Peer-Review System Subject to Federal Antitrust Laws

Article excerpt

Patrick v. Burget et al.,--U.S.--, 56 U.S.L.W. 4430 (May 17, 1988)

In a unanimous opinion the United States Supreme Court held that the "state-action" doctrine does not immunize Oregon physicians participating on hospital peer-review committees from federal antitrust scrutiny. (Justice Blackmun took no part in the consideration or decision of the case.)

Dr. Timothy A. Patrick, a surgeon from Astoria, Oregon, brought suit against a number of physicians who had initiated and were participating in peer-review proceedings seeking to terminate his privileges at Astoria's only hospital. The physicians alleged that Dr. Patrick's care of his patients was below hospital standards. Dr. Patrick resigned from the hospital before the completion of the termination proceedings and filed suit against the other physicians claiming that their actions violated [section][section]1 and 2 of the Sherman Act because they were taken with the intent of reducing competition rather than of improving patient care.

Like the majority of the hospital's medical staff, Dr. Patrick had also been an employee of the Astoria clinic. In 1973, a year after he began working at both places, Dr. Patrick was asked to join the clinic's partnership. He declined the invitation, preferring instead to establish an independent practice in competition with the clinic. After Dr. Patrick established his practice he encountered numerous difficulties with the clinic physicians, culminating in their initiation of and participation in the peer-review proceedings against him at the hospital.

In the district court, the jury returned a verdict in favor of Dr. Patrick and awarded him damages in the amount of $650,000 which the court trebled. The Court of Appeals for the Ninth Circuit reversed, holding that the defendants' peer-review activities constituted state action and were thus immune from federal antitrust laws under Parker v. Brown, 317 U.S. 341 (1943), and its progeny.

The Supreme Court reversed this holding, finding that no state actor in Oregon "actively supervises" hospital peer-review decisions. …

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