Earlier this week, my colleagues Bruce Sokler, Robert Kidwell, Dionne Lomax, and Farrah Short published an alert about the federal district court for the Eastern District of Michigan’s recent decision to deny both the government’s and defendant hospital’s respective motions for summary judgment in a suit filed by the Department of Justice and the Michigan Attorney General in 2015 against W.A. Foote Memorial Hospital, d/b/a Allegiance Health (“Allegiance”), Hillsdale Community Health Center (“HCHC”), Community Health Center of Branch County (“Branch”), and ProMedica Health System, Inc. (“ProMedica”). In this case, the government alleged that HCHC orchestrated agreements among the hospitals not to advertise or otherwise market in each other’s territories for competing health care services in violation of the Sherman Act. (You can read Dionne’s previous alert on the Allegiance complaint here.) HCHC, Branch and ProMedica have each settled, leaving Allegiance as the sole defendant.
The government moved for summary judgment, arguing that a market allocation agreement existed between Allegiance and a competing hospital that was per se unlawful or illegal under a “quick look” rule of reason analysis under the Sherman Act. Allegiance, in turn, filed for partial summary judgment, arguing for application of the full rule of reason analysis, rather than the abbreviated per se antitrust principles and the “quick look” test.
Ultimately, the court based its decision to deny both motions on the facts. Although it found that the government presented a “compelling argument” that an agreement existed, it also found that Allegiance presented evidence sufficient to raise a question of material fact as to whether its actions were a legitimate business strategy instead of an agreement to unreasonably restrain trade. On Allegiance’s motion, because the court could not determine whether an agreement exists, it also could not determine which antitrust principle should be used to analyze the legality of any such agreement, so its motion was denied as well.
A bench trial is set to begin in October 2017, so stay tuned for additional updates. And click HERE to read the full alert.