UNITED STATES v. DELTA DENTAL OF RHODE ISLAND

943 F. Supp. 172 (1996) | Cited 0 times | D. Rhode Island | October 2, 1996

Adopting Magistrate's Document of July 12, 1996, Reported at: 1996 U.S. Dist. LEXIS 14873.

1. Under § 1, plaintiff also must show that the restraint affects interstate or foreign commerce. However, since there is no dispute that Delta's alleged conduct affects interstate commerce, I do not discuss this element here.

2. "Per se rules of illegality are appropriate only when they relate to conduct that is manifestly anticompetitive." Continental T.V., Inc. v. Sylvania, Inc., 433 U.S. 36, 49-50, 53 L. Ed. 2d 568, 97 S. Ct. 2549 (1977).

3. The Continental T.V. Court took note of the fact-intensive inquiry the rule of reason analysis requires, stating: One of the most frequently cited statements of the rule of reason is that of Mr. Justice Brandeis in Chicago Board of Trade v. United States, 246 U.S. 231, 238, 62 L. Ed. 683, 38 S. Ct. 242 (1918): "The true test of legality is whether the restraint imposed is such as merely regulates and perhaps thereby promotes competition or whether it is such as may suppress or even destroy competition. To determine that question the court must ordinarily consider facts peculiar to the business to which the restraint is applied; its condition before and after the restraint was imposed; the nature of the restraint and its effects, actual or probable. The history of the restraint, the evil believed to exist, the reason for adopting the particular remedy, the purpose or end sought to be attained, are all relevant factors." Continental T.V., supra, at 49.

4. Rule 7 provides: Verification program. Delta Dental at all times reserves the right to review services rendered and fees charged by participating and nonparticipating dentists or group practices with respect to which benefits are sought. Such review may encompass, without limitation verification of ... fees charges and collections made with respect to non-subscriber patients... Complaint, P 14.

5. This point is highlighted by the difference in postures between Kartell and the case here. In Kartell, the plaintiff represented a group of physicians challenging Blue Shield's policy, in large part because Blue Shield's reimbursement rates were so low that they reduced physician profits. These low prices, however, benefitted Blue Shield enrollees through lower premium rates. Here, plaintiff is the United States. Rhode Island dentists apparently do not disapprove of Delta's Prudent Buyer clause. In fact, the chair of Rhode Island Dental Association's Council on Dental Programs supports Delta's Prudent Buyer policy because he feels that the policy sets a floor on dentists' fees. Memorandum of the United States in Opposition to the Defendant's Objections to the Magistrate's Report and Recommendation, at 9; Complaint, P22.

6. Plaintiff's non-discrimination clause, as Delta notes in its memorandum in support of their objections to the Magistrate's Report and Recommendation, is similar to Delta's Prudent Buyer clause.

7. In fact, the Oregon Dental court "looked to federal decisions interpreting section 2 of the Sherman Act for persuasive ... guidance." Oregon Dental, supra, at 640.

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