Federal Trade Commission v. Phoebe Putney Health System, Inc.
133 S. Ct. 1003
| SCOTUS | 2013Background
- Georgia Hospital Authorities Law creates hospital authorities with broad powers to operate and acquire health facilities.
- The Hospital Authority of Albany-Dougherty County owns Memorial and formed PPHS and PPMH to manage it.
- Authority planned to buy Palmyra Medical Center and lease it to a PPHS subsidiary under Memorial’s lease framework.
- FTC alleged the transaction would substantially lessen competition in the market for acute-care hospital services and violate antitrust laws.
- District Court denied injunctive relief and dismissed; Eleventh Circuit affirmed immunity under state-action doctrine.
- Supreme Court reversed, holding no clearly articulated state policy to permit acquisitions that substantially lessen competition; state-action immunity does not apply.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Georgia's law clearly articulates a policy to displace competition | FTC contends law foresees anticompetitive acquisitions. | Georgia law grants general powers but does not affirmatively express a policy to displace competition. | No clear articulation; immunity denied. |
| Whether substate entities acting under state policy are immunized without explicit state supervision | Foreseeable anticompetitive effects justify immunity if state policy contemplates displacement. | Immunity requires explicit state policy to displace competition, not mere general powers. | Active state supervision not satisfied; immunity not granted. |
| Whether the foreseeability standard used by the Eleventh Circuit is correct | Foreseeable consolidation could be seen as within the State’s contemplated effects. | Foreseeability cannot substitute for affirmative articulation of displacing policy. | Foreseeability insufficient; no affirmative policy shown. |
Key Cases Cited
- Parker v. Brown, 317 U.S. 341 (1943) (states may regulate economies as acts of government)
- California Retail Liquor Dealers Assn. v. Midcal Aluminum, Inc., 445 U.S. 97 (1980) (clear-articulation and active supervision test for immunity)
- Omni Outdoor Advertising, Inc. v. Columbia, 499 U.S. 365 (1991) (markets participating under state authorization; foreseeability discussed)
- Hallie v. Eau Claire, 471 U.S. 34 (1985) (affirms practical approach to foreseeability in clear-articulation test)
- Hallie v. Eau Claire (Wisconsin), 471 U.S. 34 (1985) (example of foreseeability meeting clear-articulation when anticompetitive effects are intended)
- FTC v. Ticor Title Ins. Co., 504 U.S. 621 (1992) (state-action immunity disfavored; requires state policy to displace competition)
- Community Communications Co. v. Boulder, 455 U.S. 40 (1982) (articulation of state policy to displace competition; neutrality not enough)
- Surgical Care Center of Hammond, L.C. v. Hospital Service Dist. No. 1, 171 F.3d 231 (5th Cir. 1999) (en banc; state-action immunity considerations)