Anticompetitive activities may not give rise to antitrust claim

January 1, 2007

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."

COURT CONCLUSION

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.

This column is written for informational purposes only and should not be construed as legal advice.

Barry Senterfitt is a partner in the insurance industry practice of Akin Gump Strauss Hauer & Feld LLP in the firm's Austin, Texas, office.