The Medical Center at Elizabeth Place, LLC v. Atrium Health System, et al.

When assessing the legality of competitive restraints imposed by joint ventures, this Court’s antitrust jurisprudence recognizes that overly lax enforcement standards promote anticompetitive conduct and overly restrictive enforcement standards can chill potentially procompetitive conduct. This Court also recognizes that, even in the context of joint ventures, certain competitive restraints are so inherently destructive of healthy competition that they are illegal per se. In this case, the Sixth Circuit held that a joint venture formed by several hospitals could avoid per se condemnation for their efforts — including bribery and threats of economic retaliation — to keep a lower-priced rival from access to over 90% of the market. Acknowledging that the circuits are split on the governing standard, the Sixth Circuit held that joint venture members (Respondents) are entitled to summary judgment, dismissing all claims of Sherman Act §1 per se violations, merely by asserting a “plausible procompetitive rationale” for a restraint that “may contribute to the success of [their] cooperative venture.” In so ruling, the Sixth Circuit expressly disagreed with circuits holding that the per se standard applies unless defendants can show that “a restraint is reasonably necessary to achieve a joint venture’s efficiencyenhancing purposes.” Major League Baseball Props., Inc. v. Salvino, Inc., 542 F.3d 290, 339 (2d Cir. 2008) (Sotomayor, J., concurring). The questions presented are: 1. For a restraint to be deemed “ancillary” to a joint venture, and thus exempt from per se condemnation,