No Single Entity Here: California Federal District Court Holds Hospital and Independent Physician Practice Association Can Conspire For Antitrust Purposes


The U.S. District Court for the Eastern District of California recently held that a hospital and a physicians practice association, and a hospital and the physicians that provide services to it under contract, may be sufficiently distinct separate economic actors capable of conspiring with each other under Section 1 of the Sherman Act. Perinatal Medical Group, Inc. et al. v. Children’s Hospital Central California et al, Case No. CV F 09-1273 LIO GSA (April 15, 2010). There are few Ninth Circuit cases addressing these issues and other circuits have come to different conclusions. More particularly, the Eastern District of California denied a motion to dismiss a complaint that alleged that a hospital and two independent physician practice associations conspired to restrain trade in violation of Section 1 of the Sherman Act by prohibiting neonatologists who did not agree to practice exclusively at the hospital or refer cases to doctors practicing exclusively neonatology at the hospital, from using the hospital's neonatal intensive care unit.

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