Patrick v. Burget, 486 U.S. 94 (1988)

Patrick v. Burget

No. 86-1145

Argued February 22, 1988
Decided May 16, 1988
486 U.S. 94

CERTIORARI TO THE UNITED STATES COURT OF APPEALF FOR THE

NINTH CIRCUIT

Syllabus

Petitioner, an Astoria, Oregon, surgeon, declined an invitation by respondents to join them as a partner in the Astoria Clinic, and instead began an independent practice in competition with the Clinic. Thereafter, petitioner experienced difficulties in his professional dealings with Clinic physicians, culminating in respondents’ initiation of, and participation in, peer review proceedings to terminate petitioner’s privileges at Astoria’s only hospital (a majority of whose staff members were employees or partners of the Clinic), on the ground that his care of his patients was below the hospital’s standards. Petitioner filed suit in Federal District Court, alleging that respondents had violated §§ 1 and 2 of the Sherman Act by initiating and participating in the peer review proceedings in order to reduce competition from petitioner, rather than to improve patient care. Ultimately, the court entered a judgment against respondents, but the Court of Appeals reversed on the ground that respondents’ conduct was immune from antitrust scrutiny under the state action doctrine of Parker v. Brown, 317 U.S. 341, and its progeny, because Oregon has articulated a policy in favor of peer review and actively supervises the peer review process.

Held: The state action doctrine does not protect Oregon physicians from federal antitrust liability for their activities on hospital peer review committees. The "active supervision" prong of the test used to determine whether private parties may claim state action immunity requires that state officials have and exercise power to review such parties’ particular anticompetitive acts and disapprove those that fail to accord with state policy. This requirement is not satisfied here, since there has been no showing that the State Health Division, the State Board of Medical Examiners, or the state judiciary reviews -- or even could review -- private decisions regarding hospital privileges to determine whether such decisions comport with state regulatory policy and to correct abuses. The policy argument that effective peer review is essential to the provision of quality medical care, and that any threat of antitrust liability will prevent physicians from participating openly and actively in peer review proceedings, essentially challenges the wisdom of applying the antitrust laws to the sphere of medical care, and as such is properly directed to Congress. Pp. 99-106.

MARSHALL, J., delivered the opinion for the Court, in which all other Members joined, except BLACKMUN, J., who took no part in the consideration or decision of the case.