Arizona v. Maricopa County Medical Society

PETITIONER: Arizona
RESPONDENT: Maricopa County Medical Society
LOCATION: Mississippi University for Women

DOCKET NO.: 80-419
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 457 US 332 (1982)
ARGUED: Nov 04, 1981
DECIDED: Jun 18, 1982

ADVOCATES:
Kenneth R. Reed - on behalf of the Petitioner
Philip P. Berelson - on behalf of the Respondents
Stephen M. Shapiro - amicus curiae

Facts of the case

Question

Media for Arizona v. Maricopa County Medical Society

Audio Transcription for Oral Argument - November 04, 1981 in Arizona v. Maricopa County Medical Society

Warren E. Burger:

We will hear arguments next in Arizona against Maricopa County Medical Society.

Mr. Reed, I think you may proceed whenever you are ready.

Kenneth R. Reed:

Mr. Chief Justice, may it please the Court, this case is here on certiorari to review what the lower courts have characterized as a controlling question of law on which there is substantial ground for difference of opinion.

The United States District Court denied our motion for partial summary judgment on the question of a violation, on the ground that the legality of Respondent's agreed upon fee schedules was to be judged under the rule of reason rather than per se rule.

He did deny it with leave to file a similar motion later after more discovery had taken place, didn't it?

Kenneth R. Reed:

To be sure, and we subsequently filed, Justice Rehnquist, a motion for partial summary judgment on the question of violation, based on the rule of reason.

That motion was filed in support of our papers for a preliminary injunction, and both of those questions were before the Ninth Circuit, both the 1292b petition for interlocutory appeal and the appeal of the denial of summary judgment motion.

Summary judgment in your favor.

Kenneth R. Reed:

No, Your Honor.

Summary judgment had been denied by the District Court under both the rule of reason theory and per se theory, and our request for continuation of the preliminary injunction was also denied under the theory that it did not violate either the per se standard and there was not enough evidence to show that it violated the rule of reason.

But didn't Judge Coppel give you leave to renew your motion for summary judgment on either standard after more discovery had taken place, just that there wasn't enough facts in the record to say what the effect of the plan was?

Kenneth R. Reed:

He did in fact give us leave to refile.

We did in fact refile it.

He did in fact deny it.

I think the question this Court has to decide is how much additional discovery need be taken and on what additional issues must discovery be taken if at all before reaching a decision.

I think, as we talk in the briefs, there is talk in the papers about disputed facts, about the desire for further discovery, but I think the facts, Justice Rehnquist, necessary for this Court's decision are clear and simple, undisputed, and have been established by Respondent's own Rule 36 admissions and the affidavits Respondents themselves have prepared and submitted and filed with the lower courts, and those facts are really only three.

One, Respondents are trade associations of competing physicians.

Two, as part of their activities, Respondents formulate and prepare lists of prices covering the range of services that they perform.

Three, as part of their function, the Respondents prepare minimum standards which they utilize in endorsing pre-paid health plans, whether insurance health plans or by third party payors such as the state of Arizona, which reimburses health care plans as an employer.

For an insurer or an employer to receive Respondents' endorsement, the third party payor must agree to accept these minimum standards, one of which is the agreement to pay Respondent's members up to the amount set forth in the agreed upon fee schedules.

In return, in return, Respondents' members agree not to bill any more than what is set forth in those fee schedules.

Those facts, Justice Rehnquist, are established beyond cavil.

I thought that the physician was free to bill the patient whatever he wanted.

Kenneth R. Reed:

That's right, Your Honor.

The physician can... a member of the society, a member of one of the Respondents can bill less than the fee schedule.

What about more?

Kenneth R. Reed:

Not at all.

He could prepare a piece of paper that said more.

He has been guaranteed of receiving what is set in the fee schedule.

And if the patient wishes to pay him more, and he sends a bill to the patient for more, and the patient pays him more, he doesn't have to return it, does he?