Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Commission to consider proposed settlement in administrative proceeding challenging Georgia hospital acquisition, (Jul 1, 2013)

By Jeffrey May, J.D.

In light of a proposed settlement, the FTC has withdrawn from adjudication an administrative action challenging Phoebe Putney Health System, Inc.’s now completed acquisition of Palmyra Park Hospital, Inc. In a June 24 order, the Commission stayed proceedings before Administrative Law Judge (ALJ) D. Michael Chappell until July 25 (In the Matter of Phoebe Putney Health System, Inc., FTC Dkt. 9348).

The FTC initiated the action in 2011 against the Hospital Authority of Albany-Dougherty County, alleging that its purchase of Palmyra Park Hospital’s assets from HCA, Inc. and subsequent lease to Phoebe Putney Health System, Inc. (PPHS)—the operator of Phoebe Putney Memorial Hospital—would substantially lessen competition or tend to create a monopoly in the inpatient general acute-care hospital services market in Dougherty County and surrounding areas. The agency sought injunctive relief to prevent the consummation of the plan prior to the completion of the administrative proceeding.

The federal district court dismissed the complaint on state action immunity grounds (793 F. Supp. 2d 1356, 2011-1 Trade Cases ¶77,508), and the appellate court affirmed (663 F.3d 1369, 2011-2 Trade Cases ¶77,722). The U.S. Supreme Court reversed the appellate court’s decision on February 19. A stay of the administrative proceedings was then lifted.

It appeared that a settlement of the long-running challenge might be in the offing when the parties in early June agreed on a preliminary injunction order, barring further integration of the now consummated merger. A few days later, the parties submitted a proposed consent agreement to the ALJ, asking that the ALJ certify the Joint Motion to Withdraw Matter from Adjudication to the Commission. On June 11, the ALJ granted the motion, noting that, “[b]ased upon the parties' representations in the Joint Motion, a reasonable possibility of settlement exists in this matter.”

Attorneys: Jeffrey H. Perry for FTC. Lee K. Van Voorhis (Baker & McKenzie, LLP) for Phoebe Putney Memorial Hospital, Inc. Emmet J. Bondurant (Bondurant, Mixson & Elmore LLP) for Hospital Authority of Albany-Dougherty County. Kevin J. Arquit (Simpson Thacher & Bartlett LLP) for HCA Inc. and Palmyra Park Hospital, Inc.

Companies: HCA Inc.; Hospital Authority of Albany-Dougherty County; Palmyra Park Hospital, Inc.; Phoebe Putney Memorial Hospital, Inc.

News: Antitrust FederalTradeCommissionNews