Appendix — Wilk v. Joint Commission on Accreditation of Hospitals

89- 1767 2, meneacarnn COU, Usk

fib & OD

No. an a ast 6 we

cpr F. SPANIOL, JR,

Jos

IN THE ne

Supreme Court of the United States

OCTOBER TERM, 1989

CHESTER A. WILK, D.C.,

JAMES W. BRYDEN, D.C.,

PATRICIA B. ARTHUR, D.C., and

MICHAEL D. PEDIGO, D.C.,

Petitioners.

Vv.

THE JOINT COMMISSION ON

ACCREDITATION OF HOSPITALS,

THE AMERICAN MEDICAL ASSOCIATION, and

THE AMERICAN COLLEGE OF PHYSICIANS,

Respondents.

APPENDIX TO THE PETITION FOR A WRIT

OF CERTIORARI TO THE UNITED STATES COURT

OF APPEALS FOR THE SEVENTH CIRCUIT

PAUL E. SLATER GEORGE P. MCANDREWS

CHRISTOPHER J. MURDOCH (Counsel of Record)

SPERLING, SLATER & SPITZ ROBERT C. RYAN

3300 Xerox Centre McANDREWS, HELD

55 West Monroe Street & MALLOY, LTD.

Chicago, Illinois 60603 Northwestern Atrium Center

(312) 641-3200 500 West Madison Street

Chicago, Illinois 60606

(312) 707-8889

Counsel for Petitioners

Midwest Law Printing Co., Chicago 60611, (812) 321-0220

INDEX TO APPENDIX

Opinion of the United States Court of Appeals for

ea eee

Judgment of the United States Court of Appeals

for the Seventh Circuit ...................

Memorandum Opinion and Order of the United

States District Court for the Northern District

SPU e ce vat oie eden ee ners eee ee

Permanent Injunction Order Against AMA ....

Babcock, M.D., JCAH, Outpatient Service for Chiro-

practor’s Patients, Hospitals, Journal of the

American Hospital Association (1964), Plaintiffs

ee ee ree ee re ea eek

Letter from Kessler, M.D., JCAH, to St. Joseph

Hospital of Parkersburg, W. Va., April 4, 1974,

Eg tee

Letter from Shu, M.D., AHA, to Kessier, M.D.,

JCAH, February 26, 1974, Plaintiffs Exhibit

FUE sao ha kok oo 04s BW eee adeaeesae eee

Letter from Arndal, M.D., JCAH, to Hillcrest

Hospital, January 9, 1973, Plaintiffs Exhibit

DO Sic raneke pease ts atae eee eee ees

Letter from Speed, M.D., JCAH, to St. Joseph

Hospital of Stanford, Ct., April 5, 1974, Plain-

Ce Ee OPN Seeds cccanweneueencesueen

Letter from Kessler, M.D., JCAH, to Bon Secours

Hospital, April 4, 1974, blind copies to: Olin,

AMA; Shu, M.D., AHA; Porterfield, M.D., JCAH,

Pee MME OOP bose odvccvcebedaoeass

PAGE

la

50a

52a

135a

143a

144a

145a

147a

14a

il

Letter from Kessler, M.D., JCAH, to Martha Jeffer-

son Hospital, May 30, 1974, Plaintiffs Exhibit

IBA. oo ccccukivenvsced seein

Letter from Speed, M.D., JCAH, to Rice Memorial

Hospital, August 13, 1974, Plaintiffs Exhibit

MAA cece cvucecdsbesres340ese eee

Letter from Kessler, M.D., JCAH, to Inglewood

Hospital, August 16, 1974, Plaintiffs Fxhibit

IBA ini nseecus ds dine seu eee eee

The Right and Duty ef Hospitals to Exclude Chiro-

practors, Journal of the American Medical Asso-

ciation, November 12, 1973, Plaintiffs Exhibit

IB wi cie ve cceseceees sues tees

Letter from Kessler, M.D., JCAH, to Bon Secours

Hospital, April 4, 1974, Plaintiffs Exhibit 37

(copy of Plaintiffs Exhibit 12B, p. 149a, on

JCAH letterhead) . «..+sss¢3008e eee

Letter from Lawless, M.D., JCAH, to Mimbres Hos-

pital and Nursing Home, May 3, 1977, Plain-

tiffe Exifbit GD oo vecicssceeese ee

Letter from Shelley, M.D., AMA Judicial Council,

to Schuyler, JCAH counsel, copied to: Davis,

M.D.; Handy, M.D.; Hesseltine, M.D.; Hilde-

brand, M.D.; Olin, AMA; Paimer, M.D.; Porter-

field, M.D., JCAH; Rudy, M.D.; Simenstead,

M.D., February 3, 1070 «.6cciccdsssetae

Sherman Act Section 1, 15 U.S.C. §1.........

Clayton Act Section 16, 15 U.S.C. §26........

150a

ld5la

152a

153a

l6la

162a

164a

164a

IN THE

Supreme Court of the United States

OCTOBER TERM, 1989

CHESTER A. WILK, D.C.,

JAMES W. BRYDEN, D.C.,

PATRICIA B. ARTHUR, D.C., and

MICHAEL D. PEDIGO, D.C.,

Petitioners,

Vv.

THE JOINT COMMISSION ON

ACCREDITATION OF HOSPITALS.

THE AMERICAN MEDICAL ASSOCIATION, and

THE AMERICAN COLLEGE OF PHY SICIANS,

Respondents.

APPENDIX TO THE PETITION | FOR A WRIT

OF CERTIORARI TO THE UNITED STATES COU RT

OF APPEALS FOR THE SEVENTH CIRCUIT

= 1 9—

IN THE |

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Nos. 87-2672 & 87-2777

Dr. CHESTER A. WILK, D.C.,

Dr. JAMES W. BryDeNn, D.C.,

Dr. Patricia B. ARTHUR, D.C., and

Dr. MICHAEL D. Pepico, D.C.

Plaintiffs-A ppellees,

Cross-Appellants,

VU.

AMERICAN MEDICAL ASSOCIATION,

Defendant-Appellant,

Cross-A ppellee.

Dr. CHESTER A. WILK, D.C.,

Dr. JAMES W. BrRYDEN, D.C.,

Dr. Patricia B. ArTHUR, D.C., and

Dr. MICHAEL B. Pepico, D.C.,

Plaintiffs-Cross-Appellants,

8

AMERICAN MEDICAL ASSOCIATION,

JOINT COMMISSION ON ACCREDITATION

OF HOSPITALS, AMERICAN COLLEGE

OF PHYSICIANS and AMERICAN ACADEMY

OF ORTHOPAEDIC SURGEONS,

Defendants-Cross-Appellees.

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 76 © 3777—Susan Getzendanner, Judge

ARGUED DECEMBER 1, 1988—DeciIpED Fresruary 7, 1990

_

Before Woop, JR., RIPPLE, and MANION, Circuit Judges.

MANION, Circuit Judge. The district court held that

the American Medical Association (““AMA”’) violated § 1

of the Sherman Act, 15 U.S.C. § 1, by conducting an il-

legal boycott in restraint of trade directed at chiroprac-

tors generally, and the four plaintiffs in particular. The

court granted an injunction under § 16 of the Clayton Act,

15 U.S.C. § 26, requiring, among other things, wide pub-

lication of its order. The court held that two additional

defendants, the Joint Commission on Accreditation of Hos-

pitals (“JCAH”’), and the American College of Physicians

(““ACP”’), had acted independently of the AMA’s boycott,

and dismissed them from the case. Wilk v. American

Medical Association, 671 F.Supp. 1465 (N.D. Ill. 1987).

The AMA appeals the finding of liability, and contends

that, in any event, injunctive relief is unnecessary. Plain-

tiffs cross-appeal against JCAH and ACP. We affirm.

#

We have observed before that ‘‘antitrust cases are no-

toriously extended.” Ball Memorial Hospital Inc. v. Mu-

tual Hospital Insurance Inc., 784 F.2d 1825, 1333 (7th

Cir. 1986). This case is no exception. Plaintiffs Chester A.

Wilk, James W. Bryden, Patricia B. Arthur, and Michael

D. Pedigo, are licensed chiropractors. Their complaint,

originally filed in 1976, charged several defendants with

violating §§ 1 and 2 of the Sherman Act, 15 U.S.C.

$§ 1 and 2. It sought both damages and an injunction.

(For a list of all the original defendants, see 671 F.Supp.

at 1469-70. We discuss here only those relevant to this

appeal.) At the first trial, plaintiffs’ primary claim was

that the defendants engaged in a conspiracy to eliminate

the chiropractic profession by refusing to deal with plain-

tiffs and other chiropractors. Defendants accomplished

this, plaintiffs claimed, by using former Principle 3 of the

AMA’s Principles of Medical Ethics, which prohibited

medical physicians from associating professionally with

_

unscientific practitioners.! Plaintiffs contended that the

AMA used Principle 3 to boycott chiropractors by labelling

them “unscientific practitioners,’ and then advising its

members, among others, that it was unethical for medical

physicians to associate with chiropractors. According to

the plaintiffs, the other defendants joined the AMA’s boy-

cott.

A jury returned a verdict for the defendants. An earlier

panel of this court, however, reversed that judgment.

Wilk v. American Medical Association, 719 F.2d 207 (7th

Cir. 1983) (Wilk J). In reversing and ordering a new trial,

we held that, in applying the rule of reason, the jury had

been allowed to consider factors beyond the effect of the

AMA’s conduct on competition. The district court had im-

properly failed to confine the jury’s consideration to the

“patient care motive as contrasted with [the] generalized

public interest motive.” Jd. at 229.

Just before the 1987 retrial, plaintiffs abandoned their

damages claim and sought only injunctive relief. This

shifted the case’s focus from the past to the present re-

garding whether plaintiffs were entitled to an injunction

under § 16 of the Clayton Act. After a lengthy bench trial,

the district court concluded that the AMA, through former

Principle 3, had unreasonably restrained trade in viola-

tion of § 1 of the Sherman Act. Because the district court

adequately detailed the rather lengthy and complex facts

of this case, we only briefly summarize them here. (The

facts relevant to the claims against JCAH and ACP are

set out in section IV of this opinion regarding plaintiffs’

cross-appeal.)

In 1963 the AMA formed its Committee on Quackery

(‘‘Committee’’). The Committee worked diligently to elim-

inate chiropractic. A primary method to achieve this goal

' Former Principle 3 previded:

A physician should practice a method of healing founded on

a scientific basis; and he should not voluntarily associate with

anyone who violates this principle.

—4da—

was to make it unethical for medical physicians to pro-

fessionally associate with chiropractors. Under former

Principle 3, it was unethical for medical physicians to

associate with “unscientific practitioners.”’ In 1966, the

AMA’s House of Delegates passed a resolution labelling

chiropractic an unscientific cult.

The district court found the AMA’s purpose in all of

this was to prevent medical physicians from referring pa-

tients to chiropractors and from accepting referrals of pa-

tients from chiropractors, so as to prevent chiropractors

from obtaining access to hospital diagnostic services and

membership on hospital medical staffs, to prevent medical

physicians from teaching at chiropractic colieges or engag-

ing in any joint research, and to prevent any cooperation

between the two groups in the delivery of health care

services. Despite the Committee’s efforts, chiropractic

ultimately became licensed in ali 50 states.

In 1977, the AMA’s Judicial Council (now known as the

Council on Judicial and Ethical Affairs, although we will

use its previous name, as did the district court) adopted

new opinions which permitted medical physicians to refer

patients to chiropractors, as long as the physicians were

confident that the services would be performed according

to accepted scientific standards. In 1979, the AMA’s House

of Delegates begrudgingly adopted Report UU, stating

that some things chiropractors did were not without ther-

apeutic value; but even so, it stopped short of saying that

these services were based on scientific standards. In 1980,

the AMA revised its Principles of Medical Ethics, elimi-

nating Principle 3. With this gesture, the district court

found, the AMA’s boycott ended. 671 F.Supp. at 1477.

(We discuss plaintiffs’ contention that the boycott con-

tinued until 1988 in the section addressing their cross-

appeal against JCAH.)

At trial, the AMA raised the so-called “‘patient care

defense” which this court had formulated in its earlier

opinion in this case. Wilk I, 719 F.2d at 227. That defense

required the AMA generally to show that it acted because

—

of a genuine, and reasonable, concern for scientific method

in patient care and that it could not adequately satisfy

this concern in a way that was less restrictive of com-

petition. The district court rejected the defense. The court

found the AMA failed to establish that throughout the

relevant period (1966-1980) their concern for scientific

methods in patient care had been objectively reasonable.

The court also found the AMA similarly failed to show

it could not adequately have satisfied its concern for scien-

tific method in patient care in a manner less restrictive

of competition than a nationwide conspiracy to eliminate

a licensed profession. C71 F.Supp. at 1481-84.

The AMA settled three antitrust lawsuits in 1978, 1980,

and 1986 brought by chiropractors, stipulating and agree-

ing that under the Judicial Council’s current opinions, a

medical physician could, without fear of discipline or sanc-

tion by the AMA, refer a patient to a licensed chiroprac-

tor when the physician believed that such a referral would

benefit the patient. Similarly, physicians could also choose

to accept or decline patients sent to them by chiroprac-

tors. The AMA also confirmed that physicians could teach

at chiropractic colleges or seminars.

The AMA’s present position regarding chiropractic is

that it is ethical for a medical physician to professionally

associate with chiropractors, if the physician believes that

the association is in his patient’s best interests. The dis-

trict court found that the AMA had not previously com-

municated this position to its membership.

Based on these findings, the court held that the AMA

and its members violated § 1 of the Sherman Act by

unlawfully conspiring to restrain trade. According to the

court, the AMA’s boycott’s purpose had been to eliminate

chiropractic; the boycott had substantial anticompetitive

effects; the boycott had no counterbalancing pro-competi-

tive effects; and the AMA’s unlawful conduct injured the

plaintiffs.

Despite the fact that the district court found the con-

spiracy ended in 1980, it concluded that the illegal boy-

—6ha—

cott’s “lingering effects” still threatened plaintiffs with

current injury and ordered injunctive relief. The court con-

cluded that the boycott caused injury to chiropractors’

: ions which had not been repaired, and current

... Injury to chiropractors. Further, the AMA never

atfirmatively acknowledged that there are no impediments

to professional association and cooperation between chiro-

practors and medical physicians, except as provided by

law. Thus, chiropractors continued to suffer because the

boycott’s negative effects (namely, inhibiting AMA mem-

bers’ individual decision-making in their relationships with

chiropractors) still remained. The district court believed

it was important that the AMA make its members aware

of the present AMA position (i.e., it is ethical for medical

physicians to professionally associate with chiropractors,

if the physician believes it is in the patient’s best interest)

to eliminate the illegal boycott’s lingering effects, and

ordered an injunction designed to accomplish that result.

671 F.Supp. at 1507-08 (form of injunction).

IT.

A. Noerr-Pennington Doctrine

The AMA complains that the district court relied almost

entirely on AMA conduct that was protected under the

Noerr-Pennington doctrine in finding that it illegally con-

spired to restrain trade. Eastern Railroad Presidents’

Conference v. Noerr Motor Freight Inc., 365 U.S. 127

(1961); United Mineworkers v. Pennington, 381 U.S. 657

(1965). See also California Motor Transport Co. v. Truck-

ing Unlimited, 404 U.S. 508 (1972). The Noerr-Pennington

doctrine protects businesses and other associations when

they join to petition legislative bodies, administrative

agencies, or courts for actions having anticompetitive con-

sequences. Id. See also Wilk I, 719 F.2d at 229. The doc-

trine does not, however, protect purely private action, not

genuinely aimed at prompting governmental action. See

Allied Tube and Conduit Corp. v. Indianhead, Inc., 486

U.S. 492 (1988).

—la—

The AMA contends that its statements regarding chiro-

practors were either statements about chiropractic’s defi-

ciencies or bona fide opinions on matters of public interest.

The district court acknowledged the AMA’s claim and, to

the extent that the Committee’s work regarding influenc-

ing legislation on the state and federal levels or in infor-

mational activities to inform the public on the nature

of chiropractic was involved, it did not consider such

conduct in reaching its decision. Wilk, 671 F. Supp. at

1473 n.2. But apart from the protected activity, the dis-

trict court found substantial evidence of acts aimed at

achieving the boycott’s goals, not legislative action. /d.

at 1473-77.

The court found that the AMA, through a resolution

recommended by its Board of Trustees, and adopted by

its House of Delegates, branded chiropractic “‘an unscien-

tific cult.”” 671 F.Supp. at 1473. This implicitly invoked

Principle 3’s ethical proscription on professional associa-

tion with chiropractors. Subsequent AMA action, id. at

1473-74, made clear the ethical bar on professional associa-

tion (which included prohibiting medical physicians from

referring patients to chiropractors, and from receiving

referrals from chiropractors; providing diagnostic, labora-

tory, or radiology services for chiropractors; and from

teaching chiropractors, or practicing together in any man-

ner). The AMA widely circulated these documents. The

court also found the Committee had regularly communi-

cated with medical boards and associations, informing them

that professional association between medical physicians

and chiropractors was unethical. 671 F.Supp. at 1473.

We disagree with the AMA that the district court ‘“‘re-

peatedly cite(d)’ AMA documents which “focus[ed] entire-

ly on the AMA’s ‘vigorous educational program’ and on

‘the necessity to move aggressively against chiropractic

in the state legislatures.’ ’’ One such document the AMA

points to is an internal AMA memorandum (PX 464, Jt.

App. 776-77) from the Committee to the Board of Trus-

tees, discussing the AMA’s goal of “the containment of

_

chiropractic and, ultimately, the elimination of chiroprac-

tic.” It expressly disavows any intention of using the

document publicly. And while the document details some

activity that was likely protected, it suggests that activ-

ity may have been done only ‘‘to minimize the chiroprac-

tic argument that the [AMA’s] campaign is simply one of

economics. .. .” (Jt. App. 777). Also falling outside of the

Noerr-Pennington doctrine’s protection is an AMA Judicial

Council opinion, holding that it was unethical for medical

physicians to professionally associate with chiropractors,

which was circulated to AMA members and to 56 medical

specialty boards (Jt. App. 801-03). Finally, in 19738, the

AMA drafted “Standard X,” which incorporated the un-

scientific practitioners’ ethical bar into the JCAH ac-

crediting standards. At the AMA’s urging, JCAH adopted

Standard X.

These activities were not aimed at obtaining legislative

action. They were instead aimed at medical physicians and

hospitals, cautioning them that it was unethical and indeed

dangerous (the obvious inference from receiving health

care from an unscientific cult) to associate professionally

with chiropractors. In the face of the district court’s

specific findings on this issue, we cannot say it erred in

relying on these activities.

B. Unreasonable Restraint of Trade

The central question in this case is whether the AMA’s

boycott constituted an unreasonable restraint of trade

under § 1 of the Sherman Act. A restraint is unreasonable .

if it falls within the category of restraints held to be per

se unreasonable, or if it violates what is known as the

“Rule of Reason.”’ Federal Trade Commission v. Indiana

Federation of Dentists, 476 U.S. 447, 457-58 (1986); NCAA

v. Board of Regents of the University of Oklahoma, 468

U.S. 85, 103 (1984); National Society of Professional En-

gineers v. United States, 435 U.S. 679, 692 (1978). Re-

straints that are per se unreasonable include agreements

whose nature and necessary effect are so plainly anti-

competitive that no elaborate study of the industry or

—~9a—

restraint is needed to establish their illegality. Nat’! Soci-

ety of Professional Engineers, 435 U.S. at 692. Concerted

refusals to deal, described as group boycotts, typically are

held unlawful per se. See Indiana Federation of Dentists,

476 U.S. at 458; Consolidated Metal Products, Inc. v.

American Petroleum Institute, 846 F.2d 284, 290 (5th Cir.

1988). The per se rule avoids a burdensome inquiry into

actual market conditions where the likelihood of anticom-

petitive effect is so obvious that the costs of determining

whether the particular restraint at issue involves anticom-

petitive conduct is unwarranted. Jefferson Parish Hospital

District No. 2 v. Hyde, 466 U.S. 2, 15-16 n. 25 (1984). In

contrast, the rule of reason category includes agreements

whose competitive effect can only be evaluated by analyz-

ing the facts peculiar to the business involved, the partic-

ular restraint’s history, and the reasons it was imposed.

Nat'l Society of Professional Engineers, 435 U.S. at 692.

The test of legality under the rule of reason is whether

the challenged conduct promotes or suppresses competi-

tion. Id. at 691; see also Chicago Board of Trade v. United

States, 246 U.S. 231, 238 (1918). The purpose of both ap-

proaches (per se or rule of reason) is to decide the re-

straint’s competitive significance.

The Supreme Court historically has been slow to con-

demn rules adopted by professional associations as unrea-

sonable per se. Indiana Federation of Dentists, 476 U.S.

at 458. The Court is also reluctant to extend the per se

rule to restraints imposed in the context of business rela-

tionships where a practice’s economic impact is not im-

mediately apparent. id. Likewise, judicial inexperience

with a particular arrangement cautions against extending

the per se approach’s reach insofar as judging the alleged

restraint’s lawfulness under the antitrust laws. NCAA v.

Board of Regents, 468 U.S. at 100 n.21; see also North-

west Wholesale Stationers, Inc. v. Pacific Stationery and

Printing Co., 472 U.S. 284, 294 (1985); Arizona v. Mari-

copa County Medical Society, 457 U.S. 332, 344 (1982);

Consolidated Metal Products, 846 F.2d at 290. Neverthe-

less, the Supreme Court has not refrained from applying

--l0a—

the per se approach solely on the grounds that the

judiciary has little antitrust experience in the particular

industry. See Arizona v. Maricopa County Medical Soci-

ety, 457 U.S. at 349-51 (health care industry).

As a general rule, § 1 claims under the Sherman Act

should be evaluated under the rule of reason unless the

challenged action falls into the category of agreements

which are deemed so harmful in their effect on competi-

tion so as to be conclusively presumed to be unreasonable

and thus illega! without a detailed inquiry as to the pre-

cise harm they are alleged to have caused. Northwest

Wholesale Stationers, 472 U.S. at 289-90; Consolidated

Metal Products, 846 F.2d at 289-90. In this court’s first

go-round with this case, it held that the AMA’s alleged

boycott should be measured under the rule of reason.

Wilk I, 719 F.2d at 221-22. We held that in the context

of a learned profession, the nature and extent of the re-

straint’s anticompetitive effect was too uncertain to war-

rant per se treatment. /d. at 221. Moreover, we looked

to the Supreme Court’s decisions involving professional

associations (e.g., Arizona v. Maricopa County Medical

Society, 457 U.S. 332; Nat'l Society of Professional En-

gineers, 435 U.S. 679; and Goldfarb v. Virginia State Bar,

421 U.S. 773 (1975)), and noted the pains the Court had

taken to carve out the possibility that a practice which

might violate the Sherman Act in another context might

not violate the Act when a learned profession was in-

volved. Wilk I, 719 F.2d at 222. Thus, we concluded, ‘‘[a]

canon of medical ethics purporting, surely not frivolous-

ly, to address the importance of scientific method gives

rise to questions of sufficient delicacy and novelty at least

to escape per se treatment.” Jd.

On appeal, plaintiffs urge that we change course and

apply instead the per se rule. Plaintiffs claim that the

Supreme Court’s decisions in Indiana Federation of Den-

tists and Northwest Wholesale Stationers undercut our

prior decision to treat this case under the rule of reason.

But like the district court, we decline plaintiffs’ invita-

tion to revisit this issue. The Court in Indiana Federa-

tion of Dentists did not itself apply a per se rule. Nor

—lla—

do we read either case as requiring us to employ the per

se analysis on the facts of this case. And, in any event,

even under the rule of reason, the boycott was unlawful.

Cf. Parts and Electric Motors, Inc. v. Sterling Electric,

Inc., 826 F.2d 712, 720-21 (7th Cir. 1987) (because jury

had concluded that the challenged action—an alleged tying

arrangement—had unreasonably restrained competition,

and had found liability under the rule of reason, it was

unnecessary to decide the case under the per se inquiry).

The threshold issue in any rule of reason case is market

power. Schachar v. American Academy of Ophthalmology,

Inc., 870 F.2d 397, 398 (7th Cir. 1989); Valley Liquors,

Inc. v. Renfield Importers Ltd., 822 F.2d 656, 666 (7th

Cir. 1987) (Valley IT). Market power is the ability to raise

prices above the competitive level by restricting output.

NCAA v. Board of Regents, 468 U.S. at 109 n.38; Ball

Memorial Hospital, 784 F.2d at 1331. Whether market

power exists in an appropriately defined market is a fact-

bound question, and appellate courts normally defer to dis-

trict court findings on that issue. Jefferson Parish Hos-

pital, 466 U.S. at 42 (O’Connor, J., concurring). Here, the

district court found the relevant market to be the provi-

sion of health care services to the American public nation-

wide, particularly care for the treatment of musculoskel-

etal problems. 671 F.Supp. at 1478. Several facts demon-

strated the AMA’s market power within the health care

services market. AMA members constituted a substantial

force in the provision of health care services in the United

States and they constituted a majority of medical physi-

cians. AMA members received a much greater portion of

fees paid to medical physicians in the United States than

non-AMA members. Jd. The evidence showed that AMA

members received approximately 50% of all fees paid to

health care providers. Finally, according to plaintiffs’ ex-

pert, the AMA enjoyed substantial market power. The

district court also found there was substantial evidence

that the boycott adversely affected competition, and that

a showing of such adverse effects negated the need to

—12a—

prove in any elaborate fashion market definition and mar-

ket power, relying on Indiana Federation of Dentists, 476

U.S. at 460-62.

The AMA first contests the district court’s finding of

market power. It challenges the court’s reliance on market

share evidence as a basis to find market power and the

district court’s lumping together all AMA members as a

group in assessing market share as a basis for its market

power finding. We are not convinced the trial court erred.

The district court properly relied on the AMA member-

ship’s substantial market share in finding market power.

While we cautioned against relying solely on market share

as a basis for inferring market power in Ball Memorial

Hospital, 784 F.2d at 1336, we did not rule out that ap-

proach. Id. See also Parts and Electric Motors, 826 F.2d

at 720 n. 7; Valley II, 822 F.2d at 666-67. This is especial-

ly so where there are barriers to entry and no substitutes

from the consumer’s perspective. Ball Memorial Hospital,

784 F.2d at 1836. Here the district court found the AMA

membership was a substantial force in the American

health care market, and that there were substantial bar-

riers to the entry of new chiropractors into the field, such

as substantial education requirements, 671 F.Supp. at

1479.

The district court also relied on substantial evidence of

adverse effects on competition caused by the boycott to

establish the AMA’s market power. In Indiana Federa-

tion of Dentists, the Supreme Court explained that since

“the purpose of the inquiries into market definition and

market power is to determine whether an arrangement

has the potential for genuine adverse effects on competi-

tion, ‘proof of actual detrimental effects, such as reduc-

tion of output’ can obviate the need for an inquiry into

market power, which is but a ‘surrogate for detrimental

effects.’ ”’ 476 U.S. at 460-61, quoting 7 P. Areeda, Anti-

trust Law $1511, p.429 (1986). See also, P. Areeda, The

Rule of Reason—A Catechism on Competition, 55 Anti-

trust Law Journal 571, 577 (1986). Thus, the district court

recited the boycott’s anticompetitive effects:

—1l3a—

It is anticompetitive and it raises costs to interfere

with the consumer’s free choice to take the product

of his liking; it is anticompetitive to prevent medical

physicians from referring patients to a chiropractor;

(Lynk—1427-28) it is anticompetitive to impose higher

costs on chiropractors by forcing them to pay for

their own x-ray equipment rather than obtaining

x-rays from hospital radiology departments or radiolo-

gists in private practice; and it is anticompetitive to

prevent chiropractors from improving their education

in a professional setting by preventing medical physi-

cians from teaching or lecturing to chiropractors. (Tr.

1409-22, 1424-31.)

671 F.Supp. at 1478-79. See also Wilk I, 719 F.2d at 214.

These findings eliminated the need for an inquiry into

market power.

The AMA’s attempts to discredit the evidence the dis-

trict court relied on to find anticompetitive effects are

unavailing. The record does not show, as the AMA con-

tends, that forcing chiropractors to purchase their own

x-ray equipment had no adverse effect on chiropractors.

And the district court did not clearly err in finding that

former Principle 3 reduced demand for chiropractic ser-

vices simply because there was evidence that a patient

had seen a chiropractor before and after having seen a

medical physician. Moving on, the AMA argues that even

if market power existed, it escapes liability under the rule

of reason because former Principle 3 had overriding pro-

competitive effects. The AMA’s argument is not unper-

suasive in the abstract; but unfortunately it relies on

evidence which the district court rejected as “speculative.”

671 F.Supp. at 1479. Essentially, the AMA argues that

the market for medical services is one where there is ‘“‘in-

formation asymmetry.” In other words, health care con-

sumers almost invariably lack sufficient information needed

to evaluate the quality of medical services. This increases

the risk of fraud and deception on consumers by unscrupu-

lous health care providers possibly causing what the AMA

terms ‘market failure’: consumers avoiding necessary

—l4a—

treatment (for fear of fraud), and accepting treatment with

no expectation of assured quality. The AMA’s conduct,

the theory goes, ensured that physicians acquired reputa-

tions for quality (in part, by not associating with unscien-

tific cultists), and thus allowed consumers to be assured

that physicians would use only scientifically valid treat-

ments. This in effect simultaneously provided consumers

with essential information and protected competition.

Getting needed information to the market is a fine goal,

but the district court found that the AMA was not moti-

vated solely by such altruistic concerns. Indeed, the court

found that the AMA intended to “destroy a competitor,”’

namely, chiropractors. It is not enough to carry the day

to argue that competition should be eliminated in the

name of public safety. See Nat’l Society of Professional

Engineers, 435 U.S. 679.

But the AMA persists in arguing that pro-competitive

effects were achieved by the boycott through what its

expert called “nonverbal communication.” In rejecting

this argument, the district court stated that the AMA’s

expert’s

theory is that the boycott constituted nonverbal com-

munication which informed consumers about the dif-

ferences between medical physicians and chiroprac-

tors, and that this had a pro-competitive effect. (Tr.

1411-12.) I reject this opinion as speculative. (Tr.

1434-43.) Mr. Lynk [William J. Lynk, the AMA’s ex-

pert] neither conducted nor read any studies regard-

ing the efficacy of such nonverbal communications.

Id. He neither conducted nor read any surveys of

consumer opinion to determine whether consumers

were confused about the differences between medical

physicians and chiropractors. (/d.) I saw no evidence

of any such confusion during the trial. Mr. Lynk’s

opinion does not accord with common sense. A nation-

wide conspiracy intended by its participants to con-

tain and eliminate a licensed profession cannot be

justified on the basis of Mr. Lynk’s personal opinion

—ld5a—

that it was pro-competitive, nonverbal communication

to consumers.

671 F.Supp. at 1479. We find the district court’s reason-

ing compelling.

The AMA, however, argues that the district court missed

the boat in rejecting Mr. Lynk’s theory. The relevant

question, according to the AMA, is not whether consumers

would perceive any differences between physicians and

chiropractors today; rather, it is whether they would ever

view a physician’s referral of a patient to a chiropractor

as a physician’s endorsement of the chiropractor’s prac-

tices. But the AMA misses the essence of the district

court’s ruling. The trial court rejected the AMA’s theory

as speculative because Lynk neither conducted nor read

any studies regarding nonverbal communications; his views

were only his “personal opinion.” 671 F.Supp. at 1479.

In fact, Lynk testified that an empirical study could not

even be performed to determine the pro-competitive ef-

fects of Principle 3. (Jt. App. at 351-52.) Thus, even if the

AMA is right in asserting that the relevant inquiry is how

a physician’s referral would be viewed by the consumer,

there was no underlying study or data to support its theory.

Moreover, Lynk’s testimony did not bear out the AMA’s

assertions regarding the “relevant question.”” The AMA

says ‘that it is irrelevant to its theory whether health care

consumers perceive any differences between chiropractors

and medical physicians, and that Lynk’s testimony went

to the role of reputation and information in health care

service markets. But in testifying as to the pro-competi-

tive function of standards generally, Lynk testified that

they improve consumer information by making it possible

for consumers to make more informed choices ‘“‘about what

it is they are getting from alternative sellers of the same

or substitute products to the extent that it allows them

to make better choices.” (Jt. App. 343.) Lynk also testified

that one of the interests served by former Principle 3 was

that it would clarify the distinctions between the profes-

sion of medicine and alternative professions ‘‘that are not

—16a—

based on medical science but which can create the appear-

ance that they are.” (Jt. App. 351.) This seems to go pre-

cisely to the perceived differences between chiropractors

and medical physicians.

In sum, we agree with the district court that the AMA’s

boycott constituted an unreasonable restraint of trade

under § 1 of the Sherman Act under the rule of reason.

Therefore, the district court’s findings that the AMA’s

boycott was anticompetitive, and was not counter-balanced

by any pro-competitive effects were not erroneous. Nat'l

Society of Professional Engineers, 485 U.S. at 691.

C. Patient Care Defense

In the AMA’s first appeal, we modified the rule of rea-

son to allow the AMA to justify its boycott of chiroprac-

tors if it could show that it was motivated by a concern

for “patient care.”’ Wilk I, 719 F.2d at 227. We were per-

suaded that measuring former Principle 3’s reasonableness

required a more flexible approach than the traditional rule

of reason inquiry provided. Jd. at 226-27. Thus, we ex-

plained that if plaintiffs met their burden of persuasion

on remand by showing that former Principle 3 and the

implementing conduct had restricted competition rather

than promoting it, the burden of persuasion would shift

to the defendants to show:

(1) that they genuinely entertained a concern for what

they perceive as scientific method in the care of each

person with whom they have entered into a doctor-

patient relationship; (2) that this concern is objectively

reasonable; (3) that this concern has been the domi-

nant motivating factor in defendants’ promulgation

of Principle 3 and in the conduct intended to imple-

ment it; and (4) that this concern for scientific method

in patient care could not have been adequately satis-

fied in a manner less restrictive of competition.

Id. at 227.

—17a—

In this appeal, plaintiffs ask us to reconsider the pa-

tient care defense, urging that three subsequent Supreme

Court decisions have implicitly rejected it; see Patrick v.

Burget, 486 U.S. 94, 104-05 (1988); Indiana Federation of

Dentists, 476 U.S. at 458-60; and Jefferson Parish Hos-

pital Dist. No. 2, 466 U.S. at 25 n. 41. While these deci-

sions may cast doubt on the patient care defense’s con-

tinuing vitality, they did not address the specific issue of

whether the patient care defense on the facts in this case

would be allowed. While we acknowledge that there has

been some academic criticism of the defense (see Kissam,

Antitrust Boycott Doctrine, 69 Iowa L. Rev. 1165, 1214-16

(1984); Havighurst, Doctors and Hospitals; An Antitrust

Perspective on Traditional Relationships, 1984 Duke L.J.

1071, 1103 n.101 (1984)), we need not revisit the issue

because the district court’s finding that the AMA did not

satisfy its burden of persuasion under the defense was

not clearly erroneous.

The district court held that the AMA failed to meet the

defense’s second and fourth elements: that its concern for

scientific method in patient care was objectively reason-

able, and that the concern for scientific method in patient

care could not have been satisfied adequately in a man-

ner less restrictive of competition, respectively. While only

those two rulings are at issue, it is useful to summarize

the district court’s treatment of the entire defense.

Although doubting the AMA’s genuineness regarding its

concern for scientific method in patient care, the district

court concluded that the AMA established that element.

While it was attacking chiropractic as unscientific, the

AMA simultaneously was attacking other unscientific

methods of disease treatment (e.g., the Krebiozen treat-

ment of cancer), and, as the district court noted, the ex-

istence of medical standards or guidelines against unscien-

tific practice was relatively common. 671 F.Supp. at 1481.

The court, however, found that the AMA failed to carry

its burden of persuasion as to whether its concern for

scientific method in patient care was objectively reason-

able.

—18a—

The court acknowledged that during the period that the

Committee on Quackery was operating, there was plen-

ty of material supporting the belief that all chiropractic

was unscientific. But, according to the court (and this is

unchallenged), at the same time, there was evidence be-

fore the Committee that chiropractic was effective, indeed

more effective than the medical profession, in treating cer-

tain kinds of problems, such as back injuries. The Com-

mittee was also aware, the court found, that some medical

physicians believed chiropractic could be effective and that

chiropractors were better trained to deal with musculo-

skeletal problems than most medical physicians. Moreover,

the AMA’s own evidence suggested that at some point

during its lengthy boycott, there was no longer an objec-

tively reasonable concern that would support a boycott

of the entire chiropractic profession. Also important was

the fact that “it was very clear” that the Committee’s

members did not have open minds to pro-chiropractic ar-

guments or evidence. 671 F.Supp. at i481-83.

Next, the court found that the AMA met its burden

in establishing that its concern about scientific method was

the dominant motivating factor for promulgating former

Principle 3, and in the conduct undertaken and intended

to implement it. 671 F.Supp. at 14838. But even so, the

court acknowledged there was evidence showing that the

AMA was motivated by economic concerns, as well.

Finally, the court concluded that the AMA failed to

meet its burden in demonstrating that its concern for

scientific method in patient care could not have been sat-

isfied adequately in a manner less restrictive of competi.

tion. The court stated that the AMA had presented no

evidence of other methods of achieving their objectives

such as public education or any other less restrictive ap-

proach. 671 F.Supp. at 1483.

The AMA attacks the district court’s findings as to the

second element (concern for scientific method as objective-

ly reasonable), claiming that the court rewrote the ele-

ment to require the AMA to show its concern with chi

—19a—

ropractic (rather than with scientific patient care) was ob-

jectively reasonable. Wilk, 671 F.Supp. at 1481. We dis-

agree. The AMA’s claim in passing that the court ‘‘mis-

conceiv[ed]” the defense is barely explained in one of its

67 footnotes; but in any event, we think the district court

was true to the defense and adequately supported its hold-

ing with several key factual determinations. It recited the

evidence directly at odds with the AMA’s belief that all

chiropractic was unscientific. 671 F.Supp. at 1481-83. The

AMA does not challenge the district court’s findings, so

those findings must stand. Beyond that, the AMA reads

this element too rigidly. The issue here is whether its con-

cern for scientific method in the care of patients was ob-

jectively reasonable. In the context of this particular case,

then, the question is whether that concern justified a boy-

cott of chiropractic. Based on the undisputed facts, it did

not.

The AMA’s challenge to the fourth element (concern for

scientific method in patient care could not have been ade-

quately satisfied in a manner less restrictive of competi-

tion) is equally unpersuasive. The AMA completely fails

to offer any evidence to support its burden. Instead, it

argues that its former guideline had at most a de minimis

effect on chiropractors’ costs, and thus could not be

treated as an attempt to contain and eliminate the en-

tire chiropractic profession. This, however, ignores the fact

that the AMA’s self-proclaimed and described “mission”

was to contain, and ultimately eliminate chiropractic. (Jt.

App. 776.) The AMA participated in a nationwide boycott

and conspiracy designed to contain and eliminate a pro-

fession that was licensed in all fifty states at the time

the Committee on Quackery was disbanded. As the dis-

trict court held, it is ‘‘a difficult task” to argue that this

was “the only way to satisfy the AMA’s concern for the

use of scientific method in patient care.”” 671 F.Supp. at

1483. Furthermore, we reject the AMA’s attempts to min-

imize the effect its boycott had on competition. The dis-

trict court found the boycott had several anticompetitive

—20a—

effects, such as raising costs by interfering with con-

sumers’ free choice, which are unrefuted. 671 F.Supp. at

1478-79, 1480.?

D. Antitrust Injury

To seek an injunction under § 16 of the Clayton Act,

a private plaintiff must allege “threatened loss or damage

‘of the type the antitrust laws were designed to prevent

and that flows from that which makes defendants’ acts

unlawful.’ ’’ Cargill Inc. v. Monfort of Colorado Inc., 479

U.S. 104, 118 (1986) (quoting Brunswick Corp. v. Pueblo

Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977)). Here, the

district court concluded that plaintiffs had shown the kind

of injury the antitrust laws were designed to prevent. 671

F.Supp. at 1479-80. Plaintiff's economic expert (Stano)

compared chiropractors’ incomes with podiatrists’ and op-

tometrists’ incomes (comparable limited license practi-

tioners) over the relevant period of time and concluded

that chiropractors’ incomes had been lower than both. This

Styno viewed as consistent with plaintiffs’ boycott theory.

2 The AMA’s assertion that former Principle 3 operated to pre-

vent the “free-riding”’ that would have occurred if physicians had re-

ferred patients to chiropractors inisses the mark. Apparently, the

AMA believes that if physicians were forced to refer patients to chi-

ropractors, chiropractors would benefit (the “free ride’”’) from the

physicians’ reputation for providing quality medical service, with-

out necessarily deserving that reputation themselves. But neither

this court nor the district court would require the AMA to endorse

chiropractic, nor do we mandate that there be referrals. We simply

speak to the restraint on professional association, and say that

physicians, hospitals, and other institutions must be free to make

their own uncoerced decisions on whether to professionally asso-

ciate with chiropractors. We do not compel medical physicians to

praise or sponsor chiropractors’ work. See Schachar v. American

Academy of Ophthalmology, 870 F.2d 397, 399 (7th Cir. 1989). We

do not even require “cooperation or friendliness.” Jd. We also note

that the AMA apparently misconceives the role of the free-riding

analysis in antitrust law. See Premier Electrical Construction Co.

v. National Electrical Contractors Ass’n Inc., 814 F.2d 358, 368-70

(7th Cir. 1987) (explaining the concept).

—2la—

He also concluded that a jump in chiropractors’ incomes

during the 1978-1980 period was consistent with the ac-

knowledged lessening of the boycott by the AMA during

that time. Lynk, the AMA’s economic expert, though he

faulted the data plaintiffs’ expert relied upon, agreed that

if he were to compare chiropractors’ incomes to com-

parable groups, he also would include podiatrists and op-

tometrists (although he stated he would seek further ex-

planations for differences between the groups’ incomes).

In the district court’s view, further support for plaintiffs’

theory of harm was the “very strong evidence of a per-

vasive, nationwide, effective conspiracy which by its very

nature would have affected the demand curve for chiro-

practic services and adversely affected the income of chi-

ropractors.”’ 671 F.Supp. at 1480. Finally, the district

court added, there was evidence of injury to reputation

suffered by chiropractors. (Both economic experts, accord-

ing to the court, believed that injury to reputation would

constitute an anticompetitive effect of the boycott.)

The AMA argues that plaintiffs failed to establish an

antitrust injury. Essentially the argument goes somewhat

like this. This case is not a class action; rather, it involves

only the four named plaintiffs. The only harm here would

have been to “scientific” chiropractors. Because, accord-

ing to the AMA (but not the district court), plaintiffs were

not and are not “‘scientific practitioners,” they could not

have suffered any injury from former Principle 2. If any

chiropractors could establish antitrust injury, it would be

those who have “renounced the theory of sublaxations and

limit their practices to conservative physical therapy mo-

dalities.”” The AMA’s argument thus hinges on its lengthy

assertion that the four plaintiffs are ‘‘unscientific practi-

tioners.”” The problem with this approach, however, is that

the district court did not agree with the AMA that the

plaintiffs were ‘‘unscientific”’ practitioners. Although the

court acknowledged that there was some evidence that

the plaintiffs did not use common methods in treating

common symptoms, and that the treatment of patients ap-

peared to be undertaken on an ad hoc rather than on a

—22a—

scientific basis, it did not go so far as the AMA believes,

and establish or find that the plaintiffs in this case were

“unscientific practitioners.”’ Indeed, it expressly held that

no one involved in the case, including the plaintiffs, be-

lieved that chiropractic treatment should be used for treat-

ment of diseases such as cancer, diabetes, heart disease,

high blood pressure, and infections. 671 F.Supp. at 1482.

Regardless, neither the district court, nor this court is

equipped to determine whether chiropractic is ‘“‘scientific’’

or not. So the AMA’s argument must fail in any event.

We see the AMA’s argument here as yet another invita-

tion to tackle the question of whether chiropractic is

“either good or bad, efficacious or deleterious, quackery

or science.” 671 F.Supp. at 1481. The district court re-

peatedly stated it was not deciding whether chiropractic

was scientific. 671 F.Supp. 1482 n. 8, 1482-83, 1506-07. Yet

both sides (below it was plaintiffs, 671 F.Supp. at 1482;

here, it is the AMA) continue to color their arguments

with how they view their own, or the other side’s, pro-

fession. Like the district court, we do not see our task

as deciding whether or not chiropractic is scientific.

The AMA also quibbles with the evidence of antitrust

injury. The district court rejected the same arguments.

671 F.Supp. at 1480. We too are unpersuaded. The AMA

offers no good reason why we should accept its expert’s

opinion over that of the plaintiffs’, and we decline to do

so. But beyond that, the district court relied on more than

just plaintiffs’ expert in determining there was an anti-

trust injury. It also relied on the evidence of the “per-

vasive, nationwide, effective conspiracy which by its very

nature would have affected the demand curve for chiro-

practic services and therefore adversely affected income

of chiropractors.” 671 F.Supp. at 1480. (Further, we also

note that the AMA is far too generous in its characteriza-

tion of plaintiffs’ expert’s “‘concession”’ that the AMA’s

conduct was “lawful and pro-competitive.’’)

The evidence established that all chiropractors’ incomes

were lower than those of comparable limited license prac-

titioners. And the evidence was that all chiropractors suf-

—23a—

fered an injury to their reputation. 671 F.Supp. at 1480.

Indeed, the district court found that the individual plain-

_ tiffs suffered rejections and lost opportunities and that

“the individual plaintiffs have been personally harmed, and

continue to be personally threatened, by a lack of associa-

tion with members of the AMA caused by the boycott

and the lingering effects of the boycott.” 671 F.Supp. at

1486. Moreover, the court stated that “(t]he activities of

the AMA undoubtedly have injured the reputation of chi-

ropractors generally. This kind of injury more likely than

not was sustained by the four plaintiffs.’’ Jd. This direct-

ly refutes the AMA’s contention that there was nothing

but a showing of “‘classwide injury.’’?

If.

Entitlement To Injunctive Relief

Section 16 of the Clayton Act provides that:

Any person, firm, corporation, or association shall be

entitled to sue for and have injunctive relief .

against threatened loss or damage by a violation of

the antitrust laws . . . when and under the same

conditions and principles as injunctive relief against

threatened conduct that will cause loss or damage is

granted by courts of equity, under the rules govern-

ing such pr ceedings .

3 The AMA cites United States v. Borden Co., 347 U.S. 514

(1954), for the proposition that a showing of classwide injury is

insufficient to support injunctive relief for an individual plaintiff.

While that might be true, Borden does not say so. There, the

Supreme Court held that in light of the differences in the interests

sought to be vindicated by the government and by private litigants

in actions under the Clayton Act, the government was not pre-

cluded from obtaining injunctive relief against price discrimination

simply because, in an earlier private action, a decree enjoined the

conduct in question. At any rate, the trial court here relied on

more than evidence of “classwide injury” in finding that these four

plaintiffs were injured by the AMA’s unlawful boycott.

—24a—

15 U.S.C. § 26. Although the district court concluded that

the AMA’s boycott ended in 1980 (when former Princi-

ple 3 was eliminated), it held that an injunction never-

theless was necessary in this case.

The trial court concluded there were lingering effects

of the AMA’s conspiracy; that the AMA never acknowl-

edged the lawlessness of its past conduct, and in fact con-

tinued to maintain that it had always been in compliance

with the antitrust laws; that the AMA had never affir-

matively stated that it was ethical for medical physicians

to professionally associate with chiropractors; that the

AMA had never publicly stated to its members the ad-

missions made in the trial court about chiropractic’s im-

proved nature, despite the fact that the AMA currently

claims that it made changes in its policy in recognition

of chiropractic’s change and improvement; that the AMA

never publicly retracted articles such as “The Right and

Duty of Hospitals to Deny Chiropractor Access to Hos-

pitals”; that a medical physician had to read very carefully |

the current AMA Judicial Council opinions to realize that

there had been a change in the treatment of chiroprac-

tors; and, finally, that the AMA’s systematic, long-term

wrongdoing and long-term intent to destroy chiropractic

“suggest[ed]”” that an injunction was appropriate. 671

F.Supp. at 1488. The court believed that it was impor-

tant to make AMA members aware of the AMA’s present

position—that it is ethical for medical physicians to pro-

fessionally associate with chiropractors, if the physician

believes it is in his patient’s best interest—to eliminate

the unlawful boycott’s lingering effects. The injunction,

then, is to ‘‘assure that. the AMA does not interfere with

the right of a physician, hospital or other institution to

make an individual decision on the question of professional

association.” 671 F.Supp. at 1507.

The injunction requires the AMA to arrange publica-

tion of the district court’s order in the Journal of the

American Medical Association, mail the order to each of

the AMA’s members, and revise the current opinions of

—25a—

the AMA’s Council on Judicial and Ethical Affairs (former-

ly the Judicial Council) so that it states the AMA’s pres-

ent position on chiropractic in a separate provision, with

a heading and index references referring to chiropractors.

671 F.Supp. at 1507-08.

The AMA correctly points out that the district court

wrongly placed the burden of proof on the AMA in de-

ciding whether injunctive relief was appropriate in this

case. But the AMA does not argue how, if at all, the

court’s error prejudiced it. We do not think the AMA was

prejudiced.

The district court treated the AMA’s argument in this

respect as an argument that the claim for injunction was

moot instead of an argument that no injunctive relief was

necessary. Although these concepts are similar, they are

analytically distinct, and a court could find that a case

is not moot yet deny injunctive relief. See United States

v. Concentrated Phosphate Export Association, Inc., 393

U.S. 199, 203 (1968); W.T. Grant, 345 U.S. at 633; TRW,

Inc. v. Federal Trade Commission, 647 F.2d 942, 953-54

(9th Cir. 1981); SCM Corporation v. Federal Trade Com-

mission, 565 F.2d 807, 812 (2d Cir. 1977). There are prac-

tical differences between the concepts, as well. The moot-

ness burden is a heavy one, aiid the defendant must show

that there is no reasonable expectation that the wrong

will be repeated. By contrast, the burden for showing

whether injunctive relief is necessary is on the moving

party; here plaintiffs. The district court wrongly placed

the burden of persuasion on the AMA. 671 F.Supp. at

1484. But no matter which party bore the burden on this

issue, the district court’s ultimate findings leave no doubt

that injunctive relief was appropriate.

A party moving for an injunction must show some cog-

nizable danger of recurrent violation, that is, something

more than the mere possibility which serves to keep the

case alive. W.T. Grant, 345 U.S at 633. ““‘To be considered

are the bona fides of the ey. d intent to comply, the

effectiveness of the discontinuance and, in some cases, the

—26a—

character of the past violations.” /d. Courts require “clear

proof’ that an unlawful practice has been abandoned, and

must guard against attempts to avoid injunctive relief “‘by

protestations of repentance and reform, especially when

abandonment seems timed to anticipate suit, and there

is a probability of resumption.” Oregon State Medical

Society, 343 U.S. at 333. These issues are committed to

the trial court’s discretion. /d. at 634; see also U.S. v.

Concentrated Phosphate, 393 U.S. at 203-04. Thus, we will

not substitute our judgment for the district court’s. The

question is not how we would rule if we were address-

ing the question in the first instance. Rather, the ques-

tion is whether the district court’s decision was reason-

able. See United States v. United States Currency in the

Amount of $103,387.27, 863 F.2d 555, 561 (7th Cir. 1988).

We believe the court’s decision was reasonable. It found

a cognizable danger of recurrent violations, was unim-

pressed with the AMA’s expressed intent to comply with

antitrust laws, was unpersuaded by the effectiveness of

the AMA’s discontinuance of its boycott, and properly con-

sidered the systematic and long-term nature of the boy-

cott. W.T. Grant, 345 U.S. at 633.

The AMA characterizes many of its challenges to the

district court’s decision to order an injunction as attacks

on the court’s findings of fact. Thus, for example, the

AMA argues that the district court ‘erroneously found

a risk of recurrence.”’ But the facts are relatively undis-

puted. The AMA is really challenging the district court’s

decision that those facts supported an injunction.

In this regard, the district court found that the AMA’s

behavior in connection with the 1983 revision of the JCAH

accreditation standards for hospitals indicated the AMA’s

likelihood of returning to its old (anti-chiropractic) ways.

(The facts surrounding the 1983 revisions are set out more

fully in section IV below, in connection with plaintiffs’

cross appeal against JCAH.) The AMA’s original position

toward those standards was favorabie to chiropractors in

that it supported the JCAH position that each hospital

—27a—

be permitted to decide for itself, under applicable state

law, which licensed health care providers would be allowed

hospital privileges and membership on the medical staff.

However, after an outcry from its membership the AMA

was forced to change its original position to satisfy its

constituents, namely, medical physicians; it thus sought

to have JCAH approve a more restrictive accreditation

standard which would ensure medical and osteopathic phy-

sicians control of the medical staff and patient care in

hospitals. 671 F.Supp. at 1476, 1488. This incident led the

trial court to conclude that the AMA’s “present assur-

ances [were] good only until the next chiropractic battle.”’

Id. at 1488.

The facts surrounding the 1983 JCAH revisions are not

in dispute. Even so, the AMA terms the district court’s

reliance on this incident as “‘baffling.”” Thus, it contends

that even under the district court’s injunction order it will

still be allowed to urge restrictions on chiropractors before

recognized accrediting bodies, and that its conduct regard-

ing the JCAH standards would be consistent with that

mandate. The AMA also argues that the district court’s

conclusion that the JCAH’s 1983 revision was reasonable,

indeed proper, validates the AMA’s call to action to en-

sure medical and osteopathic physician control of medical

staff and patient care. We disagree.

While the AMA, under the district court’s order, may

in the future be free to urge restrictions or take posi-

tions with respect to chiropractic, the AMA’s action with

respect to the 1983 JCAH revisions must be viewed in

the context in which it occurred. It came on the heels

of a lengthy illegal boycott of chiropractors. And although

the AMA believed the JCAH’s initial standards were con-

sistent with the then current antitrust legal climate, it

was unable to maintain its position in the face of a bar-

rage of criticism from its members. 671 F.Supp. at 1476-

77. That coupled with the fact that the district court found

the AMA even through the date of trial continued to re-

spond to requests for information on chiropractic by send-

ing out anti-chiropractic literature, id., was enough for the

—28a—

district court properly to conclude that there was evidence

that suggests a possible return to the AMA’s former pol-

icies. Finally, the JCAH’s action in 1983, although found

reasonable and proper, is wholly distinct from the AMA’s

action. JCAH was an independent body, motivated by

completely different concerns. Thus, while the AMA was

attempting to contain and eliminate competitors (i.e.,

chiropractic), JCAH was acting only to assure that respon-

sibility for patient care in acute care hospitals remained

in the hands of medical and osteopathic physicians, the

only practitioners who could perform that acute care.

In challenging the need for an injunction, the AMA also

contends that it is legally bound by settlements in three

separate chiropractic antitrust lawsuits to the position that

chiropractors are licensed limited practitioners and that

no form of professional association with chiropractors is

unethical. These settlements, according to the AMA, elimi-

nate any threat that the boycott will recur. Again, we

disagree. Although the settlements may be some evidence

militating against the likelihood of recurrence, it is not

so strong as to reverse the district court’s determination.

The trial court considered this evidence, 671 F.Supp. at

1487-88, but found it was outweighed by other evidence

(recited above in connection with the JCAH 1983 revi-

sions) of a risk of a return to the AMA’s former policies.

Id. at 1488. Notably, the district court found it relevant

that in all of the settlements, there was no admission of

liability.

The AMA additionally argues that the permanence of

its post-1977 guidelines (and hence the unlikelihood of a

return to its old ways) is emphasized by the “‘fact’’ that

they were undertaken entirely independently of this law-

suit. However, the district court never found this “fact”’;

and the district court could properly be skeptical of the

AMA’s “protestations of repentance and reform,” Oregon

State Medical Society, 343 U.S. at 333, especially since

the AMA’s change of position occurred not too long after

this suit was filed in 1976.

—29a—

Another factor supporting the injunction is that the

AMA still vigorously maintains that its boycott activity

was lawful, and has never acknowledged its past conduct’s

lawlessness. This coupled with the AMA’s begrudging

statement on professional association with chiropractors

was sufficie:it for the district court to doubt (1) the AMA’s

intent to comply with the antitrust laws in the future ab-

sent an injunction, and (2) the effectiveness of the discon-

tinuation of its illegal conduct. Importantly, the district

court found that even as of the trial date, the AMA con-

tinued to respond to requests for information on chiroprac-

tic by sending outdated anti-chiropractic literature. Fur-

ther, none of the AMA’s policies contain any affirmative

statement that the boycott is over. An example of the

AMA’s begrudging and ineffective removal of the ethical

bar to professional association is Opinion 3.01 of its

Judicial Council. The AMA cites Opinion 3.01 as evidence

that its revised guideline has eliminated the prior guide-

lines on chiropractic, and removed any negative references

to specific licensed limited practitioners. But as the district

court noted, Opinion 3.01 is entitled “‘Nonscientific Prac-

titioners.’’* Thus, the AMA member still must look under

4 In 1980, the AMA adopted a new set of ‘Principles of Medical

Ethics” that replaced the former “Principles” that had been in

place since 1957. The 1980 ‘Principles’”’ provide in part:

3.00 OPINIONS ON INTERPROFESSIONAL RELATIONS

3.01. NONSCIENTIFIC PRACTITIONERS. It is wrong to

engage in or to aid and abet in treatment which has no scien-

tific basis and is dangerous, is calculated to deceive the patient

by giving him false hope, or which may cause the patient to

delay in seeking proper care until his condition becomes ir-

reversible.

Physicians should also be mindful of state laws which

prohibit a physician from aiding and abetting an unli-

censed person in the practice of medicine, aiding or abet-

ting a person with a limited license in providing services

beyond the scope of his license, or undertaking the joint

medical treatment of patients under the foregoing cir-

cumstances.

(Footnote continued on following page)

—30a—

the heading ‘“‘Nonscientific Practitioners” to discover that

it is now permissible to associate with chiropractors. Any

beneficial effect of Opinion 3.01 likely is lost because it

is buried in a category almost certain to conjure up the

ethical prohibitions of the past.

Yet another factor supporting an injunction is what the

district court termed the boycott’s “lingering effects.” The

court found not only that plaintiffs had been personally

harmed by the boycott, but that they continued to be per-

sonally harmed and threatened by a lack of association

with members of the AMA as a result of the boycott and

its lingering effects. 671 F.Supp. at 1486. The boycott,

while it was in full bloom, “more likely than not affected

4 continued

A physician is otherwise free to accept or decline to

serve anyone who seeks his services, regardless of who

has recommended that the individual see the physician.

3.02 OPTOMETRY. It is not unethical for an ophthalmolo-

gist to employ an optometrist as ancillary personnel to

assist him provided the optometrist is identified to pa-

tients as an optometrist. A physician may send his pa-

tient to a qualified and ethical optometrist for optometric

services. The physician would be ethically remiss, of

course, if before doing so he did not insure that there

was an absence of any medical reason for his patient’s

complaint, and he would be equally remiss if he sent a

patient without having made a medical evaluation of the

patient’s condition.

Physicians may teach in recognized schools of optometry

for the purpose of improving the quality of optometric

education. The scope of this teaching may embrace sub-

jects within the legitimate scope of optometry which are

designed to prepare students to engage in optometry

within the limits prescribed by law.

(Jt. App. 1416.) Compare the treatment of optometrists and chiro-

practors. One has to look in the category of “nonscientific practi-

tioners” to learn that it is ethical to associate with chiropractors.

But there is a separate section devoted to optometrists, about

whom the AMA at one time had some very negative things to

say. 671 F.Supp. at 1487.

—3la—

individual decision-making by AMA members and other

medical physicians in their relationship with chiroprac-

tors;”” and until AMA members learn that the AMA’s pol-

icies in fact have changed, AMA members’ decision-mak-

ing with respect to professional association with chiroprac-

tors will continue to be affected, according to the trial

court. The evidence amply supported this conclusion. It

is based not only on the lengthy and successful boycott,

but on the begrudging nature of the AMA’s more recent

and lawful changes.

The district court also found a continuing injury to

chiropractors’ reputation as a result of the boycott. Be-

cause the AMA has never made any attempt to publicly

repair that damage, the court found that chiropractors will

continue to suffer injury to reputation from the boycott.

671 F.Supp. at 1486-87. The AMA’s publication of its

changes and its settlements were not enough, in the eyes

of the district court, to overcome these harmful effects.

The AMA has not convinced us that the district court was

wrong in this assessment.

The AMA’s strongest challenge comes to the district

court’s findings with respect to the lingering effects on

chiropractors’ incomes. The court found that the injury

to chiropractors’ incomes threatened to continue through

the date of trial. 671 F.Supp. at 1487. For this it relied

on plaintiffs’ expert’s analysis regarding chiropractic in-

come levels through 1986. (Jt. App. 57.) The court found

this continuing harm existed, even though plaintiffs’ ex-

pert’s last data point showed that chiropractors’ income

in 1984 exceeded that of podiatrists and optometrists—

the comparable professions. 671 F.Supp. at 1487. The

court did not, however, “find,” as the AMA contends, that

chiropractors’ incomes had actually increased in 1984;

rather, it only acknowledged the expert’s data in this

regard. /d. Obviously, given its finding regarding 1986 in-

come levels (i.e., that chiropractors’ incomes continued to

suffer), the court was more persuaded by the expert’s in-

come projections into 1986 regarding the lagging of chi-

ropractors’ income, than by the 1984 data. The AMA’s

—32a—

assertion that there is no basis for the district court to

rely on the projection of chiropractors’ income is baseless.

There was testimony that chiropractors’ incomes would

still have suffered in 1986 as a result of the boycott. (Jt.

App. 57.) But even without the lingering effects on chi-

ropractors’ income, there still remain the effects on pro-

fessional association and reputation, which by themselves

may be sufficient to show continuing harm from the boy-

cott.

In sum, even though the distzict court wrongly allocated

the burden of proof in deciding whether injunctive relief

was necessary, its ultimate findings regarding the risk of

a return to the unlawful policies, the effectiveness of the

AMA’s discontinuance or voluntary cessation, and the

character of the past violations, without question satisfy

the proper standard. W.7. Grant, 345 U.S. at 633. None

of the objections the AMA raises on appeal undercuts the

district court’s decision to grant an injunction. That the

AMA feels an injunction is not necessary (or for that mat-

ter, that even we may have felt the same had we consid-

ered the case as an original matter), is not the appropriate

test. That call was for the district court to make. /d.

Because the district court did not abuse its discretion, we

uphold its decision to award injunctive relief.®

5 Based on the language in section 16 that equitable relief is avail-

able “when and under the same conditions and principles as _in-

junctive relief... is granted by courts of equity. . . . the AMA

makes a passing argument, buried in two of its 67 footnotes (two

footnotes, incidentally, that are separated by seven pages of text)

that the district court erred by not requiring the plaintiffs to meet

all the requirements for an injunction that traditional equity juris-

prudence imposes. The AMA does not bother to say what those

traditional equitable requirements are, in the case of a permanent

injunction, except to say that the plaintiffs had to show they had

no adequate remedy at law. Nor does the AMA cite any cases

concerning the propriety of a permanent injunction under § 16.

The Supreme Court has stated § 16 invokes “traditional equi

table principles.” Zenth Radio Corp. v. Hazeltine Research, Inec.,

(Footnote continued on following page)

—33a—

Anticipating this negative (for it) result, the AMA makes

a last-ditch perfunctory argument. It attacks the injunc-

tion, arguing that it is unnecessarily overbroad, purports

to award classwide relief in a case that was never cer-

tified as a class action, and “implicate[s] the AMA’s rights

under the First Amendment.” None of these arguments

are convincing.

True enough, as the AMA observes, an injunction in

a private antitrust suit should award a plaintiff injunc-

tive relief “only to the extent necessary to protect it from

future damage likely to occur if the defendant continues

the unlawful antitrust conduct.” Ohio-Sealey Mattress

Manufacturing Co. v. Sealey, Inc., 669 F.2d 490, 495 (7th

Cir. 1982). But beyond this general principle, the AMA

5 continued

395 U.S. 100, 130 (1969); see also Roland Machinery Co. v. Dresser

Industries, Inc., 749 F.2d 380, 386 (7th Cir. 1984). Scholarly com-

ment nas echoed this theme. E.g., 2 P. Areeda and D. Turner,

Antitrust Law § 312d (1978); Easterbrook and Fischel, Antitrust

Suits by Targets of Tender Offers, 80 Mich. L. Rev. 1155, 1168-69

(1982). Section 16’s language indicates that traditional equity prin-

ciples should apply. But while it is true that the district court

stated that the plaintiffs did not have to meet all the traditional

equitable requirements for an injunction, we are not convinced that

this misstatement affected the court’s analysis. The important point

is that equitable relief is discretionary, and not automatically avail-

able to an injured plaintiff. See Areeda & Turner, supra, § 312d

at 39. The district court did exercise discretion and did not auto-

matically grant the plaintiffs an injunction. The court carefully

weighed the AMA’s conduct, the likelihood it would recur, the

harm it caused and might in the future cause, and we believe.

implicitly in all this, the relative hardships to the parties of grant-

ing an injunction. See 671 F.Supp. at 1484-8x,.

It is true that the district court did not specifically find that

the plaintiffs had no adequate remedy at law. The AMA baldly

asserts that damages would have been adequate, but does not

mention how. At any rate, at this stage in the case, we are not

inclined to reverse the district court’s careful decision based on

an underdeveloped argument that the AMA did not even deem

worthy of including under a separate heading in the text of its

brief.

—34a—

does not make any genuine argument that the injunction

is overbroad. Instead, it simply asserts that the primary

beneficiaries of the district court’s order, insofar as it re-

quires the order to be mailed to every AMA member,

that it be published in the Jowrnal of the American Med-

ical Association, and that the AMA revise a national

ethical publication, are the some 30,000 chiropractors in

the nation as a whole who were not parties to this case.

Doubtless, these other chiropractors may benefit from the

mass mailing and publication required by the district

court’s order. But this does not necessarily make the in-

junction overbroad.

The AMA’s suggestion that the publications and mail-

ings should have been limited to the four communities in

which the individual plaintiffs practiced unnecessarily

limits the relief, and ignores the public interest served

by private antitrust suits. Such suits can effectively open

competition to a market that was previously closed by

illegal restraints. National Society of Professional Engi-

neers, 435 U.S. at 698; see also International Salt Co.

v. United States, 332 U.S. 392, 401 (1947). Relief here is

provided not only to the plaintiff chiropractors, but also

in a sense to all consumers of health care services. En-

suring that medical physicians and hospitals are free to

professionally associate with chiropractors (e.g., by the

publication and mailing of the order to AMA members),

likely will eliminate such anticompetitive effects of the

boycott as interfering with consumers’ free choice in

choosing a product (health care provider) of their liking.

In this way competition is served by the injunction. In

short, the injunction, as designed by Judge Getzendan-

ner, reasonably attempts to eliminate the consequences

of the AMA’s boycott, and we will not disturb it. National

Society of Professional Engineers, 435 U.S. at 698.®

6 For the same reason, we do not view the district court’s in-

junction as improperly awarding classwide relief where no class

was certified. The AMA’s argument in this regard is just a re-

phrasing of its argument that the injunction is overbroad.

—35a—

Finally, we reject the AMA’s hint (“argument” seems

too generous when the AMA’s claim comprises but one

paragraph of a 77-page brief, Max M. v. New Trier High

School District No. 203, 859 F.2d 1297, 1300 (7th Cir.

1988)) that the district court’s order somehow infringes

on the AMA’s First Amendment rights. We think the in-

junction as written is sufficiently tailored to avoid con-

stitutional objection. As the Supreme Court has stated:

[w]hile the resulting order may curtail the exercise

of liberties that the [defendants] might enjoy, that

is a necessary and, in cases such as this, unavoidable

consequence of the violation. .. . The First Amend-

ment does not ‘make it . . . impossible ever to en-

force laws against agreements in restraint of trade

’ Giboney v. Empire Storage and Ice Co., 336

U.S. 490, 502. In fashioning a remedy, the District

Court may, of course, consider the fact that its in-

junction may impinge upon rights that would other-

wise be constitutionally protected, but those protec-

tions do not prevent it from remedying the antitrust

violations.

National Society of Professional Engineers at 697-98. That

the injunction requires the AMA to publicize and mail

copies of the order to AMA members, among other things,

does not render it unconstitutional. The district court’s

form of injunction and method of ensuring its publication

(and thus its efficacy) was a reasonable attempt at elimi-

nating the consequences of the AMA’s lengthy, systematic,

successful, and unlawful boycott.

IV.

Plaintiffs’ Cross-Appeal

Plaintiffs filed a cross-appeal challenging the judgments

for defendants JCAH and ACP. With respect to JCAH,

plaintiffs advance two separate theories of liability. First,

they allege that JCAH unlawfully conspired with the

AMA and participated in the AMA’s boycott of chiroprac-

—36a—

tors. Second, plaintiffs contend that JCAH, as a member-

ship trade association, acted as a conspiracy each time

it promulgated industry standards, and thus violated the

antitrust laws in its own right. As to the latter theory

of liability, plaintiffs assert that they raised it before the

trial court, but that the court never ruled on it. JCAH

does not contest this summarization of the events in the

district court, and we accept it. Plaintiffs’ theory against

ACP also is two-fold. They first contend that ACP also

participated in the AMA’s boycott. Second, they charge

that ACP is a member of the “continuing conspiracy that

is the JCAH.” None of plaintiffs’ arguments are persuasive.

Following the first trial in this case, JCAH and ACP

appealed the denial of their motions for a directed ver-

dict. We affirmed the denial of those motions, explaining

that the evidence was sufficient to permit, but not require,

a jury (or, as it turned out, the trial court) to conclude

that the defendants JCAH and ACP knew that concerted

action in a scheme was contemplated and invited, and that

both acquiesced and participated in that scheme. Wilk J,

719 F.2d at 233. This would have permitted a finding of

liability, we reasoned, citing Theater Enterprises Inc. v.

Paramount Film Distributing Corp., 346 U.S. 537, 540

(1954); Interstate Circuit Inc. v. United States, 306 U.S.

208, 226-27 (1939).

Following Wilk J, the Supreme Court decided two cases,

which the district court in the second trial held clarified

and limited the cases relied upon in Wilk J. These cases

were Monsanto v. Spray-Rite Service Corp., 465 U.S. 752

(1984), and Matsushita Electric Industrial Co. v. Zenith

Radio Corp., 475 U.S. 574 (1986). In Monsanto, the Court

held that, to survive a summary judgment motion, an anti-

trust plaintiff needed evidence tending to “exclude the

possibility” that the alleged conspirators were acting in-

dependently, id. at 764, and that the plaintiff must pre-

sent “direct or circumstantial evidence that reasonably

tends to prove” that the alleged conspirators ‘‘ ‘had a

conscious commitment to a common scheme designed to

—3la—

achieve an unlawful objective.’ ”’ Jd., quoting Edward J.

Sweeney & Sons v. Texaco, Inc., 637 F.2d 105, 111 (3d

Cir. 1980), cert. denied, 451 U.S. 911 (1981). Matsushita

reaffirmed that holding. There, the Court stated ‘‘conduct

that is as consistent with permissible competition as with

illegal conspiracy does not, without more, support an in-

ference of conspiracy.” 475 U.S. at 597 n.21.

Applying Monsanto and Matsushita, the district court

analyzed plaintiffs’ claims to determine whether or not

each defendant’s own conduct showed membership in the

AMA’s conspiracy. 671 F.Supp. at 1489.7 We review each

defendant separately. Again, because the district court

adequately set forth the facts, we only summarize them

here.

A. JCAH

JCAH is a not-for-profit corporation established for the

purpose of setting standards and conducting health care

accreditation programs in conjunction with those standards.

JCAH’s members include the AMA, ACP, the American

College of Surgeons, the American Hospital Association,

and the American Dental Association. It is governed by

a board of commissioners. Twenty-one commissioners are

appointed by the various members, who then appoint one

public commissioner. The AMA is one of JCAH’s two

“dominant members”’ (this characterization being based

solely on the number of commissioners each member is

allotted).

Participation by hospitals in the JCAH’s accreditation

program was voluntary. Nevertheless, accreditation was

7 The district court also held that even if JCAH were acting in-

dependently of the AMA boycott, its members (e.g., the AMA)

were not responsible for the actions of JCAH. 671 F.Supp. at

1491-92. On appeal, plaintiffs tell us that this was unnecessary,

and actually confused their asserted theory that JCAH was an

unlawful conspiracy in its own right. Thus, we do not pass on the

propriety of the district court’s ruling in this regard.

—38a—

important to a hospital and “‘loss of accreditation would

be devastating.” Jd. at 1490. Since before 1958, JCAH

had standards providing that hospital medical staffs were

to be limited to fully licensed physicians (this was liberal-

ized in 1970 to include dentists). Jd.

In 1964, JCAH’s director stated, in a national newslet-

ter, that JCAH viewed chiropractors as cultists, and that

hospitals that encouraged such cultists to use their facil-

ities in any way would “very probably be severely criti-

cized and lose [their] accreditation.’’ Despite the similari-

ty of this statement to later AMA efforts, the district

court found there was no direct evidence that JCAH was

acting in concert with the AMA with regard to this state-

ment or its distribution; thus, it concluded this action was

independent.

In 1970, JCAH completed a revision of its standards

and published an accreditation manual for hospitals. The

manual included ‘Standard X”’ (which was drafted by the

AMA). Standard X provided that the governing board of

each hospital had to assure that medical staff members

practiced in an ethical manner. The accreditation manual

included a source reference to the AMA’s Principles. The

district court found that the uncontradicted testimony was

that JCAH’s board of commissioners never discussed the

subject of chiropractic in connection with the accredita-

tion manual. It further found that no chiropractor nar-

ticipated in the accreditation manual’s revision process

despite the opportunity to participate. Jd. Based on these

findings, the court concluded there was no evidence that

JCAH adopted Standard X in connection with chiroprac-

tors or to further the AMA’s boycott. And while JCAH

letters responding to inquiries from hospitals about the

role of chiropractors throughout the 1970s did indicate

that JCAH would withdraw accreditation of a hospital

that had chiropractors on its medical staff or that granted

privileges to chiropractors, the district court found these

letters were completely consistent with the then-existing

accreditation standards, and were ‘not convincing evi-

—39a—

dence that JCAH had joined the conspiracy against chi-

ropractors.”” Id.

Finally, in 1977, JCAH revised its standards to provide

that medical staff membership was to be limited “‘unless

otherwise provided by law” to fully licensed physicians

and dentists. References to the AMA’s Principles were

deleted. So from 1977 on, JCAH’s position on chiroprac-

tors was that, as limited licensed practitioners, they could

be included on medical staffs, if permitted under local law.

In 1980, JCAH amended the accreditation manual by de-

leting Standard X.

Based on these findings, the district court found that

all JCAH undertook all action from 1964 through 1980 in-

dependently of the AMA boycott. Further support for its

conclusion was the fact that JCAH’s standards were large-

ly consistent with federal law. /d.

Likewise, the district court found that the 1983 revi-

sions of the JCAH standards were independent of the

AMA boycott, and that the 1983 revisions were not evi-

dence that the conspiracy against chiropractors continued

into 1983. Ultimately, JCAH standards were liberalized

regarding admission to medical staffs and allowance of

hospital privileges to limited licensed practitioners, in-

cluding chiropractovs. But the standard also required that

each accredited hospital’s s medical staff have an executive

committee, the majority of which had to be medical and

osteopathic physicians. (This, according to plaintiffs, is

evidence that the conspiracy against chiropractors con-

tinued into 1983.)

In 1983 the AMA participated in the JCAH standards

revision process. That process began in 1982 with recom-

mendations from JCAH staff and the JCAH standard-

survey procedures committee. The early recommendations

were that each hospital be permitted to decide for itself,

under applicable state law, which licensed health care pro-

viders would be allowed hospital privileges and medical

staff membership. After initially supporting this approach,

AMA members and other medical societies which wanted

—40a—

to ensure medical and osteopathic physician control of the

medical staff and patient care in hospitals criticized the

AMA. Feeling the heat of their members’ criticism, the

AMA changed its position and supported revisions which

would ensure such control. In late 1983, JCAH adopted

new standards which included the mandatory, medical

physician-dominated executive committee concept.

According to the district court, the evidence supported

the conclusion that JCAH members were acting to en-

sure that the responsibility for patient care in acute care

hospitals remained in the hands of medical and osteopathic

physicians, and that this was an appropriate goal for

JCAH. Patients in acute care hospitals are generally the

very sick or in need of surgery. They are patients who

require treatment with drugs or surgery—i.e., treatment

by fully licensed physicians (that chiropractors may not

perform). This led the court to conclude that “[tJhe evi-

dence supports no conclusion other than that patient care

in acute care hospitals, and the medical staffs of acute

care hospitals, ought to be under the control of fully

licensed physicians rather than limited licensed practi-

tioners. I am persuaded that the JCAH members were

not acting to prevent chiropractors from being admitted

to hospitals or obtaining hospital privileges.”’ 671 F.Supp.

at 1493.8

Because the court found that JCAH’s acts before the

1983 revisions were independent of the AMA boycott, and

that the 1983 revisions were not evidence that the con-

spiracy against chiropractors continued into 1983, it con-

cluded that plaintiffs failed to prove that JCAH was a

member of the conspiracy. Jd. at 1494.

8 The court went on to observe that under current JCAH stan-

dards, hospitals could grant chiropractors medical staff member-

ship, clinical privileges, admission privileges, and access to diag-

nostic services without fearing loss of JCAH accreditation. Author-

ity for making individual medical staff appointments now rests with

the individual hospital’s governing board.

—4la—

1. JCAH as Conspiracy

Plaintiffs’ first theory on appeal is that JCAH, as a

trade association, “acts as a conspiracy or combination

every time it promulgates industry standards [which un-

reasonably restrain competition].”’ But a trade association

is not, just because it involves collective action by com-

petitors, a “walking conspiracy.” Consolidated Metal Prod-

ucts, Inc., 846 F.2d at 293-94. There is no evidence that

JCAH’s accreditation program “is merely a ploy to ob-

scure a conspiracy” against chiropractors. Jd. at 294. And

plaintiffs’ arguments for a separate antitrust violation with

respect to JCAH standing alone are unpersuasive.

The most serious problem with plaintiffs’ theory is that

they did not prove any actual or threatened antitrust in-

jury directly traceable to the alleged antitrust violation

which would be redressed by the issuance of an injunc-

tion against JCAH. See Cargill, Inc. v. Monfort of Col-

orado Inc., 479 U.S. at 122. Thus, even if this particular

claim was not expressly addressed by the district court,

plaintiffs’ claim still must fail. In support of their conten-

tion that they suffered actual injury, plaintiffs offer

“evidence” of examples of when each plaintiff was denied

privileges or medical staff membership at certain hospitals.

But after thoroughly reviewing the record, we conclude

these examples do not show any connection to JCAH or

its Standard X. (Jt. App. 13-14; 15-17; 89-100; 181; 182-87;

190-91; 380-81; 420; 672-81; 773-74; 851; and 934-35.) Be-

cause we find no antitrust injury occurred as a result of

the 1970 Standard X, we necessarily conclude that there

was no continuing JCAH boycott as a result of the revi-

sions in 1983.9

% Plaintiffs claim, for the first time in their reply brief, that the

1983 standards themselves violate the antitrust laws. The district

court, however, stated that plaintiffs were not claiming that the

1983 JCAH standards violated the antitrust laws. 671 F.Supp. at

1492. Whether they did or did not raise the issue in the district

court, there is no question that the plaintiffs’ initial appellate brief

(Footnote continued on following page)

—42a—

2. JCAH as Member of the AMA Boycott

Plaintiffs’ second theory of antitrust liability against

JCAH contends that JCAH was a member of the AMA’s

boycott. In this regard, plaintiffs contend that JCAH knew

the AMA boycott was contemplated and that it acquiesced

and participated in that scheme. As stated above, the

Monsanto and Matsushita cases hold that to establish

liability under this theory, there must be evidence that

at least tends to exclude the possibility that the alleged

conspirators were acting independently, rather than pur-

suant to “ ‘conscious commitment to a common scheme de-

signed to achieve an unlawful objective’,’”’ Monsanto, 465

U.S. at 764, quoting Edward J. Sweeney & Sons, 637 F.2d

at 111. Plaintiffs, however, argue that Monsanto and Mat-

sushita are inapplicable to this case because here we are

dealing with a horizontal combination, and because there

is “direct evidence”’ of a conspiracy in this case. We agree

with the district court, however, that this case should be

governed under the standards set forth in Monsanto and

Matsushita. We have stated before, “(t]he actual label

placed on the conspiracy is a ‘pedantic distinction,’ as the

Monsanto standard applies regardless of which label is at-

tached.” Valley IJ, 822 F.2d at 660 n. 5. And plaintiffs

point to no “direct evidence” of the conspiracy.

At best, plaintiffs make only a perfunctory argument

that JCAH knowingly adhered to and participated in the

AMA’s unlawful boycott. Nowhere do they attempt to

show just how the district court made erroneous findings

of fact. Rather, they point to the fact that JCAH adopted

9 continued

did not raise this issue. Rather, plaintiffs argued that “The JCAH

1983 Revisions Continue[d] The Boycott.”’ In this regard they

stated, ‘only one conclusion is possible: the JCAH M.D. domina-

tion standard perpetuates the boycott” (emphasis added). We think

it plain that plaintiffs made their claim that the 1983 revisions

themselves were unlawful for the first time on reply. We thus will

not address the argument. See Gold v. Wolpert, 876 F.2d 1327,

1331 n. 6 (7th Cir. 1989).

————————————————————

—43a—

Standard X (after being manipulated by the AMA in do-

ing so) to establish JCAH’s participation in the boycott.

But the district court found that JCAH’s board of com-

missioners never discussed the subject of chiropractic, and

that the subject was never raised in connection with the

1970 revisions of the accreditation manual. It also found

that no chiropractor participated in the revision process

despite having an “extensive opportunity” to do so. Thus,

the court held ‘“{t]here was no evidence that JCAH

adopted Standard X in connection with chiropractors or

in furtherance of the AMA boycott.” 671 F.Supp. at 1490.

Plaintiffs’ urgings to the contrary are nothing but a bald

invitation to substitute our judgment for the district

court’s. Consistent with our prior treatment of this issue

in Wilk I, 719 F.2d at 233, the evidence may have been

sufficient to find that JCAH participated in the conspiracy,

but it did not require such a finding. The district court

was entirely within its right to find no conspiracy between

JCAH and the AMA.

As evidence of JCAH’s participation in the conspiracy,

plaintiffs also point to the district court’s finding that

JCAH cooperated with the AMA in connection with the

distribution of an article titled ““The Right and Duty of

Hospitals to Exclude Chiropractors from Hospitals.’’ Ap-

parently, they believe this carries the day in establishing

JCAH’s participation in the boycott. We disagree. As the

district court found, the JCAH’s use of the cited article

was in connection with inquiries from hospitals about the

role of chiropractors in hospitals. 671 F.Supp. at 1490. The

court also found that the JCAH letters were ‘‘complete-

ly consistent with the then-existing accreditation stan-

dards.” Id. We thus agree with the district court that

this was “not convincing evidence” that JCAH partici-

pated or joined in the AMA’s conspiracy against chiroprac-

tors. Id. Cf. Monsanto, 465 U.S. at 762 (communication

about prices and marketing strategy does not alone show

—44a—

that distributors are not making independent pricing de-

cisions).!°

B. ACP

The analysis and outcome would be much the same for

ACP as for JCAH, at least so far as its alleged participa-

tion in the AMA’s boycott is concerned. ACP’s alleged

membership or participation in the AMA’s unlawful boy-

cott, for example, is also judged under the Matsushita

and Monsanto standards. Here, though, we must digress

briefly to address a problem with plaintiffs’ argument.

Their claims in this respect seem at best to be confused.

In their ovening brief, they refer to the ACP’s participa-

tion in ‘“‘the boycott,” and argue that the district court’s

finding that the ACP did not participate in any boycott

of chiropractors is clearly erroneous. The district court’s

findings in this regard concern whether or not ACP was

a member of or participated in the AMA’s conspiracy. 671

F.Supp. at 1471, 1489, 1494-96. It is obvious from the

district court’s opinion, and from plaintiffs’ opening brief,

that “the boycott” referred to is the AMA’s unlawful boy-

cott. But in their reply brief, plaintiffs say it is “‘irrele-

vant” whether or not ACP conspired with the AMA. In

other words, they are arguing that the district court’s

10 Plaintiffs make one additional claim. This case, they tell us,

fits neatly within the framework of American Society of Mechani-

cal Engineers, Inc. v. Hydrolevel Corp., 456 U.S. 556 (1982). They

assert that because the trial court found the AMA manipulated

the JCAH and caused it to adopt Standard X (as well as circu-

lating the AMA’s “Right and Duty of Hospitals to Exclude Chiro-

practors’”’), that JCAH was liable because it ailowed itself to be

manipulated and used as a mechanism through which the AMA

enforced its anti-competitive scheme. Plaintiffs cite Hydrolevel in

the portion of their argument dealing with JCAH’s alleged know-

ing adherence and participation in the AMA’s boycott. But Hydro-

level does not address the conscious parallelism issue. Hydrolevel

speaks of an association’s liability in its own right, not as a mem-

ber of another’s unlawful conspiracy. We thus believe Hydrolevel

is inapplicable to this case.

—45a—

finding that ACP was not a member of the AMA’s boy-

cott, 671 F.Supp. at 1494-96, is not at issue on this ap-

peal. We will take them at their word; that issue is now

foreclosed against them.

Apparently, then, plaintiffs are claiming, as they did

with JCAH, that the ACP as a membership association

engaged in concerted activity through various acts. That

is, the ACP is liable under § 1 of the Sherman Act in

its own right. Plaintiffs also present a second theory of

liability: that the ACP, as a member of the JCAH, is

liable for the unlawful acts of that organization because

it knowingly participated in and ratified those acts.

1. ACP as a Conspiracy

There is no evidence that ACP itself engaged in an

unlawful boycott of chiropractors. Plaintiffs point to the

ACP’s bylaws which provided that the purpose of the

ACP included “preserving the history and perpetuating

the best tradition of medicine and medical ethics.’’ Be-

cause of the fact that many of the ACP’s members were

also AMA members, plaintiffs argue that this veiled

reference to ethics somehow furthered an ACP boycott.

But the ACP never adopted the AMA’s Principles (in-

cluding former Principle 3), and never required its mem-

bers to subscribe to those principles. 671 F.Supp. at 1494.

Also, the ACP never had a code of ethics. In 1984 it

published the American College of Physicians Ethics Man-

ual. But this was not a code or set of regulations. Rather,

it was an effort to address major contemporary issues con-

fronting all physicians and merely attempted to stimulate

debate on medical ethics. The manual stated nothing about

chiropractic or about what remedies are or are not “scien-

tific.’’ Indeed, as the district court found, the manual ap-

pears to leave the individual physician free to make his

own judgment as to the kinds of treatment he should par-

ticipate in and in his relations with other licensed health

practitioners. 671 F.Supp. at 1494.

—46a—

The plaintiffs rely on two additional documents to estab-

lish an ACP boycott. The first grew out of a September

1978 meeting of the ACP’s board of governors. (The board

of governors was not the ACP’s policymaking body.) The

Board at that meeting accepted a report by an ad hoc

committee appointed to suggest what might be done to

promote the ACP’s policy toward chiropractic. According

the district court, the minutes of that meeting reflect

that:

The committee agreed unanimously that ACP should

be concerned about and oppose any action which

would include chiropractic among the scientifically-

based modes of medical care and which would give

chiropractors direct access to the diagnostic facilities

of hospitals.

671 F.Supp. at 1495. Plaintiffs also point to a resolution

adopted by the board of governors which provided, among

other things:

(2) the governors should remain alert to efforts of

chiropractors to gain access to radiographic and clin-

ical laboratory diagnostic facilities in their regions and

keep ACP headquarters informed of such develop-

ments;

*x* * *

(8) the governors should alert colleagues in other

disciplines to the efforts of chiropractors to gain ac-

cess to radiographic and clinical pathology diagnostic

facilities; and

(9) the governors and the college members in their

regions should discuss these matters with their coun-

ty and state medical societies and with their repre-

sentatives to the house of delegates of the AMA.

671 F.Supp. at 1495-96.

Although the district court found that many parts of

the resolution related to matters protected under the

Noerr-Pennington doctrine, not everything included was

—47a—

protected. (This is not at issue on appeal.) What is im-

portant is that the district court found that the resolu-

tion contained no call for the participation of ACP or its

members in the AMA’s boycott against chiropractors, ‘‘or

[in the] ACP’s own boycott.” 671 F.Supp. at 1496. Con-

tinuing, the court explained “{mJjoreover, the resolution

was never implemented . . . and there is no evidence that

ACP members were called upon to cooperate in effectu-

ating ACP’s ‘policy’ on chiropractic.” Jd. Plaintiffs do not

show how the district court’s findings are clearly er-

roneous; rather, they just interpret the document dif-

ferently. It is well established by now, however, that we

do not substitute our view of the facts for the district

court’s on appeal. After reviewing the evidence, we are

not left with the “definite and firm conviction” that the

district court made a mistake in interpreting this evidence.

Anderson v. City of Bessemer City, 470 U.S. 564, 574

(1985).

Plaintiffs also point to a joint document in which the

ACP participated, titled “Status Report on Chiropractic

Lawsuits” to establish an ACP conspiracy. The report was

distributed to ACP members. It does contain an admis-

sion that Principle 3 forbade association with chiroprac-

tors. But, as the district court explained, this admission

was irrelevant as to ACP which had not adopted the

AMA’s Principles, and which did not have a medical ethic

similar to Principle 3. We agree. Again, plaintiffs just offer

their different interpretation of the document, which has

never been enough to carry the day when reviewing a

district court’s factual determinations. We see no error."!

11 Plaintiffs also argue that the district court erroneously ‘“‘ex-

cluded evidence [which] proves ACP’s knowing intent to exclude

chiropractors.” (Plaintiff's reply br. at 23.) What plaintiffs are get-

ting at is that certain evidence was held by the district court to

be protected under the Noerr-Pennington doctrine. The first in-

volved a letter written to a governmental agency (the National

Institute of Neurological Diseases and Strokes (NINDS)) in con-

(Footnote continued on following page)

—48a—

2. ACP Participation in JCAH’s Conspiracy

Finally, plaintiffs contend that ACP is a member of “the

continuing conspiracy that is the JCAH.” But since we

have held JCAH did not violate the antitrust laws, ACP

could not be liable for participating in JCAH’s acts. Thus,

plaintiffs’ theory that ACP is liable for participating in

JCAH’s conspiracy fails.

V.

Conclusion

We affirm the district court’s finding that the AMA vio-

lated § 1 of the Sherman Act by conducting an illegal

boycott of chiropractors, and the district court’s decision

to grant an injunction against the AMA. In finding liabil-

ity, the court did not improperly rely on evidence of con-

duct protected by the Noerr-Pennington doctrine. The

district court’s factual findings supported its finding that

the AMA’s boycott was illegal under the rule of reason,

and those findings were not clearly erroneous. The district

11 continued

nection with a government project (the study of chiropractic).

Plaintiffs claim this was not protected under the Noerr-Pennington

doctrine because blind copies were sent to the AMA’s Committee

on Quackery and other medical societies. They ignore the fact,

however, that the district court made an alternative holding with

respect to this letter. It stated that even if the letter was not

protected, it was obvious that it expressed only the author’s own

opinion as to what action the ACP’s board of regents (its policy-

making body) might take in the future, and that it was not the

act of the ACP endorsing ithe AMA chiropractic policy statement.

The court also found there was no evidence that ACP had know!-

edge of the activities of the Committee on Quackery. Thus, we

do not need to address whether or not this document was pro-

tected under the Noerr-Pennington doctrine, as the alternative

ground is both sound and unchallenged.

Plaintiffs make two perfunctory and undeveloped contentions

with regard to “exclusion” of “boycott activity.”” But neither of

these amounts to an “argument” under Fed.R.App.P. 28(aX4).

Thus, we will consider neither.

—49a—

court also did not clearly err in finding that the AMA

did not meet its burden of proving its patient care de-

fense, and in finding that the AMA’s boycott caused the

plaintiffs past injury and the threat of future injury. The

court did not abuse its discretion in imposing an injunc-

tion on the AMA. The court’s factual findings supported

its exercise of equitable discretion, and the injunction was

not overbroad.

We also affirm the district court’s findings that JCAH

and ACP did not participate in the AMA’s boycott, or

in any other way violate § 1 in their activities concern-

ing chiropractors. The plaintiffs’ theory that JCAH itself

conspired by setting standards fails because the plaintiffs

failed to prove that the JCAH’s actions caused them any

actual or threatened injury. The court’s finding that JCAH

did not participate in the AMA’s conspiracy was not clear-

ly erroneous. The plaintiffs have waived any contention

that ACP participated in the AMA’s conspiracy by claim-

ing that any such participation was “irrelevant.’’ The

district court did not clearly err by finding that ACP did

not conduct its own conspiracy, and since JCAH did not

violate § 1, ACP could not be liable for participating in

JCAH’s actions.

The district court’s decision is

AFFIRMED.

A true Copy:

Teste:

RUD b onabe sien osname Sr aiannaneeesmnteanene

Clerk of the United States Court of

Appeals for the Seventh Circuit

—50a—

JUDGMENT — ORAL ARGUMENT

UNITED STATES COURT OF APPEALS

For the Seventh Circuit

Chicago, Illinois 60604

February 7, 1990.

Before

Hon. HARLINGTON Woop, JR., Circuit Judge

Hon. KENNETH F. RIPPLE, Circuit Judge

Hon. DANIEL A. MANION, Circuit Judge

Nos. 87-2672 & 87-2777

Dr. CHESTER A. WILK, D.C.,

Dr. JAMES W. BrRYDEN, D.C.,

Dr. PATRICIA B. ARTHUR, D.C., and

Dr. MICHAEL D. PepiGco, D.C., as

peat: Piaintiffs-Appellees,

Cross-Appellants,

v.

AMERICAN MEDICAL ASSOCIATION,

Defendant-Appellant,

Cross-Appellee.

—5la—

Dr. CHESTER A. WILK, D.C.,

Dr. JAMES W. BRYDEN, D.C.,

Dr. Patricia B. ARTHUR, D.C., and

Dr. MICHAEL D. PEpIGo, D.C.,

Plaintiffs-Cross-Appellants,

Vv.

AMERICAN MEDICAL ASSOCIATION,

JOINT COMMISSION ON ACCREDITATION

OF HOSPITALS, AMERICAN COLLEGE

OF PHYSICIANS and AMERICAN ACADEMY

OF ORTHOPAEDIC SURGEONS,

Defendants-Cross-Appellees.

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 76 C 3777 — Susan Getzendanner, Judge

This cause was heard on the record from the United

States District Court for the Northern District of Illinois,

Eastern Division, and was argued by counsel.

On consideration whereof, IT IS ORDERED AND AD-

JUDGED by this Court that the judgment of the said Dis-

trict Court in this cause appealed from be, and the same

is hereby, AFFIRMED, with costs in accordance with the

opinion of this Court filed this date.

—52a—

Chester A. WILK, D.C., et al.,

Plainti’s,

Vv.

AMERICAN MEDICAL ASSOCIATION,

et al., Defendants.

Civ. A. No. 76 C 3777.

United States District Court,

N.D. Illinois, E.D.

Sept. 25, 1987.

* * KC * *

MEMORANDUM OPINION

AND ORDER

GETZENDANNER, District Judge:

This antitrust case is on remand for a new trial from

the Court of Appeals, Wilk v. AMA, 719 F.2d 207 (7th

Cir. 1983) (‘Wilk’). On May 4, 1987 the case was reas-

signed to me under Local Rule 2.30e for the purpose of

conducting the trial. The trial was conducted during May

and June of 1987. The record consists of 3,624 pages of

transcript, approximately 1,265 exhibits, and excerpts from

73 depositions.

On August 27, 1987, the Court issued a memorandum

opinion containing written findings of fact and conclusions

of law under Rule 52 of the Fed.R.Civ.P. Thereafter, two

of the defendants, the American College of Surgeons and

the American College of. Radiology settled the case with

the plaintiffs and I granted motions to amend the memo-

randum opinion of August 27th. In the present opinion

I have made those changes, plus additional editorial

changes, and have included citations to the record sup-

plied, at my request, by plaintiff's counsel but checked

by me.

—53a—

I. The First Trial and the Wilk Decision

The plaintiffs, Chester A. Wilk, James W. Bryden, Fatricia

B. Arthur, and Michael D. Pedigo, are licensed chiroprac-

tors. In a complaint filed in 1976, plaintiffs charged the

defendants with violating Sections 1 and 2 of the Sherman

Act, 15 U.S.C. Sections 1 and 2. Section 1 of the Sherman

Act declares illegal every contract, combination or con-

spiracy in restraint of trade or commerce. Section 2 pre-

scribes penalties for every person who shall monopolize,

or attempt to monopolize, or combine or conspire with

any other person or persons, to monopolize any part of

the trade or commerce. The original defendants were the

American Medical Association (“‘AMA’’), the American Hos-

pital Association (““AHA”’), the American College of Sur-

geons (‘‘ACS”’), the Joint Commission on Accreditation of

Hospitals (““JCAH”’’), the American College of Physicians

(“ACP”), the American College of Radiology (“ACR”’), the

American Academy of Orthopaedic Surgeons (““AAOS’’),

American Osteopathic Association (“AOS’’), American Acad-

emy of Physical Medicine and Rehabilitation (““AAPMR’”’),

Illinois State Medical Society (“ISMS”’), Chicago Medical

Society (“CMS”), The Medical Society of Cook County

(““MSCC’”’), H. Doyl Taylor, Dr. Joseph A. Sabatier, Jr.,

M.D., Dr. H. Thomas Ballantine, M.D., and James H.

Sammons, M.D.! A number of the original defendants

settled the case and have been dismissed, and all of the

original individual defendants except Dr. Sammons ob-

tained summary judgment prior to the retrial of this case.

Thus, the defendants which remain in the case are the

AMA, JCAH and AAOS.

1 A full description of the defendants is set forth in Wilk and

will not be repeated here.

—54a—

At the first trial, the plaintiffs’ principal claim was that

the defendants engaged in a conspiracy to eliminate the

chiropractic profession by refusing to deal with the plain-

tiffs and other chiropractors. Plaintiffs claimed that the

boycott was accomplished through the use of Principle 3

of the AMA’s Principles of Medical Ethics (““AMA’s Prin-

ciples”) which prohibited medical physicians from associat-

ing professionally with unscientific practitioners. Princi-

ple 3 provided as follows:

A physician should practice a method of healing

founded on a scientific basis; and he should not volun-

tarily professionally associate with anyone who vio-

lates this principle.

It was the plaintiffs’ contention that the AMA used Prin-

ciple 3 to achieve a boycott of chiropractors by first call-

ing chiropractors “unscientific practitioners,” and then ad-

vising AMA members and other medical societies that it

was unethical for medical physicians to associate with

chiropractors. The other defendants, plaintiffs claimed,

joined the boycott and the result was a conspiracy in re-

straint of trade in violation of Section 1 of the Sherman

Act. The jury returned a verdict for the defendants and

against the plaintiffs. That judgment was reversed on ap-

peal and the case was remanded.

The Wilk Court clarified the principal legal issues in the

case. The Court held that the legality of the defendants’

conduct under Section 1 must be adjudged under the rule

of reason articulated in Chicago Board of Trade v. United

States, 246 U.S. 231, 238, 38 S.Ct. 242, 244, 62 L.Ed.

683 (1918). The Court rejected the plaintiffs’ argument

that the defendants’ conduct was a per se violation of Sec-

tion 1, holding that “ta canon of medical ethics purport-

ing, surely not frivolously, to address the importance of

scientific method gives rise to questions of sufficient

—55a—

delicacy and novelty at least to escape per se treatment.”

719 F.2d at 222. Under the rule of reason, the inquiry

mandated is whether the challenged agreement is one that

promotes competition or one that suppresses competition.

National Society of Professional Engineers v. United

States, 435 U.S. 679, 691, 98 S.Ct. 1355, 1365, 55 L.Ed.2d

637 (1978).

The Court also considered whether proof of coercive en-

forcement of Principle 3 or of the purported agreement

among the defendants was necessary to satisfy the Section

1 agreement criterion. Relying on Goldfarb v. Virginia

State Bar, 421 U.S. 773 at 791, n. 21, 95 S.Ct. 2004, 2015

n. 21, 44 L.Ed.2d 572 (1975), the Court noted that even

without a threat of professional discipline, the mere exist-

ence of ethical opinions of professional associations consti-

tutes substantial reason to adhere to the standards be-

cause professionals would comply in order to assure that

they did not discredit themselves by departing from pro-

fessional norms. Thus, the Wilk Court held:

... even without coercive enforcement, a court may

find that members of an association promulgating

guidelines sanctioning conduct in violation of Sec. 1

participated in an agreement to engage in an illegal

refusal to deal.

719 F.2d at 230.

Next, the Court held that if the plaintiffs met their

burden of showing that the effect of Principle 3 and the

implementing conduct had been to restrict competition

rather than to promote it, the defendants could then come

forward to show:

(1) that they genuinely entertained a concern for

what they perceive as scientific method in the care

of each person with whom they have entered into a

—5ba—

doctor-patient relationship; (2) that this concern is ob-

jectively reasonable; (3) that this concern has been

the dominant motivating factor in defendants’ promul-

gation of Principle 3 and in the conduct intended to

implement it; and (4) that this concern for scientific

method in patient care could not have been adequate-

ly satisfied in a manner less restrictive of competi-

tion.

719 F.2d at 227. This was called the “patient care de-

fense.” Finally, with respect to the plaintiffs’ Section 2

claim, the Court of Appeals noted that it was not sepa-

rately argued on appeal, and the Court declined to sepa-

rately discuss it.

Shortly before the scheduled trial before this court, the

plaintiffs waived their claim for damages and sought only

injunctive relief. This turned the case from a jury toa

bench trial, and it shifted the focus of the case from the

past to the present in order to determine whether the

plaintiffs were entitled to injunctive relief under Section

16 of the Clayton Act.

II. Summary of This Court’s Rulings

In view of the length of this opinion, I shall summarize

my principal findings. The AMA and its officials, including

Dr. Sammons, instituted a boycott of chiropractors in the

mid-1960s by informing AMA members that chiropractors

were unscientific practitioners and that it was unethical

for a medical physician to associate with chiropractors.

The purpose of the boycott was to contain and eliminate

the chiropractic profession. This conduct constituted a con-

spiracy among the AMA and its members and an unrea-

sonable restraint of trade in violation of Section 1 of the

Sherman Act.

ee |

—57a—

The AMA sought to spread the boycott to other medi-

cal societies. Other groups agreed to participate in the

boycott by agreeing to induce their members to forego

any form of professional, research, or educational associ-

ation with chiropractors. The defendants which knowingly

Joined in the conspiracy were ACR (which has now been

dismissed from the case) and AAOS. None of the defen-

dants established the patient care defense. The plaintiffs

are entitled to injunctive relief against the AMA, but not

against AAOS or Dr. Sammons. The actions of the other

defendants, JCAH and ACP, were taken independently

of the AMA boycott and these defendants did not join

the conspiracy. Accordingly, defendants JCAH, ACP,

AAOS and Dr. Sammons are dismissed.

The plaintiffs’ Section 2 claim was limited to the defen-

dants’ alleged conspiracy to monopolize the hospital health

care market through restrictive hospital accreditation stan-

dards promulgated by JCAH. In view of the court’s find-

ing that JCAH did not join the conspiracy, the Section

2 claim is dismissed.

III. New Zealand Report

During trial I reserved ruling on an important eviden-

tiary ruling, the admissibility of a report summarizing the

findings of a task force appointed by the New Zealand

government to study chiropractic in that nation, “Chiro-

practic in New Zealand: Report of the Commission of In-

quiry” (“the New Zealand Report’). (PX 1829.) The New

Zealand Report was heavily relied upon by the plaintiffs

to show that chiropractic was a valid health care profes-

sion. The defendants opposed introduction of the report,

and the parties have now briefed the issue.

—58a—

The Report was published in 1979 after nearly two

years of investigation including 78 days of public hear-

ings, 15 days of closed sessions, and visits to medical and

chiropractic establishments both in New Zealand and

other English-speaking countrics. The plaintiffs assert that

these acts entitle the Report to admission as evidence

both for the truth of the matters asserted and for the

purpose of showing the information available on chiroprac-

tic as of 1979. With one narrow exception, I disagree.

Rule 803{8) of the Federal Rules of Evidence, which is

an exception to the hearsay rule embodied in Rule 802,

makes admissible:

Records, reports, statements, or data compilations,

in any form, of public offices or agencies, setting forth

... in civil actions ... factual findings resulting from

an investigation made pursuant to authority granted

by law, unless the sources of information or other

circumstances indicate lack of trustworthiness.

The burden of proving untrustworthiness lies with those

opposing admission. As explained in the advisory commit-

tee notes, “the rule ... assumes admissibility in the first

instance but with ample provision for escape if sufficient

negative factors are present.” Among these factors are

the untimeliness of the inquiry, the lack of special skill

or experience on the part cf the investigating officials,

procedural defects in the conduct of the investigation (such

as failure to hold hearings), and/or the bias or motivation

problems of the investigators. Other factors, both positive

and negative, may, of course, also be considered.

With these considerations in mind, the defendants assert

that the New Zealand Report is fundamentally untrust-

worthy primarily because its conclusions are based upon

otherwise inadmissible, unreliable evidence collected and

evaluated by persons with no particular skill or back-

—59a—

ground to make assessments respecting the safety or ef-

ficacy of health care practices. Defendants particularly ob-

ject to the New Zealand Commission’s acceptance, at

“face value,” of the testimonial accounts of patients’ ex-

perience with chiropractors. The Commission found that

such “evidence is not decisive, but it is compelling.”

Defendants’ view of the scientifically questionable basis

of the New Zealand Report’s conclusions is supported by

a review of the Report prepared by the United States

Congress’ Office of Technology Assessment (“the OTA re-

view’’). (Exhibit A to Memorandum of Defendant ACR

in Opposition to Admission of New Zealand Report.) That

review questions the applicability of the New Zealand

findings to the United States and finds “serious problems’”’

in the Report’s treatment of safety and efficacy issues.

Although the plaintiffs have suggested that the OTA

review may be biased because it was prepared by a doc-

tor of medicine, the court disregards these conclusory al-

legations. The OTA review itself is balanced and well-rea-

soned in its assessment of the New Zealand Report. Its

primary criticism of the Report is not that its conclusions

are wrong, but that they are not based upon well-de-

signed, controlled clinical trials. Regarding the efficacy of

chiropractic, the New Zealand Commission considered only

five randomized trials. Of these, only two involved chiro-

practic services—each of which contained significant de-

sign flaws. The OTA review concluded: “There is a strong

hint that spinal manipulation has efficacy in the immedi-

ate relief of back pain and other kinds of pain that goes

beyond placebo effect. However, this can only be consid-

ered suggestive without further research.” (/d. at 6.) With

respect to the question of chiropractic safety, the OTA

review—after disparaging as “not evidence” anecdotal ac-

counts in the medical literature purporting to show chiro-

—60a-—

practic is unsafe—stated it was unable to find any well-de-

signed study. It concluded, consistent with this finding,

that the New Zealand Report’s review of the safety issue

was “unsatisfactory.”’ (/d. at 6.)

In light of this thorough and well-considered appraisal

of the New Zealand Report, with which I agree, I do not

find the Report’s conclusions trustworthy. The request for

admission for the purposes of showing the truth of the

matter asserted is therefore denied.

The plaintiffs urge, alternatively, that the New Zealand

Report should be admitted to show first notice to the de-

fendants that chiropractic was not quackery, and second

that any belief that chiropractic was quackery could not

be objectively reasonable. To the extent that the Report

is offered solely to show information available on chiro-

practic in the latter half of 1979, the request to admit

is unobjectionable. It is not, however, especially probative.

The Report was not written until three years after the

commencement of this lawsuit; its only possible relevance

is with respect to plaintiffs’ continuing violation point. The

Report therefore may come in to show that the defen-

dants may have suspected that their public position on

chiropractic was untenable. It may not come in to show

that that public stand was objectively unreasonable. To

hold otherwise would negate my ruling on admissibility

for the truth of the matter asserted. As the defendants

correctly note, there is no basis upon which to infer that

the defendants’ belief was not reasonable absent reliance

on the truth of the Report itself. I hold, accordingly, that

the New Zealand Report may be admitted, but only for

the limited purpose stated.

—tla—

IV. Liability of the Defendants

A. American Medical Association (“AMA”)

and Dr. Sa mmons

1. Boycott Activities

In the early 1960s the AMA became concerned that

medical physicians were cooperating with chiropractors,

(PX 550A.) In 1963, the AMA hired as its general coun-

sel the author of the Iowa Medical Society’s plan to con-

In 1964, the Committee’s primary goal was to contain

and eliminate chiropractic, (PX 464, 727; Stevens Tr. 2104,

2117, 2122, 2162, 2170, 2185.) Throughout the 1960s and

early 1970s, H. Doy! Taylor, the chairman of the Depart-

tion of chiropractic as a recognized health care service,

(PX 464, 466, 188.) I found his video deposition denials,

and his explanation that at all times he and the Com-

mittee only meant to eliminate chiropractic as a health

hazard, incredible and unworthy of belief. Mr. Taylor be-

lieved that chiropractic was based on a “single cause—

single cure”’ theory of disease and that given this base-

less foundation, the entire profession should be Swept

away.

The Committee worked aggressively to achieve its goals

in several areas. It conducted nationwide conferences on

chiropractic (PX 565, 742, 1177): prepared and distributed

—62a—

numerous publications critical of chiropractic (e.g., Holman

Dep.); assisted others in the preparation and distribution

of anti-chiropractic literature (e.g., PX 251, 439); regularly

communicated with medical boards and associations, warn-

ing that professional association between medical physi-

cians and chiropractors was unethical (e.g., PX 466, 498,

550, 550A, 1288, 12C, 7296, 1705); and attempted to dis-

courage colleges, universities, and faculty members from

cooperating with chiropractic schools (e.g., PX 532, 456,

1519, 790; Fineberg Dep.; Tr. 2112-15).?

In 1966, the AMA adopted the anti-chiropractic resolu-

tion. (PX 464.) This resolution, recommended by the AMA

Board of Trustees and adopted by the House of Delegates,

called chiropractic an unscientific cult. (PX 464, 500.) This

label implicitly invoked Principle 3 of the AMA’s Prin-

ciples which made it unethical for a physician to associate

with an unscientific practitioner. (E.g., PX 56, 156A, 499A,

741, 745, 746.) In 1967, the AMA Judicial Council® issued

an opinion under Principle 3 specifically holding that it

was unethical for a physician to associate professionally

with chiropractors. (Tr. 2939.) “Associating professionally”’

2 The Committee worked to influence legislation on the state and

federal levels and engaged in informational activities to inform the

public on the nature of chiropractic. All of this activity is protected

under the Noerr-Pennington doctrine and I have not relied on any

such conduct in reaching any conclusion in this case. The Wilk

Court specifically approved the jury instruction used in the first

trial that stated that defendants’ advocacy activity directed to

legislative and administrative agencies or bodies was protected if

the ‘defendants undertook such efforts to influence governmental

bodies with a sincere purpose to obtain the governmental actions

that they sought.” 719 F.2d at 229.

3° The Judicial Council is now known as the Council on Judicial

and Ethical Affairs, but I shall refer to it in this opinion by its

original name.

—63a—

would include making referrals of patients to chiroprac-

tors, accepting referrals from chiropractors, providing di-

agnostic, laboratory, or radiology services for chiroprac-

tors, teaching chiropractors, or practicing together in any

form. This opinion was published in the 1969 Opinions and

Reports of the Judicial Council of the AMA (“1969 Opin-

ions,’ PX 505) which was widely circulated to members

of the AMA. (Holman Dep.) The opinion on chiropractic

was also sent by the AMA to 56 medical specialty boards

and associations. (PX 550, 550A.)

The AMA and the Committee on Quackery used the

anti-chiropractic policy statement as a tool—what the Com-

mittee called a “‘necessary tool’”—to spread the boycott

to other medical groups. The Committee’s efforts were

successful. (PX 464.) Other groups, including some of the

defendants, specifically adopted or approved the policy

statement on the ethical prohibition against association

with chiropractors. (PX 464, 478B, 1166, 120.) In 1971, the

Committee made a report (PX 464) of its activities to the

AMA Board of Trustees and described the policy state-

ment as follows:

This was the necessary tool with which your Com-

mittee has been able to widen the base of its chiro-

practic campaign. With it, other health-related groups

were asked and did adopt the AMA policy statement

or individually-phrased versions of it. These, in turn

led to even wider acceptance of the AMA position.

* * * * *K *

The hoped-for effect of this widened base of sup-

port was and is to minimize the chiropractic argu-

ment that the campaign is simply one of economics,

dictated and manipulated by the AMA.

The memorandum further stated:

The Committee has not submitted such a report

(earlier] because it believes that to make public some

—6§4a—

of its activities would have been and continues to be

unwise. Thus this report is intended only for the in-

formation of the Board of Trustees.

Principle 3 was widely viewed as proscribing associa-

tion with chiropractors. The three defendants who issued

the Status Report on Chiropractic Lawsuits in 1978 ac-

knowledged in that Report that Principle 3 proscribed as-

sociation with chiropractors. (PX 1069.) Any reasonable

medical physician who read Principle 3 and either the

AMA policy statement or any AMA reference to chiro-

practors as unscientific practitioners, would conclude that

it was unethical for medical physicians to associate with

a chiropractor. (E.g., PX 499A, 1477B.)

In 1973, the AMA drafted Standard X, which incor-

porated the unscientific practitioners ethics bar into the

JCAH hospital accrediting standards. (PX 2266, 72.) The

AMA urged JCAH to adopt Standard X, and JCAH com-

plied. (/d.) Keeping chiropractors out of hospitals was one

of the goals of the boycott. (PX 9D, 9E, 9F, 9G, 12B, 12C,

18.) When chiropractic was included under Medicare in

1973, the AMA became concerned that this would open

the way for chiropractors to be on hospital staffs. (E.g.,

PX 651, 700.) Doyl Taylor caused the Office of General

Counsel of the AMA to publish an-article entitled ‘“The

Right and Duty of Hospitals to Exclude Chiropractors”

in the Journal of the American Medical Association. (PX

464.) This was intended to offer advice to hospital trus-

tees across the country. (PX 716.) It also told every

hospital attorney that JCAH accreditation might be lost

if hospitals dealt with chiropractors. (E.g., PX 12B, 12C.)*

4 The JCAH accreditation standards prior to 1983 did not per-

mit a hospital to allow chiropractors on the medical staff or to

(Footnote continued on following page)

—6d5a—

The Committee on Quackery disbanded in December of

1974. By this time, chiropractic had achieved licensing in

all fifty states, chiropractic services had become reimburs-

able through Medicare, Medicaid, and virtually every pri-

vate health insurance plan, and the chiropractic educa-

tional system had been given official sanction by the

United States Office of Education. Nevertheless, the Com-

mittee pronounced itself a success. (Taylor Vid. Dep.; PX

464.) The AMA believed that chiropractic would have

achieved greater growth if it had not been for the Com-

mittee’s activities. (PX 253.) In May of 1975 the AMA

Department of Investigation was disbanded and Doy! Taylor

left the employ of the AMA. (PX 7292: Taylor Vid. Dep.)

This lawsuit was filed in 1976. In that year, the Judicial

Council suspended distribution of the 1971 Opinions which

contained the anti-chiropractic policy. (Tr. 2939.) Later

that year the AMA Judicial Council adopted Opinion 3.50

and in March of 1977 Opinions 3.60, 3.70, and 3.71 were

adopted. (Tr. 2940; DX 21231.) Under these opinions, a

medical physician could refer a patient to a “limited i-

censed practitioner’ for diagnostic or other health care

services. Although there was no express reference to chi-

ropractors, chiropractors would fall within the definition

of “limited licensed practitioners.”” Next, a medical physi-

cian could choose to accept or decline patients sent to her

or him by a licensed practitioner or by a layman. Final-

ly, a medical physician could engage in any teaching per-

4 continued

obtain hospital privileges, except to the extent allowed by state

law. (E.g., PX 6, 828A, 10A, 11A, 14A, 12C.) The legality of JCAH’s

actions prior to the 1983 revisions to the JCAH standards. and

the responsibility of the member owners for such actions, will be

discussed fully in the section of this opinion dealing with JCAH.

I do not find that the AMA, or any other member of JCAH, is

legally responsible for the pre-1983 accreditation standards.

—66a—

mitted by law for which she or he is qualified. However,

the relaxation of the right to refer patients was not with-

out qualification. Opinion 3.60 specifically required that

a medical physician should not refer a patient unless she

or he is confident that the services provided on referral

will be performed in accordance with accepted scientific

standards. In addition, Opinion 3.01 provided that it is

“wrong to engage in or aid and abet any treatment which

has no scientific basis and is dangerous.”’ Distribution of

the revised opinions began in May of 1977. (Tr. 2941.)

Principle 3 was still in effect.

In July of 1979, the AMA House of Delegates adopted

Report UU. Report UU (Tr. 2941; PX 7248) was the AMA’s

new policy statement on chiropractic. It was a very be-

grudging change of position. Although it is now hailed by

the AMA lawyers and Dr. Alan R. Nelson (Tr. 2028-33),

present Chairman of AMA’s Board of Trustees, as a rec-

ognition by the AMA of the growth and development of

chiropractic as a valid health care service, the Report does

not convey that change of heart. First, Report UU states

that the AMA knows of no scientific evidence to support

spinal manipulation and adjustment as appropriate treat-

ment for such diseases as cancer, diabetes, and infections.

It does not declare support for that which the AMA seem-

ingly now approves—chiropractic manipulation for musculo-

skeletal problems. Next the Report condemns the single

cause of disease theory and states that “chiropractors dis-

agree on the extent to which they accept or reject tradi-

tional chiropractic doctrine.” The Report does not state

that the two major chiropractic associations had rejected

the doctrine in 1969. (PX 245.) But the Report continues:

Describing chiropractic as an “unscientific cult” does

not, however, necessarily mean that everything a chi-

ropractor may do when acting within the scope of

—67a—

his or her license granted by the state is without

therapeutic value, nor does it mean that all chiroprac-

tors should be equated with cultists. It is better to

call attention to the limitations of chiropractic in the

treatment of particular ailments than to label chiro-

practic an “unscientific cult.”

The Report then reaffirms that a physician should at all

times practice a method of healing founded on a scien-

tific basis. This again directly tied into Principle 3 which

prohibited association with unscientific practitioners. Al-

though the Report ends by stating that a medical physi-

cian may refer a patient to a limited licensed practitioner

permitted by law to furnish such services, there is no par-

ticular reference to chiropractors. Report UU was obvi-

ously written by lawyers in an effort to bring the AMA

into compliance with the antitrust laws, and not a bold

change of position designed to reverse the attitudes of

the AMA members formed, at least in part, by the then

eleven-year old boycott.

In December of 1978, the AMA House of Delegates

adopted Resolution 14 which provided that medical physi-

clans “continue to exercise the duty to expose unscien-

tific practices and practitioners while supporting and pro.

tecting the freedom of individuals to choose among’ physi-

clans, other licensed practitioners or religious healers as

part of the American tradition.” (PX 7248.) It is hard to

tell the purpose of this resolution, other than to suggest

a similarity between chiropractors and Elmer Gantry, but

it once again keyed into Principle 3 which condemned

association with unscientific practitioners.

In 1980 the AMA adopted a completely revised version

of the principles of medical ethies. (Tr. 2947-48: DX 21233.)

Principle 3 finally was eliminated. The new principles pro-

vided that a medical physician “shall be free to choose

—68a—

whom to serve, with whom to associate, and the environ-

ment in which to provide medical services.” (PX 7249.)

The revised principles theoretically do allow association

with chiropractors but there is no explicit reference to

chiropractors in the new code.

The revised code received a fair amount of publicity in

the medical and private press in 1980. (DX 21209, 21211-

12, 21221.) The revision was interpreted as changing the

AMA’s position on chiropractic in response to various

pressures, including the legal climate. And yet, two years

later, when Dr. Daniel T. Cloud, who was then finishing

his term as president of the AMA, was asked in a for-

mal interview whether the 1980 ethics code changed the

position of doctors with regard to chiropractors—“‘Was

there a change?—he stated, “No.” (PX 7125.) This fairly

bizarre answer (considering the nature of the publicity the

ethics revision received) today is explained by the AMA’s

lawyers as a technically accurate answer since, they

assert, the change in position was accomplished in 1977

and 1979. Yet today the AMA relies on the revision of

the ethical standards in 1980 as part of its change in posi-

tion on chiropractic. The lawyers’ argument is not per-

suasive. In 1982 the president of the AMA appears to be

announcing that the AMA has not changed its position

on chiropractic.

The AMA settled three chiropractic lawsuits in 1978,

1980 and 1986 by stipulating and agreeing that under its

current opinions of the Judicial Council a medical physi-

cian may, without fear of discipline or sanction by the

AMA, refer a patient to a duty licensed chiropractor when

he believes that referral may benefit the patient. The

AMA confirmed that a physician may teach at a chiroprac-

tic college or seminar and that a physician may choose

to accept or decline patients sent to him by a chiroprac-

—69a—

tor. The only settlement entered into prior to the end of

the boycott was in 1978, and that settlement did not ef.

fectuate a termination of the boycott since Principle 3 was

still in effect.

In 1983 the AMA participated in the revision of the

JCAH accreditation standards for hospitals. The revision

process started in 1982 with recommendations from the

JCAH staff and the JCAH Standard-Survey Procedures

Committee that each hospital, through its governing body,

be permitted to decide for itself, under applicable state

law, which licensed health care providers would be allowed

hospital privileges and membership on the medical staff.

(Tr. 1775.) The AMA initially supported this approach but

it was severely criticized by its members and other medi-

cal societies which wanted to ensure medical and osteo-

pathic physician control of the medical staff and patient

care in hospitals. (E.g., PX 7101-02, 7146, 7161-68, 7192,

7317.) As a result of this criticism, the AMA changed its

position and supported revisions which would ensure such

control. (PX 7102, 7109.) In February of 1983, the AMA

voted to recommend revised standards that would require

the medical staff of each hospital to have an “executive

committee,” the majority of which had to be medical or

osteopathic physicians. (PX 7102.) The executive commit-

tee would make recommendations to the hospital’s govern-

ing body for its approval of credentialing, membership on

the medical staff, hospital privileges delineations, and

structure of the medical staff. Any dispute between the

medical staff and the governing body of the hospital would

have to be resolved jointly by them. (PX 7142-48, 7150-54.)

In late 1983, JCAH adopted the new standards which in-

cluded the mandatory, medical physician dominated execu-

tive committee concept. (Tr. 1771-74.)

—7T0a—

The plaintiffs rely heavily on the 1983 accreditation stan-

dards to show that the conspiracy was ongoing. This issue

is discussed generally in the section of this opinion deal-

ing with JCAH, and, in short, I have rejected the argu-

ment. What is noteworthy with respect to the AMA, how-

ever, is that although it believed that the standards orig-

inally proposed by the JCAH Standards-Survey Proced-

ures Committee were more in tune with the existing anti-

trust “legal climate,” it was unable to sustain its posi-

tion when faced with substantial criticism of its members

and other medical groups. (PX 71538, 7103, 7120, 7133,

7159, 7192.)

Through the date of the trial, the AMA continued to

respond to requests for information on chiropractic which

it received from AMA members and others by sending

out anti-chiropractic literature. (PX 7230, 7245-47, 7219-20,

7224-25, 7287, 7210, 7227, 7234-36, 7238-39.) The old boy-

cott language has been eliminated, but the AMA has not

had anything positive to say about chiropractic. It was

not until midway through the trial of this case that the

AMA announced that chiropractic has improved and that

at least some forms of chiropractic treatment and joint

adjustments are scientific. (Tr. 1214-17, 1222, 1249-56,

1259-60, 1975-76, 2029-30, 2984.) The membership has

never been informed of this position.

The plaintiffs argue that the AMA boycott began in 1966

and continued until 1983 when the JCAH accreditation

standards were revised. The AMA argues that Report

UU and the 1977 opinions constituted a change in the

AMA’s policy on chiropractors and that any conspiracy

ended in 1977 or before. I reject both positions. The dis-

cussion of the 1983 revision of the JCAH standards is con-

tinued in the section of this opinion dealing with JCAH.

—Tla—

Regarding the AHA’s argument, Report UU and the 1977

opinions were clearly inadequate to end the boycott and

probably deliberately so. This is well demonstrated by the

American College of Physicians’ analysis of the 1977 re-

visions of the opinions. (PX 1440.) In a 1978 report to its

members, the ACP stated:

In 1977, as noted above, a revision of the Judicial

Council interpretations of the AMA Principles. of

Medical Ethics appeared. The explicit language of

1966 was absent; there was no reference to chiroprac-

tic per se. In many places, the language used was

unclear and ambiguous.

Paragraph 1, Section 3.50, of the 1977 Judicial Coun-

cil Opinions and Reports does, however, remain

forthright:

‘‘A physician should not use unscientific methods of

treatment, nor should he voluntarily associate pro-

fessionally with anyone who does. It is wrong to

engage in, or to aid and abet in treatment which has

no scientific basis and is dangerous, is calculated to

deceive the patient by giving him false hope, or which

may cause the patient to delay in seeking proper care

until his condition becomes irreversible.”

This interpretation supports the court’s view that the 1977

opinions were ambiguous and that the use of the key

phrase “unscientific methods” continued to signal the ex-

istence of the boycott. I also find that the settlement

agreements in other chiropractic litigation that occurred

prior to 1980 did not end the boycott since Principle 3

was still in effect and the AMA had never publicly stated

that its policy on chiropractic (calling chiropractic “unscien-

tific’) was wrong. I conclude that the AMA and its mem-

bers engaged in a group boycott or conspiracy against chi-

—7T2a—

ropractors from 1966 to 1980, when Principle 3 was finally

eliminated.®

2. Unreasonable Restraint of Trade

The next question is whether the boycott or conspiracy

constituted an unreasonable restraint of trade under Sec-

tion 1 of the Sherman Act. To answer this question, |

have undertaken a rule of reason analysis.

The relevant market was the provision of health care

services to the American public on a nationwide basis, par-

ticularly for the treatment of musculosketal problems. As

noted by the Court of Appeals, some medical physicians

(such as orthopedic surgeons, internists, and general prac-

titioners) are in direct competition with chiropractors in

this market. Medical physicians and chiropractors are in-

terchangeable for the same purposes. (Tr. 423-26, 429-30,

433-34, 1259, 1953, 2108, 7140, 1449.) Consumers seek both

medical physicians and chiropractors for the same com-

plaints, principally back pain and other neuromusculoskele-

tal problems, and both groups render services for the

treatment of those complaints. (Tr. 1104-36; PX 7247, 1055,

1529 at 46, 7208.) Competition between medical physicians

and chiropractors was recognized by Dr. Joseph A. Saba-

tier, amember of the Committee on Quackery and a former

defendant in this case, as early as 1964. At one point, Dr.

Sabatier stated, “it would be well to get across that the

5 Dr. Sammons was a willing participant in the conspiracy. As

an AMA trustee, Dr. Sammons was on the Committee on Quack-

ery Oversight Panel of the Board of Trustees of the AMA and

recommended continued funding of the Committee with knowledge

that its prime mission was to be to contain and eliminate chiro-

practic. (PX 1391.) Dr. Sammons presently is the Executive Vice

President of the AMA.

—7T3a—

doctor of chiropractic is stealing [the young medical physi-

cian’s] money.” (PX 322; see also PX 172 at 8, 241.)

The AMA’s intent is clearly relevant to the rule of rea-

son analysis. The boycott was intended to contain and

eliminate the entire profession of chiropractic. (Taylor Vid.

Dep.; PX 464; Tr. 2104, 2117, 2122, 2162, 2170, 2185.)

Whether or not the elimination of competition per se was

consciously intended, that was the natural result of an in-

tent to destroy a competitor. The AMA’s market power

is also relevant. Members of the AMA constitute a sub-

stantial force in the provision of health care services in

the United States. (Tr. 416.) They constitute a majority

of medical physicians (PX 7325, 7327-28; Tr. 415-16), and

a much greater portion of fees paid to medical physicians

in the United States is paid to AMA members. (Tr. 416.)

Given the substantial market power of AMA members

and the specific intent of the AMA, a substantial adverse

effect on competition is evident.6 Despite the fact that

the number of chiropractic schools, the number of chiro-

practors, and the number of patient visits to chiroprac-

tors grew during the boycott, I accept the Committee on

Quackery’s admissions that the boycott was successful.

(Taylor Vid. Dep.; PX 464.) These admissions were not

mere puffery. The success of the boycott is shown in part

by the adverse reaction of various medical societies to the

AMA’s modification of its anti-chiropractic policy in 1977

and the AMA’s settlement of some chiropractic lawsuits

° The matter is so clear that in 1979 an AMA lawyer agreed that

a medical organization that engages in activities calculated to pro-

fessionally ostracize any member who voluntarily engages in any

kind of a professional relationship with a chiropractor is in re-

straint of trade, and a general boycott against all doctors of chiro-

practic is indefensible. (PX 7184.)

—T4a—

in the late ’70s and early ’80s. (E.g., PX 1069.) Many

medical physicians individually criticized the AMA for

ameliorating its policy. This shows substantial support for

the boycott. (Jd.) It was also clear to me from the testi-

mony, particularly of the older medical physicians, that

medical physicians acted in conformity with Principle 3.

(E.g., PX 1498A, 1467, 1477B, 1519A, 14A; Stronach Dep.;

Bender Dep.) A principle of medical ethics is inherently

a forceful mandater of conduct. No honest professional

wants to risk the stigma of being labeled unethical. As

the Court of Appeals noted, the fact that the AMA never

sanctioned or disciplined a member for violation of Prin-

ciple 3 is not controlling. Enforcement was not necessary

to obtain compliance with the boycott.

The anti-competitive effects of the boycott were general-

ly conceded by the defendants’ expert, William J. Lynk

of Lexecon Inc. (Tr. 1290-1346, 1361-1555.) Some of the

anti-competitive effects acknowledged by Mr. Lynk include

the following: it is anti-competitive and it raises costs to

interfere with the consumer’s free choice to take the prod-

uct of his liking; it is anti-competitive to prevent medical

physicians from referring patients to a chiropractor; (Lynk

1427-28) it is anti-competitive to impose higher costs on

chiropractors by forcing them to pay for their own x-ray

equipment rather than obtaining x-rays from hospital radi-

ology departments or radiologists in private practice; and

it is anti-competitive to prevent chiropractors from im-

proving their education in a professional setting by

preventing medical physicians from teaching or lecturing

to chiropractors. (Tr. 1409-22, 1424-31.) Mr. Lynk agreed

that in an economic sense a boycott such as the one de-

scribed by plaintiffs raises the costs of chiropractic ser-

vices and creates inefficiencies and economic dislocations.

Obviously, Mr. Lynk did not concede the existence of the

—75a—

boycott but agreed that these would be anti-competitive

effects that would flow from such a boycott. I have also

considered the fact that, as conceded by Mr. Lynk, there

are substantial barriers to the entry of new chiropractors

into the field, such as substantial education requirements.

These barriers increase the likelihood that the boycott had

a substantial adverse effect on competition.

The Court of Appeals in Wilk, which reviewed substan-

tially the same boycott evidence, concluded:

Through such mechanisms, individual physicians were

discouraged from cooperating with chiropractors in:

patient treatment, because referrals were inhibited

by defendants’ activities; research; and educational

activities, such as sharing clinical experience and re-

search results. Chiropractors were denied access to

the hospital facilities they considered necessary to

practice their professions. Medical doctors were dis-

couraged from aiding chiropractors in interpreting

electrocardiograms. Requests by individual plaintiffs

to use iuboratory and X-ray facilities were not granted;

requests for hospital in-patient privileges were simi-

larly denied. Referrals from medical doctors were re-

duced. Public demand for chiropractic services was

negatively affected.

719 F.2d at 214.

The defendants argue that all of this evidence is not

enough—that the plaintiffs must specifically prove an im-

pact on price and output. The cases do not support that

position. As Professor Areeda recently noted in his arti-

cle “The Rule of Reason—a Catechism on Competition,”

55 Antitrust Law Journal, 571 (1986), the Supreme Court

has held that the purpose of the inquiry into market

definition and market power is to determine whether an

arrangement has the potential for genuine adverse effects

on competition. If there is actual proof of adverse effects,

—76a—

then the plaintiffs need not prove market definition and

market power. The Supreme Court in Federal Trade

Commission v. Indiana Federation of Dentists, 476 U.S.

447, 106 S.Ct. 2009, 2019, 90 L.Ed.2d 445 (1986), stated

that “the inquiry into market power is but a surrogate

for detrimental effects.”’

The AMA relies on Mr. Lynk’s conclusion that the boy-

cott had pro-competitive effects that would have outweighed

the anti-competitive effects. (Tr. 1409.) Mr. Lynk’s theory

is that the boycott constituted nonverbal communication

which informed consumers about the differences between

medical physicians and chiropractors, and that this had

a pro-competitive effect. (Tr. 1411-12.) I reject this opin-

ion as speculative. (Tr. 1434-43.) Mr. Lynk neither con-

ducted nor read any studies regarding the efficacy of such

nonverbal communications. /d. He neither conducted nor

read any surveys of consumer opinion to determine whether

consumers were confused about the differences between

medical physicians and chiropractors. (/d.) I saw no evi-

dence of any such confusion during the trial. Mr. Lynk’s

opinion does not accord with common sense. A nationwide

conspiracy intended by its participants to contain and elim-

inate a licensed profession cannot be justified on the basis

of My. Lynk’s personal opinion that it was pro-competitive,

nonverbal communication to consumers.

3. Antitrust Injury

Having determined that the effect of Principle 3 and

the implementing conduct has been to unreasonably re-

strict competition rather than to promote it, I now con-

sider whether the plaintiffs have shown injury of the kind

the antitrust laws were designed to prevent.

—Tla—

The plaintiffs principally rely on the testimony of Dr.

Miron Stano, their economic expert. Dr. Stano compared

the income of chiropractors, podiatrists, and optometrists

over the relevant period of time and concluded that the

income of chiropractors was lower than that of the other,

comparable limited licensed practitioners. (Tr. 458.) He

viewed this as consistent with the boycott theory. He also

noted a jump in chiropractors’ income during the period

1978 to 1980 and he concluded that the jump was consis-

tent with the acknowledged lessening of the boycott by

the AMA during that period. (Tr. 641.)

The defendants’ economic expert, Mr. Lynk, faulted the

data relied upon by Dr. Stano (Tr. 1809-20), but he agreed

that if he were to compare chiropractors’ income to com-

parable groups, he would also include podiatrists and op-

tometrists, as well as other groups, but he would seek

further explanations for the differences between the

groups’ incomes. (Tr. 1464-67.) Mr. Lynk further criticized

the “jump” analysis done by Dr. Stano due to the fact

that Dr. Stano relied on income projections from the

Bureau of Labor Statistics (“BLS”). (Tr. 1310, 1322-23,

1500.) Defendants argued that BLS statistics are a poor

source to begin with, and that reliance on such statistics

further was not justified because in 1980 BLS began to

note that it obtained its income projections for chiroprac-

tors from the American Chiropractors Association, thus

signaling a change in the data collection methodology used

by the BLS. This revelation caused the recalling of Dr.

Stano, the introduction of a new defense expert, Mr.

Robert Topel, a labor economist from the University of

Chicago, and a new deposition of Dr. Stano. Mr. Topel’s

testimony cast further doubt on the BLS data used by

Dr. Stano. (Topel Tr. 3574-3589.) However, the cross ex-

amination of Mr. Lynk demonstrated to my satisfaction

—78a—

that the data used by Dr. Stano were reasonable. Several

of the critical numbers had some independent verification.

(Tr. 1525-30.) I have also considered Mr. Topel’s criticism

but find that the data collection procedures used by the

BLS during the relevant time remained consistent enough

to be useful in this case.

I do not rely on Dr. Stano’s evidence in isolation. I

understand that the data are not the best that could be

used for such studies, but the best data, suggested by

Mr. Topel, do not exist. What lends support to Dr. Stano’s

result is the very strong evidence of a pervasive, nation-

wide, effective conspiracy which by its very nature would

have affected the demand curve for chiropractic services

and adversely affected income of chiropractors. Again,

defendants’ economist, Mr. Lynk, agreed that such a con-

spiracy would shift the demand curve for chiropractic ser-

vices. (Tr. 1415-22.)

The plaintiffs also established injury to reputation suf-

fered by chiropractors. Both economic experts believed

that injury to reputation would constitute an anti-competi-

tive effect of the boycott. (Tr. 410-11, 1456-59.) See Weiss

v. York Hospital, 745 F.2d 786, 806-07 (8rd Cir. 1984), cert.

denied, 470 U.S. 1060, 105 S.Ct. 1777, 84 L.Ed.2d 836

(1985) (policy denying staff privileges to osteopaths like-

ly to injure their professional reputations). In addition to

labeling all chiropractors as unscientific cultists and depriv-

ing chiropractors of association with medical physicians,

injury to reputation was assured by the AMA’s name-call-

ing practice. For example, in 1973, Dr. Sabatier, an AMA

official, described chiropractors as rabid dogs and killers.

(PX 1288.) Such statements were made in furtherance of

the conspiracy and obviously injure reputations.

—T9a—

4. Rejection of Per Se Violation

The Seventh Circuit has already held that Principle 3

escapes per se treatment because it involves a medical

ethic which nonfrivolously addresses the importance of

scientific method, a subject well within the natural am-

bit of a medical association. The plaintiffs argue that the

Supreme Court’s decision in F.T.C. v. Indiana Federa-

tion of Dentists, 106 S.Ct. 2009 (1986), decided after Wilk,

compels application of the per se analysis. I disagree.

First, Indiana Dentists itself was decided under a rule

of reason analysis. Although the Supreme Court rejected

the dentists’ rationale that the withholding of x-rays in

that case was justifiable as being in the best interests

of patients, and specifically said that such a purported

justification was legally and factually marred, the Court

did not apply a per se rule.

Indiana Dentists is quite like National Society of Pro-

fessional Engineers v. United States, 485 U.S. 679, 98

S.Ct. 1855, 55 L.Ed.2d 687 (1978). In both cases the Su-

preme Court refused to allow professional competitors to

deprive consumers of information they desired, and in

both cases the court rejected the professionals’ purported

consumer welfare justification for the restraint. I believe

the result in Indiana Dentists was based on the same ra-

tionale that decided Professional Engineers. I do not read

Indiana Dentists as requiring a per se analysis. The plain-

tiffs also urge that Jndiana Dentists eliminates the pa-

tient care defense created by the Seventh Circuit in Wilk.

The Supreme Court did not address the specific issue of

whether patient care defense on the facts in this case

would be allowed, and since /ndiana Dentists is much

more like Professional Engineers than this case, I believe

I must follow Wilk.

—0a—

5. Patient Care Defense

I now consider whether the AMA has established the

Wilk patient care defense. The first element is whether

the AMA and its members genuinely entertained a con-

cern for scientific method in the care of patients. I have

some questions about the genuineness of the AMA’s con-

cern for scientific method based on the fact that when

the AMA adopted changes in its chiropractic policy be-

tween 1977 and 1980, it apparently did so without deciding

whether chiropractic was scientific. That shows disregard

for scientific method in patient care. Nevertheless, I con-

clude that the AMA has established this element. At the

time it was attacking chiropractic as unscientific, it was

attacking other unscientific methods of treatment of dis-

ease, for example the Krebiozen treatment of cancer. The

existence of medical standards or guidelines against un-

scientific practice is common. Other medical societies have

long had such prohibitions and the chiropractors them-

selves have a similar ethical guideline. (DX L31.) So I con-

clude that the AMA has established the first element of

genuine concern.

The next element is whether the c

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