- 10th Circuit Affirms Summary Dismissal of Nephrologists' Monopolization Shootout in the Streets of Durango
- October 28, 2009
- Law Firm: Holland & Hart LLP - Denver Office
Dr. Mark F. Bevan has a thriving nephrology practice in Farmington, New Mexico. Mercy Medical Center of nearby Durango, Colorado repeatedly invited him to provide kidney dialysis and other nephrology services in’ Durango, which he declined. The hospital then with the financial support of the Southern Ute Indian Tribe hired a different nephrologist to practice his craft in Durango. Under the pre-existing bylaws of the Hospital, the hiring of the new doctor automatically resulted in the cancellation of Dr. Bevan’s consulting privileges at the hospital. Consulting privileges were designed for the purpose of filling gaps in physician coverage. He was left with the status of being a member of the consulting staff. He then applied for active staff privileges at the hospital , but found it difficult to ethically meet the requirement in the by-laws that he reside within 30 minutes of the hospital. The hospital, in an attempt to pre-empt and residential success by Dr. Bevan, granted the new physician the exclusive right to practice nephrology at the hospital. Dr. Bevan responded with a claim of monopolization and attempted monopolization of the nephrology physician services in Durango in violation of Section 2 of the Sherman Act.
In Four Corner’s Nephrology Associates, P.C. et al v. Mercy Medical Center of Durango, No. 08-1231 (10th Cir. 2009), a panel of the Tenth Circuit Court of Appeals affirmed the summary dismissal, on the basis that even if a monopolist, the Hospital had no duty to deal with Dr. Bevan and that Dr. Bevan was unable to describe any anti-trust injury. The court noted that monopoly power was not itself illegal. It is only illegal when accompanied with an element of anticompetitive conduct. The Court perceived that the refusal to permit Dr. Bevan to access its facilities was a reflection of “competitive zeal” to maximize its own short term profits. The conduct was procompetitive, not anti-competitive.
What then about the Aspen Ski case where the Supreme Court held that the Aspen Ski company engaged in anti-competitive conduct by dropping the Aspen Highlands from its four resort ski pass, even though the ski pass arrangement was profitable to Aspen Ski. The Court noted that the right to refuse to deal is not unqualified and that Aspen Ski had abandoned short term profits for long term monopoly by attempting to drive Highlands out of the market. The key difference according the Court is that the desire to exclude competitors from one’s facility in order to make more money now is okay and procompetitive, while the willingness to accept short term losses to make more money down stream through the maintenance of a monopoly is not.
The pesky question of antitrust injury also arose here. Antitrust laws are not designed to protect competitors, but to protect consumers. The Court perceived Dr. Bevan’s attempt to join the medical staff of the hospital as more of an effort to participate in the benefits of a monopoly than to protect consumers. It is of course the Court’s perception that counts.