On February 19, the Supreme Court announced its decision in FTC v. Phoebe Putney Health System, Inc. The question in this case was whether a government hospital authority that created a private corporation, which then acquired the only competing hospital in the county, can invoke the “state action doctrine” as a shield against federal antitrust laws. Under the state action doctrine, federal antitrust laws do not apply to public actions taken pursuant to a clearly articulated and affirmatively expressed state policy of displacing competition.
In an opinion delivered by Justice Sotomayor, the Court held unanimously that the “state action doctrine” did not not apply because the state had not clearly articulated and affirmatively expressed a policy allowing hospital authorities to make acquisitions that substantially reduce competition. The lower appellate court was reversed and the case remanded for further proceedings.
To discuss the case, we have Aaron Nielson, who is of counsel in the Washington, D.C. office of Kirkland and Ellis.