With a U.S. Supreme Court victory in hand, the Federal Trade Commission is moving forward with its administrative case to undo the merger of the only two hospitals in Albany, Ga.
On Feb. 19, the high court in FTC v. Phoebe Putney Health System Inc. ruled unanimously that the state action doctrine did not immunize the hospital acquisition from the federal antitrust laws.
Now, the FTC has lifted the stay on its so-called Part 3 administrative proceeding, with a trial date set for July 15 at the latest.
"Time is of the essence because 'this is now a consummated acquisition in which significant integration of hospital assets and operations—and likely, interim harm to competition—may have taken place,'" the FTC commissioners wrote in the March 14 order lifting the stay. The FTC in April 2011 originally brought two complaints challenging the hospital merger, one in the U.S. District Court for the Middle District of Georgia and the other administratively. The administrative proceeding was stayed pending resolution of the federal court litigation.
The FTC in district court lost its bid for a preliminary injunction to stop the deal, and lost again before the U.S. Court of Appeals for the 11th Circuit. Technically, the acquiring party in the deal was the local hospital authority ("a straw man" according to the FTC) and the courts found that as a government entity, the authority was exempt from antitrust scrutiny under the state action doctrine. But the Supreme Court disagreed and remanded the case.
Now, the FTC is proceeding with its administrative hearing. The commissioners overruled the objections from the hospital to lift the stay, writing "although Respondents argue that the Supreme Court's decision would not be final until the 25-day period for a motion for reconsideration has elapsed, they have not indicated that they intend to file such a motion—nor indeed provided any grounds for the Court's reconsideration of its unanimous decision."
Wilmer Culter Pickering Hale and Dorr partner Seth Waxman represented the hospitals before the Supreme Court. Before the 11th Circuit, the hospitals turned to Baker & McKenzie; Weil, Gotshal & Manges; Simpson, Thacher & Bartlett; Flynn Peeler & Phillips; Bondurant, Mixson & Elmore; Baudino Law Group; Perry & Walters; and Parker, Hudson, Rainer & Dobbs.
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