*1 ERISA, аllegedly which was caused Fund, scheme to bilk by a fraudulent Anthony MARRESE, R. M.D. and Allegations instant action. crux Treister, M.D., Michael R. part per only plain- of fraud se are Plaintiffs-Appellees, conspiracy alleging tiffs’ claim. In a con- spiracy facilitate the fraudulent diver- AMERICAN ACADEMY OF ORTHO sion Fund’s insurance premiums, SURGEONS, PAEDIC set forth in sufficient detail Defendant-Appellant. necessary facts to state a claim upon which No. 81-2671. may granted.43 relief be United Appeals, States Seventh Circuit. IV. CONCLUSION The order granting summary judgment Argued Feb. 1982. Welch, in favor Morgan of Kleindienst and Decided Nov. 1982. & Kleindienst is reversed. The order dis- Rehearing En Banc Granted Opinion missing the amended complaint second Vacated Jan. 1983. 14, 1980, as to July defendants American, and Klekamp, Evans and the order striking Welch, names of Kleindienst and Mor-
gan and Kleindienst from the second complaint
amended are reversed.44 The
case is remanded to the district court for proceedings
further inconsistent with opinion.45 Thus, fraud. These claims are 9(b) not stated with inap- we ade 43. do hold that Rule quate specificity, nor are plicable there sufficient to this case because even facts claims of a developed in fiduciary subject the record for us consider breach of 9(b). are to Rule duties appellants’ Caster, arguments Moreover, intelligently. See Robinson it applied; Cir.1966). is not clear which note that the in- state’s law should be We also present- pleadings and this issue was stant ing detailed not briefed to us. Thus, underlying alleged presumably ap open remains circumstances pellants, subject fiduciary proper fraudulent actions and breach of exercise of dis duties, court, distinguishable develop cretion the district Robinson where remand, 9(b) upon upheld although claims under Rule dismissal would cau they complaint containing preempted by ERISA, tion that of a “bare assertions 1144(a). conspiracy Dependahl of a U.S.C. § defraud.” See v. Falstaff Brewing Corp., denied, (8th Cir.), cert. 454 U.S. 102 S.Ct. L.Ed.2d however, uphold, de- district court’s 44. We (1981). a claim state cision that cannot under the Racketeer these defendants investigate 45. The district court should also Corrupt Organizations Act Influenced and possibility consolidating the instant case (RICO), (1976). 18 U.S.C. See Order of § currently pending with others before the court 24, 1980, portions plain- at 3. Nov. Those also arise out Hauser’s de- efforts to , complaint July filed on tiffs’ second amended fraud the Fund. should be un- Consolidation containing properly RICO count were practical dertаken it is to do so in order to sjricken. any prejudice avoid named defendants rule on the do not substance We this case who are also defendants in other pendent appellants’ law claims based on state related actions.
1085 *4 Griffith, argued, Kendall M. D. Thomas Crisham, Nord, Hollis, Robert E. Pamela S. brief, Culbertson, Hinshaw, Moel-
on the mann, Fuller, 111., Chicago, Hoban & for defendant-appellant. Foss, Michael T. Sawyier, Schuman & Drake, Chicago, 111., John J. Casey, for plaintiffs-appellees. PELL, STEWART, Before Judge, Circuit POSNER,* (Retired), Justice and Circuit Judge. POSNER, Judge. Circuit appeal This criminal brings contempt cata, up judi- to us issues of res 26(c) pretrial discovery under Rules (d) and dure, of the Rules of Federal Civil Proce- the application and of the Sherman Act’s “Rule of Reason” to denial mem- bership professional in a association. The defendant-appellant in this case is the American Academy Orthopaedic Sur- geons, private association to which most surgeons orthopaedic in the United States belong. plaintiffs The are two orthopaedic surgeons practice Evansville, who Indi- ana, and Chicago, respectively, and were denied membership Academy withоut hearing or a reasons. statement of Mem- bership alleged certain to confer profes- advantages, sional it is not a prerequi- site either to being practice certified to orthopaedic an surgeon obtaining or to hos- pital privileges. staff Each of the practice is certified to orthopaedic surgery and has staff privileges hospitals. at several * Judge Sprecher originally pertinent portions was the third member briefs and of the record and panel, untimely prevented recording tape but his death the oral has listened participation argument. his in the decision of this case. Judge place has read Posner took his and being membership After denial plaintiffs’ refused application for plaintiffs brought the Academy membership and to all other denials of state They in an Illinois court. claimed a membership applications between 1970 and right under Illinois a hearing law to Academy persisted 1980. The It refused. application their and to reasonable stan in its refusal even after the district court membership. dards for The Appel Illinois limiting protective issued a order acсess to late Court held that the complaint failed to the discovered materials to the state a claim because counsel, and even after not an Academy is “economic necessity.” Academy produce ordered the the re Treister of Ortho v. American quested The court held the documents. paedic Ill.App.3d 755-56, Surgeons, of its Academy in criminal order 501, 508, 396 N.E.2d $10,000. Ill.Dec. 1232 and fined it The Academy appeals (1979). Having lost in plain state court the from that judgment. tiffs the Academy then sued in federal dis asks us to hold that injunctive trict relief damages court for discovery order was an abuse of the district Act, 1 of under section the Sherman 15 court’s 26(c) discretion under Rule 1, charging illegal boycott. U.S.C. § Procedure., Federal Rules Civil complaint alleged the Academy is out that plaintiffs point is not a final field, “a monopoly possessed of sub that we argue cannot review it stantial power to control the market because the court has not district certified services,” orthopaedic surgical and that the appeal it for an immediate under 28 U.S.C. though fully plaintiffs, qualified for mem *5 1292(b). the contempt But judgment is § the bership under announсed criteria of the order, us; final re viewable by a party Academy, were excluded for “extraneous” willing who is to pay price the of being reasons, Dr. which the case of Treister punished for contempt (or suffering an (no Dr. particulars given Marrese) were for equivalent sanction such as dismissal of the “(a) his supposed willingness included complaint) validity if the of the order he expert testimony against offer other ortho disobeyed ultimately upheld is may by paedic malpractice surgeons in medical get that means immediate review of the cases; (b) willingness known to consult his order. cases Many See, e.g., hold this. surgical relatively on a out-patients high- Ryan, 530, 532-33, United v. 402 States U.S. basis; (c) volume his nonconformity of 1580, 1581-82, 91 29 85 (1971); S.Ct. L.Ed.2d personality personal attitudes with Revenue, Ryan v. Commissioner Internal those most orthopaedic established sur 13, 19-20 (7th 517 F.2d Cir.1975); Hanley v. particular geons and in those who were McHugh (7th 419 Constr. F.2d 957 already members of academy.” the The Cir.1969); Serv., National Util. Inc. v. alleged that complaint the Academy had Serv., Inc., Northwestern & Wire Steel 426
refused and that explain its actions the Cir.1970); F.2d 222 Hastings North actions compe effect of those was “to limit Dist, Indepеndent East School 615 F.2d and enforce with conformity tition current (5th Cir.1980). 631 But these cases practices” injure plain and to business with uneasily coexist another line of cases practice profession. tiffs in the of their which holds where as in this case the Academy moved to
The
dismiss the com
judgment
is for criminal
than
rather
civil
grounds:
judgment
plaint
contempt,
validity
on two
dis
underlying
missing the plaintiffs’
questioned
state court action
appeal
not be
on
may
order
proceeding;
was res
contempt judgment. See, e.g.,
federal
United
a claim
complaint
America,
failed to state
Mine
v. United
Workers of
States
denied,
291-94,
677, 694-96,
was
Sherman Act. The motion
330 U.S.
67 S.Ct.
(N.D.Ill.1980),
(1947);
Community
496
236
and dis
ITT
F.Supp.
ty
discovery
of the
order that
the
case
by
and
means
unobtainable
less
disobeyed is therefore properly before us.
likely
discourage
advocacy.
such
See
26(c)
Rule
of the
Hastings
Federal Rules of
Independent
North East
School
the
empowers
632;
Dist.,
Civil Procedure
district court
at
In re
supra, 615 F.2d
Petrole
justice
any
requires
to “make
order which
um Prods.
Litigation,
Antitrust
F.2d
party
person
or
protect
annoy
(2d
Cir.1982).
embarrassment,
ance,
oppression, or undue
say
Yet we cannot
that there is not
expense, including
burden or
.. . that dis
case if not a
lurking
First Amend
”
not be had ....
covery
The effective
right
ment
at
least a First Amendment
litigation
management
complex
of
requires
interest,
sought by
the discovery
the
judge be
the district
allowed a broad
and which
impair
differen
plaintiffs would
guiding the
discovery process,
discretion
the usual
tiates this case from
antitrust
exercising
and
un
powers
therefore in
his
sought
is
invoices
discovery
where
26(c).
Corp.
Chrysler
der Rule
v. Fedders
the minutes
or
of a
reports
or salesmen’s
(6th Cir.1981).
Corp.,
of directors.
Acad
corporation’s board
But his discretion is not unlimited and if he
may
engaged in a
emy
conspiracy
be
it he commits
abuses
reversible error. Silk
laws,
it is
also
violate
antitrust
Corp.,
wood v. Kerr-McGee
exchange of information
engaged in an
(10th Cir.1977).
related
mat
surgical techniques
about
This
ruling
exchange
In
on a
great
motion under Rule
interest.
public
ters of
discovery,
26(c)
to limit
if the
has to
may
district court
be inhibited
files,
membership
party
even under a
it
seеking
disclose
leverage to extort a settle-
order;
protective
order is the
protective
ment, by enabling
impose
him to
on his
arrangement
lawyers’
laymen
kind of
opponent costs
induce a
may
settle-
distrust.
If the
instinctively
Academy com-
despite
ment offer
the lack of merit of the
with the
plies
discovery order its members
Predatory
discovery
case.
is
serious prob-
may be reluctant
offer candid evalua-
lem
litigation today,
in federal
and Rule
future,
applicants
tions
26(c) is
one of
district court’s too' little
atmosphere
mutual confidence that en-
weapons against
used
is
it. This
not to say
courages
exchange
a free
of ideas may be
26(c)
that a Rule
movant
demand a
eroded.
on
trial of
merits
spot.
suppose
It is also necessary to consider the
pleadings,
that after the
and the evidence
probable impact
order,
discovery
if it
obtained
all
from the
discovery
other
upheld,
purely private
on the
interests of
interpreted in
are
the most favorable
Academy and its
members. One does
light
party
seeking
discovery
the ghosts
to raise
of Aristotle and
order,
every
aftеr
assumption
favorable
Tocqueville to be
de
reminded that volun
respect
to that
party
what
tary
important
associations are
to many
might
up
requested
turn
way of
in particular,
Americans
people,
and that
indulged,
additional evidence is
it seems
voluntary professional
are
associations
im
highly unlikely that
the party’s claim or
professionals (the
to American
portant
last
defense,
may be,
as the case
has any possi-
very
proposition
premise
plain
is the
ble merit. A motion for summary judg-
suit,
tiffs’
as it was
their Illi
might
premature
ment
be
because discovery
suit).
nois
Confidentiality
deliberations
yet complete.
was not
But if the discovery
membership
essential to the voluntary
requested
burdensome,
would be
proba-
character of an association. Without
it
ble lack of
merit
the underlying claim or
are
evaluations of appli
there
no candid
defense is not
irrelevant
to the district
cants,
such
and without
evaluations the
court’s
of its
exercise
discretion under Rule
character of
association as a group
26(c).
associating by free
people
compro
choice
point
This
is not new. “The court has
therefore,
mised.
First
Apart,
to order
discretion whether or not
dis
considerations,
Amendment
which we have
however,
hardly
and would
covery,
indirectly implicated
are only
said
order, the
to refuse
involuntary
abuse of
when
disclosure
discretion
files of voluntary
appears
asso
the claim or defense
baseless and
private (but
ciation is inimical
hardship
wor
discovery would work a
on the
objectives
association,
thy)
even
party.”
other
4 Moore’s Federal Practice
protective
order is
when
issued. This is
26.56[1],
pp.
26-125,
¶
26-124 to
n. 20
*7
such
say
may
not to
that
disclosure
not be
(Moore
1982).
eds.
& Lucas
Doe v.
See
New
ordered; but it involves a significant hard
Services,
York
City Dept,
Social
ship,
in
be
every
which must
balanced
134,
(2d Cir,1981);
147
Spier v. Home Ins.
against its benefits.
896,
404
F.2d
899-900
Cir.1968);
Springfield
Comm.,
Dionne v.
School
340
On the benefit
of the ledger
side
334,
(D.Mass.1972)
F.Supp.
335
(Wyzanski,
26(c) analysis
a Rule
in
usual
emphasis
J.) (“Federal
stage
courts do not
academic
other,
is on whether there are
ly
less bur
merely
Quixotes
tournaments
for Don
to
of getting
means
the information
densome
practice knighthood”).
In a clear
re
seeking
the party
that
needs to
discovery requеst
consideration,
to
this
deny
his ease. But
fusal
prove
another
(burdensome
ground
request
support
in
of a
emphasized
legit
but no less
frequently
less
imate,
claim)
be an
any possible probably
is whether his case
baseless
could
abuse
has
discretion;
not,
we
“value” of of
must decide whether this
only
merit.
If it does
give
to
will
requested discovery
be
is such a case.
legislative
sev
no basis in the
or
language
has advanced
histo-
laws;
believing
this anti
grounds for
that
the federal antitrust
and the
ry
eral
merit,
that,
see,
whatev
suit
conceivable
as we are about
state
trust
has no
fact
files
adjudicate defenses based on federal
correspondence
er the
courts
plaintiffs
trying
may
law,
are
preclusive
that
obtain
effect under
antitrust
in refusing
about its motives
to admit
in
estoppel
show
the doctrine of collateral
applicants
suit,
other
mem
plaintiffs
shows
subsequent
federal
bership.
competent
One is that
suit is barred
tribunals to
courts are
that state
judicata
questions
because
earlier
federal antitrust
adjudicate
—and
in
against
their state court
so in
plaintiffs
brought,
not be
cases
why should this
True,
Academy.
defended,
action
under federal antitrust
as well as
include an antitrust count
plaintiffs did not
law?
But res
action.
bars not
that
question is an
But
however
party
that a
only
actually
claims
made
swered,
plain
doubted that the
it cannot be
first
but also the
claims he could
under the
joined
have
claim
tiffs could
made on the basis' of
have
the facts that he
Ill.Rev.Stat.1981,
Act,
ch.
Antitrust
Illinois
alleged
plaintiff
that suit. A
not
suit;
60,
38,
in their state
§
split
by bringing
his cause
action
a suit
would
close a substitute it
must consider how
lost,
then,
on one
he has
theory and
after
for their
Act claim.
have been
Sherman
again
different
trying
theory.
on a
Feder
act is
identical to
Illinois
language
Department
Moitie,
ated
Stores
452 U.S.
Act.
1 of the
of the Sherman
Section
that
394,
2424,
(1981);
fusal and Treister to Ill.Rev.Stat.1981, 60-3(2). ch. bly.” § membership, and it is irrelevant that language persuaded The difference allege chose not the antitrust Illinois Appellate boycott that a implications facts in their state of those 3(2) never challenged under section could court action. se; illegal per have to pronounced point the plaintiffs they But out that the Rule be evaluated under of Reason. Serv., Act H.F. joined Group Multiple Listing could Sherman Blake v. they 730, 743, that were Ill.App.3d claim to the other claims N.E.2d court. in state Blumenstock prosecuting (1976). that is of no moment in the Co., 252 v. Curtis Pub. case. see Agency only Bros. Adv. We shall present 385, 386-87, 440-41, 40 theory illegal of an boycott tenable the federal (1920), L.Ed. 649 held have is a Rule Reason jurisdiction over theory, per theory; courts have suits not a se far exclusive and so of the federal antitrust alleging boycotts violations are unlawful if unreason laws, holding repeated many concerned, and the able arе we can find no differ *8 cases, modern such as Kurek v. Pleasure ence in between the substantive standards Peoria, Driveway Ill., Blake, Park Dist. of supra, & 583 and federal acts. Illinois See 378, Cir.1978) curiam), 743, 25, (7th (per Ill.App.3d 739, in 345 at F.2d 379 36 N.E.2d proposition 28; Co., circuit. This ques People this has been v. Distrib. 53 cf. Crawford 648, Note, 332, 339, (1972), tioned. Exclusive Jurisdiction 291 652 See Ill.2d N.E.2d Actions, Ill.Rev.Stat.1981, 38, the Federal in Private eh. 60- interpreting Courts Civil § 509, 510 n. It has (1957). 70 Harv.L.Rev. 13 11.
1Q91 preme But there is a difference in the precedent remedies on which the court two acts. A prevailing plaintiff under the relied, Labs., Inc., Becher v. Contorne 279 ease boycott in a Act Sherman 388, 391-92, 356, 49 357, 73 L.Ed. federal in other antitrust case is enti- (1929) (per Holmes, J.); 752 preclu- and the trebling tled to an automatic of his dam- sive effect state court factfindings in ages. 3(2) 15. But section See U.S.C. § subsequent federal antitrust suits. subject act is to the following Illinois provision: “if it is shown viola- [the] point The last will bear some elabo willful, may, tion the court in its was discre- ration. The best reason for not giving pre tion, increase the amount recovered as dam- clusive effect to a judgment in an earlier ages up to a total 3 times the amount of state action be would a belief that Ill.Rеv.Stat.1981, damages.” 38, actual ch. competent were not adjudi state courts 60-7(2). § cate antitrust questions, federal even if the If it not for this were difference statute, Nash state had enacted enforceable of Co., County Bd. of Educ. v. Biltmore courts, tracking own course in its the feder 484, (4th Cir.1981), 487-93 F.2d be a al statutes. But this antitrust belief cannot holding precedent plain- direct that the be that state given maintained courts are tiffs’ federal antitrust claim is barred decide allowed to federal ques antitrust judicata. The Fourth thought Circuit it tions, preclusive with effect under the doc that a plaintiff intolerable should able to trine of collateral estoppel, in suits which in bring an antitrust in state court under a federal antitrust claim'is way raised a state statute identical to the Sherman Act defense. At least clear where the then, after suit, final in question Lyons is factual. Westing See v. bring same suit in federal court under Corp., house (2d Elec. 222 F.2d And, said, Act. Sherman as we have it Cir.1955); Fire Ins. Co. Calvert v. American made would have no difference in Nash if 1228, 1236 Mutual Reinsurance the first suit had brought been under an- (7th Cir.1979) (dictum). n. 18 But es theory other and the plaintiff had reserved sential issues in most federal antitrust theоry his antitrust for later in use federal market, eases —relevant power, market ef court in the event that he failed win in competition, fect on monopolistic intent, state court theory. other and so forth —are If factual. state courts decision; a frankly Nash is innovative competent to decide those are issues rejects contrary authority in three circuits. preclusive effect in any subsequent federal Corp., See Abramson Pennwood Inv. 392 suit, and the state’s antitrust law is identi (2d Cir.1968); F.2d v. Wat Clark law, cal to the do federal not see how an chie, (9th F.2d Cir.1975); object antitrust being claimant can re Hayes Solomon, quired, judicial economy, interest of (Our spoken Cir.1979). circuit never litigate his claim in state court question, although per the brief curiam under state law when he is in state already opinion Kurek Driveway v. Pleasure & court, choice, by his on another claim. That Ill., Peoria, supra, Park Disk of could be insight is the essential of Nash. imply, though it read to does not expressly speak directly But Nash does to a adopt, approach Nash.) inconsistent with case such as this where state antitrust Nash, cases predate and the statute not identical to federal. The decided them may courts that want to reex such a was question to do in what position the light amine their in' of the full Nash. F.2d at 492. convincing reserved discussion of the issue in Nash; given like the answer the academic authorities that a state court support court marshaled in which held position, Lyons, supra, of its Currie, e.g., Res Judicata: bar federal antitrust Neglected judgment would Defense, damages 45 U.Chi.L.Rev. treble could (1978); suit, 347-48 because part the enigmatic seemingly in the state suit. dispositive Su- obtained not have been *9 at 189. tion of the Sherman Act and joining That case is distin-
See 222 one, this one though. For federal the state law guishable their claim claims had no tre- Lyons getting chance of to sue thing, they instead decided on in which court, damages in state whereas ble court would federal have court. state some and Treister would have had Marrese decide the state law jurisdiction had treble the getting damages under chance pendent juris- the doctrine claims under Act if un- they Antitrust had sued Illinois diction. they had two act. would have der that as choice was attractive to Neither jump that would not face them hurdles to made, as one plaintiffs they would They in a federal antitrust suit. try piecemeal, case litigating and was a violation prove have had to willful law claims in state court’s their state court and appeal to the trial have had would law in federal damages. to award treble their federal claim court with discretion is, of the Illinois in approach litigation act much as outcome in the first an adverse statute, criminal maxi- typical to set a having (they hoped) preclusive no effect on which the penalty “sentencing” mum procedure No for this second. reason impose only will in extreme presumably against its suggested. been And advan cases, penalty than a definite as un- rather plaintiffs to the must balanced the tages law. der federal defendant, and to the to the inconvenience judicial systems, federal state and allow another But there is and better distinc ing plaintiff stages a his case try this case Lyons. tion between Since stage having preclu decision at one no had sued Westinghouse Lyons in state court in subsequent stages effect (except sive contract Lyons for had inter breach factfindings actual made at one stage posed the defense that the contract was would, earlier, as noted have collateral-es Act, illegal question under Sherman subsequent stage). effect a toppel was a We whether in the state suit where, of this the balance preclusion on the merits defense would bar think favors Lyons Act maintaining a Sherman the relevant standard of as in this Westinghouse in court liability federal is the same state and federal . not, that it part The court held would as though the remedies are similar law and Lyons not have because could plaintiffs’ have said identical. alternatives damages (or for that matter obtained treble litigation were not so piecemeal paltry successfully asserting any damages) from courts should have to entertain such illegality his of antitrust to West defense litigation at a time when both the state and state law inghouse’s contract claim. If res judicial systems are staggering federal un applied, had would judicata Westinghouse magnitude. of unprecedented der caseloads succeeded in by suing in state court have We add even if the district giving choice of either
putting Lyons rejecting was judge correct Acade up damages to treble or abandon his claim he argument, should have my’s ing defense in the meritorious possibly piecemeal character considered of this Teamsters state New York suit. Cf. State part as of his litigation appraisal of the & Retirement Fund v. Pen Conf. Pension to the hardship complying with Corp., 953, 957 sion Benefit Guar. plaintiffs’ request. Because (D.C.Cir.1979). The put to unneces not face present painful did choice. legal expense by splitting their claim sary If a state could they they wanted forum did, they request their form of a state joined have antitrust count to their place special that would burden law counts then they other state should have opponent made though had a shot at damages, treble appeal judge’s equita a one as if district they brought so sure had weaker 26(c) discretion under Rule than if the federal suit. could have Alternatively, they ble first, litigating federal court had been their claims alleging sued in a viola- plaintiffs
1093
Academy in a
parsimoni-
more
boycott case,
found in a
Board of Trade of
ous manner.
Chicago
States,
City of
v. United
246 U.S.
231,
242,
(1918).
62
683
38 S.Ct.
L.Ed.
There is an additional reason
believ-
legality
of an internal
case involved
rule
ing that the plaintiffs’
antitrust suit
be
exchange designed
of a commodities
to lim-
groundless whatever
the contested dis-
it
competition
members,
some of its
covery might reveal. This reason
as
has we
violation
and a
would
rule
have been
see
implications
shall
different
for the dis-
punishable by expulsion. A more accurate
trict court’s exercise of its
26(c) pow-
Rule
generalization today
be that boycotts
would
ers: not that
it should have denied the
per se
illegal
they
are
only
are used to
requested discovery altogether
that
it
agreements
enforce
that are themselves il-
should
postponed
have
of
legal per
se—for example, price-fixing
membership
pending other,
files
bur-
less
agreements.
See United States Trotting
might quickly
densome
that
have
Chicago
Ass’n,
Ass’n v.
781,
Downs
665 F.2d
ground-
shown
suit was
whether the
indeed
(en
(7th Cir.1981)
banc),
787-90
gen-
for the
less as a
matter of
law.
principle,
eral
and Spray-Bite Serv. Corp. v.
watershed
great
of that law is
Co.,
1226,
684
(7th
Monsanto
F.2d
1234-36
per
the distinction between
se illegality and
Cir.1982), for the price-fixing exception.
illegality under the Rule of Reаson.
If a
that is
organized
least
the rule for
asso-
.At
practice
per
is
within
se category, all
having
ciations
some
purposes;
lawful
we
you
prove
have to
establish a violation is
need not consider
a
whether
conspiracy or
engaged
that
defendant
practice;
hoc “association,”
other ad
if anticompeti-
you do not
show that
in fact the
intent,
tive in
treated
under a
practice
or
has had
will have an adverse
harsher standard.
on competition.
effect
But if
practice
a
is
not
se
per
within the
it
category
is
—if
It
is true
early cases,
that some
words,
governed,
in other
the Rule of
such as United States v. Terminal Railroad
(the dichotomy
Reason
perfect,
Louis,
383,
Ass’n of St.
U.S.
mergers
there
practices,
are some
for exam
507,
(1912),
tical
they
(1979).
terms
deal with each
Reviewing
on which
L.Ed.2d 931
these cases
other,
It
to be
boycott.
boycotts
was a form
used
this court held that
can
recently
per
illegal
said
were
se.
on
illegal per
often that
se
the basis of
boycotts
not be deemed
entirely
competitors (rather
But that
true. The best
was never
than on
impact
known
of the Rule
Reason
if there is no “direct
consuming public)
statement
however,
of,
likely,
What is far more
supply
or demand
influence the
effort to
alleging
boycott
are
Phil Tolkan
for,
product.”
competitor’s
*11
illegal,
only by
is so
virtue
Datsun,
that,
Milwaukee Datsun
if it is
of
Inc. v. Greater
Reason;
Ass’n, Inc.,
they
and therefore
of
Advertising
the Rule
Dealers’
Cir.1982).
alleged
show,
element of ille
None is
as an essential
must
are com-
ef
“anticompetitive
Marrese
market
in
Treister and
some
gality,
this case.
Corp.
members and member-
Academy
boycott. Lektro-Vend
petitors of
from the
fect”
competing
in
with
ship may
be valuable
at 268. To
supra, 660 F.2d
Vendo
orthopae-
and nonmember
both member
to
they
likely
have done or are
see whether
dists,
is no contention that
there
so,
facts
to do
assume that all of the
be able
with the
interfering directly
Academy is
(This is
plaintiffs
are true.
alleged by
customers,
or
suppliers
to
access
plaintiffs’
assumption,
for some of the
generous
too
get
hospital
to
staff
by trying
privi-
as
allegations were denied in an af
plaintiffs’
alleged
effect of denial
leges revoked.
plaintiffs
did not counter
that
fidavit
ability to
membership
plaintiffs’
on the
of
own.)
of their
Then the
an affidavit
with
indirect,
orthopaedic medicine
practice
were denied admission to
plaintiffs
lawyer membership
trial
just
denying
as
a
competi
they
because
are fierce
Academy
Lawyers
College of Trial
in the American
tors;
also denied ad
others like them are
only an indirect effect on his
would have
reason;
membership
for this
in
mission
speaking
to obtain clients. We are
ability
great pro
it
Academy carries with
such
course,
degree
of
but an “indi-
of matters
to
advantages
aspirants
that most
fessional
effect, by
falling
which we mean one
rect”
membership
orthopaedic surgeons
all
—and
complete
far short
exclusion from
are
already
aspir
are not
members
who
market,
support
per
will not
a
se attack on
(if
fails)
have an incen
ants —will
boycott.
a
in the kind of
to avoid
com
engaging
tive
en
behavior
petitive
Nor do the plaintiffs
price-
allege
that cost them their chance of
gaged in and
among
fixing conspiracy
orthopaedic sur
becoming members.
to
geons,
conspiracy
which the exclusion
granted
plain-
even with all this
membership
from
if,
might
showing
come close to
Academy
ancillary.
Even
have not
tiffs
required
effects
in a
taking
competitive
notice
to
(concept
’pleading
kind of
extreme,
According to their
we could tease such an
case.
its furthest
Rule of Reason
statements,
majority of ortho-
statement
in the com
the vast
allegation out of the
own
who have been
denying
surgeons
that one of the reasons
plaint
paedic
(at
three
oral
Academy
years
for at least
Dr. Treister
practicing
plaintiffs’
sur
counsel said
willingness
consult
one of the
argument
was his “known
suspect
using
he was
relatively high-vol
though
gical
percent,
out-patients
of the Acade-
perhaps imply
license)
members
“high
ume
volume”
are
poetic
basis” —
10,000 members in all. The
help
plain
ing
price
low
it has
my, and
—it
boycott
restrictions
sort
price-fix
places
any
is a form of
no
tiffs.
If the
concerned,
got
could have
members.
far as it is
ing,
plaintiffs probably
on its
So
damages
ferociously
they
as a
as
as
like.
right
compete
ten treble
matter of
can
they
nonmembers
in a suit under the Illinois
deal with
grace
They
rather than
are free to
Act,
practice in
provides
right
Treister —to
Antitrust
such as Marrese and
them,
patients
to refer
damages
price-fixing
cases.
treble
See
association
meet-
Ill.Rev.Stat.1981,
60-3(1),
Academy’s
60-
them,
ch.
forth.
§§
and so
as
such
Nash,
correctly
we consider
to nonmembers
7(2).
ings
open
a decision
are
Treister,
though they object,
decided,
indistinguishable
would then be
Marrese and
us,
to having
seems
frivolously
this case
we would have no doubt
badges.
judica
that the suit
nonmember
The freedom
at all
was barred
wear
deal with nonmembers
con-
ta.
members
point
of orthopaedic surgeons
firms
earlier
that this
not a
belong
our
who
a “direct ef-
where the association makes
Academy is so
that competition
few
among
of,
or
supply
fort
to influence
demand
competition
is not
them —
for,
product.” Phil Tolkan
competitor’s
or
alleged
regulate
to limit
way —is
Datsun,
than of The con- 26(c) (d) der Rules and of the Federal Rules competitive guaranteed sumer is conditions Procedure, guaranteed, he he but is not has no of Civil and a clear case the in of, a preservation duty, discovery interest in the fixed num- to defer a burdensome re competitors ber of than the greater quest pending completion discovery far of on being required number assure his able to likely dispose an issue that is buy competitive Maybe in market. thereby request entire case make older case of view would survive in a naked Cooper, Wright, Miller & Fed moot. 8See resulting aggression in the total exclusion eral Practice and Procedure §§ market; from the competitor of a but that (1976). We are not here as we speaking (if would be a se case per anything) and this denial, of but only postpone were earlier is not. ment; appropri is sometimes the former ate, the latter more It is often so. should 10,000 members The do apparent court, been have district not, however, the same compete all in mar- us, the present likely it is to is case orthopaedic surgery ket. The market for the issue compe wash out over on effect compеtes local. with other Dr. Marrese or- tition. There would been no Evansville, conceiva thopaedists in Dr. Treister with hardship ble orthopaedists requiring other in Chicago. plain- them to tiffs will have the conduct discovery burden at trial of show- this is ing gaining these sue before access local markets the number to the member- STEWART, (Retired), Justice sequence discovery may dissenting. files.
ship
to coerce
intended
the Acad-
been
well have
In this case our mission is no more than
settle,
event the
but in
balance
emy
criminal
citation for
to review a
enough to
us
make
is clear
hardships
comply
discovery
order.
refusing to
conclude,
judicata
independently
Nonetheless,
majority opinion
wrestles
court, in
issue,
refusing to
that the district
concerning, first,
questions
with difficult
files,
the membership
defer
and, second,
judicata,
of res
the doctrine
its discretion.
abused
of the Sherman Act to a denial
application
are raised
Other
issues
professional organiza-
briefs,
that we take of the
on the
view
ground,
new
forges
despite
tion.
It
need
discussed.
only
case
one of them
a factual
absence of
record in this
decide
us to
asks
desрite
contrary precedent
the existence of
was
abuse of
I believe
Because
other Circuits.
the district court’s
discretion but also that
questions
properly
neither of
on the
complaint
basis
refusal to dismiss the
Court,
for review this
presented
that the
erroneous. We have
judicata
of res
was
concerning
substance
discussion
the discovery
decide whether
jurisdiction to
extremely
doctrine of res
dubi-
discretion,
an abuse of
because it
order was
*13
ous,
the contempt
and that
citation was
order,
of that
is the disobedience
that
the
proper,
respectfully
I
dissent.
punished by
judge
the
holding
district
Academy
contempt.
criminal
But we
litigating
In
course of
an
the
to review
jurisdiction
have
the dis
would
defendant-appellant
the
Ameri-
judge’s
trict
refusal
to dismiss the com
Orthopaedic Surgeons, the
Academy
can
only if he had certified
interloc
plaint
plaintiffs-appellees Drs. Marrese and Treis-
appeal
utory order for an immediate
discovery
correspondence
ter
sought
the
not do
1292(b),
he did
so. He
28 U.S.C.
and
relating
and other documents
to the denial
Academy
point out that the
could
did
for
application
membership
of their
its
judicata argument
make
wished
in organization
previous
as well as
deni-
to all
contempt citation,
appeal
its
the
and
als of
since 1970. The Acade-
right,
the
he was
because
merit of that
produce
to
my refused
documents.
is,
seen,
argument
germane
as we have
to
protective
then
The
Court
issued
District
discovery
the
order was an abuse
whether
to the documents to
limiting
order
access
his,
of discretion. But
statement did not
counsel,
the
ordered
requirement
satisfy
1292(b)
of section
produce
Academy
requested
ma-
if “of the
judge,
opinion
district
Academy’s
refusal
Following
terial.
interlocutory] or
[nonappealable
that such
order,
Judge
District
comply with his
controlling question of law
der involves a
for
Academy
contempt and
cited the
im-
ground
to which there
for
is substantial
$10,000 fine.
posed
Academy
then
opinion
and that an
difference
immediate
brought
appeal.
appeal
may
order
materially ad
termination
majority opinion
vance
ultimate
liti
first addresses the
writing
shall
state in
such
gation,
whether,
...
so
appeal
from a
question
criminal
made,
order.”
no
statement was
Since
such
judgment
comply
failure
contempt
have
jurisdiction
do not
review
order,
validity
discovery
with a
refusing
district court’s order
to dismiss the
may be reviewed.
underlying order
Watkins,
In re
complaint,
(5th
271 F.2d 771
that the
opinion correctly
validity
concludes
Cir.1959), and the appeal from that
order
discovery
may
order
underlying
of an
jurisdiction
dismissed for
lack
in this
appeal from a
reviewed on
criminal con-
judgment
court. The
re
See
United States v.
tempt
judgment.
Costs in
to the appellant.
versed.
this court
530, 532-3,
Ryan,
402 U.S.
91 S.Ct.
1581-82,
(1971).
So
29 L.Ed.2d
Ordered.
discovery order,
reviewing
however,
In
Just disposition of plaintiffs’ claims ...
by the
appellate
principle
court is limited
would
impossible
be rendered
should they
broad
judges
district
have
discretion in
requested
be denied access to the
informa
conducting pre-trial
and in fram
tion. Proof of the claimed group boycott
A
ing protective
judge’s
trial
dis
orders.
require
demonstration of the real
covery
invalidated
order
not be
unless
Academy’s
reasons for
denial of admission
an abuse of
represents
discretion.
candidates,
information obtainable solely
Lewis,
(8th
Voegeli
Cir.
through the
materials
seeks to
1977) (“[W]e
unlikely to fault
аre most
[the
protect.”
American
Marrese v.
unless, in
trial
the totali
court’s]
No. 80
Orthopaedic Surgeons,
C
slip
circumstances,
ty
[discovery] rul
(E.D.Ill.
op.
5,1981).
at 6
Ruling
Mar.
ings
abuse
gross
are seen to be a
of discre
Academy’s
interest
confidentiality
tion
unfairness in
resulting in fundamental
insubstantial,”
was “not
. ..
the District
case.”); Keyes
the trial of the
v. Lenoir
protective
Court drafted a
order imposing
(4th
Rhyne
Cir.),
College, 552 F.2d
restrictive
which,
conditions under
denied,
cert.
Court,
words of the District
“the confiden
(1977);
L.Ed.2d 190
Swanner
United tiality of Academy’s admissions process
States,
Cir.1969).
(5th
1099
436, 440,
385,
requested,
386,
rul-
40
the relief
S.Ct.
64
support
L.Ed. 649
discovery
(citing cases))
motion.”
no
ing
(1920),
on a
federal antitrust claim could have
But,
the District
present
in the
Court
by the Illinois
decided
courts.
been
proba-
the suit was
did not determine that
Because of the federal courts’ exclusive
Rather, it denied the mo-
groundless.
bly
claims,
over federal antitrust
jurisdiction
dismiss and ordered discovery.
tion to
several Circuits have stated that
doc
Thus,
guise
in the
granting
the District
does
litiga
trine
not bar the
judicata
of res
discretion
consider the
Court
merits of a
a
antitrust claim between
tion of
federal
determining
suit
whether
participated in an earlier
parties who have
permissible,
majority opinion actually
involving the same set of
state court trial
narrows
District Court’s
discretion
Solomon,
958, 984
facts.
597 F.2d
Hayes v.
party
a
permitting
relitigate
the merits
denied,
1078,
(5th Cir.1979), cert.
444 U.S.
unsuccessful
of an
motion to dismiss in an
1028,
(1980);
100
been decided had the chosen to
bring their suit in completely different expansion
forum. of the doctrine of This fun- principle, contradicts the system, legal to our that parties,
damental
judges,
choose the forum in which to
BANK,
Plaintiff,
ROCK ISLAND
resolve their differences and
frame
claims advanced in their
More-
pleadings.
v.
over,
the majority opinion’s analysis is The AETNA CASUALTY AND SURETY
premise
based on the errant
merely
COMPANY, Defendant, Third-Party
suit,
plaintiff
instituting
federal
Plaintiff-Appellant,
insist
decide any
federal court
relat-
ed
pen-
state claim under the doctrine of
jurisdiction.
jurisdiction
dent
KEARNEY,
“[PJendent
William J.
Third-Party
discretion,
a doctrine of
not of plaintiff’s
Defendant-Appellee.
right.” United Mine Workers of America
No. 81-2205.
Gibbs,
715, 726,
(1966).
yet been or a trial in this majority opinion obligated “Rule of Reason” analysis
conduct a activities, though there
defendant’s
single in the record show the nature fact actions, the purposes defendant’s conduct, mar- geographic relevant
kets, con- or the effect of defendant’s
duct specu- It does these markets. so
