Chiropractic Antitrust Suit: Entitlement to An Injunction

Memorandum Opinion and Order:
Liability of the AMA and Dr. Sammons

6. Entitlement to An Injunction

Section 16 of the Clayton Act gives private parties the right to seek injunctive relief for violation of the antitrust laws:

Any person, firm, corporation, or association shall be entitled to sue for and have injunctive relief … against threatened loss or damage by a violation of the antitrust laws … when and under the some conditions and principles as injunctive relief against threatened conduct that will cause loss or damage is granted by courts of equity, under the rules governing such proceedings …

In accordance with well established Supreme Court decisions, all that is required to state a case for such relief is “a real threat of future violation or a contemporary violation of a nature likely to continue to recur.” United States v. Oregon State Medical Soc., 343 U.S. 326, 333 (1952); Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 130 (1969). Thus although the statutory provision “invokes traditional principles of equity,” Zenith Radio at 130, an antitrust plaintiff need not meet all of the requirements for an injunction imposed by traditional equity jurisprudence. Commodity Futures Trading Comm. v. Hunt, 591 F.2d 1211, 1220 (7th Cir. 1979).

Any relief fashioned by the court must be in accordance with the regulatory scheme and adequately serve the particularized needs of the case before the court. The trial court’s discretion must be exercised to effectuate the manifest objective of the specific legislation involved. Commodity Futures 591 F.2d at 1220, quoting SEC v. Advance Capital Growth Corp., 470 F.2d 40, 53 (7th Cir. 1972). In view of the strong public policies private antitrust plaintiffs tend to promote, the teaching of Commodity Futures is important to the court’s decision in this case.

In determining the appropriateness of injunctive relief, courts have typically scrutinized the prior conduct of the defendant. Voluntary cessation of allegedly illegal conduct is looked upon with extreme skepticism by courts but may be a factor in determining the appropriateness of injunctive relief “if the defendant can demonstrate that there is no reasonable expectation that the wrong will be repeated. The burden is a heavy one.” United States v. Realty Multi-List, Inc., 629 F.2d 1351, 1388 (5th Cir. 1980), quoting United States v. W.T. Grant Co., 345 U.S. 629, 633 (1953).

Where a violation has been founded on systematic wrongdoing, rather than on isolated occurrence or event, the Seventh Circuit has observed that a court should be more inclined to issue an injunction. Commodity Futures, 591 F2d at 1220. Relief is appropriate against a defendant which retains a financial interest in continuing antitrust violations and/or a position in the market which could enable it to carry out such anticompetitive activity. Commodity Futures indicates that the defendant’s acceptance of blame for its conduct is a factor tending to diminish the necessity of injunctive relief. Conversely, lack of contrition would also have some relevance.

The plaintiffs urge that a court, once it has found a violation of the antitrust laws, has “the duty to compel action by the conspirators that will, so for as practicable, cure the ill effects of the illegal conduct, and assure the public freedom from its continuance.” United States v. United States Gypsum Co., 340 U.S. 76, 88 (1950). While this is the only case I have found which states that such an injunction is mandatory, there is no question that a court may consider lingering efforts as a factor. As the Supreme Court stated in International Salt Co. v. United States, 332 U.S. 392, 400-01 (1947):

The District Court is not obliged to assume, contrary to common experience, that a violator of the antitrust laws will relinquish the fruits of his violation more completely than the court requires him to do. And advantages already in hand may be held by methods more subtle and informed, and more difficult to prove, than those which, in the first place, win a market … In an equity suit, the end to be served is not punishment of post transgression, nor is it merely to end specific illegal practices. A public interest served by such civil suits is that they effectively pry open to competition a market that has been closed by defendants’ illegal restraints.

The point, clearly, is to deny those in violation of the Act future benefits from their forbidden conduct. United States Gypsum Co., 340 U.S. at 89. See also Or2gon State Medical Soc., 343 U.S. at 333. Continuing effects of post illegal conduct, therefore, is an important factor to consider.

Because this suit is brought by private citizens, the AMA contends that (1) the plaintiffs must show a threat of personal injury and (2) that they are entitled only to preventive relief disabling that threat. It bases its position on the Supreme Court’s recogni-tion that a private litigant’s objectives in pursuing an antitrust action ore not necessarily congruent with the public interest. United States v. Borden Co., 347 U.S. 514, 518-19 (1954). This difference in interests, it adds, renders inapplicable many of the cases cited by the plaintiffs in support of broad injunctive relief. That contention is only partially correct.

It is true that an antitrust plaintiff must prove some kind of personal injury or threat of injury stemming from the defendant’s anticompetitive activity in order to maintain its lawsuit; both the Clayton Act and Article Ill of the Constitution require this much-. See Borden, 347 U.S. at 518-19 (Clayton Act); Julian 0. von Kalinski, I Antitrust Low and Trade Regulation Section 4.06(6) (1986); Valley Forge Christian College v. Americans United for Separation of Church and State, 454 U.S. 464, 472 (1982) (“at an irreducible minimum, Art. III requires the party who invokes the court’s authority to show that he personally has suffered from actual or threatened injury as a result of the putatively illegal conduct of the defendant”).

Where the AMA’s argument is flowed is in its suggestion that the relief granted to a private plaintiff is necessarily more limited than that available were the government bringing the lawsuit. While it is true that a private plaintiff may not bring an action on behalf of the public, it does not follow that the relief granted to a private litigant may not take on a “public” character. See International Salt 332 U.S. at 401 (“A public interest served by such civil suits is that they effectively pry open to competition a market that has been closed by defendants’ illegal restraints”). See also Hawaii v. Standard Oil Company of California, 405 U.S. 251, 262 (1972) (Congress sought enforcement of antitrust laws by encouraging plaintiffs to serve as private attorneys general). I generally agree, however, that courts should be “quite reluctant to grant ‘drastic’ or sweeping” injunctive relief to private plaintiffs von Kalinski, Antitrust Laws at Section 4.406(6).

The defendants argue that the plaintiffs have not shown any personal injury, as opposed to just a generalized injury to the profession of chiropractic. This argument has led to an extensive inquiry into each incident by which the plaintiffs claim they were harmed or are being threatened with harm as a result of the boycott. Each rejection suffered by one of the plaintiffs has been dissected to determine whether the boycott was the source of the rejection. [The material facts relating to the rejections testified to by the plaintiffs (and recited, for example, in the Plaintiffs’ Summary of Proofs) ore not in dispute and they will not be recited in this opinion. The disputed question is the source of or the basis for the rejection.]

It obviously would be extremely difficult to discover facts which would show whether a particular rejection or lost opportunity suffered by a plaintiff or any chiropractor was caused by the boycott. For example, the AMA argues that many medical physicians have reached an independent conclusion that chiropractors have no value or impose harm on patients based on their own experiences, or on sources of such conclusions that are independent of the AMA (such as the 1975 Consumers Report articles), or on statements of or actions by the AMA and other defendants which are protected Noerr-Pennington activity. The AMA would have this court ask, if a medical physician refuses to associate with a chiropractor who can say that the boycott was a contributing factor?

While it is difficult to say in any particular instance, a fair inference from the evidence is that the nature and extent of the boycott has influenced the thinking of medical physicians in their dealing, or refusing to deal, with chiropractors. The Committee on Quackery directly resulted from the AMA’s concern that some medical physicians were cooperating with chiropractors and that AMA believed that this should be stopped. The Committee believed it was successful, and as I have already noted, I believe that the Committee’s self-assessment was correct. It took the boycott to stop cooperation among medical physicians and chiropractors. [Obviously, the boycott was not 100% successful and there has always been some cooperation among medical physicians and chiropractors.]After the ethical proscription was lifted in 1980, some medical physicians did begin to associate with chiropractors. Certainly, Dr. Nelson and Drs. Epps and Dickey (current members of the Judicial Council who testified for the AMA) would not be taking referrals from chiropractors today, as they do, if Principle 3 were still on the books and if the AMA had not changed its chiropractic policy. It is important to note that these three doctors are well versed in the AMA’s present policies since they were all called to testify about those policies.

I conclude that while the boycott was in full bloom it more likely than not affected individual decision-making by AMA members and other medical physicians in their relationships with chiropractors, including the plaintiffs. Until AMA members learn that the AMA’s policies in fact have changed and that the reason for the change, as Dr. Nelson has testified, is that chiropractic has matured, the effects of the boycott, in my judgment, will continue to affect AMA members’ decision-making with respect to association with chiropractors. From this I conclude that the rejections and lost opportunities suffered by the individual plaintiffs more likely than not were caused in significant part by the boycott. Thus, the individual plaintiffs have been personally harmed, and continue to be personally threatened, by a lack of association with members of the AMA caused by the boycott and the lingering effects of the boycott. The injury and the threatened loss are “fairly traceable” to the AMA’s actions. Allen v. Wright, 82 L.Ed.2d 556, 569 (1984); Valley Forge Christian College v. American United, 454 U.S. 464, 472 (1982); Hope, Inc. v. College of DuPage, 738 F.2d 797, 804 (7th Cir. 1984). I reach this conclusion despite the fact that no AMA member confessed that he refused to associate with one of the plaintiffs because of the constraints of Principle 3, and despite the self-serving denials that Principle 3 had anything to do with a decision not to deal with one of the plaintiffs.

The evidence has also established a continuing injury to reputation which both Dr. Stano and Mr. Lynk testified would constitute an anti-competitive effect of the boycott. The activities of the AMA undoubtedly have injured the reputation of chiropractors generally. This kind of injury more likely than not was sustained by the four plaintiffs. In my judgment, this injury continues to the present time and likely continues to adversely affect the plaintiffs. The AMA has never made any attempt to publicly repair the damage the boycott did to chiropractors’ reputations. There has been no affirmative statement by the AMA to its members that it is ethical to associate with chiropractors. There has been no public announcement of what the AMA has argued in this courtroom in defense against an injunction, namely that chiropractic has changed and improved, or of the substance of Dr. Nelson’s testimony. I believe that until some of these things are said by the AMA to its members, plaintiffs and chiropractors generally will continue to suffer injury to reputation resulting from the boycott.

Finally, based on Dr. Santo’s testimony, the plaintiffs have established a likelihood that their incomes have been diminished as a result of the boycott, and that such injury threatens to continue to this day. The AMA points out that the lost data point utilized by Dr. Stano showed that chiropractors’ income in 1984 exceeded that of podiatrists and optometrists. That is correct, but the analyses done by Dr. Stano to predict income through 1986 showed that the projection was still lower than similar projections for podiatrists and optometrists. Thus, I conclude that the plaintiffs have demonstrated sufficient personal injury to obtain an injunction in this case.

The final question is whether the court will exercise its discretion and issue an injunction against any of the defendants who have been found guilty of a Section I violation. The AMA has strenuously argued that no injunction is necessary since its present policies are in compliance with the antitrust laws; it has no intention of changing its present policies; most of the conduct relied upon by the plaintiffs occurred in the mid to late 1960s; and the AMA has voluntarily taken corrective action.

I agree that the AMA’s present policies do not prohibit association with chiropractors. With respect to the specific corrective action taken by the AMA, I have already discussed the begrudging nature of Report UU and the continued use of the concept of “unscientific practices” in both Report UU and in the 1977 revised Opinions of the Judicial Council. Until Principle 3 was eliminated in 1980, Report UU and the revised opinions remained ambiguous due to the references to unscientific conduct. To this day, the AMA responds to requests for information on chiropractice by sending outdated anti-chiropractic literature. But the more important point for purposes of determining whether an injunction is necessary is the fact that in none of the AMA policies is there any affirmative statement that the boycott is over. An example of such an affirmative statement is that of the Illinois State Medical Society: “There are and should be no ethical or collective impediments to full professional association and cooperation between doctors of chiropractic and medical physicians, except as provided by law.” The Opinion of the Judicial Council which the AMA relies on most heavily to show its new position on chiropractic, Opinion 3.01, is entitled “Nonscientific Practitioners.” So the AMA member has to look under “Nonscientific Practitioners” to find out that it is permissible to associate with a chiropractor. In contrast, the 1969 Opinions had a separate section on optometrists, about whom the AMA at one time had very negative things to say, but today there is nothing similar on chiropractors. Another example is the AMA’s acknowledgment of its changed thinking about osteopaths. The 1969 Opinions contained an opinion on osteopathy which states that 11 recognition should be given to the transition presently occurring in osteopathy.” A medical physician whose thinking on chiropractic was formed at least in port by the boycott has not been told affirmatively by the AMA that the boycott is off.

The AMA also relies on the settlement agreements it entered into in several other lawsuits brought by chiropractors in Pennsylvania, New York, and Iowa, in 1978, 1981, and 1986, respectively. [The AMA also relies on the favorable results it received in other chiropractic litigation, but none of those results is binding here and there are substantial differences among the various lawsuits that render comparison useless.] In these agreements the AMA basically agreed to adopt some of the policy changes that it has now adopted and to not change those policies. In addition, Drs. Nelson, Epps and Dickey, testified that the AMA has no plans to change its present policies on chiropractic. Some of the plaintiffs’ witnesses, Dr. Freitag and Dr. James Winterstein, D.C., stated their agreement with and support of the current AMA policies. Finally, the AMA relies on the fact that the change in the AMA position, and the medical profession’s criticism of that change in position, received wide publicity in both the medical and popular press in the late 1970s and early 1980s. From this the AMA concludes its members have been informed of the change in position.

In response to the AMA’s argument that there is no evidence that suggests a return to its former policies, I need only refer to AMA’s behavior in connection with the 1983 revision of the JCAH accreditation standards for hospitals. The AMA was forced to change its original position which was more favorable to chiropractors in response to criticism from its members and other medical societies. The AMA changed its position to satisfy its constituents, medical physicians, and it voted to approve the more restrictive accreditation standards. The fact that the AMA was forced to back away from its original position indicates to me that the AMA’s present assurances are good only until the next chiropractic battle.

The plaintiffs note that in all of the settlement agreements executed by the AMA there is no admission of liability, and that in this case the AMA vigorously argues that its conduct is now and always has been legal. “The activities of the AMA relating to chiropractic and doctors of chiropractic have always been in compliance with antitrust laws …” AMA Motion for Summary Judgment, March 24, 1987, p.10. This is a relevant factor.

I conclude that an injunction is necessary in this case. There are lingering effects of the conspiracy; the AMA has never acknowledged the lawlessness of its post conduct and in fact to this day maintains that it has always been in compliance with the antitrust laws; there has never been on affirmative statement by the AMA that it is ethical to associate with chiropractors; there has never been a public statement to AMA members of the admissions made in this court about the improved nature of chiropractic despite the fact that the AMA today claims that it made changes in its policy in recognition of the change and improvement in chiropractic; there has never been public retraction of articles such as “The Right and Duty of Hospitals to Deny Chiropractor Access to Hospitals”; a medical physician has to very carefully read the current AMA Judicial Council Opinions to realize that there has been a change in the treatment of chiropractors and the court cannot assume that members of the AMA pore over these opinions; and finally, the systematic, long-term wrongdoing and the long-term intent to destroy a licensed profession suggests that an injunction is appropriate in this case, When all of these factors are considered in the context of this “private attorney general” antitrust suit, a proper exercise of the court’s discretion permits, and in my judgment requires, an injunction.

I have reviewed the form of injunction proposed by the plaintiffs in connection with the motions for summary judgment, and I have already informed the parties that regardless of the outcome of this case, I would not grant the sweeping form of injunction sought by the plaintiffs. As the defendants have suggested, the plaintiffs appear to want a forced marriage between the professions. Certainly no judge should perform that ceremony. The plaintiffs are directed to prepare a proposed form of injunction consistent with this opinion and along the lines of the Illinois State Medical Society settlement agreement. The proposed form of injunction should be discussed with the AMA to see if some agreement can be reached as to form.

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