St. Joseph’s had failed to show that two independent competitiors had “unlawfully combined to injure competition,” as required by § 1 of the Sherman Act. As to HCA and HCA Management, the court relied on the holding of the Supreme Court in Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 104 S.Ct. 2731, 81 L.Ed.2d 628 (1984), that a parent company and its wholly owned subsidiary are legally incapable of conspiring with each other, and their activity must be viewed as that of a single enterprise for purposes of § 1 of the Sherman Act.
As to HCA Management and MMC, the district court found there could be no conspiracy between a corporation and its employee, relying on Tose v. First Pennsylvania Bank, N.A., 648 F.2d 879 (3rd Cir.1981), cert. denied 454 U.S. 893, 102 S.Ct. 390, 70 L.Ed.2d 208 (1981); Nelson Radio & Supply Co., Inc. v. Motorola, Inc., 200 F.2d 911 (5th Cir.1952), cert. denied, 345 U.S. 925, 73 S.Ct. 783, 97 L.Ed. 1356 (1953).
According to the plaintiff the relationship of the parties is not as simple as the district court views iti The plaintiff contends that while HCAM is a wholly owned subsidiary of HCA, its status as an employee of MMC is more complicated than the usual employer-employee situation. In this case the employee is a separate corporate entity with an entirely separate board of directors, and the employee is in the business of managing hospitals for a profit. As such, St. Joseph’s argues that HCA/HCAM had the independent corporate existence plus the independent interest and motive necessary to support a conspiracy claim under § 1 of the Sherman Act.
As the Seventh Circuit pointed out in Tamaron Distributing Corporation v. Weiner, 418 F.2d 137 (7th Cir.1969), Nelson Radio
does not preclude a conspiracy or combination between a corporation and any agent. The guiding principle is the requirement that there be more than one independent business entity involved in the combination or conspiracy. Thus in Nelson Radio, the court properly held that the corporation could not conspire with its managing officers and agents who maintained no business identity separate from the corporation itself. On the other hand, where there are distinct entities, the existence of an “agency” relationship between them does not foreclose a violation of Section 1 of the Act.
Id. at 139.
The courts have repeatedly noted that, while a corporation’s officers and its employees are legally incapable of conspiring among themselves, if the “officers or employees act for their own interests, and outside the interests of the corporation, they are legally capable of conspiring with their employers for purposes of Section 1.” Tunis Brothers Co., Inc. v. Ford Motor Co., 763 F.2d 1482 (3rd Cir.1985), appeal pending; H & B Equipment Co., Inc. v. International Harvester, 577 F.2d 239 (5th Cir.1978). Greenville Publishing Co. v. Daily Reflector, Inc., 496 F.2d 391 (4th Cir.1974).
St. Joseph’s alleged that HCA and MMC were separate entities with separate economic interests but failed to support the allegations with sufficient facts to show that anyone other than MMC had an “independent personal stake” in the outcome of the conspiracy. St. Joseph’s should be given an opportunity to amend the complaint, if it can, to show the missing elements.
Section 2 of the Sherman Act
St. Joseph’s has also alleged a violation of § 2 of the Act. The district court did not distinguish the claims under §§ 1 and 2 since it determined that the actions of the defendants were protected activity. Our determination that such action is not immune from antitrust action applies to both Sections 1 and 2.
Section 2 differs from § 1 in that it is not restricted to a conspiracy, but is aimed at, inter alia, the acquisition or retention of effective market control. Monopolies, attempted monopolies and conspiracies to monopolize any part of interstate commerce are a violation of § 2 of the Sherman Act.