## F I L E D United States Court of Appeals Tenth Circuit 

### JUN 27 2000 

### PATRICK FISHER Clerk PUBLISH
UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

ANTHONY DIAZ, PAUL DIEHL and ALLAN KAMINSKY, Plaintiffs-Appellants, v. MICHAEL FARLEY, MORRIS MATTHEWS, JOAN ABELE, COTTONWOOD OBSTETRICS & GYNECOLOGY & INFERTILITY, OLD FARM OBSTETRICS &GYNECOLOGY, and JOHN DOES IX, Defendants-Appellees. No. 98-4136

Appeal from the United States District Court

for the District of Utah (D.C. No. 94-CV-1184-B)
Jay D. Gurmankin (Eliot M. Cohen and Chris R. Hogle with him on the briefs), Berman, Gaufin, Tomsic, Savage & Campbell, Salt Lak e City, Utah, for Plaintiffs-Appellants. George A. Hunt, Williams & Hunt, Salt Lake City, Ut ah and Randy T. Austin, Kirton & McConkie, Salt Lake City, Utah (R. Stephen Marshall, Durham, Jones & Pinegar, Salt Lake City, Utah; Kenneth W. Yeates, V an Cott, Bagley, Cornwall & McCarthy; R. Brent Stephens, Snow, Christensen & Martineau, Salt Lake City, Utah, with them on the brief) for Defendants-Appell ees.- 2 -

Before TACHA, BRORBY and EBEL , Circuit Judges.

EBEL , Circuit Judge.

Drs. Diaz, Diehl, and Kaminsky (collectively, the “ plaintiffs”) are anesthesiologists with privileges at Cottonwood Hos pital in Murray, Utah. They brought an antitrust suit against three other anesthesiologists with privileges at Cottonwood, Drs. Farley, Matthews, and Abele (colle ctively, the “individual defendants”), and against two entities, Cottonwood Obstetrics & Gynecology & Infertility (“Cottonwood Ob/Gyn”) and Old Farm Obst etrics & Gynecology (“Old Farm Ob/Gyn”). The plaintiffs alleged that the ind ividual defendants engaged in a horizontal group boycott that violated Section 1 of the Sherman Act and the Utah Antitrust Act. They further alleged that Cott onwood Ob/Gyn and Old Farm Ob/Gyn also violated Section 1 of the Sherman Act and the Utah Antitrust Act when they horizontally agreed to honor the boycott engineered by the individual defendants. The plaintiffs also sued all of the de fendants for tortious interference with economic relations, and they sued one of the i ndividual defendants, Dr. Abele, for defamation. The plaintiffs maintain that the actions of the def endants were per se unlawful under the antitrust laws, and they have co nceded that they could not1 It was unclear whether the district court’s July 1 7, 1998 Memorandum

Decision disposed of all of the claims against all of the defendants, or just the claims against the individual defendants. On June 12, 2000, the district court filed a Supplemental Order clarifying that its Memo randum Decision was and is a final judgment dismissing all of the plaintiffs’ cl aims against all of the defendants. The district court also filed a Judgme nt pursuant to Federal Rule of Civil Procedure 58.

2 The majority of the facts in this case are undispu ted and are adopted from the district court’s thorough opinion. See Diaz v. Farley , 15 F. Supp.2d 1138 (D. Utah 1998). To the extent that any facts are dispu ted, we have viewed them in the light most favorable to the plaintiffs, because thi s appeal stems from the grant of a motion for summary judgment in favor of the defen dants. See Kaul v. Stephan , 83 F.3d 1208, 1212 (10th Cir. 1996). - 3 - prove their claims if the rule of reason governs th e conduct at issue. The district court found that the rule of reason applies to the actions of the defendants; therefore it granted the individual defendants’ mot ion for summary judgment on the antitrust claims, and dismissed with prejudice the plaintiffs’ antitrust claims against all of the defendants. 1 The district court then dismissed without prejudi ce the pendant defamation and tortious interference wi th economic relations claims. The plaintiffs now appeal, and we affirm.
I. BACKGROUND 2

A. Cottonwood Hospital and the Anesthesia Departme nt
Cottonwood Hospital is located in Murray, Utah, jus t south of Salt Lake City. The hospital is governed pursuant to bylaws recommended by the Cottonwood Hospital medical staff and adopted by th e Cottonwood Hospital- 4 -

Board of Trustees. The bylaws establish separate d epartments within Cottonwood Hospital, including a Department of Anesthesiology. Anesthesiology services at Cottonwood Hospital are provided by the members of the Department of Anesthesiology (“Department”), all of whom are lice nsed anesthesiologists who practice medicine independently of each other. The anesthesiologists are not considered employees of the hospital. The Departme nt schedules anesthesiologists to cover the operating room (“OR” ), the labor and delivery room, and other areas of the hospital. Each area r equires a specific number of anesthesiologists each day. Historically, anesthes iologists working in one area have not been regularly scheduled in another area. The OR and labor and delivery divisions have each had a certain number of “slots, ” or physicians, who rotate in the schedule. A new physician is usually only adde d to the rotation in these areas when another physician leaves. Until November, 1993, two anesthesiologists from th e Department were responsible for scheduling anesthesiology services at Cottonwood. In November, 1993, a single anesthesiologist, Dr. Farley, became the monthly scheduler. He was selected as scheduler by a two-thirds majority vote of the voting members of the Department. As the scheduler, Dr. Farley was r esponsible for ensuring that a sufficient number of anesthesiologists were assigne d to cover each area of the3 There is some uncertainty in the record whether Dr . Diehl left the labor

and delivery anesthesia practice in 1985 or 1989. We use the 1989 date because that appears consistent with his deposition testimo ny, but if that fact is in dispute, it is not determinative of our holding. - 5 - hospital at all times. Prior to February, 1994, a single department member was assigned to cover each 24-hour labor and delivery s hift.
B. Plaintiffs-Appellants
Plaintiff-appellant Dr. Anthony Diaz practiced gene ral anesthesiology at Cottonwood, including obstetric (“ob/gyn”) anesthes iology between 1981 and 1982. He left Cottonwood in 1982 to practice medic ine elsewhere and then returned to Cottonwood in 1990. From 1990 to 1992, Dr. Diaz did some “fill in” anesthesiology work on the labor and delivery sched ule at the rate of approximately two shifts per month. In 1993, he re quested significant additional labor and delivery shifts. Plaintiff-appellant Dr. Paul Diehl practiced anesth esia in labor and delivery at Cottonwood between 1981 and 1989. In 1989, Dr. Diehl left the labor and delivery anesthesia practice to work in the OR anes thesia practice. 3 In 1992 and 1993, Dr. Diehl again sought significant work in labor and delivery. Plaintiff-appellant Dr. Kaminsky practiced anesthes iology in labor and delivery at Cottonwood between 1980 and 1983. In 1 983, Dr. Kaminsky gave up- 6 -

his labor and delivery shifts for shifts in the OR division. In 1993, Dr. Kaminsky asked to be included again in the labor and delivery schedule. Thus, plaintiffs Drs. Diaz, Diehl, and Kaminsky eac h performed anesthesiology services in the labor and delivery r oom at Cottonwood Hospital for a period of time in the 1980s; each voluntarily cea sed performing such services in the labor and delivery room; and each sought to reg ain a significant number of shifts on the labor and delivery schedule in 1993.
C. Defendants-Appellees
Defendant-appellee Dr. Michael Farley has been a me mber of Cottonwood’s Department of Anesthesiology since 198 6; defendant-appellee Dr. Morris Matthews has been a member since 1983; and d efendant-appellee Dr. Joan Abele was a member from 1983 to 1996. All three in dividual defendants were part of a five-physician rotation that regularly pe rformed anesthesiology in labor and delivery for several years prior to 1993. Defe ndants-appellees Cottonwood Ob/Gyn and Old Farm Ob/Gyn are practice groups comp rised of gynecologists and obstetricians with privileges to practice at Co ttonwood Hospital.- 7 -

D. Scheduling Dispute
In November, 1993, Dr. Diaz, who was the acting Ane sthesia Department Chairman, called a Department meeting to discuss th e scheduling of ob/gyn anesthesia. At that time, there was apparently onl y one open slot in the labor and delivery rotation and Drs. Diaz, Diehl, and Kaminsky were all seeking increased labor and delivery shifts. The Department members concluded that the plaintiffs would be scheduled for “some” labor and delivery sh ifts. In December, 1993, the Department members met again to discuss whether the plaintiffs should be given new “slots” so that everyone would work equally on the labor and delivery schedule, or whether they wo uld be given one slot to share among the three of them. The Department members ap parently decided that the ob/gyn anesthesiologists currently filling the “slo ts” would meet separately to discuss the issue. It is unclear whether that meet ing ever took place. The plaintiffs continued to work to some extent in labo r and delivery, but there was no definite resolution of the scheduling issue. The individual defendants’ hesitations about granti ng plaintiffs’ requests to return to the labor and delivery rotation apparentl y stemmed from the following: concern over the plaintiffs’ absence from ob/gyn an esthesia, possible disruption of the smoothly running ob/gyn anesthesia schedule, and a decrease in the- 8 -

individual defendants’ own total number of shifts w ith ob/gyn patients. At around this time, individual defendant Dr. Matthews wrote the following in his journal: Three people who had all left OB in the past now ar e asking to come back on. There is one slot open, and another fello w in the OR wants to do more OB. The OR people what [sic] us to equa lly divide the shifts, but those of us who never left don’t want that. In addition some of the OB’s don’t want one of them to come bac k. Since he quit doing OB when I cam [sic] 10 years ago, I wond er how good his memory is, but I think we’ll have to let him work s ome shifts and let him remember why he gladly left a decade ago. We h ave some problems in the department. About half of the peop le are easy to get along with and all the surgeons will work with them . The others have personality quirks or are slow, and some surge ons request not to have them. Shortly thereafter, Dr. Matthews sent Dr. Farley a letter, informing him that a proposed contract being considered with Cottonwood Ob/Gyn would impact the monthly anesthesia schedule. At around the same ti me, Dr. Abele circulated an unauthorized informal “poll” to the Obstetrics Department at Cottonwood Hospital, asking OB practitioners to rate anesthesi ologists, including Drs. Diaz, Diehl, and Kaminsky. Dr. Ron Larkin, the managing partner of Cottonwood Ob/Gyn, testified that he had concerns about the addition of the plaintiff s to the labor and delivery schedule based on prior experiences with all three plaintiffs. Dr. Larkin stated that he “did not want them taking care of our patie nts” because of those concerns. On February 4, 1994, the physicians at Cottonwood O b/Gyn requested that- 9 -

another anesthesiologist be scheduled for their pat ients whenever Plaintiff Dr. Kaminsky was on call.
E. The Agreement Between Dr. Matthews and Cottonwo od Ob/Gyn
Soon after Cottonwood Ob/Gyn’s request regarding Dr . Kaminsky, Cottonwood Ob/Gyn and individual defendant Dr. Matthews reached an agreement. The agreement obligated Dr. Matthews pe rsonally to provide anesthesiology services to Cottonwood Ob/Gyn’s pati ents in the labor and delivery room, or to select another physician of hi s choosing to perform such services. The contract, which was signed on February 7, 1994, provided that Dr. Matthews “shall have exclusive authority and contro l over all anesthesia services provided to patients of Cottonwood obstetrics for l abor, cesarean section and D & Cs performed in the labor suite at Cottonwood Hospi tal.” Thus, according to the agreement, either Dr. Matthews or an anesthesiologi st selected by him would provide anesthesiology services for Cottonwood Ob/Gyn patients in labor and delivery.
F. Double Coverage of Plaintiffs’ Shifts at Cotton wood Hospital
After the agreement was made, Dr. Matthews informedDr. Kaminsky that he would be “double covered,” meaning that wheneverDr. Kaminsky was on the4 This still allowed Doctor Kaminsky to provide anes thesiology services to

ob/gyn patients admitted to Cottonwood Hospital who were not from Cottonwood Ob/Gyn. - 10 - labor and delivery schedule, there would also be an other anesthesiologist (selected by Dr. Matthews) scheduled. The anesthes iologist selected by Dr. Matthews would be the one who would provide anesthe siology services to the patients of Cottonwood Ob/Gyn in labor and delivery

. 4 Dr. Matthews offered Drs. Diehl and Diaz two non-double covered shifts per mo nth, with the possibility for increased work for Cottonwood Ob/Gyn patients in th e future if their ob/gyn skills were deemed acceptable. Dr. Diaz accepted t his offer, but Dr. Diehl declined and was then subject to being double cover ed. Subsequently, Cottonwood Ob/Gyn requested that Dr. Diaz not perfo rm anesthesia on its obstetrical patients because of poor performance; t herefore, Dr. Diaz was ultimately double covered as well. The double cove rage policy operated to preclude the plaintiffs from performing anesthesia services on Cottonwood Ob/Gyn patients in the labor and delivery suite. Whenever they were scheduled in labor and delivery, Dr. Matthews or an anesthesiolo gist selected by him was scheduled as well. The other anesthesiologist perf ormed the anesthesiology services for the Cottonwood Ob/Gyn patients in labo r and delivery. Plaintiffs were also ultimately double covered for Cottonwood Ob/Gyn patients seen in the OR after physicians in the OR indicated that they would5 15 U.S.C. § 1 provides in relevant part: “Every c ontract, combination in

the form of trust or otherwise, or conspiracy, in r estraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal.” - 11 - prefer not to be scheduled with them. In addition, the plaintiffs allege that the effects of the agreement and the double coverage po licy have been extended as Dr. Matthews has asked other groups of obstetrician s and gynecologists who deliver babies at Cottonwood to enter into agreemen ts similar to the one he had with Cottonwood Ob/Gyn. On March 7, 1994, Dr. Matthews sent a letter to Dr. Alan Rappeleye of Old Farm Ob/Gyn in an attempt to solicit Old Farm Ob/Gy n to enter into an agreement similar to the agreement he had with Cottonwood Ob/ Gyn. On June 8, 1994, Old Farm Ob/Gyn sent a letter to Cottonwood Ob/Gyn indi cating that Old Farm Ob/Gyn would abide by the Cottonwood Ob/Gyn agreeme nt. Plaintiffs allege that the June 8th letter serves as evidence of a horizon tal agreement between Old Farm Ob/Gyn and Cottonwood Ob/Gyn to boycott plaintiffs.
H. Procedural History
The plaintiffs sued under Section 1 of the Sherman Act, 15 U.S.C. § 1 (1990), 5 alleging that the defendants engaged in a conspira cy that unreasonably restrained trade. They argued that the conduct at issue amounted to a horizontal- 12 -

group boycott that merited per se condemnation under the antitrust laws. They conceded to the district court that they did not have sufficient evidence to proceed under a theory that the alleged conduct violated th e rule of reason. The district court granted the individual defendant s’ motion for summary judgment and dismissed the plaintiffs’ antitrust cl aims against all of the defendants after finding that per se treatment was inappropriate for three reasons: (1) the boycott alleged by the plaintiffs was not t he type that has been historically shown to always or almost always negatively affect competition; (2) a preliminary examination of market conditions did not reveal anyanticompetitive impact; and (3) the defendants offered procompetitive justifications for their actions. The district court then declined to exercise supplement al jurisdiction over plaintiffs’ defamation and tortious interference with economic relations claims pursuant to 28 U.S.C. § 1367, and dismissed those claims without prejudice. Plaintiffs do not appeal that dismissal. In this appeal, plaintiffs allege that the districtcourt relied on an inaccurate and inconsistent characterization of the facts, and they maintain that the per se rule applies to the conduct of the defendants.6 28 U.S.C. § 1337 provides in relevant part:

(a) The district courts shall have original jurisdi ction of any civil action or proceeding arising under any Act of Congr ess regulating commerce or protecting trade and commerce against r estraints and monopolies.

715 U.S.C. § 15 provides in relevant part: Except as provided in subsection (b) of this sectio n [regarding foreign states], any person who shall be injured inhis business or property by reason of anything forbidden in the ant itrust laws may sue therefor in any district court of the United St ates in the district in which the defendant resides or is found or has an a gent, without respect to the amount in controversy, and shall rec over threefold the damages by him sustained, and the cost of suit, inc luding a reasonable attorney’s fee. - 13 - II. DISCUSSION The district court had original jurisdiction over t he antitrust claims pursuant to 28 U.S.C. § 1337 6 and 15 U.S.C. § 15. 7We have jurisdiction under 28 U.S.C. § 1291. We review de novo a district court’s order granting summary judgment.
See Kaul , 83 F.3d at 1212. Summary judgment is appropriate if the pleadings, d epositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine i ssue as to any material fact and that the moving party is entitled to judgment as a matter of law. When applying this standard, we exa mine the factual record and reasonable inferences therefrom in the l ight most favorable to the party opposing summary judgment. If there is no genuine issue of material fact in dispute, then we next determine if the substantive law was correctly applied by the di strict court. Id.8 Plaintiffs point specifically to the district court’s failure to mention an

agreement between Drs. Farley and Matthews that Dr. Farley would make the labor and delivery schedule in accordance with Dr. Matthews’ decisions. In acting in accordance with Dr. Matthews’ decisions w hen developing the schedule, Dr. Farley was simply abiding by the agreement betw een Dr. Matthews and Cottonwood Ob/Gyn and carrying out his duties as th e scheduler. Thus, the district court did not “ignore” the agreement betwe en Dr. Matthews and Dr. Farley; rather, it likely considered Dr. Farley’s a ctions as an element of the overall agreement between Dr. Matthews and Cottonwo od Ob/Gyn. - 14 - A. The District Court’s Characterization of the Fa cts

Plaintiffs first contend that the district court re lied on an inaccurate and internally inconsistent characterization of the fac ts in reaching its decision. They argue that the district court placed too much empha sis on the agreement between Dr. Matthews and Cottonwood Ob/Gyn, and ignored oth er evidence of conversations and agreements involving the defendants. Although the district court did not specifically mention the substance of every relevant conversation in which the defendants engaged in the months leading up to the agreement between Dr. Matthews and Cottonwood Ob/Gyn, the district co urt did discuss several meetings and conversations involving the defendants that preceded the Matthews/Cottonwood Ob/Gyn agreement. Plaintiffs h ave failed to show how any of the evidence they cite that was not mentioned in the district court opinion would alter the horizontal group boycott analysis. 8- 15 -

Plaintiffs also claim that the district court erred in giving credence to the alleged concerns about their obstetrical anesthesio logy skills. They argue that because Dr. Matthews offered Drs. Diaz and Diehl tw o non-double covered shifts per month, any concern about their skills was merel y a “red herring argument.” Dr. Matthews, however, offered Drs. Diaz and Diehl those shifts on an “experimental test basis” to allow them to prove th at concerns about their skills were unwarranted. Thus, the fact that Dr. Matthews offered Drs. Diaz and Diehl non-double covered shifts is not indicative of a la ck of concern about their skills. In addition, the record contains evidence that ther e was some basis for concern about the obstetric anesthesiology skills of the pl aintiffs. Plaintiffs also point to what they consider a funda mental contradiction within the district court’s rendition of the facts. The district court opinion contained the following two statements: (1) “[T]he ob/gyn doctor or patient had no realistic choice but to use the anesthesiologiston call when an obstetric case presented itself,” Diaz , 15 F. Supp.2d at 1147; and (2) “The agreement ena bles the patient or ob/gyn doctor performing a procedure to choose which anesthesiologist he or she will use rather than req uiring the doctor to use whichever anesthesiologist happens to be on call,” Id. at 1148. The statements are not fundamentally contradictory; rather, they a re easily reconciled. In the first statement, the district court describes the situati on as it existed prior to the- 16 -

Matthews/Cottonwood Ob/Gyn agreement; and in the se cond statement, the district court describes the situation as it existe d after the agreement. Before the agreement, neither the ob/gyn doctor nor the patien t could choose an anesthesiologist. After the agreement, Cottonwood Ob/Gyn doctors could tell Dr. Matthews which anesthesiologists they preferred fortheir patients. Then, whenever a non-preferred anesthesiologist was on th e labor and delivery schedule, a preferred anesthesiologist could be scheduled as well to provide services for the Cottonwood Ob/Gyn patients. The district court mad e these observations in support of its conclusion that the agreement increa sed user choices. Thus, plaintiffs’ first argument fails. They have not demonstrated that the district court relied on an inaccurate or inconsist ent characterization of the facts in reaching its decision.

B. Per Se Versus Rule of Reason Analysis
Plaintiffs next argue that the district court erred in finding that per se analysis does not govern the conduct of the defendants in this case. We agree with the district court’s resolution of this issue and we find its analysis thorough; therefore, we adopt much of its reasoning in this o pinion. Section 1 of the Sherman Act prohibits “every contr act, combination . . . or conspiracy in restraint of trade or commerce . . . .” 15 U.S.C. § 1. The Sherman- 17 -

Act’s prohibition generally precludes only restraints that are unreasonable. See Northwest Wholesale Stationers, Inc. v. Pacific Stationery & Printing Co. , 472 U.S. 284, 289, 105 S. Ct. 2613, 86 L. Ed.2d 202 (19 85). The Supreme Court has developed two main analytical approaches for determ ining whether a defendant’s conduct unreasonably restrains trade: the per se rule and the rule of reason. The rule of reason is the usual method of analyzing con duct under the Sherman Act.
See Northwest Wholesale , 472 U.S. at 289. It requires “the fact finder [t o] weigh[] all of the circumstances of a case in decid ing whether a restrictive practice should be prohibited as imposing an unreas onable restraint on competition.” Continental T.V., Inc. v. GTE Sylvan ia, Inc. , 433 U.S. 36, 49, 97 S. Ct. 2549, 2557, 53 L. Ed.2d 568 (1977). Per se analysis is reserved for “‘agreements or practices which because of their pe rnicious effect on competition and lack of any redeeming virtue are conclusively p resumed to be unreasonable and therefore illegal without elaborate inquiry as to the precise harm they have caused or the business excuse for their use.’” Northwest Wholesale , 472 U.S. at 289 (quoting Northern Pacific Ry. Co. v. United States , 356 U.S. 1, 5, 78 S. Ct. 514, 518, 2 L. Ed.2d 545 (1958)). “The decision to apply the per se rule turns on ‘whether the practice facially appears to be one th at would always or almost always tend to restrict competition and decrease ou tput . . . or instead one designed to increase economic efficiency and rendermarkets more, rather than- 18 -

less, competitive.’” Id. at 289-90 (quoting Broadcast Music, Inc. v. Columb ia Broadcasting System, Inc. , 441 U.S. 1, 19-20, 99 S. Ct. 1551, 1562-63, 60 L. Ed.2d 1 (1979) (further quotations and citations om itted)). Because plaintiffs conceded below that they did not have sufficient ev idence to proceed under a theory that defendants’ conduct violated the rule o f reason, if we find, as the district court did, that the per se rule does not apply, the order dismissing plaintiffs’ antitrust claims must be affirmed. Plaintiffs allege that defendants engaged in a hori zontal restraint of trade in the form of a group boycott. In Northwest Wholesal e , the Supreme Court clarified its earlier language from Klor’s, Inc. v. Broadway-Hale Stores, Inc. , 359 U.S. 207, 79 S. Ct. 705, 3 L. Ed.2d 741 (1959), and held quite clearly that not all group boycotts or horizontal restraints of trade ar e to be judged under a per se standard. See Northwest Wholesale , 472 U.S. at 295. There, the court stated that unless the defendants in a group boycott situation “possess[] market power or exclusive access to an element essential to effecti ve competition, the conclusion that expulsion [of the plaintiff] is virtually always likely to have an anticompetitive effect [thereby invoking a per se analysis] is not warranted.” Id. at 296. The Court also stated that in per se cases, “the practices were generally not justified by plausible arguments that they were intended to enhance overall efficiency and make markets more competitive.” Id. at 294.- 19 -

With regard to each of the three factors mentioned above, we agree with the district court that “[t]he present situation is qui te different from the Supreme Court cases meriting per se review.” Diaz , 15 F. Supp.2d at 1146. There is no showing that the defendants hold a dominant positio n in a relevant market; the defendants did not control access to an element “es sential” to enable plaintiffs to compete; and the agreements the plaintiffs challeng e did, in some regards, make the markets more competitive. First, plaintiffs have not shown that defendants ho ld a dominant position in a relevant market. As stated by the district court :

In this case, the plaintiffs have not alleged marke t power on the part of the defendants. Indeed, the plaintiffs have not defined any relevant market. Accordingly, the court has no basis on which to determine the size of Cottonwood Ob/Gyn’s and Old F arm Ob/Gyn’s practices at Cottonwood Hospital compared to other ob/gyn groups or how significantly the agreement between Dr. Matthew s and Cottonwood Ob/Gyn and Old Farm Ob/Gyn affects the p laintiffs’ or other anesthesiologists’ ability to practice ob/gynanesthesia at Cottonwood Hospital or any other relevant geographi c market. Diaz , 15 F. Supp.2d at 1148. Second, the defendants did not control access to an element “essential” to plaintiffs’ ability to compete. The plaintiffs rem ained free to practice anesthesiology at Cottonwood and free to compete to increase their access to ob/gyn patients. Although agreements between the i ndividual defendants and the two groups of doctor-users of anesthesiology servic es effectively precluded the9 This case is easily distinguishable from Full DrawProductions v. Easton

Sports, Inc. , 182 F.3d 745 (10th Cir. 1999), where this court r eversed the district court’s dismissal of an antitrust claim for failure to allege antitrust injury adequately. In Full Draw , the plaintiffs alleged that the defendants’ group boycott cut off their access to suppliers and exhib itors of archery goods and services, which was an essential element for the pl aintiff to be able to compete in the market of sponsoring trade shows for archery pr oducts. See Full Draw , 182 F.3d at 751. We found the plaintiffs’ allegations sufficient to state a violation of § 1 of the Sherman Act. See id. - 20 - plaintiffs from performing anesthesiology services on Cottonwood Ob/Gyn and Old Farm Ob/Gyn patients during the term of the agr eements, that result is a necessary consequence of all such agreements betwee n providers and users of goods and services. Here, plaintiffs could compete for all the other ob/gyn work, and there is no showing by plaintiffs of the percentage of the market that was precluded because of the agreements with CottonwoodOb/Gyn and Old Farm Ob/Gyn. In addition, the agreements with Cottonwoo d Ob/Gyn and Old Farm Ob/Gyn were apparently terminable-at-will, and ther e is no showing that plaintiffs were precluded from trying to improve their skills and relationships with doctors in order to compete for business with the doctors i n those groups. Finally, plaintiffs still had staff privileges and could uti lize Cottonwood Hospital to service their own patients. 9 Third, Northwest Wholesale explicitly allows courts to consider plausible arguments concerning procompetitive effects in dete rmining whether the per se rule or the rule of reason should apply to a horizo ntal group boycott. See- 21 -

Northwest Wholesale , 472 U.S. 284, 294 (stating that group boycott cas es analyzed under the per se rule “were generally not justified by plausible arguments that they were intended to enhance overal l efficiency and make markets more competitive”). If there are no such p lausible arguments, “the likelihood of anticompetitive effects is clear and the possibility of countervailing procompetitive effects is remote.” Id. Here, the defendants advance a plausible argument that the agreements in question actually e nhanced competition by increasing a doctor’s ability to choose which anesthesiologists he or she would use at Cottonwood Hospital. Before the agreements, the ob/gyn doctors largely had to accept whoever was scheduled to be on shift at the time of any particular delivery. This argument further counsels against u se of the per se approach. Finally, the fact that the conduct at issue in this case concerns decisions relating to health care presents a further reason w hy we should be cautious in applying a per se test. Because agreements pertaining to the provis ion of health care services often raise issues of professional me dical judgment, it is typically useful to apply a rule of reason approach: Allegations of a concerted refusal to deal arise fr equently in the health care industry. Denial of hospital staff pri vileges is frequently alleged to be the product of a group boycott organi zed by competing health care providers. In such cases, the courts h ave generally applied the rule of reason, holding that a hospital must be allowed, in conjunction with its medical staff, to exclude indi vidual doctors on the basis of their lack of professional competence or unprofessional conduct. Actions to enforce ethical rules by medic al associations are- 22 -

also frequently alleged to constitute a group boyco tt. Again, the courts generally apply the rule of reason, examinin g whether the rules serve a legitimate purpose in establishing pr ofessional standards of care without unduly limiting competiti on among providers. ABA Section of Antitrust Law, Antitrust Law Develop ments 118 (4th ed. 1997) (citations omitted). We cannot say that the type o f internal hospital scheduling practice at issue in this case is the kind of pract ice that has historically posed anticompetitive consequences. As the district court here observed:

Furthermore, this case deals with a call system that appears to be common throughout the health care ind ustry. The unique nature of the call system and the relative i nexperience of the courts in understanding and regulating internal hospital scheduling practices make it wholly inappropriate t o justify condemning one type of scheduling practice as per se violative of the Sherman Act. The United States Supreme Court has cautioned that “It is only after considerable exper ience with certain business relationships that courts classifythem as per se violations.” Broadcast Music, Inc. , 441 U.S. at 9. It may be that this type of scheduling practice actually invo lved a combination or concerted action by the defendants a nd that it is anticompetitive, but such a conclusion should only be reached after an analysis of all relevant factors under the Rule of Reason. In sum, defendants’ alleged practice is no t the type that regularly poses anticompetitive consequences. Consequently, per se analysis is not appropriate. Diaz , 15 F. Supp.2d at 1147-48; see also Retina Assoc. v. Southern Baptist Hosp. , 105 F.3d 1376, 1381-82 (11th Cir. 1997) (finding per se analysis inappropriate for an opthalmological care provider group’s allegedly exclusive referral practices, in part because the effect of the referral practices w as “not fully understood” and- 23 -

had not been historically shown to always or almostalways adversely affect competition). Therefore, we find that plaintiffs have not shown t hat the conduct at issue in this case constitutes the type of horizontal gro up boycott deserving of per se analysis. They have failed to “present a threshold case that the challenged activity falls into a category likely to have predo minately anticompetitive effects.” Northwest Wholesale , 472 U.S. 284, 298. Plaintiffs’ citations to this court’s decisions in Brown v. Presbyterian Healthcare Servs. , 101 F.3d 1324 (10th Cir. 1996), Coffey v. Healtht rust , 955 F.2d 1388 (10th Cir. 1992), and Tarabishi v. McAles ter Regional Hospital , 951 F.2d 1558 (10th Cir. 1991), are unavailing. Brownis distinguishable from the present case because it did not even involve the is sue of whether to use a per se or rule of reason standard in evaluating the defend ant’s conduct. The only antitrust issue in that appeal was an issue of caus ation. See Brown , 101 F.3d at 1334-1335. Furthermore, factually we note that the plaintiff in Brownwas denied all privileges to practice at the hospital in quest ion, see Brown , 101 F.3d at 1328, whereas here, the plaintiffs continued to be able t o practice at Cottonwood. Although Coffeyindicated that a horizontal, as opposed to a verti cal, group boycott is a necessarycondition for application of the per se rule, it did not imply, as plaintiffs suggest, that it was a sufficientcondition for using the per se10 The reference is to Weiss v. York Hospital , 745 F.2d 786, 818-20 (3rd

Cir. 1984), a case in which the Third Circuit analy zed a situation it found analogous to a traditional boycott under the per se rule. Because Weiss involved facts different from those present here, and becaus e the statements in Weiss regarding analysis of group boycotts were supersede d by the Supreme Court’s ruling in Northwest Wholesale , we do not find Weiss instructive in our analysis in this case. - 24 - rule. See Coffey , 955 F.2d at 1392. In fact, the holding of Northw est Wholesale is inconsistent with such a suggestion. See Northwest Wholesale , 472 U.S. at (finding that the rule of reason governed the legal ity of horizontal agreements that resulted in the expulsion of a competitor from a pu rchasing cooperative). Thus, contrary to plaintiffs’ suggestion, Coffeydoes not dictate that because defendants engaged in horizontal agreements that limited plain tiffs’ access to ob/gyn anesthesiology, per se analysis must govern their conduct. Tarabishi actually lends support to the district court’s dec ision that a per se analysis is inappropriate in the present situation. In Tarabishi , this court relied in part on the fact that the defendants had terminated the plaintiff doctor’s staff privileges “at least ostensibly because of a lack o f professional competence or unprofessional conduct,” in order to conclude that “Weiss does not dictate the use of per se analysis.” 10 Tarabishi , 951 F.2d at 1570 n.18. The court in Tarabishi stated, “Denying staff privileges to a physician th rough peer review on the basis that the physician’s conduct is unprofessional and inappropriate is not an activity ‘likely to have predominantly anticompetitive effec ts’ such that per se treatment- 25 -

is necessary.” Id. at 1571 (citation omitted). Here, although there was not a “peer review,” the conduct of the defendants was si milarly motivated, at least in part, by issues of the plaintiffs’ competency to pr ovide medical services. That suggests that this claim is a poor candidate to be evaluated under a per se standard of review.
III. CONCLUSION We find that the district court did not rely on an inaccurate and internally inconsistent characterization of the facts in reach ing its decision, and we agree with the district court that per se analysis does not govern the conduct at issue in this case. We also find no error in the district c ourt’s recognition of the plausible procompetitive justifications for the agreement between Dr. Matthews and Cottonwood Ob/Gyn. Therefore, we AFFIRM the distri ct court’s order granting summary judgment to the individual defendants and d ismissing the plaintiffs’ claims against all of the defendants.