Jefferson Parish Hospital District No.

2 V. HYDE 466 U.S. 2 (1984)

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Nature of the Case

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Facts

D made an exclusive contract with a firm of anesthesiologists, Roux & Associates. If you wanted care at D, you had to use one of those anesthesiologists. Hyde (P), a board-certified anesthesiologist, applied for admission to the medical staff of East Jefferson Hospital. The credentials committee and the medical staff executive committee recommended approval, but D denied the application because the exclusive contract. P sued D seeking a declaratory judgment that the contract is unlawful and an injunction ordering D to appoint him to the hospital staff. There are at least 20 hospitals in the New Orleans metropolitan area, and about 70 percent of the patients living in Jefferson Parish go to hospitals other than D. Because it regarded the entire New Orleans metropolitan area as the relevant geographic market in which hospitals compete, this evidence convinced the District Court that D does not possess any significant 'market power'; therefore, it concluded that D could not use the contract to anticompetitive ends. The District Court denied relief finding that the anticompetitive consequences of the contract were minimal and were outweighed by benefits in the form of improved patient care. The Court of Appeals reversed because it was persuaded that the contract was illegal 'per se.' It found that 30 percent of the residents of the parish go to D and that 'patients tend to choose hospitals by location rather than price or quality.' The Court of Appeals concluded that the relevant geographic market was the East Bank of Jefferson Parish. The Court of Appeals held that the case involves a 'tying arrangement' because the 'users of the D's operating rooms (the tying product) are also compelled to purchase the hospital's chosen anesthesia service (the tied product).' The Supreme Court granted certiorari.