The Supreme Court has referred to U.S. antitrust laws as the Magna Carta of free enterprise—a set of laws as important to the preservation of economic freedom as the Bill of Rights is to the protection of personal freedoms. While these laws are typically enforced by state and federal governments, i.e., the Department of Justice and state attorneys general, they also provide for a private right of action enforceable by persons who have been injured by activities that are forbidden by the antitrust laws.
The federal courts keep a watchful eye, however, on private lawsuits. Court-made doctrine has limited the circumstances under which private parties may pursue antitrust claims. The Supreme Court has long admonished that federal antitrust law is not designed to protect businesses from the workings of the market, but rather to protect the public from the failure of the market. Not all persons who have suffered an injury flowing from an antitrust violation have the right to pursue a private claim. The lower courts have maintained that only those who can most efficiently vindicate the purposes of the antitrust laws have standing to maintain a private action. These courts have developed the requirement of "antitrust standing," and the companion doctrine of "antitrust injury" in order to assure that only appropriate claims are pursued.
The Seventh Circuit Court of Appeals recently affirmed a judgment for a medical practice group (defendant) brought on antitrust grounds by an individual physician, anesthesiologist Dr. Carolyn G. Kochert (plaintiff). At the outset, the court acknowledged that exclusive arrangements between anesthesiology groups and hospitals were commonplace and not inherently anticompetitive. The federal appeals court concluded the physician was unable to identify an antitrust injury or "standing."
The facts involved a hospital that granted an anesthesiology practice group an exclusive contract to provide anesthesia services for the hospital. The practice group then subcontracted with the plaintiff physician to provide services at the hospital. Subsequently, the hospital merged with another hospital, and when the exclusive contract expired thereafter, the anesthesiology group's contract was not renewed, and the new combined hospital entered into an exclusive arrangement with another practice group. The individual physician complained in her suit that she had suffered an antitrust injury as a result of the hospital's actions in excluding competition from the marketplace, and that she was forced to pursue a different practice outside the field of anesthesiology. At the time the merger occurred, the physician had established a practice in a new field (pain management). At the time her practice group's contract was not renewed, she was practicing full-time in her new field.
The court concluded that the physician had failed to demonstrate an antitrust injury and that even though the defendants may have engaged in anticompetitive behavior, the behavior did not injure the physician's practice because it was non-existent by that point. The court pointed out that the plaintiff's cause of action depended on proof of not only anticompetitive behavior, but that the plaintiff had suffered injuries that flowed directly from the defendant's anticompetitive activity. The court noted that the plaintiff was not the party who could most efficiently vindicate the purposes of the antitrust laws in the case, and therefore, she lacked standing.
Barry Senterfitt is a partner in the insurance industry practice of Akin Gump Strauss Hauer & Feld LLP in the firm's Austin, Texas, office.