Phoebe, FTC go to high court Monday

WASHINGTON — Arguments from both sides in the Federal Trade Commission’s appeal of the purchase of Palmyra Medical Center by the Hospital Authority of Albany-Dougherty County are set to be heard by the U.S. Supreme Court Monday.

The case of FTC v. Phoebe Putney Health System is one of two on the court’s argument calendar for Monday. At question will be whether the Georgia Legislature, by vesting a local government entity with general corporate powers to acquire and lease out hospitals and other property, has clearly articulated and affirmatively expressed a state policy to displace competition in the market for hospital services.

Under the State Action Doctrine, federal antitrust laws do not apply to anti-competitive conduct of certain subordinate public entities created by a state if the conduct is authorized as part of a “state policy to displace competition” that is “clearly articulated and affirmatively expressed” in state law.

Another question being presented, according to court documents, is whether such a state policy, even if clearly articulated, would be sufficient to validate the conduct in this matter. The FTC is arguing that the government entity associated with the acquisition — the Hospital Authority — neither actively participated in negotiating the terms of the purchase nor has practical means of overseeing the hospital’s operation. The Hospital Authority and Phoebe officials have stated that acquiring Palmyra has been a longstanding goal of the authority.

On June 25, it was announced that the court would hear the case after the 11th Circuit Court of Appeals upheld a ruling late last year that had been handed down by U.S. District Judge Louis Sands, who issued an opinion stating that the acquisition of Palmyra, now Phoebe North, was exempt from federal oversight.

A number of amicus briefs have been filed in support of both sides. The American Antitrust Institute, groups of economics professors and several states, Drs. Joseph Stubbs and Corleen Thompson and the National Federation of Independent Business have been among those who have thrown their support behind the FTC.

Meanwhile, the American Hospital Association and Georgia Hospital Association, the Georgia Alliance of Community Hospitals and the National Association of Public Hospitals and Health Systems as well as Lee Memorial Health System in Florida have filed amicus briefs in support of the Hospital Authority and Phoebe Putney Health System.

A transcript of the arguments is expected to be available on the Supreme Court’s website sometime Monday, with an audio recording to follow on Friday.

Monday’s arguments will start at 10 a.m.