                                   PRECEDENTIAL


      UNITED STATES COURT OF APPEALS
           FOR THE THIRD CIRCUIT
                ____________

                     No. 15-2032
                    ____________

       DEBORAH HEART & LUNG CENTER,

                                           Appellant

                          v.

          VIRTUA HEALTH, INC.;
 VIRTUA MEMORIAL HOSPITAL BURLINGTON
               COUNTY;
THE CARDIOLOGY GROUP, P.A.; JOHN DOES 1-10


    On Appeal from the United States District Court
             for the District of New Jersey
            (D. C. Civil No. 1-11-cv-01290)
      District Judge: Honorable Renee M. Bumb


             Argued on February 10, 2016

Before: FUENTES, KRAUSE and ROTH, Circuit Judges

           (Opinion filed: August 17, 2016)
Anthony Argiropoulos, Esquire       (Argued)
Thomas Kane, Esquire
Epstein Becker & Green
One Gateway Center
13th Floor
Newark, NJ 07102

                     Counsel for Appellant

James J. Ferrelli, Esquire
Duane Morris
1940 Route 70 East
Suite 100
Cherry Hill, NJ 08003

Seth A. Goldberg, Esquire
Philip H. Lebowitz, Esquire         (Argued)
Duane Morris
30 South 17th Street
United Plaza
Philadelphia, PA 19103

                     Counsel for Appellees Virtua Health,
                     Inc. and Virtua Memorial Hospital
                     Burlington County

Robert V. Dell’Osa, Esquire
Cozen O’Connor
1650 Market Street
One Liberty Place, Suite 2800
Philadelphia, PA 19103

                     Counsel for Appellee Cardiology Group




                                2
                     P.A.


                         O P I N I ON


ROTH, Circuit Judge:

       In antitrust suits, definitions matter. When a plaintiff
offers an undisputed definition of the relevant products and
markets at issue, it is just and reasonable to hold the plaintiff
to its own definition. Deborah Heart and Lung Center
(Deborah) set the parameters for the instant dispute before the
District Court and subsequently failed to meet its own self-
imposed burden. Consequently, we will affirm the District
Court’s entry of judgment in favor of Virtua Health, Inc.
(Virtua), Virtua Memorial Hospital Burlington County
(Virtua Memorial), and The Cardiology Group P.A. (CGPA).

                               I.

       The record in this case is voluminous, and the District
Court ably laid out the factual circumstances in its opinion.1
Nevertheless, an abbreviated summary is useful here to
provide clarity and background. Deborah is a charity hospital
located in Browns Mills, New Jersey. Virtua operates
multiple hospitals in southern New Jersey, including Virtua
Memorial. CGPA was a group of twelve cardiologists who
practiced in Burlington County, New Jersey. Cardiac surgery
could not be performed at Virtua Memorial during the time

1
 Deborah Heart & Lung Ctr. v. Virtua Health, Inc., No. 11-
1290, 2015 WL 1321674, at *1–6 (D.N.J. Mar. 24, 2015).




                               3
period at issue, due to state regulations. Deborah and Virtua
competed in the market for medical services.

       Deborah identified the “products” over which the
instant dispute arose as emergency and non-emergency
advanced cardiac interventional procedures, referred to as
ACIs. ACIs include angioplasties and other procedures to
alleviate cardiac blockages. If a patient requires an ACI
procedure and her doctor lacks the expertise or privileges at a
suitable hospital, the patient must be referred to another
physician or hospital that is authorized to provide the
procedures. In New Jersey, the hospital in which the patient
is being treated may be prevented by state regulation from
allowing ACIs to be performed, which would also necessitate
a transfer to an authorized cardiac hospital. For non-
emergency ACI procedures, the market at issue, as defined by
expert testimony submitted by Deborah, consists of five New
Jersey counties and portions of Philadelphia. For emergency
procedures, the market consists of three New Jersey counties.
Virtua did not challenge Deborah’s market definitions in the
District Court, nor does it do so here.

        Until July 2006, none of CGPA’s physicians could
perform ACI procedures. Consequently, CGPA had to refer
its patients in need of ACIs to other doctors. Beginning in
1992, CGPA and Deborah had a relationship that resulted in
the transfer of numerous ACI patients to Deborah. This
relationship was formalized in 1999 through five individual
contracts, known as physician leases, between ACI-qualified
cardiologists at Deborah and CGPA.

      The ties between CGPA and Deborah began to fray in
2005, when the doctors at CGPA entered into an exclusive




                              4
agreement to provide Virtua Memorial with all necessary
cardiovascular services. Referrals to Deborah still occurred
after the agreement was signed, but those referrals dropped
off significantly, from 627 in 2005 to 60 in the first seven
months of 2010. In 2006, CGPA hired a doctor—who had
previously worked at Deborah—who was capable of
performing some ACIs, leading CGPA to terminate its
physician leases with Deborah.

       In 2007, CGPA signed a new set of physician leases,
this time with doctors who worked primarily at Penn
Presbyterian Hospital in Philadelphia. Under the new
agreement, when CGPA patients needed procedures that its
physicians could not perform or that could not be performed
at Virtua Memorial, those patients were typically transferred
to Penn Presbyterian. Virtua is not mentioned in the new
contracts, but Deborah alleges that Virtua was an unnamed
party that participated in the contracts’ negotiation. Deborah
also alleges that the goal of the new physician leases was to
drive Deborah out of business.

       Prior to the 2007 contract with Penn Presbyterian,
approximately eighty-five percent of CGPA’s transfers went
to Deborah. After the contract, only thirty percent of
transfers went to Deborah while seventy percent went to Penn
Presbyterian.      Deborah asserts that this arrangement
constituted an illegal restraint on trade and resulted in harm to
competition because it forced some consumers to obtain ACI
procedures at Penn Presbyterian when, in a competitive
market, they would have chosen Deborah. Deborah also
alleges that the quality of care at Deborah was superior to the
quality offered at other facilities in the market.




                               5
       Deborah’s amended complaint, filed in the U.S.
District Court for the District of New Jersey, asserted that
CGPA and Virtua violated Section 1 and Section 2 of the
Sherman Act.2 Deborah also filed suit in New Jersey state
court alleging common law claims for tortious interference
and unfair competition. The District Court dismissed the
Section 2 count from the amended complaint for failure to
state a claim, a ruling from which Deborah does not appeal.
Following lengthy discovery, the District Court in its well-
reasoned opinion granted Virtua and CGPA’s motions for
summary judgment on Deborah’s Section 1 claim, holding
that Deborah did not introduce sufficient evidence to show
injury to competition in the designated markets.

                              II.3

        Resolution of the instant appeal is relatively simple,
but we write to clarify the burden on an antitrust plaintiff,
alleging a Section 1 claim in which the plaintiff does not
assert that the defendants possess market power. An antitrust
plaintiff must prove four prongs: (1) “concerted action by the
2
  15 U.S.C. §§ 1–2.
3
  The District Court had jurisdiction over this matter pursuant
to 15 U.S.C. § 4 and 28 U.S.C. §§ 1331 and 1337(a). We
have jurisdiction over this appeal pursuant to 28 U.S.C. §
1291. Our review of a District Court’s grant of summary
judgment is plenary. Goldenstein v. Repossessors Inc., 815
F.3d 142, 146 (3d Cir. 2016). Summary judgment is
appropriate if, after drawing all reasonable inferences in favor
of the non-moving party, “the movant shows that there is no
genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Id. (quoting Thomas
v. Cumberland Cnty., 749 F.3d 217, 222 (3d Cir. 2014)).




                               6
defendants,” (2) “anti-competitive effects within the relevant
product and geographic markets,” (3) that “the concerted
actions were illegal” and (4) that the plaintiff “was injured as
a proximate result of the concerted action.”4 Failure to prove
any one of these prongs is fatal to the Section 1 claim.5 The
District Court held that Deborah failed to present sufficient
evidence to raise a genuine issue of material fact as to the
second prong of this inquiry.

       Section 1 claims are evaluated, except in certain
circumstances inapplicable here, under the “rule of reason.”6
Deborah alleges that CGPA and Virtua engaged in an illegal
exclusive dealing arrangement with Penn Presbyterian,
meaning that Deborah must prove that the arrangement’s
“‘probable effect’ is to substantially lessen competition in the
relevant market.”7

       As previously mentioned, the definition of the relevant
markets at issue was not disputed in the District Court.8 The
relevant market for emergency ACI procedures consisted of
three New Jersey counties, while the relevant market for non-

4
   Gordon v. Lewistown Hosp., 423 F.3d 184, 207 (3d Cir.
2005).
5
  Id.
6
  ZF Meritor, LLC v. Eaton Corp., 696 F.3d 254, 268 (3d Cir.
2012).
7
  Id.
8
  J.A. 15; id. at 734:10-14 (Summary Judgment Hearing Tr.:
“The Court [to Deborah counsel]: You don’t dispute the
definition of the market, right? [Deborah counsel]: No. We
submitted a report, it’s not in dispute, so it is our definition of
the market. We agree with that.”).




                                7
emergency ACI procedures consisted of those three counties,
plus two more New Jersey counties and parts of Philadelphia.
Thus, to proceed to trial, Deborah must present sufficient
evidence of anti-competitive effects “in the relevant market.”9
Anti-competitive effects for Section 1 purposes can be shown
in two ways: by showing “actual anticompetitive effects,
such as reduction of output, increase in price, or deterioration
in quality of goods and services,” or by showing the
defendant has “[m]arket power—the ability to raise prices
above those that would prevail in a competitive market,”
which is “essentially a surrogate for detrimental effects.”10
We have noted that “the difficulty of isolating the market
effects of the challenged conduct” means proof of “actual
anticompetitive effects,” as opposed to market power, “is
often impossible to make.”11

       Deborah did not, and, indeed, could not argue that
CGPA and Virtua had sufficient market power as a stand-in
for proof of actual anticompetitive effects.12 Deborah’s
expert explained that the relevant market included multiple
hospitals and hundreds of cardiologists. At most, CGPA’s
physicians represented less than eight percent of the
cardiologists practicing in the relevant market for emergency

9
  ZF Meritor, LLC, 696 F.3d at 268.
10
   Angelico v. Lehigh Valley Hosp., Inc., 184 F.3d 268, 276
(3d Cir. 1999) (quoting Orson, Inc. v. Miramax Film Corp.,
79 F.3d 1358, 1367 (3d Cir. 1996)).
11
   Id.
12
   Deborah’s attempts to raise a market power argument before us
in the first instance are inappropriate, given that the failure to raise
the argument before the District Court waived any opportunity to
raise it here. Metro. Edison Co. v. Pa. Pub. Utility Comm’n, 767
F.3d 335, 352 (3d Cir. 2014).




                                   8
ACI procedures and less than five percent of the cardiologists
practicing in the relevant market for non-emergency ACI
procedures. Thus, Deborah attempted to show actual anti-
competitive effects. It did so, however, only in reference to a
small subset of patients, namely, CGPA’s patients and those
patients who appeared in Virtua Memorial’s emergency
room. Deborah argues that, to prevail, it need not show anti-
competitive effects in the market as a whole, so long as it
shows more than a de minimis effect on competition in the
market. Deborah’s argument is foreclosed by our long-
standing precedent.

       In Eichorn v. AT&T Corp., we held that, in a rule of
reason analysis, courts must “examine the competitive
significance of the alleged restraint to determine whether it
has an anti-competitive effect on the market and is an
unreasonable restraint on trade.”13 In that case, we clarified
that “the relevant geographic market is the area in which a
potential buyer may rationally look for the goods or services
he or she seeks.”14 Deborah’s expert stated that the “relevant
geographic market” at issue in this matter are the three- and
five-county areas in New Jersey and parts of Philadelphia
previously mentioned. Yet, all of the arguments on which
Deborah relies to show anti-competitive effects pertain solely
to CGPA’s patients and patients entering Virtua Memorial’s
emergency room.

      Such a narrow definition would be improper even if it

13
   248 F.3d 131, 145 (3d Cir. 2001) (citing Tunis Bros. Co. v.
Ford Motor Co., 952 F.2d 715, 722 (3d Cir. 1991)).
14
   Id. at 147 (quoting Pa. Dental Ass’n v. Med. Serv. Ass’n of
Pa., 745 F.2d 248, 260 (3d Cir. 1984)).




                              9
matched with Deborah’s expert’s evaluation of the market at
issue, which it does not. In Brader v. Allegheny General
Hospital, we noted that courts have routinely concluded that
“absent an allegation that the hospital is the only one serving
a particular area or offers a unique set of services . . . the
relevant geographic market” may not be limited “to a single
hospital.”15 There is no evidence in the record indicating that
CGPA or Virtua Memorial were sufficiently unique to
warrant reducing the size of the geographic market to only
those entities, nor does Deborah make such an attempt here.
Thus, assuming, arguendo, that Deborah presented sufficient
evidence that CGPA and Virtua’s agreement caused some
anti-competitive effects to the patients of those entities, such
a showing is insufficient to demonstrate the type of anti-
competitive effects on the overall market necessary to prove a
Section 1 claim.

       The United States Supreme Court reached a similar
conclusion in Jefferson Parish Hospital District No. 2 v.
Hyde, in which the Court evaluated the “tying” of
anesthesiology services to surgical services at a New Orleans
hospital, requiring all patients at the hospital to use a single
group of anesthesiologists.16        Notably, the restraint in
Jefferson Parish was even more severe than that present in
the instant matter. Here, a significant minority of CGPA and
Virtua patients were still treated at Deborah after the
allegedly anti-competitive arrangement, while the Jefferson
Parish patients were prohibited from being treated by
anesthesiologists other than those contracted to the hospital in


15
     64 F.3d 869, 877–78 (3d Cir. 1995) (collecting cases).
16
     466 U.S. 2, 4–5 (1984).




                                10
question.17
       The Supreme Court held that even though the hospital
in that case required all of its patients to use a single
anesthesiology provider, the hospital’s actions did not violate
the Sherman Act because Dr. Hyde, the plaintiff
anesthesiologist who could not practice at East Jefferson
Hospital, failed to show anti-competitive effects on “the
market as a whole,” specifically, the larger New Orleans
metropolitan area with approximately twenty hospitals.18 In
Jefferson Parish, the plaintiff presented anecdotal evidence
that patients were unable to obtain the anesthesiologist of
their choice, attempting to show actual anti-competitive
effects based on the restriction of consumer choice at the
hospital in question.19 The Supreme Court held that such
evidence was not enough, observing that “[i]t may well be
true that the contract made it necessary for Dr. Hyde and
others to practice elsewhere, rather than at East Jefferson.
But there has been no showing that the market as a whole has
been affected at all by the contract.”20

       Despite Deborah’s efforts to distinguish Jefferson
Parish, there is no cognizable difference between the anti-
competitive effects found insufficient there and the anti-
competitive effects alleged here. Deborah makes much of the
alleged fact that CGPA patients were de facto prevented from
using the hospital of their choosing because patients did not
learn of the arrangement between CGPA and Penn
Presbyterian until it was too late, when the patients were

17
   Id.
18
   Id. at 7 n.7, 26–27; 31.
19
   Id. at 29–30.
20
   Id. at 31.




                              11
already being treated by CGPA physicians. The same,
however, was true of the Jefferson Parish patients, where the
Supreme Court noted that patients with a decided preference
for one anesthesiology provider over another could, absent
emergency situations, choose another hospital.21 The Court
held that the mere fact that consumers were required to make
a choice to change hospitals in order to obtain the
anesthesiologist of their choice did not constitute a Sherman
Act violation.22

        We conclude that a plaintiff, who asserts actual anti-
competitive effects to prove a Section 1 violation, must,
absent evidence of market power possessed by the
defendants, show anti-competitive effects on the market as a
whole. Where, as here, a plaintiff shows effects only on a
small subset of that market and makes no attempt to show
broader effects, the plaintiff cannot meet the requirements of
the second prong of the antitrust inquiry. Deborah staked its
ground for the instant dispute and its failure to occupy enough
of that ground is fatal to its claims.

                             III.

       For the foregoing reasons, we will affirm the judgment
of the District Court.




21
     See id. at 23–25.
22
     Id.




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