Washington, D.C., partner Rob McCann was quoted in the Health Law Reporter on the U.S. Supreme Court’s decision in FTC v. Phoebe Putney Health System Inc.
The court ruled that the acquisition of Palmyra Park Hospital in Albany, Ga., by Phoebe Putney Health System (PPHS) was not immune from antitrust scrutiny under the state action doctrine. The high court found the doctrine did not apply because the Georgia Legislature did not “clearly articulate and affirmatively express a public policy to displace competition” for hospital services when it adopted a law giving county hospital authorities the power to acquire area hospitals.
Rob commented that the ruling, although not unexpected, is a significant victory for the FTC. “I think there has always been a concern at the FTC with the possibility that hospitals would find ways to use the state action doctrine to end-run the Clayton Act—as was the perception with ‘certificate of public convenience' laws,” he said.
“However, I don't think the Supreme Court's result is at all that surprising given the disfavor into which the state action doctrine has fallen,” he added. “I was always surprised that the 11th Circuit had come down in favor of the state action argument in this case because the Eleventh Circuit rejected a virtually identical argument in FTC v University Health Inc., 938 F.2d 1206 (11th Cir. 1991), over 20 years ago.”
The high court’s decision is particularly noteworthy for its unanimity.