Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Huntington Beach illegally maintained ambulance services monopoly, suit says, (Aug 31, 2016)

By Linda O’Brien, J.D., LL.M.

The City of Huntington Beach has established an illegal monopoly over the provision of emergency medical services in its area, which has forced consumers to pay supra-competitive prices for such services, according to a complaint filed by a private ambulance service in the federal district court in Santa Ana, California (AmeriCare MedServices, Inc. v. City of Huntington Beach, August 29, 2016).

AmeriCare MedServices, Inc. is a family-owned business that is licensed to provide emergency ambulance service (EMS) throughout Orange County.

According to the complaint, under state law, the California Emergency Medical Services Authority (EMSA) reviews and approves the prehospital EMS plans submitted by local EMS agencies to determine whether those plans effectively "meet the needs of the persons served." The local agencies had the authority to determine which areas within its jurisdiction should be "exclusive operating areas" subject to a competitive bidding process and which areas should be non-exclusive where multiple qualified providers operate to provide emergency response services.

Beginning in 1960, the City of Huntington Beach allowed Seals Ambulance Services to provide emergency ambulance services within the Huntington Beach city limits. In 1986, the City entered into a contract with Orange County to administer its emergency response ambulance services. Although the City was allowed under the contract to use a competitive request for proposal (RFP) process, the City opted to allow Seals to continue to operate exclusively within the city. However, in 1993, the City ceased using its existing provider and entered into the ambulance services business itself. Since that time, the rates for ambulance services have risen astronomically, the complaint alleges.

The complaint alleges that in February 2015, AmeriCare submitted a written request to the City to be placed on the prehospital EMS rotation within the nonexclusive operating area comprising Huntington Beach. The City responded that it has the authority to designate its own exclusive area without any competitive process and is not required to add providers on the rotation.

The City of Huntington Beach possesses monopoly power in the market for the provision of prehospital EMS in the Huntington Beach area, the complaint claims. The City has purportedly maintained its monopoly power by anticompetitive and exclusionary conduct. As a result, consumers of prehospital EMS have been forced to pay supra-competitive prices while receiving lower quality, slower service, AmeriCare argues.

AmeriCare asserts claims for monopolization and attempted monopolization in violation of Section 2 of the Sherman Act as well as unfair business practices in violation of California’s Unfair Competition Law. The action seeks declaratory and injunctive relief, treble damages, pre- and post-judgment interest, costs of suit, attorney fees, and any other just and proper relief.

The case is No. 8:16-cv-01596-JLS-AFM.

Attorneys: Jarod Bona (Bona Law PC) for AmeriCare MedServices, Inc.

Companies: AmeriCare MedServices, Inc.

News: Antitrust CaliforniaNews