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| [1] | UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT |
| [2] | Nos. 87-2672, 87-2777 |
| [3] | 1990.C07.41521 <http://www.versuslaw.com>;
895 F.2d 352 |
| [4] | decided: February 7, 1990. |
| [5] | DR. CHESTER A. WILK, D.C., DR. JAMES W. BRYDEN, D.C., DR. PATRICIA B.
ARTHUR, D.C., AND DR. MICHAEL D. PEDIGO, D.C., PLAINTIFFS-APPELLEES, CROSS-APPELLANTS, v. AMERICAN MEDICAL ASSOCIATION, DEFENDANT-APPELLANT, CROSS-APPELLEE. DR. CHESTER A. WILK, D.C., DR. JAMES W. BRYDEN, D.C., DR. PATRICIA B. ARTHUR, D.C., AND DR. MICHAEL B. PEDIGO, D.C., PLAINTIFFS-CROSS-APPELLANTS, V. AMERICAN MEDICAL ASSOCIATION, JOINT COMMISSION ON ACCREDITATION OF HOSPITALS, AMERICAN COLLEGE OF PHYSICIANS AND AMERICAN ACADEMY OF ORTHOPAEDIC SURGEONS, DEFENDANTS-CROSS-APPELLEES |
| [6] | Appeal from the United States District Court for the Northern District
of Illinois, Eastern Division. No. 76 C 3777 -- Susan Getzendanner, Judge. |
| [7] | George P. McAndrews, argued, Robert C. Ryan, Robert H. Resis, MCANDREWS,
HELD & MALLOY, Chicago, Illinois, Paul E. Slater, argued, SPERLING,
SLATER & SPITZ, Chicago, Illinois, for Plaintiffs-Appellees. |
| [8] | Jack R. Bierig, Newton N. Minow, David W. Carpenter, SIDLEY & AUSTIN,
Chicago, Illinois, for AMERICAN MEDICAL ASSOCIATION, Defendant-Appellant. |
| [9] | Robert E. Nord, D. Kendall Griffith, HINSHAW, CULBERTSON, MOELMANN, HOBAN
& FULLER, Chicago, Illinois, Ronald J. Russel, Chicago, Illinois, Daniel
M. Schuyler, argued, James L. Simon, SCHUYLER, ROCHE & ZWIRNER, Chicago,
Illinois, Perry L. Fuller, HINSHAW, CULBERTSON, MOELMANN, HOBAN & FULLER,
Chicago, Illinois, Phil C. Neal, argued, NEAL, GERBER, EISENBERG & LURIE,
Chicago, Illinois, for Defendants-Appellees. |
| [10] | Wood, Jr., Ripple, and Manion, Circuit Judges. |
| [11] | Author: Manion |
| [12] | MANION, Circuit Judge. |
| [13] | The district court held that the American Medical Association ("AMA")
violated § 1 of the Sherman Act, 15 U.S.C. § 1, by conducting an illegal
boycott in restraint of trade directed at chiropractors generally, and the
four plaintiffs in particular. The court granted an injunction under § 16
of the Clayton Act, 15 U.S.C. § 26, requiring, among other things, wide
publication of its order. The court held that two additional defendants,
the Joint Commission on Accreditation of Hospitals ("JCAH"), and
the American College of Physicians ("ACP"), had acted independently
of the AMA's boycott, and dismissed them from the case. Wilk v. American
Medical Association, 67 11 F. Supp. 1465 (N.D. Ill. 1987). The AMA appeals
the finding of liability, and contends that, in any event, injunctive relief
is unnecessary. Plaintiffs cross-appeal against JCAH and ACP. We affirm. |
| [14] | I. |
| [15] | We have observed before that "antitrust cases are notoriously extended."
Ball Memorial Hospital Inc. v. Mutual Hospital Insurance Inc.,
784 F.2d 1325,
1333 (7th Cir. 1986). This case is no exception. Plaintiffs Chester A. Wilk,
James W. Bryden, Patricia B. Arthur, and Michael D. Pedigo, are licensed
chiropractors. Their complaint, originally filed in 1976, charged several
defendants with violating §§ 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1
and 2. It sought both damages and an injunction. (For a list of all the
original defendants, see
671 F. Supp. at 1469-70.
We discuss here only those relevant to this appeal.) At the first trial,
plaintiffs' primary claim was that the defendants engaged in a conspiracy
to eliminate the chiropractic profession by refusing to deal with plaintiffs
and other chiropractors. Defendants accomplished this, plaintiffs claimed,
by using former Principle 3 of the AMA's Principles of Medical Ethics, which
prohibited medical physicians from associating professionally with unscientific
practitioners.*fn1
Plaintiffs contended that the AMA used Principle 3 to boycott chiropractors
by labelling them "unscientific practitioners," and then advising
its members, among others, that it was unethical for medical physicians
to associate with chiropractors. According to the plaintiffs, the other
defendants joined the AMA's boycott. |
| [16] | A jury returned a verdict for the defendants. An earlier panel of this
court, however, reversed that judgment. Wilk v. American Medical Association,
719 F.2d 207
(7th Cir. 1983) (Wilk I). In reversing and ordering a new trial, we held
that, in applying the rule of reason, the jury had been allowed to consider
factors beyond the effect of the AMA's conduct on competition. The district
court had improperly failed to confine the jury's consideration to the "patient
care motive as contrasted with [the] generalized public interest motive."
Id. at 229. |
| [17] | Just before the 1987 retrial, plaintiffs abandoned their damages claim
and sought only injunctive relief. This shifted the case's focus from the
past to the present regarding whether plaintiffs were entitled to an injunction
under § 16 of the Clayton Act. After a lengthy bench trial, the district
court concluded that the AMA, through former Principle 3, had unreasonably
restrained trade in violation of § 1 of the Sherman Act. Because the district
court adequately detailed the rather lengthy and complex facts of this case,
we only briefly summarize them here. (The facts relevant to the claims against
JCAH and ACP are set out in section IV of this opinion regarding plaintiffs'
cross-appeal.) |
| [18] | In 1963 the AMA formed its Committee on Quackery ("Committee").
The Committee worked diligently to eliminate chiropractic. A primary method
to achieve this goal was to make it unethical for medical physicians to
professionally associate with chiropractors. Under former Principle 3, it
was unethical for medical physicians to associate with "unscientific
practitioners." In 1966, the AMA's House of Delegates passed a resolution
labelling chiropractic an unscientific cult. |
| [19] | The district court found the AMA's purpose in all of this was to prevent
medical physicians from referring patients to chiropractors and from accepting
referrals of patients from chiropractors, so as to prevent chiropractors
from obtaining access to hospital diagnostic services and membership on
hospital medical staffs, to prevent medical physicians from teaching at
chiropractic colleges or engaging in any joint research, and to prevent
any cooperation between the two groups in the delivery of health care services.
Despite the Committee's efforts, chiropractic ultimately became licensed
in all 50 states. |
| [20] | In 1977, the AMA's Judicial Council (now known as the Council on Judicial
and Ethical Affairs, although we will use its previous name, as did the
district court) adopted new opinions which permitted medical physicians
to refer patients to chiropractors, as long as the physicians were confident
that the services would be performed according to accepted scientific standards.
In 1979, the AMA's House of Delegates begrudgingly adopted Report UU, stating
that some things chiropractors did were not without therapeutic value; but
even so, it stopped short of saying that these services were based on scientific
standards. In 1980, the AMA revised its Principles of Medical Ethics, eliminating
Principle 3. With this gesture, the district court found, the AMA's boycott
ended.
671 F. Supp. at 1477.
(We discuss plaintiffs' contention that the boycott continued until 1983
in the section addressing their cross-appeal against JCAH.) |
| [21] | At trial, the AMA raised the so-called "patient care defense"
which this court had formulated in its earlier opinion in this case. Wilk
I,
719 F.2d at 227.
That defense required the AMA generally to show that it acted because of
a genuine, and reasonable, concern for scientific method in patient care
and that it could not adequately satisfy this concern in a way that was
less restrictive of competition. The district court rejected the defense.
The court found the AMA failed to establish that throughout the relevant
period (1966-1980) their concern for scientific methods in patient care
had been objectively reasonable. The court also found the AMA similarly
failed to show it could not adequately have satisfied its concern for scientific
method in patient care in a manner less restrictive of competition than
a nationwide conspiracy to eliminate a licensed profession.
671 F. Supp. at 1481-84.
|
| [22] | The AMA settled three antitrust lawsuits in 1978, 1980, and 1986 brought
by chiropractors, stipulating and agreeing that under the Judicial Council's
current opinions, a medical physician could, without fear of discipline
or sanction by the AMA, refer a patient to a licensed chiropractor when
the physician believed that such a referral would benefit the patient. Similarly,
physicians could also choose to accept or decline patients sent to them
by chiropractors. The AMA also confirmed that physicians could teach at
chiropractic colleges or seminars. |
| [23] | The AMA's present position regarding chiropractic is that it is ethical
for a medical physician to professionally associate with chiropractors,
if the physician believes that the association is in his patient's best
interests. The district court found that the AMA had not previously communicated
this position to its membership. |
| [24] | Based on these findings, the court held that the AMA and its members violated
§ 1 of the Sherman Act by unlawfully conspiring to restrain trade. According
to the court, the AMA's boycott's purpose had been to eliminate chiropractic;
the boycott had substantial anticompetitive effects; the boycott had no
counterbalancing pro-competitive effects; and the AMA's unlawful conduct
injured the plaintiffs. |
| [25] | Despite the fact that the district court found the conspiracy ended in
1980, it concluded that the illegal boycott's "lingering effects"
still threatened plaintiffs with current injury and ordered injunctive relief.
The court concluded that the boycott caused injury to chiropractors' reputations
which had not been repaired, and current economic injury to chiropractors.
Further, the AMA never affirmatively acknowledged that there are no impediments
to professional association and cooperation between chiropractors and medical
physicians, except as provided by law. Thus, chiropractors continued to
suffer because the boycott's negative effects (namely, inhibiting AMA members'
individual decision-making in their relationships with chiropractors) still
remained. The district court believed it was important that the AMA make
its members aware of the present AMA position (i.e., it is ethical for medical
physicians to professionally associate with chiropractors, if the physician
believes it is in the patient's best interest) to eliminate the illegal
boycott's lingering effects, and ordered an injunction designed to accomplish
that result.
671 F. Supp. at 1507-08
(form of injunction). |
| [26] | II. |
| [27] | A. Noerr-Pennington Doctrine |
| [28] | The AMA complains that the district court relied almost entirely on AMA
conduct that was protected under the Noerr-Pennington doctrine in finding
that it illegally conspired to restrain trade. Eastern Railroad Presidents'
Conference v. Noerr Motor Freight Inc.,
365 U.S. 127,
5 L. Ed. 2d 464,
81 S. Ct. 523
(1961); United Mineworkers v. Pennington,
381 U.S. 657,
14 L. Ed. 2d 626,
85 S. Ct. 1585
(1965). See also California Motor Transport Co. v. Trucking Unlimited,
404 U.S. 508,
30 L. Ed. 2d 642,
92 S. Ct. 609
(1972). The Noerr-Pennington doctrine protects businesses and other associations
when they join to petition legislative bodies, administrative agencies,
or courts for actions having anticompetitive consequences. Id. See also
Wilk I,
719 F.2d at 229.
The doctrine does not, however, protect purely private action, not genuinely
aimed at prompting governmental action. See Allied Tube and Conduit Corp.
v. Indian head, Inc.,
486 U.S. 492,
108 S. Ct. 1931,
100 L. Ed. 2d 497
(1988). |
| [29] | The AMA contends that its statements regarding chiropractors were either
statements about chiropractic's deficiencies or bona fide opinions on matters
of public interest. The district court acknowledged the AMA's claim and,
to the extent that the Committee's work regarding influencing legislation
on the state and federal levels or in informational activities to inform
the public on the nature of chiropractic was involved, it did not consider
such conduct in reaching its decision. Wilk,
671 F. Supp. at 1473
n. 2. But apart from the protected activity, the district court found substantial
evidence of acts aimed at achieving the boycott's goals, not legislative
action. Id. at 1473-77. |
| [30] | The court found that the AMA, through a resolution recommended by its
Board of Trustees, and adopted by its House of Delegates, branded chiropractic
"an unscientific cult."
671 F. Supp. at 1473.
This implicitly invoked Principle 3's ethical proscription on professional
association with chiropractors. Subsequent AMA action, id. at 1473-74, made
clear the ethical bar on professional association (which included prohibiting
medical physicians from referring patients to chiropractors, and from receiving
referrals from chiropractors; providing diagnostic, laboratory, or radiology
services for chiropractors; and from teaching chiropractors, or practicing
together in any manner). The AMA widely circulated these documents. The
court also found the Committee had regularly communicated with medical boards
and associations, informing them that professional association between medical
physicians and chiropractors was unethical.
671 F. Supp. at 1473.
|
| [31] | We disagree with the AMA that the district court "repeatedly [cited]"
AMA documents which "[focused] entirely on the AMA's 'vigorous educational
program' and on 'the necessity to move aggressively against chiropractic
in the state legislatures." One such document the AMA points to is
an internal AMA memorandum (PX 464, Jt.App. 776-77) from the Committee to
the Board of Trustees, discussing the AMA's goal of "the containment
of chiropractic and, ultimately, the elimination of chiropractic."
It expressly disavows any intention of using the document publicly. And
while the document details some activity that was likely protected, it suggests
that activity may have been done only "to minimize the chiropractic
argument that the [AMA's] campaign is simply one of economics. . . ."
(Jt.App. 777). Also falling outside of the Noerr-Pennington doctrine's protection
is an AMA Judicial Council opinion, holding that it was unethical for medical
physicians to professionally associate with chiropractors, which was circulated
to AMA members and to 56 medical specialty boards (Jt.App. 801-03). Finally,
in 1973, the AMA drafted "Standard X," which incorporated the
unscientific practitioners' ethical bar into the JCAH accrediting standards.
At the AMA's urging, JCAH adopted Standard X. |
| [32] | These activities were not aimed at obtaining legislative action. They
were instead aimed at medical physicians and hospitals, cautioning them
that it was unethical and indeed dangerous (the obvious inference from receiving
health care from an unscientific cult) to associate professionally with
chiropractors. In the face of the district court's specific findings on
this issue, we cannot say it erred in relying on these activities. |
| [33] | B. Unreasonable Restraint of Trade |
| [34] | The central question in this case is whether the AMA's boycott constituted
an unreasonable restraint of trade under § 1 of the Sherman Act. A restraint
is unreasonable if it falls within the category of restraints held to be
per se unreasonable, or if it violates what is known as the "Rule of
Reason." Federal Trade Commission v. Indiana Federation of Dentists,
476 U.S. 447,
457-58,
90 L. Ed. 2d 445,
106 S. Ct. 2009
(1986); NCAA v. Board of Regents of the University of Oklahoma,
468 U.S. 85,
103,
82 L. Ed. 2d 70,
104 S. Ct. 2948
(1984); National Society of Professional Engineers v. United States,
435 U.S. 679,
692,
55 L. Ed. 2d 637,
98 S. Ct. 1355
(1978). Restraints that are per se unreasonable include agreements whose
nature and necessary effect are so plainly anticompetitive that no elaborate
study of the industry or restraint is needed to establish their illegality.
Nat'l. Society of Professional Engineers,
435 U.S. at 692.
Concerted refusals to deal, described as group boycotts, typically are held
unlawful per se. See Indiana Federation of Dentists,
476 U.S. at 458;
Consolidated Metal Products, Inc. v. American Petroleum Institute,
846 F.2d 284,
290 (5th Cir. 1988). The per se rule avoids a burdensome inquiry into actual
market conditions where the likelihood of anticompetitive effect is so obvious
that the costs of determining whether the particular restraint at issue
involves anticompetitive conduct is unwarranted. Jefferson Parish Hospital
District No. 2 v. Hyde,
466 U.S. 2,
15-16 n. 25,
80 L. Ed. 2d 2,
104 S. Ct. 1551
(1984). In contrast, the rule of reason category includes agreements whose
competitive effect can only be evaluated by analyzing the facts peculiar
to the business involved, the particular restraint's history, and the reasons
it was imposed. Nat'l. Society of Professional Engineers,
435 U.S. at 692.
The test of legality under the rule of reason is whether the challenged
conduct promotes or suppresses competition. Id. at 691; see also Chicago
Board of Trade v. United States,
246 U.S. 231,
238,
62 L. Ed. 683,
38 S. Ct. 242
(1918). The purpose of both approaches (per se or rule of reason) is to
decide the restraint's competitive significance. |
| [35] | The Supreme Court historically has been slow to condemn rules adopted
by professional associations as unreasonable per se. Indiana Federation
of Dentists,
476 U.S. at 458.
The Court is also reluctant to extend the per se rule to restraints imposed
in the context of business relationships where a practice's economic impact
is not immediately apparent. Id. Likewise, judicial inexperience with a
particular arrangement cautions against extending the per se approach's
reach insofar as judging the alleged restraint's lawfulness under the antitrust
laws. NCAA v. Board of Regents,
468 U.S. at 100
n.21; see also Northwest Wholesale Stationers, Inc. v. Pacific Stationery
and Printing Co.,
472 U.S. 284,
294,
86 L. Ed. 2d 202,
105 S. Ct. 2613
(1985); Arizona v. Maricopa County Medical Society,
457 U.S. 332,
344,
73 L. Ed. 2d 48,
102 S. Ct. 2466
(1982); Consolidated Metal Products,
846 F.2d at 290.
Nevertheless, the Supreme Court has not refrained from applying the per
se approach solely on the grounds that the judiciary has little antitrust
experience in the particular industry. See Arizona v. Maricopa County Medical
Society,
457 U.S. at 349-51
(health care industry). |
| [36] | As a general rule, § 1 claims under the Sherman Act should be evaluated
under the rule of reason unless the challenged action falls into the category
of agreements which are deemed so harmful in their effect on competition
so as to be conclusively presumed to be unreasonable and thus illegal without
a detailed inquiry as to the precise harm they are alleged to have caused.
Northwest Wholesale Stationers,
472 U.S. at 289-90;
Consolidated Metal Products,
846 F.2d at 289-90.
In this court's first go-round with this case, it held that the AMA's alleged
boycott should be measured under the rule of reason. Wilk I,
719 F.2d at 221-22.
We held that in the context of a learned profession, the nature and extent
of the restraint's anticompetitive effect was too uncertain to warrant per
se treatment. Id. at 221. Moreover, we looked to the Supreme Court's decisions
involving professional associations (e.g., Arizona v. Maricopa County Medical
Society,
457 U.S. 332,
73 L. Ed. 2d 48,
102 S. Ct. 2466
; Nat'l. Society of Professional Engineers,
435 U.S. 679,
55 L. Ed. 2d 637,
98 S. Ct. 1355
; and Goldfarb v. Virginia State Bar,
421 U.S. 773,
44 L. Ed. 2d 572,
95 S. Ct. 2004
(1975)), and noted the pains the Court had taken to carve out the possibility
that a practice which might violate the Sherman Act in another context might
not violate the Act when a learned profession was involved. Wilk I,
719 F.2d at 222.
Thus, we concluded, "[a] canon of medical ethics purporting, surely
not frivolously, to address the importance of scientific method gives rise
to questions of sufficient delicacy and novelty at least to escape per se
treatment." Id. |
| [37] | On appeal, plaintiffs urge that we change course and apply instead the
per se rule. Plaintiffs claim that the Supreme Court's decisions in Indiana
Federation of Dentists and Northwest Wholesale Stationers undercut our prior
decision to treat this case under the rule of reason. But like the district
court, we decline plaintiffs' invitation to revisit this issue. The Court
in Indiana Federation of Dentists did not itself apply a per se rule. Nor
do we read either case as requiring us to employ the per se analysis on
the facts of this case. And, in any event, even under the rule of reason,
the boycott was unlawful. Cf. Parts and Electric Motors, Inc. v. Sterling
Electric, Inc.,
826 F.2d 712,
720-21 (7th Cir. 1987) (because jury had concluded that the challenged action
-- an alleged tying arrangement -- had unreasonably restrained competition,
and had found liability under the rule of reason, it was unnecessary to
decide the case under the per se inquiry). |
| [38] | The threshold issue in any rule of reason case is market power. Schachar
v. American Academy of Ophthalmology, Inc.,
870 F.2d 397,
398 (7th Cir. 1989); Valley Liquors, Inc. v. Renfield Importers Ltd.,
822 F.2d 656,
666 (7th Cir. 1987) (Valley II). Market power is the ability to raise prices
above the competitive level by restricting output. NCAA v. Board of Regents,
468 U.S. at 109
n. 38; Ball Memorial Hospital,
784 F.2d at 1331.
Whether market power exists in an appropriately defined market is a fact-bound
question, and appellate courts normally defer to district court findings
on that issue. Jefferson Parish Hospital,
466 U.S. at 42
(O'Connor, J., concurring). Here, the district court found the relevant
market to be the provision of health care services to the American public
nationwide, particularly care for the treatment of musculoskeletal problems.
671 F. Supp. at 1478.
Several facts demonstrated the AMA's market power within the health care
services market. AMA members constituted a substantial force in the provision
of health care services in the Unite States and they constituted a majority
of medical physicians. AMA members received a much greater portion of fees
paid to medical physicians in the United States than non-AMA members. Id.
The evidence showed that AMA members received approximately 50% of all fees
paid to health care providers. Finally, according to plaintiffs' expert,
the AMA enjoyed substantial market power. The district court also found
there was substantial evidence that the boycott adversely affected competition,
and that a showing of such adverse effects negated the need to prove in
any elaborate fashion market definition and market power, relying on Indiana
Federation of Dentists,
476 U.S. at 460-62.
|
| [39] | The AMA first contests the district court's finding of market power. It
challenges the court's reliance on market share evidence as a basis to find
market power and the district court's lumping together all AMA members as
a group in assessing market share as a basis for its market power finding.
We are not convinced the trial court erred. The district court properly
relied on the AMA membership's substantial market share in finding market
power. While we cautioned against relying solely on market share as a basis
for inferring market power in Ball Memorial Hospital,
784 F.2d at 1336,
we did not rule out that approach. Id. See also Parts and Electric Motors,
826 F.2d at 720
n. 7; Valley II,
822 F.2d at 666-67.
This is especially so where there are barriers to entry and no substitutes
from the consumer's perspective. Ball Memorial Hospital,
784 F.2d at 1336.
Here the district court found the AMA membership was a substantial force
in the American health care market, and that there were substantial barriers
to the entry of new chiropractors into the field, such as substantial education
requirements,
671 F. Supp. at 1479.
|
| [40] | The district court also relied on substantial evidence of adverse effects
on competition caused by the boycott to establish the AMA's market power.
In Indiana Federation of Dentists, the Supreme Court explained that since
"the purpose of the inquiries into market definition and market power
is to determine whether an arrangement has the potential for genuine adverse
effects on competition, 'proof of actual detrimental effects, such as reduction
of output' can obviate the need for an inquiry into market power, which
is but a 'surrogate for detrimental effects.'"
476 U.S. at 460-61,
quoting 7 P. Areeda, Antitrust Law para. 1511, p. 429 (1986). See also,
P. Areeda, The Rule of Reason -- A Catechism on Competition, 55 Antitrust
Law Journal 571, 577 (1986). Thus, the district court recited the boycott's
anticompetitive effects: |
| [41] | It is anticompetitive and it raises costs to interfere with the consumer's
free choice to take the product of his liking; it is anticompetitive to
prevent medical physicians from referring patients to a chiropractor; (Lynk
-- 1427-28) it is anticompetitive to impose higher costs on chiropractors
by forcing them to pay for their own x-ray equipment rather than obtaining
x-rays from hospital radiology departments or radiologists in private practice;
and it is anticompetitive to prevent chiropractors from improving their
education in a professional setting by preventing medical physicians from
teaching or lecturing to chiropractors. (Tr. 1409-22, 1424-31.]! |
| [42] |
671 F. Supp. at 1478-79. See also Wilk I,
719 F.2d at 214.
These findings eliminated the need for an inquiry into market power. |
| [43] | The AMA's attempts to discredit the evidence the district court relied
on to find anticompetitive effects are unavailing. The record does not show,
as the AMA contends, that forcing chiropractors to purchase their own x-ray
equipment had no adverse effect on chiropractors. And the district court
did not clearly err in finding that former Principle 3 reduced demand for
chiropractic services simply because there was evidence that a patient had
seen a chiropractor before and after having seen a medical physician. Moving
on, the AMA argues that even if market power existed, it escapes liability
under the rule of reason because former Principle 3 had overriding pro-competitive
effects. The AMA's argument is not unpersuasive in the abstract; but unfortunately
it relies on evidence which the district court rejected as "speculative."
671 F. Supp. at 1479.
Essentially, the AMA argues that the market for medical services is one
where there is "information asymmetry." In other words, health
care consumers almost invariably lack sufficient information needed to evaluate
the quality of medical services. This increases the risk of fraud and deception
on consumers by unscrupulous health care providers possibly causing what
the AMA terms "market failure": consumers avoiding necessary treatment
(for fear of fraud), and accepting treatment with no expectation of assured
quality. The AMA's conduct, the theory goes, ensured that physicians acquired
reputations for quality (in part, by not associating with unscientific cultists),
and thus allowed consumers to be assured that physicians would use only
scientifically valid treatments. This in effect simultaneously provided
consumers with essential information and protected competition. |
| [44] | Getting needed information to the market is a fine goal, but the district
court found that the AMA was not motivated solely by such altruistic concerns.
Indeed, the court found that the AMA intended to "destroy a competitor,"
namely, chiropractors. It is not enough to carry the day to argue that competition
should be eliminated in the name of public safety. See Nat'l. Society of
Professional Engineers,
435 U.S. 679,
55 L. Ed. 2d 637,
98 S. Ct. 1355
. |
| [45] | But the AMA persists in arguing that pro-competitive effects were achieved
by the boycott through what its expert called "nonverbal communication."
In rejecting this argument, the district court stated that the AMA's expert's |
| [46] | theory is that the boycott constituted nonverbal communication which informed
consumers about the differences between medical physicians and chiropractors,
and that this had a pro-competitive effect. (Tr. 1411-12.) I reject this
opinion as speculative. (Tr. 1434-43.) Mr. Lynk [William J. Lynk, the AMA's
expert] neither conducted nor read any studies regarding the efficacy of
such nonverbal communications. Id. He neither conducted nor read any surveys
of consumer opinion to determine whether consumers were confused about the
differences between medical physicians and chiropractors. (Id.) I saw no
evidence of any such confusion during the trial. Mr. Lynk's opinion does
not accord with common sense. A nationwide conspiracy intended by its participants
to contain and eliminate a licensed profession cannot be justified on the
basis of Mr. Lynk's personal opinion that it was pro-competitive, nonverbal
communication to consumers. |
| [47] |
671 F. Supp. at 1479. We find the district court's reasoning compelling.
|
| [48] | The AMA, however, argues that the district court missed the boat in rejecting
Mr. Lynk's theory. The relevant question, according to the AMA, is not whether
consumers would perceive any differences between physicians and chiropractors
today; rather, it is whether they would ever view a physician's referral
of a patient to a chiropractor as a physician's endorsement of the chiropractor's
practices. But the AMA misses the essence of the district court's ruling.
The trial court rejected the AMA's theory as speculative because Lynk neither
conducted nor read any studies regarding nonverbal communications; his views
were only his "personal opinion."
671 F. Supp. at 1479.
In fact, Lynk testified that an empirical study could not even be performed
to determine the pro-competitive effects of Principle 3. (Jt.App. at 351-52.)
Thus, even if the AMA is right in asserting that the relevant inquiry is
how a physician's referral would be viewed by the consumer, there was no
underlying study or data to support its theory. |
| [49] | Moreover, Lynk's testimony did not bear out the AMA's assertions regarding
the "relevant question." The AMA says that it is irrelevant to
its theory whether health care consumers perceive any differences between
chiropractors and medical physicians, and that Lynk's testimony went to
the role of reputation and information in health care service markets. But
in testifying as to the pro-competitive function of standards generally,
Lynk testified that they improve consumer information by making it possible
for consumers to make more informed choices "about what it is they
are getting from alternative sellers of the same or substitute products
to the extent that it allows them to make better choices." (Jt.App.
343.) Lynk also testified that one of the interests served by former Principle
3 was that it would clarify the distinctions between the profession of medicine
and alternative professions "that are not based on medical science
but which can create the appearance that they are." (Jt.App. 351.)
This seems to go precisely to the perceived differences between chiropractors
and medical physicians. |
| [50] | In sum, we agree with the district court that the AMA's boycott constituted
an unreasonable restraint of trade under § 1 of the Sherman Act under the
rule of reason. Therefore, the district court's findings that the AMA's
boycott was anticompetitive, and was not counter-balanced by any pro-competitive
effects were not erroneous. Nat'l. Society of Professional Engineers,
435 U.S. at 691.
|
| [51] | C. Patient Care Defense |
| [52] | In the AMA's first appeal, we modified the rule of reason to allow the
AMA to justify its boycott of chiropractors if it could show that it was
motivated by a concern for "patient care." Wilk I,
719 F.2d at 227.
We were persuaded that measuring former Principle 3's reasonableness required
a more flexible approach than the traditional rule of reason inquiry provided.
Id. at 226-27. Thus, we explained that if plaintiffs met their burden of
persuasion on remand by showing that former Principle 3 and the implementing
conduct had restricted competition rather than promoting it, the burden
of persuasion would shift to the defendants to show: |
| [53] | (1) that they genuinely entertained a concern for what they perceive as
scientific method in the care of each person with whom they have entered
into a doctor-patient relationship; (2) that this concern is objectively
reasonable; (3) that this concern has been the dominant motivating factor
in defendants' promulgation of Principle 3 and in the conduct intended to
implement it; and (4) that this concern for scientific method in patient
care could not have been adequately satisfied in a manner less restrictive
of competition. |
| [54] | Id. at 227. |
| [55] | In this appeal, plaintiffs ask us to reconsider the patient care defense,
urging that three subsequent Supreme Court decisions have implicitly rejected
it; see Patrick v. Burget,
486 U.S. 94,
104-05,
100 L. Ed. 2d 83,
108 S. Ct. 1658
(1988); Indiana Federation of Dentists,
476 U.S. at 458-60;
and Jefferson Parish Hospital Dist. No. 2,
466 U.S. at 25
n. 41. While these decisions may cast doubt on the patient care defense's
continuing vitality, they did not address the specific issue of whether
the patient care defense on the facts in this case would be allowed. While
we acknowledge that there has been some academic criticism of the defense
(see Kissam Antitrust Boycott Doctrine, 69 Iowa L. Rev. 1165, 1214-16 (1984);
Havighurst, Doctors and Hospitals; An Antitrust Perspective on Traditional
Relationships, 1984 Duke L.J. 1071, 1103 n. 101 (1984)), we need not revisit
the issue because the district court's finding that the AMA did not satisfy
its burden of persuasion under the defense was not clearly erroneous. |
| [56] | The district court held that the AMA failed to meet the defense's second
and fourth elements: that its concern for scientific method in patient care
was objectively reasonable, and that the concern for scientific method in
patient care could not have been satisfied adequately in a manner less restrictive
of competition, respectively. While only those two rulings are at issue,
it is useful to summarize the district court's treatment of the entire defense. |
| [57] | Although doubting the AMA's genuineness regarding its concern for scientific
method in patient care, the district court concluded that the AMA established
that element. While it was attacking chiropractic as unscientific, the AMA
simultaneously was attacking other unscientific methods of disease treatment
(e.g., the Krebiozen treatment of cancer), and, as the district court noted,
the existence of medical standards or guidelines against unscientific practice
was relatively common.
671 F. Supp. at 1481.
The court, however, found that the AMA failed to carry its burden of persuasion
as to whether its concern for scientific method in patient care was objectively
reasonable. |
| [58] | The court acknowledged that during the period that the Committee on Quackery
was operating, there was plenty of material supporting the belief that all
chiropractic was unscientific. But, according to the court (and this is
unchallenged), at the same time, there was evidence before the Committee
that chiropractic was effective, indeed more effective than the medical
profession, in treating certain kinds of problems, such as back injuries.
The Committee was also aware, the court found, that some medical physicians
believed chiropractic could be effective and that chiropractors were better
trained to deal with musculoskeletal problems than most medical physicians.
Moreover, the AMA's own evidence suggested that at some point during its
lengthy boycott, there was no longer an objectively reasonable concern that
would support a boycott of the entire chiropractic profession. Also important
was the fact that "it was very clear" that the Committee's members
did not have open minds to pro-chiropractic arguments or evidence.
671 F. Supp. at 1481-83.
|
| [59] | Next, the court found that the AMA met its burden in establishing that
its concern about scientific method was the dominant motivating factor for
promulgating former Principle 3, and in the conduct undertaken and intended
to implement it.
671 F. Supp. at 1483.
But even so, the court acknowledged there was evidence showing that the
AMA was motivated by economic concerns, as well. |
| [60] | Finally, the court concluded that the AMA failed to meet its burden in
demonstrating that its concern for scientific method in patient care could
not have been satisfied adequately in a manner less restrictive of competition.
The court stated that the AMA had presented no evidence of other methods
of achieving their objectives such as public education or any other less
restrictive approach.
671 F. Supp. at 1483.
|
| [61] | The AMA attacks the district court's findings as to the second element
(concern for scientific method as objectively reasonable), claiming that
the court rewrote the element to require the AMA to show its concern with
chiropractic (rather than with scientific patient care) was objectively
reasonable. Wilk,
671 F. Supp. at 1481.
We disagree. The AMA's claim in passing that the court "[misconceived]"
the defense is barely explained in one of its 67 footnotes; but in any event,
we think the district court was true to the defense and adequately supported
its holding with several key factual determinations. It recited the evidence
directly at odds with the AMA's belief that all chiropractic was unscientific.
671 F. Supp. at 1481-83.
The AMA does not challenge the district court's findings, so those findings
must stand. Beyond that, the AMA reads this element too rigidly. The issue
here is whether its concern for scientific method in the care of patients
was objectively reasonable. In the context of this particular case, then,
the question is whether that concern justified a boycott of chiropractic.
Based on the undisputed facts, it did not. |
| [62] | The AMA's challenge to the fourth element (concern for scientific method
in patient care could not have been adequately satisfied in a manner less
restrictive of competition) is equally unpersuasive. The AMA completely
fails to offer any evidence to support its burden. Instead, it argues that
its former guideline had at most a de minimis effect on chiropractors' costs,
and thus could not be treated as an attempt to contain and eliminate the
entire chiropractic profession. This, however, ignores the fact that the
AMA's self-proclaimed and described "mission" was to contain,
and ultimately eliminate chiropractic. (Jt. App. 776.) The AMA participated
in a nationwide boycott and conspiracy designed to contain and eliminate
a profession that was licensed in all fifty states at the time the Committee
on Quackery was disbanded. As the district court held, it is "a difficult
task" to argue that this was "the only way to satisfy the AMA's
concern for the use of scientific method in patient care."
671 F. Supp. at 1483.
Furthermore, we reject the AMA's attempts to minimize the effect its boycott
had on competition. The district court found the boycott had several anticompetitive
effects, such as raising costs by interfering with consumers' free choice,
which are unrefuted.
671 F. Supp. at 1478-79,
1480.*fn2 |
| [63] | D. Antitrust Injury |
| [64] | To seek an injunction under § 16 of the Clayton Act, a private plaintiff
must allege "threatened loss or damage 'of the type the antitrust laws
were designed to prevent and that flows from that which makes defendants'
acts unlawful.'" Cargill Inc. v. Monfort of Colorado Inc.,
479 U.S. 104,
113,
93 L. Ed. 2d 427,
107 S. Ct. 484
(1986) (quoting Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc.,
429 U.S. 477,
489,
50 L. Ed. 2d 701,
97 S. Ct. 690
(1977)). Here, the district court concluded that plaintiffs had shown the
kind of injury the antitrust laws were designed to prevent.
671 F. Supp. at 1479-80.
Plaintiff's economic expert (Stano) compared chiropractors' incomes with
podiatrists' and optometrists' incomes (comparable limited license practitioners)
over the relevant period of time and concluded that chiropractors' incomes
had been lower than both. This Styno viewed as consistent with plaintiffs'
boycott theory. He also concluded that a jump in chiropractors' incomes
during the 1978-1980 period was consistent with the acknowledged lessening
of the boycott by the AMA during that time. Lynk, the AMA's economic expert,
though he faulted the data plaintiffs' expert relied upon, agreed that if
he were to compare chiropractors' incomes to comparable groups, he also
would include podiatrists and optometrists (although he stated he would
seek further explanations for differences between the groups' incomes).
In the district court's view, further support for plaintiffs' theory of
harm was the "very strong evidence of a pervasive, nationwide, effective
conspiracy which by its very nature would have affected the demand curve
for chiropractic services and adversely affected the income of chiropractors."
671 F. Supp. at 1480.
Finally, the district court added, there was evidence of injury to reputation
suffered by chiropractors. (Both economic experts, according to the court,
believed that injury to reputation would constitute an anticompetitive effect
of the boycott.) |
| [65] | The AMA argues that plaintiffs failed to establish an antitrust injury.
Essentially the argument goes somewhat like this. This case is not a class
action; rather, it involves only the four named plaintiffs. The only harm
here would have been to "scientific" chiropractors. Because, according
to the AMA (but not the district court), plaintiffs were not and are not
"scientific practitioners," they could not have suffered any injury
from former Principle 3. If any chiropractors could establish antitrust
injury, it would be those who have "renounced the theory of sublaxations
and limit their practices to conservative physical therapy modalities."
The AMA's argument thus hinges on its lengthy assertion that the four plaintiffs
are "unscientific practitioners." The problem with this approach,
however, is that the district court did not agree with the AMA that the
plaintiffs were "unscientific" practitioners. Although the court
acknowledged that there was some evidence that the plaintiffs did not use
common methods in treating common symptoms, and that the treatment of patients
appeared to be undertaken on an ad hoc rather than on a scientific basis,
it did not go so far as the AMA believes, and establish or find that the
plaintiffs in this case were "unscientific practitioners." Indeed,
it expressly held that no one involved in the case, including the plaintiffs,
believed that chiropractic treatment should be used for treatment of diseases
such as cancer, diabetes, heart disease, high blood pressure, and infections.
671 F. Supp. at 1482.
Regardless, neither the district court, nor this court is equipped to determine
whether chiropractic is "scientific" or not. So the AMA's argument
must fail in any event. We see the AMA's argument here as yet another invitation
to tackle the question of whether chiropractic is "either good or bad,
efficacious or deleterious, quackery or science."
671 F. Supp. at 1481.
The district court repeatedly stated it was not deciding whether chiropractic
was scientific. 671 F. Supp. 1482 n. 8, 1482-83, 1506-07. Yet both sides
(below it was plaintiffs,
671 F. Supp. at 1482;
here, it is the AMA) continue to color their arguments with how they view
their own, or the other side's, profession. Like the district court, we
do not see our task as deciding whether or not chiropractic is scientific. |
| [66] | The AMA also quibbles with the evidence of antitrust injury. The district
court rejected the same arguments.
671 F. Supp. at 1480.
We too are unpersuaded. The AMA offers no good reason why we should accept
its expert's opinion over that of the plaintiffs', and we decline to do
so. But beyond that, the district court relied on more than just plaintiffs'
expert in determining there was an antitrust injury. It also relied on the
evidence of the "pervasive, nationwide, effective conspiracy which
by its very nature would have affected the demand curve for chiropractic
services and therefore adversely affected income of chiropractors."
671 F. Supp. at 1480.
(Further, we also note that the AMA is far too generous in its characterization
of plaintiffs' expert's "concession" that the AMA's conduct was
"lawful and pro-competitive.") |
| [67] | The evidence established that all chiropractors' incomes were lower than
those of comparable limited license practitioners. And the evidence was
that all chiropractors suffered an injury to their reputation.
671 F. Supp. at 1480.
Indeed, the district court found that the individual plaintiffs suffered
rejections and lost opportunities and that "the individual plaintiffs
have been personally harmed, and continue to be personally threatened, by
a lack of association with members of the AMA caused by the boycott and
the lingering effects of the boycott."
671 F. Supp. at 1486.
Moreover, the court stated that "[the] activities of the AMA undoubtedly
have injured the reputation of chiropractors generally. This kind of injury
more likely than not was sustained by the four plaintiffs." Id. This
directly refutes the AMA's contention that there was nothing but a showing
of "classwide injury."*fn3 |
| [68] | III. |
| [69] | Entitlement To Injunctive Relief |
| [70] | Section 16 of the Clayton Act provides that: |
| [71] | Any person, firm, corporation, or association shall be entitled to sue
for and have injunctive relief . . . against threatened loss or damage by
a violation of the antitrust laws . . . when and under the same conditions
and principles as injunctive relief against threatened conduct that will
cause loss or damage is granted by courts of equity, under the rules governing
such proceedings. . . . |
| [72] | 15 U.S.C. § 26. Although the district court concluded that the AMA's boycott
ended in 1980 (when former Principle 3 was eliminated), it held that an
injunction nevertheless was necessary in this case. |
| [73] | The trial court concluded there were lingering effects of the AMA's conspiracy;
that the AMA never acknowledged the lawlessness of its past conduct, and
in fact continued to maintain that it had always been in compliance with
the antitrust laws; that the AMA had never affirmatively stated that it
was ethical for medical physicians to professionally associate with chiropractors;
that the AMA had never publicly stated to its members the admissions made
in the trial court about chiropractic's improved nature, despite the fact
that the AMA currently claims that it made changes in its policy in recognition
of chiropractic's change and improvement; that the AMA never publicly retracted
articles such as "The Right and Duty of Hospitals to Deny Chiropractor
Access to Hospitals"; that a medical physician had to read very carefully
the current AMA Judicial Council opinions to realize that there had been
a change in the treatment of chiropractors; and, finally, that the AMA's
systematic, long-term wrongdoing and long-term intent to destroy chiropractic
"[suggested]" that an injunction was appropriate.
671 F. Supp. at 1488.
The court believed that it was important to make AMA members aware of the
AMA's present position -- that it is ethical for medical physicians to professionally
associate with chiropractors, if the physician believes it is in his patient's
best interest -- to eliminate the unlawful boycott's lingering effects.
The injunction, then, is to "assure that the AMA does not interfere
with the right of a physician, hospital or other institution to make an
individual decision on the question of professional association."
671 F. Supp. at 1507.
|
| [74] | The injunction requires the AMA to arrange publication of the district
court's order in the Journal of the American Medical Association, mail the
order to each of the AMA's members, and revise the current opinions of the
AMA's Council on Judicial and Ethical Affairs (formerly the Judicial Council)
so that it states the AMA's present position on chiropractic in a separate
provision, with a heading and index references referring to chiropractors.
671 F. Supp. at 1507-08.
|
| [75] | The AMA correctly points out that the district court wrongly placed the
burden of proof on the AMA in deciding whether injunctive relief was appropriate
in this case. But the AMA does not argue how, if at all, the court's error
prejudiced it. We do not think the AMA was prejudiced. |
| [76] | The district court treated the AMA's argument in this respect as an argument
that the claim for injunction was moot instead of an argument that no injunctive
relief was necessary. Although these concepts are similar, they are analytically
distinct, and a court could find that a case is not moot yet deny injunctive
relief. See United States v. Concentrated Phosphate Export Association,
Inc.,
393 U.S. 199,
203,
21 L. Ed. 2d 344,
89 S. Ct. 361
(1968); W.T. Grant,
345 U.S. at 633;
TRW, Inc. v. Federal Trade Commission,
647 F.2d 942,
953-54 (9th Cir. 1981); SCM Corporation v. Federal Trade Commission,
565 F.2d 807,
812 (2d Cir. 1977). There are practical differences between the concepts,
as well. The mootness burden is a heavy one, and the defendant must show
that there is no reasonable expectation that the wrong will be repeated.
By contrast, the burden for showing whether injunctive relief is necessary
is on the moving party; here plaintiffs. The district court wrongly placed
the burden of persuasion on the AMA.
671 F. Supp. at 1484.
But no matter which party bore the burden on this issue, the district court's
ultimate findings leave no doubt that injunctive relief was appropriate. |
| [77] | A party moving for an injunction must show some cognizable danger of recurrent
violation, that is, something more than the mere possibility which serves
to keep the case alive. W.T. Grant,
345 U.S. at 633.
"To be considered are the bona fides of the expressed intent to comply,
the effectiveness of the discontinuance and, in some cases, the character
of the past violations." Id. Courts require "clear proof"
that an unlawful practice has been abandoned, and must guard against attempts
to avoid injunctive relief "by protestations of repentance and reform,
especially when abandonment seems timed to anticipate suit, and there is
a probability of resumption." Oregon State Medical Society,
343 U.S. at 333.
These issues are committed to the trial court's discretion. Id. at 634;
see also U.S. v. Concentrated Phosphate,
393 U.S. at 203-04.
Thus, we will not substitute our judgment for the district court's. The
question is not how we would rule if we were addressing the question in
the first instance. Rather, the question is whether the district court's
decision was reasonable. See United States v. United States Currency in
the Amount of $103,387.27,
863 F.2d 555,
561 (7th Cir. 1988). |
| [78] | We believe the court's decision was reasonable. It found a cognizable
danger of recurrent violations, was unimpressed with the AMA's expressed
intent to comply with antitrust laws, was unpersuaded by the effectiveness
of the AMA's discontinuance of its boycott, and properly considered the
systematic and long-term nature of the boycott. W.T. Grant,
345 U.S. at 633.
|
| [79] | The AMA characterizes many of its challenges to the district court's decision
to order an injunction as attacks on the court's findings of fact. Thus,
for example, the AMA argues that the district court "erroneously found
a risk of recurrence." But the facts are relatively undisputed. The
AMA is really challenging the district court's decision that those facts
supported an injunction. |
| [80] | In this regard, the district court found that the AMA's behavior in connection
with the 1983 revision of the JCAH accreditation standards for hospitals
indicated the AMA's likelihood of returning to its old (anti-chiropractic)
ways. (The facts surrounding the 1983 revisions are set out more fully in
section IV below, in connection with plaintiffs' cross appeal against JCAH.)
The AMA's original position toward those standards was favorable to chiropractors
in that it supported the JCAH position that each hospital be permitted to
decide for itself, under applicable state law, which licensed health care
providers would be allowed hospital privileges and membership on the medical
staff. However, after an outcry from its membership the AMA was forced to
change its original position to satisfy its constituents, namely, medical
physicians; it thus sought to have JCAH approve a more restrictive accreditation
standard which would ensure medical and osteopathic physicians control of
the medical staff and patient care in hospitals.
671 F. Supp. at 1476,
1488. This incident led the trial court to conclude that the AMA's "present
assurances [were] good only until the next chiropractic battle." Id.
at 1488. |
| [81] | The facts surrounding the 1983 JCAH revisions are not in dispute. Even
so, the AMA terms the district court's reliance on this incident as "baffling."
Thus, it contends that even under the district court's injunction order
it will still be allowed to urge restrictions on chiropractors before recognized
accrediting bodies, and that its conduct regarding the JCAH standards would
be consistent with that mandate. The AMA also argues that the district court's
conclusion that the JCAH's 1983 revision was reasonable, indeed proper,
validates the AMA's call to action to ensure medical and osteopathic physician
control of medical staff and patient care. We disagree. |
| [82] | While the AMA, under the district court's order, may in the future be
free to urge restrictions or take positions with respect to chiropractic,
the AMA's action with respect to the 1983 JCAH revisions must be viewed
in the context in which it occurred. It came on the heels of a lengthy illegal
boycott of chiropractors. And although the AMA believed the JCAH's initial
standards were consistent with the then current antitrust legal climate,
it was unable to maintain its position in the face of a barrage of criticism
from its members.
671 F. Supp. at 1476-77.
That coupled with the fact that the district court found the AMA even through
the date of trial continued to respond to requests for information on chiropractic
by sending out anti-chiropractic literature, id., was enough for the district
court properly to conclude that there was evidence that suggests a possible
return to the AMA's former policies. Finally, the JCAH's action in 1983,
although found reasonable and proper, is wholly distinct from the AMA's
action. JCAH was an independent body, motivated by completely different
concerns. Thus, while the AMA was attempting to contain and eliminate competitors
(i.e., chiropractic), JCAH was acting only to assure that responsibility
for patient care in acute care hospitals remained in the hands of medical
and osteopathic physicians, the only practitioners who could perform that
acute care. |
| [83] | In challenging the need for an injunction, the AMA also contends that
it is legally bound by settlements in three separate chiropractic antitrust
lawsuits to the position that chiropractors are licensed limited practitioners
and that no form of professional association with chiropractors is unethical.
These settlements, according to the AMA, eliminate any threat that the boycott
will recur. Again, we disagree. Although the settlements may be some evidence
militating against the likelihood of recurrence, it is not so strong as
to reverse the district court's determination. The trial court considered
this evidence,
671 F. Supp. at 1487-88,
but found it was outweighed by other evidence (recited above in connection
with the JCAH 1983 revisions) of a risk of a return to the AMA's former
policies. Id. at 1488. Notably, the district court found it relevant that
in all of the settlements, there was no admission of liability. |
| [84] | The AMA additionally argues that the permanence of its post-1977 guidelines
(and hence the unlikelihood of a return to its old ways) is emphasized by
the "fact" that they were undertaken entirely independently of
this lawsuit. However, the district court never found this "fact";
and the district court could properly be skeptical of the AMA's "protestations
of repentance and reform," Oregon State Medical Society,
343 U.S. at 333,
especially since the AMA's change of position occurred not too long after
this suit was filed in 1976. |
| [85] | Another factor supporting the injunction is that the AMA still vigorously
maintains that its boycott activity was lawful, and has never acknowledged
its past conduct's lawlessness. This coupled with the AMA's begrudging statement
on professional association with chiropractors was sufficient for the district
court to doubt (1) the AMA's intent to comply with the antitrust laws in
the future absent an injunction, and (2) the effectiveness of the discontinuation
of its illegal conduct. Importantly, the district court found that even
as of the trial date, the AMA continued to respond to requests for information
on chiropractic by sending outdated anti-chiropractic literature. Further,
none of the AMA's policies contain any affirmative statement that the boycott
is over. An example of the AMA's begrudging and ineffective removal of the
ethical bar to professional association is Opinion 3.01 of its Judicial
Council. The AMA cites Opinion 3.01 as evidence that its revised guideline
has eliminated the prior guidelines on chiropractic, and removed any negative
references to specific licensed limited practitioners. But as the district
court noted, Opinion 3.01 is entitled "Nonscientific Practitioners."*fn4
Thus, the AMA member still must look under the heading "Nonscientific
Practitioners" to discover that it is now permissible to associate
with chiropractors. Any beneficial effect of Opinion 3.01 likely is lost
because it is buried in a category almost certain to conjure up the ethical
prohibitions of the past. |
| [86] | Yet another factor supporting an injunction is what the district court
termed the boycott's lingering effects." The court found not only that
plaintiffs had been personally harmed by the boycott, but that they continued
to be personally harmed and threatened by a lack of association with members
of the AMA as a result of the boycott and its lingering effects.
671 F. Supp. at 1486.
The boycott, while it was in full bloom, "more likely than not affected
individual decision-making by AMA members and other medical physicians in
their relationship with chiropractors;" and until AMA members learn
that the AMA's policies in fact have changed, AMA members' decision-making
with respect to professional association with chiropractors will continue
to be affected, according to the trial court. The evidence amply supported
this conclusion. It is based not only on the lengthy and successful boycott,
but on the begrudging nature of the AMA's more recent and lawful changes. |
| [87] | The district court also found a continuing injury to chiropractors' reputation
as a result of the boycott. Because the AMA has never made any attempt to
publicly repair that damage, the court found that chiropractors will continue
to suffer injury to reputation from the boycott.
671 F. Supp. at 1486-87.
The AMA's publication of its changes and its settlements were not enough,
in the eyes of the district court, to overcome these harmful effects. The
AMA has not convinced us that the district court was wrong in this assessment. |
| [88] | The AMA's strongest challenge comes to the district court's findings with
respect to the lingering effects on chiropractors' incomes. The court found
that the injury to chiropractors' incomes threatened to continue through
the date of trial.
671 F. Supp. at 1487.
For this it relied on plaintiffs' expert's analysis regarding chiropractic
income levels through 1986. (Jt.App. 57.) The court found this continuing
harm existed, even though plaintiffs' expert's last data point showed that
chiropractors' income in 1984 exceeded that of podiatrists and optometrists
-- the comparable professions.
671 F. Supp. at 1487.
The court did not, however, "find," as the AMA contends, that
chiropractors' incomes had actually increased in 1984; rather, it only acknowledged
the expert's data in this regard. Id. Obviously, given its finding regarding
1986 income levels (i.e., that chiropractors' incomes continued to suffer),
the court was more persuaded by the expert's income projections into 1986
regarding the lagging of chiropractors' income, than by the 1984 data. The
AMA's assertion that there is no basis for the district court to, rely on
the projection of chiropractors' income is baseless. There was testimony
that chiropractors' incomes would still have suffered in 1986 as a result
of the boycott. (Jt.App. 57.) But even without the lingering effects on
chiropractors' income, there still remain the effects on professional association
and reputation, which by themselves may be sufficient to show continuing
harm from the boycott. |
| [89] | In sum, even though the district court wrongly allocated the burden of
proof in deciding whether injunctive relief was necessary, its ultimate
findings regarding the risk of a return to the unlawful policies, the effectiveness
of the AMA's discontinuance or voluntary cessation, and the character of
the past violations, without question satisfy the proper standard. W.T.
Grant,
345 U.S. at 633.
None of the objections the AMA raises on appeal undercuts the district court's
decision to grant an injunction. That the AMA feels an injunction is not
necessary (or for that matter, that even we may have felt the same had we
considered the case as an original matter), is not the appropriate test.
That call was for the district court to make. Id. Because the district court
did not abuse its discretion, we uphold its decision to award injunctive
relief.*fn5 |
| [90] | Anticipating this negative (for it) result, the AMA makes a last-ditch
perfunctory argument. It attacks the injunction, arguing that it is unnecessarily
overbroad, purports to award classwide relief in a case that was never certified
as a class action, and "[implicates] the AMA's rights under the First
Amendment." None of these arguments are convincing. |
| [91] | True enough, as the AMA observes, an injunction in a private antitrust
suit should award a plaintiff injunctive relief "only to the extent
necessary to protect it from future damage likely to occur if the defendant
continues the unlawful antitrust conduct." Ohio-Sealy Mattress Manufacturing
Co. v. Sealy, Inc.,
669 F.2d 490,
495 (7th Cir. 1982). But beyond this general principle, the AMA does not
make any genuine argument that the injunction is overbroad. Instead, it
simply asserts that the primary beneficiaries of the district court's order,
insofar as it requires the order to be mailed to every AMA member, that
it be published in the Journal of the American Medical Association, and
that the AMA revise a national ethical publication, are the some 30,000
chiropractors in the nation as a whole who were not parties to this case.
Doubtless, these other chiropractors may benefit from the mass mailing and
publication required by the district court's order. But this does not necessarily
make the injunction overbroad. |
| [92] | The AMA's suggestion that the publications and mailings should have been
limited to the four communities in which the individual plaintiffs practiced
unnecessarily limits the relief, and ignores the public interest served
by private antitrust suits. Such suits can effectively open competition
to a market that was previously closed by illegal restraints. National Society
of Professional Engineers,
435 U.S. at 698;
see also International Salt Co. v. United States,
332 U.S. 392,
401,
92 L. Ed. 20,
68 S. Ct. 12
(1947). Relief here is provided not only to the plaintiff chiropractors,
but also in a sense to all consumers of health care services. Ensuring that
medical physicians and hospitals are free to professionally associate with
chiropractors (e.g., by the publication and mailing of the order to AMA
members), likely will eliminate such anticompetitive effects of the boycott
as interfering with consumers free choice in choosing a product (health
care provider) of their liking. In this way competition is served by the
injunction. In short, the injunction, as designed by Judge Getzendanner,
reasonably attempts to eliminate the consequences of the AMA's boycott,
and we will not disturb it. National Society of Professional Engineers,
435 U.S. at 698.
*fn6 |
| [93] | Finally, we reject the AMA's hint ("argument" seems too generous
when the AMA's claim comprises but one paragraph of a 77-page brief, Max
M. v. New Trier High School District No. 203,
859 F.2d 1297,
1300 (7th Cir. 1988)) that the district court's order somehow infringes
on the AMA's First Amendment rights. We think the injunction as written
is sufficiently tailored to avoid constitutional objection. As the Supreme
Court has stated: |
| [94] | [while] the resulting order may curtail the exercise of liberties that
the [defendants] might enjoy, that is a necessary and, in cases such as
this, unavoidable consequence of the violation. . . . The First Amendment
does not 'make it . . . impossible ever to enforce laws against agreements
in restraint of trade. . . .' Giboney v. Empire Storage and Ice Co.,
336 U.S. 490,
502,
93 L. Ed. 834,
69 S. Ct. 684
. In fashioning a remedy, the District Court may, of course, consider the
fact that its injunction may impinge upon rights that would otherwise be
constitutionally protected, but those protections do not prevent it from
remedying the antitrust violations. |
| [95] | National Society of Professional Engineers at 697-98. That the injunction
requires the AMA to publicize and mail copies of the order to AMA members,
among other things, does not render it unconstitutional. The district court's
form of injunction and method of ensuring its publication (and thus its
efficacy) was a reasonable attempt at eliminating the consequences of the
AMA's lengthy, systematic, successful, and unlawful boycott. |
| [96] | IV. |
| [97] | Plaintiffs' Cross-Appeal |
| [98] | Plaintiffs filed a cross-appeal challenging the judgments for defendants
JCAH and ACP. With respect to JCAH, plaintiffs advance two separate theories
of liability. First, they allege that JCAH unlawfully conspired with the
AMA and participated in the AMA's boycott of chiropractors. Second, plaintiffs
contend that JCAH, as a membership trade association, acted as a conspiracy
each time it promulgated industry standards, and thus violated the antitrust
laws in its own right. As to the latter theory of liability, plaintiffs
assert that they raised it before the trial court, but that the court never
ruled on it. JCAH does not contest this summarization of the events in the
district court, and we accept it. Plaintiffs' theory against ACP also is
two-fold. They first contend that ACP also participated in the AMA's boycott.
Second, they charge that ACP is a member of the "continuing conspiracy
that is the JCAH." None of plaintiffs' arguments are persuasive. |
| [99] | Following the first trial in this case, JCAH and ACP appealed the denial
of their motions for a directed verdict. We affirmed the denial of those
motions, explaining that the evidence was sufficient to permit, but not
require, a jury (or, as it turned out, the trial court) to conclude that
the defendants JCAH and ACP knew that concerted action in a scheme was contemplated
and invited, and that both acquiesced and participated in that scheme. Wilk
I,
719 F.2d at 233.
This would have permitted a finding of liability, we reasoned, citing Theatre
Enterprises Inc. v. Paramount Film Distributing Corp.,
346 U.S. 537,
540,
98 L. Ed. 273,
74 S. Ct. 257
(1954); Interstate Circuit Inc. v. United States,
306 U.S. 208,
226-27,
83 L. Ed. 610,
59 S. Ct. 467
(1939). |
| [100] | Following Wilk I, the Supreme Court decided two cases, which the district
court in the second trial held clarified and limited the cases relied upon
in Wilk I. These cases were Monsanto v. Spray-Rite Service Corp.,
465 U.S. 752,
79 L. Ed. 2d 775,
104 S. Ct. 1464
(1984), and Matsushita Electric Industrial Co. v. Zenith Radio Corp.,
475 U.S. 574,
89 L. Ed. 2d 538,
106 S. Ct. 1348
(1986). In Monsanto, the Court held that, to survive a summary judgment
motion, an antitrust plaintiff needed evidence tending to "exclude
the possibility" that the alleged conspirators were acting independently,
id. at 764, and that the plaintiff must present "direct or circumstantial
evidence that reasonably tends to prove" that the alleged conspirators
"'had a conscious commitment to a common scheme designed to achieve
an unlawful objective.'" Id., quoting Edward J. Sweeney & Sons
v. Texaco, Inc.,
637 F.2d 105,
111 (3d Cir. 1980), cert. denied,
451 U.S. 911,
68 L. Ed. 2d 300,
101 S. Ct. 1981
(1981). Matsushita reaffirmed that holding. There, the Court stated "conduct
that is as consistent with permissible competition as with illegal conspiracy
does not, without more, support an inference of conspiracy."
475 U.S. at 597
n. 21. |
| [101] | Applying Monsanto and Matsushita, the district court analyzed plaintiffs'
claims to determine whether or not each defendant's own conduct showed membership
in the AMA's conspiracy.
671 F. Supp. at 1489.
*fn7 We review
each defendant separately. Again, because the district court adequately
set forth the facts, we only summarize them here. |
| [102] | A. JCAH |
| [103] | JCAH is a not-for-profit corporation established for the purpose of setting
standards and conducting health care accreditation programs in conjunction
with those standards. JCAH's members include the AMA, ACP, the American
College of Surgeons, the American Hospital Association, and the American
Dental Association. It is governed by a board of commissioners. Twenty-one
commissioners are appointed by the various members, who then appoint one
public commissioner. The AMA is one of JCAH's two "dominant members"
(this characterization being based solely on the number of commissioners
each member is allotted). |
| [104] | Participation by hospitals in the JCAH's accreditation program was voluntary.
Nevertheless, accreditation was important to a hospital and "loss of
accreditation would be devastating." Id. at 1490. Since before 1958,
JCAH had standards providing that hospital medical staffs were to be limited
to fully licensed physicians (this was liberalized in 1970 to include dentists).
Id. |
| [105] | In 1964, JCAH's director stated, in a national newsletter, that JCAH viewed
chiropractors as cultists, and that hospitals that encouraged such cultists
to use their facilities in any way would "very probably be severely
criticized and lose [their] accreditation." Despite the similarity
of this statement to later AMA efforts, the district court found there was
no direct evidence that JCAH was acting in concert with the AMA with regard
to this statement or its distribution; thus, it concluded this action was
independent. |
| [106] | In 1970, JCAH completed a revision of its standards and published an accreditation
manual for hospitals. The manual included "Standard X" (which
was drafted by the AMA). Standard X provided that the governing board of
each hospital had to assure that medical staff members practiced in an ethical
manner. The accreditation manual included a source reference to the AMA's
Principles. The district court found that the uncontradicted testimony was
that JCAH's board of commissioners never discussed the subject of chiropractic
in connection with the accreditation manual. It further found that no chiropractor
participated in the accreditation manual's revision process despite the
opportunity to participate. Id. Based on these findings, the court concluded
there was no evidence that JCAH adopted Standard X in connection with chiropractors
or to further the AMA's boycott. And while JCAH letters responding to inquiries
from hospitals about the role of chiropractors throughout the 1970s did
indicate that JCAH would withdraw accreditation of a hospital that had chiropractors
on its medical staff or that granted privileges to chiropractors, the district
court found these letters were completely consistent with the then-existing
accreditation standards, and were "not convincing evidence that JCAH
had joined the conspiracy against chiropractors." Id. |
| [107] | Finally, in 1977, JCAH revised its standards to provide that medical staff
membership was to be limited "unless otherwise provided by law"
to fully licensed physicians and dentists. References to the AMA's Principles
were deleted. So from 1977 on, JCAH's position on chiropractors was that,
as limited licensed practitioners, they could be included on medical staffs,
if permitted under local law. In 1980, JCAH amended the accreditation manual
by deleting Standard X. |
| [108] | Based on these findings, the district court found that all JCAH undertook
all action from 1964 through 1980 independently of the AMA boycott. Further
support for its conclusion was the fact that JCAH's standards were largely
consistent with federal law. Id. |
| [109] | Likewise, the district court found that the 1983 revisions of the JCAH
standards were independent of the AMA boycott, and that the 1983 revisions
were not evidence that the conspiracy against chiropractors continued into
1983. Ultimately, JCAH standards were liberalized regarding admission to
medical staffs and allowance of hospital privileges to limited licensed
practitioners, including chiropractors. But the standard also required that
each accredited hospital's medical staff have an executive committee, the
majority of which had to be medical and osteopathic physicians. (This, according
to plaintiffs, is evidence that the conspiracy against chiropractors continued
into 1983.) |
| [110] | In 1983 the AMA participated in the JCAH standards revision process. That
process began in 1982 with recommendations from JCAH staff and the JCAH
standard-survey procedures committee. The early recommendations were that
each hospital be permitted to decide for itself, under applicable state
law, which licensed health care providers would be allowed hospital privileges
and medical staff membership. After initially supporting this approach,
AMA members and other medical societies which wanted to ensure medical and
osteopathic physician control of the medical staff and patient care in hospitals
criticized the AMA. Feeling the heat of their members' criticism, the AMA
changed its position and supported revisions which would ensure such control.
In late 1983, JCAH adopted new standards which included the mandatory, medical
physician-dominated executive committee concept. |
| [111] | According to the district court, the evidence supported the conclusion
that JCAH members were acting to ensure that the responsibility for patient
care in acute care hospitals remained in the hands of medical and osteopathic
physicians, and that this was an appropriate goal for JCAH. Patients in
acute care hospitals are generally the very sick or in need of surgery.
They are patients who require treatment with drugs or surgery -- i.e., treatment
by fully licensed physicians (that chiropractors may not perform). This
led the court to conclude that "[the] evidence supports no conclusion
other than that patient care in acute care hospitals, and the medical staffs
of acute care hospitals, ought to be under the control of fully licensed
physicians rather than limited licensed practitioners. I am persuaded that
the JCAH members were not acting to prevent chiropractors from being admitted
to hospitals or obtaining hospital privileges."
671 F. Supp. at 1493.
*fn8 |
| [112] | Because the court found that JCAH's acts before the 1983 revisions were
independent of the AMA boycott, and that the 1983 revisions were not evidence
that the conspiracy against chiropractors continued into 1983, it concluded
that plaintiffs failed to prove that JCAH was a member of the conspiracy.
Id. at 1494. |
| [113] | 1. JCAH as Conspiracy |
| [114] | Plaintiffs' first theory on appeal is that JCAH, as a trade association,
"acts as a conspiracy or combination every time it promulgates industry
standards [which unreasonably restrain competition]." But a trade association
is not, just because it involves collective action by competitors, a "walking
conspiracy." Consolidated Metal Products, Inc.,
846 F.2d at 293-94.
There is no evidence that JCAH's accreditation program "is merely a
ploy to obscure a conspiracy" against chiropractors. Id. at 294. And
plaintiffs' arguments for a separate antitrust violation with respect to
JCAH standing alone are unpersuasive. |
| [115] | The most serious problem with plaintiffs' theory is that they did not
prove any actual or threatened antitrust injury directly traceable to the
alleged antitrust violation which would be redressed by the issuance of
an injunction against JCAH. See Cargill, Inc. v. Monfort of Colorado Inc.,
479 U.S. at 122.
Thus, even if this particular claim was not expressly addressed by the district
court, plaintiffs' claim still must fail. In support of their contention
that they suffered actual injury, plaintiffs offer "evidence"
of examples of when each plaintiff was denied privileges or medical staff
membership at certain hospitals. But after thoroughly reviewing the record,
we conclude these examples do not show any connection to JCAH or its Standard
X. (Jt.App. 13-14; 15-17; 89-100; 181; 182-87; 190-91; 380-81; 420; 672-81;
773-74; 851; and 934-35.) Because we find no antitrust injury occurred as
a result of the 1970 Standard X, we necessarily conclude that there was
no continuing JCAH boycott as a result of the revisions in 1983.*fn9 |
| [116] | 2. JCAH as Member of the AMA Boycott |
| [117] | Plaintiffs' second theory of antitrust liability against JCAH contends
that JCAH was a member of the AMA's boycott. In this regard, plaintiffs
contend that JCAH knew the AMA boycott was contemplated and that it acquiesced
and participated in that scheme. As stated above, the Monsanto and Matsushita
cases hold that to establish liability under this theory, there must be
evidence that at least tends to exclude the possibility that the alleged
conspirators were acting independently, rather than pursuant to "'conscious
commitment to a common scheme designed to achieve an unlawful objective',"
Monsanto,
465 U.S. at 764,
quoting Edward J. Sweeney & Sons,
637 F.2d at 111.
Plaintiffs, however, argue that Monsanto and Matsushita are inapplicable
to this case because here we are dealing with a horizontal combination,
and because there is "direct evidence" of a conspiracy in this
case. We agree with the district court, however, that this case should be
governed under the standards set forth in Monsanto and Matsushita. We have
stated before, "[the] actual label placed on the conspiracy is a 'pedantic
distinction,' as the Monsanto standard applies regardless of which label
is attached." Valley II,
822 F.2d at 660
n. 5. And plaintiffs point to no "direct evidence" of the conspiracy. |
| [118] | At best, plaintiffs make only a perfunctory argument that JCAH knowingly
adhered to and participated in the AMA's unlawful boycott. Nowhere do they
attempt to show just how the district court made erroneous findings of fact.
Rather, they point to the fact that JCAH adopted Standard X (after being
manipulated by the AMA in doing so) to establish JCAH's participation in
the boycott. But the district court found that JCAH's board of commissioners
never discussed the subject of chiropractic, and that the subject was never
raised in connection with the 1970 revisions of the accreditation manual.
It also found that no chiropractor participated in the revision process
despite having an "extensive opportunity" to do so. Thus, the
court held "[there] was no evidence that JCAH adopted Standard X in
connection with chiropractors or in furtherance of the AMA boycott."
671 F. Supp. at 1490.
Plaintiffs' urgings to the contrary are nothing but a bald invitation to
substitute our judgment for the district court's. Consistent with our prior
treatment of this issue in Wilk I,
719 F.2d at 233,
the evidence may have been sufficient to find that JCAH participated in
the conspiracy, but it did not require such a finding. The district court
was entirely within its right to find no conspiracy between JCAH and the
AMA. |
| [119] | As evidence of JCAH's participation in the conspiracy, plaintiffs also
point to the district court's finding that JCAH cooperated with the AMA
in connection with the distribution of an article titled "The Right
and Duty of Hospitals to Exclude Chiropractors from Hospitals." Apparently,
they believe this carries the day in establishing JCAH's participation in
the boycott. We disagree. As the district court found, the JCAH's use of
the cited article was in connection with inquiries from hospitals about
the role of chiropractors in hospitals.
671 F. Supp. at 1490.
The court also found that the JCAH letters were "completely consistent
with the then-existing accreditation standards." Id. We thus agree
with the district court that this was "not convincing evidence"
that JCAH participated or joined in the AMA's conspiracy against chiropractors.
Id. Cf. Monsanto,
465 U.S. at 762
(communication about prices and marketing strategy does not alone show that
distributors are not making independent pricing decisions).*fn10 |
| [120] | B. ACP |
| [121] | The analysis and outcome would be much the same for ACP as for JCAH, at
least so far as its alleged participation in the AMA's boycott is concerned.
ACP's alleged membership or participation in the AMA's unlawful boycott,
for example, is also judged under the Matsushita and Monsanto standards.
Here, though, we must digress briefly to address a problem with plaintiffs'
argument. Their claims in this respect seem at best to be confused. In their
opening brief, they refer to the ACP's participation in "the boycott,"
and argue that the district court's finding that the ACP did not participate
in any boycott of chiropractors is clearly erroneous. The district court's
findings in this regard concern whether or not ACP was a member of or participated
in the AMA's conspiracy.
671 F. Supp. at 1471,
1489, 1494-96. It is obvious from the district court's opinion, and from
plaintiffs' opening brief, that "the boycott" referred to is the
AMA's unlawful boycott. But in their reply brief, plaintiffs say it is "irrelevant"
whether or not ACP conspired with the AMA. In other words, they are arguing
that the district court's finding that ACP was not a member of the AMA's
boycott,
671 F. Supp. at 1494-96,
is not at issue on this appeal. We will take them at their word; that issue
is now foreclosed against them. |
| [122] | Apparently, then, plaintiffs are claiming, as they did with JCAH, that
the ACP as a membership association engaged in concerted activity through
various acts. That is, the ACP is liable under § 1 of the Sherman Act in
its own right. Plaintiffs also present a second theory of liability: that
the ACP, as a member of the JCAH, is liable for the unlawful acts of that
organization because it knowingly participated in and ratified those acts. |
| [123] | 1. ACP as a Conspiracy |
| [124] | There is no evidence that ACP itself engaged in an unlawful boycott of
chiropractors. Plaintiffs point to the ACP's bylaws which provided that
the purpose of the ACP included "preserving the history and perpetuating
the best tradition of medicine and medical ethics." Because of the
fact that many of the ACP's members were also AMA members, plaintiffs argue
that this veiled reference to ethics somehow furthered an ACP boycott. But
the ACP never adopted the AMA's Principles (including former Principle 3),
and never required its members to subscribe to those principles.
671 F. Supp. at 1494.
Also, the ACP never had a code of ethics. In 1984 it published the American
College of Physicians Ethics Manual. But this was not a code or set of regulations.
Rather, it was an effort to address major contemporary issues confronting
all physicians and merely attempted to stimulate debate on medical ethics.
The manual stated nothing about chiropractic or about what remedies are
or are not "scientific." Indeed, as the district court found,
the manual appears to leave the individual physician free to make his own
judgment as to the kinds of treatment he should participate in and in his
relations with other licensed health practitioners.
671 F. Supp. at 1494.
|
| [125] | The plaintiffs rely on two additional documents to establish an ACP boycott.
The first grew out of a September 1978 meeting of the ACP's board of governors.
(The board of governors was not the ACP's policymaking body.) The Board
at that meeting accepted a report by an ad hoc committee appointed to suggest
what might be done to promote the ACP's policy toward chiropractic. According
to the district court, the minutes of that meeting reflect that: |
| [126] | The committee agreed unanimously that ACP should be concerned about and
oppose any action which would include chiropractic among the scientifically-based
modes of medical care and which would give chiropractors direct access to
the diagnostic facilities of hospitals. |
| [127] |
671 F. Supp. at 1495. Plaintiffs also point to a resolution adopted by the
board of governors which provided, among other things:
|
| [128] | (2) the governors should remain alert to efforts of chiropractors to gain
access to radiographic and clinical laboratory diagnostic facilities in
their regions and keep ACP headquarters informed of such developments; |
| [129] | (8) the governors should alert colleagues in other disciplines to the
efforts of chiropractors to gain access to radiographic and clinical pathology
diagnostic facilities; and |
| [130] | (9) the governors and the college members in their regions should discuss
these matters with their county and state medical societies and with their
representatives to the house of delegates of the AMA. |
| [131] |
671 F. Supp. at 1495-96.
|
| [132] | Although the district court found that many parts of the resolution related
to matters protected under the Noerr-Pennington doctrine, not everything
included was protected. (This is not at issue on appeal.) What is important
is that the district court found that the resolution contained no call for
the participation of ACP or its members in the AMA's boycott against chiropractors,
"or [in the] ACP's own boycott."
671 F. Supp. at 1496.
Continuing, the court explained "[moreover], the resolution was never
implemented . . . and there is no evidence that ACP members were called
upon to cooperate in effectuating ACP's 'policy' on chiropractic."
Id. Plaintiffs do not show how the district court's findings are clearly
erroneous; rather, they just interpret the document differently. It is well
established by now, however, that we do not substitute our view of the facts
for the district court's on appeal. After reviewing the evidence, we are
not left with the "definite and firm conviction" that the district
court made a mistake in interpreting this evidence. Anderson v. City of
Bessemer City,
470 U.S. 564,
84 L. Ed. 2d 518,
105 S. Ct. 1504,
(1985). |
| [133] | Plaintiffs also point to a joint document in which the ACP participated,
titled "Status Report on Chiropractic Lawsuits" to establish an
ACP conspiracy. The report was distributed to ACP members. It does contain
an admission that Principle 3 forbade association with chiropractors. But,
as the district court explained, this admission was irrelevant as to ACP
which had not adopted the AMA's Principles, and which did not have a medical
ethic similar to Principle 3. We agree. Again, plaintiffs just offer their
different interpretation of the document, which has never been enough to
carry the day when reviewing a district court's factual determinations.
We see no error.*fn11 |
| [134] | 2. ACP Participation in JCAH's Conspiracy |
| [135] | Finally, plaintiffs contend that ACP is a member of "the continuing
conspiracy that is the JCAH." But since we have held JCAH did not violate
the antitrust laws, ACP could not be liable for participating in JCAH's
acts. Thus, plaintiffs' theory that ACP is liable for participating in JCAH's
conspiracy fails. |
| [136] | V. |
| [137] | Conclusion |
| [138] | We affirm the district court's finding that the AMA violated § 1 of the
Sherman Act by conducting an illegal boycott of chiropractors, and the district
court's decision to grant an injunction against the AMA. In finding liability,
the court did not improperly rely on evidence of conduct protected by the
Noerr-Pennington doctrine. The district court's factual findings supported
its finding that the AMA's boycott was illegal under the rule of reason,
and those findings were not clearly erroneous. The district court also did
not clearly err in finding that the AMA did not meet its burden of proving
its patient care defense, and in finding that the AMA's boycott caused the
plaintiffs past injury and the threat of future injury. The court did not
abuse its discretion in imposing an injunction on the AMA. The court's factual
findings supported its exercise of equitable discretion, and the injunction
was not overbroad. |
| [139] | We also affirm the district court's findings that JCAH and ACP did not
participate in the AMA's boycott, or in any other way violate § 1 in their
activities concerning chiropractors. The plaintiffs' theory that JCAH itself
conspired by setting standards fails because the plaintiffs failed to prove
that the JCAH's actions caused them any actual or threatened injury. The
court's finding that JCAH did not participate in the AMA's conspiracy was
not clearly erroneous. The plaintiffs have waived any contention that ACP
participated in the AMA's conspiracy by claiming that any such participation
was "irrelevant." The district court did not clearly err by finding
that ACP did not conduct its own conspiracy, and since JCAH did not violate
§ 1, ACP could not be liable for participating in JCAH's actions. |
| [140] | The district court's decision is |
| [141] | AFFIRMED. |
|
|
|
| Opinion Footnotes | |
|
|
|
| [142] | *fn1 Former
Principle 3 provided: |
| [143] | *fn2 The
AMA's assertion that former Principle 3 operated to prevent the "free-riding"
that would have occurred if physicians had referred patients to chiropractors
misses the mark. Apparently, the AMA believes that if physicians were forced
to refer patients to chiropractors, chiropractors would benefit (the "free
ride") from the physicians' reputation for providing quality medical
service, with out necessarily deserving that reputation themselves. But
neither this court nor the district court would require the AMA to endorse
chiropractic, nor do we mandate that there be referrals. We simply speak
to the restraint on professional association, and say that physicians, hospitals,
and other institutions must be free to make their own uncoerced decisions
on whether to professionally associate with chiropractors. We do not compel
medical physicians to praise or sponsor chiropractors' work. See Schachar
v. African Academy of Ophthalmology,
870 F.2d 397,
399 (7th Cir. 1989). We do not even require "cooperation or friendliness."
Id. We also note that the AMA apparently misconceives the role of the free-riding
analysis in antitrust law. See Premier Electrical Construction Co. v. National
Electrical Contractors Ass'n. Inc.,
814 F.2d 358,
368-70 (7th Cir. 1987) (explaining the concept). |
| [144] | *fn3 The
AMA cites United States v. Borden Co.,
347 U.S. 514,
98 L. Ed. 903,
74 S. Ct. 703
(1954), for the proposition that a showing of classwide injury is insufficient
to support injunctive relief for an individual plaintiff. While that might
be true, Borden does not say so. There, the Supreme Court held that in light
of the differences in the interests sought to be vindicated by the government
and by private litigants in actions under the Clayton Act, the government
was not precluded from obtaining injunctive relief against price discrimination
simply because, in an earlier private action, a decree enjoined the conduct
in question. At any rate, the trial court here relied on more than evidence
of "classwide injury" in finding that these four plaintiffs were
injured by the AMA's unlawful boycott. |
| [145] | *fn4 In 1980,
the AMA adopted a new set of "Principles of Medical Ethics" that
replaced the former "Principles" that had been in place since
1957. The 1980 "Principles" provide in part: |
| [146] | *fn5 Based
on the language in section 16 that equitable relief is available "when
and under the same conditions and principles as injunctive relief . . .
is granted by courts of equity. . . .," the AMA makes a passing argument,
buried in two of its 67 footnotes (two footnotes, incidentally, that are
separated by seven pages of text) that the district court erred by not requiring
the plaintiffs to meet all the requirements for an injunction that traditional
equity jurisprudence imposes. The AMA does not bother to say what those
traditional equitable requirements are, in the case of a permanent injunction,
except to say that the plaintiffs had to show they had no adequate remedy
at law. Nor does the AMA cite any cases concerning the propriety of a permanent
injunction under § 16.
The Supreme Court has stated § 16 invokes "traditional equitable
principles." Zenith Radio Corp. v. Hazeltine Research, Inc.,
395 U.S. 100,
130,
23 L. Ed. 2d 129,
89 S. Ct. 1562
(1969); see also Roland Machinery Co. v. Dresser Industries, Inc.,
749 F.2d 380,
386 (7th Cir. 1984). Scholarly comment has echoed this theme. E.g., 2
P. Areeda and D. Turner, Antitrust Law § 312d (1978); Easterbrook and
Fischel, Antitrust Suits by Targets of Tender Offers, 80 Mich.L.Rev. 1155,
1168-69 (1982). Section 16's language indicates that traditional equity
principles should apply. But while it is true that the district court
stated that the plaintiffs did not have to meet all the traditional equitable
requirements for an injunction, we are not convinced that this misstatement
affected the court's analysis. The important point is that equitable relief
is discretionary, and not automatically available to an injured plaintiff.
See Areeda & Turner, supra, § 312d at 39. The district court did exercise
discretion and did not automatically grant the plaintiffs an injunction.
The court carefully weighed the AMA's conduct, the likelihood it would
recur, the harm it caused and might in the future cause, and we believe,
implicitly in all this, the relative hardships to the parties of granting
an injunction. See
671 F. Supp. at 1484-88.
It is true that the district court did not specifically find that the
plaintiffs had no adequate remedy at law. The AMA baldly asserts that
damages would have been adequate, but does not mention how. At any rate,
at this stage in the case, we are not inclined to reverse the district
court's careful decision based on an underdeveloped argument that the
AMA did not even deem worthy of including under a separate heading in
the text of its brief. |
| [147] | *fn6 For
the same reason, we do not view the district court's injunction as improperly
awarding classwide relief where no class was certified. The AMA's argument
in this regard is just a rephrasing of its argument that the injunction
is overbroad. |
| [148] | *fn7 The
district court also held that even if JCAH were acting independently of
the AMA boycott, its members (e.g., the AMA) were not responsible for the
actions of JCAH.
671 F. Supp. at 1491-92.
On appeal, plaintiffs tell us that this was unnecessary, and actually confused
their asserted theory that JCAH was an unlawful conspiracy in its own right.
Thus, we do not pass on the propriety of the district court's ruling in
this regard. |
| [149] | *fn8 The
court went on to observe that under current JCAH standards, hospitals could
grant chiropractors medical staff membership, clinical privileges, admission
privileges, and access to diagnostic services without fearing loss of JCAH
accreditation. Authority for making individual medical staff appointments
now rests with the individual hospital's governing board. |
| [150] | *fn9 Plaintiffs
claim, for the first time in their reply brief, that the 1983 standards
themselves violate the antitrust laws. The district court, however, stated
that plaintiffs were not claiming that the 1983 JCAH standards violated
the antitrust laws.
671 F. Supp. at 1492.
Whether they did or did not raise the issue in the district court, there
is no question that the plaintiffs' initial appellate brief did not raise
this issue. Rather, plaintiffs argued that "The JCAH 1983 Revisions
[Continued] The Boycott." In this regard they stated, "only one
conclusion is possible: the JCAH M.D. domination standard perpetuates the
boycott" (emphasis added). We think it plain that plaintiffs made their
claim that the 1983 revisions themselves were unlawful for the first time
on reply. We thus will not address the argument. See Gold v. Wolpert,
876 F.2d 1327,
1331 n. 6 (7th Cir. 1989). |
| [151] | *fn10 Plaintiffs
make one additional claim. This case, they tell us, fits neatly within the
framework of American Society of Mechanical Engineers, Inc. v. Hydrolevel
Corp.,
456 U.S. 556,
72 L. Ed. 2d 330,
102 S. Ct. 1935
(1982). They assert that because the trial court found the AMA manipulated
the JCAH and caused it to adopt Standard X (as well as circulating the AMA's
"Right and Duty of Hospitals to Exclude Chiropractors"), that
JCAH was liable because it allowed itself to be manipulated and used as
a mechanism through which the AMA enforced its anti-competitive scheme.
Plaintiffs cite Hydrolevel in the portion of their argument dealing with
JCAH's alleged knowing adherence and participation in the AMA's boycott.
But Hydrolevel does not address the conscious parallelism issue. Hydrolevel
speaks of an association's liability in its own right, not as a member of
another's unlawful conspiracy. We thus believe Hydrolevel is inapplicable
to this case. |
| [152] | *fn11 Plaintiffs
also argue that the district court erroneously "excluded evidence [which]
proves ACP's knowing intent to exclude chiropractors." (Plaintiff's
reply br. at 23.) What plaintiffs are getting at is that certain evidence
was held by the district court to be protected under the Noerr-Pennington
doctrine. The first involved a letter written to a governmental agency (the
National Institute of Neurological Diseases and Strokes (NINDS)) in connection
with a government project (the study of chiropractic). Plaintiffs claim
this was not protected under the Noerr-Pennington doctrine because blind
copies were sent to the AMA's Committee on Quackery and other medical societies.
They ignore the fact, however, that the district court made an alternative
holding with respect to this letter. It stated that even if the letter was
not protected, it was obvious that it expressed only the author's own opinion
as to what action the ACP's board of regents (its policy-making body) might
take in the future, and that it was not the act of the ACP endorsing the
AMA chiropractic policy statement. The court also found there was no evidence
that ACP had knowledge of the activities of the Committee on Quackery. Thus,
we do not need to address whether or not this document was protected under
the Noerr-Pennington doctrine, as the alternative ground is both sound and
unchallenged.
Plaintiffs make two perfunctory and undeveloped contentions with regard
to "exclusion" of "boycott activity." But neither
of these amounts to an "argument" under Fed. R. App. P.
28(a)(4).
Thus, we will consider neither. |
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