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Arizona v. Maricopa County Medical Society, 457 U.S. 332 (1982), was a U.S. Supreme Court case involving antitrust law. A society of doctors in Maricopa County, Arizona, established maximum fees that their members could claim for seeing patients who were covered by certain health insurance plans. Arizona charged them with violations of state antitrust law regarding price fixing. The society tried to rebut the state's charges by claiming that the maximum-fee arrangement was necessary to allow doctors to see these patients, and therefore generated economic benefits.

On appeal, the Supreme Court rejected this defense, saying that price fixing was not truly necessary here: the society could have used insurance to pool their risk. The society's efficiency justification was either a pretext, or else could have been done through less restrictive means. The Court held that their justifications failed as a matter of fact.

Facts

Maricopa County Medical Society, by agreement of their member doctors, established the maximum fees the doctors may claim in full payment for health services provided to policyholders of specified insurance plans. Arizona filed a complaint against MCMS in Federal District Court, alleging that they were engaged in an illegal price-fixing conspiracy in violation of the Sherman Antitrust Act.

Judgment

In a 4–3 decision, the court held that the maximum fee agreements, as price-fixing agreements, are per se unlawful under § 1 of the Sherman Act.

Significance

The ruling stipulates not just that maximum price fixing among competitors is unlawful, but that it is unlawful per se. This precludes any significant inquiry into potential procompetitive justifications for such an arrangement. According to one author, the result of the decision was to make "antitrust analysis once again confused and haphazard."^[1]

Notes

^ Gerhart, Peter M. (1982), "The Supreme Court and Antitrust Analysis: The (Near) Triumph of the Chicago School", The Supreme Court Review, 1982: 319–349, doi:10.1086/scr.1982.3109560, JSTOR 3109560, S2CID 147003503.

References

Leffler, Keith B. (1983), "Arizona v. Maricopa County Medical Society: Maximum-Price Agreements in Markets with Insured Buyers", Supreme Court Economic Review, 2: 187–211, doi:10.1086/scer.2.1147125, S2CID 155736979.
Cohen, Harry Philip (1981), "IPAs and Per Se Rules: Arizona v. Maricopa County Medical Society", Journal of Law, Medicine & Ethics, 9 (5): 8–12, doi:10.1111/j.1748-720X.1981.tb00286.x, S2CID 71189740.

External links

Text of Arizona v. Maricopa County Medical Society, 457 U.S. 332 (1982) is available from: CourtListener Google Scholar Justia Library of Congress Oyez (oral argument audio)

[1] Gerhart, Peter M. (1982), "The Supreme Court and Antitrust Analysis: The (Near) Triumph of the Chicago School", The Supreme Court Review, 1982: 319–349, doi:10.1086/scr.1982.3109560, JSTOR 3109560, S2CID 147003503.

[1]

Sources on rule of reason
US v. Trans-Missouri Freight Asn, 166 U.S. 290 (1897)
US v. Joint Traffic Association, 171 U.S. 505 (1898)
Addyston Pipe and Steel Co. v. US, 175 U.S. 211 (1899)
Standard Oil Co. of New Jersey v. US, 221 U.S. 1 (1911)
Chicago Board of Trade v. US, 246 U.S. 231 (1918)
United States v. Topco Assocs., Inc., 405 U.S. 596 (1972)
National Soc. of Prof. Engineers v. US, 435 U.S. 679 (1978)
Broadcast Music v. Columbia Broadcast, 441 U.S. 1 (1979)
Broadcast Music, Inc. v. CBS, Inc., 441 U.S. 1 (1979)
Arizona v. Maricopa County Med Soc, 457 U.S. 332 (1982)
NCAA v. University of Oklahoma, 468 U.S. 85 (1984)
FTC v. Indiana Fed'n of Dentists, 476 U.S. 447 (1986)
Palmer v. BRG of Georgia, Inc., 498 U.S. 46 (1990)
California Dental Assn. v. FTC, 526 U.S. 756 (1999)
See US antitrust law and rule of reason