Mercatus Group, LLC v. Lake Forest Hosp. (Summary)

ANTITRUST

Mercatus Group, LLC v. Lake Forest Hosp., No. 10-1665 (7th Cir. May 26, 2011)

The United States Court of Appeals for the Seventh Circuit upheld summary judgment in favor of a hospital that was sued for allegedly violating federal antitrust laws. The suit was brought by a corporation that planned to construct a physician center that would compete with the hospital. The physician center alleged that the hospital mounted a public relations campaign laced with misrepresentations and designed to convince the community board to deny the request to develop the project. It also claimed that the hospital improperly offered incentives to two hospital-affiliated physician groups to keep them from relocating their practices to the physician center.

The court concluded that the hospital’s efforts to lobby the community board, acting in a legislative capacity, and its campaign to sway the public were immunized from antitrust liability under free speech principles dealing with the hospital’s right to petition the government for redress. Similarly, the hospital’s “derogatory” comments about the physician center to other businesses in the community and warnings to the physician center’s hospital partner to “stay out of its territory,” when not backed by any coercive conduct, were not actionable under the federal antitrust laws.

Lastly, the court found that the hospital’s conduct in attempting to retain physicians that the physician center was trying to lure away did not constitute actual or attempted monopolization under federal antitrust laws. According to the court, absent predatory conduct by the hospital, there could be no antitrust liability in the hospital trying to retain the business of its physicians and “the Hospital had no duty to step aside and allow [the physician center] to make off with its physicians, patients, and revenue.”