Supreme Court to determine whether state action doctrine can be used to circumvent antitrust laws
Despite losses at the district and appellate levels, the Federal Trade Commissions (FTC) fight to enjoin the merger of two hospitals in Albany, Georgia is not over.
June 29, 2012 at 06:00 AM
4 minute read
The original version of this story was published on Law.com
Despite losses at the district and appellate levels, the Federal Trade Commission's (FTC) fight to enjoin the merger of two hospitals in Albany, Georgia is not over. While a district court in Georgia denied the FTC's motion for a preliminary injunction in Federal Trade Commission v. Phoebe Putney Health System, Inc., and the 11th Circuit upheld that decision, the Supreme Court announced on June 25 that it would hear the FTC's appeal.
As a result, the court will consider whether an alleged merger to monopoly of two hospitals—Phoebe Putney Health System and Palmyra Medical Center—can be exempt from antitrust enforcement based on the “state action” doctrine, which holds that certain state-mandated or -directed actions are exempted from antitrust liability. The FTC and critics of the 11th Circuit decision fear that the application of state action immunity in this context will pave the way for future transactions to be structured in a similar way in order to avoid the reach of the antitrust laws.
The Georgia statute at issue allows a local county hospital authority to acquire by “lease, purchase, or otherwise, and to sell to others or lease to others for any number of years not to exceed forty, any land, buildings, structures, or facilities constituting any part of any existing or future project,” including “the acquisition, construction, and equipping of hospitals, health care facilities… and other public health operation by others to promote the public health needs of the community.”
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