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Santa Cruz Medical v. Dominican Santa Cruz Hospital

1995-2 Trade Cases ¶ 71,254

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Santa Cruz Medical v. Dominican Santa Cruz Hospital

United States District Court for the Northern District of California

1995-2 Trade Cases ¶ 71,254

Facts

In 1990 Dominican Santa Cruz Hospital (Dominican) (defendant) acquired AMI Community Hospital of Santa Cruz (AMI). Soon after the acquisition, Dominican stopped using AMI as an acute-care hospital, instead offering subacute care, such as rehabilitation. Santa Cruz Medical (the partnership) (plaintiff) was a partnership of physicians and medical practitioners who worked in the Santa Cruz area. The partnership sued Dominican in federal court, alleging that Dominican violated § 7 of the Clayton Act when it acquired AMI, creating a highly concentrated hospital market. In 1995 the partnership moved for summary judgment. To support its § 7 claim, the partnership argued that the relevant product market for the case was acute-care inpatient hospital services and that the relevant geographic market was Santa Cruz County. Dominican opposed the motion. In addition to denying that its acquisition of AMI was anticompetitive, Dominican argued that the relevant product market was inpatient and outpatient hospital services, including acute-care hospitals and alternative facilities, such as rehabilitation facilities and nursing homes. Dominican also argued that the relevant geographic market included the counties of Santa Clara and Northern Monterey in addition to Santa Cruz.

Rule of Law

Issue

Holding and Reasoning (Whyte, J.)

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