## Facts

- Georgia’s Hospital Authorities Law permits local governments to create hospital authorities to operate and maintain needed health care facilities and grants them powers to acquire, lease, and operate hospitals.
- The Hospital Authority of Albany–Dougherty County (the Authority) owned Memorial Hospital, which it leased to nonprofit entities affiliated with Phoebe Putney Health System, Inc. (PPHS) to manage and operate.
- Palmyra Medical Center (Palmyra) was the only other acute-care hospital in Dougherty County and was privately owned.
- PPHS proposed that the Authority purchase Palmyra using funds supplied by PPHS and then lease Palmyra’s assets back to a PPHS subsidiary.
- The Authority approved the transaction, which would have placed PPHS in control of both acute-care hospitals in the county.
- The Federal Trade Commission (FTC) brought an administrative challenge alleging the transaction would substantially lessen competition or tend to create a monopoly under § 7 of the Clayton Act and constituted an unfair method of competition under § 5 of the FTC Act.
- The FTC and Georgia sought preliminary injunctive relief in federal court to prevent consummation during the administrative proceeding.

## Issues

1. Whether the Georgia Hospital Authorities Law “clearly articulated and affirmatively expressed” a state policy to displace competition by authorizing acquisitions that substantially lessen competition, such that the Authority and related private parties are immune under the state-action doctrine.

## Decision

- The Supreme Court unanimously reversed and remanded.
- The Court held Georgia had not clearly articulated and affirmatively expressed a policy permitting hospital authorities to make acquisitions that substantially lessen competition.
- Because the clear-articulation requirement was not met, neither the Authority nor the private hospital entities could claim state-action immunity against the FTC’s antitrust challenge.

## Legal Principles

- State-action immunity is an exception to federal antitrust law and is construed narrowly.
- For municipalities and other substate governmental entities, state-action immunity requires a “clearly articulated and affirmatively expressed” state policy to displace competition; active state supervision is not required.
- The “foreseeability” of anticompetitive effects is insufficient unless those effects are the inherent, logical, or ordinary result of what the state law authorizes in a manner reflecting an affirmative decision to displace competition.
- General grants of corporate powers (such as acquiring property, leasing facilities, and operating hospitals) do not, without more, clearly authorize anticompetitive consolidation.

## Conclusion

The Court allowed the FTC to proceed with federal antitrust scrutiny of a hospital acquisition structured through a local authority, holding that broad enabling authority to acquire and lease hospitals did not clearly express a state policy to permit transactions that substantially lessen competition.


Fed. Trade Comm'n v. Phoebe Putney Health Sys., Inc., 568 U.S. 216 (2013)