Records of antitrust lawsuits display a bewildering array of defendants. This arises from the nature of antitrust law. Many antitrust violations arise from conspiracies. Unlike recent developments in the medical malpractice arena, law-makers have not demonstrated any tendency to limit the scope of potentially liable parties. A recent lawsuit provides a good example. Because he was denied staff privileges, a chiropractor sued: the hospital; the chairman of the board, both individually and as chairman; 7 trustees, both individually and as trustees; 3 hospital officers; 13 physicians, both individually and as members of the medical staff; and 1 physician, individually, as a member of the medical staff, and as a hospital trustee. [Cohn v. Bond, 953 F.2d 154 (4th Cir., 1991)] This listing is fairly typical and, in these days of increasing health care joint ventures, might be considered modest.

Those charged with an antitrust violation under federal law face the potential of joint and several liability. This means that any losing party is responsible for all the (trebled) damages from the illegal actions. Full liability arises regardless of the party's share of actual responsibility, and regardless of whether or not all the responsible parties were even sued.

Practical Consideration

PHDs receive considerable protection from antitrust liability. Under federal law, the Local Government Antitrust Act, discussed below, eliminates PHDs from the pool of those required to pay damages. Further, this Act will usually extend to protect the PHD's officers and employees. The state action doctrine, also discussed below, will probably lead to dismissal of the suit against the PHD and against the PHD's officers and employees.

Corporations may face civil liability, criminal liability, or both. Corporations are responsible for the actions of their agents, officers and employees under a legal doctrine known as "respondeat superior." The doctrine holds employers liable for actions taken within the scope of the employee's authority. Corporations might also face liability through membership in a joint venture or any other type of association.

Corporations are criminally liable if the unlawful acts taken by their employees were within the scope of their employment. This is true even if the corporation had a specific policy prohibiting the illegal antitrust activity engaged in by the employee. The company will also face criminal liability even though if it had instructed the employee not to take the unlawful action.

Corporate employees, officers and agents may be charged with civil or criminal violations of the antitrust laws, or both. The corporate shield will ordinarily provide no protection for the acts of its officials, provided they had authority and control over the allegedly illegal activities.

Corporate employees and officers face criminal sanctions for their conduct when they knowingly participated in the unlawful conspiracy. In the criminal law arena, knowingly participated generally means either actual knowledge or constructive knowledge. Constructive knowledge means that the facts demonstrate clearly that the employee or officer should have known of the illegal activity, even though he or she did not.

Individuals may face both civil and criminal sanctions for violations of the antitrust law. Individuals may face liability for independent actions taken in concert with other persons or corporations. Liability may also arise through membership in a joint venture or another type of association.

Two federal agencies are given broad authority to enforce the federal antitrust laws, the Department of Justice and the Federal Trade Commission. Their jurisdiction is frequently overlapping, however the two agencies usually develop agreements which limit duplication of enforcement activities. Both agencies currently have a strong focus on health care matters. Only the Department of Justice has the power to bring criminal charges for violations of the federal antitrust acts.

The Antitrust Section of the Washington State Attorney General's Office has authority to enforce the state's Consumer Protection Act, and may have authority to enforce the federal antitrust laws as well. The federal and state antitrust laws are overlapping and the Attorney General will bring claims under the federal laws, as well as RCW 19.86 . Relative to its federal counterparts, the state is more likely to proceed against a violation that is localized in nature. In fact, 75% of its investigations stem from citizen complaints. Washington's Attorney General is considered to be fairly aggressive in antitrust enforcement, relative to its sister states.

Further Legal Background

The federal enforcement agencies devote a large portion of their time responding to businesses considering activities with potential antitrust implications. The Department of Justice and the Federal Trade Commission issue Business Review Letters and Advisory Opinions, respectively. The state Attorney General will also respond to requests for review of proposed activities. While none of the reviews provide an immunity from antitrust liability, they can be helpful to potential joint venture participants under the proper circumstances.

Private parties can sue under both the federal and state antitrust laws. There are some substantial incentives for private parties to do so, because of the heavy penalties which attach to a violation and are paid to the party suing. Also, a successful private party will be compensated for its attorney's fees. Private party suits cannot result in a criminal conviction.

If a federal antitrust violation is found, damages will be calculated and then the amount of damages is tripled to determine the penalty. Also, a losing party will have to bear the cost of the plaintiff's attorney's fees, which are generally substantial in antitrust litigation. Finally, the court may issue an injunction, prohibiting the illegal activity in the future. PHDs are exempt from having to pay damages as a result of the Local Government Antitrust Act, discussed below.

In addition to the treble damage liability, criminal penalties can attach to a violation of the Sherman Act. A corporation convicted under the Act can face a maximum penalty of up to $10,000,000. An individual transgressor can face up to three years in jail plus penalties of up to $350,000. Criminal actions may only be enforced by the Department of Justice and are usually only brought for the most egregious offenses, generally for price-fixing, market allocation and some boycotts.

An individual or company violating the state's Consumer Protection Act will face the possibility of an injunction, treble damages and a penalty. Also, a losing party will have to bear the cost of the plaintiff's attorney's fees. Both the attorney general and private parties are authorized to seek an injunction, barring the losing party from engaging in the activity in the future.

The attorney general and private parties are authorized to recover damages. Alternatively, the attorney general may seek a court order requiring the violator to restore property or money to an injured party. [RCW 19.86.080] If a private party brings a successful suit the court will award at least actual damages and has the authority to render the judgment in an amount up to three times the proven damages. [RCW 19.86.090]

Finally, depending upon the offense, the court may impose civil penalties upon the violator. A fine may be imposed in an amount not to exceed $100,000 for an individual transgressor, and $500,000 for a corporation. [RCW 19.86.140]

Both of the federal agencies and the state attorney general frequently settle with the alleged violator rather than proceeding to trial. These agreements are commonly reflected in consent decrees issued by a court. In addition to the substantial savings in legal fees, parties charged with an antitrust violation find the decrees preferable because they cannot be used as evidence of wrongdoing if they are also facing a lawsuit instituted by a competitor. The enforcement agencies will rarely settle without obtaining an injunction barring the company from engaging in the future in the types of activities alleged to be illegal. Generally the party agreeing to the consent decree will also have to pay some penalties.

As is discussed in detail below, PHDs are substantially exempt from damage awards for violations of the federal antitrust laws. Also PHDs are exempt from coverage under the state's Consumer Protection Act.