Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Prime Healthcare denied Supreme Court review in monopolization suit, (Jun 27, 2016)

By Greg Hammond, J.D.

Prime Healthcare Services, Inc. has been denied U.S. Supreme Court review of a decision entered by the U.S. Court of Appeals in San Francisco, which affirmed that Prime failed to sufficiently allege harm to competition or monopoly power in favor of conspiracy and monopolization claims against a competitor and two unions (Prime Healthcare Services, Inc. v. Service Employees International Union, Dkt. 15-1448).

Prime, a health care services company, claimed that Kaiser Permanente, certain Kaiser affiliated companies, Service Employees International Union, and United Healthcare Workers-West: (1) conspired to eliminate competing non-unionized hospitals, including Prime, in violation of Section 1 of the Sherman Act under the guise of the collective bargaining process and a labor-management agreement; and (2) monopolized, attempted to monopolize, and conspired to monopolize the acute care emergency hospital services market in similar geographies. The federal district court in San Diego dismissed the antitrust claims, finding that Prime failed to adequately allege its conspiracy and monopolization claims, and the appellate court affirmed.

Prime argued in its petition that the appellate court, without any analysis or justification, ignored the per se analysis. Instead, the appellate court proceeded to analyze both the horizontal conspiracy and vertical conduct that facilitated the horizontal non-exempt conspiracy under the rule of reason, Prime alleged. Prime consequently claimed that the appellate court’s decision marked a clear departure from the Supreme Court’s precedent, and evidenced a circuit split with regard to the standard of scrutiny given to vertical facilitators of horizontal conspiracies.

The questions presented were: (1) whether the Ninth Circuit failed to follow this Court’s precedent by not applying the per se standard to a horizontal conspiracy in violation of the Sherman Act between two labor unions, their leadership, and their members, where the unions forfeited their limited antitrust immunity by colluding with a nonlabor entity; and (2) whether the Ninth Circuit erred by not applying the per se standard to the conduct of a hospital that participated in and facilitated the horizontal nonexempt collusion of two labor unions, their leadership, and their members in violation of the Sherman Act.

Attorneys: Edward S. Scheideman II (DLA Piper) for Prime Healthcare Services, Inc. David C. Frederick (Kellogg, Huber, Hansen, Todd, Evans & Figel P.L.L.C.) and Daniel A. Small (Cohen Milstein Sellers & Toll PLLC) for Respondents.

Companies: Prime Healthcare Services, Inc.; Kaiser Permanente; Service Employees International Union; United Healthcare Workers-West

News: Antitrust