This is the Urbandale office building from which four Iowa pathologists launched a new business, Goldfinch Laboratories. (Photo via Google Earth)
A lawsuit in which Iowa pathologists are suing their former colleagues is escalating, with one side accusing the other of self-righteously attempting to maintain a monopoly at the expense of patients.
The lawsuit is one of three involving allegations of unfair competition, harassment, retaliation and discrimination among central Iowa pathologists.
The suit was filed five months ago in U.S. District Court for the Southern District of Iowa by four pathologists who last year established Goldfinch Laboratory of Urbandale – physicians Tiffani Milless, Caitlin Halverson, Renee Ellerbroek and Jared Abbott.
The four are suing their previous employers, Iowa Pathology Associates of Des Moines and Regional Laboratory Consultants, alleging the two companies have tried to suppress competition for pathology services in central Iowa and maintain a monopoly, all in violation of state and federal law.
Each of the companies provides dermatopathology and other pathology services for patients in central Iowa whose physicians require laboratory services that provide medical diagnoses from biological specimens.
The lawsuit alleges that since 2021, IPA and RLC pressured its pathologists to sign employment agreements that include a no-compete clause. At the time, the four IPA-employed pathologists who would later defect and form Goldfinch, refused to sign the agreement.
The lawsuit claims the agreement was not intended to prohibit the use of confidential corporate information and was instead aimed at maintaining IPA’s and RLC’s monopoly on services.
While the legal fight pits one group of pathologists against another, lawyers for Goldfinch argue it’s the patients who suffer from the defendants’ practices. Goldfinch accuses IPA of refusing to share biopsy slides with Goldfinch pathologists, even when those slides are required to ensure the continuity of care offered to patients and even when, according to Goldfinch, the refusal “could well have caused harm to patients.”
Goldfinch fights motion to dismiss
IPA and RLC have denied any wrongdoing and filed a motion to have the case dismissed.
In a recent response to that motion, Goldfinch rejects what it calls the defendants’ “self-righteous assertion that any injuries suffered by Goldfinch are its own fault.” Goldfinch argues IPA and RLC took advantage of their “monopoly power” and charged “above-market fees for their services” to small Iowa hospitals, increasing the cost of health care for rural Iowans.
Specifically, Goldfinch claims IPA and RLC charged rural hospitals in Iowa “at least 400% of the actual Medicare fee schedule amount for the technical component of pathology services.”
“Moreover,” Goldfiich’s attorneys have told the court, “they had no incentive to improve the quality or timeliness of their services because they faced no competition.”
Once Goldfinch was launched, the company’s lawyers argue, IPA and RLC “engaged in a series of unfair and deceptive practices designed to drive Goldfinch out of business or, at a minimum, to cripple its ability to compete … The defendants seem to believe that the formation of a competitive practice that would undermine their monopoly entitled them to take whatever unfair actions, and to make whatever false statements, that they concluded would undo the competitive threat posed by Goldfinch. Their position apparently is that Goldfinch had it coming for threatening their monopoly.”
A judge has to rule on the motion to dismiss the case.
In addition to seeking damages for an estimated $3.3 million in losses, Goldfinch is seeking an injunction barring IPA and RLC from engaging in the “unlawful acts” alleged as part of the lawsuit.
Two related lawsuits advance in state court
The federal lawsuit follows a state-court lawsuit filed by IPA and RLC against the four Goldfinch partners in late 2022 that is in the final stages of litigation.
That lawsuit seeks to block Goldfinch from soliciting IPA clients or using IPA information, and alleges the Goldfinch pathologists were “flagrantly, rampantly and disloyally working against” IPA’s interests even before they left IPA. A bench trial in that case was held last month, but the court has yet to issue a decision and recent post-trial briefs are sealed from public view.
Separately, two of the Goldfinch pathologists — Tiffani Milless and Caitlin Halverson – have filed a discrimination lawsuit against IPA and RLC, alleging they were paid $200,000 to $350,000 annually, which they claim was far less than what some of the less qualified male doctors were paid.
The lawsuit also alleges various forms of harassment, including IPA’s alleged distribution of corporate-branded T-shirts in honor of Laboratory Week. One year, the slogan on the back of the shirt pertained to Formalin, which is a preservative commonly used in labs, and read, “Formalin Causes Shrinkage, Too” — a “Seinfeld”-inspired reference to male genitalia.
A trial in that case is scheduled for August 2025.