Court Opinion

ID: 9479639
Source: CourtListenerOpinion
Date Created: 2023-08-05 07:24:07.103199+00
Date Added: 2024-06-11T17:47:10.174875
License: Public Domain

TJOFLAT, Chief Circuit Judge,
concurring:
I concur in the majority’s disposition of this case but write separately because I am concerned about the district court’s application of the rule of reason and the per se rule to the appellees’ boycott and price-fixing claims.1 The majority’s opinion creates the impression that the district court simply made procedural errors in failing to give proper notice before issuing the preliminary injunction and in failing to hold an evidentiary hearing on disputed facts. I agree with that characterization of the district court’s errors but fear that the procedural errors resulted from a misunderstanding of when a court may apply the per se rule to claims of boycott and price fixing.
In issuing the preliminary injunction, the district court apparently based its prediction that the appellees ultimately would prevail on the merits on a mistaken belief that the per se rule would automatically apply to this case. That mistaken belief probably led the court to forgo the eviden-tiary hearing. I believe it is wise, therefore, to discuss the findings of fact that a court must make before it may apply the per se rule to a case such as this.
With regard to the boycott claim, I submit that the Supreme Court’s opinion in Northwest Wholesale Stationers, Inc. v. Pacific Stationery & Printing Co., 472 U.S. 284, 105 S.Ct. 2613, 86 L.Ed.2d 202 (1985), clearly prohibits the application of the per se rule to cooperative buying arrangements unless a court has made certain preliminary findings of fact. In Northwest, the Court held that “[ajbsent ... a showing [of market power or exclusive access to an element essential to effective competition] with respect to a cooperative buying arrangement, courts should apply a rule-of-reason analysis.” 472 U.S. at 297, 105 S.Ct. at 2621; see Live Poultry Dealers’ Protective Assoc. v. United States, 4 F.2d 840, 842-43 (2d Cir.1924) (L. *1540Hand, J.) (Sherman Act forbids “all agreements preventing competition in price among a group of buyers, otherwise competitive, if they are numerous enough to affect the market”).
Thus, the district court must make findings of fact with regard to the South Florida Hospital Association's (SFHA) market power and control over access to an essential element of competition. If, for example, the district court finds that the SFHA is merely an association of small hospitals that, as a combined force, accounts for only a small share of the relevant market for temporary nursing services,2 then the court should hold that the SFHA does not possess market power. Likewise, if the court finds that members of the SFHA could contract independently with temporary nursing agencies, then the court might also hold that the SFHA does not have control over access to an essential element of competition. Cf. Broadcast Music, Inc. v. Columbia Broadcasting Sys., 441 U.S. 1, 23-24, 99 S.Ct. 1551, 1564, 60 L.Ed.2d 1 (1979) (noting that members of a joint sales agency could sell independently). If the court finds either that the SFHA had market power or that it had control over access to an essential element of competition, then the court should apply the per se rule of liability. Otherwise, the court should examine the buying arrangement under a rule-of-reason analysis. See Northwest Wholesale, 472 U.S. at 296-97, 105 S.Ct. at 2620-21.
Determining whether to apply the rule of reason or the per se rule to the appellees’ price-fixing claim is somewhat more complex. The Supreme Court has never wavered from its application of the per se rule to price-fixing agreements. See Arizona v. Maricopa County Medical Soc’y, 457 U.S. 332, 347, 102 S.Ct. 2466, 2475, 73 L.Ed.2d 48 (1982). The appellants, however, have presented facts that, if true, would indicate that the members of the SFHA never entered into an agreement to fix prices;3 rather, the appellants entered into an agreement that allegedly had as a corollary effect the stabilization of prices for temporary nursing services.4
Certainly, any agreement that has the effect of stabilizing prices can constitute a violation of the antitrust laws. See United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 222-23, 60 S.Ct. 811, 844, 84 L.Ed. 1129 (1940).5 Not all joint purchasing agreements, however, have a stabilizing effect on prices. If the purchasing agent does not have market power or does not have control over access to an essential element of competition, then the agent will still have to bid against other purchasers for the scarce resources. Consequently, the appellees’ price-fixing claim will stand or fall on the same findings of fact required to support their boycott claim: (1) did the SFHA have market power, and (2) did the SFHA control access to an essential element of competition? If the court answers “yes” to either question, then the per se rule should be applied. See United States v. Trenton Potteries Co., 273 U.S. 392, 397, 47 S.Ct. 377, 379, 71 L.Ed. 700 (1927) (“Agreements which create such potential power [to fix prices] may well be held to be in themselves unreasonable or unlawful restraints_” (emphasis add*1541ed)). If the court answers no to both questions, then it should apply the rule-of-reason analysis to the price stabilization claim as well as to the boycott claim. See Broadcast Music, 441 U.S. at 23-24, 99 S.Ct. at 1564-65.

. The district court indicated in its order granting a preliminary injunction that, if the plaintiffs were to succeed on their claims, Florida antitrust laws would provide the basis for their success. Nevertheless, I base the views expressed in this opinion on an interpretation of the federal antitrust laws. I do so because, as the district court correctly noted, "the reasoning of the opinions interpreting the Sherman Act [is] equally applicable to the court’s analysis of the Florida antitrust laws." See generally Fla. Stat. §§ 542.16 (Florida antitrust laws complement federal antitrust laws), 542.18 (provision analogous to § 1 of the Sherman Act) (1987).

. One commentator, citing Brown Shoe Co. v. United States, 370 U.S. 294, 82 S.Ct. 1502, 8 L.Ed.2d 510 (1962), and Standard Oil Co. v. United States, 337 U.S. 293, 69 S.Ct. 1051, 93 L.Ed. 1371 (1949), has suggested that control of ten percent of the relevant market should ordinarily constitute market power. See Davidow, Antitrust, Foreign Policy, and International Buying Cooperation, 84 Yale L.J. 268, 273 & n. 27 (1974). The Court’s opinion in Brown Shoe, however, makes clear that such a bright-line test for market power probably will be of little use. See 370 U.S. at 343-44, 82 S.Ct. at 1534.

. Appellants allege that no maximum or uniform price was set for accepting bids. In fact, they allege, all of the bids ultimately accepted were above the price range suggested by the SFHA.

. The stabilization results from the members’ agreement not to bid against each other for temporary nursing services.

. Of course, it is not the court’s duty to determine whether the price stabilization is economically beneficial. As the Socony-Vacuum Court stated, ”[t]he elimination of so-called competitive evils is no legal justification for such buying programs." 310 U.S. at 220, 60 S.Ct. at 843.