Jefferson Parish Hospital District No. 2 v. Hyde

In 1971, East Jefferson Hospital (Jefferson Hospital) (defendant) entered into an agreement with Roux & Associates (Roux) that established Roux as the exclusive provider of Jefferson Hospital’s anesthesiological services. Under the agreement, any fees for anesthesiology were billed separately to patients, with payments divided between Jefferson Hospital and Roux. Under the agreement, only anesthesiologists from Roux were able to practice anesthesiology at Jefferson Hospital. In 1977, Edwin G. Hyde (plaintiff) applied to become an anesthesiologist at Jefferson Hospital. Hyde was ultimately denied due to Jefferson Hospital’s exclusivity agreement with Roux. In response, Hyde sued Jefferson Hospital, seeking an injunction and a declaratory judgment that the agreement with Roux violated antitrust law. Hyde argued the agreement was an unlawful tying arrangement. Hyde presented evidence showing that patients often request specific anesthesiologists, which the contract prevented. Jefferson Hospital presented evidence that 70 percent of patients in the area attended hospitals other than Jefferson Hospital, arguing that it lacked sufficient market power to cause competitive harm. The district court agreed, ruling that Jefferson Hospital did not possess market power in the relevant geographic market. The court also ruled the pro-competitive benefits of the contract outweighed the anticompetitive harm. The court of appeals reversed, holding Jefferson Parish did possess market power, which rendered the contract per se illegal. Jefferson Hospital appealed.