Otiz v. st. peter’s case study 159223

1) Read the case study (“Contract Violates Antitrust Laws”) on pages 100-101 in the textbook and answer the two discussion questions.

2) Write a paper (1,000-1,500 words) that addresses the discussion questions. Include a detailed rationale for your answers.

3) Prepare this assignment according to the APA guidelines found in the APA Style Guide, located in the Student Success Center. An abstract is not required.

4) This assignment uses a grading rubric. Instructors will be using the rubric to grade the assignment; therefore, students should review the rubric prior to beginning the assignment to become familiar with the assignment criteria and expectations for successful completion of the assignment.


Citation: Oltz v. St. Peter’s Community Hosp.,







19 F.3d 1312 (9th Cir. 1994)
















Oltz, a nurse anesthetist, brought an antitrust




action against physician anesthesiologists and St.








Community Hospital after he was terminated.




Oltz had a billing agreement with the hospital,




which provided 84% of the surgical services




in the rural community that it served. The anesthesiologists




did not like competing with the nurse




anesthetist’s lower fees and, as a result, entered




into an exclusive contract with the hospital on April




29, 1980, in order to squeeze the nurse anesthetist




out of the market. This resulted in cancellation of




the nurse anesthetist’s contract with the hospital.




Oltz filed a suit against the anesthesiologists and




hospital for violation of the Sherman Antitrust Act,




15 U.S.C. § 1. The anesthesiologists settled for




$462,500 before trial.




The case against the hospital proceeded to trial.




The jury found that the hospital conspired with




the anesthesiologists and awarded the plaintiff




$212,182 in lost income and $209,649 in future




damages. The trial judge considered the damage




award to be excessive




and ordered a new trial.




The hospital motioned the court to exclude all




damages after June 26, 1982, which was the date




that the hospital renegotiated its exclusive contract




with the anesthesiology group. The court decided




that Oltz failed to prove that the renegotiated contract




also violated antitrust laws, thus ruling that




Oltz was not entitled to damages after June 26,




1982. Because




Oltz conceded that he could not




prove damages greater than those offset by his








with the physicians, his claim for damages




against the hospital was disposed of by summary








The judge who presided over Oltz’s request for




attorneys’ fees restricted the amount that he could




claim. Because Oltz had been denied damages




from the hospital, the judge refused to award attorneys’




fees or costs for work performed after the




1986 liability trial.














Was Oltz entitled to seek recovery for all damages




resulting from destruction of his business after




June 26, 1982?














The US Court of Appeals for the Ninth Circuit




held that Oltz was entitled to seek recovery for all


















Oltz introduced evidence that the initial exclusive




contract violated antitrust laws and that such




violation destroyed his practice. “Because the initial




conspiracy destroyed his practice, Oltz is entitled




to seek recovery for all damages resulting from the




destruction of his business. . . . The legality of any




subsequent agreements between the conspirators




is irrelevant, because the April 29, 1980, contract




severed the lifeline to Oltz’s thriving practice. . .”












1. What should parties to a contract be aware of




when negotiating exclusive contracts?




2. What remedies are available when one party




breaches a contract by refusing to perform an




agreed-upon service?



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