Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Settlement in administrative proceeding challenging Georgia hospital acquisition still under consideration, (Jul 25, 2013)

By Jeffrey May, J.D.

Efforts to reach a settlement continue in the FTC action challenging Phoebe Putney Health System, Inc.’s now completed acquisition of Palmyra Park Hospital, Inc. Yesterday, the Commission issued an order extending until August 8 the withdrawal from adjudication. The original withdrawal from adjudication had been set to expire today. The extension will “facilitate further consideration of the Consent Proposal,” according to the Commission (In the Matter of Phoebe Putney Health System, Inc., FTC Dkt. 9348).

In April 2011, the FTC initiated the action against the Hospital Authority of Albany-Dougherty County, alleging that the hospital authority’s 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 court action was dismissed 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 challenge was revived by the U.S. Supreme Court. The Court ruled in February 2013 that the state action immunity doctrine did not shield the transaction from attack.

A stay of the administrative proceedings was lifted, and a stipulated injunction was entered to maintain the status quo, pending the outcome of the administrative proceedings.

Shortly thereafter, the parties submitted a proposed consent agreement to the administrative law judge (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.” On June 24, the Commission issued its first order withdrawing the matter from adjudication.

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