## Facts

- York Hospital was a principal hospital in the York, Pennsylvania area and offered specialized services not readily available elsewhere in the region.
- Historically, York Hospital’s governing documents barred osteopathic physicians (D.O.s) from obtaining staff privileges, limiting their ability to admit and treat patients there.
- In 1974, after threatened legal action, York amended bylaws to remove the explicit D.O. exclusion, but D.O.s alleged continued de facto discrimination in credentialing and professional treatment.
- Dr. Malcolm Weiss, a licensed D.O. general practitioner, applied for staff privileges at York Hospital.
- The medical staff conducted an unusual “special investigation” into Weiss and another D.O. applicant; the other D.O. ultimately received privileges, but Weiss was denied.
- The stated reasons for denying Weiss centered on alleged inability to cooperate with other physicians and interpersonal issues.
- Weiss sued York Hospital and its medical staff, alleging a conspiracy to exclude D.O.s from staff privileges in violation of Sherman Act § 1, and sought class treatment for similarly situated D.O.s.
- A jury found York Hospital not liable but found the Medical and Dental Staff liable under § 1; the district court entered judgment, awarded damages (subject to trebling), and ordered injunctive relief.
- Defendants appealed liability, remedies, and procedural rulings; Weiss cross-appealed on aspects of class and damages.

## Issues

1. Whether the medical staff’s collective conduct regarding staff privileges constituted concerted action restraining trade in violation of Sherman Act § 1.
2. Whether the challenged exclusionary practices were condemnable as a per se group boycott or required rule-of-reason analysis, and whether the evidence supported liability under the applicable standard.
3. Whether defendants possessed sufficient market power in a properly defined product and geographic market to cause anticompetitive effects.
4. Whether the conduct had a sufficient effect on interstate commerce to satisfy Sherman Act jurisdiction.
5. Whether certification of a class of D.O. physicians under Federal Rule of Civil Procedure 23 was proper, including Rule 23(b)(2) treatment for injunctive relief.

## Decision

- The Third Circuit affirmed the judgment that the Medical and Dental Staff violated Sherman Act § 1 through collective exclusionary conduct directed at D.O.s.
- The court affirmed the jury’s verdict exonerating York Hospital as a corporate entity on the record presented.
- The court upheld the district court’s class certification rulings, including certification supporting injunctive relief.
- The court rejected challenges to Sherman Act jurisdiction based on interstate commerce and rejected venue-related objections.
- The court generally sustained damages and injunctive relief designed to require nondiscriminatory consideration of osteopathic applicants, without disturbing the core liability determination.

## Legal Principles

- A hospital medical staff composed of independent physicians may constitute a “combination” of separate economic actors capable of concerted action under Sherman Act § 1.
- Coordinated exclusion of qualified competitors from access to hospital privileges can constitute a group boycott and an unlawful restraint of trade when it produces substantial anticompetitive effects in a market where access to the facility is significant for competition.
- Even where credentialing and peer review can have legitimate quality-of-care purposes, asserted justifications do not defeat § 1 liability if the factfinder can conclude they are pretextual or insufficient relative to anticompetitive exclusion.
- Market power and competitive effects may be shown where a dominant hospital’s privileges are practically necessary for physicians to compete for patients and provide services in the relevant geographic area.
- Local hospital operations satisfy the Sherman Act’s interstate commerce nexus when the hospital’s purchases, reimbursements, and related financial flows substantially involve interstate channels.
- Rule 23(b)(2) certification is appropriate where defendants are alleged to have acted on grounds generally applicable to the class, making injunctive relief suitable for classwide resolution.

## Conclusion

The Third Circuit held that a hospital medical staff’s collective control over staff privileges can amount to concerted action under Sherman Act § 1 and affirmed liability where the staff’s practices functioned to exclude osteopathic physicians in a market where hospital access was competitively important; it also upheld class certification, jurisdiction, and remedies requiring nondiscriminatory credentialing.


Weiss v. York Hosp., 745 F.2d 786 (3d Cir. 1984)