U.S. District Court For The Northern District Of Florida Holds That A Doctor Is Not An Efficient Enforcer Of The Antitrust Laws With Respect To An Alleged Conspiracy To Exclude Her From Practicing
On January 3, 2018, Judge Mark E. Walker granted defendant doctors’ motion to dismiss a lawsuit filed by plaintiff Wendy Garlington, a rival practitioner, on grounds that Garlington was not an “efficient enforcer” of the antitrust laws, as required for antitrust standing under Section 4 of the Clayton Act. This decision is consistent with a line of precedent from the U.S. Court of Appeals for the Eleventh Circuit that sets a high bar under the efficient enforcer requirement for plaintiffs pursuing antitrust claims against competitive rivals in the medical services arena.
Plaintiff Garlington sought to start her own private practice specializing in infectious disease in Gainesville, Florida. Garlington alleged that in order to start her practice and obtain patients, Garlington needed to obtain privileges at the North Florida Regional Medical Center (“NFRMC”). During the application process, the defendant practitioners refused to agree to serve as an alternate provider for Garlington to attend to Garlington’s patients in the event of an emergency when Garlington was not available. This refusal effectively blocked Garlington from obtaining the necessary privileges at NFRMC. Without privileges at NFRMC, Garlington lacked the same access to patients as other private infectious disease physicians in Gainesville because public hospitals generally do not refer infectious disease patients to private practices in Gainesville. Garlington claimed that the defendants violated Section 1 of the Sherman Act because they conspired to keep her from competing against them in the Gainesville market for private infectious disease services. The defendants moved to dismiss on the grounds that Garlington lacked antitrust standing.
A plaintiff has antitrust standing to bring a lawsuit under Section 4 of the Clayton Act when she alleges facts showing that she (1) has suffered an antitrust injury and (2) that she is an efficient enforcer of the antitrust laws. In Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477 (1977), the U.S. Supreme Court held that “antitrust injury” is an “injury of the type the antitrust laws were intended to prevent and that flows from that which makes the defendants’ acts unlawful.” In addressing whether a plaintiff is an “efficient enforcer” of the antitrust laws, courts weigh several factors, including: (1) the directness or indirectness of the asserted injury; (2) the remoteness of the injury; (3) whether other potential plaintiffs were better suited to vindicate the harm; (4) whether the damages were highly speculative; (5) the extent to which the apportionment of damages was highly complex and would risk duplicative recoveries; and (6) whether the plaintiff would be able to efficiently and effectively enforce the judgment. Sunbeam Television Corp. v. Nielsen Media Research, Inc., 711 F.3d 1264, 1271 (11th Cir. 2013). This analysis is based on factors first enunciated by the Supreme Court in Associated General Contractors v. California State Council of Carpenters, 459 U.S. 519 (1983), although that decision never used the term “efficient enforcer.”
The court held that Garlington sufficiently pled the first prong of antitrust standing—antitrust injury. Garlington argued that her injury was exclusion from “the market of private practitioners of [infectious disease] medicine in Gainesville,” due to defendants’ collective decision to refuse to agree to serve as an alternate provider when she reapplied for privileges at NFRMC. The court also found that there was a genuine dispute of material fact as to whether defendants’ refusals to be Garlington’s alternative provider were coordinated instead of unilateral, based on evidence that the four private infectious disease physicians in Gainesville had jointly discussed their shared desire not to give up on-call days or serve as Garlington’s alternate provider. The court also held that there was a factual dispute as to whether Garlington would have been able to open her own private practice in infectious disease had she obtained privileges.
However, the court held that Garlington failed to sufficiently plead the second prong of antitrust injury—that she is an efficient enforcer of the antitrust laws. Judge Walker noted that courts addressing lawsuits within the medical services and credentialing context have found that patients, third-party payors, and the government are often better suited than rival practitioners to pursue antitrust claims based on competitors’ anticompetitive conduct, because these parties have an unconflicted interest in greater competition, e.g., lower prices, better quality, more consumer choice, while a rival providers’ interests are limited to their own interests in obtaining more business and may diverge from patients’ interests. The court cited several Eleventh Circuit antitrust cases in the medical services industry in support of its position that patients and the government have a stronger interest in ensuring that prices and services remain at competitive levels. The court found that Garlington was not the appropriate party; rather, potential patients seeking more choices in Gainesville for quality infectious disease care at competitive prices are better suited than Garlington to pursue an antitrust claim against the defendants. The court also found that Garlington’s damages were too speculative to confer antitrust standing, as she admitted that she was not entitled to or guaranteed any patient referrals, even if she obtained the privileges at NFRMC. Thus, Judge Walker found that the plaintiff was not an efficient enforcer of the antitrust laws and that her Sherman Act Section 1 claim must be dismissed.