## Facts

- Dr. Timothy Patrick practiced general surgery in Astoria, Oregon, at Columbia Memorial Hospital, the town’s only hospital.
- A dominant multi-physician group, the Astoria Clinic, supplied a majority of the hospital’s medical staff and included Dr. William M. Burget and other respondent physicians.
- Patrick declined partnership in the Clinic and opened an independent competing practice.
- Afterward, Clinic physicians initiated and participated in hospital peer-review proceedings that resulted in termination of Patrick’s hospital privileges, limiting his ability to compete.
- Respondents asserted the action was based on substandard patient care; Patrick alleged the quality rationale was a pretext to exclude a competitor.
- Patrick sued under §§ 1 and 2 of the Sherman Act, alleging anticompetitive conduct through the peer-review process.
- Oregon required hospitals to maintain peer-review procedures and to make certain reports, but state entities did not decide staff-privilege outcomes or substantively review specific peer-review decisions.

## Issues

1. Whether private physicians’ conduct on hospital peer-review committees is immune from federal antitrust liability under the state-action doctrine when the State favors peer review but does not actively supervise particular peer-review decisions affecting competition.

## Decision

- The Supreme Court reversed the Ninth Circuit.
- The Court held that the physicians were not entitled to state-action (Parker) immunity because the “active supervision” requirement was not met.
- The Court remanded for further proceedings consistent with its rejection of immunity.

## Legal Principles

- Private parties claiming state-action immunity must satisfy two requirements: (1) a clearly articulated and affirmatively expressed state policy to displace competition, and (2) active state supervision of the challenged restraint.
- “Active supervision” requires that state officials have and exercise power to review the specific anticompetitive acts and to disapprove acts that do not conform to state policy.
- State authorization of peer review, procedural regulation, or reporting requirements does not constitute active supervision without substantive review authority over particular privilege decisions.
- Potential policy benefits of peer review do not justify expanding antitrust immunity beyond the doctrine’s supervisory requirements; any broader exemption is for legislative action.

## Conclusion

The Court held that private physicians participating in hospital peer review cannot claim state-action immunity from Sherman Act liability absent active, substantive state oversight of the particular peer-review decisions that restrain competition.


Patrick v. Burget, 486 U.S. 94 (1988)