Opinion ID: 808085
Heading Depth: 4
Heading Rank: 2

Heading: Market Share and Market Power

Text: Another element of an antitrust claim requires the plaintiff to show the defendant can wield “market power.” To do so, a plaintiff must show evidence of either power to control prices or the power to exclude competition. Reazin v. Blue Cross & Blue Shield, Inc., 899 F.2d 951, 966 (10th Cir. 1990). Power over price and competition may depend on various market characteristics, such as “market trends, number and strength of other competitors, and entry barriers.” Shoppin’ Bag of Pueblo, Inc. v. Dillon Cos., 783 F.2d 159, 162 (10th Cir. 1986). “Market share is relevant to the determination of the existence of market or monopoly power, but market share alone is insufficient to establish market power.” Reazin, 899 F.2d at 967 (internal quotation marks omitted). And the 6 Dr. Cohlmia cites a number of other cases in support of his view that antitrust injury can be demonstrated without an “actual lessening of competition or an increase in prices.” Aplt. Br. at 32 (quoting Blue Shield of Virginia, 457 U.S. at 482). But the cases he cites were primarily decided at the motion to dismiss stage when the court is still determining jurisdiction, and are predicated on a finding of “an abusive peer review process”—a finding we rejected above by concluding that SJMC is entitled to HCQIA immunity. See Balaklaw v. Lovell, 14 F.3d 793, 795 n.2 (2d Cir. 1994); Fuentes v. South Hills Cardiology, 946 F.2d 196 (3d Cir. 1991); Mishler v. St. Anthony’s Hosp. Sys., 694 F.2d 1225 (10th Cir. 1981); Full Draw Prods. v. Easton Sports, Inc., 182 F.3d 745 (10th Cir. 1999). -22- absence of market share may give rise to a presumption that market power does not exist. Id. at 969–70. Dr. Cohlmia’s expert testified that SJMC controlled between 15.8% and 19.3% of the market, and SJMC does not dispute this quantitative conclusion. From this testimony, Dr. Cohlmia argues that market share “between 17% and 25% . . . is sufficient to show monopoly power.” Aplt. Br. at 34 (citing Valley Liquors, Inc. v. Renfield Importers, Ltd., 822 F.2d 656, 667 (7th Cir. 1987)). But as SJMC notes, this is hardly a bright-line, or even a commonly accepted, metric. See Reazin, 899 F.2d at 968 (We have not determined “a firm market share percentage . . . before a finding of monopoly power can ever be sustained. We prefer the view that market share percentages may give rise to presumptions, but will rarely conclusively establish or eliminate market or monopoly power.”); see also Colorado Interstate Gas Co. v. Natural Gas Pipeline Co., 885 F.2d 683, 694 n.18 (10th Cir. 1989) (“While the Supreme Court has refused to specify a minimum market share necessary to indicate a defendant has monopoly power, lower courts generally require a minimum market share of between 70% and 80%.”). Thus, while high market shares may give rise to presumptions of market power, a market share of less than 20% is woefully short under any metric from which to infer market power. See also Domed Stadium Hotel, Inc. v. Holiday Inns, Inc., 732 F.2d 480, 490 (5th Cir. 1984) (“[U]ndisputed evidence of low market share may make monopolization an impossibility as a matter of law.”); IIB -23- Areeda & Hovenkamp 250 (“We . . . presume that market shares below 50 or 60 percent do not constitute monopoly power . . . . [and e]ven without an absolute rule, a clear presumption will almost always be decisive.”). Given the low market share at issue here, Dr. Cohlmia argues he can still demonstrate market power by showing “other compelling structural evidence . . . to support monopolization.” Dimmitt Agri.. Indus., Inc. v. CPC Int’l, Inc., 679 F.2d 516, 529 (5th Cir. 1984). Since the market share percentages held by SJMC are well shy of clear market power, in determining whether there is any “other compelling structural evidence,” we consider the strength of competition and the difficulty or ease of entry into the market. Shoppin’ Bag, 783 F.2d at 162. With respect to the strength of competition, there are four hospital systems in Tulsa that perform the types of surgeries at issue and SJMC is not even the largest—Saint Francis is. In addition, a specialty heart hospital operated by Saint Francis competed with SJMC, HMC, and SouthCrest at the relevant times here. While performing surgery is a capital-intensive process, for a market the size of Tulsa, four hospital systems do not indicate significant market power by any one player. To the contrary, the record shows each participant in Tulsa had a roughly equivalent share of the market, and no one entity was exercising market power. 7 7 Additionally, we disagree with Dr. Cohlmia’s citation to Oltz v. St. Peter’s Community Hosp., 861 F.2d 1440 (9th Cir. 1988), for the proposition that anti-competitive behavior by a hospital can evidence antitrust injury for “two different segments of the economy. . . . the market in which anesthesia providers (continued...) -24- As to barriers of entry, SJMC points out that fourteen new surgeons have entered the market since 1994, with many of them being recruited by Dr. Cohlmia. While Dr. Cohlmia makes a legitimate argument that exclusion by one hospital can lead to a domino effect of exclusion by other hospitals, he still does not overcome the fact that the mishandled surgeries justified SJMC’s peer review. And as we discussed above, the peer review process resulted in a suspension decision affirmed by a neutral evaluator. The peer review process is no more an entry barrier than any standard requiring professionals to maintain certain professional credentials. Assuming that SJMC lacked the requisite market power, Dr. Cohlmia’s claims may still be pursued for those Section 1 violations that do not require a showing of market power. Thus, a demonstration of anticompetitive conduct can be based on actual adverse effects to competition. FTC v. Indiana Fed’n of Dentists, 476 U.S. 447, 460–61 (1986). Dr. Cohlmia’s claim falls short here as well. He points to SJMC’s “concerted refusal to deal with Plaintiff and the coercion of patients.” Aplt. Br. at 36. But he is not entitled to practice at SJMC or any other hospital; and he 7 (...continued) compete for staff privileges . . . [and] the patient market for anesthesia services.” Id. at 1447. While the Ninth Circuit did so hold, the facts in Oltz indicate that St. Peter’s had an 84% market share for surgical services. Id. at 1442. In such a case, an exclusive agreement to exclude the plaintiff from the market—where such a large showing of market share is demonstrated and conceded by the defendants—is fair evidence of antitrust injury. -25- never explains how his patients were coerced by SJMC. If he is referring to a reduction of choice in the market for physicians, that argument is simply circular and refers back to his claims of market power, which he cannot support. In sum, we agree with the district court that Dr. Cohlmia has not demonstrated SJMC has sufficient market power to control prices or exclude competition.