Legal Document

425 U.S. 738 96 Supreme Court Reporter 1848 48 United States Reports Lawyer’s Edition 2d Series KF101.8 U54 338 HOSPITAL BUILDING COMPANY, Petitioner,v.TRUSTEES OF the REX et al. Number 74-1452 Argued Feb. 25, 1976. Decided May 24, Syllabus Petitioner corporation, which operates a 49-bed proprietary hospital (Mary Elizabeth) in Raleigh, N.C., brought this antitrust action alleging that respondents, private, tax-exempt (Rex) two of its officers, and health planning officer, had violated Sherman Act by conspiring along with others to block relocation expansion within Raleigh Mary Elizabeth, for purpose enabling Rex monopolize business providing services Raleigh. alleged substantial portion medicines supplies comes from out-of-state sellers; large revenue insurance companies or Federal Government; it pays management service fee parent company, Georgia-based Delaware corporation; planned would be largely financed through lenders. Concluding petitioner's was strictly local, respondents' conduct only incidentally insubstantially affected interstate commerce, District granted motion dismiss complaint. The Appeals affirmed. Held: Petitioner's complaint states cause upon relief can under Act, combination factors involving petitioner commerce being sufficient establish "substantial effect" on meaning as result conduct. Pp. 743-747. (a) That respondents may not have intentional goal affecting does exempt their coverage. Burke versus Ford, 389 320, 88 443, 19 554. 744-745. (b) test satisfied even if impact falls short causing suppliers go out market price conspiracy. 745-746. 4 Cir., 511 Reporter, 2nd 678, reversed remanded. John. Train III, Atlanta, Ga., petitioner. Ray S. Bolze, Washington, D.C., respondents. Carl Weissburg Lyle R. Mink, Los Angeles, Cal., Federation American Hospitals, amicus curiae. Mr. Justice MARSHALL delivered opinion Court. 1 This is suit §§ 2 26 Statutes-at-Large 209, amended, 15 Code KF62 1-2. has are engaged an unlawful conspiracy restrain trade furnishing medical surgical services, they attempting N.C. metropolitan area. dismissed amended pleadings, finding nexus between violations commerce. Fourth Circuit, sitting en banc, affirmed judgment Court, holding provision "local" activity, 682 (4 Cir. 1975), did adequately allege Id., at 684, We certiorari, 423 820, 33, 46 37 (1975), now reverse. hold complaint, fairly read, alleges restraint substantially dismissal pleadings thefore inappropriate. * Atlantic 3 Since we reviewing must, course, take true material facts See, e.g., Mandeville Island Farms, Incorporated Crystal Sugar Co., 334 219, 222, 68 996, 999, 92 L.Ed. 1328, 1332 (1948). corporation organized profit laws North Carolina. It Elizabeth Hospital, offers general range public. Respondent Trustees Hospital Carolina also located other three administrator Rex, one individual trustees, executive secretary local agency responsible making recommendations state officials concerning community's need additional beds. several co-conspirators named defendants action, acted concert city 49 beds 140 According orchestrated plan delay and, possible, prevent issuance authorization necessary prerequisite Elizabeth. After some months, finally granted, but since then, alleged, employed series bad-faith tactics, including bringing frivolous litigation, implementation expansion. maliciously instigated publication adverse information about order All these actions, contended, been taken part attempt compensated identifies areas involved. purchases proportion up 80% Of sellers. In 1972, spent $112,000 items. A number patients come State. Moreover, claims outside Government Medicaid Medicare programs. based gross receipts Georgia. Finally, developed plans finance $4 million involvements claims, continuing adversely anticompetitive B 5 Respondents' asserted both no jurisdiction over subject matter Fed.Rule Civ.Proc. 12(b)(1), failed claim could granted. Rule 12(b)(6). Critical contention "to requisite effect required Act." App. 32. dismiss, concluding "is intra-state business," Pet. Cert., D-3, "the complained case directly affects activity plaintiff, affect commerce." Defendant 3-4. 6 three-judge division Circuit ruling Thereupon, filed rehearing withdrawn. On again 678 (1975). While perceived ambiguity whether decision grounded 12(b)(1) 12(b) (6), treated 12(b)(6) granted.1 court then held allegations true, were inadequate support conclusion occurring II 7 prohibits every contract, combination, "in among States," § 1, monopolizing "any States." 2. settled encompasses far more than restraints motivated desire limit sole "(W)holly produce effects condemned Employing Plasterers Assn., 347 186, 189, 74 452, 454, 98 618, 623 (1954). As long question "substantially commerce," Gulf Oil Corporation Copp Paving 419 195, 95 392, 398, 42 378, 386 (1974); U.S., 234, S.Ct., 1000, L.Ed., 1333, coverage established. " 'If feels pinch, how operation applies squeeze.' supra, L.Ed.2d, 386, quoting Women's Sportswear 336 460, 464, 69 714, 716, 93 805, 811 (1949).2 8 case, Appeals, while recognizing requires colained concluded issue meet standard. disagree. coconspirators succeed blocking expansion, well revenues thousands perhaps hundreds dollars less otherwise be. Similarly, fees blocked. multimillion-dollar financing State, simply place succeeded scheme. certainly Act. 9 found considerations crucial refusal find Court's reliance neither warranted. First, observed: "The (on commerce) here seems us indirect fortuitous consequence intrastate area market, rather purposely directed toward F.2d, 684 (footnote omitted). But fact might termed "indirect" because producing "purposely directed" lead scope For instance, 554 (1967), Oklahoma liquor retailers against wholesalers restrained dividing into exclusive territories. patently nevertheless practical economics3 expected reduce significantly magnitude made distillers. wholesalers' territorial . almost surely resulted fewer sales hence distillers occurred free competition prevailed wholesalers." 322, 444, 556 Whether intended irrelevant our holding. See McKesson & Robbins, 351 305, 76 937, 100 1209 (1956). same way, instant purposeful 10 further justified "no arguing source supply company lending institution doesn't expand, likely will affected." 684. great relevance satisfied. An "substantial" enterprises fold price. instance considered chalnge association union Chicago plastering contractors. pleadings. so ground amounted charges "local monopoly," 188, reached appealed Expediting 32 823, 29, reversed. proved, show "Unreasonable burdens uninterrupted flow materials Illinois." (emphasis added). demand allegations, either express implied, threaten demise businesses price.4 Thus, conspiracy, extent successful, "unreasonable flow" wholly adequate claim. 11 "a should failure unless appears beyond doubt plaintiff prove set his entitle him relief." Conley Gibson, 355 41, 45-46, 78 99, 102, 80, 84 (1957) And cases, where proof hands conspirators," Poller Columbia Broadcasting, 368 473, 82 486, 491, 458, 464 (1962), dismissals prior giving ample opportunity discovery very sparingly. Applying concededly rigorous standard, conclude Act.5 Accordingly, reverse remanded proceedings consistent opinion. 12 So ordered. We, too, treat having However, analysis different regard want subject-matter 12(b)(1). event, critical inquiry adequacy When Congress passed 1890, took narrow view power Commerce Clause. E.g., H.R.Rep. 1707, 51st Cong., 1st Sess., (1890); Slater, Antitrust Action: Formula Narrowing Parker Brown, Nw.U.L.Rev. 71, (1974). Subsequent decisions permitted reach expand expanding notions congressional power. 201-202, 401. Compare E. C. Knight 156 249, 39 325 (1895), 1328 (1948), 618 noted "(i)t sense must Goldfarb Virginia State Bar, 421 773, 784, 2004, 2011, 44 572, 583 n. 783-785, 582. may, though demonstrate involves violation law, indeed Cf. Oregon Medical Soc., 343 326, 72 690, 978 (1952).

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