Court Opinion

ID: 8912944
Source: CourtListenerOpinion
Date Created: 2022-11-27 03:47:54.888643+00
Date Added: 2024-06-11T17:08:42.059059
License: Public Domain

LARSON, Senior District Judge
(dissenting).
I respectfully dissent from the majority decision. The defendants’ conduct constitutes price-fixing that is per se illegal under the Sherman Act. In addition, the trial *561court abused its discretion in refusing to continue or grant the preliminary injunction.
I.
We are presented with two consolidated appeals by the State of Arizona. No. 79-3427 was brought pursuant to 28 U.S.C. § 1292(b). The controlling question of law certified was whether the challenged practice should be judged under a per se rule or by the rule of reason. No. 79-3612 is an appeal from a district court order of July 17, 1979, which in essence was a refusal to continue an injunction. The majority opinion reaches only the first appeal, noting, however, that it cannot be said that “the district court would have erred in dissolving a preliminary injunction.” I believe both appeals can and must be treated fully.
The complaint in this action was filed on October 17, 1978. Arizona moved for a preliminary injunction on October 25, 1978, but no hearing was held on this motion before the events which led to these appeals. On November 2, 1978, the parties agreed to an order establishing the sequence of discovery and pretrial motions. Paragraph 6 of this order forbade the defendants from engaging in allegedly illegal practices until the preliminary injunction motion was heard, or May 1, 1979, or until further order of the court. On April 20, 1979, Arizona moved to maintain the status quo past May 1, 1979. Defendants objected, but on April 30, 1979, the trial judge decided that Paragraph 6 of the November 2, 1978, order would remain in effect pending further order of the court. In a June 5, 1979, order and memorandum, defendants’ motion to dismiss the complaint and plaintiff’s motion for summary judgment on the issue of liability were denied by the district court. It was in this order that the district judge stated that the challenged conduct would be analyzed under the rule of reason rather than by a per se rule.
Following this decision, the defendants moved to vacate the April 30 order. On July 17,1979, the district court granted this request. The district court appeared to view the continuation of Paragraph 6 of the November 2, 1978, order as either a temporary restraining order or “because of the lapse of time and the preparation of the parties, as an application for a preliminary injunction.”
This July 17, 1979, order was appealed pursuant to 28 U.S.C. § 1292(a)(1), which allows review of interlocutory orders “granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions.” Grants or denials of temporary restraining orders are not appealable under this statute. In the Matter of Vuitton et Fils S.A., 606 F.2d 1, 3 (2d Cir. 1979); Levesque v. State of Maine, 587 F.2d 78, 79 (1st Cir. 1978); Sohappy v. Smith, 529 F.2d 570, 572 (9th Cir. 1976); 9 Moore’s Federal Practice H 110.20[5] (2d ed. 1975). However, often the characteristics and circumstances of an order, not how it is denominated, determine whether it is appealable. See Sampson v. Murray, 415 U.S. 61, 85-88, 94 S.Ct. 937, 950-51, 39 L.Ed.2d 166 (1974); Melanson v. John J. Duane Co., 60S F.2d 31, 33 (1st Cir. 1979); Clements Wire & Mfg. Co. v. NLRB, 589 F.2d 894, 896-97 (5th Cir. 1979); Moore’s Federal Practice, supra. This order was continued for over eight months. That fact alone might require that it be treated as a preliminary injunction. See Sampson v. Murray, supra, 415 U.S. at 86, 94 S.Ct. at 951. The district court believed it could be so viewed, and the defendants, when requesting vacation of the order, argued that it was in effect a preliminary injunction. In addition, there had already been extensive consideration of the merits by the district court. The July 17 order was the denial or dissolution of a preliminary injunction and is therefore appealable.
The general standard for reviewing grants or denials of preliminary injunctions is whether the trial court abused its discretion. Miss Universe, Inc. v. Flesher, 605 F.2d 1130, 1132-33 (9th Cir. 1979); City of Anaheim v. Kleppe, 590 F.2d 285, 288 n.4 (9th Cir. 1978). A decision based on an erroneous legal premise would also be reversible. Miss Universe, Inc. v. Flesher, *562supra; Kennecott Copper Corp., Nevada Mines v. Costle, 572 F.2d 1349, 1357 n.3 (9th Cir. 1978); Klaus v. Hi-Shear Corp., 528 F.2d 225, 231 (9th Cir. 1975). See Chromalloy American Corp. v. Sun Chemical Corp., 611 F.2d 240,, 244 (8th Cir. 1979); State of Kansas ex rel. Stephan v. Adams, 608 F.2d 861, 867 n.5 (10th Cir. 1979); Jack Kahn Music Co. v. Baldwin Piano & Organ Co., 604 F.2d 755, 758 (2d Cir. 1979). As discussed in detail below, I believe the district court was legally wrong in declining to apply a per se rule to defendants’ conduct.1 Even if the district court was correct in applying the rule of reason, it was, however, an abuse of discretion to refuse to prolong the injunction and the status quo.
The test for awarding preliminary injunctions has undergone considerable evolution in recent decisions.2 This history is traced in City of Anaheim v. Kleppe, supra. Currently there are two tests which are viewed as the extremes of a continuum.3 The moving party must show either (1) probable success on the merits and possible irreparable injury or (2) sufficiently serious questions going to the merits to create a fair ground for litigation and a balance of hardships tipping decidedly toward the moving party. Anderson v. United States, 612 F.2d 1112, 1116 (9th Cir. 1979); Miss Universe, Inc. v. Flesher, supra, at 1134. As the balance of hardships increases in favor of the moving party, the necessity of showing a likelihood of success on the merits decreases. City of Anaheim v. Kleppe, supra. A final factor present in the decision whether to award preliminary relief is an evaluation of where the public interest lies. City of Anaheim v. Kleppe, supra.
The district judge declined to continue the injunction because he thought the balance of harms favored defendants. The defendant Foundations claimed only that physicians were threatening to withdraw if they could not increase the fees they recovered from third-party payors. A simple alternative was available for defendants to preserve their membership and avoid injury. They could suspend the requirement that doctors accept the fee schedule amounts as the maximum payment for *563treatment of insurance-covered patients. The Foundations could continue to perform their other functions. The physicians who wished to raise their fees could do so, and would have no reason to leave the Foundations. In the event that a favorable result for the physicians is obtained in this litigation, the Foundations could proceed to establish a new fee schedule and reinstitute the requirement that its member physicians adhere to the schedule. This procedure would avoid the only harm a preliminary injunction would cause the defendant Foundations: loss of membership.
Arizona claimed that promulgation of a new fee schedule would mean substantial increases in medical costs for its residents. The district court believed that any harm to those whom Arizona represents could be compensated by money damages. Arizona is not seeking damages and in any event the expense of proving and disbursing the increased charges to individual patients would likely be greater than the amount of damages recovered. The additional medical costs to Arizona citizens would be unrecoverable and irreparable. The balance of harms tips strongly in Arizona’s favor. In addition, the public interest would best be served by continuing to enjoin the defendants from preparing and using a new fee schedule. The fact that it is Arizona, the primary regulator of the health industry in that State and guardian of its citizens’ interests, which has challenged defendants’ conduct is also entitled to weight.
The district court also felt Arizona had not established a likelihood of success under the rule of reason, but it appears to me that plaintiff has shown a strong probability of success, even if forced to proceed under this standard. Fee-setting in this context is so obviously anticompetitive that it must be found to violate the Sherman Act. It is unquestioned that Arizona has at least raised serious questions about the legality of defendants’ behavior. Therefore, wherever one chooses to stop along the continuum of preliminary injunction factors, Arizona is entitled to relief.
II.
I turn now to the standard of liability by which the challenged activity should be measured. This inquiry can be handled most efficiently if guided by three questions. First, is this a type of “naked price restraint” which has previously been adjudged per se illegal? If so, then only some peculiarity of the health care industry can justify application of a lesser standard. See e. g., Silver v. New York Stock Exchange, 373 U.S. 341, 347, 83 S.Ct. 1246, 1251, 10 L.Ed.2d 389 (1963). Second, if this is not a form of conduct traditionally found to be per se illegal, does it possess such harmful features that it should now be declared per se illegal? See, e. g., Broadcast Music, Inc. v. Columbia Broadcasting System, Inc., 441 U.S. 1, 19-20 n.33, 99 S.Ct. 1551, 1562 n.33, 60 L.Ed.2d 1 (1979). Third, even if the rule of reason must be applied, is the practice so plainly anticompetitive that only a truncated rule of reason analysis need be carried out? See, e. g., National Society of Professional Engineers v. United States, 435 U.S. 679, 692, 98 S.Ct. 1355, 1365, 55 L.Ed.2d 637 (1978). The third question is relevant here because if answered in the affirmative, the likelihood of plaintiff’s success, and the propriety of granting preliminary relief, would be increased.
Defendants formulated and dispersed relative value guides and conversion factor lists which together were used to set an upper limit on fees received from third-party payors. It is clear that these activities constituted maximum price-fixing by competitors. Disregarding any “special industry” facts, this conduct is per se illegal. Albrecht v. Herald Co., 390 U.S. 145, 151-53, 88 S.Ct. 869, 873, 19 L.Ed.2d 998 (1968); Kiefer-Stewart Co. v. Seagram & Sons, 340 U.S. 211, 213, 71 S.Ct. 259, 260, 95 L.Ed. 219 (1951); Kartell v. Blue Shield of Mass., Inc., 592 F.2d 1191, 1193 n.2 (1st Cir. 1979); Quinn v. Mobil Oil Co., 375 F.2d 273, 274, 276-78 (1st Cir.), cert. dismissed, 389 U.S. 801, 88 S.Ct. 8, 19 L.Ed.2d 56 (1967); Crane Distributing Co. v. Glenmore Distilleries, 267 F.2d 343, 345 (6th Cir. 1959); Vandervelde v. Put & Call Brokers & Dealers As*564soc., 344 F.Supp. 118, 134 (S.D.N.Y.1972). Precedent alone would mandate application of the per se standard.
I find nothing in the nature of either the medical profession or the health care industry that would warrant their exemption from per se rules for price-fixing. Although the Supreme Court has distinctly rejected a broad learned professions exemption from the antitrust laws, National Society of Professional Engineers v. United States, supra, 435 U.S. at 696, 98 S.Ct. at 1367; Goldfarb v. Virginia State Bar, 421 U.S. 773, 787, 95 S.Ct. 2004, 2013, 44 L.Ed.2d 572 (1975), confusion remains over the extent to which these professions are or should be subject to per se rules. See generally Bauer, Professional Activities and the Antitrust Laws, 50 N.D. Lawyer 570 (1975); Note, The Professions & Non-commercial Purposes, 11 U.Mich.J. of L. Reform 387 (1978); Note, The Antitrust Liability of Professional Associations After Goldfarb, 1977 Duke L.J. 1047.
In Goldfarb, the district court found fee-setting by attorneys to be per se illegal. 355 F.Supp. 491, 493 (E.D.Va.1973). The Supreme Court stated that a “naked agreement was clearly shown, and the effect on prices is plain,” and that “respondents’ activities constitute a classic illustration of price fixing.” 421 U.S. at 782, 783, 95 S.Ct. at 2010, 2011. Although not explicit, a valid interpretation of this language is that the Supreme Court agreed that the per se rule was applicable. Certainly this is not a rule of reason analysis. The Supreme Court did add a caveat that the “public service aspect, and other features of the professions, may require that a particular practice, which could properly be viewed as a violation of the Sherman Act in another context, be treated differently. We intimate no view on any other situation than the one with which we are confronted today.” 421 U.S. 788-89 n.17, 95 S.Ct. at 2013 n.17. The situation with which the Court was confronted in Goldfarb — price-fixing— is the same practice challenged in this case.
National Society of Professional Engineers v. United States, supra, is also not totally explicit on the standard applied. Both the district court, 404 F.Supp. 457, 460-61 (D.D.C.1975), and the court of appeals, 181 U.S.App.D.C. 41, 46, 555 F.2d 978, 983 (D.C.Cir.1977), found the ban on competitive bidding to be per se illegal. Both courts believed this result was consonant with Goldfarb. The Supreme Court recognized that the lower courts had found the practice unlawful on its face, 435 U.S. at 686, 98 S.Ct. at 1362, and it agreed with that assessment, 435 U.S. at 692-693, 98 S.Ct. at 1365-1366. The central lesson of the case appears to be that when the nature and character of an agreement among professionals is plainly anticompetitive, no extended analysis is necessary to find it forbidden under the Sherman Act. I believe that in the wake of Goldfarb and National Society of Professional Engineers, the Supreme Court would be willing to apply per se rules to professional price tampering and that this Court should not hesitate to do so.
Such an approach would be in accord with the rulings of other courts. See United States v. Texas State Board of Public Accountancy, 464 F.Supp. 400, 402-03 (W.D. Tex.1978) (competitive bidding ban is per se illegal), aff’d, 592 F.2d 919 (5th Cir.), cert. denied, 444 U.S. 925, 100 S.Ct. 262, 62 L.Ed.2d 180 (1979); Veizaga v. National Board for Respiratory Therapy, [1977 — 1] Trade Cases (CCH) 1161,274 (N.D.Ill.1977) (per se rule applied to commercial activity of a profession). Commentators have suggested that the commercial aspects of the professions, including medicine, should be subject to customary per se rules. See Horan & Nord, Application of Antitrust Law to the Health Care Delivery System, 9 Cumberland L.Rev. 685, 700 (1979); Weller, Medicaid Boycotts & Other Maladies from Medical Monopolists, 11 Clearinghouse Rev. 99, 104 (1977); Note, The Professions & Non-commercial Purposes, supra, at 399 and n.36, 414-15. Several authors have advocated that price-fixing by physicians, including maximum fee-setting, be declared per se illegal. See Havighurst & Kissam, The Antitrust Implications of R. V. Studies in Medicine, 4 J. Health Politics, Policy & Law 48, 75 (1979); Horan & Nord, supra, at *565709; Kallstrom, Health Care Cost Control by Third-Party Payors, 1978 Duke L.J. 645, 683.
The defendants’ price-fixing has a wholly commercial nature and has no relation to any public service aspect of the medical profession, or to any other professional objective of the defendants; nor does it appear to be motivated by a desire to benefit consumers. Eliminating the fee-setting would not inhibit defendants from continuing to perform peer review, quality control, or other permissible functions. These activities are entirely separable from the fee-setting. That physicians are the participants in this price-fixing scheme does not exempt it from per se illegality.
A second exemption which might be advanced is one for the health care industry. Of course, Congress has not provided such an exemption and the courts should be extremely reluctant to imply one. Goldfarb v. Virginia State Bar, supra, 421 U.S. at 787, 95 S.Ct. at 2013. It is not necessary here to strike any broader rule than to deny special treatment to price-fixing by physicians. Whether other practices in the health care business are due deferential handling can be decided when those activities are placed at issue.
Much attention has recently been focused on health care delivery, with particular concern over the seemingly uncontrollable increases in health care costs. Congress has examined the serious problems existing in the industry and has studied the potential benefits of introducing competitive forces.4 Government agencies also have shown interest in the competitive state of health care.5 A number of articles and books have been written on the subject.6 The Supreme Court has even noted the problem in a recent case, Group Life & Health Ins. Co. v. Royal Drug Co., 440 U.S. 205, 232 n.40, 99 5. Ct. 1067, 1083 n.40, 59 L.Ed.2d 261 (1979).7
The health care industry currently does not display significant competitive conditions. There are many reasons for this situation, including the tax laws, the effects of insurance, and, as the majority notes, governmental regulation and financial entanglement. It is also undoubtedly true that a major factor has been the active suppression of competition by traditional *566medical associations.8 The restraints fostered by these groups are and should be subject to conventional antitrust scrutiny. Although market forces may be bridled in part by factors beyond the reach of the Sherman Act, this does not prevent utilization of the law to remove additional constraints which normally are illegal. Partial governance by competitive forces can create benefits even though anticompetitive forces remain in the market.
It is not our task to determine what the competitive order should be. The Sherman Act requires that absent very unusual circumstances market forces should be given free rein. The policy decision that competition is in the public interest has been made by Congress and must be enforced by the courts. National Society of Professional Engineers v. United States, supra, 435 U.S. at 692, 695, 98 S.Ct. at 1365, 1367. Furthermore, “[Ejarly cases also foreclose the argument that because of the special characteristics of a particular industry, monopolistic arrangements will better promote trade and commerce than competition. That kind of argument is properly addressed to Congress . .” Id. at 689,98 S.Ct. at 1364 (cites omitted).
We are confronted here with a challenge to behavior usually found per se illegal under the antitrust laws. Nothing in the arguments advanced by defendants or by the majority opinion convinces me that application of the procompetitive policy of the Sherman Act to physician price-fixing will be harmful to the health care business or to its consumers. On the contrary, vigorous enforcement of the law could encourage new forms of health care delivery that would . significantly benefit the public.9 Some initial steps toward reform have been made in medicine. See In the Matter of A.M.A., F.T.C. Docket No. 9064, Trade Reg. Rpts. No. 409 Pt. II (CCH) (Oct. 30, 1979) (forbidding advertising and price restraints). The majority opinion will hinder attempts by doctors, consumers and government to continue the process of applying Sherman Act principles to health care.
The alternative to increased competition, partly secured through private and government enforcement of the antitrust laws, is probably total government control.10 Few people consider this an appealing option. The choice, however, is not ours to make. We need only follow the mandate of the Sherman Act, which requires that competitive forces be allowed free rein. Only Congress can declare that health care is to be exempted from this mandate.
It might be argued that the challenged practice should not now be judged under a per se rule because courts have not yet had enough experience with this type of restraint to form a clear judgment about its competitive effects. See Broadcast Music, Inc. v. Columbia Broadcasting System, Inc., supra.11 This appears to be the thrust of *567the majority opinion. Such an argument is inappropriate here, because courts long ago determined that price tampering and maximum price-fixing among competitors lack significant competitive virtues and are therefore per se illegal. Even if this were the first judicial examination of this form of restraint, its anticompetitive vices are egregious and its procompetitive features nonexistent, so that this Court could declare it to be within the per se rules.12
Three of the harms engendered by maximum fee-setting are elimination of the freedom of individual sellers and buyers to determine prices, the possibility that the “maximum” price is in reality being used to establish a price floor or price uniformity, and the use of a maximum price structure to inhibit entry of competing forms of health care delivery which might capture a significant market share and deflect income from traditional fee-for-service physicians. See Albrecht v. Herald Co., supra, at 152-53; L. Sullivan, Handbook on the Law of Antitrust § 78, p. 210-11 (1977); Havighurst, supra, at 377; Havighurst & Kissam, supra, at 55-68; Kallstrom, supra, at 650, 681-83. The record indicates that these harms were intended and have occurred in Arizona.
Defendants claimed that doctors were threatening to leave the Foundations if they could not increase fees. This is an admission that freedom of individual physicians to determine prices has been abolished. Similarly, third-party payors are unable to individually negotiate a lower fee. They are in a take-it-or-leave-it situation. Letters exchanged among doctors, specialty groups, and the defendants show that the fee schedules were not attempts to set a true ceiling price, but were designed to fix the fee which doctors would receive for performing a particular service. Finally, defendants have quite openly stated that their purpose is to protect fee-for-service medicine against competing forms of health care delivery. While the defendants may take steps to preserve traditional forms of business, they may not use restraints of trade to do so. It is not necessary to find predatory pricing to establish that defendants’ activity had the goal of unlawfully suppressing competition.
The Foundations’ plan is a cozy arrangement for both doctors and third-party payors and it diminishes their incentives to control costs. Assignment of benefits by patients covered under Foundation-approved insurance plans is apparently automatic. These claims are submitted for payment directly to the Foundations, eliminating third-party review of bills. When doctors vote to raise the level of reimbursement, insurance companies are notified in advance so that they can increase premiums to cover their higher costs. The entire system is designed to avoid providing anyone with an incentive to control costs. In addition, this system of payment appears to have been created to tie up a large percentage of doctors and third-party payors by generating high revenues for them. This would discourage them from exploring alternate, more efficient forms of health care delivery and serves to insulate physicians’ *568incomes from any competitive pressures. The only party who does not benefit is the consumer, who must pay ever greater amounts for medical care.
In light of the total absence of real incentives for any of the plan’s participants to limit fees, it is misleading to suggest that a redeeming virtue of the maximum fee schedule is cost control. A detailed economic analysis is not always necessary to understand the purpose or effect of a particular activity. Logic and common sense tell us that it is unreasonable to expect that a combination of medical providers might willingly take measures which could reduce their income and which would require changes in the way they have traditionally conducted business.13 This is especially true when the providers are doctors, who have a long history of resisting any challenge to fee-for-service medicine. Steps to check costs will have to be initiated by informed consumers with a wider competitive choice or, more likely" from third-party payors acting on behalf of consumers.14 These initiatives will occur only if the power of physicians is decreased in relation to these parties. Allowing doctors to set fees certainly does not improve the situation. If the fee schedule established by the defendants were abolished, it could be expected that third-party payors would be able to negotiate with each physician or health care delivery unit individually, and might be able to institute genuine attempts to control costs. Doctors would be encouraged to find methods of doing business which would lower their fees and allow them to increase their share of third-party payor business. In short, a market with more competitive features could be brought into existence.
I do not agree with the majority’s belief that the relevant inquiry is whether fees are higher or lower as a result of the defendants’ conduct. I am confident that the fee schedule does have the effect of raising prices, and that in its absence consumers would ultimately obtain less expensive medical care. See Kallstrom, supra, at 650. The majority’s emphasis on the level of fees, however, is a version of the “reasonableness of prices” justification for price-fixing. This defense has been repeatedly rejected. National Society of Professional Engineers v. United States, supra, at 689, 98 S.Ct. at 1364; United States v. Trenton Potteries, Co., 273 U.S. 392, 397, 47 S.Ct. 377, 379, 71 L.Ed. 700 (1927). Lower prices are not the sole measuring rod of competitive conditions, nor are they necessarily the ultimate goal of the Sherman Act. That goal is the absence of restraints on market forces. See Reiter v. Sonotone Corp., 99 S.Ct. 2326, 2332 (1979) (“essence of the antitrust laws is to ensure fair price competition in an open market” (emphasis added)); National Society of Professional Engineers v. United States, supra, 435 U.S. at 692, 98 S.Ct. at 1365 (restraint illegal because it impedes the ordinary give and take of the marketplace); Goldfarb v. State Bar of Virginia, supra, 421 U.S. at 785, 95 S.Ct. at 2012 (“Nor was it necessary for petitioners to prove that the fee schedule raised fees. Petitioners clearly proved that the fee schedule fixed fees and thus *deprive[d] purchasers or consumers of the advantages which they derive from free competition’ ” (cites omitted)); United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 221, 60 S.Ct. 811, 843, 84 L.Ed. 1129 (1950) (“Any combination which tampers with price structures is engaged in an unlawful activity. Even though the members of the price-fixing group were in no position to control the market, to the extent that they raised, lowered, or stabilized prices they would be directly interfering with the free play of market forces.”) Congress has decided that an open market will result in public benefits, which may include lower prices. If these benefits do not result, Congress must rectify the problem, not the courts. Removal of the fee schedule here, however, clearly will be favorable to the general public.
The level or reasonableness of agreed-upon prices is also irrelevant because part *569of the danger in such agreements is the aggregation of competitors. Even though their initial price-tampering may seem benign, combinations of competitors possess considerable power which inevitably will be abused. See United States v. Trenton Potteries, supra. The Sherman Act requires that these consolidations of power be stopped in their infancy.
The fee schedule here presents serious competitive problems.15 The only justification advanced on its behalf, cost control, is illusory and nonexistent. Based on an assessment of its competitive impact, this fee schedule should be subject to the per se standards traditionally applied to price-fixing.
Finally, even if the rule of reason is the correct standard by which to judge defendants’ activities, a detailed economic analysis of the industry is not necessary. This agreement to fix fees is so plainly anticompetitive that it is an unreasonable restraint of trade on its face. See National Society of Professional Engineers v. United States, supra. Because no in-depth study is necessary and because it is obvious that the practice is illegal, Arizona’s likelihood of success is extremely high. This contributes to the district court’s error in refusing preliminary relief.
The majority counsels a cautious approach. The truly circumspect path would be to assume, until it is proven otherwise, that the per se rules, which have arisen from long experience with price tampering, are fully applicable to physician fee-setting. Because the district court used erroneous legal premises and abused its discretion in weighing the preliminary injunction factors, this Court should either grant preliminary relief to plaintiff or order the district court to reconsider its decision to deny a preliminary injunction.

. Although the district court’s June 5, 1979, memorandum is well reasoned, it displays a misperception of the current state of antitrust analysis. The district court felt that per se rules were being supplanted by greater use of the rule of reason. A careful survey of recent decisions discloses that not only are per se rules continuing to be applied in traditional . areas like price-fixing, but they are also being extended to encompass new anticompetitive practices. The Supreme Court has continually reaffirmed the value of per se rules, especially when applied to conduct affecting pricing. Maximum price-fixing clearly has been and should be regarded as per se illegal, particularly in a horizontal context. See text, infra 643 F.2d at 563. The Kallstrom article referred to by the district court takes the position that maximum price setting among individual medical providers should be per se illegal, especially when done by a Foundation for Medical Care. Kallstrom, Health Care Cost Control by Third-Party Payors, 1978 Duke L.J. 645, 680-83. Finally, the district court felt that professionals were accorded special treatment under the antitrust laws. Supreme Court and other decisions, however, indicate that when commercial practices of a profession are at issue, per se rules may be applied, particularly if the challenged activity affects price. See text, infra, 643 F.2d at 564-565. The combined effect of all these errors requires that the district court at least be ordered to reconsider its refusal to continue the preliminary injunction.

. I have concentrated on the general standards for preliminary injunctions but it should be noted that § 16 of the Sherman Act, 15 U.S.C. § 26, also governs preliminary relief under the antitrust laws. Much of the procedural difficulty here could have been avoided by closer adherence to the requirements of Rule 65 of the Federal Rules of Civil Procedure, particularly after defendants objected to .the April 30 continuation of Paragraph 6.

. This continuum approach has been utilized by several circuit courts of appeals. See Chromalloy American Corp. v. Sun Chemical Corp., supra; Maryland Undercoating Co. v. Payne, 603 F.2d 477, 481 (4th Cir. 1979); Florida Medical Assoc. v. United States Dept. of Health, 601 F.2d 199, 202 (5th Cir. 1979); Jackson Dairy, Inc. v. H. P. Hood & Sons, 596 F.2d 70, 72, 74 (2d Cir. 1979); Citizens Energy Coalition of lnd. v. Sendak, 594 F.2d 1158, 1162 (7th Cir. 1979); Doe v. Colautti, 592 F.2d 704, 706 (3d Cir. 1979). One of these courts has suggested that the balance may also work in the opposite direction; the greater the movant’s likelihood of success, the less the balance of harms must t swing in his favor. See Maryland Undercoating Co. v. Payne, supra, at 481 n.8.

. See Staff of Perm. Subcomm. on Investigations of Senate Govern. Affairs Comm., 96th Cong., 1st Sess., California Relative Value Studies: An Overview (Staff Study 1979); Staff of Subcomm. on Oversight & Investigations of House Comm, on Interstate & Foreign Commerce, 95th Cong., 2d Sess., Conflicts of Interest on Blue Shield Boards of Directors (Comm. Print 1978); Skyrocketing Health Care Costs: The Role of Blue Shield: Hearings Before the Subcomm. on Oversight & Investigation of the House Comm, on Interstate & Foreign Commerce, 95th Cong., 2d Sess. (1978); Competition in the Health Services Market, Pts. 1-3: Hearings Before the Subcomm. on Antitrust & Monopoly of Senate Comm, on the Judiciary, 93d Cong., 2d Sess. (1974).

. See In the Matter of A.M.A., F.T.C. Docket No. 9064, Trade Reg. Rpts. No. 409, pt. II (CCH) (Oct. 30, 1979); Federal Trade Commission, Competition in the Health Care Sector (1978) (collection of papers from F.T.C. conference); Kanwit, FTC Enforcement Efforts Involving Trade & Professional Associations, 46 Antitrust L.J. 640 (1978); Palmer, Antitrust Activities By the FTC in the Health Field, 37 Fed.B.J. 40 (1978) (lists FTC relative value guide cases on pages 46-47).

. See P. Proger, Antitrust in the Health Care Field (1979); M. Thompson, Antitrust & the Health Care Provider (1979); Borsody, The Antitrust Laws & the Health Industry, 12 Akron L.Rev. 417 (1979); Havighurst, Professional Restraints on Innovation in Health Care Financing, 1978 Duke L.J. 314; Havighurst & Kissam, supra; Horan & Nord, supra; Kallstrom, supra: Kessel, Price Discrimination in Medicine, 1 J.L. & Econ. 20 (1958); Rosoff, Antitrust Laws & the Health Care Industry, 23 St. Louis, U.L.J. 446 (1979); Weller, supra; Note, Application of Antitrust Laws to Anti-competitive Activities by Physicians, 30 Rutgers L.J. 991 (1977).

. “[E]xempting provider agreements from the antitrust laws would be likely in at least some cases to have serious anticompetitive consequences. Recent studies have concluded that physicians and other health-care providers typically dominate the boards of directors of Blue Shield plans. Thus, there is little incentive on the part of Blue Shield to minimize costs, since it is in the interest of the providers to set fee schedules at the highest possible level. This domination of Blue Shield by providers is said to have resulted in rapid escalation of healthcare costs to the detriment of consumers generally.”

. See Havighurst, supra, at 315-321; Havighurst & Kissam, supra, at 58, 68; Kessel, supra, at 32; Palmer, supra, at 42-3.

. The legal profession has been the recent subject of antitrust reform. The changes necessitated by adherence to the antitrust laws do not appear to have inflicted serious damage on the profession or its clients. See Weller, supra, at 101.

. See generally Enthoven, Rx for Health Care Economics, 59 Hosp.Prog. 44 (Oct. 1978); Havighurst, Controlling Health Care Costs, 1 J. Health Politics, Policy & Law 471 (1977); Havighurst & Hackbarth, Private Cost Containment, 300 N.Eng.J. of Med. 1298 (1979); McClure, On Broadening the Definition of and Removing Regulatory Barriers to a Competitive Health Care System, 3 J. of Health Politics, Policy & Law 303 (1978).

. In Broadcast Music the Supreme Court’s major concern was the danger of too-quick characterization of conduct as price-fixing. Placing activity in the per se illegal price-fixing category essentially forecloses the issue of liability against the defendant. Therefore, care must be taken to ascertain that the conduct is indeed a traditional form of price-fixing, or a variant displaying similar anticompetitive aspects. The Court felt that defendant’s behavior in Broadcast Music was not traditional price-fixing. 441 U.S. at 23, 99 S.Ct. at 1564 (“the blanket license cannot be wholly equated with a simple horizontal arrangement among competitors”). Defendant was already subject to antitrust decrees, id. at 10-16, 99 S.Ct. at 1557-1560, and was seen as performing a middleman function, id. at 19-23, 99 S.Ct. at 1562-1564. See Comment, 91 Harv.L.Rev. 488 (1977) (author’s analysis apparently followed by Supreme Court).
*567Here we are examining conduct which is a customary form of price-fixing between competitors, 441 U.S. at 8, 99 S.Ct. at 1556 (“ [Agreements among competitors to fix prices on their individual goods or services are among those concerted activities that the Court has held to be within the per se category.”), and the deficiencies of “analysis by characterization” are not a problem. In my view, the fact that defendants’ activity is conventional price-fixing makes this second area of inquiry unnecessary in this case. What is different here is not the challenged practice itself, but the industry in which it occurs. As I stated above at 556-558, that difference should not require abandonment of the per se rules.

. Civil liability under the Sherman Act may be predicated on a finding of either an unlawful purpose or an anticompetitive effect. McLain v. Real Estate Board of New Orleans, Inc., 444 U.S 232, 100 S.Ct. 502, 509, 62 L.Ed.2d 441 (1980); United States v. United States Gypsum Co., 438 U.S. 422, 436 n.13, 98 S.Ct. 2864, 2873 n.13, 57 L.Ed.2d 854 (1978). Defendants’ purpose here was to fix prices and to suppress competition. These are per se unlawful purposes. It may not be necessary to assess the actual competitive effects of the controverted behavior where the unlawful purpose is clear.

. See Havighurst & Kissam, supra, at 68.

. See Havighurst, Controlling Health Care Costs, supra, at 485.

. The fee schedule also poses potential anti-competitive problems as a price information exchange. The schedule was widely disseminated and could be used by doctors who were not Foundation members and could be used to bill clients not covered by the third-party payors. In this way the schedule would have an even greater impact on prices. This price information sharing relates to the level of price and does not seem to have a market-perfecting function. As such it is particularly dangerous. See United States v. United States Gypsum Co., supra, 438 U.S. at 441 n.16, 98 S.Ct. at 2875 n.16; L. Sullivan, supra, at §§ 93-96; Posner, Information & Antitrust, 67 Geo.L.J. 1187 (1979).