Newsroom - January 2012

For much of 2011, several lawyers at Parker, Hudson represented longtime client Phoebe Putney Health System in defending Phoebe's role in the Hospital Authority of Albany-Dougherty County's acquisition of another Albany hospital, Palmyra Medical Center, from multiple court challenges brought in federal and state court by the Federal Trade Commission (FTC), the Georgia Attorney General, and a private litigant. Our efforts contributed to victory in all of the court cases, established important antitrust precedent, and allowed the acquisition of Palmyra to close by an important December 15, 2011 deadline. The litigation progressed in the following stages:

● Shortly after the proposed acquisition was publicly announced in December 2010, John Parker and Raj Shah represented Phoebe in the review of the proposed acquisition by State and Federal officials along with D.C. co-counsel, with John Parker playing the lead role in dealing with the State officials reviewing the acquisition.

● After the FTC and the Georgia Attorney General brought suit against Phoebe, The Hospital Authority, and other defendants in Federal District Court in Albany, seeking to enjoin the acquisition, Bob Brennan, John Parker, and Tom Watry, and D.C. co-counsel represented Phoebe in defending against the litigation. Following a round of compressed briefing and a day long evidentiary hearing, the District Court summarily dismissed the lawsuit, concluded that the acquisition of Palmyra was immune from antitrust scrutiny under the state action immunity doctrine, and refused to enjoin the acquisition.

● The FTC, but not the Georgia Attorney General, immediately appealed the District Court's decision to the Eleventh Circuit Court of Appeals and obtained a stay of the acquisition pending appeal. Bob Brennan, John Parker, and Tom Watry and D.C. co-counsel represented Phoebe on appeal, which the Court of Appeals expedited due to the December 15, 2011 acquisition deadline. Following another compressed round of briefing and oral argument before a three-judge panel, the Court of Appeals affirmed the order of the District Court on December 9, 2011, and held that the acquisition was immune from antitrust scrutiny.

● While the Federal Court litigation was proceeding, a private litigant filed a separate lawsuit in the Superior Court of Dougherty County seeking to stop the acquisition on a variety of constitutional, statutory, and equitable grounds. Bob Brennan, John Parker, Patty Veazey, and Ashley Filip represented Phoebe Putney in the private party litigation. Once the Court of Appeals ruled in Phoebe's favor in the Federal Court litigation and the closing of the acquisition appeared imminent, the private party plaintiff sought a temporary restraining order in State Court to stop the closing of the transaction. During a hearing on December 13, 2011, just two days before the December 15, 2011 deadline, Bob Brennan and Patty Veazey, along with counsel for the Hospital Authority and Palmyra's prior owner, convinced the Superior Court to deny the request for a temporary restraining order and allow the acquisition to close before the December 15, 2011 deadline. Once the acquisition of Palmyra closed, the private party plaintiff, at the urging of Phoebe and the Hospital Authority, dismissed the remainder of the complaint that sought to challenge, among other things, the operating structure and governance of Phoebe.

The litigation was widely followed by the national health care bar and received regular commentary in professional publications such as Modern Healthcare Magazine and the BNA Health Law Reporter. The subject of the FTC's increased antitrust enforcement in health care has been of great interest to health care executives, and the litigation established an important antitrust precedent concerning state action immunity.

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Upcoming Events

2/28/2019 - Tracy Field, a healthcare partner in our Atlanta office, will be presenting "Legal and Practical Considerations in Analyzing Potential Overpayments" at the Long Term Care and the Law program for the American Health Lawyers Association in Phoenix, Arizona, on February 28 and March 1.

3/29/2019 - Tracy Field, a healthcare partner in our Atlanta office, will be presenting "Anatomy of an Overpayment Analysis for Providers" at the North Carolina Healthcare Financial Management Association's 2019 Annual Conference in Pine Hurst, North Carolina, on March 29.

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