Religious Riders and the Sherman Act

Bailey Sanders* March, 2026

Can corporations engage in anticompetitive behavior on the basis of religious belief? While the answer may seem like an obvious no, in fact this question has largely been overlooked. It has hovered at the margins of the debate over religious exemptions: Proponents of religious exemptions have essentially argued that there is no harm in providing such exemptions to businesses because a competitive market will ensure consumers who might be denied services or goods by a religious firm can still obtain those goods and services elsewhere. But what if religiously minded businesses act in ways that are specifically designed to limit access to certain goods and services not just with respect to their own businesses but other businesses as well?

In this Article, I apply an antitrust lens to Catholic hospitals’ practice of imposing religious restrictions on secular, competitor collaborators, as well as post-sale religious restrictions on the sale of Catholic hospitals to secular buyers. Although Catholic hospital stakeholders assert that these contractual arrangements are necessary to protect the Catholic healthcare mission, this Article shows that these arrangements are also anticompetitive. By requiring a secular firm to artificially suppress output, these agreements lead both to deadweight loss (in the form of a denial of care) and higher prices. And because there is no procompetitive justification for such market harms, these agreements violate Section 1 of the Sherman Act.

There is not, and there should not be, a religious exemption to the Sherman Act. Although religious liberty is a fundamental component of our democratic system, this Article argues that there must nonetheless be market limits to free exercise. Religious firms may enjoy a right to unilaterally refuse to provide certain goods or services on the basis of religious devotion, but they should not be permitted to enter into anticompetitive agreements that limit other market actors’ ability to fully compete in the market. Similarly, secular businesses should not be permitted to justify otherwise anticompetitive agreements on the basis of other firms’ religious beliefs.

Introduction

The facts of Burwell v. Hobby Lobby Stores, Inc. are well known.¹ But what if the facts had been just a little bit different? Say, for instance, the Affordable Care Act never included a contraceptive mandate. And imagine the owners of Hobby Lobby, facing a tight labor market, realized the company was losing out on quality employees who were choosing employers with more comprehensive health plans that included all FDA-approved contraceptive devices. Could the owners of Hobby Lobby therefore reach out to other employers in the relevant labor market and ask them to agree to refuse contraceptive coverage in their benefit plans? The prospect of being able to downgrade their health plans without fear of competitive consequences might be appealing to employers. But such an agreement would also constitute an anticompetitive restraint on trade, which is prohibited by Section 1 of the Sherman Act.²

While it may seem intuitive that corporate religious liberty rights do not (or should not) stretch so far as to justify anticompetitive activity, the conflict between the two has been largely overlooked.³ It hovers at the margins of the exemptions debate, if one looks closely: In defending the right to religious exemptions, some of the most vigorous proponents of religious liberty have argued that religious exemptions should be permitted, as long as there are other market alternatives providing the same goods, services, or benefits.⁴ This is so, they argue, because, if the market provides sufficient alternatives, a religious exemption harms no one.⁵ According to this line of argument, if a gay couple who is denied a wedding cake at one bakery can purchase a cake at the bakery down the street, or if a woman who is denied emergency contraception at her home pharmacy can purchase the medicine online, no substantial harm has occurred. Put differently, religious liberty advocates have successfully argued that the government’s only compelling interest is ensuring access to goods and services in the market and that, as a result, the existence of “a strong competitive market negate[s] any compelling state interest” in forcing religious business owners to provide goods, services, or benefits in violation of their sincerely held religious beliefs.⁶ Refusing to provide a religious exemption is therefore permissible only if “markets will not solve the problem.”⁷

As others have noted, this view “implies that a competitive market inflicts no harm that justifies government intervention in the private [market] order.”⁸ But it also assumes that religious businesses are not acting in ways that impede market competition and, therefore, consumers’ ability to access alternative providers in the market. What if that assumption does not hold? What if religiously minded businesses act in ways that are specifically designed—like in the opening hypothetical—to limit access to certain goods and services not just with respect to their own businesses but others’ as well? Although religious-exemption advocates often accuse opponents of engaging in a parade of horribles,⁹ religious market actors, specifically religious hospitals, have been engaging in such behavior for decades. Catholic hospitals, for instance, routinely require secular hospitals to cease providing a wide range of reproductive healthcare services (e.g., contraceptives, tubal ligations, and abortion) as a condition of membership in competitor collaborations.¹⁰ They have also imposed post-sale restrictions on the sale of Catholic hospitals, restrictions that prevent secular buyers from expanding the range of reproductive healthcare services provided, even in the face of strong community demand.¹¹

The assumption that there are and will continue to be sufficient market alternatives to counteract religious hospitals’ refusal to serve is deeply troubling when those same hospitals require other, secular market actors to refuse care. When sufficient numbers of religious hospitals do so, it becomes increasingly likely, for example, that a woman who is denied a tubal ligation at her local Catholic hospital will find that, due to its contractual obligation, even the secular hospital down the street will not provide her with care.¹² And the same is true for the woman seeking emergency contraception following a sexual assault,¹³ the woman seeking to terminate a pregnancy due to a lethal fetal anomaly,¹⁴ and the woman experiencing a miscarriage but who is not yet hemorrhaging.¹⁵ In other words, such contractual arrangements make it increasingly likely that patients will be denied standard healthcare services even at institutions that possess no independent religious or moral objections to such services.¹⁶ And this is true in states spanning the spectrum of post-Dobbs legislation.

Advocates for reproductive healthcare access, of course, have been keenly aware of religious restrictions on care for decades now. But while advocates and scholars have considered antitrust law as a potential tool for preserving healthcare access following religious-secular hospital mergers,¹⁷ little attention has been paid to antitrust’s potential for combatting other types of religiously motivated restrictions.¹⁸ This Article begins to fill this gap by considering whether Section 1 of the Sherman Act can be deployed to combat competitor collaborations and hospital sales that prohibit the provision of reproductive healthcare services at secular institutions. Catholic hospital stakeholders assert that these contractual arrangements are necessary to protect the Catholic healthcare mission, but, as this Article demonstrates, these arrangements are also anticompetitive. Religious restrictions on a religious-secular hospital collaboration ultimately limit output: The secular hospital must agree, in return for the Catholic hospital’s willingness to collaborate, to provide only those services the Catholic hospital would also be willing to provide. Similarly, post-sale religious restrictions on services boil down to an agreement not to compete; regardless of consumer demand and changing market conditions, the buyer may not enter into new service lines (or expand output in existing lines). Both agreement types lead to lower output and higher prices than would otherwise exist. And both, this Article argues, violate Section 1 of the Sherman Act.

Given the clear anticompetitive nature of these contractual arrangements and reproductive healthcare advocates’ desire to protect and promote access to care in a post-Dobbs world, it seems likely that antitrust litigation will target such arrangements sooner rather than later.¹⁹ In response, the defendant hospitals will likely argue that these agreements—what we might call “religious riders” to larger commercial agreements—are ancillary agreements that are reasonably necessary to achieve the procompetitive benefits of a larger procompetitive agreement. As this Article will show, however, such an argument fails for both doctrinal and practical reasons. Courts should hold the antitrust-doctrinal line and refrain from writing in a religious exemption to the Sherman Act.

Yet protection from liability might lie elsewhere. Changes in Supreme Court case law pose a nontrivial challenge for plaintiffs who file suit under the Sherman Act. Fifteen years ago, corporations could not have used religion to justify anticompetitive behavior.²⁰ But since then, the Supreme Court has dramatically expanded religious-liberty rights, creating a potential opportunity for religious firms to do just that.²¹ This Article provides a first look at some of the key doctrinal issues that are likely to arise should a hospital raise a religious liberty defense to a Sherman Act violation. Whether or not the new religious liberty case law demands an exemption to the Sherman Act is a close one, but, ultimately, this Article argues that a religious liberty defense should fail.

This Article proceeds in four parts. Part I provides an overview of the increasingly religious nature of the American healthcare market, its implications for patients, and the ways in which religious restrictions have grown through “contract, not devotion.”²² Part II substitutes a devotion lens for an antitrust lens and argues that scholars and observers have failed to fully interrogate the anticompetitive nature of religious healthcare institutions’ activities in our nation’s reproductive healthcare markets. Although religious-secular hospital mergers have gained considerable attention,²³ less attention has been paid to other agreements between Catholic hospitals and secular hospitals—namely, agreements to limit output or not compete. These agreements should be deemed illegal under long-standing antitrust principles. Part III provides a preliminary look at some of the key doctrinal issues—under both the First Amendment and the Religious Freedom Restoration Act (RFRA)—that are likely to arise in a suit challenging religiously motivated restraints, like those considered in Part II. Part IV lays out a few practical details a litigant should consider when bringing these claims. First, although antitrust liability is joint and several, a plaintiff should sue only the secular hospital, as it is the secular hospital’s behavior—not that of the Catholic hospital—that injunctive relief can effectively redress. After all, the goal of any lawsuit is not to require the Catholic hospital to begin providing services to which it morally objects: Antitrust law does not (and cannot) require this. Second, the most appropriate plaintiffs are individual states, not individual consumers. This is because estimating damages for deadweight loss, a key harm caused by the restraints considered in Part II, is particularly challenging.

I. An Increasingly Religious Healthcare Market

Doctors are thinking through a medical framework designed to present patients with safe choices informed by science, and the bishops appear to view the same clinical moment through a theological framework designed to override or remove those choices in favor of their beliefs about God’s will. — Lori Freedman²⁴

American society has grown less religious over the past several decades.²⁵ Somewhat counterintuitively, this same period has seen a steady and significant increase in healthcare institutions operating under a religious standard of care, one that prohibits providers from offering many of the most common and in-demand reproductive health services. Notably, the increase in religiously restricted healthcare appears to have taken place through inorganic growth (e.g., mergers, acquisitions, competitor collaborations, and sale restrictions), as opposed to increasing consumer demand for theologically infused healthcare. ²⁶

A. The Growth of Religiously Restricted Healthcare & Its Consequences for Women’s Health

Although a wide range of religious healthcare institutions exist (e.g., Baptist, Jewish, Episcopal, Catholic), the growth in religious healthcare mentioned above is driven primarily by an increase in Catholic healthcare. The percentage of short-term acute care hospitals in the United States that are Catholic-owned or affiliated with a Catholic system has steadily increased. Indeed, over the fifteen-year period between 2001 and 2016, the number of acute care hospitals that are Catholic-owned or -‍affiliated grew by 22 percent, while the overall number of hospitals in the United States decreased.²⁷ In absolute terms, this means that the total number of Catholic short-term acute care hospitals grew from 449 in 2001 to 577 in 2020.²⁸ As of 2022, one in seven hospital beds are in a Catholic facility or affiliate.²⁹

This growth has been especially pronounced in certain areas of the country. In ten states, more than 30 percent of acute care hospital beds and more than 30 percent of births are in Catholic facilities.³⁰ The numbers are even higher in states such as Iowa, South Dakota, Washington, and Wisconsin—where 40 percent or more of acute care beds are in hospitals operating under Catholic doctrine—and in Alaska, where 46 percent of all acute care beds are located in a single Catholic hospital that is more than twice the size of any other hospital in the state.³¹ Additionally, recent reports have found that the number of Catholic-owned, sole-community hospitals has also been increasing.³² In 2011, 30 Catholic hospitals were designated by Medicare as “sole community hospitals”;³³ by 2020, that number had risen to 52.³⁴ Moreover, a more recent study found that there are now 132 “religious hospital monopolies”—areas in which all available hospitals are religious institutions—with 121 (about 91 percent) identifying as Catholic.³⁵

The growth in Catholic healthcare is troubling to many healthcare advocates, particularly reproductive healthcare advocates, because Catholic healthcare systems operate under a religious standard of care wherein the “free and informed health care decision of the person” is followed only if “it does not contradict Catholic principles.”³⁶ Those principles are laid out in the Ethical and Religious Directives for Catholic Healthcare (“the Directives”), which are promulgated by the United States Conference for Catholic Bishops (USCCB) and approved by the Vatican.³⁷ The Directives are divided into six sections, each beginning with a theological reflection and ending with a list instructing Catholic hospitals on how to provide theologically permissible healthcare.³⁸

Although the Directives apply to all hospital activities and service lines, the greatest discrepancy between secular hospitals’ and Catholic hospitals’ approaches to healthcare involves the provision of (mainly women’s) reproductive healthcare services. While the Directives permit providing natural family planning services (to married couples) and prenatal and delivery care, Catholic hospitals’ ability to provide most standard forms of reproductive healthcare—including abortion, sterilization (vasectomies, tubal ligations, and hysterectomies), birth control, emergency contraception (including in the event of sexual assault), and many common infertility techniques—is limited.³⁹ Physicians employed at Catholic hospitals are prohibited from providing most forms of reproductive healthcare except when certain narrow factual circumstances render such services morally acceptable under Catholic doctrine.⁴⁰ Consider, for example, abortion care. Under the Directives, a direct abortion⎯any medical intervention that directly and intentionally kills a fetus or ends a pregnancy before viability⎯is never permitted.⁴¹ However, an abortion is allowed if its “purpose [is] the cure of a proportionately serious pathological condition of a pregnant woman” and “cannot be safely postponed until the unborn child is viable.”⁴² In this case, the abortion is considered to be indirect, making it morally permissible.

This religious standard of care most often comes into play when pregnant patients experiencing a miscarriage present at a Catholic hospital.⁴³ The full range of treatment options for a miscarriage include expectant management (waiting to see if the body completes the miscarriage without intervention), medication (misoprostol or mifepristone) to speed up the miscarriage process, or surgical removal of the fetus.⁴⁴ If fetal heart tones are still present, the latter two treatments would constitute an abortion.⁴⁵ In most hospitals, doctors make treatment decisions based on the patient’s wishes and medical status. When a woman is medically stable, some women prefer to wait and see whether they can pass the pregnancy naturally.⁴⁶ Others may choose to expedite the process with the assistance of medication or surgery, particularly if the waiting is prolonged, pain is intense, or risk of complications is high.⁴⁷ When a woman is not medically stable or the chances that she will develop an infection are high, doctors often advise medical or surgical treatment over expectant management.⁴⁸

Hospitals operating under the Directives, however, can provide only expectant management when fetal heart tones are detected unless a medical or surgical abortion is necessary to save the woman’s life.⁴⁹ Treating physicians who believe that medication or surgical abortion care is the appropriate treatment for a miscarrying pregnant patient must, before administering such treatment, demonstrate to the hospital’s Ethics Committee that the woman’s health or life is at serious risk. That is, the physician must wait until the pregnant patient’s condition becomes so critical that she is likely to die if denied abortion care. Under these conditions, the abortion procedure is permitted because it is intended specifically to cure the woman of serious illness, not to end the fetus’s life.⁵⁰ Under these facts, the abortion is considered indirect and is, therefore, morally permissible. This is in sharp contrast to the secular care provided at non-Catholic hospitals,⁵¹ where treatment is provided to prevent medical harm (e.g., hemorrhaging, infection, loss of fertility) a priori. As one physician working in both Catholic and non-Catholic hospitals explained:

Say somebody ruptured their membranes, or say somebody had a lethal anomaly, or somebody had no fluid and the prognosis was zero, in the non-Catholic hospital you would just consent them to put in some medicine to put them through labor, or do a D&E. And in the Catholic hospital you had to wait till they get sick . . . .⁵²

Notably, because of the Directives’ restrictions on abortion, it is common for physicians at Catholic hospitals to transfer miscarriage patients to secular competitors to receive care.⁵³ As one physician working at a Catholic hospital explained:

We often tell patients that we can’t do anything in the hospital but watch you get infected, and we often ask them if they would like to be transferred to a hospital that would go ahead and get them delivered before they get infected[.] . . . [W]e actually have the patients discharge themselves . . . drive themselves and then admit themselves to the next institution.⁵⁴

Such transfers, however, are not always possible.⁵⁵ As noted above, an increasing number of communities rely on just one Catholic hospital for all services. ⁵⁶ In such communities, pregnant patients denied care at the Catholic hospital may have no other recourse but to wait until their condition deteriorates sufficiently so as to justify abortion care under the Directives. Moreover, even when secular alternatives exist, the delay in receiving care can result in significant patient harm.⁵⁷ Dr. David Eisenberg, for example, explained that “the sickest patient” he ever cared for during his residency was a young pregnant woman whose water had broken far before fetal viability.⁵⁸ The Catholic Chicago-area hospital at which she presented refused to take steps to hasten delivery, and, by the time she was transferred to Dr. Eisenberg’s hospital ten days later, she had a fever of 106 degrees and was dying of sepsis. She survived, but she suffered an acute kidney injury requiring dialysis and a cognitive injury due to the severity of her sepsis.⁵⁹ “To this day,” Dr. Eisenberg recalled, he has “never seen someone so sick—because we would never wait that long before evacuating the uterus.”⁶⁰ More recently, the California Attorney General filed a complaint against a Catholic hospital after the hospital refused to provide abortion care to a woman experiencing a miscarriage at fifteen-weeks, instead discharging her—with the offer of a bucket and towels—so she could drive to a nearby community hospital. By the time she arrived at the secular provider, she was actively hemorrhaging.⁶¹

B. Growth Through Contract, Not Devotion

The growth in religiously restricted healthcare is likely puzzling to those who have been tracking the steady decline in religiosity among Americans over the past several decades,⁶² not to mention the strong (and growing) support for reproductive rights, even among most Catholic Americans.⁶³ But the reason is simple: As Elizabeth Sepper has documented, the available evidence suggests that much of the growth—and maintenance—of religiously restricted healthcare has been driven by contract, not conversion.⁶⁴ The growing number of healthcare institutions operating under a religious standard of care is explained by Catholic hospitals’ and systems’ aggressive approach to mergers, acquisitions, and competitor collaborations⁶⁵—not through the construction of new hospitals in response to community demand. At the same time, Catholic hospitals and systems have sought to prevent new secular options by imposing religious restrictions on the sale of Catholic hospitals to secular buyers.⁶⁶

Of course, turning to acquisitions and collaborative arrangements to remain competitive is not unique to Catholic hospitals. The 1980s and 1990s saw a rise in merger and affiliation agreements by both secular and religious hospitals as a result of changing market dynamics,⁶⁷ including shifts in care modalities and reimbursements in the market that necessitated consolidation.⁶⁸ This consolidation trend has continued in more recent decades, with 1,573 mergers taking place from 1998 to 2017 and another 428 hospital and health system mergers announced from 2018 to 2023.⁶⁹

But Catholic hospitals are unique in that the Directives govern not only their healthcare services but also their approach to acquisitions, partnerships, and other types of competitor collaborations. This has been true since 1994, when the USCCB added a sixth section to the Directives titled “Forming New Partnerships with Health Care Organizations and Providers.”⁷⁰ This revision was driven by the recognition that, while historically “most health care providers enjoyed a degree of independence from one another,” Catholic healthcare providers were increasingly merging with or affiliating with other healthcare providers.⁷¹ And although “new partnerships [could] be viewed as opportunities for Catholic health care institutions and services to witness to their religious and ethical commitments and so influence the healing profession,” they also pose “the danger of scandal in any association with abortion providers.”⁷² By partnering with secular healthcare providers who provided “immoral” care, Catholic hospitals might lead consumers to believe that receiving (purchasing) such healthcare is, in fact, permissible. Accordingly, the Directives instruct Catholic hospitals to first seek out Catholic health partners over secular health partners when engaging in healthcare collaborations or partnerships.⁷³

Recognizing that this might not always be possible, however, the Directives also provide instructions for how Catholic hospitals can collaborate with non-Catholic hospitals in a theologically permissible way. Directive 70 prohibits Catholic healthcare organizations from engaging in “immediate material cooperation in actions that are intrinsically immoral, such as abortion, euthanasia, assisted suicide, and direct sterilization.”⁷⁴ Directive 73 requires Catholic hospitals to ensure that “neither its administrators nor its employees will manage, carry out, assist in carrying out, make its facilities available for, make referrals for, or benefit from the revenue generated by immoral procedures.”⁷⁵ Moreover, as stated in Directive 74, “[i]n any kind of collaboration, whatever comes under control of the Catholic institution—whether by acquisition, governance, or management—must be operated in full accord with the moral teaching of the Catholic Church, including these Directives.”⁷⁶

To comply with their acquisition or collaboration agreement, many formerly secular hospitals and providers have agreed to limit the range of reproductive healthcare services they originally provided.⁷⁷ Abortion services are the most common services to be cut,⁷⁸ but sterilizations, contraception, and in vitro fertilization services have all been on the chopping block.⁷⁹ For instance:

When a new health center was formed by the merger of Lorain Community Hospital and St. Joseph Hospital and Health Center in 1995—the only two hospitals in Lorain, Ohio—the resulting center ceased providing tubal ligations and vasectomies “to make accommodations to the church’s ethical directives.”⁸⁰
When four nonsectarian hospitals entered into a consortium with two Catholic hospitals in St. Petersburg, Florida, in 1997, the nonsectarian hospitals agreed to cease providing abortion, in vitro fertilization, and sterilization services.⁸¹
When Nathan Littauer Hospital of Gloversville, New York, and St. Mary’s Hospital of Amsterdam, New York, formed an affiliation called TriCounty Health in the early 2000s, Nathan Littauer agreed to discontinue abortion, sterilization, and contraceptive counseling services.⁸²
When historically secular Sierra Vista Regional Health Center entered a two-year trial affiliation with the Catholic Carondelet Health Network in 2010, Sierra Vista—the sole community provider of acute care in a rural three-county region of Arizona—began fully adhering to the Directives.⁸³
When Ascension acquired the only hospital in Bartlesville, Oklahoma, in 2014, affiliated OBGYNs (every OBGYN in the town except for one) were told to cease providing contraceptives as birth control.⁸⁴
When Hoag Presbyterian Hospital in Newport Beach, California, entered a partnership with St. Joseph Health in 2013, it announced it would cease providing elective abortions.⁸⁵

Catholic hospitals and systems have also taken affirmative steps to ensure that their exit from any particular market will not lead to an increase in religiously prohibited services.⁸⁶ Although the Directives do not speak to the sale of Catholic hospitals, Catholic hospitals and healthcare systems have often demanded that interested secular buyers contractually commit to adhering to the Directives, often in perpetuity.⁸⁷

For example, when Tenet Healthcare purchased a Catholic hospital (Queen of Angels/Hollywood Presbyterian Medical Center) in Los Angeles in 1998, it agreed to continue enforcing the Directives from 1998 to 2018 and ensure that any subsequent owners did as well.⁸⁸ Similarly, when the private-equity firm Cerberus Capital Management purchased the six-hospital Caritas Christi Health Care System in Boston in 2010, it agreed to maintain compliance with the Directives while simultaneously transforming the six hospitals into for-profit entities.⁸⁹ Moreover, Steward (the for-profit formed by Cerberus) signed a “stewardship agreement” with the Roman Catholic Archbishop of Boston affirming that “all Hospitals will be operated in accordance with the moral, ethical and social teachings of the Roman Catholic Church as expressed in the Directives and as interpreted solely and exclusively by” the archbishop.⁹⁰ This agreement included a $25 million “termination contribution” clause that applied if the archbishop determined that the for-profit owners had not lived up to their religion-based obligations.⁹¹ The agreement also provided that if the six hospitals were sold or merged with other institutions, Steward would pay the archbishop up to $25 million unless it could secure a purchaser’s commitment to the Directives.⁹²

* * *

Catholic hospitals provide healthcare services in accordance with religious doctrine as interpreted by the United States Conference of Catholic Bishops. Yet Catholic hospitals are not the only ones that are operating under Catholic doctrine. Due to Catholic hospitals’ imposition of—and secular hospitals’ and buyers’ acquiescence to—contractual terms imposing religious restrictions on care, many secular institutions are also operating under Catholic doctrine.

II. Applying an Antitrust Lens

Catholic hospitals have the right to refuse to provide services they believe are immoral.⁹³ But Catholic hospitals’ imposition of Catholic doctrine on secular hospitals as a matter of contract is concerning because it means that consumers might be denied standard healthcare services even at institutions that possess no independent religious or moral objections to those services. Indeed, consumers’ ability to access the full spectrum of reproductive healthcare services is increasingly dependent upon the market share of religiously restricted healthcare in their community.

Faced with this reality, healthcare advocates have searched for ways to maintain access to care.⁹⁴ Antitrust laws provide a promising avenue to maintain such access. Antitrust law, writ large, aims to ensure fair and rigorous competition in the marketplace, thereby promoting both consumer welfare and economic efficiency.⁹⁵ In pursuit of these goals, antitrust law is designed to prevent harmful monopolies and other anticompetitive practices that harm consumers and businesses. Specifically, the Sherman Act prohibits anticompetitive restraints on trade, monopolization, and the attempt to monopolize.⁹⁶ The Clayton Act, in turn, prohibits mergers or acquisitions that are substantially likely to lessen competition.⁹⁷ And the Federal Trade Commission Act (FTC Act), among other things, prohibits unfair competition methods.⁹⁸

Yet, while litigants can use all three antitrust statutes to protect market competition for reproductive healthcare services, legal activism over the past several decades has focused on hospital mergers—and, therefore, Section 7 of the Clayton Act.⁹⁹ Less attention has been paid to how other antitrust laws might promote and preserve access to reproductive healthcare. This Article begins to fill this gap by considering whether Section 1 of the Sherman Act can be deployed to combat competitor collaborations and hospital sales that prevent the provision of reproductive healthcare services at secular institutions.¹⁰⁰

A. Section 1 Violations?

Section 1 of the Sherman Act prohibits “[e]very contract, combination . . . or conspiracy, in restraint of trade or commerce.”¹⁰¹ That is, it is focused on agreements (collusive behavior) between market actors, not unilateral behavior. Further, although a literal reading of the statute would arguably make every restraint on trade illegal,¹⁰² the Supreme Court has long held that the Sherman Act prohibits only unreasonable—that is, anticompetitive—restraints of trade.¹⁰³ This is because many agreements (restraints) in the marketplace are actually procompetitive in nature and, therefore, desirable.

Of course, there are also many anticompetitive agreements, and courts must determine whether a particular challenged restraint violates the Sherman Act. In doing so, courts generally distinguish between agreements that are per se illegal and those that may or may not be illegal, depending on the facts. Thus, a small set of restraints will be found to be “unreasonable per se because they ‘always or almost always tend to restrict competition and decrease output.’”¹⁰⁴ These type of restraints are so inherently anticompetitive and damaging to market competition that the courts have concluded there is no need to further inquire into their market effects. ¹⁰⁵ Classic examples of such per se restraints are agreements to rig bids, set or limit output, fix prices, and allocate markets.¹⁰⁶ For most challenged restraints, however, courts will apply the “rule of reason.”¹⁰⁷ The rule of reason requires courts to conduct a more intensive, fact-specific assessment of the market to assess whether the restraint’s anticompetitive effects outweigh its procompetitive effects. ¹⁰⁸ If the restraint’s procompetitive effects outweigh the anticompetitive effects, the restraint is not illegal.

Importantly, noneconomic justifications for anticompetitive behavior are never cognizable as a defense against antitrust liability. Although defendants have frequently tried to justify anticompetitive behavior as necessary to achieve some particularly important social good, the Supreme Court has continually rebuffed those efforts. ¹⁰⁹ And this is true even in the so-called “learned professions” of law, medicine, engineering, and the like.¹¹⁰ For instance, in National Society of Professional Engineers v. United States,¹¹¹ the Court rejected the defendants’ argument that the challenged restraint was necessary to protect the public from shoddy engineering work; to accept such an argument, the Court explained, would be to accept that competition—the very good sought by the antitrust laws—was harmful.¹¹² Similarly, in FTC v. Superior Court Trial Lawyers Ass’n, the Supreme Court refused to consider the “social utility or political wisdom” of a boycott among state-appointed criminal defense lawyers.¹¹³ Thus, the courts have firmly rejected the argument that certain restraints should be entitled to an antitrust exemption simply because competitors may have motivations (e.g., protecting the public or defending the indigent) other than profit.¹¹⁴

In the next two Sections, I apply these fundamental antitrust principles to Catholic hospitals’ imposition of (and secular hospitals’ acquiescence to) religiously motivated output restrictions in the context of competitor collaborations and hospital sales. The analysis shows that these restraints “involve[] the same conduct, and cause[] the same harm[s], as traditional antitrust wrongdoing.”¹¹⁵ And although hospitals may claim these anticompetitive restraints are reasonably necessary to achieve certain procompetitive effects, there are doctrinal and practical reasons to reject such a claim.

1. Agreements to Reduce Output in Reproductive Service Lines

First, consider religious-secular competitor collaborations wherein a secular hospital agrees to cease providing (or provide fewer) reproductive healthcare services as a condition of the collaboration.¹¹⁶ Healthcare collaborations, which can range from loose affiliations to more integrated joint ventures, can be permissible under antitrust law when their net effect is procompetitive; collaborating, for example, might allow two institutions to achieve cost savings and quality improvements that would be difficult to achieve individually.¹¹⁷ But healthcare collaborations, because they involve agreements among competitors, also raise the possibility of a Sherman Act Section 1 violation. If a collaboration involves an agreement that, standing alone, might be per se illegal, one must consider whether the agreement is a “naked” restraint on trade¹¹⁸ or an “ancillary” agreement—an agreement that is subordinate and collateral to a legitimate transaction and reasonably necessary to achieve the procompetitive goals of the venture. If it is the latter, it must be subject to the rule of reason.¹¹⁹

For example, two hospitals might form a joint venture to purchase a new robotic surgery system that physicians from both hospitals will use. Agreements regarding the purchase and operation of such a system would likely be viewed as ancillary to the joint venture—they are related and reasonably necessary to achieve its goals.¹²⁰ But an agreement between the hospitals to set service prices that are not furnished through the joint venture, in contrast, is likely to be viewed as a naked restraint on trade and therefore per se illegal.¹²¹

With this in mind, let us consider the competitive implications of a religious-secular competitor collaboration that involves religious restrictions on care. This stylized hypothetical will guide the discussion:

Hospital A and Hospital B are independent competitors in County C. Both possess obstetrics and gynecology departments that provide reproductive healthcare services from prenatal care through delivery. They decide to enter a joint venture whereby they will combine resources to deliver higher quality care and lower costs across service lines. However, because Hospital A adheres to the Directives, the parties agree that Hospital B will cease providing elective abortions, elective contraceptives, elective sterilization procedures, in vitro fertilization, and certain forms of miscarriage care, except as permitted under the Directives.

The competitive effects of what one might call the “religious rider,” the requirement that Hospital B start adhering to the Directives, can be easily parsed out. Hospital B has agreed to exit one reproductive service line (in vitro fertilization, which is never permitted under the Directives) and to artificially limit output in others (abortion care, contraceptive care, and sterilizations).¹²² This means that the market for in vitro fertilization has lost a competitor (and all of its output) while the other markets will see a significant decrease in output as Hospital B begins providing services in only limited, theologically permissible circumstances. ¹²³ For example, while Hospital B would have previously provided a patient with a tubal ligation for sterilization purposes, it will now provide patients with a tubal ligation only if they can demonstrate a medical need. In either case, the decrease in output means that Hospital B will turn away some (indeed many) consumers seeking reproductive healthcare.

Several consequences flow from this output reduction. First, some consumers will go without care, perhaps because their need was time-sensitive or because financial challenges bar them from going elsewhere.¹²⁴ This denial of care constitutes deadweight loss, a form of inefficiency associated with reduced output.¹²⁵ Second, some number of consumers will seek care at an alternative provider in the market. The alternative providers, in turn, will experience an increase in market share (i.e., market power) that will provide them with the ability to charge higher prices.¹²⁶ Consumers who purchase care at these providers, then, will suffer an overcharge due to the supracompetitive price. This, of course, is no different from what happens when a cartel agrees to reduce output to raise the price of a product. In such a scenario, some socially beneficial transactions do not occur, while others take place at a supracompetitive price.¹²⁷

But it is also important to think about how the agreement impacts competition between Hospital A and Hospital B specifically. External conditions can make it more or less costly for individuals or corporations to adhere to religious principles. As McConnell and Posner explain, “If contraceptives are illegal, a Catholic will experience little incremental cost from obeying the Church’s teaching against birth control, but once they are legalized the Catholic will face a temptation to stray from the Church’s teaching.”¹²⁸ The same logic holds for religious businesses that seek to profit in a competitive market: The legalization of services prohibited by the Church puts Catholic hospitals at a competitive disadvantage because they cannot provide as many services as their competitors—or at least not without experiencing a theological cost.

For instance, both Hospital A and Hospital B compete to treat patients presenting at the emergency room experiencing a miscarriage. They also compete to treat patients who are seeking prenatal and delivery services. But Hospital B—prior to the agreement—provided a wider range of treatment options to these patients.¹²⁹ In doing so, it exerted pressure on Hospital A to also provide a greater range of services. ¹³⁰ By agreeing not to provide more services than its religious counterpart, Hospital B is therefore reducing pressure on Hospital A to provide the full range of reproductive healthcare despite its religious objections to doing so.

Finally, while it can often be difficult to parse out anticompetitive effects on quality of care,¹³¹ this is not the case when we are faced with a religious output restriction that reduces the treatment options providers can provide to patients. Here, the negative quality effects are built into the agreement. First, the elimination of particular services obviously negatively impacts the quality of care—patients are simply denied care! Second, as detailed in Part I, the religious standard of care practiced at Catholic hospitals is not always the standard of care: Physicians at Catholic hospitals report being forced to provide substandard care with respect to postpartum tubal ligations,¹³² ectopic pregnancy management,¹³³ and timely miscarriage management.¹³⁴ Yet, because Hospital B has agreed to provide only care that Hospital A would itself be willing to provide, the community is now faced with two hospitals that provide substandard reproductive healthcare. Indeed, Hospital B can no longer serve as an important escape valve for patients who present at Hospital A only to be denied care.¹³⁵

Put simply, there are clear and serious anticompetitive effects flowing from the religious rider that accompanies the collaboration agreement. The relevant question is, then, whether this agreement constitutes a “naked” restraint on trade that is per se illegal or an “ancillary” agreement that is reasonably necessary to achieve the overall procompetitive goals of the larger collaboration. And here, for simplicity’s sake, we will assume that the overall collaboration does result in procompetitive effects (in other service lines). If this were not the case, the collaboration as a whole would be impermissible under the rule of reason.¹³⁶

Plaintiffs challenging this religious rider would, of course, argue that the rider constitutes a “naked” agreement on trade. If an agreement “is formed with the objectively intended purpose or likely effect of increasing price or decreasing market wide output in the short run,” it may be considered a naked restraint on competition.¹³⁷ Here, of course, the explicit purpose of the religious rider is to decrease market output at Hospital B. And its only effect in the market for reproductive healthcare services is anticompetitive; it has no plausible redeeming procompetitive effects.

Moreover, from an economic standpoint, the rider bears no rational relation to increased efficiency or improved care in other service lines. Even if the overall collaboration allows the two hospitals to achieve such effects, there is no reason why the large partnership’s procompetitive benefits could be achieved if Hospital B provides only “medically indicated” contraception and sterilization to patients presenting at its facilities but could not be achieved if Hospital B provided contraception and sterilization to patients who wanted it for birth control purposes as well. Moreover, if the agreement “produced procompetitive efficiencies, [it] would increase output and reduce the price” of services, not reduce the available services while increasing the ability of other market competitors to raise prices.¹³⁸

As defendants, Hospitals A and B would face a “heavy burden of establishing an affirmative defense which competitively justifies this apparent deviation from the operations of a free market.”¹³⁹ To do so, they would need to show that the religious rider is an ancillary restraint and therefore exempt from the per se rule.¹⁴⁰ Under the ancillary restraints doctrine, a horizontal agreement can be exempt from the per se rule if it meets two requirements: “(1) [it is] ‘subordinate and collateral to a separate, legitimate transaction,’ . . . and (2) [it is] ‘reasonably necessary’ to achieving that transaction’s pro-competitive purpose.’”¹⁴¹ If the restraint meets these two conditions, it is analyzed under the rule of reason, which, as explained above, involves a fact-specific inquiry to determine if the restraint’s procompetitive effects outweigh its anticompetitive effects.¹⁴²

Here, the crux of the matter is whether the religious rider is “reasonably necessary” to achieve the collaboration’s asserted procompetitive effects: higher quality care and lower costs at both hospitals. Hospital A and Hospital B would presumably argue that the agreement is reasonably necessary. And we might expect the argument to go something like this: Hospital A operates in the market as a Catholic hospital. Because of this, it can collaborate only under certain conditions—that is, ones that do not give rise to “scandal.”¹⁴³ Therefore, in order for it to collaborate with a secular hospital, it must secure an agreement from that hospital that it too will operate in the market as a Catholic hospital (i.e., follow the Directives). Otherwise, the collaboration cannot take place. Put differently, Hospital A and Hospital B might argue that the religious rider is reasonably necessary to achieve the procompetitive benefits of the larger collaboration because Hospital A simply won’t collaborate without such a rider. Either the religious rider is permitted or the procompetitive benefits of the larger collaboration (which we assume have been proven) will not be achieved.

From one perspective, this argument makes sense. If one hospital would not enter a collaboration without this religious rider, isn’t the religious rider therefore reasonably necessary to achieve the collaboration’s procompetitive effects? In support of this intuition, Hospitals A and B might point to the Seventh Circuit’s often-cited decision in Polk Bros. v. Forest City Enterprises.¹⁴⁴ The Seventh Circuit expanded on Polk Bros. in Blackburn v. Sweeney, explaining that “courts must look to the time an agreement was adopted in assessing its potential for promoting enterprise and productivity.”¹⁴⁵ If the agreement promoted enterprise and productivity when it was adopted, the restraint is properly characterized as ancillary, not naked.¹⁴⁶ And this, the two hospitals would argue, is the case with respect to the religious rider.

But this argument is highly problematic. First, this argument boils down to an assertion that the output restriction is reasonably necessary because the parties say it is. But antitrust law does not permit defendants to simply assert that certain anticompetitive agreements are necessary; when determining whether an otherwise per se illegal agreement is reasonably necessary to achieve the procompetitive effects of a larger agreement, courts pressure test the arguments put forth by conducting “an inherently fact-specific inquiry” to determine whether cooperation would have been possible absent the challenged restraint.¹⁴⁷ For instance, when considering whether a non-solicitation agreement between two healthcare staffing agencies was reasonably necessary, the Ninth Circuit concluded that the answer was yes because the non-solicitation agreement ensured that one of the healthcare firms could provide spillover assignments to the other without endangering its own ability to supply hospitals.¹⁴⁸ Other courts have recognized that certain anticompetitive restraints may be reasonably necessary to the success of a joint venture because they alleviate concerns about free-riding,¹⁴⁹ protect trade secrets,¹⁵⁰ or permit a new product to be sold.¹⁵¹ Here, however, the agreement to limit output at the secular hospital serves no purpose beyond making cooperation religiously palatable to Hospital A.

Second, federal enforcers have long maintained that “if the participants [to a collaboration] could achieve an equivalent or comparable efficiency-enhancing integration through practical, significantly less restrictive means, then . . . the agreement is not reasonably necessary.”¹⁵² Supreme Court case law supports this reasoning. In NCAA v. Board of Regents, for instance, the Court explained that the NCAA’s efficiency justification for limiting member schools’ ability to televise their football games failed because NCAA football could be marketed just as effectively without the restrictive television plan.¹⁵³ Here, the hospitals’ argument should fail for the same reason: The two hospitals could achieve the same procompetitive efficiencies of the larger collaboration without the output restriction. Further, there is considerable evidence that there are, in fact, less restrictive (and religiously palatable) alternatives to a flat output restriction at the secular hospital. In past religious-secular collaborations and mergers, the parties have instituted “religious firewalls” (i.e., structural remedies) to ensure the secular partner can provide care while making sure that Catholic hospital employees, funds, and facilities are not used to provide impermissible care. ¹⁵⁴ And, at times, the parties have gotten quite creative, such as by creating a “hospital within a hospital.”¹⁵⁵ Antitrust law has no problem with such institutional practices and, in fact, would encourage them if they allow procompetitive collaborations that might not otherwise occur.

Third, this argument goes directly against a core pillar of modern antitrust law, namely, the principle that social justifications for anticompetitive conduct are not cognizable.¹⁵⁶ Although the hospitals may couch the religious rider in economic terms by arguing that it is reasonably necessary to obtain procompetitive efficiencies, this does not change the fact that the first-order reason for the restraint is a matter of faith. Hospital A will not cooperate with Hospital B if Hospital B provides certain services under certain conditions because Hospital A believes that providing those services to consumers is immoral. More specifically, Hospital A fears that by collaborating with or selling to a firm that provides these services, it may give rise to scandal—that is, lead observers to conclude that it views the sale of these services to be permissible.¹⁵⁷

This amounts to a social justification for anticompetitive behavior, a defense that has been rejected time and time again by the Supreme Court.¹⁵⁸ Moreover, the Court has also made clear that firms are not entitled, through anticompetitive agreements, “to pre-empt the working of the market by deciding for [themselves] that [their] customers do not need that which they demand.”¹⁵⁹ Thus, while it is perfectly fine for a Catholic hospital to believe that the market should not provide certain services, arguments based on an assumption that competition for particular services is undesirable are precluded under the Sherman Act.¹⁶⁰ This is because “[t]he heart of our national economic policy long has been faith in the value of competition.”¹⁶¹ Antitrust law assumes that “all elements of a bargain—quality, service, safety, and durability—and not just the immediate cost, are favorably affected by the free opportunity to select among alternative offers.”¹⁶² And the Court has made clear that this reasoning applies to all products in the market, including those that some may believe to be harmful.¹⁶³

Now, it is possible that the defendant hospitals might make a different sort of argument under the ancillary restraint doctrine. The parties might argue that Hospital B’s cessation of various service lines is necessary to avoid inefficiencies stemming from an attempt to integrate reproductive care across the secular and religious hospitals. And, indeed, attempts to adhere to the Directives while maintaining care have caused inefficiencies in past collaborative agreements among Catholic and secular entities. For example, after the local bishop of one Catholic hospital learned that sterilizations were taking place in the hospital, something the bishop saw as violating the Directives, the Catholic hospital sold one individual operating room to a nonreligious clinic.¹⁶⁴ As a result:

[T]here were two consent forms: one consent form for the cesarean section on Saint P’s Hospital paper, and then a separate consent form which was the clinic paper for the tubal ligation. And then the biggest step . . . was that [hospital] staff cannot be, in any way, shape, or form, involved in the case. They can’t be at the OR table, they can’t start the case, they can’t participate in the c-section—in any way, at all—if there will be a tubal ligation.¹⁶⁵

Such restrictions on staffing and operations ultimately lowered the quality of care, as one physician explained:

[I]t’s vastly complicated, but I’ll keep it only stupidly complicated. All c-sections between 7:00a.m. and 5:00p.m. are staffed by clinic ambulatory surgery personnel, whether they need a tubal or not. And after 5:00p.m., we try and maintain a call team of ambulatory surgery personnel that will come in from outside the hospital to cover the c-sections that require tubals. . . . We have not been able to maintain a call team for every night, and weekend. So, at this point, we have maybe 60% of the nights and weekends covered. So . . . if you want your tubes tied, you’re basically playing, you know, Russian Roulette as to whether you’ll get your operation done.¹⁶⁶

In response, Hospitals A and B might argue that, absent Hospital B’s agreement to limit output, adherence to the Directives would limit the ability of the parties to fully integrate administrative and financial processes. The parties will have to devise inefficient workarounds to allow Hospital B to provide services in a way that allows Hospital A to comply with the Directives, workarounds that harm patient care.

But such an argument holds no water under the antitrust laws. Anticompetitive ancillary restraints are permissible only when they are necessary to achieve efficiencies, not to avoid self-imposed inefficiencies.¹⁶⁷ Such an argument would in fact make clear, as noted earlier, that there are practical, significantly less restrictive means for achieving the overall collaboration that do not require a total cessation of services at the secular institution.¹⁶⁸

The argument that a religiously motivated output restriction is necessary to effectuate the collaboration’s procompetitive benefits should therefore fail. But note that if the joint venture itself, without output restriction, has been proved to be otherwise procompetitive, the joint venture should be left intact. And if the parties propose religious “firewalls” in the absence of the output restriction, courts should be receptive to such “firewalls” as long as they do not restrict the ability of the secular hospital to compete as an independent market actor in its own facilities.

* * *

The restraint described above constitutes a naked restraint on trade that is not reasonably necessary to achieve procompetitive benefits. Instead, it exists for purely social, faith-based reasons. As such, it violates Section 1 of the Sherman Act, and courts should enjoin the restraint.

2. Agreements to Restrict Output Post-Sale

I next consider religious post-sale restrictions on hospitals. As noted earlier, Catholic hospitals and systems sometimes require secular buyers to agree to adhere to the Directives—for decades and sometimes even in perpetuity—when purchasing a Catholic hospital. As with religious-secular competitor collaborations involving output restrictions, these restrictions are often justified as legitimate efforts to promote the Catholic healthcare mission.¹⁶⁹

But we should suspect that such agreements also lead to anticompetitive market effects. Requiring a secular buyer to comply with the Directives means, in practical terms, that a competitor has agreed to substitute its judgement as to what services to sell, and under what circumstances, for that of another market actor—a market actor that has exited the market. This seems problematic from an antitrust viewpoint, since antitrust law is motivated by the belief that agreements which “deprive[] the marketplace of the independent centers of decisionmaking that competition assumes and demands” are “fraught with anticompetitive risk.”¹⁷⁰ So let us consider the potential anticompetitive effects of such an agreement and whether they might be justified by some procompetitive outcome. Again, for analytical clarity, I use a stylized hypothetical to guide the discussion:

Hospitals A, B, and C are the only three hospitals in County D. Hospital A is a Catholic hospital and structures its provision of reproductive healthcare according to the Directives. Hospitals B and C are secular hospitals which provide a full range of reproductive healthcare services. The owners of Hospital A enter into an agreement to sell Hospital A to a secular buyer that seeks to enter the market in County D. As part of the sale agreement, the secular buyer agrees to continue adhering to the Directives in perpetuity at Hospital A, even though it holds no moral opposition to Directive-prohibited healthcare services and would otherwise provide them.

As a starting point, the first-order effect of this agreement is an artificial suppression of output. By agreeing to adhere to the Directives, the secular buyer has agreed not to expand the types of services it will provide to the community (in vitro fertilization, elective abortions) or expand output in an existing service line (miscarriage care, contraception, sterilization) regardless of market demand or profitability.¹⁷¹ And it has agreed to refrain from doing so in perpetuity. Thus, although one might expect that the sale of Hospital A to a secular buyer would lead to an increase in services and market competition,¹⁷² this does not occur because the secular buyer has contracted away its right to fully compete in various service lines, regardless of consumer demand. In other words, the restraint “reduc[es] the importance of consumer preference in setting . . . output” and constrains the buyer’s freedom to compete in the market.¹⁷³ The second-order effect of this agreement is that the price for reproductive services in the market will be artificially inflated. Were it not for the agreement, the secular buyer would be incentivized to provide the full spectrum of reproductive care under just as many circumstances as Hospitals B and C are willing to provide such care. That is, were it not for the agreement, the market would see an increase in competition among Hospitals A, B, and C, which should have a downward impact on price.

Thus, just as with the religious rider in the competitor collaboration scenario, the religious rider in the hospital sale scenario leads to clear and serious anticompetitive effects in the market. The entrance of the secular buyer should increase output and decrease price, but these effects are stymied because the religious rider stays Hospital A’s new owner. The religious rider, in other words, acts like an agreement not to compete because it prevents the new owner from fully and freely competing in the market. The question then becomes: Are there any procompetitive justifications for this religious rider?

We might imagine that Hospital A’s seller would argue that the religious rider is ultimately procompetitive because it is reasonably necessary to achieve some other procompetitive effect. Here, the owner of Hospital A might argue that it would not sell Hospital A to a secular buyer without the religious rider, and thus the relevant procompetitive benefit is the sale of the hospital itself.

Now, at a high level, this argument makes some sense if we think about antitrust law’s approach to noncompetes in the business-sale context. Although agreements not to compete have long been prohibited under antitrust doctrine,¹⁷⁴ noncompetes in the context of a business sale are an established exception to the general rule.¹⁷⁵ The reasoning for such an exception is essentially the ancillary restraint doctrine: The law recognizes that a noncompete agreement might sometimes be necessary to effectuate the sale of a business.¹⁷⁶

In the classic scenario of a business sale, the noncompete provision is believed to be reasonably necessary for two reasons. First, and most importantly, it assures the buyer that the seller will not simply set up shop down the street and take all her old customers with her, thereby undermining the value of the buyer’s purchase.¹⁷⁷ Without such assurance, a buyer might not be willing to make the purchase, and the sale would not take place. Second, the noncompete agreement also enables the seller to sell her business at its fair value. Without the ability to agree not to compete, a business seller may not be able to obtain the true value of her business in a sale because potential buyers fear she will undercut the value of their purchase by competing post-sale.¹⁷⁸

However, because the default assumption is that noncompete agreements are prohibited,¹⁷⁹ a noncompete to the sale of a business must be reasonable and limited in scope.¹⁸⁰ Determining whether a noncompete is reasonable is a matter of state law. In general, state courts will enforce an agreement not to compete in the context of a business sale “(1) if it is reasonably necessary to protect the legitimate interest of the purchaser; (2) if it is reasonable with respect to both time and territory; and (3) if it does not interfere with the interest of the public.”¹⁸¹ Noncompetes generally fail on either prong (1) or (2), as the enforcement of a reasonable contract designed to enable the sale of a business is considered in the public’s interest.¹⁸²

However, when we apply the traditional analysis to a religious, post-sale noncompete on a secular buyer, the traditional justifications for allowing a noncompete in a business sale start to fall apart. First, of course, is the fact that the agreement here requires compliance in perpetuity. While noncompetes in the sale of a business have been allowed to protect the purchaser’s legitimate interest, they have never been allowed to exist in perpetuity.¹⁸³ So, right off the bat, requiring Hospital A to refrain from fully competing in the markets for reproductive healthcare services in perpetuity would be a grave cause of concern from an antitrust perspective. At the very least, a court would find that the agreement’s duration is unreasonable and strike that provision.¹⁸⁴ Second, from a geographic perspective, the restraint makes no sense given that the seller has exited the market.

But the problems in the seller’s argument go deeper than this because the core justifications for allowing noncompetes in the sale context do not apply here. First, business-sale noncompetes have traditionally been allowed to protect the buyer’s legitimate interest by limiting the seller’s ability to compete post-sale.¹⁸⁵ The law accepts that a seller might not be able to find a buyer for her business if she cannot promise the buyer that she will not immediately lure all her old customers to a new shop. But in the example above, this logic does not hold. The religious rider does nothing to protect the buyer’s legitimate interests; the secular buyer would gladly purchase the hospital without the religious rider. Instead, the religious rider is protecting the seller’s interest in ensuring that certain services not be sold in the market because the seller believes it is immoral to provide and consume them. But this interest is not legitimate (i.e., cognizable) under the antitrust laws.¹⁸⁶

Second, in the traditional noncompete scenario, the restraint on competition works to ensure that the buyer obtains the full value of the business while also protecting the seller’s ability to sell at full price.¹⁸⁷ But a restriction on the new owner’s ability to compete post-sale should undermine the value of the sale. ¹⁸⁸ After all, most buyers want to be able to use their new property as they see fit.¹⁸⁹ And evidence suggests that buyers who commit to the continuation of religious restrictions have received a discount in past sales.¹⁹⁰

Now, of course, business sellers are entitled to sell their businesses for less money than the market might demand. Antitrust law doesn’t prevent this (absent an anticompetitive restraint). The key point here is that restraining a buyer’s ability to compete is not necessary for the seller to receive the full market value of its business. That is, it is not ancillary to the sale’s larger procompetitive purpose. Thus, the second main justification for deviating from the law’s antipathy towards noncompetes in the context of a business sale—protecting the sale value—does not hold when a noncompete is imposed on the buyer as opposed to the seller.

For these reasons alone, any plaintiff challenging the agreement has a strong argument that the agreement is not reasonably necessary to achieve the larger procompetitive effects of the sale. To find otherwise would require a court to invert the traditional analysis governing noncompetes in the business-sale context. But a plaintiff might further support its claim by focusing on the public interest prong of the traditional test. While the public interest prong rarely plays a decisive role in the traditional noncompete analysis,¹⁹¹ it is considerably more forceful when the subject of analysis is a religiously motivated noncompete imposed on a secular healthcare buyer. First, in the most general of terms, it is clearly in the public’s interest that there be a thriving, competitive market for healthcare services.¹⁹² Courts should be suspicious of sale agreements that prevent healthcare entities from providing a comprehensive range of services to the community.¹⁹³ These agreements effectively act as barriers to entry and deprive communities of the benefits that flow from increased competition in the healthcare space. And under the terms of the sale agreement, the buyer of Hospital A would be prohibited from adding reproductive services even if Hospitals B and C shut down and Hospital A was the sole source of healthcare for the entire community.

Second, while religious institutions and providers generally have a right to unilaterally refuse to provide treatments that conflict with their religious beliefs,¹⁹⁴ it is against the public interest to allow religious institutions and providers to impose through contract these care restrictions on secular providers, just as it is against the public interest to allow secular providers to contract away their ability to fully compete. Doing so denies the community the benefits that accrue from an otherwise willing provider (competitor) entering the market,¹⁹⁵ thereby forestalling an increase in competition (and lower prices) and consumer choice.¹⁹⁶

Note, of course, that nothing under Section 1 prevents a Catholic hospital from deciding to sell only to a Catholic buyer whom it trusts to follow the Directives unilaterally. Nor does Section 1 prohibit a secular buyer from voluntarily and unilaterally deciding that it would like to see how profitable it would be to continue operating under the Directives. If there is value in it, the buyer will be prompted to continue adhering to Catholic doctrine voluntarily. In contrast, if the value that accrues from possessing a Catholic identity and complying with the Directives is not large enough, the buyer will act accordingly. The problem arises when the buyer and seller enter into an agreement that removes the buyer’s independent decisionmaking ability to act as it chooses. Such an outcome is “not consistent with [the] fundamental goal of antitrust law.”¹⁹⁷

* * *

The restraint described above is wholly different from the typical sort of noncompete agreement that courts have analyzed in the context of a business sale. It does nothing to protect a buyer’s legitimate interest and instead acts as a barrier to entry across multiple service lines, thereby depriving the public of greater output and lower prices—the goods of increased competition. Put differently, it is an unreasonable restraint on trade, one whose anticompetitive effects are not outweighed by any procompetitive benefits. As such, it runs afoul of Section 1 of the Sherman Act.

B. A Religious Exemption to the Sherman Act?

Courts have not considered whether religiously motivated output restrictions—in the context of a competitor collaboration or sale—violate the antitrust laws. It does not appear that any such restriction has been challenged under Section 1 of the Sherman Act.¹⁹⁸ As Catholic doctrine’s reach into secular institutions clashes with reproductive healthcare advocates’ desperation to preserve access, the potential for litigation is ripe. Although I hope that the previous Sections have shown why these suits should succeed under Section 1, I will spend a bit more time here developing the doctrinal case for denying a religious exemption under Section 1 of the Sherman Act.

To start, it may be helpful to again emphasize what the Sherman Act does not do. The Sherman Act does not require Catholic hospitals (or any hospital) to provide particular services to the public. Nor does the Sherman Act require Catholic hospitals (or any hospital) to collaborate with or sell to a particular market actor.¹⁹⁹ Business decisions regarding what products or services to sell, as well as what entities to collaborate with or sell to, are to be made at the discretion of each individual firm according to its own profit-maximizing calculus.

In addition, the Sherman Act takes no issue with the growth in facilities operating under Catholic doctrine when that growth does not take place through anticompetitive means.²⁰⁰ Imagine, for instance, that a Catholic hospital and secular hospital chose to enter into a joint venture to create a clinic serving prenatal and postpartum clients. Even if this new clinic operated under the Directives—and thus provided no abortion services or contraceptive services—the Sherman Act would likely view this collaboration in a favorable light. After all, by collaborating, the two firms expanded output in the community. Similarly, imagine that a buyer in the market wants to purchase a Catholic hospital and continue operating it under Catholic doctrine because she believes that is the most profitable course of action.²⁰¹ The Sherman Act again takes no issue with this.²⁰²

The problem arises—from an antitrust perspective—when religious firms seek to dictate through contract the market behavior of other firms in ways that harm consumers.²⁰³ In the restraints examined above, a religious firm is not simply asserting its own right to sell only those services it deems legitimate or to collaborate only with those firms it finds morally suitable; it is also seeking to control the market decisions of another, independent firm.

Courts should firmly resent any inclination to treat such restraints as permissible simply because of their religious gloss. First, if taken at face value, the hospitals’ argument in both the competitor-collaboration and sale context (i.e., that the religious rider is ancillary to a larger, procompetitive agreement) appears to result in a blanket religious exemption to the ancillary restraint doctrine. As noted earlier, when determining whether an otherwise per se illegal agreement is reasonably necessary to achieve the procompetitive effects of a larger agreement, courts carefully evaluate the arguments put forth by the parties to determine whether cooperation would have been possible absent the challenged restraint.²⁰⁴ But if antitrust law were to allow a firm to justify an ancillary restraint based on a religious belief, a court’s ability to interrogate the veracity of this assertion becomes murky. The Constitution rightly bars Courts from questioning whether the religious beliefs of an individual—or a firm—are “true.”²⁰⁵ So, faced with the claim that a religious hospital is prohibited, by the terms of its faith, from engaging in a collaboration or selling a hospital without imposing a religious restriction, a court may well feel forced to simply accept the business agreement. And this would seem to relieve religious firms of the burden to prove that an otherwise anticompetitive restraint is reasonably necessary to achieve procompetitive effects.²⁰⁶ Put simply, while antitrust law does not allow firms to claim that anticompetitive behavior is reasonably necessary simply because the firms say it is so, this is what would likely occur if antitrust law were to treat religious justifications as cognizable.

Second, in arguing that the output restriction in reproductive service lines is necessary to achieve procompetitive gains in other service lines, the parties seek to trade off the welfare of one consumer group (primarily composed of women) with that of another. But the Sherman Act does not protect only certain market participants; it “protect[s] all who are made victims of the forbidden practices by whomever they may be perpetrated.”²⁰⁷ And the Supreme Court has made clear that “[i]f a decision is to be made to sacrifice competition in one portion of the economy for greater competition in another portion, this . . . is a decision that must be made by Congress and not by private forces or by the courts.”²⁰⁸ It is not the courts’ place to decide “which markets, and market participants, are more deserving of competition in discrete parts of the economy.”²⁰⁹ Moreover, this principle seems even more potent in the healthcare context; how can courts be the ones to decide which consumers are more deserving of a competitive healthcare market?

Finally, holding the doctrinal line against religious exemptions for anticompetitive conduct is important to ensure fair and consistent treatment under the antitrust laws. For instance, what if two abortion clinics agreed that they would institute a pricing cap on the price of dilation and curettage to ensure that women in the community could access care at an affordable price? Such a restraint would constitute a per se illegal price fixing agreement, regardless of the good intentions of the clinics. Yet a religious exemption might allow some firms to get away with similar behavior, if they could prove it was religiously motivated. It might allow, for instance, two pediatric clinics that form a joint venture to justify one clinic requiring the other to cease providing childhood vaccinations to patients because of the first clinic’s religious objection to vaccines. As others have noted, “[I]t would obviously harm predictability to treat identical practices or transactions differently by reason of subjective occurrent thoughts.”²¹⁰ Moreover, writing in a religious exemption for anticompetitive behavior would likely open the floodgates to more problematic behaviors, as “[e]very practice that makes consumer harm possible and profitable leaves a loaded gun lying around the economy that someone might later decide to pick up and use.”²¹¹ The creation of a religious exemption to the Sherman Act would almost certainly result in a wave of defendants using religion to justify anticompetitive behaviors. Dealing with such cases does not seem like a good use of courts’ time.

* * *

For the reasons detailed in this Part, courts should refrain from expanding (either explicitly or implicitly) antitrust doctrine to allow for a religious exemption to religiously motivated output restrictions like those considered here. Refusing to provide a religious exemption to firms engaged in anticompetitive conduct is both entirely in line with current antitrust law and also necessary to ensure fair and consistent treatment under antitrust law.

III. Applying a Religious Liberty Lens

If we have strict, rigid rules, and we still live or try to make a living like we did in the 1800s, we couldn’t compete in our businesses. . . . In order to succeed and make a living and support our family, we can’t compete if we’re out here trying to build houses with hand saws and hammers and nails. We would have no job because it would take us way too long . . . . —Al Yoder ²¹²

Religious-secular collaborations and hospital sales that impose religiously motivated restrictions at secular institutions can cause serious anticompetitive harm. Antitrust law, as a doctrinal matter, cannot and should not be read to excuse such anticompetitive restraints due to their religious overtones. But protection from antitrust liability might be found elsewhere. Indeed, there is good reason to believe that any attempt to challenge these restraints today, while solidly grounded in antitrust doctrine, may ultimately run aground in the shallows of religious liberty law. Although just fifteen years ago it was clear that corporations could not justify anticompetitive behavior on the basis of religious belief, the Supreme Court’s recent expansion of religious liberty rights²¹³ raises the possibility that religious firms may now engage in otherwise impermissible anticompetitive behavior if they can frame it in free exercise terms.²¹⁴

This Part provides a preliminary look at some of the key doctrinal issues—under both the First Amendment and the Religious Freedom Restoration Act (RFRA)—that are likely to arise in a suit challenging religiously motivated restraints, like those considered in Part II. The goal is not to provide an exhaustive analysis but to consider key questions and points of dispute. This initial analysis suggests that the plaintiffs (and therefore the government) should prevail: The Sherman Act’s prohibition of religiously motivated, anticompetitive restraints both serves a compelling interest and is appropriately tailored to achieve that interest. The doctrinal issues raised here, however, are worthy of further scholarly exploration.

A. A Comparable Secular Exemption

The First Amendment guarantees that “Congress shall make no law . . . prohibiting the free exercise [of religion].”²¹⁵ Until recently, the cornerstone of modern free exercise jurisprudence was Employment Division v. Smith,²¹⁶ wherein the Supreme Court held that “the right of free exercise does not relieve an individual of the obligation to comply with a ‘valid and neutral law of general applicability on the ground that the law proscribes (or prescribes) conduct that his religion prescribes (or proscribes).’”²¹⁷ However, although Smith has not been officially overruled, recent Supreme Court decisions have greatly weakened it, such that the existence of any comparable secular exemption to a law or regulation triggers strict scrutiny.²¹⁸ One must therefore consider whether there are any comparable secular exemptions to the Sherman Act that would allow secular firms to engage in similar anticompetitive behavior.

At first glance, it would seem that a defendant hospital would be in a strong position to argue that there is at least one comparable secular exemption. At this moment in time, there are around thirty statutory exemptions to the Sherman Act²¹⁹ and several judge-made doctrines that can be viewed as exemptions as well.²²⁰ Among other things, antitrust law does not apply (or applies in a limited manner) to the “business of insurance,”²²¹ ocean shipping,²²² exporting cartels that send products into foreign commerce,²²³ international airline alliances,²²⁴ or professional baseball.²²⁵ Under the Court’s current jurisprudence, just one of these exemptions needs to be sufficiently comparable to trigger a religious exemption.

But as scholars have noted, ²²⁶ whether a court finds a comparable exemption necessarily depends on how broadly or narrowly one conceives of the state’s interest. This is because whether a secular exemption is “comparable” depends on whether it undermines the government’s interest to the same, or similar, extent as a requested religious exemption. ²²⁷ If a permitted secular exemption undermines the government’s stated goal to the same degree as a prohibited religious exemption, the activities are comparable.²²⁸ Therefore, how the parties—and ultimately a court—defines the government’s interest under the Sherman Act will determine if a religious exemption is due.

A defendant seeking an antitrust exemption for religious hospitals (and their secular partners) will likely argue that the government’s interest should be conceptualized broadly: protecting competition writ large. If the government’s interest is conceptualized as protecting competition, then Congress’s exemptions for certain industries or activities can evince that the government’s interest in protecting competition isn’t absolute. And if some industries or activities are exempted, so too should anticompetitive behavior motivated by religious belief. Thus, if agreements relating to anti-hog-cholera serum and hog-cholera virus are exempt from the antitrust laws, and they are,²²⁹ then so too should the restraints in Part II. Or, similarly, a party might argue that because the medical residency matching program (which arguably constitutes an output- and price-fixing agreement within the physician labor market) has been immunized from antitrust liability,²³⁰ so too should religiously motivated agreements to limit output or not compete.²³¹

A hospital might also point to the existence of a Certificate of Public Advantage (COPA) statute, if one exists in the relevant state. COPA laws allow state agencies to approve mergers and collaborations that are traditionally considered anticompetitive if the state determines the benefits outweigh the potential harms.²³² If the state has allowed an otherwise anticompetitive collaboration to take place in one market, the hospitals would likely use this allowance as evidence that the government’s interest in promoting competition is not absolute. In fact, the hospitals might even argue, relying on Fulton v. City of Philadelphia,²³³ that the very existence of the state action doctrine itself, which allows states to subvert the competitive process in pursuit of specific policy goals,²³⁴ demands a religious exemption. In Fulton, the Court made clear that, when the government retains any discretion to grant exemptions from a general rule, it must exempt religious objectors unless it can satisfy the strict scrutiny test.²³⁵ Therefore, defendants might argue that, if the state can absolve potentially anticompetitive conduct for a secular reason, then it must do the same for religious reasons.

Those who oppose a religious exemption will, on the other hand, seek to show that such a broad conceptualization of the government’s interest is inaccurate. Plaintiffs will likely argue that framing the government’s interest as simply “protecting competition writ large” is inherently counterintuitive in the antitrust context, given that the first step in any Section 1 case is to define the relevant market—the economic sphere that measures and assesses anticompetitive conduct.²³⁶ Defining the relevant market is a necessary precursor to determining participants’ market share, the relevant competitors in the market, and, importantly, whether the challenged conduct is anticompetitive. What is anticompetitive in one market might not be so in another.

For example, the restraints discussed in Part II suggest that the government’s interest needs to be framed in relation to the healthcare market. And plaintiffs would likely argue that the relevant market is even narrower: the market(s) for reproductive healthcare. By narrowing the focus in this way, plaintiffs can knock out most of the statutory and doctrinal exemptions that exist. The relevant question would then become: Are there any exemptions that, to an extent similar to the requested religious exemptions, undermine the government’s interest in promoting competition in these specific markets?²³⁷

Plaintiffs would, of course, argue that there are no comparable statutory exemptions exempting anticompetitive behavior in the reproductive healthcare market. And this is true—there are no exemptions specifically targeting the reproductive-healthcare markets. Moreover, they would likely argue that the state action doctrine—and therefore COPA statutes—does not represent a comparable secular exemption. The state action doctrine exempts certain anticompetitive conduct from antitrust scrutiny when private entities act pursuant to a “clearly articulated and affirmatively expressed . . . state policy” that is “‘actively supervised’ by the [s]tate.”²³⁸ It does not provide immunity to private actors engaging in anticompetitive behavior on their own initiative,²³⁹ as is the case with the restraints detailed in Part II.²⁴⁰

Further, plaintiffs might argue, as scholars have, ²⁴¹ the government can have multiple interests. While the overarching purpose of the Sherman Act (and antitrust laws in general) is to protect and promote competition within our national economy, the Act actually works to advance a multitude of more specific government interests within each of the individual markets that make up the larger economy.²⁴² The government, for instance, does not seek to protect competition in the healthcare market simply for the sake of protecting competition; it does so because it believes that, by protecting the competitive process within the healthcare market, it will ensure its citizens can purchase innovative, affordable, and quality healthcare services. As such, the government’s decision to provide an exemption in any particular market based on government interests specific to that market does not mean that it has necessarily undermined its interest in protecting competition in other markets.

B. Substantial Burden

RFRA provides that the “[g]overnment shall not substantially burden a person’s exercise of religion even if the burden results from a rule of general applicability.”²⁴³ A court considering a religious liberty defense to the restraints described in Part II will therefore need to consider whether Section 1’s prohibition on anticompetitive restraints substantially burdens Catholic hospitals’ exercise of religion.

Given the Supreme Court’s decision in Burwell v. Hobby Lobby Stores, Inc.,²⁴⁴ a Catholic hospital will arguably be on strong footing in asserting that Section 1’s anticompetitive-restraint prohibition substantially burdens their free exercise rights. In Hobby Lobby, the plaintiffs argued that the Affordable Care Act’s contraceptive mandate substantially burdened their exercise of religion because it forced them to be complicit in behavior that they viewed as ending an innocent life.²⁴⁵ In their eyes, certain forms of contraception are abortifacients, and to provide their employees with insurance coverage for such medications would be tantamount to funding abortion.²⁴⁶ While the government argued that the link between providing coverage and the potential ending of human life was too attenuated to substantially burden the owners’ religious exercise, the Court rejected this argument, noting that it was outside the Court’s jurisdiction to say that the plaintiffs’ beliefs “are mistaken or insubstantial.”²⁴⁷ Because the owners were forced (in their eyes) to choose between funding their employees’ use of immoral services or dropping their employee insurance plans altogether and paying a penalty,²⁴⁸ the mandate constituted a substantial burden on their free exercise.²⁴⁹

Here, the Catholic hospital would likely make a similar complicity-based argument. The Catholic hospital might argue, for instance, that the Sherman Act’s prohibition on output restrictions in a competitor collaboration substantially burdens its exercise of religion because the prohibition forces the Catholic hospital to choose between collaborating in a way that makes it morally complicit or not collaborating at all.²⁵⁰ This, in turn, restricts the hospital’s ability to grow and might even cause it to fail. Similarly, in the business-sale context, the argument would be that selling the hospital to a buyer who may offer prohibited services makes the Catholic hospital complicit and gives rise to scandal. ²⁵¹ Thus, the Sherman Act’s prohibition on noncompetes may force the Catholic hospital to choose between selling its hospital to a morally unsuitable buyer or not selling at all. Put differently, the Sherman Act imposes a substantial burden on Catholic hospitals by making the hospital choose between adherence to its faith and financial growth.²⁵²

Given how deferential Hobby Lobby was to the plaintiff’s substantial burden argument, it is possible that a court would find the above arguments persuasive. But it is also possible that a court would be reluctant to find that a corporation’s free exercise rights are substantially burdened by the inability to control another market actor’s actions. In Hobby Lobby, after all, the plaintiffs did not seek to control their employees’ behavior; the company sought simply to ensure that they themselves did not subsidize behavior they believed to be immoral. In fact, one can describe Hobby Lobby as an opinion solely focused on the unilateral right of corporations, for-profit and non-profit alike, to refuse “to engage in activities to which they object on grounds of conscience.”²⁵³ But the restraints considered here present a different question: Are a corporation’s free exercise rights substantially burdened when the corporation is prohibited from preventing other market actors from engaging in activities to which it objects on grounds of conscience?

Plaintiffs would of course argue that the answer is no. And to support their argument, they might try to distinguish between two important, often-conflated concepts: (1) the plaintiffs’ sincere religious belief that the coverage mandate made them complicit in immoral behavior, and (2) the plaintiffs’ belief that having to choose between that complicity and paying significant fines constituted a substantial burden. The Court’s opinion made clear that courts have no role to play in evaluating the reasonableness of a plaintiff’s belief that certain behaviors would make them complicit.²⁵⁴ But this question is separate from whether a regulation imposes a substantial burden. A careful reading of the Court’s opinion in Hobby Lobby shows it found the coverage mandate to impose a substantial burden because it forced the plaintiffs to pay “an enormous sum of money—as much as $475 million per year in the case of Hobby Lobby—if they insist[ed] on providing insurance coverage in accordance with their religious beliefs.”²⁵⁵

Put differently, the regulation in Hobby Lobby required Hobby Lobby’s owners to choose between suffering “substantial secular costs” for being religiously compliant and “substantial religious costs” for complying with a secular law. ²⁵⁶ To distinguish the facts here from those in Hobby Lobby, then, the plaintiffs might argue that there is no similar religious-secular tradeoff. While violating Section 1 of the Sherman Act can result in treble damages, compliance with it does not necessarily impose a religious cost on a Catholic hospital. The hospital is still free to operate under Catholic doctrine and collaborate or sell only to those market actors it finds morally suitable; the Sherman Act does not require Catholic hospitals to collaborate with secular hospitals or to sell to any particular market actor. Catholic hospital employees and stakeholders are also free to advocate for expanding Catholic healthcare principles. Section 1 of the Sherman Act simply prohibits the Catholic hospital from imposing an anticompetitive restraint (e.g., its religious beliefs) on another market competitor (or a secular firm from agreeing to an anticompetitive restraint proposed by a Catholic hospital).

Notably, to conclude that such a prohibition does not constitute a substantial burden does not require a court to doubt the sincerity (or reasonableness) of a Catholic hospital’s beliefs regarding complicity. Instead, it requires a court to distinguish between accepting the Catholic hospital’s sincere belief—that it would be complicit in immoral behavior were it to voluntarily collaborate with or sell to a firm that engages (or plans to engage) in behavior prohibited by Catholic doctrine—and accepting the Catholic hospital’s argument that to be denied the ability to impose an output restriction or noncompete on another firm substantially burdens its religious exercise. More simply, it only requires a court to reject the argument that a corporation’s exercise of religion is substantially burdened when it cannot impose that religion on another corporation.

Plaintiffs might also argue that to accept the argument that Section 1 imposes a substantial burden on religious firms would provide Catholic hospitals with an unwarranted and artificial competitive advantage.²⁵⁷ Catholic hospitals arguably face a (self-imposed) competitive disadvantage in the market: Their ability to collaborate with or to sell to particular market actors is constrained by religious doctrine. In contrast, no such constraint impedes a secular hospital’s evaluation of a potential collaborator or buyer, meaning it may benefit from more financial growth opportunities. But these two types of firms are (currently) on even footing under the Sherman Act: Neither can justify imposing anticompetitive agreements on the market on the basis of social, noneconomic goals. Buying into the Catholic hospital’s substantial burden analysis, however, upends that even footing and provides Catholic hospitals with immunity for anticompetitive behavior that is not available to secular firms.²⁵⁸ And this would improperly “shift the costs of observing one’s religion to others who do not believe or practice it,” in effect imposing a tax on nonadherents.²⁵⁹ In other words, finding a substantial burden would not only be incorrect—it would also represent an unfair “redistribution” of the private market order, like that decried by the Hobby Lobby plaintiffs.²⁶⁰

C. Compelling Interest(s)

At the second stage of analysis under both the First Amendment²⁶¹ and RFRA, ²⁶² a court must consider whether the government’s refusal to provide a religious exemption to Section 1 is justified by a compelling interest. Specifically, what interest does the government have in preventing the types of restraints considered in Part II, and is that interest sufficiently weighty to override religious exercise rights?

As Elizabeth Sepper has documented, corporate challengers to the Affordable Care Act’s contraceptive mandate sought to reduce the government’s compelling interest to preserving market access.²⁶³ In their view, the government could not justify impinging on corporations’ (or individuals’) religious beliefs when a functioning market already permitted employees to purchase contraceptives on their own dime. And in siding with the religious objectors, several courts accepted this line of reasoning. The Tenth Circuit, for instance, reasoned that an interest in promoting sex equality could not justify the mandate because women remained “free” to purchase contraception themselves.²⁶⁴ The D.C. Circuit, in turn, viewed the mandate as a “subsidization of a woman’s procreative practices.”²⁶⁵ As articulated by Richard Epstein, the government doesn’t have a compelling interest in forcing religious firms to subsidize employees’ contraceptive use because contraceptives “are readily available in the marketplace to all comers at competitive prices.”²⁶⁶ Such arguments have been expanded to justify religious exemptions more broadly; Andrew Koppelman suggests, for instance, that religious exemptions to antidiscrimination laws are sensible unless “markets will not solve the problem.”²⁶⁷

Whether one agrees with these arguments, it should be clear that those advocating for a religious exemption to the mandate implicitly assumed religious businesses were not acting in ways that impeded market competition and, therefore, consumers’ ability to purchase contraception at competitive prices.²⁶⁸ Indeed, the Tenth Circuit noted specifically that religious employers opposing the mandate did not seek to “prevent employees from using their own money to purchase” contraceptives in the market.²⁶⁹ It should follow then that, should circumstances present where religious firms do engage in behavior that disrupts the market’s competitive functioning by reducing output and raising prices, the government does have a compelling interest in stopping such behavior. To argue otherwise would require defendants to suggest that the government does not have a compelling interest in preserving market access to goods and services. And while they might do so, it would be a hard argument to make.

By passing the Sherman Act, the Supreme Court explained, Congress “sought to establish a regime of competition as the fundamental principle governing commerce in this country.”²⁷⁰ The Act is a “charter of freedom”²⁷¹ that assumes “the unrestrained interaction of competitive forces will yield the best allocation of our economic resources, the lowest prices, the highest quality and the greatest material progress, while at the same time providing an environment conducive to the preservation of our democratic political and social institutions.”²⁷² In fact, the Supreme Court has gone so far as to characterize the antitrust laws as “the Magna Carta of free enterprise. They are as important to the preservation of economic freedom and our free-enterprise system as the Bill of Rights is to the protection of our fundamental personal freedoms.”²⁷³ In other words, it has long been accepted that the Sherman Act serves a fundamental role in protecting the nation’s economic interests.

Thus, plaintiffs would argue that the government has a compelling interest in preserving competition—and therefore market access—in the markets for reproductive healthcare. ²⁷⁴ In doing so, plaintiffs would do well to emphasize that, unlike in the contraceptive mandate cases, enforcing the Sherman Act in this context ensures that female consumers benefit from a free and competitive reproductive-healthcare marketplace—rather than from free reproductive health services. Similarly, in contrast to antidiscrimination laws, which have been portrayed as forcing religious firms to provide services they reject on religious grounds, the government does not seek to force Catholic hospitals (or even secular hospitals) to provide a particular service. Rather, the government seeks to ensure that any decision to provide or not to provide a service is made freely. That is, the goal is to provide an opportunity for the market to work, not to dictate what the market must provide.²⁷⁵

But plaintiffs could argue also that the Sherman Act plays an important role not only in promoting economic freedom but religious freedom as well. While a Catholic hospital would logically focus on its own religious liberty rights, plaintiffs would do well to note that consumers also have a religious liberty interest in being able to pursue healthcare in accordance with their own religious beliefs (or lack thereof). And the existence of secular healthcare institutions—that is, institutions that do not limit healthcare treatments according to a particular religious doctrine—play an enormously important role in ensuring consumers can access care that accords with their own faith.²⁷⁶ Thus, it is one thing if Catholic healthcare spreads far and wide in the market through free and fair competition because the majority of consumers seek out healthcare compliant with Catholic doctrine. It is another matter entirely if that spread is in part a function of anticompetitive behavior that results in decreased options and subpar treatment for consumers at secular facilities. Plaintiffs might therefore argue that the government has a compelling interest not only in promoting a competitive healthcare market but also in ensuring consumers can access care that aligns with their religious beliefs (or lack thereof). Indeed, just as the government has an interest in preventing the acquisition of secular monopoly power through anticompetitive means, plaintiffs might argue, so too does it have an interest in preventing the acquisition of a religious monopoly in healthcare through anticompetitive means.²⁷⁷

To prohibit one but not the other would arguably be inconsistent with the “State’s obligation of religious neutrality.”²⁷⁸ And plaintiffs might point to the Supreme Court’s opinion in Associated Press v. United States for support.²⁷⁹ There the Court rejected a free speech challenge to the Sherman Act, noting

a command that the government itself shall not impede the free flow of ideas does not afford non-governmental combinations a refuge if they impose restraints upon that constitutionally guaranteed freedom. . . . Freedom to publish is guaranteed by the Constitution, but freedom to combine to keep others from publishing is not.²⁸⁰

Put simply, while the Constitution protects the free exercise of religion, plaintiffs would emphasize it is not just the Catholic hospital’s free exercise rights that are at stake here. Catholic hospitals (and other religious firms) have the right to unilaterally pursue the tenets of their faith, but that does not mean they have the freedom to combine and impose restraints on other market actors’ abilities to provide or purchase healthcare in accordance with their own beliefs. In the words of one court, “assuming that the [hospital’s] activity is a genuine expression of the right to exercise freely, there are still limits on the tactics that may be used to accomplish its ends.”²⁸¹ Here, plaintiffs can argue that the state has a compelling interest in protecting the religious liberty rights of all its citizens, not just some, and that the Sherman Act’s prohibition of anticompetitive restraints helps effectuate that goal.

D. Less Restrictive Alternative

Under both the First Amendment²⁸² and RFRA,²⁸³ even a law or regulation justified by a compelling interest must not sweep too broadly and thereby restrict individuals’ (or corporations’) free exercise rights unnecessarily. If the government could achieve its goals through less burdensome means, it must do so. So, the question becomes, is there a way for the government to protect market competition while allowing restraints like those considered in Part II?

If one accepts that the government has a compelling interest in protecting market competition, the answer seems to be no. The key antitrust concern with respect to the restraints described in Part II is that a market actor (the secular hospital or the new, secular owner of a hospital) is unable to respond independently to market demand for reproductive healthcare because it has agreed to provide only the services that a Catholic hospital would be willing to provide. Such agreements are prohibited because their very existence distorts the competitive process by “depriv[ing] the marketplace of the independent centers of decisionmaking that competition assumes and demands.”²⁸⁴ Thus, because the restraints themselves are problematic, it would seem that the government’s interest in protecting competition can be achieved only by prohibiting the restraints entirely, that is, by prohibiting the output restriction or agreement not to compete. Either the secular healthcare provider is free to respond independently to market demand, or it is not.²⁸⁵

Importantly, however, this does not mean that there might never be a less restrictive alternative available under the Sherman Act—or other antitrust laws. Antitrust law does not seek to dictate a particular market outcome or any particular level of competition; instead, it seeks to ensure that competitive market conditions are not impeded by illegal conduct. As such, relevant agencies have sought to appropriately thread the needle between protecting competition and preventing anticompetitive behavior when crafting remedies for Sherman Act Section 2 and Clayton Act Section 7 violations.²⁸⁶

For instance, rather than prohibit a proposed merger entirely, the agencies might instead accept certain structural remedies that would adequately protect market competition.²⁸⁷ And, as noted earlier, creative structural remedies have been employed in the context of religious-secular hospital mergers, remedies that have allowed for services to continue while simultaneously respecting a Catholic hospital’s need to distance itself from allegedly immoral procedures.²⁸⁸ One might therefore argue that the government’s decision to completely block a religious-secular hospital merger, rather than allow some sort of structural remedy to preserve care, would fail both the narrow tailoring and least restrictive alternative tests of the First Amendment and RFRA.

Whether structural or behavioral remedies could allow for a compromise between the government’s interest in protecting the competitive process and a religious firm’s desire to engage in conduct that runs afoul of the antitrust laws, then, depends on the type of conduct at issue. Section 1’s flat prohibition against anticompetitive restraints suggests there is no remedy other than removing the restraint; in certain monopolization and merger cases, however, there might be more room for compromise.

* * *

Currently, there is no religious exemption to the Sherman Act’s prohibition against anticompetitive restraints. Yet, because of the prevailing winds of religious liberty law, religious firms that find themselves facing an antitrust challenge to the restraints considered here will certainly be incentivized to raise a religious liberty defense. My analysis suggests that a religious liberty defense should be rejected. Even if a court finds that defendants have the better argument on the first prong of either First Amendment or RFRA analyses (an outcome that is by no means certain), the Sherman Act’s prohibition of religiously motivated, anticompetitive restraints both serves a compelling interest and is appropriately tailored to achieve that interest. In other words, there are market limits to free exercise rights.

IV. Bringing a Case: Some Practical Considerations

I have argued that Catholic and secular hospitals have routinely entered into agreements that violate Section 1 of the Sherman Act, thereby harming competition and reducing community access to reproductive healthcare. Plaintiffs may therefore want to bring suit under Section 1 of the Sherman Act challenging the types of restraints analyzed in Part II. The removal of these restraints will allow the market to operate according to the natural give-and-take of market forces, thereby incentivizing hospitals (secular and religious alike) to provide the full range of reproductive healthcare services.²⁸⁹ Given the unique nature of these agreements, I make two suggestions for potential plaintiffs to consider.

First, any plaintiff that files suit should file suit only against the secular hospital. Doing so will allow the plaintiff to make clear that the goal of an antitrust challenge is not to force the Catholic hospital²⁹⁰ to provide healthcare services to which it is morally opposed, but to require the secular hospital to begin allowing its providers to provide healthcare in accordance with patient need and their best medical (and moral) judgment. It also helps highlight the fact that the secular hospital has no religious liberty defense of its own and is restricting its doctors’ ability to provide appropriate care to patients for profit-maximizing reasons.

Second, while the antitrust laws allow for private and public enforcement, doctrinal standing concerns suggest that state attorneys general are best suited to bring suit, at least if damages are sought as part of the remedy. This is because one of the key harms imposed by the agreements in Part II is the inability to purchase healthcare. This results in a form of deadweight loss, a concept that has not been adequately incorporated into consumer antitrust doctrine.²⁹¹ This is likely due, at least in part, to the difficulty in estimating individual-level deadweight loss damages.²⁹² But, as others have argued, state attorneys general have the ability to bring parens patriae suits to recover aggregate deadweight loss.²⁹³

A. The Secular Hospital as Sole Defendant

Antitrust conspirators face joint and several liability.²⁹⁴ I suggest, however, that potential plaintiffs sue the secular hospital and only the secular hospital. I do so for both practical and strategic reasons.

As a starting point, the first-order goal of any lawsuit challenging the above restraints is to increase access to care by removing the anticompetitive restraint. In the competitor-collaboration scenario, the secular hospital has agreed to cease providing certain services to the community that it would otherwise provide. Meanwhile in the secular buyer scenario, the buyer has agreed never to provide those services for the duration of the contract, regardless of its own desires and community demand. Both lead to an artificial suppression of healthcare in the community. The first goal of any lawsuit, then, is injunctive relief requiring the secular hospital to allow its providers to provide the full range of medical care. It is not the goal, in contrast, to require the Catholic hospital (or even individual providers at either hospital) to provide care in violation of sincerely held religious beliefs. As such, injunctive relief can only target the secular hospital.

But even if a plaintiff were to sue for damages as well, strategic considerations suggest that it should, again, sue only the secular hospital. Doing so helps emphasize that the goal of the lawsuit is to end the anticompetitive restraint, not to attack religious healthcare per se. After all, the secular hospital has no religious liberty defense in support of its actions. Its only hope is to show why its agreement to limit output does not violate the Sherman Act. This, as I demonstrated in Part II, is something it cannot do.

It is possible, of course, that the secular hospital might move to join the Catholic hospital under Rule 19 of the Federal Rules of Civil Procedure, which states that a required party must be joined in an action if feasible.²⁹⁵ Similarly, the Catholic hospital might move to intervene, arguing that the case raises important issues about its ability to operate in the market as a religious healthcare provider. ²⁹⁶ However, either action poses some risks for the hospitals. Doing so would highlight, first, that the secular hospital has no religious reason for its behavior and has agreed to cease providing standard and popular services to the community for profit-maximizing reasons, and, second, that the Catholic hospital is trying to deny access to care not just at its own facilities but others as well. The public will likely find neither fact particularly palatable. In fact, history suggests that some religious-secular collaborations and proposed mergers have fallen apart following community outcry when the real-world effects (i.e., denial of care) became public.²⁹⁷

In sum, plaintiffs should sue the secular hospital because of the mismatch between which hospital is the target for injunctive relief (the secular hospital) and which hospital is motivated by religious belief (the Catholic hospital). Suing only the secular hospital highlights the disjunction within this mismatch and will make for a cleaner argument before the court, thereby decreasing the chances of a court improperly concluding that the plaintiff seeks to force the Catholic hospital to provide morally contested services. Moreover, by focusing on just the secular hospital, the plaintiff can work to craft a narrative that is less about Catholic healthcare per se and more about the secular hospital’s willingness to cease or refrain from providing necessary healthcare to community members for profit-maximizing, rather than faith-based, reasons.

B. The State as Plaintiff

From an access perspective, the most important relief to be gained by challenging the restraints described in Part II is injunctive relief. Such relief would allow providers at the secular hospital to begin providing care based on patient needs and according to their best medical judgment. But the antitrust laws are designed also to provide compensation to the victims of illegal, anticompetitive behavior. Indeed, private plaintiffs are highly incentivized to bring suit, as the Clayton Act provides treble damages plus attorneys’ fees for anyone injured by an antitrust violation.²⁹⁸ In doing so, the Act creates a “crucial deterrent to potential violators.”²⁹⁹ But here, a claim for damages presents a few challenges, primarily because of the particular intersection between antitrust standing and the estimations of damages. In this section, I will contend that doctrinal standing issues suggest that state enforcers are best suited to bring a case for damages.

Let us begin with antitrust standing. Because the harms that flow from an anticompetitive violation are theoretically infinite—thus creating infinite potential plaintiffs—the courts have developed antitrust standing as a prudential doctrine to limit the number of plaintiffs who can bring a case.³⁰⁰ A private antitrust plaintiff’s standing therefore turns on the following: “(1) the nature of the plaintiff’s alleged injury; that is, whether it was the type the antitrust laws were intended to forestall; (2) the directness of the injury; (3) the speculative measure of the harm; (4) the risk of duplicative recovery; and (5) the complexity in apportioning damages.”³⁰¹ While prongs (1)–(2)³⁰²and (4)–(5)³⁰³ pose no challenges in the scenarios outlined in Part II, prong (3) is a different matter.

To understand why, we need to consider how damages would be calculated in the scenarios above. Antitrust damages are typically calculated by comparing what the plaintiff’s financial results would have been in a “but for” world (i.e., one in which the antitrust violation did not occur) with the plaintiff’s financial results in the actual world.³⁰⁴ For instance, in the context of a price-fixing scheme, a consumer plaintiff’s damages would generally be the difference between the price the plaintiff actually paid and the price the plaintiff would have paid absent the existence of the price-fixing scheme.³⁰⁵ Yet the typical antitrust damages scenario does not apply to the facts above—consumers are not harmed because they paid an overcharge to the secular or Catholic hospital; they were harmed because they were either (1) denied the ability to purchase care or (2) paid an overcharge to an alternate provider in the market—that is, one that was not party to the anticompetitive agreement.

It may be helpful here to add some numbers to the discussion. Say the competitive price (the price that would exist absent the anticompetitive restraint) for a tubal ligation in either scenario considered in Part II is $4,000, while the supracompetitive price (the price an alternate provider in the market can charge in light of the secular hospital’s restraint on output) ranges from $4,500 to $7,000, depending on how many additional providers are in the market. And let’s say that we have two hypothetical consumers, one who is willing to pay $5,000 for a tubal ligation and one who is willing to pay $6,000.

Under competitive conditions, one hypothetical consumer receives a surplus of $1,000—the difference between her reservation price and the actual market price—while the other receives a surplus of $2,000. But under anticompetitive conditions—that is, when the Catholic and secular hospital (or buyer) enter into their agreement—each consumer either pays an overcharge at an alternate hospital or is unable to purchase care at all. As Table 1 demonstrates, which harm occurs will depend upon both the individual consumer’s reservation price and how many other competitors exist in the market, if any.

Table 1: Mapping the Anticompetitive Effects—Tubal Ligation

# Additional Providers	Reservation Price	Competitive Price	Supra- competitive Price	Loss in Consumer Welfare / Deadweight Loss	Overcharge	Care Received?
Customer #1
5	$5,000	$4,000	$4,500	$500	$500	Yes
4	$5,000	$4,000	$4,750	$750	$750	Yes
3	$5,000	$4,000	$5,000	$1000	$1,000	Yes
2	$5,000	$4,000	$6,000	$1,000	NA	No
1	$5,000	$4,000	$7,000	$1,000	NA	No
0	$5,000	$4,000	Service unavailable	$1,000	NA	No
Customer #2
5	$6,000	$4,000	$4,500	$500	$500	Yes
4	$6,000	$4,000	$4,750	$750	$750	Yes
3	$6,000	$4,000	$5,000	$1,000	$1,000	Yes
2	$6,000	$4,000	$6,000	$2,000	$2,000	Yes
1	$6,000	$4,000	$7,000	$2,000	NA	No
0	$6,000	$4,000	Service unavailable	$2,000	NA	No

We see, for instance, that the consumer with a higher reservation price of $6,000 can access care (albeit at an overcharge) under more market scenarios than the consumer with a lower reservation price. This means that higher income individuals (or individuals with more comprehensive insurance coverage) are more likely than lower income individuals to secure treatment in the face of the anticompetitive restraints analyzed here.³⁰⁶ But in two-hospital markets, consumers are unable to access care regardless of income level or insurance coverage. Thus, potential plaintiffs fall into two buckets: Either they suffer an overcharge receiving care at an alternate provider not party to the agreement, or they are unable purchase a particular reproductive healthcare service altogether.

This is problematic from a standing perspective for two reasons. The first reason is that it is impossible—at least without engaging in speculation—to calculate the individual damages suffered by those consumers who are denied the ability to purchase care. In Table 1, each consumer’s reservation price is simply assumed, but in real life, of course, that number would need to be subject to reasonable proof. This poses a major problem in the litigation context, as there must be a reasonable basis for assumptions employed in the plaintiff’s damages model.³⁰⁷ The second reason is that the plaintiffs who are forced to pay an overcharge at an alternate provider in the market are what we call “umbrella victims.” Umbrella victims are consumers who purchase a supracompetitive-priced product not from a member of a cartel but from another firm in the market that has raised its prices under the “umbrella” of the higher price charged by the cartel members.³⁰⁸ Courts are currently divided on whether or not umbrella victims have standing to bring an antitrust claim,³⁰⁹ with those denying standing generally doing so due to concerns about potentially speculative and duplicative damages recovery.³¹⁰

Neither of these standing problems are insurmountable, however. Consider first the damages incurred by the denial of care (i.e., the deadweight loss that occurs when socially beneficial transactions do not take place). While it is very difficult to calculate an individual-level measure of harm for consumers who are denied care, it is not as difficult to calculate an aggregate measure of the harm, as Christopher Leslie has previously argued:³¹¹ “Although deadweight loss cannot be calculated with pinpoint accuracy, reasonable estimates are possible. And that is all that the standard for antitrust damages requires.”³¹² And while it would be difficult and perhaps ill-advised to allow individual consumers to sue for aggregate deadweight loss,³¹³ there is no reason the state could not do so. State attorneys general have the authority to pursue antitrust claims on behalf of natural persons in their states,³¹⁴ and they have done so in a broad range of consumer suits.³¹⁵ Moreover, the federal parens patriae statute specifically provides that “damages may be proved and assessed in the aggregate . . . without the necessity of separately proving the individual claim of, or amount of damages to, persons on whose behalf the suit was brought.”³¹⁶ The damages secured in a parens patriae suit could then be distributed among consumers who can demonstrate that they sought and were denied care at the secular hospital or funneled to the state’s family planning programs through a cy pres distribution, among other possibilities.³¹⁷

Now let us consider umbrella victims. A closer examination shows that there is no problem when it comes to standing because the concerns that have motivated some courts’ denial of standing—the difficulty in estimating damages and the threat of duplicative recovery—are not present under the types of restraints considered in Part II. First, calculating the overcharge incurred by consumers who sought care at an alternative provider poses no greater difficulty or speculation than calculating an overcharge in the typical antitrust case. The agreements in Part II require the secular hospital to decrease its output (or refrain from increasing its output) artificially, which will in turn provide the other providers in the market with more patients and, therefore, greater market share. Plaintiffs can present expert economic evidence, supported by patient inflow data and payor claims data, demonstrating the decrease in output and its foreseeable impact on other competitors in the market. There may even be evidence that the secular hospital’s cessation of services positively impacted competitor hospitals’ bargaining positions with insurance networks seeking to ensure that their members can access the full spectrum of reproductive care.

Second, there is no possibility of duplicative recovery as there are only two types of harm imposed—overpaying or an inability to purchase—and consumers can fall into only one of those two buckets. That contrasts a more typical antitrust case, in which there are direct purchasers who are considered the most appropriate plaintiff. There are no direct purchasers in the scenarios outlined above, only those who are denied care and those forced to purchase it elsewhere at a supracompetitive price. The sum of the overcharge damages and the aggregate deadweight loss is therefore equal to the total harm imposed by the agreement.

That damages concerns have led some courts to deny that umbrella standing does not apply to the scenarios analyzed here suggests the umbrella victims, if not the “deadweight loss” victims, could successfully bring individual suits or a class action suit. But such a suit could account only for a portion of the harm imposed by the hospitals’ anticompetitive agreement—consumers who were denied the ability to purchase care would be left out. As such, I suggest that the most efficient approach is for the state to bring suit on behalf of both sets of consumers.

Conclusion

In 2010, “historically secular Sierra Vista Regional Health Center in southeastern Arizona began a trial two-year affiliation with the Catholic Carondelet Health Network, a member of the Ascension Health system.”³¹⁸ The affiliation was expected to culminate in a merger between the two entities. “As a condition of the affiliation, Sierra Vista, the sole community provider of acute care in a rural three-county region, was required to follow the Directives.”³¹⁹ Shortly after the trial affiliation began, a woman experiencing a miscarriage at fifteen weeks presented at the hospital. The patient had been carrying twins and had already miscarried one of the twins at home.³²⁰ When she arrived at the hospital, she was stable, “[b]ut the umbilical cord from the first fetus was coming out of her vagina, while the second fetus was still in her uterus.”³²¹ The doctor who examined her recommended that she receive an abortion given the low chance of a successful pregnancy and the high risks of severe hemorrhaging and infection.³²² The patient and her husband agreed with this course of treatment, and the physician prepared to complete the miscarriage.³²³ But the remaining fetus had a heartbeat, meaning that abortion was not permitted under the Directives—at least not until an abortion would be necessary to preserve the mother’s life. This fact led a hospital administrator to intervene and order the physician to transfer the patient to avoid violating the Directives.³²⁴ According to the physician’s deposition, the administrator did not inquire as to the possible risks or complications of denying treatment, whether the patient could possibly continue the pregnancy, where the patient would be transferred, or how long it might take her to receive treatment.³²⁵ The doctor was forced to return to the patient and her husband and inform them that he could not provide the agreed-upon treatment. Instead of receiving care at Sierra Vista, the patient was sent by ambulance to another hospital eighty miles away.³²⁶ This ambulance trip put her at risk of hemorrhaging and sepsis, although her condition luckily did not worsen, and she received the care she needed.³²⁷

This denial of care has been frequently highlighted as an example of the dangers religious healthcare restrictions pose to patients.³²⁸ But while it seems everyone recognized the inherent wrongness of the situation—a patient being denied care that she and her provider felt was both medically and morally appropriate, and in a secular hospital no less—no observers appear to have recognized that this story had antitrust implications. As this Article has demonstrated, this trial affiliation contained an illegal output restriction. According to the public reporting, Sierra Vista and Carondelet Health, although in the process of merging, had not yet done so. Instead, they were still operating as separate, competing market actors.³²⁹ Yet, due to the agreement, Sierra Vista could not act as an independent economic actor and provide treatment to patients unless the Carondelet Health Network was willing to do so as well.

While the board of Sierra Vista Regional Medical Center voted to discontinue its affiliation with the Carondelet Health Network shortly after this incident,³³⁰ there are still many secular facilities operating under religious restrictions as a matter of contract. For those who believe in a free and open marketplace, one that allows consumers to purchase and providers to provide care in accordance with their own religious beliefs, such contractual arrangements are deeply problematic. Our nation’s antitrust laws, however, offer a viable tool for combatting such exclusionary practices and ensuring that all Americans can access the care they need and deserve.

* Visiting Assistant Professor of Law, Duke University, Duke University, JD/PhD. Many thanks to Stanislav Rabinovich, Ashlee-Paxton Turner, Barak Richman, Daniel Francis, Christopher Leslie, Greg Day, Theodosia Stavroulaki, Alicia Gilbert, Stuart Benjamin, Elizabeth Sepper, Joan Krause, Max Eichner, Leslie Griffin, Meghan Boone, Micah Schwartzman, James Nelson, Richard Katskee, Bill Marshall, Daniel Crane, Michael Frakes, John de Figueiredo, Veronica Root-Martinez, Ben Grunwald, Chris Buccafusco, Tim Meyer, Jared Danaher, and the attendees of the Richmond Junior Scholars conference and Duke Junior Scholars workshop.