To the contrary, Defendant's prices should not deter competitive experimentation or innovation by non-member competitors. Plaintiff is free to charge whatever prices he can command. If the market values a service that is too expensive to be offered by member-doctors within the rules of Defendant's maximum-price policy, then the price-fixing scheme would actually help Plaintiff because it would enable it to offer valued services effectively closed to PFMC-affiliated doctors. However, if consumers are not willing to pay for more costly services, they would not patronize those services regardless of the prices for alternative services. The antitrust laws do not require the market to subsidize underappreciated products to ensure their "competitiveness."
Maricopa 's real concern was not for non-participating doctors such as Dr. Ramey, nor the participating doctors who voluntarily agreed to limits. The Court's concern was that if too many doctors were participating in the conspiracy, advanced techniques could become unavailable to consumers who would otherwise be willing to pay for them. A patient who needs and could pay for a complicated $ 300,000 heart transplant operation would be injured if doctors refused to perform the additional services because they could not charge more than $ 200,000. Consumers, not doctors, are the victims of this type of antitrust violation.
c. Disguised Minimum Prices
Maricopa 's third concern was that a maximum-price scheme can be a masquerade for a more harmful minimum price scheme. Maricopa, 457 U.S. at 347-348. However, as a competitor, Plaintiff could only benefit from artificially high prices. "A competitor 'may not complain of conspiracies that . . . set minimum prices at any level.'" ARCO, 495 U.S. at 337 (quoting Matsushita Electric Industrial Corp. v. Zenith Radio Corp., 475 U.S. 574, 585 n. 8, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986) (emphasis original)). "Low prices benefit consumers regardless of how those prices are set, and so long as they are above predatory levels, they do not threaten competition. Hence, they cannot give rise to antitrust injury." ARCO, 495 U.S. at 340. The ARCO Court added that "rivals cannot be excluded in the long run by a non-predatory maximum-price scheme unless they are relatively inefficient," Id. at 337 n.7, and that a "firm complaining about the harm it suffers from nonpredatory price competition is really claiming that it is unable to raise prices." Id. at 337-338. As noted above, Plaintiff has not alleged that Defendant's prices are predatory. Therefore, no basis for antitrust injury exists under this theory.
4. Plaintiff Has Not Suffered An Antitrust Injury
Plaintiff has not established any potential antitrust injuries contemplated by ARCO or Maricopa. Therefore, Plaintiff is injured, if at all, not by price fixing but by the increased efficiency that results from Defendant's cost-containing operation.
Although Defendant has no apparent market power to produce such results, suppose that Plaintiff's injuries did force it out of business. While conduct that eliminates rivals reduces competition, reduction of competition does not invoke the Sherman Act until it harms consumer welfare. Rebel Oil Co., Inc. v. Atlantic Richfield Co., 51 F.3d 1421, 1433 (9th Cir. 1995). Courts have repeatedly found that Congress designed the Sherman Act as a "consumer welfare prescription." Id. (quoting ROBERT H. BORK, THE ANTITRUST PARADOX 66 (1978)). Consumer welfare is maximized when economic resources are allocated to their best use and when consumers are assured competitive price and quality. Id. (citations omitted). Plaintiff has failed to demonstrate an injury to consumer welfare.
Therefore, even if Plaintiff is correct that Defendant's practices constitute a per se illegal restraint of trade, absent a showing of antitrust injury as defined in Brunswick, that claim is not Plaintiff's to make. Plaintiff has failed to establish that it can demonstrate antitrust injury at trial. Therefore, Defendant's motion for summary judgment must be granted as to Plaintiff's second cause of action.
D. Rejection of Dr. Ramey as a Preferred Provider
Plaintiff's first cause of action alleges that Defendant's refusal to accept Dr. Ramey as a member is an illegal group boycott because it limits Plaintiff's access to PFMC-affiliated patients and handicaps its ability to compete in the market for ENT medical services. Plaintiff's third cause of action alleges that Defendant's rejection of Dr. Ramey's application for membership was illegal because it was done in furtherance of its price-fixing scheme.
The only plaintiff in this case is J. Allen Ramey, M.D., Inc. Dr. Ramey himself is not a plaintiff. The medical corporation of a solo practitioner does not have standing to contest a hospital's rejection of privileges for the individual doctor. See Todorov v. DCH Healthcare Authority, 921 F.2d 1438, 1441 n. 1 (11th Cir. 1991). Therefore, Defendant must be granted summary judgment as to Plaintiff's first and third causes of action.
Even if Dr. Ramey himself were a plaintiff, he would still be required to establish antitrust injury, which, as discussed above, the corporation has failed to do. In any case, antitrust injury would be difficult to establish. If Defendant was not engaging in anticompetitive activities, then it had the right as a private enterprise to reject Dr. Ramey's application. Numerous courts have rejected § 1 claims based upon the rejection of privileges or membership in the medical arena. See BCB Anesthesia Care v. Passavant Mem. Area Hosp., 36 F.3d 664, 667-668 (7th Cir. 1994) ("Hundreds, perhaps thousands of pages in West publications are devoted to [such questions] . . . [and they] almost always come to the same conclusion: the staffing decision at a single hospital was not a violation of section 1 of the Sherman Act.").
If, on the other hand, Defendant's pricing polices represent an illegal, profitable price-fixing conspiracy, Dr. Ramey could not establish antitrust injury by arguing that he was prevented from participating in the illegal conspiracy. Dr. Ramey's application expressly stated his acceptance of Defendant's pricing policies. Participation in an illegal, anticompetitive conspiracy is not representative of the type of behavior the antitrust laws were designed to protect, and therefore a denial of such does not give rise to antitrust injury under Brunswick. See Local Beauty Supply, Inc. v. Lamaur, Inc., 787 F.2d 1197, 1201-1204 (7th Cir. 1986) (distributor allegedly terminated for underselling a price-maintenance scheme did not suffer antitrust injury; right to receive supercompetitive profits achieved by participation in price-fixing conspiracy is not protected by Sherman Act).
Therefore, summary judgment against Plaintiff on these claims may be fairly based on more than the technicality (albeit an important one) that the complaint fails to name Dr. Ramey as a plaintiff.
The Court denies Plaintiff's motion for summary judgment. The Court grants Defendant's motion for summary judgment as to all claims.
IT IS SO ORDERED.
DATED: APR 6 1998
Rudi M. Brewster
UNITED STATES DISTRICT JUDGE