May 23, 2022

Volume XII, Number 143

Advertisement
Advertisement

May 20, 2022

Subscribe to Latest Legal News and Analysis

Georgia District Court Grants Temporary Restraining Order in Phoebe Putney Litigation

The next step of the on-going Phoebe Putney litigation is completed.  On Wednesday, April 15, the district court for the Middle District of Georgia granted the Federal Trade Commission's (FTC) motion for a Temporary Restraining Order (TRO) in Federal Trade Commission v. Phoebe Putney Health System, Inc., No. 1:11-cv-58 (M.D. Ga.).  In its order, the court stated that the FTC "carried its burden of persuasion to establish the need for the imposition of the 'extraordinary and drastic remedy' of a TRO pending the outcome of the court’s decision on the [Preliminary Injunction] Motion."  The TRO prohibits Phoebe Putney Memorial Inc. from taking further steps to consolidate with Palmyra Park Hospital.  Further, the court stated "In response to Plaintiff’s request that the Court order Defendants to refrain from instituting any price changes, the Court ordered that Defendants are prohibited from making any price changes to existing contracts; however, said prohibition does not extend to the formation of any new contracts."  Richard A. Feinstein, Director of the FTC's Bureau of Competition issued a brief statement on the district court's ruling saying "We are pleased that the Court has issued a Temporary Restraining Order prohibiting any further steps to consolidate the two hospitals in Albany, and prohibiting any price changes to existing health-plan contracts, pending our Motion for Preliminary Injunction." 

The district court had granted a TRO the FTC filed in 2011 to stop the acquisition, but dissolved that TRO upon the district court's finding that the transaction was exempt under the state action immunity doctrine.  The 11th Circuit affirmed, but in February of this year, the Supreme Court reversed holding that Georgia's enabling statute did not clearly articulate an affirmatively expressed policy for displacing competition.    

The district court's grant of the TRO is another victory for the FTC in this long litigation.  Now that the Supreme Court ruled the transaction is not exempt from the antitrust laws, the hospitals will have to defend what the FTC calls a merger to monopoly.  The TRO will stay in place until a hearing on the motion for Preliminary Injunction, which is scheduled for June 14, 2013.  The FTC has a successful track record in getting preliminary injunctions granted in hospital mergers, so it would not be surprising if the district court also granted the Motion for Preliminary Injunction.  This case is further evidence of the high priority the FTC places on challenging health care mergers it views as anticompetitive and shows the FTC is willing to commit resources over an extended period of time to challenge such mergers.

© 2022 McDermott Will & EmeryNational Law Review, Volume III, Number 146
Advertisement

About this Author

McDermott’s Antitrust & Competition Practice Group has broad experience in all aspects of antitrust and competition law, and it is recognized as one of the leading antitrust/competition practices in the world.  The Group’s 65+ lawyers have a sophisticated practice that encompasses U.S. antitrust law, EC competition law and the competition laws of other countries throughout the world. The Group is centered in Washington, D.C. and has lawyers with significant antitrust/competition experience in its Chicago, Houston, Los Angeles, New York, Silicon Valley, Brussels, Paris, Rome and Milan...

202 756 8061

McDermott’s Antitrust & Competition Practice Group has broad experience in all aspects of antitrust and competition law, and it is recognized as one of the leading antitrust/competition practices in the world.  The Group’s 65+ lawyers have a sophisticated practice that encompasses U.S. antitrust law, EC competition law and the competition laws of other countries throughout the world. The Group is centered in Washington, D.C. and has lawyers with significant antitrust/competition experience in its Chicago, Houston, Los Angeles, New York, Silicon Valley, Brussels, Paris, Rome and Milan...

202 756 8061
Advertisement
Advertisement
Advertisement