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| [1] | UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT |
| [2] | No. 91-10040 |
| [3] | 1992.C09.42301 <http://www.versuslaw.com>;
974 F.2d 1206 |
| [4] | filed: September 11, 1992. |
| [5] | UNITED STATES OF AMERICA, PLAINTIFF-APPELLANT, v. A. LANOY ALSTON, D.M.D., P.C.; RONALD D. WALKER; DESERT VALLEY DENTAL, LTD.; RICHARD B. MEYER; AARON L. ("LANOY") ALSTON, DEFENDANTS-APPELLEES. |
| [6] | Appeal from the United States District Court for the District of Arizona.
D.C. No. CR-90-00042-ACM. Alfredo C. Marquez, District Judge, Presiding. |
| [7] | James F. Rill, Assistant Attorney General, Charles A. James, Deputy Assistant
Attorney General, John J. Powers, III, Andrea Limmer, United States Department
of Justice, Washington, D.C., for plaintiff-appellant United States of America. |
| [8] | Stephen M. Weiss, Karp, Stolkin & Weiss, Tucson, Arizona, for defendants-appellees
Aaron Lanoy Alston and A. Lanoy Alston, D.M.D., P.C. |
| [9] | Frederic J. Dardis, Dardis & Hippert, Tucson, Arizona, for defendant-appellee
Richard B. Meyer. |
| [10] | Peter B. Keller, Keller, Postero & Hall, Tucson, Arizona, for defendants-appellees
Ronald D. Walker and Desert Valley, Ltd. |
| [11] | Mary K. Logan, Thomas H. Boerschinger, American Dental Association, Chicago,
Illinois, Kirk B. Johnson, Edward B. Hirshfeld, Michael L. Ile, American
Medical Association, Chicago, Illinois, Jack R. Biereg, Richard D. Raskin,
Sidley & Austin, Chicago, Illinois, Mark E. Haddad, Paul E. Kalb, Sidley
& Austin, Washington, D.C., for amici curiae American Dental Association
and American Medical Association. |
| [12] | Before: Betty B. Fletcher, Charles Wiggins and Alex Kozinski, Circuit
Judges. Opinion by Judge Kozinski. |
| [13] | Author: Kozinski |
| [14] | KOZINSKI, Circuit Judge. |
| [15] | We examine three dentists' criminal antitrust convictions. |
| [16] | Background |
| [17] | Aaron Lanoy Alston, Richard B. Meyer and Ronald D. Walker provide dental
services for members of prepaid dental plans in Tucson, Arizona.*fn1
They and other providers receive two kinds of payments: capitation fees,
which are paid by the plans to the dentists based on the number of plan-member
patients they see, and co-payment fees, which are paid by the patients to
the dentists based on the services performed. The plans, not the dentists,
determine both fee amounts. |
| [18] | Co-payment fees in Tucson had not risen for ten years, although they had
in other cities, including nearby Phoenix. Some Tucson dentists were failing
to break even on the most commonly performed services, such as porcelain
crowning. Several Tucson dentists had individually approached the plans
about increasing the fee schedule; their efforts proved unsuccessful. Drs.
Alston, Meyer and Walker were among the dentists who felt the fees were
too low. They met with about fifty local dentists at Dr. Alston's office
to discuss the fees, after which many of those present at the meeting mailed
letters to the plans requesting higher fees.*fn2
The plans did in fact revise their fee schedules, resulting in higher costs
to plan members for some services. |
| [19] | This practice drew immediate fire from the Justice Department, which obtained
an indictment against Alston, Meyer and Walker for conspiring to fix prices
in violation of section 1 of the Sherman Act.*fn3
The jury convicted all three defendants, but the district court granted
judgments of acquittal notwithstanding the verdict to Meyer and Walker and
a new trial to Alston. United States v. Alston, 1991-1 Trade Cas. Par. 69,366
(D. Ariz. 1990). The government appeals.*fn4 |
| [20] | Discussion |
| [21] | I |
| [22] | We begin with the Supreme Court's most recent per se case, FTC v. Superior
Court Trial Lawyers Association,
493 U.S. 411,
107 L. Ed. 2d 851,
110 S. Ct. 768
(1990) (SCTLA). About 100 private lawyers in Washington, D.C., regularly
served as court-appointed attorneys for indigent defendants. More than 90
percent of them agreed to stop providing legal representation until the
District of Columbia government increased their compensation. Because of
the boycott's detrimental effect on the quality of criminal Justice, the
District government acceded to the lawyers' demands. The Federal Trade Commission
brought a civil action against SCTLA, alleging that the boycott constituted
an unfair method of competition in violation of section 5 of the FTC Act.*fn5
After hearings before an ALJ, the Commission and the D.C. Circuit, the case
came before the Supreme Court. The Court held that the lawyers' boycott
was "a plain violation of the antitrust laws,"
493 U.S. at 428,
and that it was prohibited per se. |
| [23] | In so holding, the Court made clear that the per se condemnation of price
fixing is a substantive rule of antitrust law, not merely a device of administrative
convenience: "The per se rules are, of course, the product of judicial
interpretations of the Sherman Act, but the rules nevertheless have the
same force and effect as any other statutory commands." Id. at 432-33.
Price fixing is illegal regardless of pro-competitive justifications offered
therefor: "It is not our task to pass upon the social utility or political
wisdom of price-fixing agreements," id. at 421-22; "every such
horizontal arrangement among competitors poses some threat to the free market,"
id. at 434; "[price-fixing agreements] are all banned because of their
actual or potential threat to the central nervous system of the economy,"
id. at 435 (quoting United States v. Socony-Vacuum Oil Co.,
310 U.S. 150,
226,
84 L. Ed. 1129,
60 S. Ct. 811
n.59 (1940)). |
| [24] | The government analogizes the dentists here to the lawyers in SCTLA, and
argues that the per se rule is thus applicable. Amici supporting the dentists
argue that the case should be analyzed instead under the rule of reason.
It's true that in a very narrow class of cases, market arrangements involving
horizontal restraints are nevertheless analyzed under the rule of reason
rather than the per se approach. See NCAA v. Board of Regents,
468 U.S. 85,
98-104,
82 L. Ed. 2d 70,
104 S. Ct. 2948
(1984) (limiting television coverage of members' college football contests);
Broadcast Music, Inc. v. CBS,
441 U.S. 1,
16-24,
60 L. Ed. 2d 1,
99 S. Ct. 1551,
201 U.S.P.Q. (BNA) 497 (1979) (blanket licensing of copyrighted music at
set fees). Such cases, however, involve industries "in which horizontal
restraints on competition are essential if the product is to be available
at all." NCAA,
468 U.S. at 101;
see also Robert H. Bork, The Antitrust Paradox 278 (1978). |
| [25] | The health-care market is not such an industry. As we recently had occasion
to note: |
| [26] | The application of antitrust laws to medical markets dates at least as
far back as American Medical Association v. United States,
317 U.S. 519,
87 L. Ed. 434,
63 S. Ct. 326
(1943), where the Supreme Court maintained that the "occupation of
the individual physicians charged as defendants is immaterial." Id.
at 528. If the Supreme Court's message in Arizona v. Maricopa County Med.
Soc'y,
457 U.S. 332,
349-51,
73 L. Ed. 2d 48,
102 S. Ct. 2466
(1982); Jefferson Parish Hosp. Dist. No. 2 v. Hyde,
466 U.S. 2,
25,
80 L. Ed. 2d 2,
104 S. Ct. 1551
n.42 (1984); and FTC v. Indiana Fed'n of Dentists,
476 U.S. 447,
463,
90 L. Ed. 2d 445,
106 S. Ct. 2009
(1986), was not clear enough, then its specific announcement in National
Gerimedical Hosp. & Gerontology Ctr. v. Blue Cross,
452 U.S. 378,
69 L. Ed. 2d 89,
101 S. Ct. 2415
[, 393] (1981), should have been. . . . The antitrust laws apply to hospitals
in the same manner that they apply to all other sectors of the economy.
Health care providers are exposed to the same liability and entitled to
the same defenses as businesses in other industries. |
| [27] | Boulware v. State of Nevada,
960 F.2d 793,
796-97 (9th Cir. 1992) (emphasis added). The district court properly allowed
the government to proceed on a per se theory. |
| [28] | II |
| [29] | A. The jury returned guilty verdicts against all three defendants, who
then moved for judgments of acquittal notwithstanding the verdict, and in
the alternative for a new trial. The district court granted judgments of
acquittal to Meyer and Walker, and granted Alston's new trial motion. The
reasons for the court's decision appear to be two: That there was insufficient
evidence to support the convictions, and that the instructions given were
deficient.*fn6 |
| [30] | We reject the argument that the jury instructions were erroneous. The
district court itself recognized: |
| [31] | I have looked at my instructions. I think the instructions are technically
and legally correct, but I think they were too sterile. I didn't relate
or connect the instructions to the case itself. And I have been uncomfortable
with that ever since, that while it wasn't a legal error, that I could have
done a better job of telling the jury that they didn't have to find the
defendants guilty. |
| [32] | 1991-1 Trade Cas. at 65,471 (emphasis added). We have reviewed the instructions
and agree that they were "technically and legally correct." |
| [33] | The court began by correctly characterizing a conspiracy as "an agreement
of two or more persons to accomplish some unlawful purpose or to accomplish
a lawful purpose by unlawful means." Instruction #8. The court went
on to state: |
| [34] | In order to convict any defendant, the government must prove beyond a
reasonable doubt as to that defendant each of the following: First, that
the conspiracy charged existed at or about the time stated in the indictment;
second, that the defendant knowingly - that is, voluntarily and intentionally
- became a member of the conspiracy charged in the indictment, knowing of
its goal and intending to help accomplish it; third, that interstate commerce
was involved. |
| [35] | Id. This instruction correctly states the government's burden.*fn7 |
| [36] | The court also specified the conduct charged in this case: "What
the government has charged here, and what it must prove, is that there was
a single, continuing conspiracy, which the defendant joined, to fix and
raise co-payment fees paid by members of the dental plans named in the indictment."
Id. This instruction accurately characterizes the indictment and, if proven,
would constitute an antitrust violation. See SCTLA,
493 U.S. at 422-23.
|
| [37] | The court then instructed the jury on the per se nature of price fixing: |
| [38] | Under the Sherman Act, price fixing is per se illegal. If you find there
was a conspiracy to fix co-payment fees, it does not matter why the fees
were fixed or whether they were too high or low; reasonable or unreasonable;
fair or unfair. It is not a defense to price fixing that the defendants
may have had good motives, or may have thought that what they were doing
was legal, or that the conspiracy may have had some good results. You may
not consider any justification for fixing the fees. |
| [39] | Instruction #10. Although defendants strenuously object to this instruction
on the grounds that it left the jury no choice but to convict, it is an
accurate statement of the law. See SCTLA,
493 U.S. at 421-24,
432-36. |
| [40] | Finally, the court noted that "the defendants are competitors if
you find that they are individuals providing the same service to customers."
Instruction #12. Again, this instruction is correct under the Supreme Court's
most recent price-fixing case. SCTLA,
493 U.S. at 422
& n.9. Each of these jury instructions accurately stated the law of
conspiracy and price fixing; they cannot serve as the basis for acquittal.
Nor does the district Judge's sense he could have made clearer to the jury
they didn't have to convict support the judgment of acquittal. A jury is
presumed to follow the instructions given by the court. See, e.g., Yates
v. Evatt,
114 L. Ed. 2d 432,
111 S. Ct. 1884,
1893 (1991) ("customary presumption that jurors follow instructions").
We therefore turn to the evidence in the case. |
| [41] | B. A judgment of acquittal is improper if, viewing the evidence in the
light most favorable to the government, a rational trier of fact could have
found the defendant guilty beyond a reasonable doubt. United States v. Merriweather,
777 F.2d 503,
507 (9th Cir. 1985), cert. denied,
475 U.S. 1098,
89 L. Ed. 2d 898,
106 S. Ct. 1497
(1986); see Glasser v. United States,
315 U.S. 60,
80,
86 L. Ed. 680,
62 S. Ct. 457
(1942) ("The verdict of a jury must be sustained if there is substantial
evidence, taking the view most favorable to the Government, to support it.").
In reviewing the district court's decision, we apply the same standard.
Merriweather,
777 F.2d at 507;
United States v. Hazeem,
679 F.2d 770,
772 (9th Cir.), cert. denied,
459 U.S. 848,
74 L. Ed. 2d 95,
103 S. Ct. 106
(1982); see United States v. Aceves-Rosales,
832 F.2d 1155,
1157 (9th Cir. 1987), cert. denied,
484 U.S. 1077,
98 L. Ed. 2d 1018,
108 S. Ct. 1056
(1988); United States v. Toomey,
764 F.2d 678,
680 (9th Cir. 1985), cert. denied,
474 U.S. 1069,
88 L. Ed. 2d 799,
106 S. Ct. 828
(1986). Grants of motions for acquittal are reviewed under the same standard
as denials. See United States v. Varkonyi,
611 F.2d 84,
85 (5th Cir.), cert. denied,
446 U.S. 945,
64 L. Ed. 2d 801,
100 S. Ct. 2173
(1980); United States v. Clemones,
577 F.2d 1247,
1255 (5th Cir. 1978); United States v. Burnette,
524 F.2d 29,
30 (5th Cir. 1975), cert. denied,
425 U.S. 939,
48 L. Ed. 2d 180,
96 S. Ct. 1673
(1976). There is no dispute over these legal standards; the question is
their application to the evidence in this case. |
| [42] | The government charged, and was required to prove, that defendants agreed
to persuade the plans to raise co-payment fees and then took steps to carry
out the agreement. The government charged that, in furtherance of this scheme,
the defendants met at various offices, including Dr. Alston's, to discuss
fees; that they agreed on higher co-payment fees to be paid by the plans;
that they agreed to and did mail identical letters to the plans demanding
higher fees; and that the plans did in fact raise the fee schedules. |
| [43] | The record here shows that the government made its case. For example,
the government introduced Dr. Alston's appointment calendar, which indicated
more than one meeting with Dr. Meyers and/or Dr. Walker. Although on appeal,
as at trial, defendants offer an alternative explanation for these meetings,
the jury must have weighed the evidence and determined that defendants met
to discuss fees. We cannot second-guess that determination. |
| [44] | It is undisputed, moreover, that a large number of dentists gathered one
evening at Dr. Alston's office to discuss fees, and that all three defendants
were instrumental in arranging the meeting. Although defendants advance
various explanations for the meeting, the jury was entitled to find that
defendants conspired to set the co-payment fees. Defendants had ample opportunity
to persuade the jury otherwise; they failed, and this is not the forum to
resolve competing factual claims. |
| [45] | The dentists attending the meeting were mailed a form letter to be sent
to the plans, together with a cover letter bearing Dr. Alston's name. The
cover letter opened: "Enclosed is a copy of the letter we agreed to
send." It closed as follows: "I feel it mandatory . . . that we
get 100 percent participation from all 50 doctors so that we can make a
significant impact." The letter to the plans stated, in part, that
the sender was "establishing a minimum co-payment schedule," and
that it would "be the minimum schedule accepted." Defendants and
several other dentists did in fact mail these letters to the plans. Sometime
thereafter, the plans raised the co-payment fees to match the schedules
in the letters. |
| [46] | The district Judge saw the witnesses, reviewed the evidence and was intimately
familiar with all aspects of the case. We are reluctant to overturn his
informed judgment in this matter. Nevertheless, under the per se rule the
jury had only to find that defendants knowingly participated in an agreement
to raise co-payment fees. Our review of the record convinces us that it
was not irrational for the jury to conclude that defendants did so. Because
we must review judgments of acquittal notwithstanding the verdict in the
light most favorable to the government, the judgments of acquittal as to
Meyer and Walker cannot stand. On remand, the district court shall consider
their alternative motions for a new trial. |
| [47] | C. A district court's power to grant a motion for a new trial is much
broader than its power to grant a motion for judgment of acquittal. See
3 Charles Alan Wright, Federal Practice and Procedure § 553 at 245 (1982).
"The district court need not view the evidence in the light most favorable
to the verdict; it may weigh the evidence and in so doing evaluate for itself
the credibility of the witnesses." United States v. Lincoln,
630 F.2d 1313,
1319 (8th Cir. 1980); accord United States v. Indelicato,
611 F.2d 376,
387 (1st Cir. 1979). "If the court concludes that, despite the abstract
sufficiency of the evidence to sustain the verdict, the evidence preponderates
sufficiently heavily against the verdict that a serious miscarriage of Justice
may have occurred, it may set aside the verdict, grant a new trial, and
submit the issues for determination by another jury." Lincoln,
630 F.2d at 1319.
Our role is limited to determining whether the district court "clearly
and manifestly" abused its discretion. Id.; see United States v. Lopez,
803 F.2d 969,
977 (9th Cir. 1986), cert. denied,
481 U.S. 1030,
95 L. Ed. 2d 530,
107 S. Ct. 1958
(1987); United States v. Shaffer,
789 F.2d 682,
687 (9th Cir. 1986); United States v. Falsia,
724 F.2d 1339,
1343 (9th Cir. 1983). The decision "is within the sound discretion
of the district court, and the appellant carries a significant burden to
show" an abuse of discretion. United States v. Steel,
759 F.2d 706,
713 (9th Cir. 1985) (citation omitted). |
| [48] | Appellate deference makes sense. Circuit Judges, reading the dry pages
of the record, do not experience the tenor of the testimony at trial. The
balance of proof is often close and may hinge on personal evaluations of
witness demeanor. And, because an order directing a new trial leaves the
final decision in the hands of the jury, it does not usurp the jury's function
in the way a judgment of acquittal does. In fact, until 1984 grants of new
trial motions were not appealable. 3 Wright, supra p. 10997, § 559 at 95
(Supp. 1991). Although they now are, a court of appeals will only rarely
reverse a district Judge's grant of a defendant's motion for a new trial,
and then only in egregious cases. |
| [49] | Here the district Judge sat through the entire trial, and after the jury
returned its verdicts the Judge reviewed all the transcripts. Upon careful
reflection, he granted Alston's motion for a new trial. The district Judge
discussed in detail the dentists' proffered explanations for their behavior: |
| [50] | In essence the testimony is as follows: Dr. Alston says: I talked to Steve
Touche [one of the plan managers,] and I have discussed the co-payment schedules,
and I think it is undisputed that all of the dentists were complaining they
were too low. It wasn't any secret to anybody. They had more expenses because
of the AIDS scare and so forth. |
| [51] | I think the companies were well aware that there was unhappiness within
the profession with the co-payment schedules. |
| [52] | In any event, Dr. Alston testified and he said that Steve Touche had told
him that the Phoenix schedule [the one the dentists wanted adopted] was
acceptable and that he should get together with the doctors and make what
was called a quote, "show of force," and that as a result of his
conversations with Touche he got the doctors together. |
| [53] | I reviewed Steve Touche's testimony. Interestingly enough, he never denies
having said that. He just says: I don't recall. That's exactly what he says. |
| [54] | The testimony of the defendants Walker and Meyer and the other people
that were at the meeting are [sic] that Dr. Alston had told them and said
at the meeting that the companies had approved the schedule - and I am not
citing exact words, but, in essence, that he had talked with the companies
and the companies were in agreement and that basically what the companies
wanted was to see if any dentists would approve of the Phoenix schedule.
And, in fact, at the meeting there were Discussions about wanting to change
some here and there, and Dr. Alston said that he didn't think that they
would get approval but that he would go back to the company, or the companies. |
| [55] | I think it is uncontradicted, or certainly the reasonable Conclusion of
the evidence is that Dr. Meyer and Dr. Walker were told that - or certainly
were under the impression that the companies had approved the schedule and
that Dr. Alston was kind of the go-between. |
| [56] | It seems to me that if that is the reasonable Conclusion of what the dentists
all thought, that there was no conspiracy. They weren't conspiring to do
anything, they thought they were working with the company. |
| [57] | 1991-1 Trade Cas. at 65,471-72 (emphasis added). |
| [58] | We have reviewed the transcripts of the trial. The dentists offered alternative
explanations for almost everything the government presented. Although the
jury apparently chose to believe the government's version of events, a reasonable
trier of fact could have come out the other way. Given the district Judge's
familiarity with the evidence and his ability to evaluate the witnesses,
and in light of the deferential standard of review we are bound to apply
in reviewing an order granting a new trial, we cannot say the district Judge
abused his discretion in coming to a different Conclusion than did the jury. |
| [59] | The government argues that the district Judge's ruling was an abuse of
discretion nevertheless, because even under the facts as he viewed them
a criminal antitrust violation has been made out. We are confronted, therefore,
with a question of law: Assuming that the jury had found the facts as the
district court believed it should have, would that have led to a judgment
of acquittal? In other words, would a finding that the dentists believed
the schedule was proposed or approved by the plans prior to the meeting,
and was submitted to the assembled dentists merely for their reaction, absolve
them of liability for price fixing? |
| [60] | We recognize that the dental consumers actually bear the burden of higher
co-payments, and that the plans' approval of the dentists' action cannot
transform an otherwise unlawful conspiracy into a harmless meeting. But
in a criminal case the government must prove that the defendants had the
requisite mental state to commit the crime. See United States v. United
States Gypsum Co.,
438 U.S. 422,
436-43,
57 L. Ed. 2d 854,
98 S. Ct. 2864
(1978); United States v. O'Mara,
963 F.2d 1288,
1292-95 (9th Cir. 1992) (Kozinski, J., Concurring). The indictment charges,
and the district court correctly instructed the jury to find, that the defendants
knowingly conspired to fix and raise co-payment fees. In a criminal antitrust
prosecution, the government need not prove specific intent to produce anticompetitive
effects where a per se violation is alleged. See United States Gypsum Co.,
438 U.S. at 440
(intent requirement has "certain exceptions for conduct regarded as
per se illegal"); United States v. Brown,
925 F.2d 1182,
1187-88 (9th Cir. 1991). But while they need not have entered the agreement
with the specific intent to violate the Sherman Act, mere acquiescence in
a fee schedule proposed or approved by the plans does not an antitrust conspiracy
violation make. Barry v. Blue Cross,
805 F.2d 866,
870-74 (9th Cir. 1986) (no Sherman Act violation when Blue Cross sought
comments and suggestions from physicians regarding a new health plan; all
decisions regarding the plan were made by Blue Cross, not the doctors);
see Arizona v. Maricopa County Medical Soc'y,
457 U.S. 332,
352-53,
73 L. Ed. 2d 48,
102 S. Ct. 2466
& n.26 (1982). If the dentists had believed they were only complying
with the plans' requests, they would have lacked the mens rea necessary
for a price-fixing conspiracy. |
| [61] | It is, of course, for the jury to determine whether the dentists' version
of this key fact is to be believed, and the first jury apparently did not
believe them. The district Judge, on the other hand, determined that the
evidence weighed heavily against the verdict. We cannot say that the district
Judge committed a "clear and manifest abuse of discretion," Lincoln,
630 F.2d at 1319,
in concluding that an inJustice could be avoided by presenting the issue
to a second jury. "The task of safeguarding the rights of criminal
defendants ultimately rests with the experienced men and women who preside
in our district courts. We should let them do their jobs." United States
v. Balough,
820 F.2d 1485,
1491 (9th Cir. 1987) (Kozinski, J., Concurring). |
| [62] | If the government chooses to retry Alston (and the other defendants if
the district court grants their motions for a new trial), the matter that
gave the district court pause can be the focus of particular attention.
Like the learned district Judge, who was troubled by what he termed his
"sterile" instructions, we underscore the importance of giving
the jury sufficient useful guidance in sorting the evidence before it. For
example, while we have approved the district court's Instruction #10, see
pp. 10993-94 supra, we note that "price fixing" is a term of art
that is hardly self-defining. Many things that might occur at a meeting
such as in Dr. Alston's office would escape the per se rule and might be
perfectly legal under the rule of reason: dentists commiserating over the
low fee schedules; or impugning the motivations or integrity of the Plans;
even sabre-rattling about economic retribution at some indefinite time in
the future if their grievances remain unaddressed. Some such activity, like
clamoring for governmental protection of their economic interests vis-a-vis
their antagonists or competitors, would even be constitutionally protected.
See Eastern R.R. Presidents Conference v. Noerr Motor Freight, Inc,
365 U.S. 127,
5 L. Ed. 2d 464,
81 S. Ct. 523
(1961); United Mine Workers v. Pennington,
381 U.S. 657,
14 L. Ed. 2d 626,
85 S. Ct. 1585
(1965). As the Seventh Circuit has observed, the district court must explain
clearly what the jury has to find in order to trigger the per se rule: "In
such a case, it must be explained to the jury that its function is to decide
whether certain conduct, described with precision in the instruction, did
or did not occur." Wilk v. American Medical Ass'n,
719 F.2d 207,
219 (7th Cir. 1983) (emphasis added). |
| [63] | Moreover, while we hold that the situation here is not sufficiently novel
or unusual to escape scrutiny under the per se rule, the relationship between
individual health care providers and medical plans is not without subtlety
and complexity. In a market consisting of individual service providers and
individual consumers, concerted action by the suppliers even on matters
not directly related to price is viewed with the greatest suspicion. See,
e.g., National Soc'y of Prof. Eng'rs v. United States,
435 U.S. 679,
98 S. Ct. 1355,
55 L. Ed. 2d 637
(1978) (holding illegal an engineering association's canon of ethics that
prohibited competitive bidding by its members). Needless to say, adoption
of suggested or "maximum" fee schedules will run afoul of Section
One's per se rule as thinly-veiled attempts at price fixing. See, e.g.,
Arizona v. Maricopa County Medical Soc'y,
457 U.S. 332,
73 L. Ed. 2d 48,
102 S. Ct. 2466
(1982). |
| [64] | But health care providers who must deal with consumers indirectly through
plans such as the one in this case face an unusual situation that may legitimate
certain collective actions. Medical plans serve, effectively, as the bargaining
agents for large groups of consumers; they use the clout of their consumer
base to drive down health care service fees. Uniform fee schedules - anathema
in a normal, competitive market - are standard operating procedure when
medical plans are involved. In light of these departures from a normal competitive
market, individual health care providers are entitled to take some joint
action (short of price fixing or a group boycott) to level the bargaining
imbalance created by the plans and provide meaningful input into the setting
of the fee schedules. Thus health care providers might pool cost data in
justifying a request for an increased fee schedule. Cf. Maple Flooring Mfrs.
Ass'n v. United States,
268 U.S. 563,
69 L. Ed. 1093,
45 S. Ct. 578
(1925) (trade association's gathering and disseminating cost and pricing
data not per se unreasonable). Providers might also band together to negotiate
various other aspects of their relationship with the plans such as payment
procedures, the type of documentation they must provide, the method of referring
patients and the mechanism for adjusting disputes. Such concerted actions,
which would not implicate the per se rule, must be carefully distinguished
from efforts to dictate terms by explicit or implicit threats of mass withdrawals
from the plans. |
| [65] | Finally, we are told that this is the first criminal antitrust prosecution
of health care professionals in half a century. See Brief for the ADA and
the AMA as Amici Curiae at 4. While it is not our place to question the
government's motives in elevating to the criminal level a dispute normally
handled as a civil enforcement matter, the crushing consequences of a criminal
conviction on the lives and careers of the defendants singled out for such
treatment makes it all the more important that the district Judge spell
out with specificity what the jury must find in order to convict. Although
both criminal and civil violations may be made out under the same substantive
provisions of the Sherman Act, "the Act has not been interpreted as
if it were primarily a criminal statute; it has been construed to have a
generality and adaptability comparable to that found . . . in constitutional
provisions." United States v. United States Gypsum Co.,
438 U.S. 422,
439,
57 L. Ed. 2d 854,
98 S. Ct. 2864
(1978) (internal quotation marks omitted). The district court should therefore
be chary of wholesale adoption of jury instructions developed primarily
in the civil enforcement context. It may deem it appropriate instead to
pattern its instructions around the unique setting of a criminal prosecution.
We leave this, like other matters on remand, in the capable hands of the
district Judge. |
| [66] | Conclusion |
| [67] | The order granting a new trial as to Alston is AFFIRMED; the orders granting
judgments of acquittal notwithstanding the verdicts as to Meyer and Walker
are VACATED. The case as to all three defendants is REMANDED for further
proceedings consistent with this opinion. If the government elects to retry
any of the defendants, the Double Jeopardy Clause does not bar retrial because
the first convictions were supported by substantial evidence. United States
v. Scott,
437 U.S. 82,
90-91,
57 L. Ed. 2d 65,
98 S. Ct. 2187
(1978). |
|
|
|
| Opinion Footnotes | |
|
|
|
| [68] | *fn1 Drs.
Alston and Walker do business as corporations, which are also defendants;
all references to the individuals include their corporations. |
| [69] | *fn2 The
exact agenda and purpose of the meeting is disputed. The government contended,
and the jury apparently found, that the dentists met with the intention
of exerting pressure on the plans to increase fees. The dentists claimed,
however, that the topic of the meeting was a new co-payment schedule proposed
by the plans, and that the letter-writing campaign was undertaken at the
behest of the president of one of the plans as a pro forma "show of
force" to help the plans justify increasing the fees in Tucson to match
those in Phoenix. |
| [70] | *fn3 "Every
contract, combination in the form of trust or otherwise, or conspiracy,
in restraint of trade or commerce among the several States, or with foreign
nations, is declared to be illegal." 15 U.S.C. § 1. |
| [71] | *fn4 Appellee
Walker argues that we lack jurisdiction to hear the government's appeal
from his judgment of acquittal, because 18 U.S.C. § 3731 states that "no
appeal shall lie where the double jeopardy clause of the United States Constitution
prohibits further prosecution." There is no double jeopardy problem,
however, where a defendant will not be subjected to a second prosecution.
As the Supreme Court explained in United States v. Wilson,
420 U.S. 332,
344-45,
43 L. Ed. 2d 232,
95 S. Ct. 1013
(1975), where "reversal [of a district court's order] on appeal would
merely reinstate the jury's verdict, review of such an order does not offend
the policy against multiple prosecution." Accord United States v. Foumai,
910 F.2d 617,
619 (9th Cir. 1990). |
| [72] | *fn5 "Unfair
methods of competition in or affecting commerce, and unfair or deceptive
acts or practices in or affecting commerce, are declared unlawful."
15 U.S.C. § 45(a)(1). Practices that violate section 1 of the Sherman Act
also violate section 5 of the FTC Act. See, e.g., FTC v. Cement Institute,
333 U.S. 683,
689-95,
92 L. Ed. 1010,
68 S. Ct. 793
(1948). |
| [73] | *fn6 The
district Judge also noted that this criminal prosecution "bothered"
his "sense of fair play" when contrasted with the civil action
in SCTLA, and expressed concern with the way prosecutors charged defendants
in drug cases with mandatory minimum sentences. 1991-1 Trade Cas. at 65,472,
65,476. Absent a showing of discrimination or other unconstitutional misconduct
in its charging decisions, such an inquiry into the prosecutor's motives
is improper. Wade v. United States,
118 L. Ed. 2d 524,
112 S. Ct. 1840
(1992); United States v. Redondo-Lemos,
955 F.2d 1296,
1298-1303 (9th Cir. 1992). We interpret the district Judge's statements
as stray comments given the opportunity to engage the government attorney
in a dialogue, rather than grounds for his decision on the merits of the
pending motions. |
| [74] | *fn7 Defendants
do not claim on appeal that the interstate commerce requirement was not
met. |
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