Crosby v. Hospital Authority of Valdosta & Lowndes County

United States Court of Appeals,

Eleventh Circuit.

No. 95-8187.

R. Derry CROSBY, Plaintiff-Appellant,

v.

HOSPITAL AUTHORITY OF VALDOSTA AND LOWNDES COUNTY, D/B/A South
Georgia Medical Center, Earl L. Creech, M.D., John R. Kendrick,
M.D., Oscar E. Aguero, M.D., Archie L. Griffin, et al., Defendants-
Appellees.

Sept. 11, 1996.

Appeal from the United States District Court for the Middle
District of Georgia. (No. 90-CV-23-VAL), Wilbur D. Owens, Jr.,
Judge.

Before ANDERSON and BLACK, Circuit Judges, and HENDERSON, Senior
Circuit Judge.

ANDERSON, Circuit Judge:

This case involves a doctor, R. Derry Crosby, who was denied

staff privileges by the Hospital Authority of Valdosta and Lowndes

County ("the Authority"). Dr. Crosby claimed that the Authority,

its board members, and the individual doctors on hospital peer

review committees (collectively "defendants") violated federal

antitrust law when they denied his application for hospital

privileges.1 The district court granted defendants' motion for

summary judgment on the ground that their actions were shielded by

the doctrine of state action antitrust immunity. Crosby v.

Hospital Authority of Valdosta, 873 F.Supp. 1568, 1581

(M.D.Ga.1995). We affirm.

I. FACTS

1
Dr. Crosby presented other state law claims which are not
relevant to this appeal.
 Dr. Crosby graduated from West Virginia College of Osteopathy,

an osteopathic medical school, where he earned a Doctor of

Osteopathy ("D.O.") degree.2 Upon completion of medical school,

Dr. Crosby completed a one year osteopathic internship at Memorial

Hospital in York, Pennsylvania. He remained at Memorial Hospital

for another four years to complete an osteopathic orthopedic

surgical residency program.

On September 20, 1986, Dr. Crosby applied for orthopedic

surgical staff privileges at South Georgia Medical Center ("SGMC"),

the hospital doing business for the Authority. After review by

numerous committees and the Authority, his application was denied.

Dr. Crosby contends that the doctors on the peer review committees

which gave recommendations to the Authority and the Authority

itself conspired to deprive him of staff privileges because he is

not an allopathic doctor and as part of a conspiracy in restraint

of trade in violation of 15 U.S.C.A. § 1, and monopolization (or an

attempt to monopolize) in violation of 15 U.S.C.A. § 2.

2
This case involves Crosby's claim that he was denied staff
privileges because he was an osteopathic as opposed to an
allopathic physician. We have described the difference between
the two as follows:

Generally, osteopathy assists the body's remedial
capabilities by focusing on the interaction of the
biological systems and stressing musculoskeletal
manipulative therapy, while allopathy treats disease by
producing effects incompatible with the condition to be
alleviated.... Although Georgia licenses both D.O.'s
and M.D.'s to practice medicine, the state
distinguishes between the two medical educations,
referencing them separately in the licensing statutes.
O.C.G.A. §§ 43-34-20(3), 43-34-26 (1984).

Silverstein v. Gwinnett Hosp. Authority, 861 F.2d 1560, 1563
(11th Cir.1988).
 The context of this case makes it necessary to review the

creation of hospital authorities in Georgia and the peer review

process at SGMC and the Authority. The Authority was created

pursuant to Georgia's Hospital Authorities Law, O.C.G.A. § 31-7-70

et seq. See generally Cox Enterprises v. Carroll City/County Hosp.

Auth., 247 Ga. 39, 273 S.E.2d 841, 844-45 (1981). Pursuant to the

Hospital Authorities Law, the Georgia legislature "created in and

for each county and municipal corporation of the state a public

body corporate and politic to be known as the "Hospital Authority'

of such county or city...." O.C.G.A. § 31-7-72(a). A hospital

authority's board is appointed by the governing body of the county

or municipal corporation in which it was created. Id. Hospital

authority board members receive no compensation for their work,

although they are permitted reimbursement for actual expenses.

O.C.G.A. § 31-7-74(a). Hospital authorities are granted the same

exemptions and exclusions from taxes as are granted to cities and

counties for similar facilities. O.C.G.A. § 31-7-72(e).

A hospital authority is "deemed to exercise public and

essential governmental functions and [has] all the powers necessary

and convenient to carry out and effectuate the purposes and

provisions of [the Hospital Authorities Law]." O.C.G.A. § 31-7-75.

These powers include, in addition to those necessary to operate a

hospital, the power to sue and be sued, to execute contracts, to

exercise the right of eminent domain, to receive proceeds from the

sale of general obligation or county bonds, and to issue revenue

anticipation certificates or other evidence of indebtedness. Id.

An authority may not operate for profit, but rather, must adjust
its prices to produce only enough revenue to cover costs with

reasonable reserves. O.C.G.A. § 31-7-77. Hospital authorities are

authorized to sell "negotiable revenue anticipation certificates"

for the purpose of funding their activities. O.C.G.A. §§ 31-7-

75(16), 31-7-78. These certificates, however, are not a debt of

the city, the county, the State, or any political subdivision.

O.C.G.A. § 31-7-79. Although not a debt of any "political

subdivision," these certificates "are declared to be issued for an

essential public and governmental purpose and together with

interest thereon and income therefrom, [are] exempt from all

taxes." O.C.G.A. § 31-7-79. Although an authority does not have

the power to tax, counties and cities possess the power to levy an

ad valorem tax for the purpose of contracting with the authority

for the provision of specific services. O.C.G.A. § 31-7-84(a).

Indeed, counties and their component municipalities are

specifically authorized to contract with hospital authorities for

the purpose of providing medical care to indigent residents of that

county or municipality. O.C.G.A. § 31-7-85. Upon dissolution, a

hospital authority is not authorized, in the absence of other

specific legislation, to convey any of its property to a private

person, association, or corporation. O.C.G.A. § 31-7-89. Finally,

the board of trustees of each authority is required to file with

the governing body of the particular municipality an annual report

of its activities. O.C.G.A. § 31-7-90.

Dr. Crosby's application for staff privileges was governed by
the bylaws of SGMC's medical staff (the "Bylaws").3 In particular,

Article X, § 2(b)(4) sets forth educational and other related

requirements for orthopedic surgeons applying for staff privileges:

"Physicians applying for Staff Membership in the specialty of

Orthopedics must demonstrate by training, experience, and

performance the requirements for eligibility in the specialty as

designated by the American Board of Orthopedics and be either board

certified or board eligible." (Bylaws, Art. X, § 2(b)(4)).

Pursuant to the Bylaws, Dr. Crosby's application for staff

privileges was reviewed by the following committees of the medical

staff: (1) the Orthopedic Service of the Department of Surgery;

(2) the Credentials Committee; (3) the Executive Committee; and

(4) the Ad Hoc Hearing Committee. The Orthopedic Service

recommended denial of Dr. Crosby's application because he did not

have the background (i.e., training, experience, and performance)

required by the Bylaws. 4 In addition, the Orthopedic Service

stated that its decision was based on its determination that there

were a sufficient number of orthopedic surgeons already on the

hospital staff. Next, the Credentials Committee recommended denial

of Dr. Crosby's application for failure to comply with the Bylaws'

3
All members of the medical staff agreed to abide by the
Bylaws. Further, the Bylaws were adopted and approved by the
Authority.
4
Specifically, Dr. Crosby was not "board certified or board
eligible" as designated by the American Board of Orthopedics
("ABO") because he had not completed an osteopathic orthopedic
residency training program that was approved by the ABO.
Accordingly, the Orthopedic Service concluded, in part, that Dr.
Crosby did not satisfy the Bylaws' residency requirements.
orthopedic residency requirements.5 The Executive Committee

reviewed the Credentials Committee's denial and affirmed its

conclusion. The Ad Hoc Hearing Committee then conducted a hearing

and concluded that the recommendation of the Executive Committee

was appropriate. Pursuant to the Bylaws, the application was

referred back to the Executive Committee, which voted to uphold the

Ad Hoc Hearing Committee's recommendation of denial on the grounds

that Dr. Crosby failed to meet the criteria established by the

Bylaws.

Finally, the Authority, acting through its Appellate Review

Committee, conducted a thorough hearing6 during which it considered

Dr. Crosby's application in light of the recommended denial by the

staff committees.7 As a result of this hearing, the Authority

unanimously voted to deny Dr. Crosby's application. It stated its

grounds for this denial as follows:

(1) The medical staff of South Georgia Medical Center, through
its Executive Committee, has found that the applicant has not
demonstrated by training, experience and performance the
requirements for eligibility in the specialty of orthopedics.

(2) The applicant has not met the "burden" placed on him by
Article V, § 1, b of the Medical Staff Bylaws of South Georgia
Medical Center.

5
In other words, the recommendation of the Credentials
Committee dropped the Orthopedic Service's second ground for
denying Dr. Crosby's application.
6
Dr. Crosby was represented by counsel at this hearing.
7
Under the Bylaws, although the various staff committees
provide recommendations to the Authority, the Authority wields
ultimate decisionmaking power over staff credentialing decisions.
(Bylaws, Article V, § 2). In this regard, the Authority
exercises meaningful control over the ultimate decision. It has
the power to follow, modify, or even disregard staff committee
recommendations. (Id. at Article V, § 2(g)-(j)).
 (3) The applicant fails to meet the requirements of Article X,
§ 2, b.—Surgical Service, 4., in that he has not demonstrated
that he is either Board Certified or Board Eligible by the
American Board of Orthopedics.

Thereafter, on March 14, 1990, Dr. Crosby filed the present

action against three groups of defendants: 1) the Authority, d/b/a

South Georgia Medical Center; 2) the board members of the

Authority; and 3) the physicians who participated in the various

review committees. He alleged violations of federal antitrust law

(restraint of trade and monopolization) and Georgia law.8

The district court, in a well-reasoned opinion, granted

summary judgment, holding that all defendants were immune from suit

by virtue of state action immunity under Parker v. Brown, 317 U.S.

341, 63 S.Ct. 307, 87 L.Ed. 315 (1943), and its progeny. Crosby,

873 F.Supp. at 1580-81. The Authority and its members, it

reasoned, were a "political subdivision" of the State and Georgia

had clearly articulated a policy authorizing the challenged

anticompetitive conduct. Id. at 1575-81. Further, it found that

the individual staff members on peer review committees, because

they acted as the Authority's agents, were protected by the

Authority's state action immunity. Id. at 1576-77. Finally, the

court held that, even if defendants were not entitled to state

action immunity, they were immune from damages under the Local

Government Antitrust Act ("LGAA"), 15 U.S.C.A. §§ 35-36, and the

Health Care Quality Improvement Act ("HCQIA"), 42 U.S.C.A. §§

11101-11152. Crosby, 873 F.Supp. at 1581-84. On appeal, Dr.

8
By consent of parties, Dr. Crosby abandoned all but his
federal antitrust claims. Crosby, 873 F.Supp. at 1570.
Crosby challenges each of these determinations.9

II. DISCUSSION

A. State Action Immunity

We review de novo the district court's grant of summary

judgment to defendants on their state action immunity defense. FTC

v. Hospital Board of Directors of Lee County, 38 F.3d 1184, 1187

(11th Cir.1994) (citation omitted); Bolt v. Halifax Hosp. Medical

Ctr. ("Bolt IV "), 980 F.2d 1381, 1384 (11th Cir.1993). Under the

state action immunity doctrine, also known as the Parker doctrine,

states are immune from federal antitrust law for their actions as

sovereign. Parker v. Brown, 317 U.S. 341, 351-53, 63 S.Ct. 307,

314, 87 L.Ed. 315 (1943); Lee County, 38 F.3d at 1187. The

doctrine is grounded in and derived from principles of federalism

and state sovereignty. Parker, 317 U.S. at 350-52, 63 S.Ct. at

313-14.

The state action immunity doctrine "does not apply directly

to a state's political subdivisions because these subdivisions "are

not themselves sovereign; they do not receive all the federal

deference of the States that create them.' " Lee County, 38 F.3d

at 1187 (quoting City of Lafayette, La. v. Louisiana Power & Light

Co., 435 U.S. 389, 412, 98 S.Ct. 1123, 1136, 55 L.Ed.2d 364

(1978)). Accordingly, actions by the State and actions by

municipalities are evaluated under different standards. The Parker

doctrine "exempts ... anticompetitive conduct engaged in as an act

9
Because we affirm the district court's ruling with respect
to state action immunity and immunity from damages under the
LGAA, we need not reach its decision regarding immunity under the
HCQIA.
of government by the State as sovereign, or by its subdivisions

pursuant to state policy to displace competition with regulation or

monopoly public service." City of Lafayette, 435 U.S. at 413, 98

S.Ct. at 1137 (Brennan, J., plurality opinion). The extension of

Parker immunity to political subdivisions reflects the Court's

conclusion that because "[m]unicipal corporations are

instrumentalities of the State for the convenient administration of

government within their limits, [cit.], the actions of

municipalities may reflect state policy." Id. (citation omitted).

Accordingly, the Court has made clear that a municipality 10

is entitled to state action immunity if it acted pursuant to

"clearly articulated and affirmatively expressed state policy."

Town of Hallie v. City of Eau Claire, 471 U.S. 34, 46-47, 105 S.Ct.

1713, 1720, 85 L.Ed.2d 24 (1985); City of Lafayette, 435 U.S. at

410, 98 S.Ct. at 1135; see also Bolt IV, 980 F.2d at 1385-86.11

10
We use the terms "municipality" and "political
subdivision" interchangeably throughout this opinion. Cf. Askew
v. DCH Regional Health Care Authority, 995 F.2d 1033, 1037 (11th
Cir.), cert. denied, 510 U.S. 1012, 114 S.Ct. 603, 126 L.Ed.2d
568 (1993) ("Ordinarily, when a local government entity seeks
immunity from antitrust liability, it must show that it is a
political subdivision of the state and that the challenged
conduct is authorized under a "clearly articulated and
affirmatively expressed policy of the state.' "); Bolt IV, 980
F.2d at 1385 ("Political subdivisions, including municipalities,
... can obtain protection under the state-action immunity
doctrine if they can "demonstrate that [they acted pursuant to a
clearly articulated stated policy displacing competition with
regulation].' ").
11
In City of Lafayette, the Court suggested that state
action immunity would apply to a municipality only if: (1) the
municipality acted pursuant to clearly articulated and
affirmatively expressed state policy; and (2) the
anticompetitive conduct was actively supervised by the State.
435 U.S. at 410, 98 S.Ct. at 1135. In Town of Hallie, the Court
held that only the first of the these two prongs applies to
municipalities. 471 U.S. at 46-47, 105 S.Ct. at 1720. In
Private parties are entitled to even less federal deference than

either the State or its political subdivisions. When a private

party seeks the protection of state action immunity, it must show

both that: (1) the challenged restraint was clearly articulated

and affirmatively expressed as state policy; and (2) the policy

was actively supervised by the state. California Retail Liquor

Dealers Ass'n v. Midcal Aluminum, Inc., 445 U.S. 97, 105, 100 S.Ct.

937, 943, 63 L.Ed.2d 233 (1980). In Town of Hallie, the Court

explained that the second prong of the Midcal test, the active

state supervision requirement, is unnecessary when the actor is a

municipality because whereas there is a real danger that a private

party acts to further his or her own interest rather than the

governmental interests of the State, there is less danger that a

municipality is involved in a private price-fixing arrangement.

471 U.S. at 47, 105 S.Ct. at 1720. Although there is some danger

that a municipality will pursue its own goals rather than those of

the State, 12 this concern is addressed by the first prong of the

Parker doctrine, i.e., the municipality must act pursuant to

clearly articulated state policy.

In sum, a greater level of state involvement in the

anticompetitive conduct must be demonstrated if the defendant is a

California Retail Liquor Dealers Ass'n v. Midcal Aluminum, Inc.,
445 U.S. 97, 105, 100 S.Ct. 937, 943, 63 L.Ed.2d 233 (1980), the
Court held that both prongs apply to private parties.
12
Cf. City of Lafayette, 435 U.S. at 412-13, 98 S.Ct. at
1136-37 ("In light of the serious economic dislocation which
could result if cities were free to place their own parochial
interests above the Nation's economic goals reflected in the
antitrust laws, ... we are especially unwilling to presume that
Congress intended to exclude anticompetitive municipal action
from their reach.").
private party rather than a political subdivision. If the

defendant is a "political subdivision," it travels under the

single-prong Town of Hallie test (i.e., the defendant must show

"clear articulation"). If the defendant is a private party, it

travels under the two-prong Midcal test (i.e., defendant must show

both "clear articulation" and "active state supervision").

Accordingly, we must determine whether the Authority, its board

members and SGMC's staff members should be evaluated as a political

subdivision or as private actors.

B. Political Subdivision or Private Actors?

1. The Authority and its Board Members

The district court found that the Authority is a political

subdivision of Georgia. It based its decision on several cases

involving similar issues in Alabama and Florida. See FTC v. Hosp.

Board of Directors of Lee County, 38 F.3d 1184 (11th Cir.1994);

Askew v. DCH Reg. Health Care Authority, 995 F.2d 1033 (11th Cir.),

cert. denied, 510 U.S. 1012, 114 S.Ct. 603, 126 L.Ed.2d 568 (1993);

Todorov v. DCH Healthcare Authority, 921 F.2d 1438 (11th Cir.1991);

see also Sweeney v. Athens Regional Medical Center, 705 F.Supp.

1556, 1565 (M.D.Ga.1989) (interpreting Georgia statute).

In determining whether the Authority is a "political

subdivision" for purposes of state action immunity, we are guided

by Town of Hallie, 471 U.S. at 46-47, 105 S.Ct. at 1720. There,

the Court held that municipalities, and perhaps state agencies,

need not satisfy the active state supervision requirement. Id. It

based its conclusion on the realization that states often act

through their municipalities and, accordingly, action by a
municipality often is equivalent to action by the State as

sovereign.

Where a private party is engaging in the anticompetitive
activity, there is a real danger that he is acting to further
his own interests, rather than the governmental interests of
the State. Where the actor is a municipality, there is little
or no danger that it is involved in a private price-fixing
arrangement. The only real danger is that it will seek to
further purely parochial public interests at the expense of
more overriding state goals. This danger is minimal, however,
because of the requirement that the municipality act pursuant
to a clearly articulated state policy. Once it is clear that
state authorization exists, there is no need to require the
State to supervise actively the municipality's execution of
what is a properly delegated function.

Id. at 47, 105 S.Ct. at 1720. The Court discounted the importance

of active supervision in the context of examining a political

subdivision's actions, noting that the "requirement of active state

supervision serves essentially an evidentiary function: it is one

way of ensuring that the actor is engaging in the challenged

conduct pursuant to state policy." Id. at 46, 105 S.Ct. at 1720.

Such evidence is not necessary where a political subdivision, a

creation and arm of the State, acts pursuant to clearly articulated

state policy. See Hass v. Oregon State Bar, 883 F.2d 1453, 1461

(9th Cir.1989), cert. denied, 494 U.S. 1081, 110 S.Ct. 1812, 108

L.Ed.2d 942 (1990).

We have held that state hospital authorities can be political

subdivisions for purposes of state action immunity. See, e.g.,

Askew, 995 F.2d at 1037-38. Of course, this does not end the

inquiry; in each case we must examine the State's statutes to

determine whether the actor is a "political subdivision," i.e.,

whether imposition of the active state supervision requirement is

necessary to determine whether the challenged actions are those of
the State as sovereign.13

The Authority was created pursuant to O.C.G.A. § 31-7-72 which

provides, in relevant part:

(a) There is created in and for each county and municipal
corporation of the state a public body corporate and politic
to be known as the "hospital authority" of such county or
city, which shall consist of a board of not less than five nor
more than nine members to be appointed by the governing body
of the county or municipal corporation of the area of
operation for staggered terms as specified by resolution of
the governing body....

(e) Nothing in this Code section is intended to invalidate any
of the acts of existing boards of authorities. Hospital
authorities shall be granted the same exemptions and
exclusions from taxes as are now granted to cities and
counties for the operation of facilities similar to facilities
to be operated by hospital authorities as provided for under
this Title.

Further, O.C.G.A. § 31-7-75 provides, in relevant part:

Every hospital authority shall be deemed to exercise public
and essential governmental functions and shall have all the
powers necessary or convenient to carry out and effectuate the
purposes and provisions of this Article.

The Authority concludes from this language that, because hospital

authorities are public bodies, they also must be political

subdivisions of the State for purposes of Parker immunity. See FTC

v. Hospital Board of Directors of Lee County, 38 F.3d 1184, 1188

(11th Cir.1994) (concluding that a health care authority was a

"political subdivision" subject to the single-prong test because it

13
Appellees cite a number of factually-distinguishable cases
for the proposition that "hospital authorities" in general are
political subdivisions. In Todorov v. DCH Healthcare Authority,
921 F.2d 1438 (11th Cir.1991) and Askew, supra, for example, we
examined hospital authorities created by the Alabama Health Care
Authorities Act. This Act specifically provided that Alabama's
hospital authorities acted as political subdivisions of the State
when exercising their powers, even if such exercise violated
federal antitrust law. These cases are not dispositive because
Georgia's statutes are not nearly so explicit.
was a special purpose unit of local government).

Dr. Crosby argues that the Georgia Supreme Court has

conclusively determined that Georgia hospital authorities are not

"political subdivisions" for purposes of state action immunity.

See Thomas v. Hospital Authority, 264 Ga. 40, 440 S.E.2d 195

(1994). In Thomas, the court examined whether a hospital authority

in Georgia was entitled to sovereign immunity from an action

arising out of a slip and fall injury. The court examined Art. I,

§ 2, ¶ 9(e) of the Georgia Constitution, which provides, in

relevant part: "Sovereign immunity extends to the state and all of

its departments and agencies." The court held that "hospital

authorities, because they are neither the State nor a department or

agency of the State, are not entitled to the defense of sovereign

immunity." Thomas, 440 S.E.2d at 196. The court unambiguously

stated that "neither the language of [the code section] which

refers to a hospital authority as a "body corporate and politic,'

nor that which assigns to it "public and essential governmental

functions' is sufficient to constitute it a political subdivision

of the state...." Id. (quotation omitted). The court concluded

that the hospital authority was not a "political subdivision":

"[T]here is a clear distinction between a political subdivision

such as a county and a corporate body such as a hospital authority,

which is a creation of the county." Id.

Thomas indicates that Georgia does not consider its hospital

authorities to be "political subdivisions" for purposes of

sovereign immunity under the Georgia Constitution. In Thomas, the

court supported its conclusion by reference to the public policy
underlying sovereign immunity in Georgia. Id., 440 S.E.2d at 196-

97. It found that a hospital authority's functions are not the

type of conduct Georgia's doctrine of sovereign immunity was

designed to protect. Sovereign immunity was intended to protect

the government from lawsuits as it goes about the business of

governing. Id. By contrast,

[t]he operation of a hospital is not the kind of function,
governmental or otherwise, entitled to the protection of
sovereign immunity. The very functions performed by the
Hospital Authority are performed by private hospitals and the
Hospital Authority is in direct competition with these private
hospitals for patients.[ ] If an instrumentality of the
government chooses to enter an area of business ordinarily
carried on by private enterprise, i.e., engage in a function
that is not "governmental," there is no reason why it should
not be charged with the same responsibilities and liabilities
borne by a private corporation.

Id., 440 S.E.2d at 197.

We recognize that the decision to "authorize" anticompetitive

conduct is wisely left to the State. See FTC v. Ticor Title

Insurance Co., 504 U.S. 621, 636, 112 S.Ct. 2169, 2178, 119 L.Ed.2d

410 (1992) (emphasizing that careful application of state action

immunity doctrine insures that the State remains responsible "for

the price fixing it has sanctioned and undertaken to control").

However, the definition of "political subdivisions" for purposes of

state sovereign immunity does not control its definition for

purposes of antitrust state action immunity. As directed by Town

of Hallie, 471 U.S. at 46-47, 105 S.Ct. at 1720, we focus instead

on whether the nexus between the State and the Authority is

sufficiently strong that there is little real danger that the

Authority is involved in a private price-fixing arrangement. See

id.
 Georgia public purpose authorities are unique entities, lying

somewhere between a local, general-purpose governing body (such as

a city or county) and a corporation. See generally Paul W.

Bonapfel, "The Legal Nature of Public Purpose Authorities:

Governmental, Private or Neither?" 8 Ga.L.Rev. 680 (1974) ("An

authority is [typically] an entity possessing both corporate and

governmental characteristics and created by general purpose

governments to accomplish specific purposes...."). Indeed,

although Georgia's hospital authorities possess many of the

attributes of a sovereign, they are clearly limited in their

character and are private actors in many respects.

In Thomas, the court focused on the fact that hospital

authorities have a separate existence from the State, i.e., they

are an instrumentality created by the State and county for a

special purpose. In other contexts, however, the Georgia Supreme

Court has recognized that hospital authorities are governmental

entities. For example, in Martin v. Hospital Authority of Clarke

County, 264 Ga. 626, 449 S.E.2d 827, 828 (1994), a case decided

after Thomas, the Georgia Supreme Court held that hospital

authorities are not liable for punitive damages because they are

"governmental entit[ies]." Indeed, the fact that hospital

authorities are governmental entities is demonstrated by the

statutes creating and regulating them. The Georgia Supreme Court

has summarized those factors illustrating the Authority's

governmental nature:

Factors tending to establish the Authority's governmental
nature include that it is a creature of statute; that it is
defined as a "public body corporate and politic " (emphasis
supplied); that its Board is appointed by the governing body
 of the relevant political subdivision or subdivisions; that
it is tax exempt; that it is deemed to exercise public and
essential governmental functions; that it may exercise the
power of eminent domain; that it receives tax revenues; and
that the governing bodies of the relevant political
subdivisions have a role in determining the disposition of its
property upon dissolution.

Cox Enterprises v. Carroll City/County Hospital Authority, 247 Ga.

39, 273 S.E.2d 841, 845 (1981). After careful analysis, the court

in Cox Enterprises, concluded that hospital authorities are

instrumentalities of the state, i.e., they are the manner in which

the state has determined to conduct its business. Id., 273 S.E.2d

at 846. Accordingly, the court held that, as a governmental

entity, the authority's attempt to bring a libel action was

unconstitutional. Id.

We are satisfied that the Authority is an instrumentality,

agency, or "political subdivision" of Georgia for purposes of state

action immunity; thus, we need not apply the active state

supervision requirement. Although Thomas held that hospital

authorities are not part of the State or county for purposes of

state sovereign immunity, the different policy reasons underlying

state action immunity indicate that Georgia's hospital authorities

are political subdivisions for state action immunity purposes. As

noted above, this determination is guided by the rationale of Town

of Hallie. Applying that rationale, we conclude that the nexus

between the State and the Authority is sufficiently strong that,

when combined with a clearly articulated policy in favor of the

challenged anticompetitive conduct, there is little danger that it

is involved in a private price fixing arrangement. See Town of

Hallie, 471 U.S. at 47, 105 S.Ct. at 1720. Cf. Porter Testing
Laboratory v. Board of Regents, 993 F.2d 768, 772 (10th Cir.),

cert. denied, 510 U.S. 932, 114 S.Ct. 344, 126 L.Ed.2d 309 (1993)

(holding that the active state supervision requirement applies only

to purely private parties).

Georgia has chosen to operate its hospitals through the

instrumentality of hospital authorities and, accordingly, it has

clothed these authorities with certain necessary governmental

qualities. Cf. Cox Enterprises, 273 S.E.2d at 846 ("Certainly the

government is authorized to operate hospitals, either directly or,

as here, indirectly."). Although hospital authorities may not

possess all of the powers enjoyed by municipalities or by the

State, they enjoy numerous governmental powers. Further, the

legislature has unambiguously stated that they are "public bodies"

which exercise "public and essential governmental functions."

O.C.G.A. §§ 31-7-72, 31-7-75. Georgia has also empowered hospital

authorities to act as market participants in several respects by

granting them several powers which resemble those of a private

corporation. The mere grant of such powers, however, does not

transform an otherwise governmental entity into a private actor of

the type we would expect to engage in a private price-fixing

agreement. The governmental powers enjoyed by the Authority are

similar in material respects to those of a hospital that is

directly operated by the State. None of its non-governmental

aspects create a danger that it is involved in a private

price-fixing arrangement.

The policy rationale employed by the court in Thomas, does

not aid Dr. Crosby's cause. The fact that the Authority engages in
the competitive business of health care, or operating a hospital,

does not remove it from the protective cloak of state action

immunity. It is axiomatic that state action immunity includes

protection for states when they engage in business. To follow the

policy rationale in Thomas and withhold immunity in those cases

where the state chooses "to enter an area of business ordinarily

carried on by private enterprise," would be to virtually eliminate

state action immunity altogether.14

Accordingly, we hold that the Authority is a "political

subdivision" of Georgia such that it is unnecessary to apply

Midcal's active state supervision requirement. Further, there has

been no argument that we should apply a different test to the

Authority's board members, and we decline to do so.

2. Members of peer review committees

Appellants also argue that the district court erred in its

determination that the individual doctors who served on the various

peer review committees were agents of the Authority and, therefore,

were entitled to the single-prong Town of Hallie test. See Crosby,

873 F.Supp. at 1576. The district court relied on Cohn v. Bond,

953 F.2d 154, 158 (4th Cir.1991), cert. denied, 505 U.S. 1230, 112

S.Ct. 3057, 120 L.Ed.2d 922 (1992), for the conclusion that

individual hospital staff members in this case should be treated as

the Authority's agents, i.e., as a political subdivision, for state

14
The parties have not argued and we decline to address the
Supreme Court's invitation to employ a "market participant"
exception to state action immunity. See City of Columbia v. Omni
Outdoor Advertising, 499 U.S. 365, 374-75, 379, 111 S.Ct. 1344,
1351, 1353, 113 L.Ed.2d 382 (1991). See also Genentech, Inc. v.
Eli Lilly and Co., 998 F.2d 931, 948 (Fed.Cir.1993), cert.
denied, 510 U.S. 1140, 114 S.Ct. 1126, 127 L.Ed.2d 434 (1994).
action immunity purposes.

In Cohn, the Fourth Circuit held that medical staff members of

a municipally owned and operated hospital, when making their

recommendations to deny hospital privileges, acted as agents of

that hospital. Id. at 157-58.

[W]hen members of the medical staff recommend action on an
application for privileges, as authorized by the municipal
hospital, they are acting in their capacity as employees, as
opposed to private parties. [Oksanen v. Page Mem. Hosp., 945
F.2d 696 (4th Cir.1991) (en banc), cert. denied, 502 U.S.
1074, 112 S.Ct. 973, 117 L.Ed.2d 137 (1992) ]. Physicians who
make peer review decisions at the behest of, or by delegation
from, the hospital's board of trustees, are acting as agents
of the hospital and are, therefore, indistinguishable from the
hospital.

Id. Because the doctors were agents of the hospital, the court

held that the "active supervision" prong was inapplicable. Id. at

158-59. "The actions of the staff are immune when as is true here,

they are acting as agents of ... a municipal hospital ... in making

their recommendations." Id. The court relied exclusively on

Oksanen, supra, for its conclusion that physicians on peer review

committees act as agents of the hospital. Cohn, 953 F.2d at 158

("As previously discussed, members of the medical staff acted as

agents of [the] Hospital in making their recommendation to deny

hospital privileges. The second, "active supervision" prong is,

therefore, inapplicable in this case.").

In Oksanen, the Fourth Circuit examined whether plaintiff had

established the existence of a contract, combination, or conspiracy

under section one of the Sherman Act. 945 F.2d at 702. Section

one of the Sherman Act does not apply to unilateral action; it

proscribes only concerted action which imposes an unreasonable

restraint on trade. Monsanto Co. v. Spray-Rite Service Corp., 465
U.S. 752, 760-61, 104 S.Ct. 1464, 1469, 79 L.Ed.2d 775 (1984);

Albrecht v. Herald Co., 390 U.S. 145, 148, 88 S.Ct. 869, 871, 19

L.Ed.2d 998 (1968). Under the intraenterprise immunity doctrine

announced in Copperweld Corp. v. Independence Tube Corp., 467 U.S.

752, 768-69, 104 S.Ct. 2731, 2740-41, 81 L.Ed.2d 628 (1984),

unilateral actions of a single enterprise do not constitute the

type of concerted action proscribed by section one of the Sherman

Act. Accordingly, an officer and an employee of the same company

are legally incapable of conspiring with one another. Id. at 769,

104 S.Ct. at 2741. ("[O]fficers or employees of the same firm do

not provide the plurality of actors imperative for a § 1

conspiracy.") (citation omitted). In Copperweld, the Court

emphasized that an "internal "agreement' to implement a single,

unitary firm's policies" does not raise the anticompetitive

concerns targeted by the Sherman Act. Id. at 769, 104 S.Ct. at

2740. "The officers of a single firm are not separate economic

actors pursuing separate economic interests, so agreements among

them do not suddenly bring together economic power that was

previously pursuing divergent goals." Id. at 769, 104 S.Ct. at

2740-41. Likewise, coordinated conduct of a corporation and its

unincorporated divisions or its wholly owned subsidiaries does not

constitute a conspiracy, but rather, unilateral conduct. Id. at

771, 104 S.Ct. at 2741-42:

A parent and its wholly owned subsidiary have a complete unity
of interest. Their objectives are common, not disparate;
their general corporate actions are guided or determined not
by two separate corporate consciousness, but one.... With or
without a formal "agreement," the subsidiary acts for the
benefit of the parent, its sole shareholder. If a parent and
a wholly owned subsidiary do "agree" to a course of action,
there is no sudden joining of economic resources that had
 previously served different economic interests, and there is
no justification for § 1 scrutiny.

Id.

In Oksanen, the court held that, under Copperweld 's

intraenterprise immunity doctrine, a hospital and its medical staff

lack the capacity to conspire during the peer review process. 945

F.2d at 703. In examining the relationship between a hospital and

its medical staff during the peer review process, the court

concluded that the medical staff works "as the Board's agent under

an "internal "agreement' to implement a single, unitary firm's

policies' of evaluating the conduct and competence of those to whom

the hospital extends privileges." Id. (quoting Copperweld, 467

U.S. at 769, 104 S.Ct. at 2740). As such, "the peer review process

does not represent the sudden joining of independent economic

forces that section one is designed to protect." Id.; see also

Copperweld, 467 U.S. at 767-69, 104 S.Ct. at 2740. Instead, the

hospital and its medical staff display a unity of interest when the

staff take part in hospital management decisions. Oksanen, 945

F.2d at 703. In addition, the court found it relevant to the

Copperweld inquiry that the hospital retained ultimate control over

staff credentialing decisions. Id. at 704 ("In Copperweld, the

parent corporation's ability to exercise control over its

subsidiary if the subsidiary failed to act in its best interests

influenced the Court's decision that the coordinated activity of

the two entities should be treated as that of a single entity.")

(citing Copperweld, 467 U.S. at 769-73, 104 S.Ct. at 2741-42).

The holding in Oksanen dictated the result in Cohn. If a

hospital and its staff during the course of peer review are
functionally one entity, then, a fortiori, the staff members are

(at the very least) agents of the hospital during peer review.

Accordingly, Cohn 's rationale persuades us only to the extent this

circuit has embraced the rationale of Oksanen.

This circuit's counterpart to Oksanen is Bolt v. Halifax Hosp.

Medical Center (Bolt III), 891 F.2d 810, 819 (11th Cir.1990),

implicitly overruled in part by City of Columbia v. Omni Outdoor

Advertising, 499 U.S. 365, 111 S.Ct. 1344, 113 L.Ed.2d 382 (1991).

Bolt III involved a physician whose medical staff privileges had

been revoked at three different hospitals. The plaintiff-physician

brought an antitrust action against the hospitals, their medical

staffs, and a local medical society. In our first panel opinion,

we held that the hospitals and their medical staffs were immune

from suit under state action immunity. See Bolt v. Halifax Hosp.

Medical Center (Bolt I), 851 F.2d 1273, 1284 (11th Cir.1988). Bolt

I was vacated when the case was taken en banc. See Bolt v. Halifax

Hosp. Medical Center, 861 F.2d 1233, 1234 (11th Cir.1988). Before

the en banc court, the hospitals and their medical staffs withdrew

their arguments based on state action immunity. The en banc court

directed the panel to reconsider its opinion in light of this

explicit waiver. See Bolt v. Halifax Hosp. Medical Center (Bolt

II), 874 F.2d 755, 756 (11th Cir.1989) (en banc). Accordingly, on

remand in Bolt III, the panel considered the case anew, largely

without state action immunity.15

15
State action immunity remained an issue in the case as to
one of the hospital defendants who had presented a new
state-action argument in its brief on rehearing en banc. Bolt
III, 891 F.2d at 818 n. 12, 823 n. 22.
 In particular, in Bolt III we considered whether plaintiff had

made out the contract, combination, or conspiracy element of his

Sherman Act claim. Like the court in Oksanen, we examined

Copperweld 's intraenterprise immunity doctrine in the context of

peer review credentialing decisions. Noting that the "directed

verdicts in this case would ... have been proper if, as the

defendants contend, the [hospital] defendants were legally

incapable of concerted action within the meaning of section 1 of

the Sherman Act," the court in Bolt III examined whether such a

conspiracy was possible. 891 F.2d at 818-19. The court rejected

application of the intraenterprise immunity doctrine on the ground

that the analogy between a corporation and its officers (or

subsidiaries) and a hospital and its medical staff was inapt in

some circumstances.

The rule for corporations is based on considerations unique to
the corporate context. Theoretically, a "conspiracy"
involving a corporation and one of its agents would occur
every time an agent performed some act in the course of his
agency, for such an act would be deemed an act of the
corporation. Thus, the rule that a corporation is incapable
of conspiring with its agents is necessary to prevent erosion
of the principle that section 1 does not reach unilateral
acts. A hospital and the members of its medical staff, in
contrast, are legally separate entities, and consequently no
similar danger exists that what is in fact unilateral activity
will be bootstrapped into a "conspiracy." See Oltz v. St.
Peter's Community Hospital, 861 F.2d 1440, 1450 (9th
Cir.1988).

Id. at 819. Cf. St. Joseph's Hosp., Inc. v. Hospital Corp. of

America, 795 F.2d 948, 956 (11th Cir.1986) ("[W]hile 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 employees for
purposes of Section 1.' ") (quotation omitted). Further, because

each member of the medical staff practiced medicine individually,

the court concluded that each is a "separate economic entity

potentially in competition with other physicians." Bolt III, 891

F.2d at 819.16 Unlike Oksanen, Bolt III rejected application of the

intraenterprise immunity doctrine to agreements between a hospital

and its staff regarding staff privilege decisions.

Relying on Bolt III, in Todorov v. DCH Healthcare Authority,

16
The court in Bolt III also examined whether one of the
hospital defendants was entitled to state action immunity. Id.
at 823-25. See supra note 15. It held that the Florida
legislature had not clearly articulated a policy to displace
competition because it had not foreseen that the hospital would
conspire with its medical staff to deny plaintiff staff
privileges on pretextual grounds. 891 F.2d at 825. Accordingly,
because the State had not foreseen that particular type of
anticompetitive conduct, the court found that the hospital was
not protected by Parker immunity. However, in Bolt v. Halifax
Hosp. Medical Center (Bolt IV ), 980 F.2d 1381 (11th Cir.1993),
we held that the Supreme Court in City of Columbia rejected this
part of Bolt III:

[T]he Court [in City of Columbia ] rejected federal
judicial inquiry into the state officials' intent in
undertaking he challenged action. Such an inquiry, the
Court stated, "would require the sort of deconstruction
of the governmental process and probing of the official
"intent' that we have consistently sought to avoid."
[Cit.] ...

The inquiry into whether the reasons for [the
hospital's] denial of staff privileges were pretextual
would require probing into the "official intent" of
HHMC, an inquiry expressly denounced by the Supreme
Court. [Cit.]

Bolt IV, 980 F.2d at 1388 (quotation omitted). Accordingly,
we held that City of Columbia implicitly overruled Bolt III
in part.

City of Columbia left untouched, however, Bolt III 's
rejection of Copperweld 's intraenterprise immunity doctrine
in the context of hospital peer review decisions. This
portion of Bolt III remains the law of this circuit.
921 F.2d 1438, 1446 n. 13 (11th 1991), we held that the individual

doctors on the medical staff of defendant hospital were separate

economic actors, not employees of the hospital, when they performed

the challenged actions, and, therefore, were not entitled to share

in the hospital's state action immunity. Id. at 1446 n. 13.

Plaintiff in Todorov was a doctor of neurology and a staff member

of the DCH Regional Medical Center (DCH), where he had been granted

privileges to practice neurology. After becoming a member of the

hospital staff, plaintiff applied for the privilege to perform

certain procedures in DCH's radiology department.17 After review

of his application, the credentials committee sought

recommendations from two of the physicians plaintiff had named as

references; both were radiologists who practiced at DCH. These

doctors did not recommend plaintiff. Indeed, they questioned his

technical competence. The credentials committee then solicited the

advice of the chairman of DCH's radiology department, who also

recommended denial of plaintiff's application for privileges. The

hospital, acting on the recommendation of the final peer committee

to review plaintiff's case, denied plaintiff's application.

Plaintiff initiated an action against DCH and the three

radiologists who provided the negative recommendations. The

district court held that DCH was immune from antitrust liability

under the Parker doctrine because it was a local governmental

entity and had acted pursuant to state authority in denying

plaintiff's application for privileges. 921 F.2d at 1445. It also

17
The hospital bylaws at DCH required a peer review process
for credentialing decisions that was similar in relevant respects
to the process at issue in the instant case.
held that the individual radiologists were immune because they were

"acting as employees of DCH and, as such, enjoyed DCH's immunity."18
Id. at 1446. On appeal, this Court agreed that DCH was entitled to

state action immunity; but, relying on Bolt III, we rejected the

district court's rationale with respect to the radiologists'

immunity:

In [Bolt III ], we held that members of a hospital's medical
staff should be considered independent legal entities for
antitrust purposes if they are not employed by the hospital
and are acting as separate economic actors.... Here, the
physicians are separate economic actors; thus, their actions
are legally distinct from the hospital's actions.
Accordingly, the district court could not properly base its
summary judgment on the ground that the radiologists and DCH
were a single legal entity.

Id. at 1446 n. 13.

The foregoing discussion demonstrates that Cohn 's reasoning

is not persuasive in this case. Cohn was dictated by Oksanen 's

holding that the hospital and its staff members on peer review

committees are functionally one entity. In other words, if the

hospital and the individual doctors are a single legal entity, it

readily follows that the doctors are agents who should share the

hospital's state action immunity. By contrast, in Bolt III we held

that a hospital and its staff members on peer review committees are

not functionally one entity to which Copperweld 's intraenterprise

immunity doctrine applies. Accordingly, in Todorov we rejected the

district court's rationale of treating the individual doctors as

the same legal entity as the hospital. See Todorov, 921 F.2d at

18
In the alternative, the district court held that the
radiologists were protected by the Noerr-Pennington doctrine.
Id. Opting to base our decision on other grounds, we declined to
affirm on these grounds. Id. at 1446 n. 14.
1446 n. 13 ("Accordingly, the district court could not properly

base its summary judgment on the ground that the radiologists and

DCH were a single legal entity.") (emphasis added).

However, the rationale of Bolt III and Todorov does not

govern the different issue in this case. Even though the Authority

and its individual doctors are not per se the same legal entity, we

must nevertheless inquire whether the particular actions of the

individual doctors which are challenged in this case were actions

taken by the doctors in performing official duties as agents of the

hospital such that they should share the hospital's state action

immunity. In other words, the fact that a hospital and its staff

are separate economic or legal entities does not mean that a staff

physician cannot be the agent of a hospital for certain purposes

and in certain circumstances (e.g., certain administrative

functions like peer review activities). In short, a hospital and

its staff can be separate entities for purposes of intraenterprise

immunity, but the staff physicians may in certain contexts be

agents of the hospital for purposes of state action immunity. The

policies underlying these two immunity doctrines are different, as

are the factors which guide our analysis.19

To determine whether the individual doctors here were agents

19
In the text we explain how Todorov is distinguished from
this case because it merely rejected the same-legal-entity
rationale. Todorov is also distinguishable on its facts. In
Todorov, the challenged actions of the individual doctors were
not actions in the performance of official duties as peer review
committee members; rather, the individual doctors merely gave
negative recommendations about plaintiff to the relevant peer
review committees. By contrast, the challenged actions of the
individual doctors in the instant case were all taken within the
scope of their official duties as members of the hospital's peer
review committees. See infra note 20.
of the Authority during the performance of the challenged actions,

we look to the policies underlying the state action immunity

doctrine and the context of the particular activities of the

doctors in this case. The core policy underlying Parker immunity

is that actions by the State, as sovereign, lie beyond the intended

scope of the antitrust laws. See Parker, 317 U.S. at 352, 63 S.Ct.

at 314 ("The state ..., as sovereign, imposed the restraint as an

act of government which the Sherman Act did not undertake to

prohibit.") (citation omitted); Town of Hallie, 471 U.S. at 38,

105 S.Ct. at 1716 ("In Parker, ... the Court refused to construe

the Sherman Act as applying to the anticompetitive conduct of a

State acting through its legislature.... Rather, it ruled that the

Sherman Act was intended to prohibit private restraints on

trade....") (quotation omitted); Patrick v. Burget, 486 U.S. 94,

99, 108 S.Ct. 1658, 1662, 100 L.Ed.2d 83 (1988) ("The Sherman Act

... was not intended "to restrain state action or official action

directed by the state.' ") (quotation omitted). What is critical

is that the action be truly that of the State and not that of an

individual or private actor. The "clear articulation" and "active

state supervision" tests reflect this core policy. These tests are

designed to ensure that the action taken was truly state action

inasmuch as they require different levels of state involvement in

the challenged action depending on whether the actor is a

municipality or a private party. See, e.g., Patrick, 486 U.S. at

100, 108 S.Ct. at 1662 ("We ... established a rigorous two-pronged

test to determine whether anticompetitive conduct engaged in by

private parties should be deemed state action and thus shielded
from the antitrust laws.").

The actions of the individual doctor-defendants which are

challenged in this case consisted exclusively of official actions

taken as members of the hospital's peer review committees.20

Accordingly, the issue in this case is whether the doctors'

activities on SGMC peer review committees should be considered

action taken by the Authority (i.e., by the political subdivision)

or action taken by the individual doctors (i.e., by private

parties). To determine whether the challenged actions were those

of the Authority qua political subdivision, we are guided by Town

of Hallie, supra. There, the Supreme Court distinguished between

actions by political subdivisions, which are presumptively intended

to further governmental interests if undertaken pursuant to clearly

articulated state policy, and actions by private parties, which are

presumptively intended to further private interests. See Town of

Hallie, 471 U.S. at 47, 105 S.Ct. at 1720. The appropriate inquiry

focuses on whether "there is little or no danger that [the actor]

is involved in a private price-fixing arrangement," id., as opposed

to state action vindicating a truly governmental interest. As was

true with respect to the Authority, we examine whether the nexus

between the State and the actions of the doctors on peer review

committees is sufficiently strong that there is little real danger

that these doctors are involved in a private price-fixing

arrangement.

20
The district court found that each individual doctor
defendant acted within the scope of his or her duty as a member
of the various credentialing committees. Crosby, 873 F.Supp. at
1571. This finding is not clearly erroneous.
 Because of the control exercised by the Authority over peer

review decisions and the statutory context of peer review in

Georgia, we conclude that the actions of individual doctors on peer

review committees should be considered actions of the Authority

such that the "active state supervision" requirement is unnecessary

to ensure that the challenged actions are truly those of the State.

First, the control exercised by the Authority over all staff

credentialing decisions is strong evidence that it is the Authority

and not its staff members acting. Under the Bylaws, the Authority

retains power over decisions to grant or deny hospital privileges.

Although the numerous layers of staff committees recommend the

grant or denial of staff privileges to the Authority, the Authority

is the repository of ultimate decisionmaking power and exercises

plenary review of all credentialing decisions. Cf. Ramey v.

Hospital Auth. of Habersham County, 218 Ga.App. 618, 462 S.E.2d

787, 788 (1995) ("[U]nder the law of this state the hospital

authority, and not the medical staff, is responsible for selecting

staff members."). Under the Bylaws, the Authority does not merely

"rubber stamp" the committee recommendations; instead, it conducts

an independent, meaningful review. It retains the power to follow,

modify, or even disregard the recommendations of staff committees.

In this case, it rendered its decision only after a full hearing at

which Dr. Crosby was represented by counsel.21

21
At this hearing before the Authority, Crosby was free to
present evidence and argument that the several recommendations of
the hospital's peer review committees were influenced by improper
and irrelevant anticompetitive motives. We must assume that the
Authority would have favorably entertained such arguments and
evidence had they been persuasive; we must neither deconstruct
the Authority's mental processes nor probe its intent. City of
 Second, our conclusion derives strong support from the

statutory context of peer review in Georgia. Under O.C.G.A. § 31-

7-15, hospitals are required to provide for the review of

professional practices in the hospital.22 Specifically, hospitals

are directed to evaluate the qualifications and professional

competence of persons seeking to perform medical and health care

services at the hospital. § 31-7-15(a)(3). Indeed, hospitals must

undertake such evaluations to be entitled to a permit. § 31-7-

15(c). The statute permits peer review committees to perform such

Columbia, 499 U.S. at 377, 111 S.Ct. at 1352.
22
O.C.G.A. § 31-7-15, provides, in relevant part:

(a) A hospital ... shall provide for the review of
professional practices in the hospital ... for the
purpose of reducing morbidity and mortality and for the
improvement of the care of patients in the hospital....
This review shall include, but shall not be limited to,
the following: ...

(3) The evaluation of medical and health care
services or the qualifications and professional
competence of persons performing or seeking to
perform such services.

(b) The functions required by subsection (a) of this
Code section may be performed by a "peer review
committee," defined as a committee of physicians
appointed by a state or local or specialty medical
society or appointed by the governing board or medical
staff of a licensed hospital or ambulatory surgical
center or any other organization formed pursuant to
state or federal law and engaged by the hospital ...
for the purposes of performing such functions required
by subsection (a) of this Code section.

(c) Compliance with the above provisions of subsection
(a) of this Code section shall constitute a requirement
for granting or renewing the permit of a hospital....

(e) Nothing in this or any other Code section shall be
deemed to require any hospital or ambulatory surgical
center to grant medical staff membership or privileges
to any licensed practitioner of the healing arts.
evaluations. § 31-7-15(b). These committees may be appointed by,

inter alia, the governing board or medical staff of a licensed

hospital. Id. This statutory scheme reflects the reality of

management at the Authority (and other hospitals). Physicians at

hospitals often work in a variety of capacities. Primarily, they

are "separate economic entities," i.e., independent contractors, as

noted by the court in Bolt III. At times, they also function as

part of the hospital's management structure.23 In particular, they

are called on to aid in staff credentialing decisions because they

are in the best position to measure the quality of a physician's

work and credentials, a proposition recognized by § 31-7-15.

For these reasons, we are satisfied that there is little or

no danger of a private price fixing arrangement in this case such

that the imposition of "active state supervision" is required. The

Authority is a political subdivision of Georgia. As explicitly

authorized by statute, it receives recommendations as to staff

privilege decisions from peer review committees. It has not

delegated absolute control to these committees;24 instead, the

Authority alone exercises ultimate control over all credentialing

decisions. The only actions in this case were those of the

Authority, a political subdivision of Georgia. Were we to rule

23
See, e.g., William S. Brewbaker, "Antitrust Conspiracy
Doctrine and Hospital Enterprise," 74 B.U.L.Rev. 67 (1994).
24
In this case, we need not and do not address the issue of
whether Midcal 's active state supervision requirement would
apply to the activities of peer review committee members if the
peer review committees exercised unbridled discretion in making
staff privilege decisions—i.e., if the Authority had completely
delegated this function to the peer review committees of the
medical staff.
otherwise, the state action immunity afforded the Authority would

be meaningless because as a practical matter the Authority must act

through its agents. In this case, we hold that the individual peer

review committee members are immune from federal antitrust

liability to the extent the Authority is immune.25
C. Clear Articulation

In this circuit, we have established a three-part inquiry to

determine whether an entity satisfies the single-prong ("clear

articulation") test set forth in Town of Hallie, supra. The entity

must show: "(1) that it is a political subdivision of the state;

(2) that, through statutes, the state generally authorizes the

political subdivision to perform the challenged action; and (3)

that, through statutes, the state has clearly articulated a state

policy authorizing anticompetitive conduct." FTC v. Hospital Board

25
Dr. Crosby rejoins that the reasons proffered by the
various peer review committees were a mere pretext for their true
anticompetitive motives. As City of Columbia directs, however,
once it is determined that the denial of Crosby's application for
staff privileges was "state action," the individual motives
underlying that action become irrelevant. City of Columbia, 499
U.S. at 377-78, 111 S.Ct. at 1352 (" "[W]here the action
complained of ... was that of the State itself, the action is
exempt from antitrust liability regardless of the State's motives
in taking the action.' ") (quotation omitted). "[A]ny action
that qualifies as state action is "ipso facto ... exempt from the
operation of the antitrust laws'...." Id., 499 U.S. at 379, at
1353 (quoting Hoover v. Ronwin, 466 U.S. 558, 568, 104 S.Ct.
1989, 1995, 80 L.Ed.2d 590 (1984)). Because the individual staff
members were acting as agents of the Authority in making their
peer review recommendations, they were acting at the behest of
and as an arm of the State and, therefore, their motives are
irrelevant so long as the challenged actions were undertaken
pursuant to clearly articulated state policy. Crosby had an
opportunity at the hearing before the Authority to demonstrate
that the peer review committee members made their recommendations
for improper and irrelevant anticompetitive reasons. We cannot
probe the Authority's intent in rejecting any such arguments by
Crosby.
of Directors of Lee County, 38 F.3d 1184, 1187-88 (11th Cir.1994).

Because we have determined that defendants are a political

subdivision of the State and the parties concede that Georgia

generally authorizes them to perform the challenged action,26 we

proceed to the third part.

The third requirement under the Lee County test is that the

State must, through its statutes, clearly articulate a policy

authorizing the challenged anticompetitive conduct. Id. at 1187-

88. The Supreme Court has noted that the phrase "clearly

expressed" does not require the legislature to state explicitly

that it anticipates anticompetitive effects. Town of Hallie, 471

U.S. at 42, 105 S.Ct. at 1718; see also Southern Motor Carriers

Rate Conf. v. United States, 471 U.S. 48, 64-65, 105 S.Ct. 1721,

1731, 85 L.Ed.2d 36 (1985) ("[I]f the State's intent to establish

an anticompetitive regulatory program is clear ..., the State's

failure to describe the implementation of its policy in detail will

not subject the program to the restraints of federal antitrust

laws."). "Rather, it simply requires that the anticompetitive

conduct be a foreseeable result of the powers granted to the

political subdivision." Lee County, 38 F.3d at 1189 (citing Town

of Hallie, supra ). This circuit requires "only that the

anticompetitive conduct be reasonably anticipated, rather than the

inevitable, ordinary, or routine outcome of a statute." Id. at

26
The district court stated that whether Georgia has
authorized the challenged conduct was not at issue. 873 F.Supp.
at 1578 n. 10. Crosby has not argued otherwise and, accordingly,
we do not specifically address this issue. We note, however,
that in examining whether Georgia, through its statutes, has
clearly articulated a state policy in favor of the alleged
anticompetitive conduct, we necessarily touch on this issue.
1190-91.

Accordingly, we must determine whether the alleged

anticompetitive conduct is a reasonably foreseeable result of the

statutes authorizing the Authority to grant or deny staff privilege

applications. To do so, we must identify precisely the alleged

anticompetitive conduct. Dr. Crosby alleges that the Authority

denied his application for staff privileges at SGMC because its

doctors determined there to be a sufficient number of orthopedic

surgeons with such privileges. As he sees it, the hospital sought

to suppress competition at SGMC so as to maintain each doctor's

current level of business and income and to inflate prices.27

In this case, the Authority's power to grant or deny staff

privileges derives from O.C.G.A. § 31-7-7, which provides in

relevant part:

(a) Whenever any licensed doctor of medicine, doctor of
podiatric medicine, doctor of osteopathic medicine, or doctor
of dentistry shall make application for permission to treat
patients in any hospital owned or operated by the state, any
political subdivision thereof, or any municipality, the
hospital shall act in a nondiscriminatory manner upon such
application expeditiously and without unnecessary delay
considering the applicant on the basis of the applicant's
demonstrated training, experience, competence, and
availability and reasonable objectives, including, but not
limited to, the appropriate utilization of hospital
facilities....

(b) Whenever any hospital owned or operated by the state, any
political subdivision thereof, or any municipality shall
refuse to grant a licensed doctor of medicine, doctor of
podiatric medicine, doctor of osteopathic medicine, or doctor
of dentistry the privilege of treating patients in the
hospital, wholly or in part, or revoke the privilege of such
licensed medical practitioner for treating patients in such

27
Dr. Crosby also alleges that the Authority denied his
application because he is an osteopathic physician. To the
extent this claim fits into the antitrust model, it is subsumed
in the argument set forth in the text.
 hospital, wholly or in part, the hospital shall furnish to the
licensed medical practitioner whose privilege has been refused
or revoked, within ten days of such action, a written
statement of the reasons therefor....

(emphasis added).

The emphasized language reflects relevant amendments

incorporated into the statute in 1990. The parties generally base

their arguments on the previous version of the statute which, inter

alia, omitted the language in subsection (a) which authorizes the

Authority to consider applications based on the "appropriate

utilization of hospital facilities." Appellant assumes that,

because the events in this case took place in 1986 and 1987, the

prior version of the statute applies.

The district court applied the new version of the statute

without discussion of the prior version. Crosby, 873 F.Supp. at

1579. It concluded that "[t]he Georgia legislature could have

foreseen, or at least reasonably anticipated, that authorities

would consider the number of market participants in determining the

"appropriate utilization of hospital facilities.' " Id.

The district court was correct to apply the new version of

the statute. As discussed infra,28 Dr. Crosby's action for damages

against all defendants is barred by the Local Government Antitrust

Act. Consequently, he is limited to injunctive relief. Because

injunctive relief is prospective, a party seeking an injunction

must show a threat of future injury. "Logically, "a prospective

remedy will provide no relief for an injury that is, and likely

will remain, entirely in the past.' " Church v. City of

28
See infra Section II.D.
Huntsville, 30 F.3d 1332, 1337 (11th Cir.1994) (quoting American

Postal Workers Union v. Frank, 968 F.2d 1373, 1376 (1st Cir.1992)).

This concept has been described as one of mootness.

At every stage in the proceedings the court must "stop, look,
and listen' to determine the impact of changes in the law on
the case before it. Kremens v. Bartley, 431 U.S. 119, 135, 97
S.Ct. 1709, 1718, 52 L.Ed.2d 184 (1977) (impact of changes in
challenged statute on composition of certified class of
plaintiffs). Where a law is amended so as to remove its
challenged features, the claim for injunctive relief becomes
moot as to those features. [Cits].

Naturist Soc., Inc. v. Fillyaw, 958 F.2d 1515, 1519-21 (11th

Cir.1992). "Thus, a superseding statute or regulation moots a case

only to the extent that it removes challenged features of the prior

law." Id.

In this case, by way of injunctive relief, Crosby does not

seek reinstatement, but rather, an order directing the Authority to

review his application anew.29 Assuming, arguendo, we undertook a

review of the old (1984) version of O.C.G.A. § 31-7-7 and concluded

that the Authority did not act pursuant to a clearly articulated

state policy, any order we issued would not solve Dr. Crosby's

problem. If we ordered that the Authority review Dr. Crosby's

application again, such review would take place under the new

(1990) version of O.C.G.A. § 31-7-7. Accordingly, the issue of

whether the old version of the statute clearly articulates the

29
In his brief, Dr. Crosby states:

Appellant, Dr. Crosby, has not and does not seek
an order directing that the Authority grant him staff
privileges. He seeks to have injunctive relief to
ensure that he is placed on a level playing field with
his allopathic competitors. He also seeks monetary
damages for the conduct of the private defendant
physicians who participated in the denial of his staff
privileges.
requisite policy is moot. We must review the current statute as

amended to determine whether Georgia has clearly articulated the

challenged anticompetitive conduct. In short, because injunctive

relief is prospective, Dr. Crosby's claim travels under the new

version of the statute. See Landgraf v. USI Film Products, 511

U.S. 244, ----, 114 S.Ct. 1483, 1501, 128 L.Ed.2d 229 (1994)

("[R]elief by injunction operates in futuro....").

The clear articulation question is not a close one.

Hospitals may make staff privilege decisions based on any

reasonable objective, "including, but not limited to, the

appropriate utilization of hospital facilities." O.C.G.A. § 31-7-

7. We agree with the district court that it "is at the very least

foreseeable, and most certainly reasonably anticipated, that this

language would enable a hospital authority to engage in

anticompetitive conduct through its peer review activities."

Crosby, 873 F.Supp. at 1579. This is not the type of case in which

we must discern what type of conduct is reasonably anticipated from

a broad authorization to act. Rather, the statute explicitly

provides for precisely the anticompetitive conduct about which Dr.

Crosby complains. At worst, Dr. Crosby alleges that the SGMC

orthopedic surgeons determined that their services were sufficient

to meet the demand for their specialty at the hospital and,

therefore, agreed to deny Dr. Crosby hospital privileges. This is

exactly what the statute directs SGMC and the Authority to do. We

readily conclude that O.C.G.A. § 31-7-7 evidences a state policy in

favor of the anticompetitive conduct challenged in this case and

hold that all defendants are shielded from suit for injunctive
relief by state action immunity.30

The foregoing result is more readily reached than the similar

results in Bolt IV, 980 F.2d at 1386 (reinstating, in part, the

rationale of Bolt III, 891 F.2d at 825 ("[O]ne could correctly say

that when Florida's legislature authorized peer review in licensed

medical facilities, ... it could foresee that [the hospital] would

rely on recommendations made by a physician's peers and refuse to

deal with (i.e., boycott) that physician.")); and Lee County, 38

F.3d at 1192 (holding that when the state legislature expanded the

hospital board's powers to acquire other hospitals, it was

foreseeable that new acquisitions would result and that this would

increase the board's market share in an anticompetitive manner).

These cases illustrate that "reasonable anticipation" does not

require explicit authorization to engage in anticompetitive

conduct.

Our conclusion is not altered by Dr. Crosby's argument that

Georgia's Constitution establishes a policy against restraints on

trade. Article III, § 6, ¶ 5 of the Georgia Constitution of 1983

provides that

the General Assembly shall not have the power to authorize any
contract or agreement which may have the effect of defeating
or lessening competition, or encouraging a monopoly, which are
hereby declared to be unlawful and void.

We will not undertake an examination of whether the legislature's

30
Our conclusion that Georgia has reasonably anticipated the
anticompetitive effects of hospital peer review decisions also
derives strong support from O.C.G.A. § 31-7-15, the statute
authorizing peer review. See supra note 22. This statute
indicates the legislature's recognition that staff credentialing
decisions will be aided by the use of peer review committees.
Accord Bolt IV, 980 F.2d at 1386.
clear articulation of anticompetitive policy in O.C.G.A. § 31-7-7

violates this constitutional provision; we do not sit to determine

whether a state statute violates state law for purposes of state

action immunity. It is sufficient that Georgia has generally

authorized the challenged anticompetitive conduct. Cf. City of

Columbia v. Omni Outdoor Advertising, 499 U.S. 365, 371-72, 111

S.Ct. 1344, 1350, 113 L.Ed.2d 382 (1991) ("[I]n order to prevent

Parker from undermining the very interests of federalism it is

designed to protect, it is necessary to adopt a concept of

authority broader than what is applied to determine the legality of

the municipality's action under state law."). Insofar as Crosby

argues that the constitutional provision simply clarifies state

policy31 (i.e., not that it renders the statute unconstitutional),

we find that such policy has been tempered by a "rule of reason."

See Ferrero v. Assoc. Materials, Inc., 923 F.2d 1441, 1447 (11th

Cir.1991). "The rule of reason protects those contracts which are

reasonable in light of the interests of the parties and the

interests of the public." Id. at 1447. As the district court

found, the rule of reason protects contracts executed pursuant to

O.C.G.A. § 31-7-7. The parties to SGMC's by-laws and the public

have an interest in "the appropriate utilization of hospital

facilities," i.e., maintaining a proper mix of doctors and

specialties at the hospital so as to attract the optimal number of

qualified professionals. O.C.G.A. § 31-7-7 is a reasonable

31
Cf. Atlanta Center Ltd. v. Hilton Hotels Corp., 848 F.2d
146, 148 (11th Cir.1988) ("The state of Georgia has expressed,
both in its constitution and in its statutory law, a strong
public policy disfavoring contractual restraints on competition
and trade.").
response to such interest because it allows hospitals to make their

staff credentialing decisions based on such criteria. See Crosby,

873 F.Supp. at 1579-81.

In sum, the statutory language here easily surpasses the

"clear articulation" mark. Further, given the mitigating influence

of the rule of reason, it is at the very least reasonably

foreseeable that O.C.G.A. § 31-7-7 would lead hospital

decisionmakers to act anticompetitively in determining the

"appropriate utilization of facilities" notwithstanding Article

III, § 6, ¶ 5 of the Georgia Constitution. Accordingly, we readily

conclude that all defendants are shielded from suit for injunctive

relief by state action immunity.32

D. Local Government Antitrust Act

The district court held that the Local Government Antitrust

Act of 1984 ("LGAA"), 15 U.S.C.A. § 34 et seq., precludes Dr.

Crosby's action for damages against all defendants. Crosby, 873

F.Supp. at 1581. Dr. Crosby does not contest this conclusion as to

the Authority or its board members. He argues, however, that the

individual committee members are not immunized by the LGAA.

32
Dr. Crosby urges that a different conclusion is mandated
by FTC v. Ticor Title Ins. Co., 504 U.S. 621, 112 S.Ct. 2169, 119
L.Ed.2d 410 (1992). His argument focuses on Ticor 's insistence
on real compliance with the active supervision requirement. Id.,
504 U.S. at 633-39, 112 S.Ct. at 2177-79. The foregoing
discussion makes clear that this aspect of Ticor has no bearing
on this case because we need not reach the "active supervision"
requirement. As to the "clear articulation" requirement, the
Court in dicta reiterated that "[i]n the usual case, Midcal 's
requirement that the State articulate a clear policy shows little
more than that the State has not acted through inadvertence...."
Id., 504 U.S. at 636, 112 S.Ct. at 2178. As the discussion supra
makes clear, Georgia's statutory action reasonably portends the
challenged anticompetitive conduct in this case.
 The LGAA provides, in relevant part:

No damages, interest on damages, costs or attorney's fees may
be recovered under section 4, 4A, or 4C of the Clayton act (15
U.S.C. 15, 15a, or 15c) in any claim against a person based on
any official action directed by a local government, or
official or employee thereof acting in an official capacity.

15 U.S.C.A. § 36(a). Section 4 of the Clayton Act provides the

damages remedy for violations of the Sherman Act; thus, it applies

to Dr. Crosby's allegations. We must determine whether the actions

of the individual committee members constitute "official action[s]

directed by a local government, or official or employee thereof

acting in an official capacity."33

As to the phrase "action directed by a local government," the

Joint Report of the Conference Committee explains:

In Referring in section 4 to the applications of the antitrust
laws to the conduct of non-governmental parties directed by a
local government, the conferees borrowed the phrase "official
action directed by" a local government from Parker v. Brown,
317 U.S. 341, 351 [63 S.Ct. 307, 313, 87 L.Ed. 315] (1941);
and the conferees intend that Parker and subsequent cases
interpreting it shall apply by analogy to the conduct of a
local government in directing the actions of non-governmental
parties, as if the local government were a state.

H.R.Conf.Rep. No. 1158, 98th Cong., 2d Sess. 3, reprinted in 1984

U.S.Code Cong. & Admin. News 4602, 4626-27 (emphasis added). The

analogy to the Parker doctrine is confirmed by comparing the

language in the statute to that in Parker. Parker held that the

federal antitrust laws were not intended "to restrain a state or

its officers or agents from activities directed by its

33
Dr. Crosby essentially concedes that the Authority falls
within the definition of "local government" and that the
individual committee members are "persons" within the meaning of
the LGAA by failing to argue otherwise on appeal. See Cheffer v.
Reno, 55 F.3d 1517, 1519 n. 1 (11th Cir.1995) (issues not argued
in brief deemed abandoned); see also Fed.R.App.P. 28(a)(6).
legislature." 317 U.S. at 350-51, 63 S.Ct. at 313 (emphasis

added); see also City of Lafayette, La. v. La. Power & Light Co.,

435 U.S. 389, 409, 98 S.Ct. 1123, 1134, 55 L.Ed.2d 364 (1978). It

is clear that the language in the statute (i.e., "action directed

by a local government") was based on the above-quoted language in

Parker.

As discussed supra, the Parker doctrine has developed such

that, where the defendant is a private actor (i.e., not a

"municipality"), he or she must show both that: 1) the challenged

restraint is one clearly articulated and affirmatively expressed as

state policy; and 2) the policy is actively supervised by the

state. FTC v. Ticor Title Ins. Co., 504 U.S. 621, 633, 112 S.Ct.

2169, 2176, 119 L.Ed.2d 410 (1992); California Retail Liquor

Dealers Ass'n. v. Midcal Aluminum, Inc., 445 U.S. 97, 105, 100

S.Ct. 937, 943, 63 L.Ed.2d 233 (1980).

Following the legislative intent embodied in the Joint Report

of the Conference Committee, we apply by analogy the Parker

doctrine to the relationship between the Authority (i.e., the

entity under the LGAA which is analogous to the State in the state

action immunity context) and the individual committee members

(i.e., the entities under the LGAA which are analogous to private

parties in the state action immunity context).34 See Cohn v. Bond,

953 F.2d 154, 157 (4th Cir.1991), cert. denied, 505 U.S. 1230, 112

S.Ct. 3057, 120 L.Ed.2d 922 (1992) ("Whether actions are directed

by an official, as contemplated by the LGAA, is determined by

borrowing and applying the State Action Doctrine two prong test.");

34
See infra, note 35.
Sandcrest Outpatient Servs., P.A. v. Cumberland County Hospital

System, Inc., 853 F.2d 1139, 1143 (4th Cir.1988) (Powell, Associate

Justice (retired)) (undertaking similar analysis).

The challenged actions of the individual committee members in

this case easily satisfy the two-prong Midcal test of clear

articulation and active supervision. First, the individual

committee members acted pursuant to clearly articulated policy of

the Authority to deny privileges when the applicant had not

completed the necessary residency. Specifically, the individual

committee members acted pursuant to the Bylaws (adopted and

approved by the Authority) in making recommendations to the

Authority to deny Crosby's hospital privileges. Second, the

Authority itself actively supervised the committees; as noted

above, the Authority made the final decision to deny Crosby's

privileges after a full hearing thereon. As noted supra, the

language of the statute (contemplating immunity for the actions of

a private person "based on any official action directed by a local

government, or official or employee thereof acting in an official

capacity"), the legislative history, and the case law (Cohn, supra;

Sandcrest, supra) make it clear that the second prong of the Midcal

test is satisfied when the local government, in this case the

Authority, actively supervises the challenged conduct.

Thus, we readily conclude that the two-prong Midcal test is

satisfied, and that the challenged actions of the individual

committee members in this case fall comfortably within the phrase
"official action directed by a local government." 35 We hold that

the individual committee members are immune from damages under the

LGAA.

III. CONCLUSION

Accordingly, for the foregoing reasons, the judgment of the

district court is

AFFIRMED.

35
We recognize that our holding, supra, that the actions of
the individual doctors should be considered actions of the
Authority for purposes of state action immunity may mean the
individual doctors are directly immune under the LGAA, 15
U.S.C.A. § 35(a). Section 35(a) provides that no damages may be
recovered from a local government, or an official or employee
thereof acting in an official capacity. However, we also
recognize that the specificity of the LGAA's language in § 35(a)
("local government, or official or employee") might suggest that
agents other than "officials" or "employees" are not directly
immune. In any event, we need not decide whether the individual
committee members should be deemed the equivalent of the local
government, or an official or employee of the local government
for purposes of the LGAA because the two-prong Midcal test is so
readily satisfied, and the doctors are clearly immune under §
36(a).