Mercatus Group, LLC v. Lake Forest Hospital, 2011 U.S. App. LEXIS 10567

Background

Mercatus planned to build a physician center on the Shepard Land in Lake Bluff, IL, with ENH as a partner seeking multiple centers.
Lake Forest Hospital opposed the project, fearing competition and loss of revenue, and launched a multi-pronged campaign against Mercatus.
Hospital lobbied Village Board members, led a public-relations push, warned ENH to stay out of Lake Bluff, and offered incentives to physician groups not to relocate.
Village Board ultimately denied development and site-plan approvals, and Mercatus never opened the center.
Mercatus sued in federal court alleging Sherman Act monopolization/attempted monopolization; the district court granted summary judgment, immunizing petitioning activity under Noerr-Pennington, and dismissing other claims; Mercatus appeals.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Noerr-Pennington immunizes the Hospital's Board-petitioning conduct.	Mercatus argues misrepresentations during Board proceedings taint immunity.	Hospital contends Board proceedings are political; Noerr-Pennington applies.	Yes; Board proceedings were legislative, not adjudicative, so Noerr-Pennington immunity applies.
Whether the fraud/sham exception to Noerr-Pennington applies to misrepresentations to the Board.	Mercatus relies on sham/fraud exception to defeat immunity.	Fraud exception does not apply to legislative proceedings.	The fraud exception does not apply to legislative proceedings, so immunity remains.
Whether the Board's proceedings were adjudicative or legislative for purposes of Noerr-Pennington.	Mercatus emphasizes alleged misrepresentations affecting the outcome.	Proceedings were legislative in character.	Board proceedings were legislative; thus fraud exception and immunity apply.
Whether the Hospital's public-relations campaign outside the Board proceedings falls outside Noerr-Pennington.	Mercatus contends accompanying antitrust liability for campaign rhetoric.	Public-relations campaign is protected political speech under Noerr-Pennington.	Protected; Noerr-Pennington immunizes the public-relations campaign.
Whether the Hospital's physician-strategy actions constitute predatory or anticompetitive conduct.	Mercatus claims incentives to NSM/LFM and misstatements were anticompetitive.	Offers were pro-competitive, not predatory; no coercive tactics shown.	No antitrust violation; actions do not demonstrate predatory/anticompetitive conduct.

Key Cases Cited

Eastern R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127 (1961) (Noerr-Pennington immunizes petitioning activity from antitrust liability)
United Mine Workers of America v. Pennington, 381 U.S. 657 (1965) (Noerr-Pennington extension; protection of petitioning)
Premier Elec. Constr. Co. v. Nat'l Elec. Contractors Ass'n, Inc., 814 F.2d 358 (7th Cir. 1987) (First Amendment safeguards; limits on Noerr-Pennington)
Allied Tube & Conduit Corp. v. Indian Head, Inc., 486 U.S. 492 (1988) (Fraud/abuse in government processes may remove immunity)
California Motor Transp. Co. v. Trucking Unlimited, 404 U.S. 508 (1972) (Misrepresentations condoned in political arena; adjudicatory context matters)
Professional Real Estate Investors, Inc. v. Columbia Pictures Indus., 508 U.S. 49 (1993) (Fraud/sham exception requires objective and anticompetitive intent; adjudicatory threshold)
Metro Cable Co. v. CATV of Rockford, Inc., 516 F.2d 220 (7th Cir. 1975) (Factors for legislative vs. adjudicative character (Metro Cable test))
Sanderson v. Culligan Intl. Co., 415 F.3d 620 (7th Cir. 2005) (Speech-related antitrust issues; enforcement mechanism matters)
Schachar v. American Academy of Ophthalmology, Inc., 870 F.2d 397 (7th Cir. 1989) (Commercial speech and antitrust boundaries; no coercive enforcement)
MCI Communications Corp. v. American Telephone & Telegraph Co., 708 F.2d 1159 (7th Cir. 1983) (Noerr-Pennington scope; petitioning protection)