(IIII Federal Trade Commission v. Phoebe Putney Health System 568 U.S. 216 (2013) SOTOMAYOR, J., delivered the opinion for a unanimous Court. Under this Court's state-action immunity doc- from Memorial Together, Memorial and Pal- trine, when a local governmental entity acts myra account for 86 percent of the market for pursuant to a clearly articulated and affirma- acute-care hospital services provided to com- tively expressed state policy to displace com- mercial health care plans and their custom- petition, it is exempt from scrutiny under the ers in the six counties surrounding Albany. federal antitrust laws. In this case, we must Memorial accounts for 75 percent of that decide whether a Georgia law that creates market on its own. special-purpose public entities called hospital In 2010, PPHS began discussions with HCA authorities and gives those entities general cor- [Palmyra's owner] about acquiring Palmyra. porate powers, including the power to acquire Following negotiations, PPHS presented hospitals, clearly articulates and affirmatively the Authority with a plan under which the expresses a state policy to permit acquisitions Authority would purchase Palmyra with PPHS that substantially lessen competition. . . . controlled funds and then lease Palmyra to In 1941, the State of Georgia amended its a PPHS subsidiary for $1 per year under the Constitution to allow political subdivisions to Memorial lease agreement. The Authority provide health care services. Under the Law, a unanimously approved the transaction. hospital authority "exercise[s] public and essen- [After the FTC challenged the merger, both tial governmental functions" and is delegated a federal district court and the US Court of "all the powers necessary or convenient to carry Appeals for the Eleventh Circuit held that the out and effectuate" the Law's purposes. transaction was immune from antitrust liabil In the same year that the Law was ity under the "state action" exemption. The adopted, the city of Albany and Dougherty Supreme Court granted certiorari.] County established the Hospital Authority of In Parker v. Brown, this Court held that Albany-Dougherty County (Authority) and the because "nothing in the language of the Authority promptly acquired Phoebe Putney Sherman Act or in its history" suggested that Memorial Hospital (Memorial), which has Congress intended to restrict the sovereign been in operation in Albany since 1911. In capacity of the States to regulate their econo- 1990, the Authority restructured its opera- mies, the Act should not be read to bar States tions by forming two private nonprofit corpo- from imposing market restraints "as an act of rations to manage Memorial: Phoebe Putney government." Following Parker, we have held Health System, Inc. (PPHS), and its subsid- that under certain circumstances, immunity iary, Phoebe Putney Memorial Hospital, Inc. from the federal antitrust laws may extend to (PPMH). The Authority leased Memorial to nonstate actors carrying out the State's regu- PPMH for $1 per year for 40 years. Under the latory program. lease, PPMH has exclusive authority over the But given the fundamental national values operation of Memorial. ... of free enterprise and economic competition Memorial is one of two hospitals in that are embodied in the federal antitrust Dougherty County. The second, Palmyra laws, "state-action immunity is disfavored, Medical Center (Palmyra), was established in much as are repeals by implication." Con- Albany in 1971 and is located just two miles sistent with this preference, we recognizetion and Antitrust Law 601 IIII state-action immunity only when it is clear that the challenged anticompetitive con- nothing in the Law or any other provision of duct is undertaken pursuant to a regulatory Georgia law clearly articulates a state policy scheme that "is the State's own." to allow authorities to exercise their general corporate powers, including their acquisi- Our case law makes clear that state-law tion power, without regard to [the ] negative authority to act is insufficient to establish effects on competition. ... state-action immunity; the substate govern- We hold that Georgia has not clearly mental entity must also show that it has been articulated and affirmatively expressed a delegated authority to act or regulate anti- policy to allow hospital authorities to make competitively. .. . acquisitions that substantially lessen compe- We have no doubt that Georgia's hospi- tition. The judgment of the Court of Appeals is tal authorities differ materially from private reversed, and the case is remanded for further corporations that offer hospital services. But proceedings consistent with this opinion. Discussion Questions 1. Research and explain the community of Albany-Dougherty County and the corporate structure involved in this case. Who do you suppose were the officials in the various corporate entities? 2. Explain how the transaction was structured, and why. 3. The federal trial court was the US District Court for the Middle District of Georgia; the court of appeals was the Eleventh Circuit, which sits in Atlanta. Considering the locations of and incumbent judges on these courts, why might the Supreme Court have a different worldview and a different perspective on the policy aspects of this issue