Deborah Heart & Lung Ctr. v. Virtua Health, Inc. — Aug. 2016 (Summary)

ANTITRUST

Deborah Heart & Lung Ctr. v. Virtua Health, Inc.
No. 15-2032 (3d Cir. Aug. 17, 2016)

The United States Court of Appeals for the Third Circuit affirmed the federal district court’s entry of summary judgment against a charity hospital, which claimed that a health system, a hospital, and a group of cardiologists (collectively, “defendants”) violated Section 1 of the Sherman Act and also brought claims for tortious interference and unfair competition.

The charity hospital alleged that when a group of cardiologists, who once had a relationship with the charity hospital that resulted in the transfer of numerous patients, entered into an exclusive agreement to provide cardiovascular services with another hospital, the arrangement constituted an illegal restraint on trade. The charity hospital maintained that the arrangement forced some consumers to obtain procedures at the other hospitals when, in a competitive market, the consumers would have chosen the charity hospital.

The court rejected the charity hospital’s position that its burden was to show that the effects of the arrangement had more than a de minimis effect on competition in the market, and found that the charity hospital failed to establish its actual burden of showing anticompetitive effects of the market as a whole. The court reasoned that all of the charity hospital’s arguments failed because the arguments pertained solely to the defendant’s patients rather than the undisputed relevant geographic market. Also, the charity hospital’s allegations failed because the charity hospital only showed the effects upon a small subset of the market rather than the broader effects upon the market as a whole.