Opinion ID: 535674
Heading Depth: 4
Heading Rank: 1

Heading: Patrick

Text: 14 In Patrick we considered whether the state action doctrine protected physicians in Oregon from federal antitrust liability for their involvement with hospital peer-review proceedings. The facts in Patrick are similar to those of this case. The plaintiff, a general and vascular surgeon, was subjected to a review of his staff privileges at a hospital in Astoria, Oregon, whereupon it was recommended that his privileges be terminated. 800 F.2d at 1502. The doctor brought suit in federal court while the hospital's peer-review proceedings were still being conducted, alleging claims under sections 1 and 2 of the Sherman Act. Id. at 1504. He alleged that the members of his former clinic initiated the hospital peer-review proceedings to preclude him from competing against them. Id. at 1502-04. We held that the doctors' conduct in the peer-review proceedings was immune from antitrust scrutiny under the state action doctrine because Oregon had articulated a policy in favor of peer review and actively supervised the peer-review process. 800 F.2d at 1505-07. The Supreme Court reversed our decision, holding that the state action doctrine did not shield the hospital peer-review proceedings from an antitrust challenge. 108 S.Ct. at 1665-66. 15 In considering the state action doctrine, the Court applied the rigorous two-prong test first devised in California Retail Liquor Dealers Ass'n v. Midcal Aluminum, Inc., 445 U.S. 97, 100 S.Ct. 937, 63 L.Ed.2d 233 (1980). Patrick, 108 S.Ct. at 1662-63. Under the Midcal test,  'the challenged restraint must be one clearly articulated and affirmatively expressed as state policy, '  and the anti-competitive conduct 'must be actively supervised by the State itself.'  Id. 108 S.Ct. at 1663 (quoting Midcal, 445 U.S. at 105, 100 S.Ct. at 943). The Court found it unnecessary to consider the clear articulation prong of the Midcal test, finding that the second prong was not satisfied. Id. 16 The Court stated that the active supervision or second requirement, mandates that the State exercise ultimate control over the challenged anticompetitive conduct, and requires that state officials have and exercise power to review particular anticompetitive acts of private parties and disapprove those that fail to accord with state policy. Id. The defendants argued that the state of Oregon actively supervised the peer-review process through (1) the state Health Division; (2) the Board of Medical Examiners (BOME); (3) and the state judicial system. Id. The Court had little difficulty in concluding that neither the Health Division nor the BOME actively supervised the peer-review decisions. Id. 108 S.Ct. at 1663-64. The Health Division had general supervisory powers over such matters as licensing hospitals and the endorsement of health laws. Although the statute authorizes the Health Division to compel a hospital to meet its obligation to establish and review peer-review procedures, the Court concluded that this authority was insufficient because the Health Division had no power to review actual peer-review decisions and overturn a decision that failed to accord with state policy. Id. at 1664. Similarly, the BOME, whose principal function was to regulate the licensing of physicians, also lacked the authority to disapprove individual peer-review decisions. Id. 17 With respect to the state judiciary, the Court declined to decide whether judicial review of private conduct can ever satisfy the active supervision requirement. This case, however, does not require us to decide the broad question whether judicial review of private conduct ever can constitute active supervision, because judicial review of privilege-termination decisions in Oregon, if such review exists at all, falls far short of satisfying the active supervision requirement. Id. at 1664-65. The Court noted that there was no statute in Oregon, or any holding by a state court, which provided a physician whose privilege had been revoked by a hospital a means of judicial review of private peer-review decisions. Id. at 1665. The Court emphasized that any judicial review that did exist was insufficient to constitute active supervision, because the review would not involve a review of the merits of a privilege termination decision. Id. (citing Straube v. Emanuel Lutheran Charity Bd., 287 Or. 375, 384, 600 P.2d 381, 386 (1979), cert. denied, 445 U.S. 966, 100 S.Ct. 1657, 64 L.Ed.2d 242 (1980)). The Court thus concluded that no state actor in Oregon actively supervised hospital peer-review decisions and that the state action doctrine was inapplicable. Id. 18