Supreme Court tightens the scope of antitrust immunity in government-owned hospital mergers
22 February 2013Antitrust, Competition and Economic Regulation Alert
In a unanimous and favorable decision for the Federal Trade Commission (FTC), the Supreme Court found that the state action immunity doctrine does not shield Phoebe Putney Health System’s acquisition of Palmyra Park Hospital from antitrust scrutiny, sending the parties back to FTC administrative litigation to battle over the legality of the hospital merger. The Court unanimously overturned the Eleventh Circuit’s decision allowing Phoebe Putney to acquire the only other nearby hospital in Albany, Georgia for US$195 million. Chastising the Eleventh Circuit for applying the state action doctrine “too-loosely,” the Supreme Court clarified the specificity required of state legislation to invoke state action immunity and, in turn, narrowed the scope of antitrust immunity potentially available to parties contemplating a transaction with a government-owned entity.