bidding process for this contract was rigged and that defendants had decided prior to soliciting the bids that it would contract with Two Rivers. As evidence of this statement, plaintiff points to the September 21, 1987, minutes of the Board meeting which state that "Mohawk Valley Physicians' Health Plan will contract with Upstate Imaging [Two Rivers] for MRI scans . . ." See Exhibit F to Plaintiff's 10(j) Statement. Defendants counter this argument by submitting the minutes of the Board meeting of October 19, 1987, which corrected this statement to read "MVP Health Plan will request bids from Upstate Imaging and Capital Imaging for MRI scans." See Exhibit 14 to Defendants' 10(j) Statement.
Although for purposes of this motion it is not this court's function to rule on the weight of the evidence or the issue of credibility, Anderson v. Liberty Lobby, 477 U.S. at 249, 106 S. Ct. at 2511, 91 L. Ed. 2d at , it is its function to determine which facts are material. In this regard, the court fails to see how the bidding process for the MRI contract, even if rigged, is any indication that defendants conspired to exclude Capital from membership in the Associates. This is especially true in light of the fact that Capital concedes that the MRI contract itself is not an antitrust violation. Moreover, Two Rivers is not a member of the Associates nor does Two Rivers provide any other radiology services to defendants' enrollees.
Accordingly, looking at the totality of the situation, the court concludes that Capital has failed to present this court with any evidence to support a finding that defendants' exclusion of Capital from membership in the Associates in any way constituted a conspiracy in violation of section 1.
2. Restraint of Trade
Even if the court had concluded that defendants illegally conspired to exclude Capital from membership, Capital still must demonstrate that the purpose or effect of this alleged conspiracy constitutes an unreasonable restraint of trade which has injured plaintiff within the meaning of section 1. See Oreck Corp. v. Whirlpool Corp., 579 F.2d 126, 133 (2d Cir. 1978), cert. denied, 454 U.S. 1083, 102 S. Ct. 639, 70 L. Ed. 2d 618 (1981). Although on its face section 1 prohibits every restraint of trade, courts have interpreted this provision to prohibit only those combinations that unreasonably restrain competition. Capital Imaging, 725 F. Supp. at 677 (citing Bunker Ramo Corp. v. United Business Forms, Inc., 713 F.2d 1272, 1283 (7th Cir. 1983); Jim Forno's Continental Motors, Inc. v. Subaru Distribs. Corp., 649 F. Supp. 746, 753 (N.D.N.Y. 1986)). Although some types of conduct are considered per se unreasonable, this court previously held that "defendants' type of exclusivity practices are vertical, nonprice restraints that [must be] analyzed not under the per se rule, but under the 'rule of reason' standard." Id. (citing Continental T.V., Inc. v. GTE Sylvania, Inc., 433 U.S. 36, 58-59, 97 S. Ct. 2549, 2561-62, 53 L. Ed. 2d 568, (1976); Ralph C. Wilson Indus. v. Chronicle Broadcasting, 794 F.2d 1359, 1363 (9th Cir. 1986)). The court adheres to this conclusion despite plaintiff's arguments to the contrary. See Barry v. Blue Cross of California, 805 F.2d 866 (9th Cir. 1986); NCAA v. Board of Regents of University of Oklahoma, 468 U.S. 85, 104 S. Ct. 2948, 82 L. Ed. 2d 70 (1974) (holding that under certain circumstances the court should analyze even a horizontal restraint using the rule of reason test).
Under this rule of reason standard, plaintiff must demonstrate more than that it was harmed in its capacity as a competitor. See id. What is significant is "injury to the market, not to individual firms . . ." Id. at 677 (quoting Klamath-Lake Pharm. v. Klamath Med. Serv. Bureau, 701 F.2d 1276, 1292 (9th Cir.), cert. denied, 464 U.S. 822, 104 S. Ct. 88, 78 L. Ed. 2d 96 (1983)). In this regard, the rule of reason inquiry focuses directly on the challenged restraint's impact on competitive conditions. National Society of Professional Engineers, 435 U.S. 679, 688, 98 S. Ct. 1355, 1363, 55 L. Ed. 2d 637, (1978). Accordingly, as this court has previously held, to adequately allege a restraint of trade under the rule of reason, plaintiff "must at least suggest the size of the relevant product and geographic markets, the amount of competition foreclosed, and how the acts of the defendants affected that competition." Id. (emphasis added) (quoting Jim Forno's Continental Motors, Inc. v. Subaru Distribs. Corp., 649 F. Supp. 746, 754 (N.D.N.Y. 1986)). The court will discuss each of these elements on which plaintiff bears the burden of proof seriatim.
a. The Relevant Antitrust Market
In its original complaint, Capital identified its geographic and product markets as the sale and use of diagnostic imaging equipment in the United States. See Plaintiff's Complaint at P7. In its original Rule 10(j) Statement, however, plaintiff refined its definition of the relevant market to be "the market for referrals to private diagnostic radiology centers offering a complete range of diagnostic imaging technology in an area within a radius of at least 100 miles from Albany, New York." See Capital Imaging, 725 F. Supp. at 677. Now that discovery has been completed, plaintiff cross-moves to amend paragraph 7 of its complaint to further narrow its definition of the relevant market as follows: "the relevant market for purposes of this action is the market for radiology referrals within a radius of 100 miles from Albany, New York." See Plaintiff's Memorandum of Law at 20.
There are two distinct, but related, components that comprise an antitrust market: (1) the relevant product market and (2) the relevant geographic market. Drs. Steuer & Latham, P.A. v. National Medical Enters., Inc., 672 F. Supp. 1489, 1510 (D.S.C. 1987). The relevant product market consists of those reasonably interchangeable services or products that compete with the products or services at issue. Id. The relevant geographic market consists of the geographic area in which there is effective competition in the sale and distribution of the particular services or products and in which persons or entities actually, or potentially may, compete. Id. In the present case, Capital defines the product market as "radiology referrals" and the geographic market as "the area within a 100 mile radius of Albany, New York." Defendants do not oppose Capital's definition of the relevant market. Absent any proof to the contrary, the court concludes that plaintiff's proposed definition of the relevant market is appropriate, at least for purposes of these motions. Accordingly, the court concludes that Capital has met its burden to suggest the size of the relevant antitrust market. The court, therefore, adopts this definition as a basis for determining whether defendants' actions constitute a restraint of trade.
b. Effect on Competition
Under the rule of reason, plaintiff must demonstrate that defendants' alleged improper behavior has either an anticompetitive purpose or an anticompetitive effect which restrains trade in the relevant market. See Apex Oil Co. v. DiMauro, 713 F. Supp. 587, 595 (S.D.N.Y. 1989). This is often difficult because the antitrust laws are concerned only with acts that harm "competition, not competitors." Id. (quoting Brunswick Corp. v. Pueblo Bowl-O-Mat, 429 U.S. 477, 488, 97 S. Ct. 690, 698, 50 L. Ed. 2d 701, (1977)). In other words, behavior that hurts or even destroys an individual competitor is not illegal under the Sherman Act unless it also adversely affects competition. See id. Thus, if plaintiff fails to prove anticompetitive purpose or effect, its complaint will fail as a matter of law to state a cause of action under the antitrust laws. See id. (citing United States Football League v. National Football League, 842 F.2d 1335, 1360 (2d Cir. 1988)). If, however, plaintiff meets this initial burden, the burden then will shift to defendants either to justify their acts or to demonstrate a procompetitive result of their challenged behavior. Apex Oil Co., 713 F. Supp. at 595 (citing NCAA v. Board of Regents, 468 U.S. 85, 113, 104 S. Ct. 2948, 2966, 82 L. Ed. 2d 70, (1984)).
In order to establish that defendants' actions have an impermissible effect on competition, Capital, as a preliminary matter, must demonstrate that defendants have significant market power in the relevant market. See Hassan v. Independent Practice Assocs., P.C., 698 F. Supp. 679 (E.D. Mich. 1988). This is so because "market power means the ability to injure consumers by curtailing output and raising price; no possible injury, no market power; no market power, no violation; injury to consumers is therefore an essential ingredient of liability." Drs. Steuer & Latham, 672 F. Supp. at 1504 (quoting Fishman v. Estate of Wirtz, 807 F.2d 520, 568 (7th Cir. 1986) (Estabrook, J. dissenting in part)).
The court has reviewed all the evidence which Capital has submitted in support of its argument that defendants have substantial market power in the "market for radiology referrals within a radius of 100 miles from Albany, New York." In this regard, plaintiff offers the following statistics:
(1) 75-80% of the primary care physicians in Schenectady County are members of the Associates