FTC v. Phoebe Putney Health System, Inc.

(1) Whether the Georgia legislature “clearly articulated and affirmatively expressed [a] state policy to displace competition” when it vested powers to acquire and lease hospitals; if so (2) whether such policy is sufficient to validate anticompetitive conduct given minimal state involvement with a leased hospital.

The 1941 Georgia Hospital Authorities Law allowed for the creation of the Hospital Authority of Albany (Authority) which acquired a local hospital (Memorial) under powers to “acquire by purchase, lease, or otherwise . . . projects.” In 1990, Authority leased Memorial operations to Respondents who in 2010 sought to acquire another hospital, increasing their geographic market from 75% to 86% with Authority’s approval.

The trial court denied Petitioner’s injunction to prevent acquisition under the Clayton Act because the “state-action doctrine” immunized Respondents from antitrust liability. The Court of Appeals for the Eleventh Circuit affirmed saying the Georgia legislature intended to displace competition because it is foreseeable that giving powers to purchase and lease would produce anticompetitive effects.

On appeal, Petitioner argues there is no clear articulation by the legislature because the powers granted are ordinary and similar to other abilities businesses would possess, and as such the foreseeability of the anticompetitive effects was construed too broadly. Finally, Petitioner argues Respondent can’t be conferred state-action antitrust immunity because Authority is not involved with the operation of Respondent’s hospital or the acquisition negotiation.