Antitrust Law Daily Wrap Up, ANTITRUST—S.D. Ohio: Medical network dodges conspiracy claims, deemed single economic actor, (Oct 29, 2014)

By Greg Hammond, J.D.

An Ohio-based medical center failed to state valid antitrust claims against medical network Premier Health Partners and its members, the federal district court in Cincinnati concluded in a decision that was unsealed on October 27. In granting Premier’s motion for summary judgment, the court determined that Premier and its members comprise a single economic actor that is unable to conspire with itself (Medical Center at Elizabeth Place v. Premier Health Partners, October 20, 2014, Black, T.).

Atrium Health System, Catholic Health Initiatives, MedAmerica Health Systems Corp., Samaritan Health Partners, and UVMC were all members of Premier Health Partners. The Medical Center at Elizabeth Place (MCEP) filed suit against Premier and its members, alleging that they engaged in an unlawful plan to deny the MCEP access to managed care contracts, physicians, and physician referrals needed to compete as a 26-bed adult acute-care hospital. Premier moved for summary judgment.

The MCEP unsuccessfully argued that there was a genuine dispute regarding whether the defendants were a single entity for purposes of the conduct challenged in the case. Specifically, the MCEP contended that the defendants were not a single entity because: (1) they did not share ownership assets; (2) they were actual and potential competitors; (3) the defendants made statements in public disclosures that supported a finding that they were separate; and (4) the defendants engaged in conduct that supported a finding of separateness among them.

Contractual control was sufficient to demonstrate that the defendants were a single entity, the court ruled. Although Premier’s members were previously competitors, they ceased competition with one another when they joined Premier and became subject to the network’s control. “Since Defendants are a single, unified economic unit, regardless of a perception of, or even actual, intra-corporate competition, Defendants are not and cannot be actual or potential [economic] competitors,” the court stated. The court also concluded that statements made in IRS Form 990s, statements made in bond documents, and Premier’s and its members’ conduct in the market did not support a finding of separateness among the defendants. Rather, the court determined that the evidence supported a finding that Premier was a joint venture, which was a single entity for antitrust purposes. Because a “single entity” was incapable of conspiring with itself for purposes of the Sherman Act, the MCEP’s claims failed as a matter of law, the court ruled.

The case number is 3:12-cv-26.

Attorneys: Richard A. Ripley (Haynes and Boone, LLP) and Toby K. Henderson (Sebaly Shillito & Dyer) for Medical Center at Elizabeth Place, LLC. Charles Joseph Faruki (Faruki Ireland & Cox PLL) for Atrium Health System, Catholic Health Initiatives, Samaritan Health Partners, UVMC, Premier Health Partners, and MedAmerica Health Systems Corp.

Companies: Medical Center at Elizabeth Place, LLC; Atrium Health System; Catholic Health Initiatives; Samaritan Health Partners; UVMC; Premier Health Partners; MedAmerica Health Systems Corp.

Cases: Antitrust OhioNews