HOSPITAL BUILDING COMPANY, Aрpellant, Federation of American Hospitals, Amicus Curiae, v. TRUSTEES OF the REX HOSPITAL, a corporation, et al., Appellees.
No. 73-1627.
United States Court of Appeals, Fourth Circuit.
Decided Feb. 18, 1975.
511 F.2d 678
Robinson-Patman Section 2(d) Claim:
It is manifest from a reading of the record and Rutledge‘s brief on this appeal that he has misread the proscription of
Section 2(d) does not refer to benefits to “favored buyers” in connection with the original sale to the buyer, such as discounts, nor does it refer to a seller who charges different prices to different buyers according to the qualification or functional level of the buyer; rather it refers to payments in connection with the resale by the buyer of the goods, for advertising, promotion or other similar purposes. Exquisite Form Brassiere, Inc. v. F.T.C., 112 U.S.App. D.C. 175, 301 F.2d 499 (1961); Rowe, Price Discrimination Under the Robinson-Patman Act, at 371. Cf. Surprise Brassiere Co. v. F.T.C., 406 F.2d 711 (5th Cir. 1969).
The record is bare of any evidence of payment or lower price allowance by any hose manufacturer to any coupler of any sum in connection with any of the services with which Section 2(d) concerns itself, to wit, promotion, advertising or similar activities connected with the resale of goods.
The District Court correctly concluded that as a matter of law the Section 2(d) claim must fail.
Robinson-Patman Section 2(f) Claim:
The District Court outrightly concluded as a matter of law that Rutledge had not established a
Affirmed.
ALFRED T. GOODWIN, Circuit Judge (specially concurring):
I concur in the majority opinion insofar as it affirms the dismissal of the action. I do so because I am satisfied that the proof put on by the plaintiff would not have sustained a verdict if there had been a jury.
I do not approve the district court‘s refusal to permit the plaintiff to rehabilitate its demand for a jury trial in order to comply with local rules. While I agree with the district court that the conduct of some of the plaintiff‘s earlier lawyers was hardly a model of efficiency and diligence, it is risky business to punish inept lawyers by denying their client a trial by jury. I would have resolved the doubts about compliance with the local rules in favor of allowing the party to cure the deficiency. On the whole record in this case, however, any error or abuse of discretion with reference to the plaintiff‘s Seventh-Amendment rights was harmless.
Carl Weissburg, Lawrence E. Mindell and Weissburg, Jacobs & Gerst, Los Angeles, Cal., on brief for amicus curiae Federation of American Hospitals.
Ray S. Bolze, Washington, D. C., and John H. Anderson, Raleigh, N. C. (Thomas W. Steed, Jr., Raleigh, N. C., John R. Fornaciari, Alexandria, Va., Allen, Steed & Pullen, and Smith, Anderson, Blount & Mitchell, Raleigh, N. C., Howrey, Simon, Baker & Murchison, Washington, D. C., Lillard H. Mount, Richard M. Hutson, II, and Hofler, Mount, White & Long, Durham, on brief), for appellees.
Before HAYNSWORTH, Chief Judge, BRYAN, Senior Circuit Judge, and WINTER, CRAVEN, BUTZNER, RUSSELL, FIELD, and WIDENER, Circuit Judges, sitting en banc.
CRAVEN, Circuit Judge:
In this action filed pursuant to
I.
The motion to dismiss was lodged under
Whether the complaint was dismissed for lack of subject matter jurisdiction or failure to state a claim upon which relief could be granted is not clear. Since Congress specifically has conferred jurisdiction of Sherman Act claims (
Nevertheless, we have concluded to affirm. That we do so should be taken by the bar and the district judges as a rare exception to prove the rule that judgments of dismissal on the pleadings in antitrust cases will ordinarily be reversed.
II.
HBC operates in Raleigh, North Carolina, a 49-bed proprietary hospital, Mary Elizabeth Hospital, which offers general medical-surgical hospital services to the public. The appellees, referred to by HBC in its brief and hereinafter by us as “the Raleigh Group,” are a North Carolina corporation that runs a hospital in competition with Mary Elizabeth in Raleigh and various individuals involved in the provision of medical-surgical hospital services in Raleigh. HBC alleged below that, beginning at least as early as 1970 and continuing through the present, the Raleigh Group together with others not parties to this suit have engaged in a conspiracy aimed at controlling the number of hospital beds, allocating customers (hospital patients), and otherwise exercising unreasonable restraints of and monopolizing the market for medical-surgical hospital services in “the Raleigh area,” defined as “the area comprising Wake County, in the State of North Carolina.”
HBC professed to have discovered the conspiracy in late 1971 when it undertook to relocate Mary Elizabeth and expand it from 49 to 140 beds. According to HBC the Raleigh Group and their co-conspirators devised a scheme involving bad faith efforts to block authorization of the expansion,1 tactics to hold up implementation of HBC‘s plans once authorization was gained, and finally malicious instigation of adverse publicity and general public antipathy. HBC alleged that the scheme has delayed expansion of Mary Elizabeth, and asked as damages treble the amount of direct costs and loss of revenue attributable to the delay. HBC also sought injunctive relief against a continuation of the alleged conspiracy. Because we conclude that the district court was correct in finding that even if HBC proved all of its factual allegations it still would have shown an insufficient connection with interstate commerce to invoke the Sherman Act, we affirm.
III.
An antitrust plaintiff may establish the necessary connection with interstate commerce in either of two ways: by demonstrating that the alleged anticompetitive conduct occurred in interstate commerсe, or by showing that the conduct, though wholly intrastate, had a substantial effect on interstate commerce.
Greenville Publishing Co. v. Daily Reflector, Inc., 496 F.2d 391, 395 (4th Cir. 1974) (emphasis added). See also Goldfarb v. Virginia State Bar, 497 F.2d 1, 16 (4th Cir.), cert. granted, 419 U.S. 963, 95 S.Ct. 223, 42 L.Ed.2d 178 (1974) (No. 74-70); Sun Valley Disposal Co. v. Silver State Disposal Co., 420 F.2d 341, 343 (9th Cir. 1969); Lieberthal v. North Country Lanes, Inc., 332 F.2d 269, 271-72 (2d Cir. 1964). Within this traditional analytic framework the question for decision is whether the conspiracy described in HBC‘s complaint has either directly re-
IV.
There is little basis for HBC‘s assertion that the alleged conspiracy acts directly in interstate commerce. The Raleigh Group is concerned exclusively with restraining Mary Elizabeth‘s provision of hospital services and with controlling the market for such services in the Raleigh area. The provision of hospital services has consistently been held to be a purely local activity. Elizabeth Hospital, Inc. v. Richardson, 269 F.2d 167, 170 (8th Cir.), cert. denied, 361 U.S. 884, 80 S.Ct. 155, 4 L.Ed.2d 120 (1959); Spears Free Clinic v. Cleere, 197 F.2d 125, 126 (10th Cir. 1952). Therеfore, anticompetitive conduct aimed at the provision of such services necessarily acts directly only upon intrastate commerce. See United States v. Oregon State Medical Society, 343 U.S. 326, 338-39, 72 S.Ct. 690, 96 L.Ed. 978 (1952); Elizabeth Hospital, Inc. v. Richardson, supra; Riggall v. Washington County Medical Society, 249 F.2d 266, 268 (8th Cir. 1957), cert. denied, 355 U.S. 954, 78 S.Ct. 540, 2 L.Ed.2d 530 (1958); Spears Free Clinic v. Cleere, supra.
HBC‘s argument that the Raleigh Group‘s anticompetitive conduct occurred “in commerce” amounts to this: (1) Mary Elizabeth, and hospitals in general, have become substantially enmeshed in the interstate commerce network through their use of interstate communications facilities, their subjection to extensive federal regulation, their purchases of materials and services from out-of-state, their treatment of patients from other states, and their financial arrangements with national health insurers and government welfare programs; (2) the conspiracy directly affected Mary Elizabeth; therefore, the conspiracy, by acting upon a hospital so entwined in interstate commerce, acted directly upon interstate commerce. We accept the premises of the syllogism but reject the conclusion.
It is settled that the “in commerce” test is not whether the conduct complained of is aimed at a business engaged in interstate commerce, but whether the conduct complained of acts directly upon the interstate aspects of such a business. United States v. Yellow Cab Co., 332 U.S. 218, 230-34, 67 S.Ct. 1560, 91 L.Ed. 2010 (1947); Sun Valley Disposal Co. v. Silver State Disposal Co., supra, 420 F.2d at 343; Lieberthal v. North Country Lanes, Inc., supra, 332 F.2d at 271; Savon Gas Stations Number Six, Inc. v. Shell Oil Co., 309 F.2d 306, 308-09 (4th Cir. 1962), cert. denied, 372 U.S. 911, 83 S.Ct. 725, 9 L.Ed.2d 719 (1963); Page v. Work, 290 F.2d 323, 330 (9th Cir.), cert. denied, 368 U.S. 875, 82 S.Ct. 121, 7 L.Ed.2d 76 (1961). Here, no matter how entwined in our increasingly national economy Mary Elizabeth and other Raleigh area hospitals may be, the fаct remains that the conspiracy complained of directly affected only one aspect of those hospitals’ businesses, namely the provision of surgical-medical hospital services in the Raleigh area. And the provision of such services remains what it always has been: a local, intrastate activity, not interstate commerce.
In its argument that “in commerce” jurisdiction exists HBC relies heavily on language from Rasmussen v. American Dairy Association, 472 F.2d 517 (9th Cir.), cert. denied, 412 U.S. 950, 93 S.Ct. 3014, 37 L.Ed.2d 1003 (1973). We cannot see the relevance of that case to our situation for purposes of the “in commerce” test. The court in Rasmussen indicated, although it did not decide conclusively, 472 F.2d at 524-25, that the “in commerce” test was met by a restraint on the intrastate sale of a filled-milk product called “Go” which was manufactured in state from ingredients all but one of which originated out of state. The court was able to suggest that the restraint acted directly upon the flow of commerce formed by “Go” and its ingredients because—as the court said—“for all practical purposes, the out-of-state ingredients are ‘Go.‘” Id. at 525 (original emphasis). Cf. Mandeville Is-
V.
It is not so easy to decide the result under the second, or “affecting commerce,” branch of the analysis. Here the fact that the Raleigh Group‘s
There is no bright line dividing cases in which the effect upon interstate cоmmerce is sufficient to permit Congress to prohibit particular anticompetitive activity under the commerce clause from those cases in which it is not sufficient. In this area perhaps more than in most, each case must turn on its own facts.
Rasmussen v. American Dairy Association, supra, 472 F.2d at 526.
HBC suggests several ways in which interstate commerce has been affected by the Raleigh Group‘s thwarting of the Mary Elizabeth expansion. Neither the hospital‘s interstate purchases of supplies and equipment,3 its billings to national insurance companies and the federal government,4 nor its purchases of management services from its parent corporation5 have increased as they would
were the hospital to expand. And the $4 million cost of expansion was to be financed by non-North Carolina lenders, so that substantial interest payments wоuld flow across state lines.
Aware that such decisions should be exercises of reasoned economic judgment rather than applications of mechanistic formulae, see Rasmussen v. American Dairy Association, supra, 472 F.2d at 523, we conclude that the various ramifications noted by HBC do not add up to a sufficiently substantial effect upon interstate commerce to satisfy Sherman Act requirements. The effect here seems to us the indirect and fortuitous consequence of the restraint of the intrastate Raleigh area hospital market, rather than the result of activity purposely directed toward interstate commerce.6 Although not controlling, this factor is relevant to the issue of substantiality. See, e. g., Spears Free Clinic v. Cleere, supra, 197 F.2d at 127; Marston v. Ann Arbor Property Managers (Management) Association, 302 F.Supp. 1276, 1280 (E.D.Mich.1969), aff‘d per curiam, 422 F.2d 836 (6th Cir.), cert. denied, 399 U.S. 929, 90 S.Ct. 2244, 26 L.Ed.2d 796 (1970). Moreover, when the various economic consequences are sorted out and considered in the perspective of their respective markets,7 it is obvious that none of them could have more than negligible impact: no source of supply or insurance company or lending institution can be expected to go under if Mary Elizabeth doesn‘t expand, and no market price likely will be affected. In short, we are unconvinced that the alleged conspiracy, even if successful, can affect interstate
commerce in the detrimental manner that concerned Congress when it passed the Sherman Act. Cf. Page v. Work, supra, 290 F.2d at 332-33.
In deciding that there is here insufficient impact on interstate commerce to invoke the Sherman Act we do not overlook Doctors, Inc. v. Blue Cross of Greater Philadelphia, 490 F.2d 48 (3d Cir. 1973). The Third Circuit in that case found jurisdiction over an alleged conspiracy of Blue Cross and a hospital planning agency aimed at manipulating the Greater Philadelphia hospital services market to Blue Cross‘s benefit. The court based its finding on the fact that the conspiracy, if successful, could shut down many of the approximately 100 hospitals in the Greater Philadelphia area, which could affect as much as $23 million per year in interstate shipments of supplies. According to the court, and we agree, this potential effect upon the traffic in out-of-state goods was “substantial enough” to invoke the Sherman Act. 490 F.2d at 53.
We think Doctors, Inc. is distinguishable. There is simply no significant comparison between the effect on commerce of one small hospital‘s delayed expansion, especially when other hospitals contemplate expansion, and the vastly greater effect of the possible closing of a significant percentage of the hospitals in a metropolitan area. The Doctors, Inc. court carefully distinguished its situation from Lieberthal v. North Country Lanes, Inc., supra, and Page v. Work, supra, referring to them as “good law” and “the kinds of cases which remain beyond the reach of interstate commerce juris-
Having quite plausibly, we think, fit this case into its appropriate pigeonhole entitled “nonsubstantial or de minimis effect on interstate commerce,” we are left with a feeling of dissatisfaction. Labeling one case “de minimis” and another as “affecting commerce” does achieve a result but is not otherwise very revealing. Anyone who studies decisions applying the “affecting commerce” test will be struck by the absence of a clear line, much less a bright one, between those effects that are deemed substantial and thоse that are characterized as “indirect,” or “fortuitous,” or “insubstantial,” or “de minimis,” or “sporadic,” or “incidental.” In any area so very gray it is absurd to suppose that we or any other court can precisely count up the tons of plaster, bottles of liquor, or quantity of proprietary drugs sufficient to cross the line of substantiality. Increasingly, intrastate economic conduct affects interstate commerce due to the interdependence of all segments of our national economy. Whether or not “de minimis” has ever been an effective litmus for application of the Sherman Act, we doubt that it now is, and we are concerned that conventional impact analysis may sometimes conceal rather than reveal the true rationale of decision.
Rather than attempt a quantitаtive measurement of interstate involvement, we should, perhaps, consider instead the real danger, in a practical sense, of anticompetitive conduct to the flow of commerce, or the potential destructive power of a conspiracy. It seems to us that courts have been doing that for a long time without necessarily saying so. Such an approach is implicit in the format and choice of words of Mr. Justice Black in United States v. Employing Plasterers Ass‘n, 347 U.S. 186, 74 S.Ct. 452, 456, 98 L.Ed. 618 (1954). The opinion runs only three pages. The approach is a sweeping one suggesting indignation that a local group of people were “able to dictate who could and who could not buy plastering materials that had to reach Illinois through interstate trade if they reached there at all.” 347 U.S. at 189, 74 S.Ct. at 454 (italics added). Such restraints are characterized as capable of causing “unreasonable burdens on the free and uninterrupted flow of plastering materials into Illinois.” Id. Notable by its absence is any quantitative analysis. Omitted is any detailed narrative of the type of commerce involved. Instead there is simply a note of impatience that any district judge could possibly have dismissed a Sherman Act complaint that alleged defendants’ power to control the intrastate market.
Similarly, in Burke v. Ford, 389 U.S. 320, 88 S.Ct. 443, 19 L.Ed.2d 554 (1967), the Supreme Court peremptorily reversed a court of appeals in a two-page per curiam. The economics of the case and description of the commerce involved were reduced to a footnote. The Court focused not on how many bottles of bourbon went from place to place but оn its apprehension that this intrastate conspiracy would “invariably reduce competition” and cause a price increase. 389 U.S. at 321, 88 S.Ct. 443.
The evil of monopoly power is the theme of both Employing Plasterers and Burke. Not one word is said about whether the anticompetitive conduct substantially or insubstantially affects interstate commerce.
In our case there is no allegation that the Raleigh Group has the power to put HBC out of business, or indeed, upon a fair reading of the whole amended complaint, that it can do any more than delay, at most, whatever expansion seems
Affirmed.
ADDENDUM
On December 17, 1974, after the preparation of the opinion in this case, the Supreme Court released its decision in Gulf Oil Corp. v. Copp Paving Co., 419 U.S. 186, 95 S.Ct. 392, 42 L.Ed.2d 378. Mr. Justice Powell‘s opinion for the Court notes that the grant of certiorari was limited to questions arising under the Clayton and Robinson-Patman Acts. What is said about the Sherman Act, by way of comparison with those Acts, is not new, at 194, 195, 95 S.Ct. 398. Although dictum as to the Sherman Act, we think language on pages 198, 199, 95 S.Ct. on page 400 is consistent with our belief that problems of application of trade control statutes cannot be solved by counting units of merchandise.
The justification for an expansive interpretation of the “in commerce” language, if such an interpretation is viable at all, must rest on a congressional intent that the Acts reach all practices, even those of local character, harmful to the national marketplace. This justification, however, would require courts to look to practical consequences, not to apparent and perhaps nominal connections between commerce and activities that may have no significant economic effect on interstate markets.
WINTER, Circuit Judge (dissenting):
Although I concurred in the panel decision affirming the district court‘s dismissal of the amended complaint for failure to allege a sufficient nexus with interstate commerce to sustain a cause of action under the Shеrman Act, I am now persuaded that the holding was incorrect. In my view, this amended complaint may not be dismissed on the pleadings. Of course, I express no view as to whether the jurisdictional allegations can be proved, but plaintiff should be afforded the opportunity to establish them, if not at trial, at least by a prima facie showing to defeat any motion by defendants for summary judgment. I therefore dissent from the majority‘s affirmance of the district court‘s dismissal of the amended complaint under
I.
The amended complaint alleges that the action is brought to redress actions of the defendants which constitute “(1) a combination and conspiracy in restraint of trade in violation of
There is no novelty in the answer. The settled law was recently restated in Gulf Oil Corporation v. Copp Paving Company, Inc., 419 U.S. 186, 95 S.Ct. 392, 42 L.Ed.2d 378 (1974). See also Greenville Publishing Co., Inc. v. Daily Reflector, Inc., 496 F.2d 391, 395-96 (4th Cir. 1974). Gulf Oil was a case which turned on the jurisdictional requirements of
The Court contrasted the “in commerce” concept of the Robinson-Patman Act and the Clayton Act with the jurisdiсtional scope of the Sherman Act, saying:
This “in commerce” language differs distinctly from that of
§ 1 of the Sherman Act , which includes within its scope all prohibited conduct “in restraint of trade or commerce among the several States, or with foreign nations. . . .” The jurisdictional reach of § 1 thus is keyed directly to effects on interstate markets and the interstate flow of goods. Moreover, our cases have recognized that in enacting § 1 Congress “wanted to go to the utmost extent of its Constitutional power in restraining trust and monopoly agreements. . . .” United States v. South-Eastern Underwriters Association, 322 U.S. 533, 558, 64 S.Ct. 1162, 1176, 88 L.Ed. 1440 (1944). Consistently with this purpose and with the plain thrust of the statutory language, the Court has held that, however local its immediate object, a “contract, combination . . . or conspiracy” nonetheless may constitute a restraint within the meaning of § 1 if it substantially and adversely affects interstate commercе. E. g., Mandeville Island Farms, Inc. v. American Crystal Sugar Co., 334 U.S. 219, 234, 68 S.Ct. 996, 1005, 92 L.Ed. 1328 (1948). “If it is interstate commerce that feels the pinch, it does not matter how local the operation which applies the squeeze.” United States v. Women‘s Sportswear Manufacturing Association, 336 U.S. 460, 464, 69 S.Ct. 714, 93 L.Ed. 805 (1949). (Emphasis in text added.) 419 U.S. at 194, 95 S.Ct. at 398.
With the standard of what the Sherman Act encompasses so clearly defined, I have no hesitancy in concluding that plaintiffs have alleged a sufficient adverse effect on interstate commerce to confer jurisdiction on the district court to decide the case on its merits.2 Under Gulf Oil, the test is one of congressional power, and the question is whether Congress could reach the alleged conduct under the commerce power. This is the clear meaning of the statement that “. . . Congress ‘wanted to go to the utmost extent of its Constitutional power’ . . . .” The majority holds in еffect that the alleged activity is too tenuously related to interstate commerce in a practical sense to justify federal regulation for antitrust reasons. In reaching this conclusion, the majority opinion, as its addendum demonstrates, applies a test designed for determining the jurisdictional ambit of the Clayton and Robinson-Patman Acts. Gulf Oil, however, teaches that this test is inappropriate for actions brought under the Sherman Act. In any event, the majority‘s conclusion is based upon determinations of: (1) the quantitative impact on interstate commerce of the alleged con-
II.
As the majority opinion states, the conspiracy in which defendants allegedly engaged was to prevent Hospital Building Company (HBC) from expanding the capacity of its proprietary Mary Elizabeth Hospital in Raleigh, North Carolina, from 49 to 149 beds. HBC is a wholly-owned subsidiary of Charter Medical Corporation (Charter), which has its principal office in Macon, Georgia, and which, by contract, provides management services to HBC for a fee, including the negotiation of contracts for the purchase of hospital supplies. Suppression of the expansion, it was charged, was to enable defendants to reduce competition in local hospital services by HBC and to enable defendants to control the local hospital service market and thus to allocate it among themselves.
HBC averred that the alleged conspiracy had the following effects on interstate commerce:
- It purchases approximately 80% of its supplies and medicines from vendors in states other than North Carolina. In 1972, excluding food and supplies for its kitchen, it purchased $112,846 of supplies for its radiology, medical laboratory, and electrocardiology operations and its pharmacy. If the hospital were enlarged from 49 to 149 beds, such purchases in interstate commerce would not only continue but increase substantially.
- It regularly uses interstate communication, including the mails, to carry out its operations. It pays Charter a fee under the management contract with it. The fee is based on gross receipts, and for 1972 the fee was approximately $36,000. If the hosрital were expanded, the amount of the fee would increase substantially.
- The fees for hospital services and charges for many of the patients at the existing hospital are paid by insurers and other providers outside of North Carolina. Although not alleged, it may be inferred that if the hospital were expanded fees paid by out-of-state providers would increase substantially.
- If the hospital were increased from 49 to 149 beds, the cost thereof would exceed $4,000,000. That cost would be financed by one or more loans with one or more lenders located outside of North Carolina. Payment of principal and interest would extend substantially into the future, and it would require regular remittances to a lender outside of North Carolina.
Conclusorily, HBC alleged that the combination and conspiracy which it charged has “a substantial and direct effect on interstate commerce.” I agree. The allegations establish the suppression of an interstate cash flow that would be both substantial and continuing. Cf. Lieberthal v. North Country Lanes, Inc., 332 F.2d 269 (2 Cir. 1964). I therefore am of the view that jurisdiction was alleged to exist in accord with the test reiterated in Gulf Oil.
III.
Doctors, Inc. v. Blue Cross of Greater Philadelphia, 490 F.2d 48 (3 Cir. 1973), as the majority points out, is a stronger case than the instant one for concluding that the alleged conspiracy had a substantial effect on interstate commerce and that the Sherman Act applied. In Doctors, the named plaintiff purchased $233,430 in supplies from out-of-state suppliers in the test year. Although this figure does not seem to be of any greater magnitude than the projected flow alleged by the plaintiff here, the majority relies on the fact that Doctors’ Hospital was typical of the approximately one-hundred other hospitals in the area against all of which the conspiracy was directed, so that it could properly be inferred that interstate purchases of great magnitude were jeopardized. The dis-
To be more specific, in Doctors the argument was advanced, as urged by the defendants here, that the object of the conspiracy was the intrastate activity of the rendition of hospital services and the effect on interstate commerce was indirect and insubstantial, so that the Sherman Act was inapplicable. In Doctors, the argument was rejected in terms which make that case a relevant and persuasive authority for reversing the district court in the instant case. Analyzing Burke v. Ford, 389 U.S. 320, 88 S.Ct. 443, 19 L.Ed.2d 554 (1967), and United States v. Employing Plasterers Ass‘n, 347 U.S. 186, 74 S.Ct. 452, 456, 98 L.Ed. 618 (1954), the Third Circuit pointed out that in both the Supreme Court found that a sufficient effect on the flow of out-of-state supplies to local businesses had been alleged to confer Sherman Act jurisdiction. 490 F.2d at 52. More importantly, “there [was not] even a concern with the specific magnitude of the impact on interstate commerce caused by the alleged conspiracy. Instead, the Court in each case ends its inquiry when it has satisfied itself that the logical and therefore probable effect of the alleged act is to reduce the flоw of goods in interstate commerce.” 490 F.2d at 53.
I recognize and accept that there are instances in which the effect on interstate commerce of anticompetitive conduct aimed at local activities may be too insubstantial to invoke Sherman Act jurisdiction. Lieberthal v. North Country Lanes, Inc., 332 F.2d 269 (2 Cir. 1964) (the one-time equipping of a new local bowling alley), and Page v. Work, 290 F.2d 323 (9 Cir. 1961) (alleging conspiracy to control legal advertising, thus causing a newspaper specializing in such advertising to sell its assets to another publisher who continued the paper and continued to buy the same quantity of newsprint from out-of-state sources), are good examples. But the instant case is more like Doctors than Lieberthal and Page. If HBC were permitted to expand, its purchases in interstate commerce and its other interstate activities would increase. It follows that an alleged conspiracy to prevent its еxpansion has an adverse effect on interstate commerce—not de minimis—and should be held to support jurisdiction under
IV.
Similarly, I view the anticompetitive power alleged here as substantial. In essence the plaintiffs allege that a local conspiracy was able to forestall out-of-state entry into the local hospital market. If by means of conspiracy and harassment those who hold a local market can foreclose or limit the entry of competition, capital, and initiative from out-of-state, then it seems to me that the federal interest in interstate commerce is directly involved. To conclude, as the majority does, that the plaintiffs here do not allege the kind of anticompetitive power which “Congress sought to guard against” is merely to disbelieve the plaintiff‘s allegations. In the Sherman Act, not only the “evil of monopoly power,” but the evil of improper attempts to achieve it are condemned. Where, as here, the out-of-state plaintiffs suggest that local official power and processes were used to delay and deter them, the plaintiffs implicate not only antitrust policy as such, but also the “national market” concerns which animate the commerce clause itself.
HBC‘s allegations about the flow of financing, management services, and supplies to the hospital from out-of-state have been stated. Additionally, HBC
There is, furthermore, a clear and significant federal interest in at least one of these connections—the interstate flow of medicare and medicaid payments, and more generally with the costs of medical care in Wake County. Actual or attempted monopolization of the local market could have a dramatic effect, not only to decrease the flow of hospital payments, but to increase the cost of hospital care in the Raleigh area as well. If hospital care costs are increased, insurance costs will also increase, and federal and out-of-state providers will spread these increased costs beyond the local area in which they are incurred. And this is so even if the overall market for hospital care in the Raleigh area is neither increased nor diminished, but only concentrated in the hands of the hospital defendants.
Under all these circumstances, I think it myopic to maintain that the service itself is rendered locally. Local patient care may be the hub of hospital operation, but the spokes—financing, supplies, management, and fee payments—all have out-of-state implications. The hub cannot be braked without affecting the spokes.
Judge BUTZNER and Judge FIELD authorize me to say that they, too, dissent and concur in this dissenting opinion.
CRAVEN, Circuit Judge