Opinion ID: 217510
Heading Depth: 2
Heading Rank: 2

Heading: Lack of Evidence of Predatory Conduct

Text: On appeal, Mercatus argues that this conduct was not protected by Noerr-Pennington and was not (as the district court concluded) mere speech outside the scope of the antitrust laws. Although we agree with Mercatus on both points, Mercatus has failed to present sufficient evidence that the Hospital's actions constituted actual or attempted monopolization under the Sherman Act. See Professional Real Estate Investors, 508 U.S. at 61, 113 S.Ct. 1920 (noting that even a plaintiff who defeats [a] defendant's claim to Noerr immunity ... must still prove a substantive antitrust violation). To prove actual monopolization of a market, Mercatus must show (1) that the Hospital possessed monopoly power in that market; and (2) that the Hospital willfully acquired or maintained that power by means other than the quality of its product, its business acumen, or historical accident. Chillicothe Sand & Gravel Co. v. Martin Marietta Corp., 615 F.2d 427, 430 (7th Cir.1980). To prove attempted monopolization, Mercatus must show (1) the Hospital's specific intent to achieve monopoly power in a relevant market; (2) predatory or anticompetitive conduct directed to accomplishing this purpose; and (3) a dangerous probability that the attempt at monopolization will succeed. Lektro-Vend Corp. v. The Vendo Co., 660 F.2d 255, 270 (7th Cir. 1981). The second element of each claim can be met by showing that the Hospital engaged in predatory or anticompetitive conduct of some kind. See Chillicothe Sand & Gravel, 615 F.2d at 430; American Academic Suppliers, Inc. v. Beckley-Cardy, Inc., 922 F.2d 1317, 1320 (7th Cir. 1991) (The offense of monopolization is the acquisition of monopoly by improper methods or, more commonly ... the abuse of monopoly, the latter occurring for example when a monopolist by pricing below cost succeeds in repelling or intimidating new entrants or extending his monopoly into new markets.); State of Illinois ex rel. Burris v. Panhandle Eastern Pipe Line Co., 935 F.2d 1469, 1481 (7th Cir. 1991) (Section 2 forbids not the intentional pursuit of monopoly power but the employment of unjustifiable means to gain that power.). Turning to Mercatus' submissions to this court, we see little to indicate why the Hospital's actions might be considered anticompetitive or predatory. This issue is never really addressed in Mercatus' opening brief, which focuses primarily on arguing that Noerr-Pennington immunity does not apply. And Mercatus' bare claim that the Hospital's conduct prevented [Mercatus'] entry and reduced competition simply does not suffice. After all, many kinds of conduct may prevent or discourage a potential competitor from entering a particular market. Federal antitrust laws are implicated only when that conduct is predatory or unjustifiable. See, e.g., Burris, 935 F.2d at 1481 (Section 2 forbids not the intentional pursuit of monopoly power but the employment of unjustifiable means to gain that power.). To the extent that Mercatus addresses this issue, it only further muddies what are already murky waters. Its reply brief argues that the Hospital tortiously violated Mercatus' no-shop agreements. The Hospital was not party to those agreements and could not breach a contract to which it was not a party. Assuming that Mercatus meant to say that the Hospital tortiously interfered with its contractual relationships with the physicians, an allegation that the Hospital acted tortiously does little to advance Mercatus' argument. The antitrust laws are designed to protect competition, while business tort law is generally designed to protect the competitors themselves. See, e.g., American Council of Certified Podiatric Physicians & Surgeons v. American Bd. of Podiatric Surgery, Inc., 323 F.3d 366, 372 (6th Cir.2003) (Isolated business torts ... do not typically rise to the level of [an antitrust] violation unless there is a harm to competition itself.). [12] For the Hospital's alleged interference to have violated the antitrust laws, then, its specific acts of interference must have had a negative effect on competition. The problem is, any interference with the no-shop agreements was arguably pro-competitive to at least some extent, given that the no-shop agreements were designed to prevent the Hospital or anyone else from competing for the physicians of LFM and NSM. That remains true whether or not the Hospital, which was admittedly aware of the no-shop agreements' existence, actually knew the substance of those agreements. To show that the Hospital's physician strategy violated the antitrust laws, Mercatus had to present evidence that the Hospital engaged in some anticompetitive conduct in addition to its alleged interference with the no-shop agreements. To that end, Mercatus alleges that the Hospital falsely implied that Mercatus was in violation of anti-kickback regulations, but we have already concluded that statements of this sort are either pro-competitive or have, at best, a minimal anticompetitive effect. Setting aside that alleged false statement, we just cannot see any reason to be troubled by the manner in which the Hospital went about convincing these physicians not to move their practices to Mercatus' physician center. The Hospital did not leverage its market power to make the physicians offers on supra-competitive terms impossible for any competitor to match. The Hospital simply offered the physicians many of the same incentives Mercatus offered to induce them to relocate their practices in the first place. Nor is there any evidence that the Hospital resorted to unfair or coercive tactics, such as threats to revoke the physicians' Hospital staff privileges if they relocated to Mercatus' physician center. [13] To the extent that Mercatus tries to argue that the Hospital, in the course of making its offers, exerted extreme pressure on the physicians, this argument founders for two reasons. First, the evidence indicates that at least some of the pressure of which Mercatus complains was not exerted by the Hospital but was an indirect result of the Hospital's public relations campaign. According to Mercatus' own CEO's deposition testimony, the Hospital's misinformation in communicating with all constituents ... sullied the entire physician market for Mercatus. For example, one key physician felt ostracized from the ... community because ... of his support of the project in the face of the hospital's objections. Another physician was fairly shaken by buzz in the community. But such community reaction was the inevitable result of the Hospital's robust public relations campaign. We have already explained that the public relations campaign falls under the protection of Noerr-Pennington. Second, to whatever extent the Hospital directly exerted pressure on LFM and NSM to remain with the Hospital, the Hospital had good competitive reason to do so. Mercatus readily admits that it was trying to lure away from the Hospital a group of doctors with a critical mass of more than 30,000 patients. The loss of this many patients was apparently fatal to Mercatus' plans to build a physician center anywhere in Lake Bluff. The effects of such a loss on the Hospital would undoubtedly have been significant as well. It is not troubling, then, that the Hospital made an extraordinary effort to retain these physicians (and, through them, the revenue from treating their patients). [14] And even if such efforts were somewhat aggressive or heavy-handed, the antitrust laws do not prohibit conduct that is only unfair, impolite, or unethical. Schachar, 870 F.2d at 400 (citation omitted). We also see nothing predatory or anticompetitive in the fact that the Hospital failed to follow through with a few of the promises it made to convince these practice groups not to relocate to the Mercatus physician center. For starters, we reject Mercatus' economic expert's attempt to argue that any failure to keep a promise apparently, regardless of the reason for that failureis anticompetitive. If that were the case, even the most mundane breach of contract could violate the antitrust laws. Lest we transform every inadvertent failure to keep a commercial promise into an antitrust violation, we conclude that the Hospital's conduct can be considered predatory only if its promises were made not to compete in the market, but only to unfairly stymie unwanted competition. That might be the case if, for example, it could be shown that the Hospital's promises were made with no intent of ever being kept, or if the Hospital's promises were broken only after the Hospital realized that Mercatus' competitive threat had passed. But nothing in the record, even when viewed in the light most favorable to Mercatus, indicates that this was the case. The evidence shows only that the Hospital fulfilled some but not quite all of the promises it made to each physician group. NSM agreed to partner with the Hospital to develop an electronic medical records system. NSM has not yet signed a contract to purchase that system, though it has expressed verbal intent to do so. And though the Hospital helped NSM obtain an extension of its office lease, the Hospital has neither assumed that lease nor subleased a portion of the office space thereunder back to NSM. The Hospital froze LFM's lease rate as promised, but has not yet provided the promised recruitment assistance to LFM, apparently because LFM never recruited another physician. As a result, we have, at best, a claim for breach of contract by the physicians against the Hospital (or perhaps a claim for promissory estoppel), not an antitrust case by Mercatus. Because of the potential chill that antitrust litigation can have on legitimate pro-competitive practices, see Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 594, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986), Mercatus was obliged, in opposing the Hospital's motion for summary judgment, to present evidence that tends to exclude the possibility that the [Hospital's] conduct was as consistent with competition as with illegal conduct. Nelson v. Monroe Reg'l Med. Center, 925 F.2d 1555, 1578 (7th Cir.1991) (quotation omitted). Despite this burden, Mercatus appears to merely complain that the Hospital had the audacity to try to retain the business of the physicians through whom Mercatus admittedly sought to draw substantial income away from the Hospital. But this is an example of the very type of competition the antitrust laws were designed to protect. It would be perverse if Mercatus' failure to prevail in that competition gave it a grievance cognizable under the Sherman Act. Even if the Hospital had monopoly power in the geographic and product markets Mercatus' economic expert endorsed, the Hospital had no duty to step aside and allow Mercatus to make off with its physicians, patients, and revenue. Cf. Olympia Equip. Leasing, 797 F.2d at 379 (Consumers would be worse off if a firm with monopoly power had a duty to extend positive assistance to new entrants, or having extended it voluntarily a duty to continue it indefinitely.). Nothing in the voluminous record could enable any reasonable finder of fact to render a verdict for Mercatus regarding the Hospital's pursuit of these two physician practice groups.