Academic journal article American Journal of Law & Medicine

Monopolies: Applying the "Rule of Reason" Instead of "Per Se" Treatment to Organizations Not Inherently Anticompetitive-All Care Nursing Service, Inc. V. High Tech Staffing Services, Inc

Academic journal article American Journal of Law & Medicine

Monopolies: Applying the "Rule of Reason" Instead of "Per Se" Treatment to Organizations Not Inherently Anticompetitive-All Care Nursing Service, Inc. V. High Tech Staffing Services, Inc

Article excerpt

Monopolies: Applying the "Rule of Reason" Instead of "Per Se" Treatment to Organizations Not Inherently Anticompetitive-All Care Nursing Service, Inc. v. High Tech Staffing Services, Inc.--The U.S. Court of Appeals for the Eleventh Circuit held that a health care preferred provider program (PPP), where hospitals obtained nurses from certain temporary nursing agencies selected as preferred providers, did not deserve per se treatment under antitrust law and correctly received rule of reason evaluation.2 The court reasoned that per se treatment applies to practices that have only shown anticompetitive effects historically.3 The court found nothing showing that PPPs resulted in anticompetitive effects in the market4 and noted that the rule of reason will usually apply in antitrust cases.5 The decision helps support the creation and existence of PPPs by placing a greater burden on non-PPP plaintiffs who allege antitrust violations under either the Sherman Act or state statutes. Plaintiffs first must establish the relevant market, then prove that the defendants' conduct adversely affected competition in order to satisfy the rule of reason.6

In the mid 1980s, southern Florida experienced a severe shortage of licensed nurses. This shortage caused wages for nursing services to increase and also created a difficulty in adequately staffing hospitals. Temporary nursing agencies provided nurses to understaffed hospitals. However, hospitals had problems with some agencies that did not provide good services. As a result, in 1988, twelve Palm Beach County hospitals began a PPP, in which hospitals would solicit bids from nursing agencies and then choose certain agencies as preferred providers based on competence, services provided, quality and bid price. The hospitals invited all agencies to participate in the bidding and selected eight agencies to sign year-long contracts. The contracts included "escape clauses" allowing the agencies to terminate the contracts with thirty days' notice. Several nonselected agencies ther filed suit against the participating hospitals and preferred agencies, alleging antitrust violations. At trial, the jury found in favor of the defendants, and the plaintiffs late] appealed.

The court stated that per se treatment under antitrust law applies only when the court finds business practices so plainly anticompetitive and lacking in am redeeming value that the court conclusively presumes the practices illegal.8 Sud illegal practices include price-fixing and group boycott, but the plaintiff has the burden to make a threshold showing that such practices occurred.9 The court ther examined the nonpreferred agencies' claim that the PPP's arrangement was per sE illegal as both price-fixing and group boycott. …

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