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U.S.: Supreme Court to hear year’s first antitrust suit over ‘state action’ exemption

By  |  November 5, 2012

The only antitrust case to reach the Supreme Court this year will decide the fate of “state action” exemption’s reach. FTC vs. Phoebe Putney Health Systems, Inc., which will be heard on November 26, was brought to the Court when the FTC challenged the merger of the two subsidiaries who run Phoebe Putney Memorial Hospital, a hospital established by the Hospital Authority of Albany-Dougherty County, who also approved the merger in 2010. Phoebe Putney bought its only local rival, Palmyra Park Hospital Inc. The FTC claims the merger is anti-competitive, though two lower courts denied the case under the “state action” exemption – which trumps federal antitrust law – ruling that Georgia law had allowed for the creation of hospital authorities and therefore “clearly articulated a policy to displace competition,” thus immunizing the Hospital Authority from federal antitrust laws. Supporters of the Hospital Authority are arguing the FTC is attempting to re-write the rules, a claim FTC denies.

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