AUSTIN, DONALD C. v. AMERICAN ASSOC NEURO
In the
United States Court of Appeals
For the Seventh Circuit
No. 00-4028
Donald C. Austin,
Plaintiff-Appellant,
v.
American Association of
Neurological Surgeons,
Defendant-Appellee.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 98 C 7685--Elaine E. Bucklo, Judge.
Argued April 9, 2001--Decided June 12, 2001
Before Posner, Evans, and Williams, Circuit
Judges.
Posner, Circuit Judge. Donald C. Austin,
a neurosurgeon, was suspended for six
months by the American Association of
Neurological Surgeons, a voluntary
association incorporated under Illinois
law as a not-for-profit corporation, to
which he belonged (he has since
resigned). He brought this suit against
the Association claiming that he had been
suspended in "revenge" for having
testified as an expert witness for the
plaintiff in a medical malpractice suit
brought against another member of the
Association, a Dr. Ditmore. Austin argues
that the suspension violated Illinois law
(federal jurisdiction is based on the
parties' being citizens of different
states) and seeks damages measured by the
decline in his expert-witness income as a
consequence of the suspension. He also
seeks an injunction expunging the record
of the suspension, but he does not seek
reinstatement to membership.
Ordinarily a dispute between a voluntary
association and one of its members is
governed by the law of contracts, the
parties' contractual obligations being
defined by the charter, bylaws, and any
other rules or regulations of the associ
ation that are intended to create legally
enforceable obligations. See, e.g., Head
v. Lutheran General Hospital, 516 N.E.2d
921, 927 (Ill. App. 1987); Perkaus v.
Chicago Catholic High School Athletic
League, 488 N.E.2d 623, 627 (Ill. App.
1986); Dawkins v. Walker, No. 1991712,
2001 WL 259285, at *5 (Ala. March 16,
2001); Robinson v. Kansas State High
School Activities Ass'n, Inc., 917 P.2d
836, 844 (Kan. 1996); 2 Marilyn E.
Phelan, Nonprofit Enterprises:
Corporations, Trusts, and Associations
sec. 14:03, p. 14-12 (2000). Austin does
not argue that in suspending him the
Association was violating any of its
contractual obligations to him. But
recognizing that membership in good
standing in a professional association
may be essential to a professional's
livelihood, Illinois like other states
has conferred additional legal rights on
members of voluntary associations (not
limited to professional associations). A
member who can show that the
association's action of which he
complains substantially impaired an
"important economic interest" of his can
base suit on procedural irregularities
(denial of "due process") or bad faith as
well as on the usual contractual grounds.
Van Daele v. Vinci, 282 N.E.2d 728, 731-
32 (Ill. 1972); National Assoc. of
Sporting Goods Wholesalers, Inc. v.
F.T.L. Marketing Corp., 779 F.2d 1281,
1285 (7th Cir. 1985) (applying Illinois
law); Jacobson v. New York Racing Ass'n,
305 N.E.2d 765, 768 (N.Y. 1973); Falcone
v. Middlesex County Medical Society, 170
A.2d 791, 796-97 (N.J. 1961); Freeman v.
Sports Car Club of America, Inc., 51 F.3d
1358, 1363 (7th Cir. 1995) (applying
Indiana law); NAACP v. Golding, 679 A.2d
554, 562 (Md. App. 1996); 2 Phelan,
supra, sec. 14:03, pp. 14-10 to 14-11.
The cases add to the list of grounds for
such a suit violation of the
association's charter or bylaws and
contravention of public policy, but the
former ground (violation of charter or
bylaws) is just another way of
assimilating voluntary-association law to
contract law (see, besides the cases
cited earlier, Van Valkenburg v. Liberty
Lodge, 619 N.W.2d 604, 610 (Neb. App.
2000), and Employees' Benefit Ass'n v.
Grissett, 732 So. 2d 968, 975 (Ala.
1998))--and the latter too, since
illegality is a conventional basis in
contract law for rescinding a contract,
see, e.g., E. Allan Farnsworth, Contracts
sec.sec. 5.1, 5.8 (3d ed. 1999),
including a bylaw or charter provision
pursuant to which a member of a voluntary
association has been expelled. See, e.g.,
Crandall v. North Dakota High School
Activities Ass'n, 261 N.W.2d 921, 925-26
(N.D. 1978). What "bad faith" adds to the
litany of grounds is obscure; it can be
regarded either as a component of the due
process analysis, analogous to the
requirement of an impartial tribunal in
an ordinary due process case, or as an
implied term in the contract between the
association and its members.
There were no procedural irregularities
here--Austin received notice and a full
hearing (with counsel) before a panel of
Association members not implicated in his
dispute with Ditmore. The complaint is
rather that the Association acted in bad
faith because it never disciplines
members who testify on behalf of
malpractice defendants as distinct from
malpractice plaintiffs and that it is
against public policy for a professional
association to discipline a member on the
basis of trial testimony unless the
testimony was intentionally false.
Austin had been retained to testify on
behalf of a woman whose recurrent
laryngeal nerve was permanently damaged
in the course of an anterior cervical
fusion performed by Dr. Ditmore,
resulting in a paralyzed vocal cord, dif
ficulty in swallowing, and shortness of
breath that ultimately required her to
undergo a tracheostomy. An anterior
cervical fusion is an operation to repair
a herniated spinal disc at the back of
the neck. The operation is called
"anterior" because the surgeon cuts into
the spine from the front, that is,
through the neck, being careful to push
aside ("retract," in medical lingo) the
tissues in front of the spine. According
to the testimony that Austin was
permitted to give at trial, he believes
and "the majority of neurosurgeons" would
concur that the plaintiff could not have
suffered a permanent injury to her
recurrent laryngeal nerve unless Dr.
Ditmore had been careless, because she
had no anatomical abnormality that might
have enabled such an injury to result
without negligence on the surgeon's part-
-though in the disciplinary hearing it
emerged that, because the recurrent
laryngeal nerve is difficult to see, and
often is not seen during the operation,
it may be impossible to determine whether
the particular patient's nerve is
unusually susceptible to injury. Austin
testified that Ditmore must have rushed
the operation (though there was no other
evidence of that) and as a result
retracted the tissues adjacent to the
recurrent laryngeal nerve too roughly. As
Ditmore pointed out at the hearing,
however, Austin could hardly be
considered an expert on anterior cervical
fusion, having performed only 25 to 30 of
them in more than 30 years in practice,
although he had performed a large number
of other cervical operations. Ditmore in
contrast had performed 700 anterior
cervical fusions--with exactly one case
of permanent damage to a patient's
recurrent laryngeal nerve, namely the
case of the patient who had sued him.
Dr. Austin claimed at the hearing that
he had based his opinion on an article by
a Dr. Ralph Cloward, described by Austin
as the "father" of anterior cervical
fusion, which had concluded that "serious
complications are avoidable and can be
prevented by the surgeon adhering
strictly to the surgical technique
described for" an anterior cervical
fusion; and on another article, which
Austin did not date, or identify other
than by the last name of the author, Wat
kins, which states that "the key to
prevention of traction injuries to the
[recurrent laryngeal] nerve is not to
retract vigorously into the soft
tissues." Although neither side's lawyer
appears to have been aware of the fact,
both articles are reprinted in full in
the appellate record--in fact twice. The
citations are Ralph B. Cloward,
"Complications of Anterior Cervical Disc
Operation and Their Treatment," 69
Surgery 175, 182 (1971); Robert G.
Watkins, "Cervical, Thoracic, and Lumbar
Complications--Anterior Approach," in
Complications of Spine Surgery 211, 221
(Steven R. Garfin ed. 1989).
Neither article supports Austin's
testimony. Cloward was making a general
statement of reassurance about the avoid
ability of serious complications of his
pet operation, not anything specifically
to do with the risk of permanent damage
to the recurrent laryngeal nerve. Watkins
never suggested that all traction
injuries to the recurrent laryngeal nerve
could be prevented by gentle retraction.
Austin admitted that he hadn't discussed
the matter with any other medical
professionals. Expert evidence contrary
to Austin's was given and the jury
returned a verdict for Ditmore. That was
in 1995. Ditmore promptly complained to
the Association and Austin was suspended
in 1997 following a hearing at which he
and Ditmore testified, the latter to the
effect that Austin had no basis for
testifying that most neurosurgeons agreed
with his view. This suit followed quickly
on the heels of the suspension, and the
district court granted summary judgment
in favor of the Association.
Oddly, apart from Cloward's article, and
the Watkins article of unknown provenance
(unknown to the lawyers, that is), no
literature on anterior cervical fusion or
injuries to the recurrent laryngeal nerve
was presented either to the Association's
hearing board or to the district court,
although some additional literature had
been presented at the malpractice trial
and there is an abundance of up-to-date
relevant literature easily retrievable
from the World Wide Web. There we
discover in a cursory search that
permanent damage to the recurrent
laryngeal nerve is a known though
fortunately rare complication of anterior
cervical fusion (a 1982 study found only
52 cases of paralysis to the recurrent
laryngeal nerve in 70,000 such
operations--.07 percent) against which
the patient should be warned. See, e.g.,
informeddecision.com, http://www.
informeddecision.com/options/cervical/cr
vfusna.htm; wvneuro.com,
http://www.wvneuro.com/anterior_
cervical_fusion_page_1_.htm;
headpain.com,
http://www.headpain.com/p_acf.htm;
neurosurgery.org,
http://www.neurosurgery.org/health/patie
nt/detail.asp? DisorderID=36. Asked on
cross-examination at the malpractice
trial to explain why the medical
literature did not confirm his view of
what a majority of neurosurgeons think,
Austin responded lamely that the "medico-
legal atmosphere that we're in these
days" had deterred the surgical community
from acknowledging that this particular
complication of anterior cervical fusion
could occur only through the surgeon's
negligence.
But that is an aside, as we do not
understand Austin to be contending that
the record is inadequate to support an
inference that his testimony was indeed
irresponsible. Since neither article on
which he relies (for, just as in the
disciplinary hearing and in the district
court, he cites no other literature in
this court) states that permanent injury
to the recurrent laryngeal nerve of a
patient with a normal neck never occurs
without negligence on the part of the
surgeon, and since his position if
accepted would, by making the surgeon an
insurer against any serious mishaps in an
anterior cervical fusion, make the
operation exceptionally risky in a
financial or liability sense for the
surgeon, and since Austin plainly had not
attempted to sound the opinion of his
profession to determine whether a
majority of the nation's several thousand
neurosurgeons agree with his unorthodox
view, there is little doubt that his
testimony was irresponsible and that it
violated a number of sensible-seeming
provisions of the Association's ethical
code. These include provisions requiring
that a member appearing as an expert
witness should testify "prudently," must
"identify as such, personal opinions not
generally accepted by other
neurosurgeons," and should "provide the
court with accurate and documentable
opinions on the matters at hand."
The dismissal of Austin's suit was
unquestionably correct. To begin with, he
failed to show that an "important
economic interest," as the Illinois cases
interpret the term, is at stake.
Membership in the American Association of
Neurological Surgeons is not a
precondition to the practice of
neurosurgery. The AANS is not even the
only association of such surgeons, though
we were told without contradiction that
it is the premier one. Austin continues
to practice neurosurgery notwithstanding
his suspension and subsequent voluntary
resignation from the Association, and he
doesn't even seek reinstatement--only
damages and expungement of the record of
his disciplinary suspension. Indeed,
despite the suspension, he continues to
testify extensively as an expert witness
in medical malpractice cases. True, his
income from testifying has fallen to 35
percent of what it was before the
suspension, when it was more than
$220,000 a year. Austin's brief describes
this drop in income as "disastrous" and
"catastrophic," but that is a hyperbolic
characterization. Thirty-five percent of
$220,000 is a healthy $77,000--and this
is merely as it were Dr. Austin's
moonlighting income, income from a
sideline to his primary profession, which
is that of a neurosurgeon, not an expert
witness (he does not claim the dubious
title of "professional expert witness").
That is not the kind of professional body
blow that the cases have in mind when
they speak of an "important economic
interest" jeopardized by the action of a
voluntary association. Compare Van Daele
v. Vinci, supra, 282 N.E.2d at 731-32,
where expulsion from an association of
independent retail grocers placed the
plaintiff grocer at a potentially
catastrophic competitive disadvantage by
denying him access to the volume
discounts that the association obtained
from its suppliers. At the very least,
the association's action must jeopardize
the principal source of the
professional's livelihood, and not a mere
sideline. Compare Falcone v. Middlesex
County Medical Society, supra, 170 A.2d
at 794, where the refusal of a local
medical society to admit a duly licensed
physician to membership prevented him as
a practical matter from practicing as a
surgeon and obstetrician by denying him
access to local hospitals. Where
membership is optional, expulsion (or
suspension, or denial of admission) is
not deemed the invasion of an important
economic interest. Treister v. American
Academy of Orthopaedic Surgeons, 396
N.E.2d 1225, 1231-32 (Ill. App. 1979);
Finn v. Beverly Country Club, 683 N.E.2d
1191, 1193 (Ill. App. 1997); Lee v.
Snyder, 673 N.E.2d 1136, 1139 (Ill. App.
1996).
But there is much more that is wrong
with this suit. There is no basis for
Austin's claim that the Association
entertains only complaints against
members who testify on behalf of
malpractice plaintiffs. What is true is
that to date all complaints (but there
have been very few) have been against
such members; but the reason is at once
obvious and innocent. If a member of the
Association is sued for malpractice and
another member gives testimony for the
plaintiff that the defendant believes is
irresponsible, it is natural for the
defendant to complain to the Association;
a fellow member has irresponsibly labeled
him negligent. If a member of the
Association who testifies for a plaintiff
happens to believe that the defendant's
expert witness was irresponsible, he is
much less likely to complain, because
that expert (and fellow member of the
Association) has not accused him of
negligence or harmed him in his practice
or forced him to stand trial or gotten
him into trouble with his liability
insurer. The asymmetry that Austin points
to as evidence of bad faith is thus no
evidence of bad faith at all; and he has
no other evidence of bad faith.
In support of his further claim that it
is against public policy for a
professional association to sanction one
of its members for irresponsible (as
distinct from knowingly false) testimony,
Austin argues that the threat of such
sanctions is a deterrent to the giving of
expert evidence and so a disservice to,
indeed an interference with, the cause of
civil justice. We disagree and think the
courts of Illinois would likewise; this
kind of professional self-regulation
rather furthers than impedes the cause of
justice. By becoming a member of the
prestigious American Association of
Neurological Surgeons, a fact he did not
neglect to mention in his testimony in
the malpractice suit against Ditmore,
Austin boosted his credibility as an
expert witness. The Association had an
interest--the community at large had an
interest--in Austin's not being able to
use his membership to dazzle judges and
juries and deflect the close and
skeptical scrutiny that shoddy testimony
deserves. It is no answer that judges can
be trusted to keep out such testimony.
Judges are not experts in any field
except law. Much escapes us, especially
in a highly technical field, such as
neurosurgery. When a member of a
prestigious professional association
makes representations not on their face
absurd, such as that a majority of
neurosurgeons believe that a particular
type of mishap is invariably the result
of surgical negligence, the judge may
have no basis for questioning the belief,
even if the defendant's expert testifies
to the contrary.
The Daubert rule, it is true, requires
judges to screen proposed expert
witnesses carefully to make sure that
their testimony will be responsible,
Daubert v. Merrell Dow Pharmaceuticals,
Inc., 509 U.S. 579 (1993); Rosen v. Ciba-
Geigy Corp., 78 F.3d 316, 318-19 (7th
Cir. 1996); Wilson v. City of Chicago, 6
F.3d 1233, 1238-39 (7th Cir. 1993), but
only federal courts are bound by the rule
(though this is not a limitation
particularly relevant here, since the
malpractice suit that Austin testified in
was tried in a federal district court);
and it is not airtight. (See Ambrosini v.
Labarraque, 101 F.3d 129, 133-34 (D.C.
Cir. 1996), discussing the limited nature
of the judge's gatekeeping role under
Daubert.) Judges need the help of
professional associations in screening
experts. The American Association of
Neurological Surgeons knows a great deal
more about anterior cervical fusion than
any judge, and if the Association finds
in a proceeding that comports with the
basic requirements of due process of law
that a member of the Association gave
irresponsible expert testimony, that is a
datum that judges, jurors, and lawyers
are entitled to weigh heavily. One has
only to read the transcript of the
disciplinary hearing, and particularly
the questions that the members of the
hearing panel, all neurosurgeons of
course, directed to Dr. Austin, to
realize how far the ordinary voir dire of
an expert can fall short. The market
response to Austin's suspension has not
been irrational.
We doubt that he would embrace the
converse of the rule for which he
contends, and concede that if a judge
rules that a proposed expert's testimony
is inadmissible because irresponsible,
that ruling is a proper predicate for
professional discipline. Fair enough; a
judge is not a surgical expert and his
ruling on the admissibility of an
expert's witness may be in error. But by
the same token the judge's ruling that
expert testimony is admissible should not
be taken as conclusive evidence that it
is responsible testimony.
There is a great deal of skepticism
about expert evidence. It is well known
that expert witnesses are often paid very
handsome fees, and common sense suggests
that a financial stake can influence an
expert's testimony, especially when it is
technical and esoteric and hence
difficult to refute in terms intelligible
to judges and jurors. More policing of
expert witnessing is required, not less.
Not that professional self-regulation is
wholly trustworthy. Professional
associations have their own axes to
grind. No doubt most members of the AANS
are hostile to malpractice litigation,
and this may impart a subtle bias to its
evaluation of members' complaints, though
there is nothing in the transcript of the
hearing before the Association's hearing
panel to justify such an inference. But
even in cases such as this, where the
absence of an "important economic
interest" deprives the disciplined member
of the special protections of Illinois
voluntary-association law, he has
recourse to defamation law should the
discipline falsely impugn his
professional competence, see, e.g.,
Alvord-Polk, Inc. v. F. Schumacher & Co.,
37 F.3d 996, 1015 (3d Cir. 1994);
Fitzgerald v. Minnesota Chiropractic
Ass'n, Inc., 294 N.W.2d 269 (Minn. 1980),
including his competence to testify
responsibly on issues within the scope of
his professional expertise. If Austin was
wronged by the Association, he had
remedies, but not under the Illinois law
of voluntary associations.
We note finally that there is a strong
national interest, which we doubt not
that Illinois would embrace, in
identifying and sanctioning poor-quality
physicians and thereby improving the
quality of health care. Although Dr.
Austin did not treat the malpractice
plaintiff for whom he testified, his
testimony at her trial was a type of
medical service and if the quality of his
testimony reflected the quality of his
medical judgment, he is probably a poor
physician. His discipline by the
Association therefore served an important
public policy exemplified by the federal
Health Care Quality Improvement Act, 42
U.S.C. sec.sec. 11101 et seq., which
encourages hospitals to conduct
professional review of its staff members
and report malpractice to a federal
database. As an inducement to the
vigorous performance of this reporting
function, the Act immunizes hospitals
from liability for disciplinary actions
they take against staff physicians,
provided only that the hospital is acting
in good faith. See 42 U.S.C. sec.sec.
11101, 11111, 11112; Brader v. Allegheny
General Hospital, 167 F.3d 832, 839-41
(3d Cir. 1999); Wayne v. Genesis Medical
Center, 140 F.3d 1145, 1148 (8th Cir.
1998) (per curiam); Imperial v. Suburban
Hospital Ass'n, Inc., 37 F.3d 1026, 1028
(4th Cir. 1994).
As a final detail, irrelevant on the
view we take of this case but possibly
relevant to future cases, we note
themerited difficulty of proof of damages
in a case such as this. Austin cannot
obtain damages for any injury to his
professional reputation and resulting
fee-earning opportunities as a result of
the accurate revelation of his having
given irresponsible testimony under oath
in a suit for medical malpractice. That
injury is the direct consequence of
socially valuable information; that it
might have been precipitated by an
unlawful act (though we think not) would
not make the act a "cause" of the injury
in a sense that the law recognizes.
Brunswick Corp. v. Pueblo Bowl-O-Mat,
Inc., 429 U.S. 477 (1977), establishes
the principle in the antitrust context,
but it is equally apropos the common law
tort context. A competitor of a merged
firm claimed to be injured because the
merger, though unlawful, had intensified
lawful competition with it. The Court
held that the injury this firm had
sustained was not the kind of injury that
antitrust law tries to prevent--on the
contrary, lawful competition is an
"injury" (to competitors hurt by
competition) that the antitrust laws seek
to promote. To put this differently, the
merger had both good and bad effects, and
the good effects should not be punished
by an award of damages. It is the same
here. Tort law does not seek to prevent
injuries arising from the dissemination
of truthful information that rationally
induces withdrawal of patronage from the
person whom the information concerns. So
Austin, had he proved a wrong, would have
had to partition the injury resulting
from it between the part due to the
revelation of truthful information and
the part due to the disciplinary
suspension itself. Compare the many cases
which hold that the victim of defamation
can obtain damages only for any
incremental harm done to his reputation
by the defamation--if his reputation has
already been destroyed by truthful
information, he has no remedy. E.g.,
McIlvain v. Jacobs, 794 S.W.2d 14, 15-16
(Tex. 1990); Desnick v. American
Broadcasting Cos., 44 F.3d 1345, 1350
(7th Cir. 1995); Haynes v. Alfred A.
Knopf, Inc., 8 F.3d 1222, 1228 (7th Cir.
1993); Re v. Gannett Co., 480 A.2d 662,
669 (Del. Super. 1984), affirmed, 496
A.2d 553 (Del. 1985).
Affirmed.
Williams, Circuit Judge, concurring in
part and in the judgment. I join the
majority opinion only insofar as it holds
that Dr. Austin has not demonstrated an
"important economic interest" in
membership in the American Association of
Neurological Surgeons. Without an
important economic interest, Dr. Austin
may not challenge in the courts the
Association's private, internal procedure
under Illinois law. Van Daele v. Vinci,
282 N.E.2d 728, 731 (Ill. 1972). As that
holding is dispositive of this case, in
my view we need not proceed to predict
whether Illinois would find the
Association's procedure a violation of
public policy. Cf. Disher v. Info. Res.,
Inc., 873 F.2d 136, 141 (7th Cir. 1989)
("We are reluctant to opine unnecessarily
on questions of state law."); Graphic
Sales, Inc. v. Sperry Univac Div., Sperry
Corp., 824 F.2d 576, 581 (7th Cir. 1987)
("As a federal court whose jurisdiction
is based on diversity of citizenship, we
are particularly hesitant to decide
unsettled questions of state law
unnecessarily.").