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Sisters of Providence in Washington v. A.A. Pain Clinic12/19/2003
Sisters of Providence in Washington, d/b/a Providence Hospital Anchorage ("Providence"), entered into an exclusive contract with Providence Anchorage Anesthesia Medical Group ("the Group") for chronic pain management services. Leon Chandler, M.D., and Michael Borrello, M.D., are anesthesiologists who were excluded by the contract and claim to have been harmed by it. They sued for anti-competitive conduct and received a jury award that was in part set aside by the trial court. This case involves a number of challenges to the verdict and to the trial court's rulings.
BACKGROUND
The following facts appear to be uncontested. In 1989 Dr. Leon Chandler launched A.A. Pain Clinic, Inc. ("A.A. Pain") to devote more of his practice to pain management. Within the relevant time periods Chandler has also had medical staff privileges at Providence.
On August 25, 1992, Providence and the Group finalized an agreement ("1992 exclusive") granting the Group exclusive rights to provide "anesthesia services" at Providence for two years. The 1992 exclusive defined "anesthesia services" as "the practice of medicine dealing with the management of procedures for rendering a patient insensitive to pain and emotional stress during surgical, obstetric, and other medical procedures and the support of life functions under the stress of anesthetic and surgical procedures." Nothing in the contract indicated that chronic pain management and treatment, as opposed to acute pain treatment, was within its range of services - a possibility previously considered but apparently not adopted by the Group.
In April 1994 the Group hired Dr. James Laidler, an anesthesiologist trained in chronic pain management. Also around that time, the Group opened up its own chronic pain treatment facility, the Alaska Pain Management Clinic, LLC ("APMC").
Providence and the Group renewed and amended their exclusive contract in 1994 ("1994 exclusive"), for the first time including "pain management" within the professional services definition. Also new to this definition was a provision stating, " otwithstanding the above, this agreement is not intended to reduce or limit the existing practice of Dr. Leon Chandler."
Though expressing concerns about the impact the exclusive would have on his practice, Chandler chose not to join the Group before or after either the 1992 or 1994 exclusive. He did however communicate his concerns in at least two letters in 1994 to Dr. Michael Norman, Chief of Anesthesia Department at Providence, and a prominent shareholder of the Group. In those letters Chandler asked for an assurance in writing which would delineate his established privileges at the hospital, as it was his understanding that he was being "grand-fathered in to do pain management at Providence." He also inquired about the privilege status of his colleague, Dr. Swift, suggesting that Swift was needed to cover any problems that might arise when Chandler was out of town.
In January 1995 Providence and the Group signed a "Letter of Understanding," indicating that it came in direct response to questions raised by Chandler: "He is specifically concerned about whether his privileges are being reduced and whether he will be able to obtain coverage for his patients during his absence." The Letter of Understanding purported not to affect Chandler's existing privileges at Providence and further stated that doctors having "the appropriate medical staff privileges" would be allowed to cover for Chandler during his absence.
In August 1995 A.A. Pain hired anesthesiologist Dr. Michael Borrello. Borrello immediately applied for clinical privileges for both anesthesia and pain manage
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