Antitrust Law Daily Wrap Up, TOP STORY: Idaho, private plaintiffs seeking to recover millions in fees in acquisition challenge, (Mar 20, 2014)

By Jeffrey May, J.D.

The State of Idaho, Saint Alphonsus Health System, Inc., and Treasure Valley Hospital (TVH) are seeking to recover attorney fees and costs for their successful challenge to St. Luke’s Health System, Ltd.’s acquisition of Saltzer Medical Group (St. Alphonsus Medical Center—Nampa, Inc. v. St. Luke’s Health System, Ltd., Case Nos. 1:12-cv-00560-BLW, 1:13-CV-00116-BLW).

In January, the federal district court in Boise held that, with the help of the FTC, the state and these private plaintiffs proved that the 2012 acquisition by St. Luke’s—the largest health care system in Idaho—of Saltzer—the state’s largest independent, multi-specialty physician practice—violated Section 7 of the Clayton Act and the Idaho Competition Act. The court permanently enjoined the acquisition and ordered St. Luke’s to fully divest Saltzer and its assets.

Idaho is seeking attorney fees in the amount of $972,993, as well as taxable costs in the amount of $68,294, and total non-taxable costs in the amount of $45,103. The Clayton Act and the Idaho Competition Act provide for mandatory recovery of attorney fees and costs in connection with an action brought under that statute, according to the state’s memorandum supporting its fee request. The state argues that the fees for its own attorneys and for attorneys at Godfrey & Kahn are reasonable. Godfrey & Kahn voluntarily capped its hourly rate for attorneys involved in this case at $465, it was noted.

Saint Alphonsus seeks $7,342,456 in attorney fees and $842,701 in non-taxable costs in the matter. In its motion, Saint Alphonsus contends that, in addition to substantially prevailing in the entire case, it substantially prevailed on a preliminary injunction request, even though its motion for preliminary injunction was denied. “Given the scope of the case, Saint Alphonsus’ attorneys conducted it in an extremely “efficient” fashion, avoiding duplication and conducting work at the lowest available rates,” according to the filing. The rates for attorneys from the two firms representing Saint Alphonsus ranged from $120 to $770.

Private plaintiff Treasure Valley Hospital (TVH)—a nine-bed physician-owned, short-term care, non-emergency hospital in Boise—also claims in its filing that it is a prevailing plaintiff entitled to its attorney fees and costs. It seeks fees in the amount of $348,977. TVH also seeks an award of its non-taxable costs in the amount of $110,124. The attorneys for TVH spent over 1700 hours on the case. The fees for those attorneys range between $175 and $225 per hour.

Yesterday, the court granted the defense request to bifurcate the attorney fee issues. It will consider first the issue regarding entitlement to fees. If entitlement is found, the parties will then provide briefing on the amount of the fees. The FTC is not seeking to recover attorney fees.

Attorneys: Eric J. Wilson, Idaho Attorney General’s Office, and Kevin J. O’Connor (Godfrey & Kahn, S.C.) for State of Idaho. David A. Ettinger (Honigman Miller Schwartz and Cohn LLP) and Keely E. Duke (Duke Scanlan & Hall, PLLC) for Saint Alphonsus Health System, Inc. Raymond D. Powers (Powers Tolman Farley, PLLC) for Treasure Valley Hospital.

Companies: Saint Alphonsus Medical Center—Nampa, Inc.; Treasure Valley Hospital Limited Partnership; St. Luke’s Health System, Ltd.; Saltzer Medical Group, P.A.

MainStory: TopStory Antitrust IdahoNews