Memorandum Opinion and Order:
I. First Trial and Wilk Decision
This antitrust case is on remand for a new trial from the Court of Appeals, Wilk v. AMA, 719 F. 2d 207 (7th Cir. 1983)
On May 4, 1987 the case was reassigned to me under Local Rule 2.30e for the purpose of conducting the trial. The trial was conducted during May and June of 1987 and the matter is now before the court for the entry of findings of fact and conclusions of law under Rule 52 of the Fed.R.Civ.P. The record in the case consists of 3,624 pages of transcript, approximately 1,265 exhibits, and excerpts from 73 depositions.
The plaintiffs, Chester A. Wilk, James W. Bryden, Patricia A. Arthur, and Michael D. Pedigo, are licensed chiropractors. In a complaint filed in 1976, plaintiffs charged the defendants with violating Sections I and 2 of the Sherman Act, 15 U. S.C Section I and 2. Section I of the Sherman Act declares illegal every contract, combination or conspiracy in restraint of trade or commerce. Section 2 prescribes penalties for every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce. The defendants remaining in the case are the American Medical Association (“AMA”), the Joint Commission on Accreditation of Hospitals (“JCAH”), the American College of Physicians (“ACP”), the American College of Surgeons (“ACS”), the American College of Radiology (“ACR”), the American Academy of Orthopaedic Surgeons (“AAOS”), and James H. Sammons, M.D., an AMA official. [A full description of the defendants is set forth in Wilk and will not be repeated here.] Several of the original defendants settled the case and have been dismissed and all of the original individual defendants except Dr. Sammons obtained summary judgment prior to the retrial of this case.
At the first trial, the plaintiffs’ principal claim was that the defendants engaged in a conspiracy to eliminate the chiropractic profession by refusing to deal with the plaintiffs and other chiropractors. Plaintiffs claimed that the boycott was accomplished through the use of Principle 3 of the AMA’s Principles of Medical Ethics (“AMA’s Principles”) which prohibited medical physicians fr om associating professionally with unscientific practitioners. Principle 3 provided as follows:
A physician should practice a method of healing founded on a scientific basis; and he should not voluntarily professionally associate with anyone who violates this principle.
It was the plaintiffs’ contention that the AMA used Principle 3 to achieve a boycott of chiropractors by first calling chiropractors “unscientific practitioners,” and then advising AMA members and other medical societies that it was unethical for medical physicians to associate with chiropractors. The other defendants, plaintiffs claimed, joined the boycott and the result was a conspiracy in restraint of trade in violation of Section I of the Sherman Act. The jury returned a verdict for the defendants and against the plaintiffs. That judgment was reversed on appeal and the case was remanded.
The Wilk Court clarified the principal legal issues in the case. The Court held that the legality of the defendants’ conduct under Section I must be adjudged under the rule of reason articulated in Chicago Board of Trade v. United States 246 U.S. 231, 238 (1918). The Court rejected the plaintiffs’ argument that the defendants’ conduct was a per se violation of Section 1, holding that “a canon of medical ethics purporting, surely not frivolously, to address the importance of scientific method gives rise to questions of sufficient delicacy and novelty at least to escape per se treatment.” 719 F.2d at 222. Under the rule of reason, the inquiry mandated is whether the challenged agreement is one that promotes competition or one that suppresses competition. National Society of Professional Engineers v. United States, 435 U.S. 679, 691 (1978).
The Court also considered whether proof of coercive enforcement of Principle 3 or of the purported agreement among the defendants was necessary to satisfy the Section I agreement criterion. Relying on Goldfarb v. Virginia State Bar, 421 U.S. 773 at 791, n.21 (1975), the Court noted that even without a threat of professional discipline, the mere existence of ethical opinions of professional associations constitutes substantial reason to adhere to the standards because professionals would comply in order to assure that they did not discredit themselves by departing from professional norms. Thus, the Wilk Court held:
… even without coercive enforcement, a court may find that members of an association promulgating guidelines sanctioning conduct in violation of Section I participated in an agreement to engage in an illegal refusal to deal. 719 F.2d at 230.
Next, the Court held that if the plaintiffs met their burden of showing that the effect of Principle 3 and the implementing conduct had been to restrict competition rather than to promote it, the defendants could then come forward to show:
(1) that they genuinely entertained a concern for what they perceive as scientific method in the care of each person with whom they have entered into a doctor-patient relationship; (2) that this concern is objectively reasonable; (3) that this concern has been the dominant motivating factor in defendants’ promulgation of Principle 3 and in the conduct intended to implement it; and (4) that this concern for scientific method in patient care could not have been adequately satisfied in a manner less restrictive of competition. 719 F.2d at 227.
This was called the “patient care defense.” Finally, with respect to the plaintiffs’ Section 2 claim, the Court of Appeals noted that it was not separately argued on appeal, and the Court declined to separately discuss it.
Shortly before the scheduled trial before this court, the plaintiffs waived their claim for damages and sought only injunctive relief. This turned the case from a jury to a bench trial, and it shifted the focus of the case from the past to the present in order to determine whether the plaintiff were entitled to injunctive relief under Section 16 of the Clayton Act.