's facilities and support services for the Listed Procedures are superior to those available to Dr. Lederer elsewhere, if those procedures are available at all. Further, both parties have emphasized the importance of continuity of care during treatment to, inter alia, ensure the accuracy of the equipment in relation to the area to be treated on a patient. Thus, it can be reasonably inferred from the evidence that a significant portion of Dr. Lederer's referrals are contingent on his ability to perform procedures that currently can only be performed at Queen's. The Court therefore FINDS that Dr. Lederer is likely to suffer irreparable harm as to his Group Three Potential Patients because, without a preliminary injunction: 1) he will be deprived of the opportunity to compete for those potential patients and will lose competitive ground in the industry; and 2) his relationship with the physicians who would have referred the Group Three Potential Patients, as well as future patients beyond the period at issue in this Motion, to Dr. Lederer is likely to suffer irreparable harm.
In the TRO Order, this Court stated:
2012 WL 381209, at *7.
Similarly, the Court finds that Defendants will suffer little harm if a preliminary injunction delays the implementation of the closed-department policy, particularly where the preliminary injunction only applies to a specific list of procedures and where Plaintiffs are actively engaged in securing other locations where they can perform those procedures. This Court therefore FINDS that the balance of the equities factor weights in favor of granting a preliminary injunction to Dr. Lederer.
In the TRO Order, this Court stated:
Id. at *7-8.
The primary non-parties who will be affected by the grant or denial of a preliminary injunction are Dr. Lederer's Group Two Patients and any new patients that are likely to come to Dr. Lederer in the near future and who require a procedure that can only be performed at Queen's. As to Dr. Lederer's Group Two Patients, the factors discussed in connection with the irreparable harm factor are also relevant to the public interest factor. As to the new patients who are likely to come to
Defendants have presented evidence that there are benefits to a closed radiation oncology department. The contemplated preliminary injunction in the instant Motion, however, would still allow Defendants to begin implementing that policy in a significant number of cases. There are many instances in which Dr. Lederer will not be permitted to use Queen's facilities because he can reasonably perform those procedures elsewhere and, as discussed infra, the preliminary injunction does not apply the Other PRO Physicians. This Court therefore FINDS that the public interest factor also weighs in favor of granting Dr. Lederer's request for a preliminary injunction.
Having found that all of the Winter facts weigh in favor of issuing the preliminary injunction, the Court CONCLUDES that Dr. Lederer is entitled to a preliminary injunction as to his Group Two Patients and his Group Three Potential Patients, but only as to the Listed Procedures that Dr. Lederer cannot reasonably perform at other facilities besides Queen's.
The Court now turns to the Winter analysis of the LLCs' request for a preliminary injunction.
Count I, Plaintiffs' due process claim, is based on the effective termination of "Plaintiffs' hospital privileges". [Complaint at ¶ 31.] The individual PRO physicians, however, had hospital privileges at Queen's; the LLCs as entities did not have hospital privileges. It is possible for an entity to pursue the due process claims of its members under the doctrines of third party standing and representational or associational standing, but those doctrines do not apply in this case.
"The requirements to establish third party standing include `injury in fact,' a close relation to the third party, and `some hindrance to the third party's ability to protect his or her own interests.'" Legal Aid Soc'y of Hawaii v. Legal Servs. Corp., 145 F.3d 1017, 1031 (9th Cir.1998) (quoting Powers v. Ohio, 499 U.S. 400, 411, 111 S.Ct. 1364, 113 L.Ed.2d 411 (1991)). In the present case, there is no evidence that there is some hindrance to the Other PRO Physicians' ability to protect their own interests, in fact, after this Court issued its Preliminary Ruling, Plaintiffs filed an amended complaint adding each of the Other PRO Physicians as plaintiffs. [Filed 2/23/12 (dkt. no. 44).]
As to representational or associational standing, the United States Supreme Court has recognized:
Hunt v. Wash. State Apple Adver. Comm'n, 432 U.S. 333, 343, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977).
Insofar as Dr. Lederer is pursuing a due process claim on his own behalf and the LLCs do not have standing to pursue due process claims on behalf of the Other PRO Physicians, the LLCs have not established that they are likely to succeed on the merits of the due process claims.
The LLCs are persons entitled to bring unfair methods of competition claims pursuant to Haw.Rev.Stat. § 480-2(e). See Haw.Rev.Stat. § 480-1 ("`Person' or `persons' includes individuals, corporations, firms, trusts, partnerships, limited partnerships, limited liability partnerships, limited liability limited partnerships, limited liability companies, and incorporated or unincorporated associations, existing under or authorized by the laws of this State, or any other state, or any foreign country."). The analysis of Dr. Lederer's likelihood of establishing a violation of Chapter 480 also applies to the LLCs. See infra Section I.A.2. As previously noted, PRO generated almost half of its business revenue from its relationship with Queen's prior to September 15, 2011, [Lederer Aff. at ¶ 8,] and PRO has had to refuse referrals in light of Queen's implementation of the closed-department model [Lederer Aff. at ¶ 4]. Thus, for purposes of the instant Motion, Plaintiffs have established that the LLCs' business has suffered an injury that anti-trust laws were intended to prevent and that the LLCs have suffered damages. The Court therefore FINDS that the LLCs have established a likelihood of success on the merits of Count VI.
Insofar as Dr. Lederer is a member and partner in PRO, which is wholly owned by PROA, and he is likely to suffer irreparable harm that impairs his ability to compete, the LLCs are also likely to suffer irreparable harm in their ability to compete. Plaintiffs have not submitted any specific evidence regarding the irreparable harm that the LLCs will suffer as to the Other PRO Physicians without a preliminary injunction. Dr. Lederer discussed a fifty-nine year-old patient of PRO physician Eva Bieniek and a sixty-eight year-old patient of PRO physician Paul DeMare, [Lederer Decl. at ¶¶ 17-18,] and Dr. Bieniek also discussed the fifty-nine year-old patient, H.M., in her declaration [Bieniek Decl. at ¶¶ 2-8]. Plaintiffs also presented a declaration by Dr. DeMare's sixty-eight year-old patient, D.S. [Id., Decl. of (Cancer Patient D.S.).] Both H.M. and D.S., however, fall within the group of patients who Queen's will allow the PRO physicians to continue to treat under the exception to the closed-department policy because they have already begun treatments at Queen's, as described in the section discussing Dr. Lederer's Group One Patients. See infra Section I.B.1. Plaintiffs have not presented any evidence about other patients or the referrals that the Other PRO Physicians are likely to receive. Plaintiffs have only presented general evidence of a loss of revenue as to the Other PRO Physicians, but that does not constitute irreparable harm for purposes of a preliminary injunction. In light of the current record, Plaintiffs have not established that the LLCs
Although the LLCs have established that they are likely to succeed on Count VI and that they are likely to suffer irreparable harm as to Dr. Lederer, that harm will be addressed by the preliminary injunction granted to Dr. Lederer. Any additional relief in a preliminary injunction to the LLCs would be duplicative. Thus, the balancing of the equities favors Defendants and no further public interest would be served by granting a preliminary injunction to the LLCs in relation to Dr. Lederer. The Court therefore CONCLUDES that the LLCs are not entitled to a preliminary injunction.
The Court now turns to the scope of Dr. Lederer's preliminary injunction. To the extent that Plaintiffs' supplemental memorandum requests that the relief in the preliminary injunction be extended to the Other PRO Physicians, Plaintiffs' request is DENIED. The denial is without prejudice to the Other PRO Physicians' filing of their own motion for a preliminary injunction, if warranted.
As to the specific procedures that the preliminary injunction should encompass, in response to the Preliminary Ruling, Defendants agree to the inclusion of the following procedures: 1) permanent seed implants for prostate cancer; 2) HDR brachytherapy for prostate cancer; 3) volume studies related to permanent seed implants or HDR brachytherapy; 4) external beam radiation therapy related to permanent seed implants or HDR brachytherapy; 5) procedures requiring general anesthesia, including pediatric external beam radiation; and 6) endoluminal trachea, bile duct (brachytherapy) radiation therapy. [Defs.' Suppl. Mem. at 2-4.]
Defendants argue that the preliminary injunction should not encompass the following procedures: 1) tomotherapy; 2) 4D CT scans; and 3) SBRT. Having considered the parties' evidence and the arguments of counsel, the Court FINDS that 4D CT scans cannot reasonably be performed at facilities other than Queen's and that similar procedures which are available at other facilities will not reasonably allow Dr. Lederer to perform the procedures encompassed by the preliminary injunction.
The Court therefore GRANTS Dr. Lederer's request for a preliminary injunction as to Dr. Lederer's Group Two Patients and Dr. Lederer's Group Three Potential Patients to the extent that those patients require any of the following procedures for the duration of the preliminary injunction: 1) permanent seed implants for prostate cancer; 2) HDR brachytherapy for prostate cancer; 3) volume studies related to permanent seed implants or HDR brachytherapy; 4) external beam radiation therapy related to permanent seed implants or HDR brachytherapy; 5) procedures requiring general anesthesia, including pediatric external beam radiation; 6) endoluminal trachea, bile duct (brachytherapy) radiation therapy; and 7) 4D CT scans ("Covered Procedures").
As to the administrative procedures required to allow Dr. Lederer to perform the Covered Procedures, after reviewing the evidence and counsel's arguments, the Court finds that the necessary procedures are best left to the parties' determination. This Court does not profess to practice medicine or to be in the business of hospital administration. Further, both Plaintiffs and Defendants have consistently affirmed
As to the duration of the preliminary injunction, the Court first declines Defendants' request for a ninety-day deadline on Dr. Lederer's acceptance of new patients who he believes will require one of the Covered Procedures. Such a deadline would be inconsistent with the analysis of Dr. Lederer's entitlement to a preliminary injunction with respect to Count VI. In the litigation of the instant Motion, Plaintiffs have represented that they may be able to move some of the procedures at issue off of Queen's campus within four months, but that others may take up to ten months. This Court therefore ORDERS Plaintiffs to file a status report regarding their efforts to secure alternate facilities for the Covered Procedures. Plaintiffs must file the status report by
In the event that the parties have a dispute regarding the scope or enforcement of the preliminary injunction, the parties may request a status conference to address the matter. The Court, however, emphasizes that the parties must not request a status conference until they have met and conferred about the issue and determined that they cannot resolve the dispute without Court intervention. Cf. Local Rule LR37.1(a) ("The court will not entertain any motion ..., unless counsel have previously conferred, either in person or by telephone, concerning all disputed issues, in a good faith effort to limit the disputed issues and, if possible, eliminate the necessity for a motion....").
Finally, although not encompassed within the scope of the instant Motion, the Court notes that, in the litigation of the Motion, the parties have reached an agreement that Queen's will allow Dr. Lederer, and all the PRO physicians, full access to the medical records of patients under their care, including existing databases and spreadsheets, subject to Queen's existing procedural and administrative requirements for access to medical records. [Defs.' Suppl. Mem. at 7 & n. 2; 3/12/12 Hrg. Trans, filed 3/14/12 (dkt. no. 60), at 8-9.]
On the basis of the foregoing, Plaintiffs' motion for preliminary injunction, filed January 27, 2012, is HEREBY GRANTED IN PART AND DENIED IN PART. The Motion is GRANTED insofar as the Court HEREBY ISSUES a preliminary injunction in favor of Plaintiff John Lederer, M.D., as to: 1) Dr. Lederer's patients for whom Dr. Lederer developed a treatment plan prior to February 1, 2012 which included one or more of the Covered Procedures, but who had not begun any of the Covered Procedures prior to February 1, 2012; and 2) new patients who were referred after February 1, 2012, and who, in the absence of a preliminary injunction, Dr. Lederer could not accept as patients pursuant to Queen's closed-department policy. The Court ORDERS Defendants to allow Dr. Lederer to perform the following procedures at Queen's for the duration of the preliminary injunction:
The preliminary injunction shall remain in effect until the Court rules upon the parties' status reports. Plaintiffs' status report is due on
Plaintiffs' Motion is DENIED in all other respects.
The Court's Order Granting in Part and Denying in Part Plaintiffs' Motion for a Temporary Restraining Order, filed February 3, 2012 [dkt. no. 19], is HEREBY DISSOLVED, and has no effect except to the extent that it provides relevant background information for the instant Order.
IT IS SO ORDERED.
The Court notes that the parties did not provide evidence on the issue whether Queen's receives state or federal funding, such as through Medicare, Medicaid, or research grants. The Court therefore expresses no opinion at this time on the issue whether quasi-public status applies because Queen's receives public funding.