When a restrictive contract limits the availability of a popular treatment, a judge feels the public’s pain.
Dr. R was a 42-year-old urologist in a successful partnership with two colleagues in a small Midwestern city. When the opportunity came to incorporate lithotripsy technology into their practice, the three physicians eagerly snatched it up.
They never anticipated that this decision would bring them into a nasty business dispute and land them in federal court.
The situation began when a national company offered Dr. R and his partners a share in a mobile lithotripsy machine. The innovative technique of using high-energy sound waves to fracture kidney stones fascinated Dr. R, and he was eager to offer this new technology to his patients.
Although the machine would be locally available only two days a week, the opportunity seemed too good to pass up. Dr. R and his associates contracted with the national company as limited partners in a joint venture. They put up several thousand dollars and signed an agreement that included a restrictive covenant prohibiting the clinicians from competing with the new alliance.
Soon Dr. R’s practice had the lithotripter two days a week, and patients no longer had to drive 100 miles to the state capital to undergo the treatment.
During the following year, the practice benefited directly through referrals from patients and emergency department physicians and indirectly as it built a reputation for being on the cutting edge of urologic treatment. Everyone seemed happy: The lithotripter company made money, Dr. R’s group made money, and the patients received top-notch care in their own hometown.
One patient changed all that.