The facts
A state association for plastic surgeons created an advertising campaign to promote the plastic surgery market. The campaign consisted of a series of billboards, internet ads and print ads placed in publications throughout the local region. One of the ads contained an image of a young woman with a distressed look on her face and a caption alluding to the fact that cosmetic surgeons are not plastic surgeons.
Two cosmetic surgeons sued the association for antitrust claiming it was engaging in deceptive trade practices by knowingly and intentionally propagating false and misleading statements to the public using the advertising campaign. The cosmetic surgeons alleged that the advertising campaign was disguised as a public safety campaign when in reality, it was meant as a scare tactic to gain a monopoly of the cosmetic surgery market and divert business away from cosmetic surgeons.
The association argued they were simply informing the public that not all doctors that perform plastic surgery procedures are board certified plastic surgeons. Additionally, the association claimed that some doctors only attend cosmetic boot camps to learn and perform cosmetic or reconstructive procedures and do not complete the proper training that is essential and accepted as a standard of competency to perform plastic surgery procedures.
The result
The courts ultimately sided with the defendant and the case was dismissed. The defense counsel expenses for the antitrust case totaled over $100,000. Even though defense was successful at a relatively early stage in the litigation, the matter was very expensive due to the complexity of antitrust laws.
Risk factors
Risk factor #1
Be sure that you fully understand antitrust laws. The main statutes include the Sherman Act of 1890, the Clayton Act of 1914 and the Federal Trade Commission Act of 1914. These acts restrict the formation of cartels and prohibit other collusive practices regarded as being in restraint of trade. Secondly, they restrict the mergers and acquisitions of organizations which could substantially lessen competition. Lastly, they prohibit the creation of a monopoly and the abuse of monopoly power.
Risk factor #2
Not all directors & officers policies provide antitrust coverage, especially for small organizations. Insured’s should be made aware of how a local association can get involved in an antitrust lawsuit. Without proper coverage, the defense cost for the claim would have come out of the association’s pocket.
*The claim scenario is strictly documented for illustrative purposes only and provides an example of what a policy could cover. It is intended to provide a general overview of the program described. Please remember only the insurance policy can give actual terms, coverage, amounts, conditions and exclusions. Program availability and coverage are subject to individual underwriting criteria.
