Antitrust Law Daily Consent decree in market allocation case against Michigan hospital approved
Tuesday, May 22, 2018

Consent decree in market allocation case against Michigan hospital approved

By Jeffrey May, J.D.

The federal district court in Ann Arbor, Michigan, approved a consent decree, settling a U.S. Department of Justice Antitrust Division/State of Michigan action against a Michigan hospital operator for conspiring with a rival hospital to restrict marketing of services. Under the terms of the consent decree, Henry Ford Allegiance Health, formerly W.A. Foote Memorial Hospital, was prohibited from agreeing with other hospitals and health care providers to limit marketing or to allocate customers, markets, or territories between providers. The settlement also prohibited improper communications with competitors about marketing efforts (U.S. v. W.A. Foote Memorial Hospital, May 21, 2018, Levy, J.).

The settlement was announced about a month before the planned March 6, 2018, trial date in the case. It resolved a suit brought in 2015 against four South Central Michigan hospital operators. The complaint named Allegiance Health, as well as Hillsdale Community Health Center, Community Health Center of Branch County, Michigan, and ProMedica Health System Inc. The other three defendants agreed to settle the charges at the time the complaint was filed.

Allegiance Health had sought dismissal on the ground that the earlier settlement rendered the government’s case against it moot. In December 2017, the court held that a live case or controversy existed because it had the power to grant an injunction that provided effective relief beyond what was already covered by the earlier consent decree. In May 2017, the court denied both sides’ motions for summary judgment.

The government had alleged that the defendants entered into naked restraints of trade that were per se unlawful under the Sherman and Michigan Antitrust Acts. The defendants allegedly conspired with rival hospitals in neighboring counties to restrict marketing in each other’s respective counties, so as not to solicit certain customers.

The case is No. 5:15-cv-12311-JEL-DRG.

Attorneys: Andrew Robinson, U.S. Department of Justice, for the United States. Dee J. Pascoe, Michigan Department of Attorney General, for the State of Michigan. Doron Yitzchaki (Dickinson Wright PLLC) and James Michael Burns (Akerman LLP) for W.A. Foote Memorial Hospital d/b/a Allegiance Health.

Companies: W.A. Foote Memorial Hospital; Henry Ford Allegiance Health

MainStory: TopStory Antitrust AntitrustDivisionNews MichiganNews

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