THE MEDICAL CENTER AT ELIZABETH PLACE, LLC v. ATRIUM HEALTH SYSTEM, et al. - Articles

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Posted by: Karen Belcher on Apr 25, 2019

Court: 6th Circuit Court (Published Opinions)

Attorneys 1:

ARGUED: Richard A. Ripley, RUYAK CHERIAN LLP, Washington, D.C., for Appellant. Shay Dvoretzky, JONES DAY, Washington, D.C., for Appellees. 

Attorneys 2:

ON BRIEF: Richard A. Ripley, Brittany V. Ruyak, RUYAK CHERIAN LLP, Washington, D.C., James A. Dyer, Patrick O’Shaughnessy, SEBALY, SHILLITO + DYER, Dayton, Ohio, for Appellant. Shay Dvoretzky, Robert Stander, JONES DAY, Washington, D.C., Melinda K. Burton, FARUKI IRELAND COX RHINEHART & DUSING P.L.L., Dayton, Ohio, Thomas Demitrack, JONES DAY, Cleveland, Ohio, for Appellees.

Judge(s): BATCHELDER, SUTTON, and WHITE, Circuit Judges.

Court Appealed: Appeal from the United States District Court for the Southern District of Ohio at Dayton.

ALICE M. BATCHELDER, Circuit Judge. This is a case about competition among hospitals in Dayton, Ohio. When Medical Center at Elizabeth Place, LLC (“MCEP”) opened in 2006, it was an acute care, for-profit hospital owned by 60 physicians and one corporate shareholder. By 2009, MCEP’s existence as a physician-owned enterprise came to an end when it sold an ownership interest to Kettering Health Network, a competitor in the Dayton healthcare market. MCEP alleges that it failed because of the anticompetitive actions of Premier Health Partners (“Premier”), a dominant healthcare network in the Dayton area. MCEP alleges that Premier contracted with area physicians and payers (insurers and managed-care plan providers) on the condition that they did not do business with MCEP. Because payers provide patients and physicians provide services, it is difficult to run a viable hospital when one, let alone both, is in short supply.

So, whether by licit or illicit means, Premier won that competition. In this litigation, the parties competed again. This time, MCEP pushed all its chips to the center of the table on one hand of cards: a claim that Premier had engaged in conduct so devoid of benefit to the market as to be per se illegal under the Sherman Act. Such claims apply only to a limited range of conduct. To be per se illegal, a defendant’s conduct has to be so obviously anticompetitive that it has no plausibly procompetitive features—a high hurdle for plaintiffs claiming restraint of trade. Once they clear it, however, plaintiffs receive a corresponding reward: they need not undergo the often arduous process of showing that the challenged conduct was anticompetitive. As one of our sister circuits has described it, “[t]he per se rule is the trump card of antitrust law. When an antitrust plaintiff successfully plays it, he need only tally his score.” United States v. Realty Multi-List, Inc., 629 F.2d 1351, 1362-63 (5th Cir. 1980).

The question before us is whether MCEP successfully played its hand. The district court from which MCEP appeals found that MCEP’s per se claim failed because the record showed that Premier’s contracts with payers and physicians had plausibly procompetitive features. That holding says nothing about whether Premier’s conduct was on balance procompetitive or anticompetitive. This opinion likewise reaches no decision on the ultimate economic merits of Premier’s actions because to do so would go beyond our charge. We must address only the question of per se illegality, and as to that, we agree with the district court that MCEP failed to meet the high standard required for per se claims. We AFFIRM.