83 FR 9750 - United States et al. v. W.A. Foote Memorial Hospital, d/b/a Allegiance Health; Proposed Final Judgment and Competitive Impact Statement
DEPARTMENT OF JUSTICE
Antitrust Division Federal Register Volume 83, Issue 45 (March 7, 2018)
Antitrust Division
Federal Register Volume 83, Issue 45 (March 7, 2018)
| Page Range | 9750-9760 | |
| FR Document | 2018-04593 |
[Federal Register Volume 83, Number 45 (Wednesday, March 7, 2018)] [Notices] [Pages 9750-9760] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-04593] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF JUSTICE Antitrust Division United States et al. v. W.A. Foote Memorial Hospital, d/b/a Allegiance Health; Proposed Final Judgment and Competitive Impact Statement Notice is hereby given pursuant to the Antitrust Procedures and Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment, Notification of Settlement and Explanation of Consent Decree Procedures, and Competitive Impact Statement have been filed with the United States District Court for the Eastern District of Michigan in United States and State of Michigan v. W.A. Foote Memorial Hospital, Civil Action No. 15-cv-12311 (JEL) (DRG). On June 25, 2015, the United States and the State of Michigan filed a Complaint alleging that Defendant W.A. Foote Memorial Hospital d/b/a Allegiance Health (``Allegiance'') entered into an agreement with Hillsdale Community Health Center that unlawfully allocated customers in violation of Section 1 of the Sherman Act, 15 U.S.C. 1, and 2 of the Michigan Antitrust Reform Act, MCL 445.772. The proposed Final Judgment, filed February 9, 2018, prohibits Allegiance from agreeing with other healthcare providers to prohibit or limit marketing or to divide any geographic market or territory. The proposed Final Judgment also prohibits Allegiance from communicating with competing healthcare systems regarding its marketing plans, with limited exceptions. The proposed Final Judgment also imposes an antitrust compliance officer and other training and monitoring requirements on Allegiance. Copies of the Complaint, proposed Final Judgment, and Competitive Impact Statement are available for inspection on the Antitrust Division's website at http://www.justice.gov/atr, and at the Office of the Clerk of the United States District Court for the Eastern District of Michigan. Copies of these materials may be obtained from the Antitrust Division upon request and payment of the copying fee set by Department of Justice regulations. Public comment on the proposed Final Judgment is invited within 60 days of the date of this notice. Such comments, including the name of the submitter, and responses thereto, will be posted on the Antitrust Division's website, filed with the Court, and, under certain circumstances, published in the Federal Register. Comments should be directed to Peter J. Mucchetti, Chief, Healthcare & Consumer Products Section, Antitrust Division, Department of Justice, 450 Fifth Street NW, Suite 4100, Washington, DC 20530 (telephone: 202-307-0001). Patricia A. Brink, Director of Civil Enforcement. UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN United States of America and State of Michigan, and Plaintiffs, v. Hillsdale Community Health Center, W.A. Foote Memorial Hospital, D/B/A Allegiance Health, Community Health Center of Branch County, and Promedica Health System, Inc., Defendants. Case No.: 2:15-cv-12311-JEL-DRG Hon. Judith E. Levy Mag. Judge David R. Grand COMPLAINT The United States of America and the State of Michigan bring this civil antitrust action to enjoin agreements by Defendants Hillsdale Community Health Center (``Hillsdale''), W.A. Foote Memorial Hospital, d/b/a Allegiance Health (``Allegiance''), Community Health Center of Branch County (``Branch''), and ProMedica Health System, Inc. (``ProMedica'') (collectively, ``Defendants'') that unlawfully allocate territories for the marketing of competing healthcare services and limit competition among Defendants. NATURE OF THE ACTION 1. Defendants are healthcare providers in Michigan that operate the only general acute-care hospital or hospitals in their respective counties. Defendants directly compete with each other to provide healthcare services to the residents of south-central Michigan. Marketing is a key component of this competition and includes advertisements, mailings to patients, health fairs, health screenings, and outreach to physicians and employers. 2. Allegiance, Branch, and ProMedica's Bixby and Herrick Hospitals (``Bixby and Herrick'') are Hillsdale's closest Michigan competitors. Hillsdale orchestrated agreements to limit marketing of competing healthcare services. Allegiance explained in a 2013 oncology marketing plan: ``[A]n agreement exists with the CEO of Hillsdale Community Health Center, Duke Anderson, to not conduct marketing activity in Hillsdale County.'' Branch's CEO described the Branch agreement with Hillsdale as a ``gentlemen's agreement not to market services.'' A ProMedica communications specialist described the ProMedica agreement with Hillsdale [[Page 9751]] in an email: ``The agreement is that they stay our [sic] of our market and we stay out of theirs unless we decide to collaborate with them on a particular project.'' 3. The Defendants' agreements have disrupted the competitive process and harmed patients, physicians, and employers. For instance, all of these agreements have deprived patients, physicians, and employers of information they otherwise would have had when making important healthcare decisions. In addition, the agreement between Allegiance and Hillsdale has deprived Hillsdale County patients of free medical services such as health screenings and physician seminars that they would have received but for the unlawful agreement. Moreover, it denied Hillsdale County employers the opportunity to develop relationships with Allegiance that could have allowed them to improve the quality of their employees' medical care. 4. Defendants' senior executives created and enforced these agreements, which lasted for many years. On certain occasions when a Defendant violated one of the agreements, executives of the aggrieved Defendant complained about the violation and received assurances that the previously agreed upon marketing restrictions would continue to be observed going forward. 5. Defendants' agreements are naked restraints of trade that are per se unlawful under Section 1 of the Sherman Act, 15 U.S.C. Sec. 1, and Section 2 of the Michigan Antitrust Reform Act, MCL 445.772. JURISDICTION, VENUE, AND INTERSTATE COMMERCE 6. The United States brings this action pursuant to Section 4 of the Sherman Act, 15 U.S.C. Sec. 4, to prevent and restrain Defendants' violations of Section 1 of the Sherman Act, 15 U.S.C. Sec. 1. The State of Michigan brings this action in its sovereign capacity under its statutory, equitable and/or common law powers, and pursuant to Section 16 of the Clayton Act, 15 U.S.C. Sec. 26, to prevent and restrain Defendants' violations of Section 2 of the Michigan Antitrust Reform Act, MCL 445.772. 7. This Court has subject matter jurisdiction over this action under Section 4 of the Sherman Act, 15 U.S.C. Sec. 4 (as to claims by the United States); Section 16 of the Clayton Act, 15 U.S.C. Sec. 26 (as to claims by the State of Michigan); and 28 U.S.C. Sec. Sec. 1331, 1337(a), 1345, and 1367. 8. Venue is proper in the Eastern District of Michigan under 28 U.S.C. Sec. 1391 and Section 12 of the Clayton Act, 15 U.S.C. Sec. 22. Each Defendant transacts business within the Eastern District of Michigan, all Defendants reside in the State of Michigan, and at least two Defendants reside in the Eastern District of Michigan. 9. Defendants all engage in interstate commerce and in activities substantially affecting interstate commerce. Defendants provide healthcare services to patients for which employers, health plans, and individual patients remit payments across state lines. Defendants purchase supplies and equipment from out-of-state vendors that are shipped across state lines. DEFENDANTS 10. Hillsdale is a Michigan corporation headquartered in Hillsdale, Michigan. Its general acute-care hospital, which is in Hillsdale County, Michigan, has 47 beds and a medical staff of over 90 physicians. 11. Allegiance is a Michigan corporation headquartered in Jackson, Michigan. Its general acute-care hospital, which is in Jackson County, Michigan, has 480 beds and a medical staff of over 400 physicians. 12. Branch is a Michigan corporation headquartered in Coldwater, Michigan. Its general acute-care hospital, which is in Branch County, Michigan, has 87 beds and a medical staff of over 100 physicians. 13. ProMedica is an Ohio corporation headquartered in Toledo, Ohio, with facilities in northwest Ohio and southern Michigan. ProMedica's Bixby and Herrick Hospitals are both in Lenawee County, Michigan. Bixby is a general acute-care hospital with 88 beds and a medical staff of over 120 physicians. Herrick is a general acute-care hospital with 25 beds and a medical staff of over 75 physicians. [GRAPHIC] [TIFF OMITTED] TN07MR18.002 [[Page 9752]] BACKGROUND ON HOSPITAL COMPETITION 14. Hillsdale competes with each of the other Defendants to provide many of the same hospital and physician services to patients. Hospitals compete on price, quality, and other factors to sell their services to patients, employers, and insurance companies. An important tool that hospitals use to compete for patients is marketing aimed at informing patients, physicians, and employers about a hospital's quality and scope of services. An executive from each Defendant has testified at deposition that marketing is an important strategy through which hospitals seek to increase their patient volume and market share. 15. Defendants' marketing includes advertisements through mailings and media such as local newspapers, radio, television, and billboards. Allegiance's marketing to patients also includes the provision of free medical services, such as health screenings, physician seminars, and health fairs. Some Defendants also market to physicians through educational and relationship-building meetings that provide physicians with information about those Defendants' quality and range of services. Allegiance also engages in these marketing activities with employers. HILLSDALE'S UNLAWFUL AGREEMENTS 16. Hillsdale has agreements limiting competition with Allegiance, ProMedica, and Branch. Unlawful Agreement Between Hillsdale and Allegiance 17. Since at least 2009, Hillsdale and Allegiance have had an agreement that limits Allegiance's marketing for competing services in Hillsdale County. As Allegiance explained in a 2013 oncology marketing plan: ``[A]n agreement exists with the CEO of Hillsdale Community Health Center, Duke Anderson, to not conduct marketing activity in Hillsdale County.'' 18. In compliance with this agreement, Allegiance has excluded Hillsdale County from marketing campaigns since at least 2009. For example, Allegiance excluded Hillsdale County from the marketing plans outlined in the above-referenced 2013 oncology marketing plan. And according to a February 2014 board report, Allegiance excluded Hillsdale from marketing campaigns for cardiovascular and orthopedic services. 19. On at least two occasions, Hillsdale's CEO complained to Allegiance after Allegiance sent marketing materials to Hillsdale County residents. Both times--at the direction of Allegiance CEO Georgia Fojtasek--Allegiance's Vice President of Marketing, Anthony Gardner, apologized in writing to Hillsdale's CEO. In one apology he said, ``It isn't our style to purposely not honor our agreement.'' Mr. Gardner assured Hillsdale's CEO that Allegiance would not repeat this mistake. 20. Allegiance also conveyed its hands-off approach to Hillsdale in 2009 when Ms. Fojtasek told Hillsdale's CEO that Allegiance would take a ``Switzerland'' approach towards Hillsdale, and then confirmed this approach by mailing Hillsdale's CEO a Swiss flag. 21. Allegiance executives and staff have discussed the agreement in numerous correspondences and business documents. For example, Allegiance staff explained in a 2012 cardiovascular services analysis: ``Hillsdale does not permit [Allegiance] to conduct free vascular screens as they periodically charge for screenings.'' As a result, around that time, Hillsdale County patients were deprived of free vascular-health screenings. 22. In another instance, in 2014 Allegiance discouraged one of its newly employed physicians from giving a seminar in Hillsdale County relating to competing services. In response to the physician's request to provide the seminar, the Allegiance Marketing Director asked the Vice President of Physician Integration and Business Development: ``Who do you think is the best person to explain to [the doctor] our restrictions in Hillsdale? We're happy to do so but often our docs find it hard to believe and want a higher authority to confirm.'' 23. The agreement between Hillsdale and Allegiance has deprived Hillsdale County patients, physicians, and employers of information regarding their healthcare-provider choices and of free health- screenings and education. Unlawful Agreement Between Hillsdale and ProMedica 24. Since at least 2012, Hillsdale and ProMedica have agreed to limit their marketing for competing services in one another's county. 25. This agreement has restrained marketing in several ways. For example, in June 2012, Bixby and Herrick's President asked Hillsdale's CEO if he would have any issue with Bixby marketing its oncology services to Hillsdale physicians. Hillsdale's CEO replied that he objected because his hospital provided those services. Bixby and Herrick's President responded that he understood. Bixby and Herrick then refrained from marketing their competing oncology services in Hillsdale County. 26. Another incident occurred around January 2012, when Hillsdale's CEO complained to Bixby and Herrick's President about the placement of a ProMedica billboard across from a physician's office in Hillsdale County. At the conclusion of the conversation, Bixby and Herrick's President assured Hillsdale's CEO that he would check into taking down the billboard. 27. ProMedica employees have discussed and acknowledged the agreement in multiple documents. For example, after Hillsdale's CEO called Bixby and Herrick's President to complain about ProMedica's billboard, a ProMedica communications specialist described the agreement to marketing colleagues via email: ``According to [Bixby and Herrick's President] any potential marketing (including network development) efforts targeted for the Hillsdale, MI market should be run by him so that he can talk to Hillsdale Health Center in advance. The agreement is that they stay our [sic] of our market and we stay out of theirs unless we decide to collaborate with them on a particular project.'' 28. The agreement between Hillsdale and ProMedica deprived patients, physicians, and employers of Hillsdale and Lenawee Counties of information regarding their healthcare-provider choices. Unlawful Agreement Between Hillsdale and Branch 29. Since at least 1999, Hillsdale and Branch have agreed to limit marketing in one another's county. In the fall of 1999, Hillsdale's then-CEO and Branch's CEO reached an agreement whereby each hospital agreed not to market anything but new services in the other hospital's county. Branch's CEO testified recently in deposition that ``There's a gentlemen's agreement not to market services other than new services.'' 30. Branch has monitored Hillsdale's compliance with the agreement. For example, in November 2004, Hillsdale promoted one of its physicians through an advertisement in the Branch County newspaper. Branch's CEO faxed Hillsdale's then-CEO a copy of the advertisement, alerting him to the violation of their agreement. 31. In addition to monitoring Hillsdale's compliance, Branch has directed its marketing employees to abide by the agreement with Hillsdale. For example, Branch's 2013 guidelines [[Page 9753]] for sending out media releases instructed that it had a ``gentleman's agreement'' with Hillsdale and thus Branch should not send media releases to the Hillsdale Daily News. 32. The agreement between Hillsdale and Branch deprived Hillsdale and Branch County patients, physicians, and employers of information regarding their healthcare-provider choices. NO PROCOMPETITIVE JUSTIFICATIONS 33. The Defendants' anticompetitive agreements are not reasonably necessary to further any procompetitive purpose. VIOLATIONS ALLEGED First Cause of Action: Violation of Section 1 of the Sherman Act 34. Plaintiffs incorporate paragraphs 1 through 33. 35. Allegiance, Branch, and ProMedica are each a horizontal competitor of Hillsdale in the provision of healthcare services in south-central Michigan. Defendants' agreements are facially anticompetitive because they allocate territories for the marketing of competing healthcare services and limit competition among Defendants. The agreements eliminate a significant form of competition to attract patients. 36. The agreements constitute unreasonable restraints of trade that are per se illegal under Section 1 of the Sherman Act, 15 U.S.C. Sec. 1. No elaborate analysis is required to demonstrate the anticompetitive character of these agreements. 37. The agreements are also unreasonable restraints of trade that are unlawful under Section 1 of the Sherman Act, 15 U.S.C. Sec. 1, under an abbreviated or ``quick look'' rule of reason analysis. The principal tendency of the agreements is to restrain competition. The nature of the restraints is obvious, and the agreements lack legitimate procompetitive justifications. Even an observer with a rudimentary understanding of economics could therefore conclude that the agreements would have anticompetitive effects on patients, physicians, and employers, and harm the competitive process. Second Cause of Action: Violation of MCL 445.772 38. Plaintiff State of Michigan incorporates paragraphs 1 through 37 above. 39. Defendants entered into unlawful agreements with each other that unreasonably restrain trade and commerce in violation of Section 2 of the Michigan Antitrust Reform Act, MCL 445.772. REQUESTED RELIEF The United States and the State of Michigan request that the Court: (A) judge that Defendants' agreements limiting competition constitute illegal restraints of interstate trade in violation of Section 1 of the Sherman Act, 15 U.S.C. Sec. 1, and Section 2 of the Michigan Antitrust Reform Act, MCL 445.772; (B) enjoin Defendants and their members, officers, agents, and employees from continuing or renewing in any manner the conduct alleged herein or from engaging in any other conduct, agreement, or other arrangement having the same effect as the alleged violations; (C) enjoin each Defendant and its members, officers, agents, and employees from communicating with any other Defendant about any Defendant's marketing in its or the other Defendant's county, unless such communication is related to the joint provision of services, or unless the communication is part of normal due diligence relating to a merger, acquisition, joint venture, investment, or divestiture; (D) require Defendants to institute a comprehensive antitrust compliance program to ensure that Defendants do not establish any similar agreements and that Defendants' members, officers, agents and employees are fully informed of the application of the antitrust laws to hospital restrictions on competition; and (E) award Plaintiffs their costs in this action, including attorneys' fees and investigation costs to the State of Michigan, and such other relief as may be just and proper. Dated: June 25, 2015. Respectfully submitted, FOR PLAINTIFF UNITED STATES OF AMERICA: William J. Baer, Assistant Attorney General for Antitrust. David I. Gelfand, Deputy Assistant Attorney General. \s\-------------------------------------------------------------------- Katrina Rouse (D.C. Bar #1013035), Jennifer Hane, Barry Joyce, Attorneys, Litigation I, Antitrust Division, U.S. Department of Justice, 450 Fifth Street NW, Suite 4100, Washington, DC 20530, (202) 305-7498, email: katrina.rouse@usdoj.gov. LOCAL COUNSEL: Barbara L. McQuade, United States Attorney. \s\ with the consent of Peter Caplan ----------------------------------------------------------------------- Peter Caplan, Assistant United States Attorney, 211 W. Fort Street, Suite 2001, Detroit, Michigan 48226, (313) 226-9784, P30643, E-mail: peter.caplan@usdoj.gov. FOR PLAINTIFF STATE OF MICHIGAN: Bill Schuette, Attorney General, State of Michigan. \s\ with the consent of Joseph Potchen ----------------------------------------------------------------------- Joseph Potchen, Division Chief. \s\ with the consent of Mark Gabrielse ----------------------------------------------------------------------- Mark Gabrielse (P75163), D.J. Pascoe, Assistant Attorney Generals, Michigan Department of Attorney General, Corporate Oversight Division, G. Mennen Williams Building, 6th Floor, 525 W. Ottawa Street, Lansing, Michigan 48933, (517) 373- 1160, Email: gabrielsem@michigan.gov. UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN United States of America and State Of Michigan, Plaintiffs, v. W.A. Foote Memorial Hospital, D/B/A Allegiance Health, Defendant. Case No.: 5:15-cv-12311-JEL-DRG Hon. Judith E. Levy Mag. Judge David R. Grand [PROPOSED] FINAL JUDGMENT Whereas, Plaintiffs, the United States of America and the State of Michigan, filed their joint Complaint on June 25, 2015, alleging that W.A. Foote Memorial Hospital, d/b/a/Allegiance Health; Hillsdale Community Health Center; Community Health Center of Branch County; and ProMedica Health System, Inc. violated Section 1 of the Sherman Act, 15 U.S.C. Sec. 1, and Section 2 of the Michigan Antitrust Reform Act, MCL 445.772; And Whereas, Plaintiffs and W.A. Foote Memorial Hospital, d/b/a Henry Ford Allegiance Health, by their respective attorneys, have consented to the entry of this Final Judgment without trial or adjudication of any issue of fact or law; And Whereas, Plaintiffs require Allegiance to agree to undertake certain actions and refrain from certain conduct for the purpose of remedying the anticompetitive effects alleged in the Complaint; And Whereas, Plaintiffs require Allegiance to agree to be bound by the provisions of the Final Judgment pending its approval by the Court; Now Therefore, before any testimony is taken, without this Final Judgment constituting any evidence against or admission by Allegiance regarding any issue of fact or law, and upon consent of the parties to this action, it is Ordered, Adjudged, and Decreed: [[Page 9754]] I. JURISDICTION This Court has jurisdiction over the subject matter of and each of the parties to this action. 28 U.S.C. Sec. Sec. 1331, 1337(a), 1345, 1367(a). The Complaint states a claim upon which relief may be granted against Allegiance under Section 1 of the Sherman Act, 15 U.S.C. Sec. 1, and Section 2 of the Michigan Antitrust Reform Act, MCL 445.772. II. DEFINITIONS As used in this Final Judgment: A. ``Allegiance'' means Defendant W.A. Foote Memorial Hospital, d/ b/a Henry Ford Allegiance Health, a corporation organized and existing under the laws of the State of Michigan and affiliated with the Henry Ford Health System with headquarters in Detroit, Michigan, (i) its successors and assigns, (ii) all subsidiaries, divisions, groups, affiliates, partnerships, and joint ventures that are controlled by Henry Ford Allegiance Health, and (iii) their directors, officers, managers, agents, and employees. B. ``Agreement'' means any contract, arrangement, or understanding, formal or informal, oral or written, between two or more persons. C. ``Communicate'' means to discuss, disclose, transfer, disseminate, or exchange information or opinion, formally or informally, directly or indirectly, in any manner. D. ``Communication'' means any discussion, disclosure, transfer, dissemination, or exchange of information or opinion. E. ``Joint Provision of Services'' means any past, present, or future coordinated delivery of any healthcare services by two or more healthcare providers, including a clinical affiliation, joint venture, management agreement, accountable care organization, clinically integrated network, group purchasing organization, management services organization, or physician hospital organization. F. ``Marketing'' means any past, present, or future activities that are involved in making persons aware of the services or products of the hospital or of physicians employed or with privileges at the hospital, including advertising, communications, public relations, provider network development, outreach to employers or physicians, and promotions, such as free health screenings and education. G. ``Marketing Manager'' means any company officer or employee at the level of director, or above, with responsibility for or oversight of Marketing. H. ``Person'' means any natural person, corporation, firm, company, sole proprietorship, partnership, joint venture, association, institute, governmental unit, or other legal entity. I. ``Provider'' means any physician or physician group and any inpatient or outpatient medical facility including hospitals, ambulatory surgical centers, urgent care facilities, and nursing facilities. III. APPLICABILITY This Final Judgment applies to Allegiance and all other persons in active concert or participation with Allegiance who receive actual notice of this Final Judgment by personal service or otherwise. IV. PROHIBITED CONDUCT A. Allegiance shall not enter into, attempt to enter into, maintain, or enforce any Agreement with any other Provider that: (1) prohibits or limits Marketing; or (2) allocates any service, customer, or geographic market or territory between or among Allegiance and any other Provider, unless such Agreement is reasonably necessary for and ancillary to a bona fide Agreement providing for the Joint Provision of Services. B. Allegiance shall not Communicate with any other Provider about Allegiance's Marketing in its or the Provider's county, except Allegiance may: (1) Communicate with any Provider about joint Marketing if the Communication is related to the Joint Provision of Services; (2) Communicate with any Provider about Marketing if the Communication is part of customary due diligence relating to a merger, acquisition, joint venture, investment, or divestiture; or (3) Market to Providers, including through its physician liaison program. C. Allegiance shall not exclude or eliminate Hillsdale County from its Marketing or business development opportunities. V. REQUIRED CONDUCT A. Within thirty days of entry of this Final Judgment, Allegiance shall hire and appoint an Antitrust Compliance Officer. The Antitrust Compliance Officer may be a current employee of Henry Ford and must be approved by Plaintiffs. B. Antitrust Compliance Officer shall: (1) within sixty days of entry of the Final Judgment, furnish a copy of this Final Judgment, the Competitive Impact Statement, and a cover letter that is identical in content to Exhibit 1 to (a) all of Allegiance's Marketing Managers and other employees engaged, in whole or in part, in activities relating to Allegiance's Marketing or business development activities; (b) all direct reports of Allegiance's CEO; and (c) Allegiance's officers and directors (including their Boards of Directors); (2) within thirty days of any person's succession to any position described in Section V.B.(1) above, furnish a copy of this Final Judgment, the Competitive Impact Statement, and a cover letter that is identical in content to Exhibit 1; (3) annually brief each person designated in Section V.B.(1) and (2) on the meaning and requirements of this Final Judgment and the antitrust laws; (4) obtain from each person designated in Section V.B.(1) and (2), within sixty days of that person's receipt of the Final Judgment, a certification that he or she (i) has read and, to the best of his or her ability, understands and agrees to abide by the terms of this Final Judgment; (ii) is not aware of any violation of the Final Judgment that has not already been reported to Allegiance; and (iii) understands that any person's failure to comply with this Final Judgment may result in an enforcement action for civil or criminal contempt of court against Allegiance and/or any person who violates this Final Judgment; (5) maintain a record of certifications received pursuant to Section V.B.(4); (6) annually communicate to Allegiance's employees that they may disclose to the Antitrust Compliance Officer, without reprisal, information concerning any potential violation of this Final Judgment or the antitrust laws; (7) ensure that each person identified in Section V.B.(1) and (2) of this Final Judgment receives at least four hours of training annually on the meaning and requirements of this Final Judgment and the antitrust laws, such training to be delivered by the Antitrust Compliance Officer or an attorney with relevant experience in the field of antitrust law; (8) maintain a log of telephonic, electronic, in-person, and other communications regarding Marketing with any Officers or Directors of any healthcare system Provider and make it available to Plaintiffs for inspection upon either Plaintiff's request; and (9) provide to Plaintiffs annually, on or before the anniversary of the effective date of this order, a written statement affirming Allegiance's compliance with Section V of this order, and including the training or instructional materials used or supplied by Allegiance or Henry Ford in connection with the training as required by Section V.B.(7). C. Allegiance shall: (1) upon learning of any violation or potential violation of any of the terms [[Page 9755]] and conditions contained in this Final Judgment, promptly take appropriate action to terminate or modify the activity so as to comply with this Final Judgment and maintain all documents related to any violation or potential violation of this Final Judgment; (2) upon learning of any violation or potential violation of any of the terms and conditions contained in this Final Judgment, within thirty days of its becoming known, file with each Plaintiff a statement describing any violation or potential violation, and any steps taken in response to the violation, which statement shall include a description of any communication constituting the violation or potential violation, including the date and place of the communication, the persons involved, and the subject matter of the communication; and (3) certify to each Plaintiff annually on the anniversary date of the entry of this Final Judgment that Allegiance has complied with the provisions of this Final Judgment. VI. COMPLIANCE INSPECTION A. For the purposes of determining or securing compliance with this Final Judgment, or of determining whether the Final Judgment should be modified or vacated, and subject to any legally recognized privilege, from time to time authorized representatives of the United States Department of Justice or the Office of the Michigan Attorney General, including consultants and other retained persons, shall, upon the written request of an authorized representative of the Assistant Attorney General in charge of the Antitrust Division or of the Office of the Michigan Attorney General, and on reasonable notice to Allegiance, be permitted: (1) access during Allegiance's office hours to inspect and copy, or at the option of the United States or the State of Michigan, to require Allegiance to provide hard copy or electronic copies of, all books, ledgers, accounts, records, data, and documents in the possession, custody, or control of Allegiance, relating to any matters contained in this Final Judgment; and (2) to interview, either informally or on the record, Allegiance's officers, directors, employees, or agents, who may have individual counsel present, regarding such matters. The interviews shall be subject to the reasonable convenience of the interviewee and without restraint or interference by Allegiance. B. Upon the written request of an authorized representative of the Assistant Attorney General in charge of the Antitrust Division or of the Office of the Michigan Attorney General, Allegiance shall submit written reports or response to written interrogatories, under oath if requested, relating to any of the matters contained in this Final Judgment as may be requested. C. No information or documents obtained by the means provided in this section shall be divulged by the United States or the State of Michigan to any person other than an authorized representative of the executive branch of the United States or the State of Michigan, except in the course of legal proceedings to which the United States or the State of Michigan is a party (including grand jury proceedings), or for the purpose of securing compliance with this Final Judgment, or as otherwise required by law. D. If at the time information or documents are furnished by Allegiance to the United States or the State of Michigan, Allegiance represents and identifies in writing the material in any such information or documents to which a claim of protection may be asserted under Rule 26(c)(1)(G) of the Federal Rules of Civil Procedure, and Allegiance marks each pertinent page of such material, ``Subject to claim of protection under Rule 26(c)(1)(G) of the Federal Rules of Civil Procedure,'' then the United States and the State of Michigan shall give Allegiance ten calendar days notice prior to divulging such material in any legal proceeding (other than a grand jury proceeding). VII. INVESTIGATION FEES AND COSTS Allegiance shall pay to the United States the sum of $5,000.00 for pre-trial litigation costs and the State of Michigan the sum of $35,000.00 to partially cover transcripts and related litigation costs. VIII. RETENTION OF JURISDICTION This Court retains jurisdiction to enable any party to this Final Judgment to apply to this Court at any time prior to the expiration of this Final Judgment for further orders and directions as may be necessary or appropriate to carry out or construe this Final Judgment, to modify any of its provisions, to enforce compliance, and to punish violations of its provisions. IX. ENFORCEMENT OF FINAL JUDGMENT A. Plaintiffs retain and reserve all rights to enforce the provisions of this Final Judgment, including their right to seek an order of contempt from this Court. Allegiance agrees that in any civil contempt action, any motion to show cause, or any similar action brought by Plaintiffs regarding an alleged violation of this Final Judgment, Plaintiffs may establish a violation of the Final Judgment and the appropriateness of any remedy therefor by a preponderance of the evidence, and Allegiance waives any argument that a different standard of proof should apply. B. In any enforcement proceeding in which the Court finds that Allegiance has violated this Final Judgment, Plaintiffs may apply for a one-time extension of this Final Judgment, together with such other relief as may be appropriate. Allegiance agrees to reimburse the Plaintiffs for any attorneys' fees, experts' fees, and costs incurred in connection with any effort to enforce this Final Judgment. X. EXPIRATION OF FINAL JUDGMENT Unless this Court grants an extension, this Final Judgment shall expire five years from the date of its entry. XI. NOTICE For purposes of this Final Judgment, any notice or other communication required to be filed with or provided to the United States or the State of Michigan shall be sent to the persons at the addresses set forth below (or such other address as the United States or the State of Michigan may specify in writing to Allegiance): Chief Healthcare & Consumer Products Section U.S. Department of Justice Antitrust Division 450 Fifth Street, Suite 4100 Washington, DC 20530 Division Chief Corporate Oversight Division Michigan Department of Attorney General 525 West Ottawa Street P.O. Box 30755 Lansing, MI 48909 XII. PUBLIC INTEREST DETERMINATION The parties, as required, have complied with the procedures of the Antitrust Procedures and Penalties Act, 15 U.S.C. Sec. 16, including making copies available to the public of this Final Judgment, the Competitive Impact Statement, and any comments thereon, and the United States' responses to comments. Based upon the record before the Court, which includes the Competitive Impact Statement and any comments and response to comments filed with the Court, entry of this Final Judgment is in the public interest. Dated:----------------------------------------------------------------- [[Page 9756]] ----------------------------------------------------------------------- Court approval subject to procedures of Antitrust Procedures and Penalties Act, 15 U.S.C. Sec. 16 ----------------------------------------------------------------------- United States District Judge Exhibit 1 [Letterhead of Allegiance] [Name and Address of Antitrust Compliance Officer] Dear [XX]: I am providing you this notice to make sure you are aware of a court order recently entered by the Honorable Judith E. Levy, a federal judge in Ann Arbor, Michigan. This court order applies to our institution and all of its employees, including you, so it is important that you understand the obligations it imposes on us. Ms. Georgia Fojtasek has asked me to let each of you know that they expect you to take these obligations seriously and abide by them. In a nutshell, the order prohibits us from agreeing with other healthcare providers, including hospitals and physicians, to limit marketing or to divide any geographic market, territory, customers, or services between healthcare providers. This means you cannot give any assurance to another healthcare provider that Henry Ford Allegiance Health will refrain from marketing our services, and you cannot ask for any assurance from them that they will refrain from marketing. The court order also prohibits communicating with any health care system provider, or their employees about our marketing plans or about their marketing plans. There are limited exceptions to this restriction on communications, such as discussing joint projects, but you should check with me before relying on those exceptions. A copy of the court order is attached. Please read it carefully and familiarize yourself with its terms. The order, rather than the above description, is controlling. If you have any questions about the order or how it affects your activities, please contact me. Thank you for your cooperation. Sincerely, [Allegiance's Antitrust Compliance Officer] UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN United States of America and State of Michigan, Plaintiffs, v. W.A. Foote Memorial Hospital, D/B/A Allegiance Health, Defendant. Case No.: 5:15-cv-12311-JEL-DRG Hon. Judith E. Levy Mag. Judge David R. Grand COMPETITIVE IMPACT STATEMENT Plaintiff the United States of America, pursuant to Section 2(b) of the Antitrust Procedures and Penalties Act (``APPA'' or ``Tunney Act''), 15 U.S.C. Sec. 16(b)-(h), files this Competitive Impact Statement relating to the proposed Final Judgment concerning W.A. Foote Memorial Hospital, d/b/a Henry Ford Allegiance Health (``Allegiance'') submitted for entry in this civil antitrust proceeding. I. NATURE AND PURPOSE OF THE PROCEEDING On June 25, 2015, the United States and the State of Michigan filed a civil antitrust Complaint alleging that Allegiance, Hillsdale Community Health Center (``HCHC''), Community Health Center of Branch County (``Branch''), and ProMedica Health System, Inc. (``ProMedica'') violated Section 1 of the Sherman Act, 15 U.S.C. Sec. 1, and Section 2 of the Michigan Antitrust Reform Act, MCL 445.772. Concerning Allegiance, the Complaint alleged that Allegiance entered into an agreement with HCHC to limit marketing of competing healthcare services in Hillsdale County. This agreement eliminated a significant form of competition to attract patients and substantially diminished competition in Hillsdale County, depriving consumers, physicians, and employers of important information and services. The hospitals' agreement to allocate territories for marketing is per se illegal under Section 1 of the Sherman Act, 15 U.S.C. Sec. 1, and Section 2 of the Michigan Antitrust Reform Act, MCL 445.772. With the Complaint, the United States and the State of Michigan filed a Stipulation and proposed Final Judgment (``Original Judgment'') with respect to HCHC, Branch, and ProMedica. That Original Judgment settled this suit as to those three defendants. Following a Tunney Act review process, the Court granted Plaintiffs' Motion for Entry of the Original Judgment (Dkt. 36) and dismissed HCHC, Branch, and ProMedica from the case (Dkt. 37). The case against Allegiance continued. Allegiance has now agreed to a proposed Final Judgment, which contains terms that are similar to those in the Original Judgment, as well as additional terms. The United States filed this proposed Final Judgment with respect to Allegiance (``proposed Final Judgment'') on February 9, 2018 (Dkt. 122-1). The proposed Final Judgment is described in more detail in Section III below. The proposed Final Judgment may be entered by the Court after compliance with the provisions of the APPA. Entry of the proposed Final Judgment would terminate this action, except that this Court would retain jurisdiction to construe, modify, and enforce the proposed Final Judgment and to punish violations thereof. II. DESCRIPTION OF THE EVENTS GIVING RISE TO THE ALLEGED VIOLATIONS A. Background on Allegiance and Its Marketing Activities Allegiance is a nonprofit general medical and surgical hospital in Jackson County, which is adjacent to HCHC's location in Hillsdale County in South Central Michigan. Allegiance is the only hospital in its county. Allegiance directly competes with HCHC to provide many of the same hospital and physician services to patients. An important tool that hospitals use to compete for patients is marketing aimed at informing consumers, physicians, and employers about a hospital's quality and scope of services. Allegiance and HCHC's marketing includes advertisements through mailings and media, such as local newspapers, radio, television, and billboards, as well as the provision of free medical services, such as health screenings, physician seminars, and health fairs. Allegiance and HCHC also market to physicians and employers through educational and relationship- building meetings that provide physicians and employers with information about the hospitals' quality and range of services. B. Allegiance's Unlawful Agreement with HCHC to Limit Marketing Allegiance agreed with HCHC to suppress its marketing in Hillsdale County, and since at least 2009 to the time of filing of the Complaint in June 2015, Allegiance and HCHC's agreement limited Allegiance's marketing for competing services in Hillsdale County. Allegiance believed that HCHC might refer more complicated cases to Allegiance because of Allegiance's agreement to pull its competitive punches in Hillsdale County. Allegiance executives acknowledged the agreement in numerous documents. The hospitals' senior executives, including their CEOs, created, monitored, and enforced the agreement, which lasted for many years. The harmful effects of the agreement continue to the present day. In compliance with this agreement, Allegiance routinely excluded Hillsdale County from many of its marketing campaigns. As Allegiance explained in a 2013 oncology marketing plan: ``[A]n agreement exists with the CEO of Hillsdale Community Health Center . . . to not conduct marketing activity in Hillsdale County.'' Allegiance employees repeatedly referred in internal documents to an ``agreement'' or a ``gentleman's agreement'' with HCHC, with a high-ranking executive [[Page 9757]] describing Allegiance's ``relationship with HCHC'' as ``one of seeking `approval' to provide services in their market.'' Allegiance executives on occasion apologized in writing to HCHC for violating the agreement and assured HCHC executives that Allegiance would honor the previously agreed-upon marketing restrictions going forward: ``It isn't our style to purposely not honor our agreement.'' Allegiance even reduced the number of free health benefits, such as physician seminars and health screenings, offered to residents of Hillsdale County because of the agreement. This unlawful agreement between Allegiance and HCHC has deprived Hillsdale County consumers, physicians, and employers of valuable free health screenings and education and information regarding their healthcare provider choices. C. Allegiance's Marketing Agreement Is Per Se Illegal The agreement between Allegiance and HCHC disrupted the competitive process and harmed consumers. The agreement deprived consumers of information they otherwise would have had when making important healthcare decisions. The agreement also deprived Hillsdale County consumers of free medical services such as health screenings and physician seminars that they would have received but for the unlawful agreement. Moreover, Allegiance's agreement with HCHC denied employers the opportunity to receive information and to develop relationships that could have allowed them to improve the quality of their employees' medical care. And the agreement diminished Allegiance's and HCHC's incentives to compete on quality or to improve patient experience, all to the detriment of South Central Michigan consumers. The agreement to restrict marketing constituted a naked restraint of trade that is per se unlawful under Section 1 of the Sherman Act, 15 U.S.C. Sec. 1, and Section 2 of the Michigan Antitrust Reform Act, MCL 445.772. See United States v. Topco Assocs., Inc., 405 U.S. 596, 607-08 (1972) (holding that naked market allocation agreements among horizontal competitors are plainly anticompetitive and illegal per se); United States v. Cooperative Theatres of Ohio, Inc., 845 F.2d 1367, 1371, 1373 (6th Cir. 1988) (holding that the defendants' agreement to not ``actively solicit[] each other's customers'' was ``undeniably a type of customer allocation scheme which courts have often condemned in the past as a per se violation of the Sherman Act''); Blackburn v. Sweeney, 53 F.3d 825, 828 (7th Cir. 1995) (holding that the ``[a]greement to limit advertising to different geographical regions was intended to be, and sufficiently approximates[,] an agreement to allocate markets so that the per se rule of illegality applies''). Allegiance's agreement with HCHC was not reasonably necessary to further any procompetitive purpose. The antitrust laws would not prohibit a hospital from making its own marketing decisions and conducting marketing activities as it sees fit, so long as it does so unilaterally. By agreeing with a competitor to restrict marketing, however, Allegiance engaged in concerted action. By doing so, Allegiance deprived consumers of the benefits of competition and ran afoul of the antitrust laws. III. EXPLANATION OF THE PROPOSED FINAL JUDGMENT The proposed Final Judgment will prevent the recurrence of the violations alleged in the Complaint and will restore the competition restrained by the anticompetitive agreement between Allegiance and HCHC. Section X of the proposed Final Judgment provides that these provisions will expire five years after its entry. A. Prohibited Conduct Under Section IV of the proposed Final Judgment, Allegiance cannot agree with any healthcare provider to prohibit or limit marketing. Allegiance also cannot allocate any services, customers, or geographic markets or territories, subject to narrow exceptions relating to the provision of certain services jointly with another healthcare provider. Allegiance is prohibited from communicating with any healthcare provider about Allegiance's marketing in its or the provider's county, subject to narrow exceptions relating to legitimate procompetitive activities. Additionally, Allegiance is prohibited from excluding Hillsdale County from its marketing or business development activities. This prohibition restores competition that was eliminated during the course of the agreement, which Allegiance implemented in part by carving out Hillsdale County from many of its marketing activities. This prohibition ensures that Hillsdale County consumers will benefit from competition. B. Compliance and Inspection The proposed Final Judgment sets forth various provisions to ensure Allegiance's compliance with the proposed Final Judgment. Section V of the proposed Final Judgment requires Allegiance to hire and appoint an Antitrust Compliance Officer within thirty days of the Final Judgment's entry. The Antitrust Compliance Officer may be a current employee of Henry Ford Health System, and Allegiance must obtain Plaintiffs' approval for the person appointed to this position. The Antitrust Compliance Officer must furnish copies of this Competitive Impact Statement, the Final Judgment, and a notice explaining the Final Judgment's obligations to Allegiance's officers and directors (including its Board of Directors), direct reports to Allegiance's Chief Executive Officer, marketing managers at the level of director and above, and all other employees engaged in activities relating to Allegiance's marketing or business development activities. The Antitrust Compliance Officer must also obtain from each recipient a certification that he or she has read and agrees to abide by the terms of the Final Judgment. The Antitrust Compliance Officer must maintain a record of all certifications received. The Antitrust Compliance Officer shall annually brief each person receiving a copy of the Final Judgment and this Competitive Impact Statement on the meaning and requirements of the Final Judgment and the antitrust laws. In addition, the Antitrust Compliance Officer shall ensure that each recipient of the Final Judgment and this Competitive Impact Statement receives at least four hours of training annually on the meaning and requirements of the Final Judgment and the antitrust laws. Section V of the proposed Final Judgment requires the Antitrust Compliance Officer to communicate annually to Allegiance's employees that they may disclose to the Antitrust Compliance Officer, without reprisal, information concerning any potential violation of the Final Judgment or the antitrust laws. In addition, the Antitrust Compliance Officer shall maintain a log of communications relating to marketing between Allegiance staff and any officers or directors of other healthcare system providers. Annually, for the term of the Final Judgment, the Antitrust Compliance Officer must provide to Plaintiffs written confirmation of Allegiance's compliance with Section V, including providing copies of the training materials used for Allegiance's antitrust training program. Additionally, within thirty days of learning of any violation or potential violation of the terms and conditions of the Final Judgment, Allegiance must file with the United States a statement describing the violation and the actions Allegiance took to terminate it. [[Page 9758]] To ensure Allegiance's compliance with the Final Judgment, Section VI of the proposed Final Judgment requires Allegiance to grant the United States and the State of Michigan access, upon reasonable notice, to Allegiance's records and documents relating to matters contained in the Final Judgment. Upon request, Allegiance also must make its employees available for interviews or depositions and answer interrogatories and prepare written reports relating to matters contained in the Final Judgment. After entering into the settlement and specifically agreeing not to carve out Hillsdale County from its marketing campaigns, Allegiance issued a press release that claimed that it was allowed to ``continue [its] marketing strategies.'' John Commins, Henry Ford Allegiance ``Reluctantly'' Settles DOJ Antitrust Suit, HealthLeaders Media, Feb. 12, 2018, http://www.healthleadersmedia.com/marketing/henry-ford-allegiance-reluctantly-settles-doj-antitrust-suit#. This statement demonstrates that Allegiance's need for an effective antitrust compliance program is particularly acute and underscores the importance of provisions in the proposed Final Judgment to allow Plaintiffs to closely monitor Allegiance's actions to ensure compliance. C. Investigation Fees and Costs The proposed Final Judgment requires Allegiance to reimburse Plaintiffs for a portion of their litigation costs. Allegiance is required to pay the United States the sum of $5,000.00 and the State of Michigan the sum of $35,000.00. D. Enforcement and Expiration of the Final Judgment The proposed Final Judgment contains provisions designed to promote compliance and make the enforcement of consent decrees as effective as possible. Paragraph IX(A) provides that Plaintiffs retain and reserve all rights to enforce the provisions of the proposed Final Judgment, including their rights to seek an order of contempt from the Court. Under the terms of this paragraph, Allegiance has agreed that in any civil contempt action, any motion to show cause, or any similar action brought by Plaintiffs regarding an alleged violation of the Final Judgment, Plaintiffs may establish the violation and the appropriateness of any remedy by a preponderance of the evidence and that Allegiance has waived any argument that a different standard of proof should apply. This provision aligns the standard for compliance obligations with the standard of proof that applies to the underlying offense that the compliance commitments address. Paragraph IX(B) of the proposed Final Judgment further provides that should the Court find in an enforcement proceeding that Allegiance has violated the Final Judgment, Plaintiffs may apply to the Court for a one-time extension of the Final Judgment, together with such other relief as may be appropriate. In addition, in order to compensate American taxpayers for any costs associated with the investigation and enforcement of violations of the proposed Final Judgment, Paragraph IX(B) requires Allegiance to reimburse Plaintiffs for attorneys' fees, experts' fees, or costs incurred in connection with any enforcement effort. IV. REMEDIES AVAILABLE TO POTENTIAL PRIVATE LITIGANTS Section 4 of the Clayton Act, 15 U.S.C. Sec. 15, provides that any person who has been injured as a result of conduct prohibited by the antitrust laws may bring suit in federal court to recover three times the damages the person has suffered, as well as costs and reasonable attorneys' fees. Entry of the proposed Final Judgment will neither impair nor assist the bringing of any private antitrust damage action. Under the provisions of Section 5(a) of the Clayton Act, 15 U.S.C. Sec. 16(a), the proposed Final Judgment has no prima facie effect in any subsequent private lawsuit that may be brought against Allegiance. V. PROCEDURES AVAILABLE FOR MODIFICATION OF THE PROPOSED FINAL JUDGMENT The proposed Final Judgment may be entered by the Court after compliance with the provisions of the APPA, which conditions entry upon the Court's determination that the proposed Final Judgment is in the public interest. The APPA provides a period of at least sixty days preceding the effective date of the proposed Final Judgment within which any person may submit to the United States written comments regarding the proposed Final Judgment. Any person who wishes to comment should do so within sixty days of the date of publication of this Competitive Impact Statement in the Federal Register, or the last date of publication in a newspaper of the summary of this Competitive Impact Statement, whichever is later. All comments received during this period will be considered by the U.S. Department of Justice. The comments and the response of the United States will be filed with the Court. In addition, comments will be posted on the U.S. Department of Justice, Antitrust Division's internet website and, under certain circumstances, published in the Federal Register. Written comments should be submitted to: Peter J. Mucchetti Chief, Healthcare and Consumer Products Section Antitrust Division United States Department of Justice 450 Fifth Street, N.W., Suite 4100 Washington, D.C. 20530 The proposed Final Judgment provides that the Court retains jurisdiction over this action, and the parties may apply to the Court for any order necessary or appropriate for the modification, interpretation, or enforcement of the Final Judgment. VI. ALTERNATIVES TO THE PROPOSED FINAL JUDGMENT The United States considered, as an alternative to the proposed Final Judgment, a full trial on the merits against Allegiance. The United States is satisfied, however, that the relief in the proposed Final Judgment will prevent the recurrence of the violations alleged in the Complaint and ensure that consumers, physicians, and employers benefit from competition. Thus, the proposed Final Judgment would achieve all or substantially all of the relief the United States would have obtained through litigation, but avoids the time, expense, and uncertainty of a full trial on the merits. VII. STANDARD OF REVIEW UNDER THE APPA FOR THE PROPOSED FINAL JUDGMENT The Clayton Act, as amended by the APPA, requires that proposed consent judgments in antitrust cases brought by the United States be subject to a sixty-day comment period, after which the court shall determine whether entry of the proposed Final Judgment ``is in the public interest.'' 15 U.S.C. Sec. 16(e)(1). In making that determination, the court, in accordance with the statute as amended in 2004, is required to consider: (A) the competitive impact of such judgment, including termination of alleged violations, provisions for enforcement and modification, duration of relief sought, anticipated effects of alternative remedies actually considered, whether its terms are ambiguous, and any other competitive considerations bearing upon the adequacy of such judgment that the court deems necessary to a determination of whether the consent judgment is in the public interest; and (B) the impact of entry of such judgment upon competition in the relevant market [[Page 9759]] or markets, upon the public generally and individuals alleging specific injury from the violations set forth in the complaint including consideration of the public benefit, if any, to be derived from a determination of the issues at trial. 15 U.S.C. Sec. 16(e)(1)(A) & (B).\1\ In considering these statutory factors, the court's inquiry is necessarily a limited one as the government is entitled to ``broad discretion to settle with the Defendant within the reaches of the public interest.'' United States v. Microsoft Corp., 56 F.3d 1448, 1461 (D.C. Cir. 1995); see generally United States v. U.S. Airways Group, Inc., 38 F. Supp. 3d 69, 75 (D.D.C. 2014) (noting the court has broad discretion of the adequacy of the relief at issue); United States v. SBC Commc'ns, Inc., 489 F. Supp. 2d 1 (D.D.C. 2007) (describing the public-interest standard under the Tunney Act); United States v. InBev N.V./S.A., No. 08-1965 (JR), 2009 U.S. Dist. LEXIS 84787, at *3 (D.D.C. Aug. 11, 2009) (noting that the court's review of a consent judgment is limited and only inquires ``into whether the government's determination that the proposed remedies will cure the antitrust violations alleged in the complaint was reasonable, and whether the mechanisms to enforce the final judgment are clear and manageable''). --------------------------------------------------------------------------- \1\ The 2004 amendments substituted ``shall'' for ``may'' in directing relevant factors for courts to consider and amended the list of factors to focus on competitive considerations and to address potentially ambiguous judgment terms. Compare 15 U.S.C. Sec. 16(e) (2004), with 15 U.S.C. Sec. 16(e)(1) (2006); see also SBC Commc'ns, 489 F. Supp. 2d at 11 (concluding that the 2004 amendments ``effected minimal changes'' to Tunney Act review). --------------------------------------------------------------------------- Under the APPA, a court considers, among other things, the relationship between the remedy secured and the specific allegations set forth in the government's complaint, whether the decree is sufficiently clear, whether enforcement mechanisms are sufficient, and whether the decree may positively harm third parties. See Microsoft, 56 F.3d at 1458-62. With respect to the adequacy of the relief secured by the decree, a court may not ``engage in an unrestricted evaluation of what relief would best serve the public.'' United States v. BNS, Inc., 858 F.2d 456, 462 (9th Cir. 1988) (quoting United States v. Bechtel Corp., 648 F.2d 660, 666 (9th Cir. 1981)); see also Microsoft, 56 F.3d at 1460-62; United States v. Alcoa, Inc., 152 F. Supp. 2d 37, 40 (D.D.C. 2001); InBev, 2009 U.S. Dist. LEXIS 84787, at *3. One court explained: [t]he balancing of competing social and political interests affected by a proposed antitrust consent decree must be left, in the first instance, to the discretion of the Attorney General. The court's role in protecting the public interest is one of [e]nsuring that the government has not breached its duty to the public in consenting to the decree. The court is required to determine not whether a particular decree is the one that will best serve society, but whether the settlement is ``within the reaches of the public interest.'' More elaborate requirements might undermine the effectiveness of antitrust enforcement by consent decree. Bechtel, 648 F.2d at 666 (emphasis added) (citations omitted).\2\ In determining whether a proposed settlement is in the public interest, a district court ``must accord deference to the government's predictions about the efficacy of its remedies, and may not require that the remedies perfectly match the alleged violations.'' SBC Commc'ns, 489 F. Supp. 2d at 17; see also U.S. Airways, 38 F. Supp. 3d at 75 (noting that a court should not reject the proposed remedies because it believes others are preferable); Microsoft, 56 F.3d at 1461 (noting the need for courts to be ``deferential to the government's predictions as to the effect of the proposed remedies''); United States v. Archer- Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) (noting that the court should grant due respect to the United States' prediction as to the effect of proposed remedies, its perception of the market structure, and its views of the nature of the case). --------------------------------------------------------------------------- \2\ Cf. BNS, 858 F.2d at 464 (holding that the court's ``ultimate authority under the [APPA] is limited to approving or disapproving the consent decree''); United States v. Gillette Co., 406 F. Supp. 713, 716 (D. Mass. 1975) (noting that, in this way, the court is constrained to ``look at the overall picture not hypercritically, nor with a microscope, but with an artist's reducing glass''). See generally Microsoft, 56 F.3d at 1461 (discussing whether ``the remedies [obtained in the decree are] so inconsonant with the allegations charged as to fall outside of the `reaches of the public interest' ''). --------------------------------------------------------------------------- Courts have greater flexibility in approving proposed consent decrees than in crafting their own decrees following a finding of liability in a litigated matter. ``[A] proposed decree must be approved even if it falls short of the remedy the court would impose on its own, as long as it falls within the range of acceptability or is `within the reaches of public interest.' '' United States v. Am. Tel. & Tel. Co., 552 F. Supp. 131, 151 (D.D.C. 1982) (citations omitted); see also U.S. Airways, 38 F. Supp. 3d at 75 (noting that room must be made for the government to grant concessions in the negotiation process for settlements) (citing Microsoft, 56 F.3d at 1461); United States v. Alcan Aluminum Ltd., 605 F. Supp. 619, 622 (W.D. Ky. 1985) (approving the consent decree even though the court would have imposed a greater remedy). To meet this standard, the United States ``need only provide a factual basis for concluding that the settlements are reasonably adequate remedies for the alleged harms.'' SBC Commc'ns, 489 F. Supp. 2d at 17. Moreover, the court's role under the APPA is limited to reviewing the remedy in relationship to the violations that the United States has alleged in its Complaint, and does not authorize the court to ``construct [its] own hypothetical case and then evaluate the decree against that case.'' Microsoft, 56 F.3d at 1459; see also U.S. Airways, 38 F. Supp. 3d at 76 (noting that the court must simply determine whether there is a factual foundation for the government's decisions such that its conclusions regarding the proposed settlements are reasonable); InBev, 2009 U.S. Dist. LEXIS 84787, at *20 (``the `public interest' is not to be measured by comparing the violations alleged in the complaint against those the court believes could have, or even should have, been alleged''). Because the ``court's authority to review the decree depends entirely on the government's exercising its prosecutorial discretion by bringing a case in the first place,'' it follows that ``the court is only authorized to review the decree itself,'' and not to ``effectively redraft the complaint'' to inquire into other matters that the United States did not pursue. Microsoft, 56 F.3d at 1459-60. As the United States District Court for the District of Columbia confirmed in SBC Communications, courts ``cannot look beyond the complaint in making the public interest determination unless the complaint is drafted so narrowly as to make a mockery of judicial power.'' SBC Commc'ns, 489 F. Supp. 2d at 15. In its 2004 amendments, Congress made clear its intent to preserve the practical benefits of using consent decrees in antitrust enforcement, adding the unambiguous instruction that ``[n]othing in this section shall be construed to require the court to conduct an evidentiary hearing or to require the court to permit anyone to intervene.'' 15 U.S.C. Sec. 16(e)(2); see also U.S. Airways, 38 F. Supp. 3d at 76 (noting that a court is not required to hold an evidentiary hearing or to permit intervenors as part of its review under the Tunney Act). The language captured Congress's intent when it enacted the Tunney Act in 1974. Senator Tunney explained: ``The court is nowhere compelled to go to trial or to engage in extended proceedings which might have the effect of vitiating the benefits of prompt and less costly settlement through the consent decree process.'' 119 Cong. Rec. 24,598 (1973) (statement of Sen. Tunney). Rather, the procedure [[Page 9760]] for the public-interest determination is left to the discretion of the court, with the recognition that the court's ``scope of review remains sharply proscribed by precedent and the nature of Tunney Act proceedings.'' SBC Commc'ns, 489 F. Supp. 2d at 11.\3\ A court can make its public-interest determination based on the competitive impact statement and response to public comments alone. U.S. Airways, 38 F. Supp. 3d at 76. --------------------------------------------------------------------------- \3\ See United States v. Enova Corp., 107 F. Supp. 2d 10, 17 (D.D.C. 2000) (noting that the ``Tunney Act expressly allows the court to make its public interest determination on the basis of the competitive impact statement and response to comments alone''); United States v. Mid-Am. Dairymen, Inc., No. 73-CV-681-W-1, 1977-1 Trade Cas. (CCH) ] 61,508, at 71,980, *22 (W.D. Mo. 1977) (``Absent a showing of corrupt failure of the government to discharge its duty, the Court, in making its public interest finding, should . . . carefully consider the explanations of the government in the competitive impact statement and its responses to comments in order to determine whether those explanations are reasonable under the circumstances.''); S. Rep. No. 93-298, at 6 (1973) (``Where the public interest can be meaningfully evaluated simply on the basis of briefs and oral arguments, that is the approach that should be utilized.''). --------------------------------------------------------------------------- VIII. DETERMINATIVE DOCUMENTS There are no determinative materials or documents within the meaning of the APPA that were considered by the United States in formulating the proposed Final Judgment. Dated: February 27, 2018 Respectfully submitted, FOR PLAINTIFF UNITED STATES OF AMERICA: Peter Caplan (P-30643), Assistant United States Attorney, U.S. Attorney's Office, Eastern District of Michigan, 211 W. Fort Street, Suite 2001, Detroit, Michigan 48226, (313) 226-9784, peter.caplan@usdoj.gov. \s\Katrina Rouse Katrina Rouse (D.C. Bar No. 1013035), Garrett Liskey, Andrew Robinson, Jill Maguire, Healthcare & Consumer Products Section, Antitrust Division, U.S. Department of Justice, 450 Fifth St., NW, Washington, DC 20530, (415) 934-5346, Katrina.Rouse@usdoj.gov. Certificate of Service I hereby certify that on February 27, 2018, I electronically filed the foregoing paper with the Clerk of Court using the ECF system, which will send notification of the filing to the counsel of record for all parties for civil action 5:15-cv-12311-JEL-DRG, and I hereby certify that there are no individuals entitled to notice who are non-ECF participants. \s\Garrett Liskey Garrett Liskey (D.C. Bar No. 1000937) Antitrust Division, Healthcare and Consumer Products Section, U.S. Department of Justice, 450 Fifth St., NW, Washington, DC 20530, (202) 598-2849, Garrett.Liskey@usdoj.gov. [FR Doc. 2018-04593 Filed 3-6-18; 8:45 am] BILLING CODE 4410-11-P
![9750 Federal Register / Vol. 83, No. 45 / Wednesday, March 7, 2018 / Notices
(‘‘Commerce’’) to be sold in the United DEPARTMENT OF JUSTICE Section, Antitrust Division, Department
States at less than fair value (‘‘LTFV’’).2 of Justice, 450 Fifth Street NW, Suite
Antitrust Division 4100, Washington, DC 20530
Background (telephone: 202–307–0001).
United States et al. v. W.A. Foote
The Commission, pursuant to section Memorial Hospital, d/b/a Allegiance Patricia A. Brink,
735(b) of the Act (19 U.S.C. 1673d(b)), Health; Proposed Final Judgment and Director of Civil Enforcement.
instituted these investigations effective Competitive Impact Statement
March 28, 2017, following receipt of a UNITED STATES DISTRICT COURT
petition filed with the Commission and Notice is hereby given pursuant to the FOR THE EASTERN DISTRICT OF
Antitrust Procedures and Penalties Act, MICHIGAN
Commerce by Charter Steel, Saukville,
Wisconsin; Gerdau Ameristeel US Inc., 15 U.S.C. 16(b)–(h), that a proposed United States of America and State of
Tampa, Florida; Keystone Consolidated Final Judgment, Notification of Michigan, and Plaintiffs, v. Hillsdale
Industries, Inc., Peoria, Illinois; and Settlement and Explanation of Consent Community Health Center, W.A. Foote
Decree Procedures, and Competitive Memorial Hospital, D/B/A Allegiance Health,
Nucor Corporation, Charlotte, North Community Health Center of Branch County,
Impact Statement have been filed with
Carolina. The Commission scheduled and Promedica Health System, Inc.,
the United States District Court for the
the final phase of the investigations Defendants.
Eastern District of Michigan in United
following notification of preliminary States and State of Michigan v. W.A. Case No.: 2:15–cv–12311–JEL–DRG
determinations by Commerce that Hon. Judith E. Levy
Foote Memorial Hospital, Civil Action Mag. Judge David R. Grand
imports of carbon and certain alloy steel No. 15–cv–12311 (JEL) (DRG). On June
wire rod from South Africa and Ukraine 25, 2015, the United States and the State COMPLAINT
were being sold at LTFV within the of Michigan filed a Complaint alleging The United States of America and the
meaning of section 733(b) of the Act (19 that Defendant W.A. Foote Memorial State of Michigan bring this civil
U.S.C. 1673b(b)). Notice of the Hospital d/b/a Allegiance Health antitrust action to enjoin agreements by
scheduling of the final phase of the (‘‘Allegiance’’) entered into an Defendants Hillsdale Community Health
Commission’s investigations and of a agreement with Hillsdale Community Center (‘‘Hillsdale’’), W.A. Foote
public hearing to be held in connection Health Center that unlawfully allocated Memorial Hospital, d/b/a Allegiance
therewith was given by posting copies customers in violation of Section 1 of Health (‘‘Allegiance’’), Community
of the notice in the Office of the the Sherman Act, 15 U.S.C. 1, and 2 of Health Center of Branch County
Secretary, U.S. International Trade the Michigan Antitrust Reform Act, (‘‘Branch’’), and ProMedica Health
Commission, Washington, DC, and by MCL 445.772. The proposed Final System, Inc. (‘‘ProMedica’’)
publishing the notice in the Federal Judgment, filed February 9, 2018, (collectively, ‘‘Defendants’’) that
Register of September 20, 2017 (82 FR prohibits Allegiance from agreeing with unlawfully allocate territories for the
44001). The hearing was held in other healthcare providers to prohibit or marketing of competing healthcare
Washington, DC, on November 16, 2017 limit marketing or to divide any services and limit competition among
and all persons who requested the geographic market or territory. The Defendants.
opportunity were permitted to appear in proposed Final Judgment also prohibits
Allegiance from communicating with NATURE OF THE ACTION
person or by counsel.
competing healthcare systems regarding 1. Defendants are healthcare providers
The Commission made these its marketing plans, with limited in Michigan that operate the only
determinations pursuant to section exceptions. The proposed Final general acute-care hospital or hospitals
735(b) of the Act (19 U.S.C. 1673d(b)). Judgment also imposes an antitrust in their respective counties. Defendants
It completed and filed its compliance officer and other training directly compete with each other to
determinations in these investigations and monitoring requirements on provide healthcare services to the
on March 1, 2018. The views of the Allegiance. residents of south-central Michigan.
Commission are contained in USITC Copies of the Complaint, proposed Marketing is a key component of this
Publication 4766, March 2018, entitled Final Judgment, and Competitive Impact competition and includes
Carbon and Certain Alloy Steel Wire Statement are available for inspection advertisements, mailings to patients,
Rod from South Africa and Ukraine: on the Antitrust Division’s website at health fairs, health screenings, and
Investigation Nos. 731–TA–1353 and http://www.justice.gov/atr, and at the outreach to physicians and employers.
1356 (Final). Office of the Clerk of the United States 2. Allegiance, Branch, and
District Court for the Eastern District of ProMedica’s Bixby and Herrick
By order of the Commission.
Michigan. Copies of these materials may Hospitals (‘‘Bixby and Herrick’’) are
Issued: March 1, 2018. be obtained from the Antitrust Division Hillsdale’s closest Michigan
Lisa R. Barton, upon request and payment of the competitors. Hillsdale orchestrated
Secretary to the Commission. copying fee set by Department of Justice agreements to limit marketing of
[FR Doc. 2018–04585 Filed 3–6–18; 8:45 am] regulations. competing healthcare services.
BILLING CODE 7020–02–P
Public comment on the proposed Allegiance explained in a 2013 oncology
Final Judgment is invited within 60 marketing plan: ‘‘[A]n agreement exists
days of the date of this notice. Such with the CEO of Hillsdale Community
comments, including the name of the Health Center, Duke Anderson, to not
daltland on DSKBBV9HB2PROD with NOTICES
submitter, and responses thereto, will be conduct marketing activity in Hillsdale
posted on the Antitrust Division’s County.’’ Branch’s CEO described the
2 The Commission also finds that imports of wire
website, filed with the Court, and, under Branch agreement with Hillsdale as a
rod subject to Commerce’s affirmative critical
certain circumstances, published in the ‘‘gentlemen’s agreement not to market
circumstances determination are not likely to Federal Register. Comments should be services.’’ A ProMedica
undermine seriously the remedial effect of the directed to Peter J. Mucchetti, Chief, communications specialist described
antidumping duty order on South Africa. Healthcare & Consumer Products the ProMedica agreement with Hillsdale
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BACKGROUND ON HOSPITAL Allegiance after Allegiance sent and Herrick’s President responded that
COMPETITION marketing materials to Hillsdale County he understood. Bixby and Herrick then
14. Hillsdale competes with each of residents. Both times—at the direction refrained from marketing their
the other Defendants to provide many of of Allegiance CEO Georgia Fojtasek— competing oncology services in
Allegiance’s Vice President of Hillsdale County.
the same hospital and physician
Marketing, Anthony Gardner, 26. Another incident occurred around
services to patients. Hospitals compete
apologized in writing to Hillsdale’s January 2012, when Hillsdale’s CEO
on price, quality, and other factors to complained to Bixby and Herrick’s
CEO. In one apology he said, ‘‘It isn’t
sell their services to patients, President about the placement of a
our style to purposely not honor our
employers, and insurance companies. ProMedica billboard across from a
agreement.’’ Mr. Gardner assured
An important tool that hospitals use to physician’s office in Hillsdale County.
Hillsdale’s CEO that Allegiance would
compete for patients is marketing aimed At the conclusion of the conversation,
not repeat this mistake.
at informing patients, physicians, and 20. Allegiance also conveyed its Bixby and Herrick’s President assured
employers about a hospital’s quality and hands-off approach to Hillsdale in 2009 Hillsdale’s CEO that he would check
scope of services. An executive from when Ms. Fojtasek told Hillsdale’s CEO into taking down the billboard.
each Defendant has testified at that Allegiance would take a 27. ProMedica employees have
deposition that marketing is an ‘‘Switzerland’’ approach towards discussed and acknowledged the
important strategy through which Hillsdale, and then confirmed this agreement in multiple documents. For
hospitals seek to increase their patient approach by mailing Hillsdale’s CEO a example, after Hillsdale’s CEO called
volume and market share. Swiss flag. Bixby and Herrick’s President to
15. Defendants’ marketing includes 21. Allegiance executives and staff complain about ProMedica’s billboard, a
advertisements through mailings and have discussed the agreement in ProMedica communications specialist
media such as local newspapers, radio, numerous correspondences and described the agreement to marketing
television, and billboards. Allegiance’s business documents. For example, colleagues via email: ‘‘According to
marketing to patients also includes the Allegiance staff explained in a 2012 [Bixby and Herrick’s President] any
provision of free medical services, such cardiovascular services analysis: potential marketing (including network
as health screenings, physician ‘‘Hillsdale does not permit [Allegiance] development) efforts targeted for the
seminars, and health fairs. Some to conduct free vascular screens as they Hillsdale, MI market should be run by
Defendants also market to physicians periodically charge for screenings.’’ As him so that he can talk to Hillsdale
through educational and relationship- a result, around that time, Hillsdale Health Center in advance. The
building meetings that provide County patients were deprived of free agreement is that they stay our [sic] of
physicians with information about those vascular-health screenings. our market and we stay out of theirs
Defendants’ quality and range of 22. In another instance, in 2014 unless we decide to collaborate with
services. Allegiance also engages in Allegiance discouraged one of its newly them on a particular project.’’
these marketing activities with employed physicians from giving a 28. The agreement between Hillsdale
employers. seminar in Hillsdale County relating to and ProMedica deprived patients,
HILLSDALE’S UNLAWFUL competing services. In response to the physicians, and employers of Hillsdale
AGREEMENTS physician’s request to provide the and Lenawee Counties of information
seminar, the Allegiance Marketing regarding their healthcare-provider
16. Hillsdale has agreements limiting Director asked the Vice President of choices.
competition with Allegiance, Physician Integration and Business
ProMedica, and Branch. Unlawful Agreement Between Hillsdale
Development: ‘‘Who do you think is the
and Branch
Unlawful Agreement Between Hillsdale best person to explain to [the doctor]
our restrictions in Hillsdale? We’re 29. Since at least 1999, Hillsdale and
and Allegiance
happy to do so but often our docs find Branch have agreed to limit marketing
17. Since at least 2009, Hillsdale and it hard to believe and want a higher in one another’s county. In the fall of
Allegiance have had an agreement that authority to confirm.’’ 1999, Hillsdale’s then-CEO and Branch’s
limits Allegiance’s marketing for 23. The agreement between Hillsdale CEO reached an agreement whereby
competing services in Hillsdale County. and Allegiance has deprived Hillsdale each hospital agreed not to market
As Allegiance explained in a 2013 County patients, physicians, and anything but new services in the other
oncology marketing plan: ‘‘[A]n employers of information regarding hospital’s county. Branch’s CEO
agreement exists with the CEO of their healthcare-provider choices and of testified recently in deposition that
Hillsdale Community Health Center, free health-screenings and education. ‘‘There’s a gentlemen’s agreement not to
Duke Anderson, to not conduct market services other than new
marketing activity in Hillsdale County.’’ Unlawful Agreement Between Hillsdale services.’’
18. In compliance with this and ProMedica 30. Branch has monitored Hillsdale’s
agreement, Allegiance has excluded 24. Since at least 2012, Hillsdale and compliance with the agreement. For
Hillsdale County from marketing ProMedica have agreed to limit their example, in November 2004, Hillsdale
campaigns since at least 2009. For marketing for competing services in one promoted one of its physicians through
example, Allegiance excluded Hillsdale another’s county. an advertisement in the Branch County
County from the marketing plans 25. This agreement has restrained newspaper. Branch’s CEO faxed
outlined in the above-referenced 2013 marketing in several ways. For example, Hillsdale’s then-CEO a copy of the
daltland on DSKBBV9HB2PROD with NOTICES
oncology marketing plan. And in June 2012, Bixby and Herrick’s advertisement, alerting him to the
according to a February 2014 board President asked Hillsdale’s CEO if he violation of their agreement.
report, Allegiance excluded Hillsdale would have any issue with Bixby 31. In addition to monitoring
from marketing campaigns for marketing its oncology services to Hillsdale’s compliance, Branch has
cardiovascular and orthopedic services. Hillsdale physicians. Hillsdale’s CEO directed its marketing employees to
19. On at least two occasions, replied that he objected because his abide by the agreement with Hillsdale.
Hillsdale’s CEO complained to hospital provided those services. Bixby For example, Branch’s 2013 guidelines
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for sending out media releases REQUESTED RELIEF (313) 226–9784, P30643, E-mail:
instructed that it had a ‘‘gentleman’s peter.caplan@usdoj.gov.
The United States and the State of
agreement’’ with Hillsdale and thus FOR PLAINTIFF STATE OF MICHIGAN:
Michigan request that the Court:
Branch should not send media releases (A) judge that Defendants’ agreements Bill Schuette, Attorney General, State of
to the Hillsdale Daily News. limiting competition constitute illegal Michigan.
32. The agreement between Hillsdale restraints of interstate trade in violation \s\ with the consent of Joseph Potchen
and Branch deprived Hillsdale and of Section 1 of the Sherman Act, 15 lllllllllllllllllllll
Branch County patients, physicians, and U.S.C. § 1, and Section 2 of the Joseph Potchen,
employers of information regarding Michigan Antitrust Reform Act, MCL Division Chief.
their healthcare-provider choices. 445.772; \s\ with the consent of Mark Gabrielse
(B) enjoin Defendants and their lllllllllllllllllllll
NO PROCOMPETITIVE
JUSTIFICATIONS members, officers, agents, and Mark Gabrielse (P75163),
employees from continuing or renewing D.J. Pascoe,
33. The Defendants’ anticompetitive in any manner the conduct alleged Assistant Attorney Generals, Michigan
agreements are not reasonably necessary herein or from engaging in any other Department of Attorney General, Corporate
to further any procompetitive purpose. conduct, agreement, or other Oversight Division, G. Mennen Williams
arrangement having the same effect as Building, 6th Floor, 525 W. Ottawa Street,
VIOLATIONS ALLEGED Lansing, Michigan 48933, (517) 373–1160,
the alleged violations;
First Cause of Action: Violation of Email: gabrielsem@michigan.gov.
(C) enjoin each Defendant and its
Section 1 of the Sherman Act members, officers, agents, and UNITED STATES DISTRICT COURT
34. Plaintiffs incorporate paragraphs 1 employees from communicating with FOR THE EASTERN DISTRICT OF
through 33. any other Defendant about any MICHIGAN
35. Allegiance, Branch, and Defendant’s marketing in its or the other
United States of America and State Of
ProMedica are each a horizontal Defendant’s county, unless such Michigan, Plaintiffs, v. W.A. Foote Memorial
competitor of Hillsdale in the provision communication is related to the joint Hospital, D/B/A Allegiance Health,
of healthcare services in south-central provision of services, or unless the Defendant.
Michigan. Defendants’ agreements are communication is part of normal due Case No.: 5:15–cv–12311–JEL–DRG
facially anticompetitive because they diligence relating to a merger, Hon. Judith E. Levy
allocate territories for the marketing of acquisition, joint venture, investment, Mag. Judge David R. Grand
competing healthcare services and limit or divestiture;
(D) require Defendants to institute a [PROPOSED] FINAL JUDGMENT
competition among Defendants. The
comprehensive antitrust compliance Whereas, Plaintiffs, the United States
agreements eliminate a significant form
program to ensure that Defendants do of America and the State of Michigan,
of competition to attract patients.
not establish any similar agreements filed their joint Complaint on June 25,
36. The agreements constitute and that Defendants’ members, officers,
unreasonable restraints of trade that are 2015, alleging that W.A. Foote Memorial
agents and employees are fully informed
per se illegal under Section 1 of the Hospital, d/b/a/Allegiance Health;
of the application of the antitrust laws
Sherman Act, 15 U.S.C. § 1. No Hillsdale Community Health Center;
to hospital restrictions on competition;
elaborate analysis is required to Community Health Center of Branch
and
demonstrate the anticompetitive (E) award Plaintiffs their costs in this County; and ProMedica Health System,
character of these agreements. action, including attorneys’ fees and Inc. violated Section 1 of the Sherman
37. The agreements are also investigation costs to the State of Act, 15 U.S.C. § 1, and Section 2 of the
unreasonable restraints of trade that are Michigan, and such other relief as may Michigan Antitrust Reform Act, MCL
unlawful under Section 1 of the be just and proper. 445.772;
Sherman Act, 15 U.S.C. § 1, under an And Whereas, Plaintiffs and W.A.
abbreviated or ‘‘quick look’’ rule of Dated: June 25, 2015.
Respectfully submitted, Foote Memorial Hospital, d/b/a Henry
reason analysis. The principal tendency Ford Allegiance Health, by their
FOR PLAINTIFF UNITED STATES OF
of the agreements is to restrain AMERICA: respective attorneys, have consented to
competition. The nature of the restraints the entry of this Final Judgment without
William J. Baer,
is obvious, and the agreements lack Assistant Attorney General for Antitrust. trial or adjudication of any issue of fact
legitimate procompetitive justifications. or law;
David I. Gelfand,
Even an observer with a rudimentary Deputy Assistant Attorney General. And Whereas, Plaintiffs require
understanding of economics could \s\ lllllllllllllllllll Allegiance to agree to undertake certain
therefore conclude that the agreements actions and refrain from certain conduct
Katrina Rouse (D.C. Bar #1013035),
would have anticompetitive effects on Jennifer Hane, for the purpose of remedying the
patients, physicians, and employers, Barry Joyce, anticompetitive effects alleged in the
and harm the competitive process. Attorneys, Litigation I, Antitrust Division, Complaint;
Second Cause of Action: Violation of U.S. Department of Justice, 450 Fifth Street
And Whereas, Plaintiffs require
MCL 445.772 NW, Suite 4100, Washington, DC 20530,
(202) 305–7498, email: katrina.rouse@ Allegiance to agree to be bound by the
38. Plaintiff State of Michigan usdoj.gov. provisions of the Final Judgment
incorporates paragraphs 1 through 37 LOCAL COUNSEL: pending its approval by the Court;
daltland on DSKBBV9HB2PROD with NOTICES
above. Barbara L. McQuade, Now Therefore, before any testimony
39. Defendants entered into unlawful United States Attorney. is taken, without this Final Judgment
agreements with each other that \s\ with the consent of Peter Caplan constituting any evidence against or
unreasonably restrain trade and lllllllllllllllllllll admission by Allegiance regarding any
commerce in violation of Section 2 of Peter Caplan, issue of fact or law, and upon consent
the Michigan Antitrust Reform Act, Assistant United States Attorney, 211 W. Fort of the parties to this action, it is
MCL 445.772. Street, Suite 2001, Detroit, Michigan 48226, Ordered, Adjudged, and Decreed:
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Court approval subject to procedures Health (‘‘Allegiance’’) submitted for II. DESCRIPTION OF THE EVENTS
of Antitrust Procedures and Penalties entry in this civil antitrust proceeding. GIVING RISE TO THE ALLEGED
Act, 15 U.S.C. § 16 VIOLATIONS
I. NATURE AND PURPOSE OF THE
lllllllllllllllllllll PROCEEDING A. Background on Allegiance and Its
United States District Judge Marketing Activities
On June 25, 2015, the United States Allegiance is a nonprofit general
Exhibit 1 and the State of Michigan filed a civil medical and surgical hospital in Jackson
[Letterhead of Allegiance] antitrust Complaint alleging that County, which is adjacent to HCHC’s
[Name and Address of Antitrust Compliance Allegiance, Hillsdale Community Health location in Hillsdale County in South
Officer] Center (‘‘HCHC’’), Community Health
Dear [XX]: Central Michigan. Allegiance is the only
Center of Branch County (‘‘Branch’’), hospital in its county. Allegiance
I am providing you this notice to make sure
and ProMedica Health System, Inc. directly competes with HCHC to
you are aware of a court order recently
entered by the Honorable Judith E. Levy, a (‘‘ProMedica’’) violated Section 1 of the provide many of the same hospital and
federal judge in Ann Arbor, Michigan. This Sherman Act, 15 U.S.C. § 1, and Section physician services to patients.
court order applies to our institution and all 2 of the Michigan Antitrust Reform Act, An important tool that hospitals use
of its employees, including you, so it is MCL 445.772. Concerning Allegiance, to compete for patients is marketing
important that you understand the the Complaint alleged that Allegiance aimed at informing consumers,
obligations it imposes on us. Ms. Georgia entered into an agreement with HCHC to physicians, and employers about a
Fojtasek has asked me to let each of you hospital’s quality and scope of services.
know that they expect you to take these limit marketing of competing healthcare
services in Hillsdale County. This Allegiance and HCHC’s marketing
obligations seriously and abide by them. includes advertisements through
In a nutshell, the order prohibits us from agreement eliminated a significant form
mailings and media, such as local
agreeing with other healthcare providers, of competition to attract patients and
including hospitals and physicians, to limit newspapers, radio, television, and
substantially diminished competition in billboards, as well as the provision of
marketing or to divide any geographic Hillsdale County, depriving consumers,
market, territory, customers, or services free medical services, such as health
physicians, and employers of important screenings, physician seminars, and
between healthcare providers. This means
you cannot give any assurance to another information and services. The hospitals’ health fairs. Allegiance and HCHC also
healthcare provider that Henry Ford agreement to allocate territories for market to physicians and employers
Allegiance Health will refrain from marketing marketing is per se illegal under Section through educational and relationship-
our services, and you cannot ask for any 1 of the Sherman Act, 15 U.S.C. § 1, and building meetings that provide
assurance from them that they will refrain Section 2 of the Michigan Antitrust physicians and employers with
from marketing. The court order also Reform Act, MCL 445.772.
prohibits communicating with any health
information about the hospitals’ quality
care system provider, or their employees With the Complaint, the United States and range of services.
about our marketing plans or about their and the State of Michigan filed a B. Allegiance’s Unlawful Agreement
marketing plans. There are limited Stipulation and proposed Final with HCHC to Limit Marketing
exceptions to this restriction on Judgment (‘‘Original Judgment’’) with
communications, such as discussing joint Allegiance agreed with HCHC to
respect to HCHC, Branch, and
projects, but you should check with me suppress its marketing in Hillsdale
ProMedica. That Original Judgment
before relying on those exceptions. County, and since at least 2009 to the
A copy of the court order is attached. settled this suit as to those three
time of filing of the Complaint in June
Please read it carefully and familiarize defendants. Following a Tunney Act 2015, Allegiance and HCHC’s agreement
yourself with its terms. The order, rather than review process, the Court granted limited Allegiance’s marketing for
the above description, is controlling. If you Plaintiffs’ Motion for Entry of the
have any questions about the order or how
competing services in Hillsdale County.
Original Judgment (Dkt. 36) and Allegiance believed that HCHC might
it affects your activities, please contact me. dismissed HCHC, Branch, and
Thank you for your cooperation. refer more complicated cases to
Sincerely,
ProMedica from the case (Dkt. 37). The Allegiance because of Allegiance’s
case against Allegiance continued. agreement to pull its competitive
[Allegiance’s Antitrust Compliance Officer]
Allegiance has now agreed to a punches in Hillsdale County. Allegiance
UNITED STATES DISTRICT COURT proposed Final Judgment, which executives acknowledged the agreement
FOR THE EASTERN DISTRICT OF contains terms that are similar to those in numerous documents. The hospitals’
MICHIGAN in the Original Judgment, as well as senior executives, including their CEOs,
United States of America and State of additional terms. The United States created, monitored, and enforced the
Michigan, Plaintiffs, v. W.A. Foote Memorial filed this proposed Final Judgment with agreement, which lasted for many years.
Hospital, D/B/A Allegiance Health, respect to Allegiance (‘‘proposed Final The harmful effects of the agreement
Defendant. continue to the present day.
Judgment’’) on February 9, 2018 (Dkt.
Case No.: 5:15-cv-12311-JEL-DRG 122–1). The proposed Final Judgment is In compliance with this agreement,
Hon. Judith E. Levy Allegiance routinely excluded Hillsdale
Mag. Judge David R. Grand described in more detail in Section III
below. County from many of its marketing
COMPETITIVE IMPACT STATEMENT campaigns. As Allegiance explained in
The proposed Final Judgment may be a 2013 oncology marketing plan: ‘‘[A]n
Plaintiff the United States of America, entered by the Court after compliance agreement exists with the CEO of
daltland on DSKBBV9HB2PROD with NOTICES
pursuant to Section 2(b) of the Antitrust with the provisions of the APPA. Entry Hillsdale Community Health Center
Procedures and Penalties Act (‘‘APPA’’ of the proposed Final Judgment would . . . to not conduct marketing activity in
or ‘‘Tunney Act’’), 15 U.S.C. § 16(b)–(h), terminate this action, except that this Hillsdale County.’’ Allegiance
files this Competitive Impact Statement Court would retain jurisdiction to employees repeatedly referred in
relating to the proposed Final Judgment construe, modify, and enforce the internal documents to an ‘‘agreement’’
concerning W.A. Foote Memorial proposed Final Judgment and to punish or a ‘‘gentleman’s agreement’’ with
Hospital, d/b/a Henry Ford Allegiance violations thereof. HCHC, with a high-ranking executive
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describing Allegiance’s ‘‘relationship (7th Cir. 1995) (holding that the Allegiance to hire and appoint an
with HCHC’’ as ‘‘one of seeking ‘‘[a]greement to limit advertising to Antitrust Compliance Officer within
‘approval’ to provide services in their different geographical regions was thirty days of the Final Judgment’s
market.’’ Allegiance executives on intended to be, and sufficiently entry. The Antitrust Compliance Officer
occasion apologized in writing to HCHC approximates[,] an agreement to allocate may be a current employee of Henry
for violating the agreement and assured markets so that the per se rule of Ford Health System, and Allegiance
HCHC executives that Allegiance would illegality applies’’). Allegiance’s must obtain Plaintiffs’ approval for the
honor the previously agreed-upon agreement with HCHC was not person appointed to this position.
marketing restrictions going forward: ‘‘It reasonably necessary to further any The Antitrust Compliance Officer
isn’t our style to purposely not honor procompetitive purpose. must furnish copies of this Competitive
our agreement.’’ Allegiance even The antitrust laws would not prohibit Impact Statement, the Final Judgment,
reduced the number of free health a hospital from making its own and a notice explaining the Final
benefits, such as physician seminars marketing decisions and conducting Judgment’s obligations to Allegiance’s
and health screenings, offered to marketing activities as it sees fit, so long officers and directors (including its
residents of Hillsdale County because of as it does so unilaterally. By agreeing Board of Directors), direct reports to
the agreement. This unlawful agreement with a competitor to restrict marketing, Allegiance’s Chief Executive Officer,
between Allegiance and HCHC has however, Allegiance engaged in marketing managers at the level of
deprived Hillsdale County consumers, concerted action. By doing so, director and above, and all other
physicians, and employers of valuable Allegiance deprived consumers of the employees engaged in activities relating
free health screenings and education benefits of competition and ran afoul of to Allegiance’s marketing or business
and information regarding their the antitrust laws. development activities. The Antitrust
healthcare provider choices. Compliance Officer must also obtain
III. EXPLANATION OF THE
C. Allegiance’s Marketing Agreement Is PROPOSED FINAL JUDGMENT from each recipient a certification that
Per Se Illegal he or she has read and agrees to abide
The proposed Final Judgment will by the terms of the Final Judgment. The
The agreement between Allegiance prevent the recurrence of the violations Antitrust Compliance Officer must
and HCHC disrupted the competitive alleged in the Complaint and will maintain a record of all certifications
process and harmed consumers. The restore the competition restrained by the received. The Antitrust Compliance
agreement deprived consumers of anticompetitive agreement between Officer shall annually brief each person
information they otherwise would have Allegiance and HCHC. Section X of the receiving a copy of the Final Judgment
had when making important healthcare proposed Final Judgment provides that and this Competitive Impact Statement
decisions. The agreement also deprived these provisions will expire five years on the meaning and requirements of the
Hillsdale County consumers of free after its entry.
medical services such as health Final Judgment and the antitrust laws.
screenings and physician seminars that A. Prohibited Conduct In addition, the Antitrust Compliance
they would have received but for the Under Section IV of the proposed Officer shall ensure that each recipient
unlawful agreement. Moreover, Final Judgment, Allegiance cannot agree of the Final Judgment and this
Allegiance’s agreement with HCHC with any healthcare provider to prohibit Competitive Impact Statement receives
denied employers the opportunity to or limit marketing. Allegiance also at least four hours of training annually
receive information and to develop cannot allocate any services, customers, on the meaning and requirements of the
relationships that could have allowed or geographic markets or territories, Final Judgment and the antitrust laws.
them to improve the quality of their subject to narrow exceptions relating to Section V of the proposed Final
employees’ medical care. And the the provision of certain services jointly Judgment requires the Antitrust
agreement diminished Allegiance’s and with another healthcare provider. Compliance Officer to communicate
HCHC’s incentives to compete on Allegiance is prohibited from annually to Allegiance’s employees that
quality or to improve patient communicating with any healthcare they may disclose to the Antitrust
experience, all to the detriment of South provider about Allegiance’s marketing Compliance Officer, without reprisal,
Central Michigan consumers. in its or the provider’s county, subject information concerning any potential
The agreement to restrict marketing to narrow exceptions relating to violation of the Final Judgment or the
constituted a naked restraint of trade legitimate procompetitive activities. antitrust laws. In addition, the Antitrust
that is per se unlawful under Section 1 Additionally, Allegiance is prohibited Compliance Officer shall maintain a log
of the Sherman Act, 15 U.S.C. § 1, and from excluding Hillsdale County from of communications relating to marketing
Section 2 of the Michigan Antitrust its marketing or business development between Allegiance staff and any
Reform Act, MCL 445.772. See United activities. This prohibition restores officers or directors of other healthcare
States v. Topco Assocs., Inc., 405 U.S. competition that was eliminated during system providers. Annually, for the term
596, 607–08 (1972) (holding that naked the course of the agreement, which of the Final Judgment, the Antitrust
market allocation agreements among Allegiance implemented in part by Compliance Officer must provide to
horizontal competitors are plainly carving out Hillsdale County from many Plaintiffs written confirmation of
anticompetitive and illegal per se); of its marketing activities. This Allegiance’s compliance with Section V,
United States v. Cooperative Theatres of prohibition ensures that Hillsdale including providing copies of the
Ohio, Inc., 845 F.2d 1367, 1371, 1373 County consumers will benefit from training materials used for Allegiance’s
(6th Cir. 1988) (holding that the competition. antitrust training program.
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defendants’ agreement to not ‘‘actively Additionally, within thirty days of
solicit[] each other’s customers’’ was B. Compliance and Inspection learning of any violation or potential
‘‘undeniably a type of customer The proposed Final Judgment sets violation of the terms and conditions of
allocation scheme which courts have forth various provisions to ensure the Final Judgment, Allegiance must file
often condemned in the past as a per se Allegiance’s compliance with the with the United States a statement
violation of the Sherman Act’’); proposed Final Judgment. Section V of describing the violation and the actions
Blackburn v. Sweeney, 53 F.3d 825, 828 the proposed Final Judgment requires Allegiance took to terminate it.
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To ensure Allegiance’s compliance that applies to the underlying offense posted on the U.S. Department of
with the Final Judgment, Section VI of that the compliance commitments Justice, Antitrust Division’s internet
the proposed Final Judgment requires address. website and, under certain
Allegiance to grant the United States Paragraph IX(B) of the proposed Final circumstances, published in the Federal
and the State of Michigan access, upon Judgment further provides that should Register.
reasonable notice, to Allegiance’s the Court find in an enforcement Written comments should be
records and documents relating to proceeding that Allegiance has violated submitted to:
matters contained in the Final the Final Judgment, Plaintiffs may apply Peter J. Mucchetti
Judgment. Upon request, Allegiance also to the Court for a one-time extension of Chief, Healthcare and Consumer
must make its employees available for the Final Judgment, together with such Products Section
interviews or depositions and answer other relief as may be appropriate. In Antitrust Division
interrogatories and prepare written addition, in order to compensate United States Department of Justice
reports relating to matters contained in American taxpayers for any costs 450 Fifth Street, N.W., Suite 4100
the Final Judgment. associated with the investigation and Washington, D.C. 20530
After entering into the settlement and enforcement of violations of the
specifically agreeing not to carve out proposed Final Judgment, Paragraph The proposed Final Judgment
Hillsdale County from its marketing IX(B) requires Allegiance to reimburse provides that the Court retains
campaigns, Allegiance issued a press Plaintiffs for attorneys’ fees, experts’ jurisdiction over this action, and the
release that claimed that it was allowed fees, or costs incurred in connection parties may apply to the Court for any
to ‘‘continue [its] marketing strategies.’’ with any enforcement effort. order necessary or appropriate for the
John Commins, Henry Ford Allegiance modification, interpretation, or
IV. REMEDIES AVAILABLE TO enforcement of the Final Judgment.
‘‘Reluctantly’’ Settles DOJ Antitrust Suit,
POTENTIAL PRIVATE LITIGANTS
HealthLeaders Media, Feb. 12, 2018, VI. ALTERNATIVES TO THE
http://www.healthleadersmedia.com/ Section 4 of the Clayton Act, 15 PROPOSED FINAL JUDGMENT
marketing/henry-ford-allegiance- U.S.C. § 15, provides that any person
reluctantly-settles-doj-antitrust-suit#. who has been injured as a result of The United States considered, as an
This statement demonstrates that conduct prohibited by the antitrust laws alternative to the proposed Final
Allegiance’s need for an effective may bring suit in federal court to Judgment, a full trial on the merits
antitrust compliance program is recover three times the damages the against Allegiance. The United States is
particularly acute and underscores the person has suffered, as well as costs and satisfied, however, that the relief in the
importance of provisions in the reasonable attorneys’ fees. Entry of the proposed Final Judgment will prevent
proposed Final Judgment to allow proposed Final Judgment will neither the recurrence of the violations alleged
Plaintiffs to closely monitor Allegiance’s impair nor assist the bringing of any in the Complaint and ensure that
actions to ensure compliance. private antitrust damage action. Under consumers, physicians, and employers
the provisions of Section 5(a) of the benefit from competition. Thus, the
C. Investigation Fees and Costs Clayton Act, 15 U.S.C. § 16(a), the proposed Final Judgment would achieve
The proposed Final Judgment requires proposed Final Judgment has no prima all or substantially all of the relief the
Allegiance to reimburse Plaintiffs for a facie effect in any subsequent private United States would have obtained
portion of their litigation costs. lawsuit that may be brought against through litigation, but avoids the time,
Allegiance is required to pay the United Allegiance. expense, and uncertainty of a full trial
States the sum of $5,000.00 and the on the merits.
State of Michigan the sum of V. PROCEDURES AVAILABLE FOR
MODIFICATION OF THE PROPOSED VII. STANDARD OF REVIEW UNDER
$35,000.00. THE APPA FOR THE PROPOSED
FINAL JUDGMENT
D. Enforcement and Expiration of the FINAL JUDGMENT
The proposed Final Judgment may be
Final Judgment entered by the Court after compliance The Clayton Act, as amended by the
The proposed Final Judgment with the provisions of the APPA, which APPA, requires that proposed consent
contains provisions designed to promote conditions entry upon the Court’s judgments in antitrust cases brought by
compliance and make the enforcement determination that the proposed Final the United States be subject to a sixty-
of consent decrees as effective as Judgment is in the public interest. day comment period, after which the
possible. Paragraph IX(A) provides that The APPA provides a period of at court shall determine whether entry of
Plaintiffs retain and reserve all rights to least sixty days preceding the effective the proposed Final Judgment ‘‘is in the
enforce the provisions of the proposed date of the proposed Final Judgment public interest.’’ 15 U.S.C. § 16(e)(1). In
Final Judgment, including their rights to within which any person may submit to making that determination, the court, in
seek an order of contempt from the the United States written comments accordance with the statute as amended
Court. Under the terms of this regarding the proposed Final Judgment. in 2004, is required to consider:
paragraph, Allegiance has agreed that in Any person who wishes to comment (A) the competitive impact of such judgment,
any civil contempt action, any motion to should do so within sixty days of the including termination of alleged
show cause, or any similar action date of publication of this Competitive violations, provisions for enforcement
brought by Plaintiffs regarding an Impact Statement in the Federal and modification, duration of relief
alleged violation of the Final Judgment, Register, or the last date of publication sought, anticipated effects of alternative
Plaintiffs may establish the violation in a newspaper of the summary of this remedies actually considered, whether
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and the appropriateness of any remedy Competitive Impact Statement, its terms are ambiguous, and any other
by a preponderance of the evidence and whichever is later. All comments competitive considerations bearing upon
the adequacy of such judgment that the
that Allegiance has waived any received during this period will be court deems necessary to a
argument that a different standard of considered by the U.S. Department of determination of whether the consent
proof should apply. This provision Justice. The comments and the response judgment is in the public interest; and
aligns the standard for compliance of the United States will be filed with (B) the impact of entry of such judgment
obligations with the standard of proof the Court. In addition, comments will be upon competition in the relevant market
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![Federal Register / Vol. 83, No. 45 / Wednesday, March 7, 2018 / Notices 9759
or markets, upon the public generally protecting the public interest is one of ‘‘need only provide a factual basis for
and individuals alleging specific injury [e]nsuring that the government has not concluding that the settlements are
from the violations set forth in the breached its duty to the public in consenting reasonably adequate remedies for the
complaint including consideration of the to the decree. The court is required to
alleged harms.’’ SBC Commc’ns, 489 F.
public benefit, if any, to be derived from determine not whether a particular decree is
a determination of the issues at trial. the one that will best serve society, but Supp. 2d at 17.
whether the settlement is ‘‘within the reaches Moreover, the court’s role under the
15 U.S.C. § 16(e)(1)(A) & (B).1 In of the public interest.’’ More elaborate APPA is limited to reviewing the
considering these statutory factors, the requirements might undermine the remedy in relationship to the violations
court’s inquiry is necessarily a limited effectiveness of antitrust enforcement by that the United States has alleged in its
one as the government is entitled to consent decree. Complaint, and does not authorize the
‘‘broad discretion to settle with the Bechtel, 648 F.2d at 666 (emphasis court to ‘‘construct [its] own
Defendant within the reaches of the added) (citations omitted).2 In hypothetical case and then evaluate the
public interest.’’ United States v. determining whether a proposed decree against that case.’’ Microsoft, 56
Microsoft Corp., 56 F.3d 1448, 1461 settlement is in the public interest, a F.3d at 1459; see also U.S. Airways, 38
(D.C. Cir. 1995); see generally United district court ‘‘must accord deference to F. Supp. 3d at 76 (noting that the court
States v. U.S. Airways Group, Inc., 38 F. the government’s predictions about the must simply determine whether there is
Supp. 3d 69, 75 (D.D.C. 2014) (noting efficacy of its remedies, and may not a factual foundation for the
the court has broad discretion of the require that the remedies perfectly government’s decisions such that its
adequacy of the relief at issue); United match the alleged violations.’’ SBC conclusions regarding the proposed
States v. SBC Commc’ns, Inc., 489 F. Commc’ns, 489 F. Supp. 2d at 17; see settlements are reasonable); InBev, 2009
Supp. 2d 1 (D.D.C. 2007) (describing the also U.S. Airways, 38 F. Supp. 3d at 75 U.S. Dist. LEXIS 84787, at *20 (‘‘the
public-interest standard under the (noting that a court should not reject the ‘public interest’ is not to be measured by
Tunney Act); United States v. InBev proposed remedies because it believes comparing the violations alleged in the
N.V./S.A., No. 08–1965 (JR), 2009 U.S. others are preferable); Microsoft, 56 F.3d complaint against those the court
Dist. LEXIS 84787, at *3 (D.D.C. Aug. at 1461 (noting the need for courts to be believes could have, or even should
11, 2009) (noting that the court’s review ‘‘deferential to the government’s have, been alleged’’). Because the
of a consent judgment is limited and predictions as to the effect of the ‘‘court’s authority to review the decree
only inquires ‘‘into whether the proposed remedies’’); United States v. depends entirely on the government’s
government’s determination that the Archer-Daniels-Midland Co., 272 F. exercising its prosecutorial discretion by
proposed remedies will cure the Supp. 2d 1, 6 (D.D.C. 2003) (noting that bringing a case in the first place,’’ it
antitrust violations alleged in the the court should grant due respect to the follows that ‘‘the court is only
complaint was reasonable, and whether United States’ prediction as to the effect authorized to review the decree itself,’’
the mechanisms to enforce the final of proposed remedies, its perception of and not to ‘‘effectively redraft the
judgment are clear and manageable’’). the market structure, and its views of complaint’’ to inquire into other matters
Under the APPA, a court considers, that the United States did not pursue.
the nature of the case).
among other things, the relationship Courts have greater flexibility in Microsoft, 56 F.3d at 1459–60. As the
between the remedy secured and the approving proposed consent decrees United States District Court for the
specific allegations set forth in the than in crafting their own decrees District of Columbia confirmed in SBC
government’s complaint, whether the following a finding of liability in a Communications, courts ‘‘cannot look
decree is sufficiently clear, whether litigated matter. ‘‘[A] proposed decree beyond the complaint in making the
enforcement mechanisms are sufficient, must be approved even if it falls short public interest determination unless the
and whether the decree may positively of the remedy the court would impose complaint is drafted so narrowly as to
harm third parties. See Microsoft, 56 on its own, as long as it falls within the make a mockery of judicial power.’’ SBC
F.3d at 1458–62. With respect to the range of acceptability or is ‘within the Commc’ns, 489 F. Supp. 2d at 15.
adequacy of the relief secured by the reaches of public interest.’ ’’ United In its 2004 amendments, Congress
decree, a court may not ‘‘engage in an States v. Am. Tel. & Tel. Co., 552 F. made clear its intent to preserve the
unrestricted evaluation of what relief Supp. 131, 151 (D.D.C. 1982) (citations practical benefits of using consent
would best serve the public.’’ United omitted); see also U.S. Airways, 38 F. decrees in antitrust enforcement, adding
States v. BNS, Inc., 858 F.2d 456, 462 Supp. 3d at 75 (noting that room must the unambiguous instruction that
(9th Cir. 1988) (quoting United States v. be made for the government to grant ‘‘[n]othing in this section shall be
Bechtel Corp., 648 F.2d 660, 666 (9th concessions in the negotiation process construed to require the court to
Cir. 1981)); see also Microsoft, 56 F.3d for settlements) (citing Microsoft, 56 conduct an evidentiary hearing or to
at 1460–62; United States v. Alcoa, Inc., F.3d at 1461); United States v. Alcan require the court to permit anyone to
152 F. Supp. 2d 37, 40 (D.D.C. 2001); Aluminum Ltd., 605 F. Supp. 619, 622 intervene.’’ 15 U.S.C. § 16(e)(2); see also
InBev, 2009 U.S. Dist. LEXIS 84787, at (W.D. Ky. 1985) (approving the consent U.S. Airways, 38 F. Supp. 3d at 76
*3. One court explained: decree even though the court would (noting that a court is not required to
[t]he balancing of competing social and have imposed a greater remedy). To hold an evidentiary hearing or to permit
political interests affected by a proposed meet this standard, the United States intervenors as part of its review under
antitrust consent decree must be left, in the the Tunney Act). The language captured
first instance, to the discretion of the 2 Cf. BNS, 858 F.2d at 464 (holding that the Congress’s intent when it enacted the
Attorney General. The court’s role in court’s ‘‘ultimate authority under the [APPA] is Tunney Act in 1974. Senator Tunney
limited to approving or disapproving the consent explained: ‘‘The court is nowhere
daltland on DSKBBV9HB2PROD with NOTICES
1 The 2004 amendments substituted ‘‘shall’’ for decree’’); United States v. Gillette Co., 406 F. Supp.
‘‘may’’ in directing relevant factors for courts to 713, 716 (D. Mass. 1975) (noting that, in this way,
compelled to go to trial or to engage in
consider and amended the list of factors to focus on the court is constrained to ‘‘look at the overall extended proceedings which might have
competitive considerations and to address picture not hypercritically, nor with a microscope, the effect of vitiating the benefits of
potentially ambiguous judgment terms. Compare 15 but with an artist’s reducing glass’’). See generally prompt and less costly settlement
U.S.C. § 16(e) (2004), with 15 U.S.C. § 16(e)(1) Microsoft, 56 F.3d at 1461 (discussing whether ‘‘the
(2006); see also SBC Commc’ns, 489 F. Supp. 2d at remedies [obtained in the decree are] so
through the consent decree process.’’
11 (concluding that the 2004 amendments ‘‘effected inconsonant with the allegations charged as to fall 119 Cong. Rec. 24,598 (1973) (statement
minimal changes’’ to Tunney Act review). outside of the ‘reaches of the public interest’ ’’). of Sen. Tunney). Rather, the procedure
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![9760 Federal Register / Vol. 83, No. 45 / Wednesday, March 7, 2018 / Notices
for the public-interest determination is 450 Fifth St., NW, Washington, DC 20530, Please enclose a check or money order
left to the discretion of the court, with (202) 598–2849, Garrett.Liskey@usdoj.gov. for $4.25 (25 cents per page
the recognition that the court’s ‘‘scope [FR Doc. 2018–04593 Filed 3–6–18; 8:45 am] reproduction cost) payable to the United
of review remains sharply proscribed by BILLING CODE 4410–11–P States Treasury.
precedent and the nature of Tunney Act
Robert E. Maher, Jr.,
proceedings.’’ SBC Commc’ns, 489 F.
Supp. 2d at 11.3 A court can make its DEPARTMENT OF JUSTICE Assistant Section Chief, Environmental
Enforcement Section, Environment and
public-interest determination based on Natural Resources Division.
the competitive impact statement and Notice of Lodging of Proposed
Consent Decree Under the [FR Doc. 2018–04570 Filed 3–6–18; 8:45 am]
response to public comments alone.
U.S. Airways, 38 F. Supp. 3d at 76. Comprehensive Environmental BILLING CODE 4410–15–P
Response, Compensation and Liabiilty
VIII. DETERMINATIVE DOCUMENTS Act
NUCLEAR REGULATORY
There are no determinative materials On February 22, 2018, the Department COMMISSION
or documents within the meaning of the of Justice lodged a proposed Consent
APPA that were considered by the Decree with the United States District Advisory Committee on the Medical
United States in formulating the Court for the Southern District of New Uses of Isotopes Renewal Notice
proposed Final Judgment. York in a lawsuit entitled United States
v. Steel of West Virginia, Civil Action AGENCY: Nuclear Regulatory
Dated: February 27, 2018
Respectfully submitted, No. 18–1661. Commission.
FOR PLAINTIFF UNITED STATES OF In this action the United States seeks, ACTION: This notice is to announce the
AMERICA: as provided under the Comprehensive renewal of the Advisory Committee on
Peter Caplan (P–30643), Environmental Response, Compensation the Medical Uses of Isotopes (ACMUI)
Assistant United States Attorney, U.S. and Liability Act, recovery of response for a period of 2 years.
Attorney’s Office, Eastern District of costs from Steel of West Virginia
Michigan, 211 W. Fort Street, Suite 2001, regarding the Port Refinery Superfund SUPPLEMENTARY INFORMATION: The U.S.
Detroit, Michigan 48226, (313) 226–9784, Site (‘‘Site’’) in the Village of Rye Brook, Nuclear Regulatory Commission (NRC)
peter.caplan@usdoj.gov. New York. The proposed Consent has determined that the renewal of the
\s\Katrina Rouse Decree resolves the United States’ Charter for the Advisory Committee on
Katrina Rouse (D.C. Bar No. 1013035), claims and requires Steel of West the Medical Uses of Isotopes for the 2
Garrett Liskey, Virginia to pay $35,829 in year period commencing on March 1,
Andrew Robinson, reimbursement of the United States’ 2018, is in the public interest, in
Jill Maguire, past response costs regarding the Site. connection with duties imposed on the
Healthcare & Consumer Products Section, The publication of this notice opens Commission by law. This action is being
Antitrust Division, U.S. Department of a public comment period on the taken in accordance with the Federal
Justice, 450 Fifth St., NW, Washington, DC proposed Consent Decree. Comments Advisory Committee Act, after
20530, (415) 934–5346, Katrina.Rouse@ consultation with the Committee
should be addressed to the Assistant
usdoj.gov.
Attorney General, Environment and Management Secretariat, General
Certificate of Service Natural Resources Division, and should Services Administration.
I hereby certify that on February 27, 2018, refer to United States v. Steel of West The purpose of the ACMUI is to
I electronically filed the foregoing paper with Virginia, Civil Action No. 18–1661, D.J. provide advice to NRC on policy and
the Clerk of Court using the ECF system, Ref. 90–11–3–1142/4. All comments technical issues that arise in regulating
which will send notification of the filing to must be submitted no later than 30 days the medical use of byproduct material
the counsel of record for all parties for civil after the publication date of this notice. for diagnosis and therapy.
action 5:15-cv-12311–JEL–DRG, and I hereby Comments may be submitted either by Responsibilities include providing
certify that there are no individuals entitled email or by mail: guidance and comments on current and
to notice who are non-ECF participants. proposed NRC regulations and
\s\Garrett Liskey To submit regulatory guidance concerning medical
Send them to:
Garrett Liskey (D.C. Bar No. 1000937) comments: use; evaluating certain non-routine uses
Antitrust Division, Healthcare and Consumer of byproduct material for medical use;
Products Section, U.S. Department of Justice, By e-mail ...... pubcomment-ees.enrd@
usdoj.gov. and evaluating training and experience
By mail ......... Assistant Attorney General, of proposed authorized users. The
3 See United States v. Enova Corp., 107 F. Supp.
U.S. DOJ—ENRD, P.O. members are involved in preliminary
2d 10, 17 (D.D.C. 2000) (noting that the ‘‘Tunney
Act expressly allows the court to make its public Box 7611, Washington, DC discussions of major issues in
interest determination on the basis of the 20044–7611. determining the need for changes in
competitive impact statement and response to NRC policy and regulation to ensure the
comments alone’’); United States v. Mid-Am. During the public comment period, continued safe use of byproduct
Dairymen, Inc., No. 73-CV-681-W-1, 1977-1 Trade
Cas. (CCH) ¶ 61,508, at 71,980, *22 (W.D. Mo. 1977)
the Consent Decree may be examined material. Each member provides
(‘‘Absent a showing of corrupt failure of the and downloaded at this Justice technical assistance in his/her specific
government to discharge its duty, the Court, in Department website: http:// area(s) of expertise, particularly with
making its public interest finding, should . . . www.usdoj.gov/enrd/Consent_ respect to emerging technologies.
daltland on DSKBBV9HB2PROD with NOTICES
carefully consider the explanations of the
government in the competitive impact statement
Decrees.html. We will provide a paper Members also provide guidance as to
and its responses to comments in order to copy of the Consent Decree upon NRC’s role in relation to the
determine whether those explanations are written request and payment of responsibilities of other Federal
reasonable under the circumstances.’’); S. Rep. No. reproduction costs. Please email your agencies as well as of various
93-298, at 6 (1973) (‘‘Where the public interest can
be meaningfully evaluated simply on the basis of
request and payment to: Consent Decree professional organizations and boards.
briefs and oral arguments, that is the approach that Library, U.S. DOJ–ENRD, P.O. Box 7611, Members of this Committee have
should be utilized.’’). Washington, DC 20044–7611. demonstrated professional
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Document Created: 2018-03-07 01:27:27
Document Modified: 2018-03-07 01:27:27
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