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Cascade Health Solutions v. PeaceHealth

United States Court of Appeals for the Ninth Circuit
515 F.3D 883 (9TH CIR. 2008)


McKenzie-Willamette Hospital (McKenzie) (plaintiff) and PeaceHealth (defendant) were the only providers of primary and secondary hospital care in Lane County, Oregon. Believing that PeaceHealth was engaging in anticompetitive practices in violation of antitrust law, McKenzie brought a suit against PeaceHealth, alleging monopolization and conspiracy to monopolize. McKenzie’s primary theory of liability was that PeaceHealth had engaged in anticompetitive price bundling when making service offerings to insurers. For example, PeaceHealth had offered one insurer a reimbursement rate of 15 percent to remain the insurer’s preferred provider for all hospital services, but a rate of only 10 percent if the insurer added McKenzie as a preferred provider. At trial, the jury found for McKenzie and awarded damages. The verdict followed an instruction by the district court that did not allow the jury to consider PeaceHealth’s relative efficiency in offering bundled services before assessing the likelihood of anticompetitive effects. PeaceHealth appealed the decision, arguing that the bundling practices were lawful.

Rule of Law


Holding and Reasoning (Gould, J.)

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