Antitrust Law Daily Whether settlement mooted U.S. market allocation case against Michigan hospital to be considered
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Friday, July 21, 2017

Whether settlement mooted U.S. market allocation case against Michigan hospital to be considered

By Jeffrey May, J.D.

The federal district court in Ann Arbor, Michigan, has asked the parties in a Department of Justice Antitrust Division action against W.A. Foote Memorial Hospital, doing business as Allegiance Health, for allegedly conspiring to allocate markets to submit briefing on whether the court has jurisdiction to impose an injunction prohibiting Allegiance from conspiring with another hospital that settled with the government and is no longer a party to the case. The court is trying to determine whether a live case or controversy exists to permit the court to issue the Justice Department’s requested relief (U.S. v. W.A. Foote Memorial Hospital, July 20, 2017, Levy, J.).

In 2015, the Justice Department filed a complaint, along with the Michigan Attorney General’s Office, against four Michigan hospital systems for allegedly allocating territories for marketing to consumers and physicians. Three of the systems—Hillsdale Community Health Center (HCHC), Community Health Center of Branch County, Michigan, and ProMedica Health System Inc.—agreed to settle the charges at that time. The Justice Department continued to litigate against the fourth—Allegiance Health.

In October 2015, the court granted the government’s motion to enter the final judgments with HCHC and the other two settling defendants and dismissed them from the case. Meanwhile, the government moved forward with its case against Allegiance. In May 2017, the court denied motions for summary judgment in the matter. The Justice Department, contending in its complaint that the agreement between Allegiance and HCHC is ongoing, is seeking prospective injunctive relief and an order requiring the implementation of a compliance program.

Under its consent decree, HCHC was required "not attempt to enter into, enter into, maintain, or enforce any Agreement with any other Provider that: (1) prohibits or limits Marketing; or (2) allocates any geographic market or territory between or among the Settling Defendant and any other Provider." Yet, the government’s complaint alleged that the agreement between Allegiance and HCHC was ongoing, and the government sought injunctive relief. Noting that a party requesting injunctive relief must show ongoing harm or real and immediate threat of repeated injury, the court gave the parties until August 7 to provide supplemental briefing on whether the court has jurisdiction over a case or controversy or whether the matter is moot.

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

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

Companies: W.A. Foote Memorial Hospital; Hillsdale Community Health Center

MainStory: TopStory Antitrust MichiganNews AntitrustDivisionNews

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