Seeking to restrain alleged violations of §§ 1 and 2 of the
Sherman Act, the United States brought this suit against the Oregon
State Medical Society, eight county medical societies, a
doctor-sponsored corporation engaged in the sale of prepaid medical
care, and eight doctors who were officers of those organizations.
The complaint charged that they conspired to restrain and
monopolize the business of providing prepaid medical care in Oregon
and conspired to restrain competition between doctor-sponsored
prepaid medical plans within the State. After a trial, the District
Court dismissed the complaint on the ground that the Government had
failed to prove its charges.
The judgment is affirmed. Pp. 343 U. S.
1. On review, it is not the function of this Court to try the
case de novo
on the record. United States v. Yellow
Cab Co., 338 U. S. 338
343 U. S.
2.Rule 52(a) of the Federal Rules of Civil Procedure, which
provides that, where an action is tried by a court without a
"findings of fact shall not be set aside unless clearly
erroneous, and due regard shall be given to the opportunity of the
trial court to judge of the credibility of witnesses,"
is peculiarly applicable in a case, such as this, where the
complaining party creates a vast record of cumulative evidence as
to long-past transactions, motives and purposes, the effect of
which depends largely on credibility of witnesses. P. 343 U. S.
3. In an action under the Sherman Act for an injunction, the
sole function of which is to forestall future violations, an
examination of evidence relating to long-past transactions is
justified only when it illuminates or explains the present and
predicts the shape of things to come. Pp. 343 U. S.
4. Conduct which had been discontinued seven years previously,
in the absence of a threat or likelihood of its resumption, does
not warrant the issuance of an injunction. Pp. 343 U. S.
Page 343 U. S. 327
5. The Government having failed to prove a concerted refusal by
the defendant doctors to deal with private health associations, it
is unnecessary here to decide whether that would violate the
antitrust laws. Pp. 343 U. S.
(a) Where the historic direct relationship between physician and
patient is involved, there are ethical considerations which are
quite different from the usual considerations prevailing in
ordinary commercial matters. P. 343 U. S.
6. The trial court's refusal to find that the defendants had
conspired to restrain or monopolize the business of prepaid medical
care was not clearly erroneous. Pp. 343 U. S.
7. The trial court's finding that the sale of medical services
by the doctor-sponsored organizations, as conducted in Oregon, did
not constitute interstate commerce was not clearly erroneous, and
the agreement between them not to compete did not fall within the
prohibitions of the Sherman Act. American Medical Assn. v.
United States, 317 U. S. 519
distinguished. Pp. 343 U. S.
8. A finding which, in the light of the record, does not leave
the reviewing court with any "definite and firm conviction that a
mistake has been committed" is not "clearly erroneous." P.
343 U. S.
In a suit by the United States to restrain alleged violations of
§§ 1 and 2 of the Sherman Antitrust Act, the District Court, after
a trial, dismissed the complaint on the ground that the Government
had failed to prove its charges. 95 F.
. The United States appealed directly to this Court
under the Expediting Act. Affirmed,
p. 343 U. S.
Page 343 U. S. 328
MR. JUSTICE JACKSON delivered the opinion of the Court.
This is a direct appeal by the United States [Footnote 1
] from dismissal by the District
Court [Footnote 2
] of its
complaint seeking an injunction to prevent and restrain violations
of §§ 1 and 2 of the Sherman Act. 26 Stat. 209, as amended, 15
U.S.C. §§ 1, 2. [Footnote
Appellees are the Oregon State Medical Society, eight county
medical societies, Oregon Physicians Service (an Oregon corporation
engaged in the sale of prepaid medical care), and eight doctors who
are or have been at some time responsible officers in those
This controversy centers about two forms of "contract practice"
of medicine. In one, private corporations organized for profit sell
what amounts to a policy of insurance by which small periodic
payments purchase the right to certain hospital facilities and
medical attention. In the other, railroad and large industrial
employers of labor contract with one or more doctors to treat their
ailing or injured employees. Both forms of "contract practice," for
rendering the promised medical and surgical service, depend upon
doctors or panels of doctors who cooperate on a fee basis or who
associate themselves with the plan on a full or part-ime employment
Objections of the organized medical profession to contract
practice are both monetary and ethical. Such
Page 343 U. S. 329
practice diverts patients from independent practitioners to
contract doctors. It tends to standardize fees. The ethical
objection has been that intervention by employer or insurance
company makes a tripartite matter of the doctor-atient relation.
Since the contract doctor owes his employment and looks for his pay
to the employer or the insurance company, rather than to the
patient, he serves two masters with conflicting interests. In many
cases companies assumed liability for medical or surgical service
only if they approved the treatment in advance. There was evidence
of instances where promptly needed treatment was delayed while
obtaining company approval, and where a lay insurance official
disapproved treatment advised by a doctor.
In 1936, five private associations were selling prepaid medical
certificates in Oregon, and doctors of that State, alarmed at the
extent to which private practice was being invaded and superseded
by contract practice, commenced a crusade to stamp it out. A "tooth
and claw" struggle ensued between the organized medical profession,
on the one hand, and the organizations employing contract doctors,
on the other. The campaign was bitter on both sides. State and
county medical societies adopted resolutions and policy statements
condemning contract practice and physicians who engaged in it. They
brought pressure on individual doctors to decline or abandon it.
They threatened expulsion from medical societies, and one society
did expel several doctors for refusal to terminate contract
However, in 1941, seven years before this action was commenced,
there was an abrupt about-ace on the part of the organized medical
profession in Oregon. It was apparently convinced that the public
demanded and was entitled to purchase protection against unexpected
costs of disease and accident, which are catastrophic to persons
without reserves. The organized doctors completely reversed
Page 343 U. S. 330
their strategy and, instead of trying to discourage prepaid
medical service, decided to render it on a nonprofit basis
In that year, Oregon Physicians' Service, one of the defendants
in this action, was formed. It is a nonprofit Oregon corporation,
furnishing prepaid medical, surgical, and hospital care on a
contract basis. As charged in the complaint,
"It is sponsored and approved by the Oregon State Medical
Society, and is controlled and operated by members of that society.
It sponsors, approves, and cooperates with component county
societies and organizations controlled by the latter which offer
prepaid medical plans."
95 F. Supp. at 121. After seven years of successful operation,
the Government brought this suit against the doctors, their
professional organizations, and their prepaid medical care company,
asserting two basic charges: first, that they conspired to restrain
and monopolize the business of providing prepaid medical care in
the Oregon, and, second, that they conspired to restrain
competition between doctor-ponsored prepaid medical plans within
the Oregon in that Oregon Physicians' Service would not furnish
prepaid medical care in an area serviced by a local society
The District Judge, after a long trial, dismissed the complaint
on the ground that the Government had proved none of its charges by
a preponderance of evidence. The direct appeal procedure does not
give us the benefit of review by a Court of Appeals of findings of
The appeal brings to us no important questions of law or
unsettled problems of statutory construction. It is much like
United States v. Yellow Cab Co., 338 U.
. Its issues are solely ones of fact. The record
is long, replete with conflicts in testimony, and includes
quantities of documentary material taken from the appellees' files
and letters written by doctors, employers, and employees. The
Government and the appellees each put more than
Page 343 U. S. 331
two score of witnesses on the stand. At the close of the trial,
the judge stated that his work
"does not permit the preparation of a formal opinion in so
complex a case. I will state my conclusions on the main issues, and
then will append some notes made at various stages throughout the
trial. These may be of aid to counsel in the preparation of
Findings of Fact and Conclusions of Law to be submitted as a basis
for final judgment."
95 F. Supp. at 104. These notes indicated his disposition of the
issues, but the Government predicates a suggestion of bias on
irrelevant soliloquies on socialized medicine, socialized law, and
the like, which they contained. Admitting that these do not add
strength or persuasiveness to his opinion, they do not becloud his
clear disposition of the main issues of the case, in all of which
he ruled against the Government. Counsel for the doctors submitted
detailed findings in accordance therewith. The Government did not
submit requests to find, but by letter raised objections to various
proposals of the appellees.
The trial judge found that appellees did not conspire to
restrain or attempt to monopolize prepaid medical care in Oregon in
the period 1936-1941, and that, even if such conspiracy during that
time was proved, it was abandoned in 1941 with the formation of
Oregon Physicians' Service marking the entry of appellees into the
prepaid medical care business. He ruled that what restraints were
proved could be justified as reasonable to maintain proper
standards of medical ethics. He found that supplying prepaid
medical care within the Oregon by doctor-ponsored organizations
does not constitute trade or commerce within the meaning of the
Sherman Act, but he declined to rule on the question whether
supplying prepaid medical care by the private associations is
The Government asks us to overrule each of these findings as
contrary to the evidence, and to find that the business
Page 343 U. S. 332
of providing prepaid medical care is interstate commerce. We are
asked to review the facts and reverse and remand the case "for
entry of a decree granting appropriate relief." We are asked in
substance to try the case de novo
on the record, make
findings, and determine the nature and form of relief. We have
heretofore declined to give such scope to our review. United
States v. Yellow Cab Co., supra.
While Congress has provided direct appeal to this Court, it also
has provided that, where an action is tried by a court without a
"findings of fact shall not be set aside unless clearly
erroneous, and due regard shall be given to the opportunity of the
trial court to judge of the credibility of the witnesses."
Rule 5i(a), Fed.Rules Civ.Proc.. There is no case more
appropriate for adherence to this rule than one in which the
complaining party creates a vast record of cumulative evidence as
to long-ast transactions, motives, and purposes, the effect of
which depends largely on credibility of witnesses.
The trial court rejected a grouping by the Government of its
evidentiary facts into four periods, 1930-1936, the year 1936,
1936-1941, and 1941 to trial. That proposal projected the inquiry
over an eighteen-ear period before the action was instituted. The
court accepted only the period since the organization of Oregon
Physicians' Service as significant, and rejected the earlier years
as "ancient history" of a time "when the Doctors were trying to
find themselves. . . . It was a period of groping for the correct
position to take to accord with changing times." 95 F. Supp. at
105. Of course, present events have roots in the past, and it is
quite proper to trace currently questioned conduct backwards to
illuminate its connections and meanings. But we think the trial
judge was quite right in rejecting pre-941 events as establishing
the cause of action the Government was trying to
Page 343 U. S. 333
maintain, and adopt his division of the time involved into two
periods, 1936-1941 and 1941 to trial.
It will simplify consideration of such cases as this to keep in
sight the target at which relief is aimed. The sole function of an
action for injunction is to forestall future violations. It is so
unrelated to punishment or reparations for those past that its
pendency or decision does not prevent concurrent or later remedy
for past violations by indictment or action for damages by those
injured. All it takes to make the cause of action for relief by
injunction is a real threat of future violation or a contemporary
violation of a nature likely to continue or recur. This
established, it adds nothing that the calendar of years gone by
might have been filled with transgressions. Even where relief is
mandatory in form, it is to undo existing conditions, because
otherwise they are likely to continue. In a forward-ooking action
such as this, an examination of "a great amount of archeology"
] is justified only
when it illuminates or explains the present and predicts the shape
of things to come.
When defendants are shown to have settled into a continuing
practice or entered into a conspiracy violative of antitrust laws,
courts will not assume that it has been abandoned without clear
proof. Local 167 v. United States, 291 U.
, 291 U. S. 298
It is the duty of the courts to beware of efforts to defeat
injunctive relief by protestations of repentance and reform,
especially when abandonment seems timed to anticipate suit, and
there is probability of resumption. Cf. United States v. United
States Steel Corp., 251 U. S. 417
251 U. S.
Page 343 U. S. 334
But we find not the slightest reason to doubt the genuineness,
good faith, or permanence of the changed attitude and strategy of
these defendant-ppellees which took place in 1941. It occurred
seven years before this suit was commenced, and, so far as we are
informed, before it was predictable. It did not consist merely of
pretensions or promises, but was an overt and visible reversal of
policy, carried out by extensive operations which have every
appearance of being permanent because wise and advantageous for the
doctors. The record discloses no threat or probability of
resumption of the abandoned warfare against prepaid medical service
and the contract practice it entails. We agree with the trial court
that conduct discontinued in 1941 does not warrant the issuance of
an injunction in 1949. Industrial Assn. v. United States,
268 U. S. 64
268 U. S.
Appellees, in providing prepaid medical care, may engage in
activities which violate the antitrust laws. They are now
competitors in the field, and restraints, if any are to be
expected, will be in their methods of promotion and operation of
their own prepaid plan. Our duty is to inquire whether any
restraints have been proved of a character likely to continue if
Striking the events prior to 1941 out of the Government's case,
except for purposes of illustration or background information,
little of substance is left. The case derived its coloration and
support almost entirely from the abandoned practices. It would
prolong this opinion beyond useful length to review evidentiary
details peculiar to this case. We mention what appear to be some
Only the Multnomah County Medical Society resorted to expulsions
of doctors because of contract practice activities, and there have
been no expulsions for such cause since 1941. There were hints in
the testimony that Multnomah was reviving the expulsion threat a
Page 343 U. S. 335
time before this action was commenced, but nothing came of it,
and what that Society might do within the limits of its own
membership does not necessarily indicate a joint venture or
conspiracy with other appellees.
Some emphasis is placed on a report of a meeting of the House of
Delegates of the State Society at which it was voted that the
"private patient status" policy theretofore applied to private
commercial hospital association contracts be extended to the
industrial and railroad type of contracts. Any significance of this
provision seems neutralized by another paragraph in the same
report, which reads:
"A receipt should be furnished each patient at the time of each
visit, as it is understood the [industrial and railroad plan]
companies concerned will probably establish a program of
reimbursement to the affected employees."
That does not strike us as a threat to restrict the practice of
industrial and railroad companies of reimbursing employees for
medical expenses, and we cannot say that any ambiguity was not
properly resolved in appellees' favor by the trial court.
The record contains a number of letters from doctors to private
associations refusing to accept checks directly from them. Some
base refusal on a policy of their local medical society, others are
silent as to reasons. Some may be attributed to the writers'
personal resistance to dealing directly with the private health
associations, for it is clear that many doctors objected to filling
out the company forms and supplying details required by the
associations, and preferred to confine themselves to direct dealing
with the patient and leaving the patient to deal with the
associations. Some writers may have mistaken or misunderstood the
policy of local associations. Others may have avoided disclosure of
personal opposition by the handy and impersonal excuse of
association "policy." The letters have some evidentiary value, but
it is not compelling, and, weighed against the other post-941
Page 343 U. S. 336
does not satisfy us that the trial court's findings are "clearly
Since no concerted refusal to deal with private health
associations has been proved, we need not decide whether it would
violate the antitrust laws. We might observe in passing, however,
that there are ethical considerations where the historic direct
relationship between patient and physician is involved which are
quite different than the usual considerations prevailing in
ordinary commercial matters. This Court has recognized that forms
of competition usual in the business world may be demoralizing to
the ethical standards of a profession. Semler v. Oregon State
Board of Dental Examiners, 294 U. S. 608
Appellees' evidence to disprove conspiracy is not conclusive, is
necessarily largely negative, but is too persuasive for us to say
it was clear error to accept it. In 1948, 1,210 of the 1,660
licensed physicians in Oregon were members of the Oregon State
Medical Society, and between January 1, 1947, and June 30, 1948,
1,085 Oregon doctors billed and received payment directly from the
Industrial Hospital Association, only one of the several private
plans operating in the State. Surely there was no effective
boycott, and ineffectiveness, in view of the power over its members
which the Government attributes to the Society, strongly suggests
the lack of an attempt to boycott these private associations. A
parade of local medical society members from all parts of the
State, apparently reputable, credible, and informed professional
men, testified that their societies now have no policy of
discrimination against private health associations, and that no
attempts are made to prevent individual doctors from cooperating
with them. Members of the governing councils of the State and
Multnomah County Societies testified that, since 1940, there have
been no suggestions in their meetings of attempts to prevent
individual doctors from serving private associations. The manager
Page 343 U. S. 337
Physicians' Service testified that at none of the many meetings
and conferences of local societies attended by him did he hear any
proposal to prevent doctors from cooperation with private
If the testimony of these many responsible witnesses is given
credit, no finding of conspiracy to restrain or monopolize this
business could be sustained. Certainly we cannot say that the trial
court's refusal to find such a conspiracy was clearly
The other charge is that appellees conspired to restrain
competition between the several doctor-ponsored organizations
within the Oregon. The charge here, as we understand it from
paragraph 33(i) of the complaint, 95 F. Supp. at 124, is that
Oregon Physicians' Service, the statewide organization, and the
county medical society sponsored plans agreed not to compete with
one another. Apparently if a county was provided with prepaid
medical care by a local society, the state society would stay out,
or if the county society wanted to inaugurate a local plan, the
state society would withdraw from the area.
This is not a situation where suppliers of commercial
commodities divide territories and make reciprocal agreements to
exploit only the allotted market, thereby depriving allocated
communities of competition. This prepaid plan does not supply to,
and its allocation does not withhold from, any community medical
service or facilities of any description. No matter what
organization issues the certificate, it will be performed, in the
main, by the local doctors. The certificate serves only to prepay
their fees. The result, if the state association should enter into
local competition with the county association, would be that the
inhabitants could prepay medical services through either one of two
medical society channels. There is not the least proof that
duplicating sources of the prepaid certificates would make them
cheaper, more available, or
Page 343 U. S. 338
would result in an improved service or have any beneficial
effect on anybody. Through these nonprofit organizations, the
doctors of each locality, in practical effect, offer their services
and hospitalization on a prepaid basis, instead of on the usual
cash fee or credit basis. To hold it illegal because they do not
offer their services simultaneously and in the same locality
through both a state and a county organization would be to require
them to compete with themselves in sale of certificates. Under the
circumstances proved here, we cannot regard the agreement by these
nonprofit organizations not to compete as an unreasonable restraint
of trade in violation of the Sherman Act.
With regard to this charge, the court found,
"The sale of medical services, by Doctor Sponsored
Organizations, as conducted within the Oregon, is not trade or
commerce within the meaning of Section 1 of the Sherman Anti-rust
Law, nor is it commerce within the meaning of the constitutional
grant of power to Congress 'To regulate Commerce . . . among the
95 F. Supp. at 118. If that finding in both aspects is not to be
overturned as clearly erroneous, it, of course, disposes of this
charge, for if there was no restraint of interstate commerce, the
conduct charged does not fall within the prohibitions of the
Almost everything pointed to in the record by the Government as
evidence that interstate commerce is involved in this case relates
to "across state line" activities of the private associations. It
is not proven, however, to be adversely affected by any allocation
of territories by doctor-ponsored plans. So far as any evidence
brought to our attention discloses, the activities of the latter
are wholly intrastate. The Government did show that Oregon
Physicians Service made a number of payments to out-f-tate doctors
and hospitals, presumably for treatment of polycyholders who
happened to remove or temporarily to
Page 343 U. S. 339
be away from Oregon when need for service arose. These were,
however, few, sporadic and incidental. Cf. Industrial Assn.v.
United States, supra,
at 268 U. S.
American Medical Assn. v. United States, 317 U.
, does not stand for the proposition that
furnishing of prepaid medical care on a local plane is interstate
commerce. That was a prosecution under § 3 of the Sherman Act of a
conspiracy to restrain trade or commerce in the District of
Columbia. Interstate commerce was not necessary to the operation of
the statute there.
We conclude that the Government has not clearly proved its
charges. Certainly the Court's findings are not clearly
"A finding is 'clearly erroneous' when, although there is
evidence to support it, the reviewing court on the entire evidence
is left with a definite and firm conviction that a mistake has been
United States v. United States Gypsum Co., 333 U.
, 333 U. S. 395
The Government's contentions have been plausibly and earnestly
argued but the record does not leave us with any "definite and firm
conviction that a mistake has been committed."
As was aptly stated by the New York Court of Appeals, although
in a case of a rather different substantive nature:
"Face to face with living witnesses, the original trier of the
facts holds a position of advantage from which appellate judges are
excluded. In doubtful cases, the exercise of his power of
observation often proves the most accurate method of ascertaining
the truth. . . . How can we say the judge is wrong? We never saw
the witnesses. . . . To the sophistication and sagacity of the
trial judge the law confides the duty of appraisal."
Boyd v. Boyd,
252 N.Y. 422, 429, 169 N.E. 632, 634.
Affirmance is, of course, without prejudice to future suit if
practices in conduct of the Oregon Physicians' Service or the
county services, whether or not involved
Page 343 U. S. 340
in the present action, shall threaten or constitute violation of
the antitrust laws. Cf. United States v. Reading Co.,
226 U. S. 324
226 U. S.
MR. JUSTICE BLACK is of opinion that the judgment below is
clearly erroneous, and should be reversed.
MR. JUSTICE CLARK took no part in the consideration or decision
of this case.
Pursuant to § 2 of the Expediting Act of 1903, 32 Stat. 823, as
amended, 15 U.S.C. § 29.
26 Stat. 209, 15 U.S.C. § 1:
"Every contract, combination in the form of trust or otherwise,
or conspiracy, in restraint of trade or commerce among the several
States . . . is declared to be illegal. . . ."
15 U.S.C. § 2:
"Every person who shall monopolize, or attempt to monopolize, or
combine or conspire with any other person or persons, to monopolize
any part of the trade or commerce among the several States . . .
shall be deemed guilty of a misdemeanor. . . ."
Judge Augustus Hand, "Trial Efficiency," dealing with antitrust
cases, Business Practices Under Federal Antitrust Laws, Symposium,
New York State Bar Assn. (C.C.H., 1951) 31-32. See also
Sec. VIII, Procedure in Antitrust and Other Protracted Cases, a
Report adopted September 26, 1951, by the Judicial Conference of
the United States.