Jefferson Parish Hospital District No. 2 v. Hyde

A hospital governed by petitioners has a contract with a firm of anesthesiologists requiring all anesthesiological services for the hospital’s patients to be performed by that firm. Because of this contract, respondent anesthesiologist’s application for admission to the hospital’s medical staff was denied. Respondent then commenced an action in Federal District Court, claiming that the exclusive contract violated § 1 of the Sherman Act, and seeking declaratory and injunctive relief. The District Court denied relief, finding that the anticompetitive consequences of the contract were minimal, and outweighed by benefits in the form of improved patient care. The Court of Appeals reversed, finding the contract illegal “per se.” The court held that the case involved a “tying arrangement” because the users of the hospital’s operating rooms (the tying product) were compelled to purchase the hospital’s chosen anesthesiological services (the tied product), that the hospital possessed sufficient market power in the tying market to coerce purchasers of the tied product, and that, since the purchase of the tied product constituted a “not insubstantial amount of interstate commerce,” the tying arrangement was therefore illegal “per se.