Court Opinion

ID: 8938282
Source: CourtListenerOpinion
Date Created: 2022-11-27 07:41:40.924709+00
Date Added: 2024-06-11T17:09:40.200630
License: Public Domain

BOYCE F. MARTIN, Jr., Circuit Judge,
concurring in the judgment.
I cannot agree with the majority’s conclusion that the appellant’s complaint should be dismissed on jurisdictional grounds. I do agree, however, that the summary judgment of the district court should be affirmed but because the appellant has failed to demonstrate any antitrust injury. I therefore concur in the judgment.
I.
Because Judge Krupansky’s opinion succinctly states the relevant facts, I shall turn immediately to the legal issues. As the majority properly recognizes, the initial legal hurdle that Dr. Stone must clear is the jurisdictional “interstate commerce” requirement.1 In Furlong v. Long Island College Hospital, 710 F.2d 922, 925 (2d Cir.1983), the case upon which the majority primarily relies, the court noted that there are two central issues involving the application of the interstate commerce requirement. First, we must decide whether the interstate commerce requirement can be met by showing that the defendant’s general business activities affect commerce or whether it must be met by making the more difficult showing that the alleged illegal conduct itself affects interstate commerce. Second, we must decide whether the interstate commerce that is affected relates only to the plaintiff’s activities or whether it can also relate to the defendant’s activities.
As I understand my colleagues’ opinions, they adopt the most restrictive answer to both of these questions. With regard to the first question, they clearly follow Furlong in holding that the “defendants’ purported illegal activity itself [must] have a ‘not insubstantial effect on interstate commerce.’ ” (Krupansky, J. at 614 n. 4) (emphasis in original). As to the second issue, Judge Krupansky finds Dr. Stone’s complaint inadequate because it only alleges “that defendants illegally excluded him from using a local facility two or three times a month.” (Krupansky, J. at 614) Judge Krupansky does not discuss whether the alleged antitrust conspiracy in this case, if taken as true, would substantially affect the defendants’ contacts with interstate commerce. I therefore assume that he is only willing to look at the alleged violation’s effect on Dr. Stone’s practice and not at how the purported conspiracy affected defendants’ practice.
In my view, the Supreme Court in McLain v. Real Estate Board of New Orleans, Inc., 444 U.S. 232, 100 S.Ct. 502, 62 L.Ed.2d 441 (1980), decided the first issue in direct contravention to the majority’s holding. In McLain, the plaintiffs alleged that real estate brokers in the New Orleans metropolitan area had conspired to fix brokerage commissions on sales of residential property. Chief Justice Burger, speaking for a unanimous Court, held that the plaintiffs’ complaint and affidavits in support of the complaint had established the requisite nexus with interstate commerce. In discussing the first question — whether we may look to the defendants’ general activities in analyzing the interstate commerce issue — the Supreme Court stated:
To establish the jurisdictional element of a Sherman Act violation it would be *622sufficient for petitioners to demonstrate a substantial effect on interstate commerce generated by respondents’ brokerage activity. Petitioners need not make the more particularized showing of an effect on interstate commerce caused by the alleged conspiracy to fix commission rates, or by those other aspects of respondents’ activity that aré alleged to be unlawful. The validity of this approach is confirmed by an examination of the case law. If establishing jurisdiction required a showing that the unlawful conduct itself had an effect on interstate commerce,* jurisdiction would be defeated by a demonstration that the alleged restraint failed to have its intended anticompetitive effect. This is not the rule of our cases.
McLain, 444 U.S. at 243, 100 S.Ct. at 509 (emphasis added). In my view, this language definitely and unambiguously rejects the majority’s answer to the first question.2
In addition to Furlong, relied on by the majority, several other lower courts have disregarded what I believe to be clear direction from the Supreme Court. The leading case in this regard is Crane v. Inter-mountain Health Care, Inc., 637 F.2d 715 (10th Cir.1981) (en banc), where the Tenth Circuit held that, despite McLain, the trial court should only look to the effect the alleged illegal activity had on interstate commerce. Crane, 637 F.2d at 724. The Crane court reasoned that in context the Supreme Court was referring only to the real estate brokers’ challenged activities and that the purpose of the above-quoted language was simply to emphasize that the plaintiff need not make a “particularized showing” to meet the interstate commerce requirement. Id. at 723. At least three other circuits have followed this interpretation, most recently the Seventh Circuit in Seglin v. Esau, 769 F.2d 1274, 1280 (7th Cir.1985). See also Hayden v. Bracy, 744 F.2d 1338, 1342-43 (8th Cir.1984); Cordova & Simonpietri Insurance Agency, Inc. v. Chase Manhattan Bank, 649 F.2d 36, 45 (1st Cir.1981).3
The Crane court’s conclusion seems to me to be a strained reading of the McLain opinion. The Crane court ignored the Supreme Court’s statement that, “if establishing jurisdiction required a showing that the unlawful conduct itself had an effect on interstate commerce, jurisdiction would be defeated by a demonstration that the alleged restraint failed to have its intended anticompetitive effect.” McLain, 444 U.S. at 243, 100 S.Ct. at 509 (emphasis added). This language explicitly rejects the view adopted in Crane and now by the majority.4
*623While my view is clearly not in accord with the opinions discussed above, I believe that larger constitutional concerns also support my treatment of the issue. As the Supreme Court has frequently recognized, Congress intended the antitrust laws to be coextensive with its commerce power, McLain, 444 U.S. at 241, 100 S.Ct. at 508, and the enormous scope of Congress’ commerce power is well documented. See, e.g., Katzenbach v. McLung, 379 U.S. 294, 85 S.Ct. 377, 13 L.Ed.2d 290 (1964); Wickard v. Filburn, 317 U.S. Ill, 63 S.Ct. 82, 87 L.Ed. 122 (1942). The narrow view of the Sherman Act’s interstate commerce requirement espoused by Crane and the majority is simply inconsistent with this generally expansive view of Congress’ commerce power. See Note, Sherman Act “Jurisdiction" in Hospital Staff Exclusion Cases, 132 U.Pa.L.Rev. 121, 133-34 (1983). For these reasons, I believe we must look to the defendant’s general business activities to determine whether there is the requisite effect on interstate commerce. Accord Hahn v. Oregon Physician Services, 689 F.2d 840, 844 (9th Cir.1982), cert. denied, 462 U.S. 1133, 103 S.Ct. 3115, 77 L.Ed.2d 1369 (1983); Western Waste Service Systems v. Universal Waste Control, 616 F.2d 1094, 1097 (9th Cir.), cert. denied, 449 U.S. 869, 101 S.Ct. 205, 66 L.Ed.2d 88 (1980).
The second issue — whether we should look to how the defendants’ activities affect interstate commerce in general, including the defendants’ interstate activities, or only the plaintiff’s role in interstate commerce — was adequately disposed of in Furlong, 710 F.2d at 926, where the court stated:
[T]his view [that we should only look to the plaintiff's activities] ignores the rationale behind the Sherman Act’s condemnation of such anticompetitive schemes as price-fixing and group boycotting. Such schemes are prohibited because they permit those who perpetrate them to constrict supply, raise prices, and lower output. If output decreases, a defendant’s demand for the goods and services it uses will also decrease. Thus, as a matter of substantive antitrust law, there is no defect in a complaint that alleges that a denial of staff privileges, undertaken in furtherance of a price-fixing or group boycotting scheme, may ultimately affect certain of the activities that connect a hospital to interstate commerce.
Accord Cardio-Medical Associates, Ltd. v. Crozer-Chester Medical Center, 721 F.2d 68, 75 (3d Cir.1983). See also Note, Sherman Act “Jurisdiction” in Hospital Staff Exclusion Cases, 132 U.Pa.L.Rev. 121, 139 (1983). I find this reasoning persuasive and believe we should follow it.5
Thus, in light of McLain, I believe that the plaintiff must simply show that the defendants’ general business activities must “as a matter of practical economics” have a “not insubstantial effect” ’ on the relevant channels of interstate commerce, including those channels affected by the defendants’ businesses. Dr. Stone’s complaint easily meets this standard. His complaint alleges in part as follows:
11. The trade and commerce affected by the conduct of the defendant Hospital, as hereinafter alleged may be described as the practice of cardiology using the hospital and cardiology facilities of the defendant Hospital.
12. The practice of cardiology at the defendant Hospital involves substantial interstate commerce arising from the *624payment for medical and hospital services and facilities in large measure by federal medicare and medicaid programs and by insurance programs sold and administered by insurance companies outside the State of Michigan.
13. Dr. Stone’s cardiology practice involves patients who, in most cases, are either economically dependent upon or legally required to resort tó use of federal and other interstate payment and insurance programs to finance needed medical care and who reside in the geographic area primarily served by the defendant Hospital. As a matter of fact and practical necessity payment for medical services rendered to patients of Dr. Stone is an integral part of an interstate transaction, since such medical service payments are a part of the interstate receipt of benefits from federal agencies in the District of Columbia.
14. The amount of federally funded or paid medical care presently provided at the defendant Hospital, and the amount of federally funded medical care which Dr. Stone would provide at the defendant Hospital but for the defendants’ wrongful actions both constitute, on an annual basis, substantial trade of commerce within the meaning of §§ 1 and 2 of the Sherman Act (15 USC §§ 1 and 2).
The defendants’ discovery has in no way disproved any of these jurisdictional allegations. I feel that Dr. Stone has sufficiently established the requisite nexus with interstate commerce to avoid dismissal on that ground.
II.
Because I do not think we can dismiss this case on jurisdictional grounds, I would reach the merits. The district court granted summary judgment on the Sherman Act claim on the ground that Dr. Stone had failed to demonstrate a conspiracy. In summary, the district court found that the hospital administration had unilaterally decided to reject Dr. Stone’s claim because he did not meet its criteria for staff privileges. The court reasoned that such unilateral action cannot serve as the basis of an antitrust claim, relying on Smith v. Northern Michigan Hospitals, Inc., 703 F.2d 942 (6th Cir.1983).
Whether or not Dr. Stone has presented enough evidence on the conspiracy issue to go to trial is a very difficult issue. Viewing the evidence in a light most favorable to the plaintiff, he arguably has presented evidence showing an implied agreement between the hospital administration and Gordon-Timmis Associates that only GordonTimmis Associates will be granted full-time geographic status at Beaumont Hospital. Because we have been admonished: “[sjummary procedures should be used sparingly in complex antitrust litigation,” Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962); see also Smith v. Northern Michigan Hospitals, Inc., 703 F.2d at 947, I am somewhat hesitant to affirm on this ground.
I do not believe, however, that we need decide this difficult issue to affirm the district court’s summary judgment in the case. Instead, I think this case can easily be affirmed on the ground that the appellant has failed to demonstrate the requisite antitrust injury or threat of injury. Although the district court did not rely upon this ground in granting summary judgment, “[tjhis court can affirm summary judgment on any basis supported by the record, ignoring, if necessary an erroneous basis relied on by a district court.” County of Oakland v. City of Berkley, 742 F.2d 289, 298 (6th Cir.1984); Herm v. Stafford, 663 F.2d 669, 684 (6th Cir.1981).6
Dr. Stone’s claim for damages for the Sherman Act violation is based on section 4 of the Clayton Act, 15 U.S.C. § 15, which allows treble damages to any person “who *625shall be injured in his business or property by anything forbidden in the antitrust laws.” Liability must be established under section 4 in order for a Sherman Act violation to become redressable as a private civil wrong. McClure v. Undersea Industries, Inc., 671 F.2d 1287, 1289 (11th Cir.1982), cert. denied, 460 U.S. 1037, 103 S.Ct. 1427, 75 L.Ed.2d 788 (1983). A successful Clayton Act plaintiff must show economic injury to its business or property caused by the alleged antitrust conspiracy. Steams v. Genrad, Inc., 752 F.2d 942, 945 (4th Cir. 1984); Midwestern Waffles, Inc. v. Waffle House, Inc., 734 F.2d 705, 723-24 (11th Cir.1984). See also Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc. 429 U.S. 477, 97 S.Ct. 690, 50 L.Ed.2d 701 (1977). Cf. Chrysler Corp. v. Fedders Corp., 643 F.2d 1229 (6th Cir. 1981) (plaintiffs must allege antitrust injury to establish standing).
The determination of antitrust injury can be properly made on a motion for summary judgment. See, e.g., Midwestern Waffles, Inc., 734 F.2d at 723-24. The record does not indicate a “genuine issue of material fact” on this particular issue. The plaintiff submitted the deposition testimony of expert witness Dr. Paul Feldstein in its brief in opposition to summary judgment. Dr. Feldstein attempted to show that Beaumont Hospital serves a distinct market of cardiology patients. Analysis of the relevant market area is, of course, a complex process, Borden, Inc. v. FTC, 674 F.2d 498 (6th Cir.1982), and one which I believe is not necessary in this instance. Rather than a complicated determination of the existence of a monopoly, the initial question, it seems to me, should be the establishment of the existence of some economic injury to “business or property” as required by 15 U.S.C. § 15. Without such a showing, further analysis is unnecessary. See Midwestern Waffles, Inc., 734 F.2d at 722-23.
The record in this case is devoid of any evidence of antitrust injury. Dr. Stone has a thriving cardiology practice at Harper Hospital, where he directs the catheterization lab, and where he has access to an emergency room through Detroit Receiving Hospital and to an open heart surgery program. Dr. Stone is still able to compete for patients currently using Beaumont Hospital by convincing them to undergo treatment at one of the several hospitals where he has staff privileges. Cf. Jefferson Parish Hospital District No. 2 v. Hyde, 466 U.S. at 26-28, 104 S.Ct. at 1566-67. Moreover, the antitrust violation, if there was any, was a conspiracy to keep any physician who wanted to be full-time geographic at Beaumont Hospital from competing with Gordon-Timmis Associates. Dr. Stone did not want to be full-time geographic. As the majority states, he only wanted to use Beaumont’s facilities two or three times a month. Thus, the putative antitrust violation in this case could in no way have caused his alleged injury.
Although Dr. Stone has failed to show injury for purposes of section 4 of the Clayton Act, he also seeks injunctive relief under section 16 of that Act, 15 U.S.C. § 26. The standard for proving injury under section 16 is not as stringent as section 4, but Dr. Stone must still demonstrate a “significant threat of injury from an impending violation of the antitrust laws or from a contemporary violation likely to continue or recur.” Bender v. Southland Corp., 749 F.2d 1205, 1214 (6th Cir.1984) (quoting Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 130, 89 S.Ct. 1562, 1580, 23 L.Ed.2d 129 (1969)). See also Dayco Corp. v. Goodyear Tire & Rubber Co., 523 F.2d 389, 395 (6th Cir.1975). Again, Dr. Stone has presented no probative evidence that he faces a “significant threat of injury.” Dr. Stone is in no danger of losing his practice at Harper Hospital. In fact, he has a contract with Harper that requires him to practice there. And as Dr. Stone himself admits, he only intends to use Beaumont catheterization facilities two or three times a month. The possible injury from not being allowed such a limited use of the facilities is de minimis.
III.
I fully realize that my stance is not in accord with the weight of judicial authority *626on this issue. I comment now in a separate concurrence because automatic dismissal of these increasingly frequent cases could preclude litigation of meritorious claims in the future, and because I feel this theory is at least worthy of consideration as one approach to a difficult problem.

. For a thorough discussion of the application of the interstate commerce requirement to hospital staff exclusion cases, see Note, Sherman Act "Jurisdiction’’ in Hospital Staff Exclusion Cases, 132 U.Pa.L.Rev. 121 (1983); see generally P. Areeda & D. Turner, Antitrust Law, ¶ 232.1 (Supp.1982).

. The argument that a failure to allege an effect on interstate commerce is a failure to state a claim rather than a failure to allege subject matter jurisdiction is a persuasive one. See, e.g., P. Areeda & D. Turner, Antitrust Law, ¶232.1 at 97-99 (Supp.1982); Note, Sherman Act "Jurisdiction” in Hospital Staff Exclusion Cases, 132 U.Pa.L.Rev. 121 (1983). This distinction is irrelevant in the instant case, however, as I believe the plaintiff has established a sufficient nexus with interstate commerce.

. Several courts have relied on the following language that appears near the end of the McLain opinion to support their conclusion:
To establish federal jurisdiction in this case, there remains only the requirement that respondents’ activities which allegedly have been infected by a price-fixing conspiracy be shown "as a matter of practical economics" to have a not insubstantial effect on the interstate commerce involved.
McLain, 444 U.S. at 246, 100 S.Ct. at 511. Courts that have adopted a narrow view of McLain have interpreted this passage to require a showing that the "infected” activities of the defendant or, in other words, defendant’s alleged antitrust violations have the requisite effect on interstate commerce. See Seglin, 769 F.2d at 1280; Furlong, 710 F.2d at 926; Cordova & Simopietri Insurance Agency, Inc. v. Chase Manhattan Bank, 649 F.2d at 45. In my opinion, this is a slim reed to rely upon to reject the indisputably explicit language in the McLain opinion rejecting this proposition. As I read this passage, it was not intended to have any limiting effect on the explicit language in the earlier portion of the opinion. The court was simply stating that the brokers’ activities had allegedly been infected by an antitrust conspiracy.

. I believe a recent decision of the Supreme Court also lends support to my position. In a hospital staff privilege case, the Court did not even discuss the interstate commerce requirement but simply turned to the merits of the *623case. Jefferson Parish Hospital District No. 2 v. Hyde, 466 U.S. 2, 104 S.Ct. 1551, 80 L.Ed.2d 2 (1984). Because the requirement is jurisdictional, as the majority recognizes, the Court implicitly acknowledged its satisfaction. In fact, four members of the Court who concurred in the judgment stated, “It is not disputed that such an impact [on interstate commerce] is present here.” Id., 104 S.Ct. at 1569, 1571 n. 5.

. The Eleventh Circuit very recently held that "Sherman Act jurisdiction requires a focus on the interstate markets involved in the defendant’s business activities.” Shahawy v. Harrison, 778 F.2d 636, 640 (11th Cir.1985) [citations omitted]. However, on facts essentially identical to those before the court here, the Shahawy court concluded that the respondents were sufficiently involved in interstate commerce to establish jurisdiction under the Sherman Act. Id. at 641.

. In this case, counsel for the defendants raised the issue of no injury in his motion for summary judgment. Counsel for the plaintiff had an opportunity to respond and did respond to the argument at the hearing on the summary judgment motion.