Mercatus Group Llc v. Lake Forest Hosp.

Decision Date26 May 2011
Docket NumberNo. 10–1665.,10–1665.
Citation641 F.3d 834
PartiesMERCATUS GROUP, LLC, Plaintiff–Appellant,v.LAKE FOREST HOSPITAL, Defendant–Appellee.
CourtU.S. Court of Appeals — Seventh Circuit

OPINION TEXT STARTS HERE

John J. Tully, Jr. (argued), Attorney, Tully & Associates, Chicago, IL, for PlaintiffAppellant.David Marx (argued), Attorney, McDermott, Will & Emery, Chicago, IL, for DefendantAppellee.Before BAUER, MANION, and HAMILTON, Circuit Judges.HAMILTON, Circuit Judge.

The First Amendment of the Constitution states that Congress shall make no law abridging the “right of the people peaceably to assemble, and to petition the Government for a redress of grievances.” Under the Noerr Pennington doctrine, federal antitrust laws have been interpreted to protect these First Amendment rights by immunizing petitioning activity from liability. In this appeal from the district court's grant of summary judgment for defendant-appellee Lake Forest Hospital, we must decide whether that doctrine shelters from antitrust liability one competitor's alleged misrepresentations about another made during and in relation to local zoning proceedings. We conclude that it does. Because nothing else in the record is sufficient to make out a claim for liability under the antitrust laws, we affirm.

I. Background

In 2004, Mercatus Group, LLC, began plans to construct a physician center—essentially, a medical office building from which physicians can provide medical services—in the Village of Lake Bluff, Illinois. Mercatus sought to build this center on a plat of land occupied at that time by an automobile dealership (the Shepard Land). Mercatus' partner in this venture was Evanston Northwestern Healthcare (“ENH”), with which Mercatus planned to construct a number of such physician centers.

Appellee Lake Forest Hospital (the Hospital) is located in nearby Lake Forest, a short distance from the Shepard Land. The Hospital recognized the “huge threat” that the proposed Mercatus Lake Bluff center posed to its ability to compete in the local market for medical services. To protect itself from this threat, the Hospital launched a multi-pronged campaign designed to prevent Mercatus from opening the physician center. First, the Hospital lobbied members of the Lake Bluff Board of Village Trustees—both individually and at a number of public Village Board meetings held on this matter—to deny Mercatus the approvals necessary to begin construction on the Shepard Land. Second, the Hospital launched a public relations campaign encouraging Hospital employees and donors, as well as the local community, to put political pressure on the Village Board to oppose the Mercatus center. Third, the Hospital told ENH to stay out of Lake Bluff and made a number of derogatory statements about Mercatus to ENH and other healthcare providers. Finally, the Hospital identified two Hospital-affiliated physician practice groups that planned to move their practices to the new Mercatus physician center and offered those groups various incentives not to do so.

The Hospital's efforts were successful. Both physician practice groups pulled out of their conditional agreements with Mercatus, the Village Board denied Mercatus the approvals necessary to develop the Shepard Land, and ENH terminated its business relationship with Mercatus. Mercatus never opened a physician center in Lake Bluff.

Mercatus brought this suit in federal district court, alleging in relevant part that the Hospital had monopolized and/or attempted to monopolize alleged markets for “comprehensive physician services” and “diagnostic imaging services” in eastern Lake County, Illinois, in violation of the Sherman Act, 15 U.S.C. § 2.1 On the Hospital's motion, the district court dismissed some of Mercatus' claims against the Hospital for failure to state a claim. Mercatus Group LLC v. Lake Forest Hosp., 528 F.Supp.2d 797 (N.D.Ill.2007) (“ Mercatus I ”). Mercatus filed an amended complaint and, following extensive discovery, the district court granted the Hospital's motion for summary judgment on that amended complaint. Mercatus Group LLC v. Lake Forest Hosp., 695 F.Supp.2d 811 (N.D.Ill.2010) (“ Mercatus II ”). The district court concluded that the Hospital's efforts before the Village Board were protected from antitrust liability by the First Amendment right to petition the government for the redress of grievances. Id. at 818–21. As for the Hospital's other conduct, the court held that what it characterized as mere misrepresentations and disparaging comments were, as a matter of law, insufficient to give rise to antitrust liability. Id. at 823; see also Mercatus I, 528 F.Supp.2d at 810 (dismissing part of original complaint on similar grounds).

On appeal, Mercatus first argues that the Hospital's petitioning conduct relating to the Village Board meetings is not protected by the First Amendment because the Hospital made a number of misrepresentations that altered the outcome of those meetings. Mercatus argues in the alternative that the Hospital's other conduct—its public relations campaign, its communications with ENH and other healthcare providers, and its efforts to convince the physician practice groups not to relocate their practices to Mercatus' physician center—violated the Sherman Act even if the Village Board proceedings are disregarded.

We affirm. Even if we assume that the Hospital made material misrepresentations during and relating to the Village Board proceedings concerning Mercatus' physician center, such misrepresentations are legally irrelevant because those meetings were inherently political in nature. The same is true of the Hospital's public relations campaign, which was inextricably intertwined with the Hospital's efforts before the Board. As for the Hospital's contacts with ENH and other healthcare providers, those contacts constituted mere speech that was not actionable under the Sherman Act. Finally, no reasonable trier of fact could conclude from this record that the Hospital's successful effort to convince physicians not to relocate their practices to Mercatus' proposed physician center constituted predatory conduct forbidden by the antitrust laws.

II. Standard of Review

We review de novo the district court's grant of summary judgment. Omnicare, Inc. v. UnitedHealth Group, Inc., 629 F.3d 697, 705 (7th Cir.2011). Summary judgment is appropriate when the pleadings and submissions in the record indicate the absence of any genuine issues of material fact, such that the moving party is entitled to judgment as a matter of law. Midwest Imports, Ltd. v. Coval, 71 F.3d 1311, 1317 (7th Cir.1995). Because Mercatus opposed summary judgment, we draw all reasonable factual inferences from the record in Mercatus' favor. Jakubiec v. Cities Service Co., 844 F.2d 470, 471 (7th Cir.1988). We will affirm only if, viewing the record in such a favorable light to Mercatus, no reasonable jury could have rendered a verdict in Mercatus' favor on any of its claims. Wilson v. Williams, 997 F.2d 348, 350 (7th Cir.1993).

In evaluating multiple claims under these standards, we recall that a plaintiff “should be given the full benefit of [its] proof without tightly compartmentalizing the various factual components and wiping the slate clean after scrutiny of each.” Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690, 699, 82 S.Ct. 1404, 8 L.Ed.2d 777 (1962). That does not mean, however, that we will aggregate the effects of conduct immunized from antitrust liability with the effects of conduct not so immunized. That approach would nullify the immunity. For that reason, we must first identify any conduct that is immunized. After we do so, we consider the evidence of the remaining challenged conduct in the aggregate to see if it is sufficient to support antitrust liability.

III. Lobbying the Village Board—the Noerr–Pennington Doctrine

Mercatus' primary argument on appeal is that the Hospital's conduct in the Village Board proceedings is not protected by the First Amendment. This, Mercatus argues, is because the Hospital allegedly made numerous misrepresentations and material omissions of fact to the Village Board that ultimately caused the Board to deny Mercatus permission to begin construction on the Shepard Land.

A. Facts on Summary Judgment

Mercatus first appeared before the Village Board at an April 2006 board meeting, at which time Mercatus made an informal pre-filing presentation of its preliminary plans for a physician center on the Shepard Land. Mercatus representatives argued that the physician center would be “a good project for the community of Lake Bluff.” The Village Board also heard from the Hospital's outgoing president, Bill Ries, who claimed that the Mercatus physician center would not be good for the community because it would extract “the most profitable outpatient services” from local hospitals. Ries also questioned Mercatus' commitment to charitable medical care and claimed that the Hospital “committed over $25 million in subsidy and charity to the people of Lake County,” representing “nearly 13 percent of our net revenue.” Village Board trustee Michael Peters, a physician at the Hospital, also expressed concern that the Mercatus plan might jeopardize the Hospital and could lead to higher healthcare prices.

In September 2006, the Lake Bluff Architectural Board of Review reviewed the proposed site plan for the Mercatus physician center. The Architectural Board recommended approval of the site plan, which was then taken under consideration by the Village Board. According to Lake Bluff ordinances, only a vote by two-thirds of the Village Board could overturn the Architectural Board's site plan approval. At the Village Board's October 2006 meeting, however, Lake Bluff's attorney informed the Village Board that, in addition to site plan approval, Mercatus needed separate Village Board approval even to develop the Shepard Land. As he explained, a...

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