Antitrust Law Daily High Court will not consider applicability of per se rule in case against hospital joint venture
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Tuesday, October 15, 2019

High Court will not consider applicability of per se rule in case against hospital joint venture

By Jeffrey May, J.D.

Petition for review filed by Ohio hospital that was unable to pursue its antitrust claims based on a per se theory was denied.

The U.S. Supreme Court today declined to review a decision of the U.S. Court of Appeals in Cincinnati that a complaining hospital was unable to meet the high bar for establishing a per se antitrust violation against participants in a hospital joint venture. Affirming summary judgment in favor of the defendants, the appellate court had concluded that the Medical Center at Elizabeth Place (MCEP), rather than pursue a claim under the rule of reason, "pushed all its chips to the center of the table on one hand of cards," made a legal bet that it could prove that the joint venture was so obviously anticompetitive as to constitute a per se restraint of trade, and lost (The Medical Center at Elizabeth Place, LLC v. Atrium Health SystemDkt. 19-322).

At issue was the allegedly anticompetitive conduct of Premier Health Partners, a dominant health care network in the Dayton area. MCEP alleged that Premier Health engaged in a per se illegal group boycott of MCEP. Specifically, MCEP alleged that Premier negotiated on behalf of the hospitals with insurers a "Panel Limitations" clause, which provided that if the insurer added other hospitals to the network, the hospital had the option of terminating the contract or renegotiating its rates. Also, MCEP challenged the defendants’ enforcement of noncompete clauses in leases and employment contracts of physicians who invested in MCEP or referred patients to MCEP. The defendants’ actions allegedly restricted MCEP’s ability to compete in the marketplace and resulted in the sale of 49 percent of its shares to the other major health care provider in the area.

The Sixth Circuit concluded that the lower court was correct when it concluded that MCEP failed to establish per se violations. There was no evidence of a per se restraint of trade. The appellate court also agreed with the lower court holding that MCEP was too late in asserting claims involving parallel conspiracies between the joint venture and doctors and the joint venture and payers, ruling that a new pleading amendment would unfairly prejudice the joint venture.

The petition asked: (1) whether, for a restraint to be deemed "ancillary" to a joint venture, and thus exempt from per se condemnation, the restraint must be reasonably necessary to achieve an efficiency-enhancing purpose of the venture; and (2) whether for a joint venture to satisfy this test at summary judgment it must substantiate through verifiable means the claimed efficiencies and efficiencies’ relationship to the restraint, or whether it is sufficient for the defendants merely to proffer a "plausible procompetitive rationale."

RICO petition. The Supreme Court today also denied a pro se petition for certiorari seeking review of a decision of the U.S. Court of Appeals in New York City, which held that RICO’s domestic injury requirement was not met in an action alleging misconduct by officials of the Government of Israel, nine charitable organizations, and three affiliated individuals. The plaintiff contended that the Second Circuit’s decision was in conflict with the decisions of Supreme Court, Third Circuit, and Seventh Circuit (Weisskopf v. Jewish Agency for IsraelDkt. 19-176).

Attorneys: Richard Arthur Ripley (Ruyak Cherian LLP) for The Medical Center at Elizabeth Place, LLC. Shay Dvoretzky (Jones Day) for Atrium Health System. R. David Weisskopf, pro se. Robert Reeves Anderson (Arnold & Porter Kaye Scholer LLP) for Tzipi Livni, Shmuel Chamdani, Na’ama Talman Boltin, Miriam Darmony Yazdi, Einat Gilead-Meshulam, Tomer Moskowitz, Calanit Shapira Bergman, Noa Regev, Alona Sadeh, Zeev Gabay, Ariel Lenga, Orit Avigail Yahalomi, and Michael Duwani Bahiri.

Companies: Medical Center at Elizabeth Place, LLC; Atrium Health System; Geft Outdoor, LLC; Jewish Agency for Israel

MainStory: TopStory Antitrust RICO

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