Jefferson Parish Hospital District. No. 2 v. Hyde case brief summary

Jefferson Parish Hospital District. No. 2 v. Hyde case brief summary

FACTS
An anesthesiologist (Hyde) denied admission to staff of Jefferson sued for tying based upon the exclusive dealing contract with Roux & Associates, an anesthesiology firm. Anesthesiology is often sold separately, almost always billed separately, and consumers frequently bring their own anesthesiologist to a hospital.

DISCUSSION

Nonetheless, the Court rejected the Circuit Court’s finding of monopoly power, which rendered the hospital incapable of forcing services upon unwilling patients. The Court also declined to find that the Roux contract had actually unreasonably restrained competition, given an analysis under the rule of reason.

Concurrence

• A monopoly cannot increase monopoly profits on the tying good through tying; it can only increase profits by creating market power in the market for the tied good.
• In order to find tying, the concurrence would require market power in the tying market, a coherent economic basis for treating the products as distinct—at the least, consumers must potentially wish to purchase the tied product separately from the tying product, and there must be a substantial threat that the tying seller will acquire market power in the tied-product market.

NOTES

• Tying is the last per se doctrine to remain unmodified in the face of Chicago School criticisms, so most scholars think it’s just a matter of time, although the doctrine has been reaffirmed in recent times.
• Tying could be used to drive out rivals in the tied-product market (if consumers need more of the tying product than the tied product) or can facilitate price discrimination (if consumers need less of the tying product than the tied product) or can be used to evade pricing regulations on the tied product.