United States v. Charleston Area Medical Center, Inc. and St. Mary's Medical Center, Inc.: Proposed Final Judgment and Competitive Impact Statement, 24636-24644 [2016-09728]
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Federal Register / Vol. 81, No. 80 / Tuesday, April 26, 2016 / Notices
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[FR Doc. 2016–09611 Filed 4–25–16; 8:45 am]
BILLING CODE 7020–02–P
DEPARTMENT OF JUSTICE
Patricia A. Brink
Director of Civil Enforcement.
Antitrust Division
UNITED STATES DISTRICT COURT
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United States v. Charleston Area
Medical Center, Inc. and St. Mary’s
Medical Center, Inc.: Proposed Final
Judgment and Competitive Impact
Statement
FOR THE SOUTHERN DISTRICT OF
WEST VIRGINIA
CHARLESTON DIVISION
Notice is hereby given pursuant to the
Antitrust Procedures and Penalties Act,
15 U.S.C. 16(b)–(h), that a proposed
Final Judgment, Stipulation, and
Competitive Impact Statement have
been filed with the United States
District Court for the Southern District
of West Virginia in United States of
America v. Charleston Area Medical
Center, Inc. and St. Mary’s Medical
Center, Inc., Civil Action No. 2:16–cv–
03664. On April 14, 2016, the United
States filed a Complaint alleging that
Charleston Area Medical Center, Inc.
4 Handbook for Electronic Filing Procedures:
https://www.usitc.gov/secretary/fed_reg_notices/
rules/handbook_on_electronic_filing.pdf.
5 Electronic Document Information System
(EDIS): https://edis.usitc.gov.
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22:08 Apr 25, 2016
Jkt 238001
and St. Mary’s Medical Center, Inc.
unlawfully agreed to allocate territories
for the marketing of competing
healthcare services and unlawfully
limited competition. The proposed
Final Judgment, filed at the same time
as the Complaint, enjoins Defendants
from limiting competition in this
manner and requires Defendants to
institute comprehensive antitrust
compliance programs to ensure that
Defendants do not establish similar
unlawful agreements and similar
limitations on competition in the future.
Copies of the Complaint, proposed
Final Judgment, and Competitive Impact
Statement are available for inspection
on the Antitrust Division’s Web site at
https://www.justice.gov/atr and at the
Office of the Clerk of the United States
District Court for the Southern District
of West Virginia. 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 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 Web
site, filed with the Court, and, under
certain circumstances, published in the
Federal Register. Comments should be
directed to Peter Mucchetti, Chief,
Litigation I, Antitrust Division,
Department of Justice, 450 Fifth Street
NW., Suite 4100, Washington, DC 20530
(telephone: 202–307–0001).
UNITED STATES OF AMERICA,
Plaintiff, v. CHARLESTON AREA
MEDICAL CENTER, INC. and ST.
MARY’S MEDICAL CENTER, INC.,
Defendants.
CASE NO.: 2:16–cv–03664
JUDGE: John T. Copenhaver, Jr.
FILED: 04/14/2016
COMPLAINT
The United States of America brings
this civil antitrust action to enjoin an
agreement by Charleston Area Medical
Center, Inc. (‘‘CAMC’’) and St. Mary’s
Medical Center, Inc. (‘‘St. Mary’s)
(collectively, ‘‘Defendants’’) that
unlawfully allocated territories for the
marketing of competing healthcare
services and limited competition
between the Defendants.
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NATURE OF THE ACTION
1. Defendants CAMC and St. Mary’s
are healthcare providers that operate
general acute-care hospitals in
Charleston, Kanawha County, West
Virginia, and Huntington, Cabell
County, West Virginia, respectively.
CAMC and St. Mary’s compete with
each other to provide healthcare
services. Marketing is a key component
of this competition and includes both
print and outdoor advertising, such as
newspaper advertisements and
billboards.
2. CAMC and St. Mary’s agreed to
limit marketing of competing healthcare
services. According to St. Mary’s
Director of Marketing, St. Mary’s ‘‘had
an agreement with CAMC that St.
Mary’s would not advertise on
billboards or in print in Kanawha
County and that CAMC would not
advertise on billboards or in print in
Cabell County.’’ He also testified that
‘‘the agreement between St. Mary’s and
CAMC is still in place today.’’
3. Defendants’ agreement has
disrupted the competitive process and
harmed patients and physicians. Among
other things, the agreement has
deprived patients of information they
otherwise would have had when making
important healthcare decisions and has
denied physicians working for the
Defendants the opportunity to advertise
their services to potential patients.
4. Defendants’ agreement is a naked
restraint of trade that is per se unlawful
under Section 1 of the Sherman Act, 15
U.S.C. 1.
JURISDICTION, VENUE, AND
INTERSTATE COMMERCE
5. The United States brings this action
pursuant to Section 4 of the Sherman
Act, 15 U.S.C. 4, to prevent and restrain
Defendants’ violations of Section 1 of
the Sherman Act, 15 U.S.C. 1.
6. This Court has subject matter
jurisdiction over this action under
Section 4 of the Sherman Act, 15 U.S.C.
4, and 28 U.S.C. 1331, 1337(a), 1345,
and 1367.
7. Venue is proper in the Southern
District of West Virginia, Charleston
Division, under 28 U.S.C. 1391 and
Section 12 of the Clayton Act, 15 U.S.C.
22. Each Defendant transacts business
within the Southern District of West
Virginia, and all Defendants reside in
the Southern District of West Virginia.
8. Defendants 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
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also purchase supplies and equipment
from out-of-state vendors that are
shipped across state lines.
DEFENDANTS AND THEIR
MARKETING
9. CAMC is a nonprofit West Virginia
corporation headquartered in
Charleston, Kanawha County, West
Virginia. It operates four general acutecare hospitals (CAMC General Hospital,
CAMC Memorial Hospital, CAMC
Women and Children’s Hospital, and
CAMC Teays Valley Hospital) with a
total of 908 beds and a medical staff of
over 120 employed physicians.
10. St. Mary’s is a nonprofit West
Virginia corporation headquartered in
Huntington, Cabell County, West
Virginia. It operates a general acute-care
hospital located in Cabell County with
393 beds and a medical staff of over 50
employed physicians. St. Mary’s also
serves as a teaching hospital for medical
students and residents from Marshall
University School of Medicine.
11. CAMC and St. Mary’s compete
with each other to provide hospital and
physician services to patients. Hospitals
compete through price, quality, and
other factors to sell their services to
patients, employers, and insurance
companies.
12. Marketing is an important tool
that hospitals use to compete for
patients, and this competition can lead
hospitals to invest in providing better
care and a broader range of services.
Hospitals use marketing to inform
patients about a hospital’s quality, scope
of services, and the expertise of its
physicians. An executive of each
Defendant testified at deposition that
marketing is an important strategy
through which hospitals seek to
increase patient volume and market
share.
13. Defendants’ marketing methods
include print advertisements, such as
newspaper advertisements, and outdoor
advertisements, such as billboards.
UNLAWFUL AGREEMENT BETWEEN
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ST. MARY’S AND CAMC
14. Since at least 2012, CAMC and St.
Mary’s have agreed to limit their
marketing for competing services.
CAMC agreed not to place print or
outdoor advertisements in Cabell
County, and St. Mary’s agreed not to
place print or outdoor advertisements in
Kanawha County. Defendants’
marketing departments have monitored
and enforced this agreement.
15. For example, in January 2012, a
CAMC urology group asked CAMC’s
marketing department to advertise its
physicians in The Herald Dispatch, a
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Cabell County newspaper. In response,
a CAMC marketing department
employee emailed the CAMC Director of
Marketing, noting that CAMC does not
typically advertise in The Herald
Dispatch because of its ‘‘ ‘gentleman’s
agreement’ ’’ with St. Mary’s. Consistent
with its agreement with St. Mary’s,
CAMC did not place the newspaper
advertisement.
16. In May 2013, St. Mary’s Director
of Marketing complained to CAMC’s
Director of Marketing after CAMC ran a
newspaper ad promoting a CAMC
physicians’ group in The Herald
Dispatch, and succeeded in getting
CAMC to agree to remove the
advertisement. In an email from St.
Mary’s Director of Marketing to other St.
Mary’s senior executives, he wrote, ‘‘I
talked with CAMC and they agreed this
ad violated our agreement not to
advertise in Charleston paper if they
didn’t advertise in Huntington paper.
Their director of marketing Says she
pulled the ad but was concerned it
might still run again one more time this
Sunday. I can’t call the HD [Herald
Dispatch] and make sure because they
could challenge this type of handshake
agreement That [sic] prevents them from
getting advertising dollars from a
different advertiser. We’ll see and I’ll
follow up from there but after Sunday
I am confident we won’t see CAMC
again in HD.’’ Consistent with its
agreement with St. Mary’s, and as
described by St. Mary’s Director of
Marketing, CAMC asked the Herald
Dispatch to remove the advertisement.
17. In June 2014, when a CAMCowned physicians’ group requested
marketing in Cabell County, a CAMC
marketing department employee
responded by telling the group’s
representative that CAMC does not
market specialist physicians in Cabell
County and St. Mary’s does not market
specialists in Kanawha County.
Consistent with its agreement with St.
Mary’s, CAMC refused to market that
physicians’ group in Cabell County.
18. In August 2014, when another
CAMC-owned physicians’ group
requested billboard advertising in Cabell
County, a CAMC marketing
representative wrote to CAMC’s Director
of Marketing, ‘‘They had asked for print
and billboard placement in Huntington.
I explained our informal agreement.
They understood.’’ CAMC’s Director of
Marketing replied, ‘‘Just watch the
county line my friend.’’ Consistent with
its agreement with St. Mary’s, CAMC
did not place print or billboard
advertising for the physician practice in
Cabell County.
19. The agreement between CAMC
and St. Mary’s has eliminated a
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significant form of competition to attract
patients by depriving patients in
Kanawha and Cabell Counties of
information regarding their healthcareprovider choices and physicians in
those counties the opportunity to
advertise their services to potential
patients.
NO PROCOMPETITIVE
JUSTIFICATIONS
20. The Defendants’ anticompetitive
agreement is not reasonably necessary to
further any procompetitive purpose.
VIOLATION ALLEGED
Violation of Section 1 of the Sherman
Act
21. The United States incorporates
paragraphs 1 through 20.
22. CAMC and St. Mary’s compete to
provide healthcare services. Defendants’
agreement is facially anticompetitive
because it limits competition between
the Defendants by allocating territories
for the marketing of competing
healthcare services. As a result, the
agreement eliminates a significant form
of competition to attract patients.
23. The agreement constitutes an
unreasonable restraint of trade that is
per se illegal under Section 1 of the
Sherman Act, 15 U.S.C. 1. No elaborate
analysis is required to demonstrate the
anticompetitive effect of this agreement.
REQUESTED RELIEF
The United States requests that the
Court:
(A) judge that Defendants’ agreement
limiting competition constitutes an
illegal restraint of interstate trade in
violation of Section 1 of the Sherman
Act, 15 U.S.C. 1;
(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, unless such
communication: is related to the
legitimate joint provision of services; is
part of normal due diligence relating to
a merger, acquisition, joint venture,
investment, or divestiture; or is related
to claims or statements made in a
Defendant’s Marketing that the other
Defendant believes are false or
misleading;
(D) require Defendants to institute a
comprehensive antitrust compliance
program to ensure that Defendants do
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not enter into or attempt to enter into
any similar agreements and that
Defendants’ members, officers, agents,
and employees are fully informed of the
application of the antitrust laws to the
Defendants’ businesses; and
(E) award Plaintiff its costs in this
action and such other relief as may be
just and proper.
Dated: April 14, 2016
Respectfully Submitted,
For Plaintiff United States of America:
WILLIAM J. BAER,
Assistant Attorney General for Antitrust
DAVID I. GELFAND,
Deputy Assistant Attorney General
PATRICIA A. BRINK,
Director of Civil Enforcement
PETER J. MUCCHETTI,
Chief, Litigation I
RYAN M. KANTOR,
Assistant Chief, Litigation I
MICHELLE R. SELTZER,
Assistant Chief, Litigation I
CAROL A. CASTO,
Acting United States Attorney for the
Southern District of West Virginia
Matthew Lindsay,
Assistant United States Attorney, Robert C.
Byrd U.S. Courthouse, Suite 4000, 300
Virginia Street, Charleston, WV 25301, Tel.
No. 304–340–2338, Matthew.Lindsay@
usdoj.gov
KATHLEEN KIERNAN,*
BARRY L. CREECH,
JOHN LOHRER,
GLENN HARRISON,
Attorneys for the United States Antitrust
Division, U.S. Department of Justice,
450 Fifth Street, N.W., Suite 4100,
Washington, D.C. 20530 (202) 353–3100
(phone), (202) 307–5802 (fax),
Kathleen.kiernan@usdoj.gov
Attorneys for the United States
* Attorney of Record
UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF
WEST VIRGINIA
II. DESCRIPTION OF THE EVENTS
GIVING RISE TO THE ALLEGED
VIOLATIONS VIOLATIONS
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CHARLESTON DIVISION
UNITED STATES OF AMERICA,
Plaintiff, v. CHARLESTON AREA
MEDICAL CENTER, INC. and ST.
MARY’S MEDICAL CENTER, INC.,
Defendants.
CASE NO.: 2:16–cv–03664
JUDGE: John T. Copenhaver, Jr.
FILED: 04/14/2016
COMPETITIVE IMPACT STATEMENT
Plaintiff United States of America,
pursuant to Section 2(b) of the Antitrust
Procedures and Penalties Act (‘‘APPA’’
or ‘‘Tunney Act’’), 15 U.S.C. 16(b)–(h),
files this Competitive Impact Statement
relating to the proposed Final Judgment
submitted for entry in this civil antitrust
proceeding.
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I. NATURE AND PURPOSE OF THE
PROCEEDING
On April 14, 2016, the United States
filed a civil antitrust Complaint alleging
that Defendants Charleston Area
Medical Center (‘‘CAMC’’) and St.
Mary’s Medical Center (‘‘St. Mary’s’’)
violated Section 1 of the Sherman Act,
15 U.S.C. 1. The Complaint alleges that
CAMC and St. Mary’s agreed to
unlawfully allocate territories for the
marketing of competing healthcare
services and to limit competition
between themselves. Specifically,
according to the Complaint, CAMC and
St. Mary’s entered into an agreement
under which they agreed not to
advertise on billboards or in print in
each others’ home counties in West
Virginia. The agreement eliminated a
significant form of competition to attract
patients and overall substantially
diminished competition to provide
healthcare services. Defendants’
agreement to allocate territories for
marketing is per se illegal under Section
1 of the Sherman Act, 15 U.S.C. 1.
With the Complaint, the United States
filed a Stipulation and proposed Final
Judgment that, as explained more fully
below, enjoins Defendants from (1)
agreeing with any healthcare provider to
prohibit or limit marketing or to allocate
any service, customer, or geographic
market or territory, and (2)
communicating with each other about
marketing, subject to narrow exceptions.
The United States and the Defendants
have stipulated that the proposed Final
Judgment may be entered after
compliance with 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.
A. Background on Defendants and Their
Marketing Activities
Defendants CAMC and St. Mary’s are
healthcare providers that operate
general acute-care hospitals in
Charleston, Kanawha County, West
Virginia, and Huntington, Cabell
County, West Virginia, respectively.
CAMC and St. Mary’s compete with
each other to provide hospital and
physician services to patients. Hospitals
compete through price, quality, and
other factors to sell their services to
patients, employers, and insurance
companies.
Marketing is an important tool that
hospitals use to compete for patients.
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Fmt 4703
Sfmt 4703
Hospitals use marketing to inform
patients about a hospital’s quality, scope
of services, and the expertise of its
physicians. Defendants’ marketing
methods include print advertisements,
such as newspaper advertisements, and
outdoor advertisements, such as
billboards. Healthcare provider
advertisements on billboards and
newspapers helps enable patients to
make more informed healthcare choices,
including choosing healthcare providers
that offer higher quality care and more
convenient services. Advertising also
spurs competition for patients, which
can lead hospitals to invest in providing
better care and a broader range of
services.
B. Defendants’ Unlawful Agreement to
Limit Marketing
Since at least 2012, CAMC and St.
Mary’s have agreed to limit their
marketing for competing services.
CAMC agreed not to place print or
outdoor advertisements in Cabell
County, and St. Mary’s agreed not to
place print or outdoor advertisements in
Kanawha County. Defendants’
marketing departments have monitored
and enforced this agreement.
Defendants’ documents show the impact
of this agreement on the Defendants’
marketing.
In January 2012, a CAMC urology
group asked CAMC’s marketing
department to advertise its physicians
in The Herald Dispatch, a Cabell County
newspaper. In response, a CAMC
marketing department employee
emailed the CAMC Director of
Marketing, noting that CAMC does not
typically advertise in The Herald
Dispatch because of its ‘‘‘gentleman’s
agreement’’’ with St. Mary’s. Consistent
with its agreement with St. Mary’s,
CAMC did not place the newspaper
advertisement.
In May 2013, St. Mary’s Director of
Marketing complained to CAMC’s
Director of Marketing after CAMC ran a
newspaper ad promoting a CAMC
physicians’ group in The Herald
Dispatch, and succeeded in getting
CAMC to agree to remove the
advertisement. In an email from St.
Mary’s Director of Marketing to other St.
Mary’s senior executives, he wrote, ‘‘I
talked with CAMC and they agreed this
ad violated our agreement not to
advertise in Charleston paper if they
didn’t advertise in Huntington paper.
Their director of marketing Says she
pulled the ad but was concerned it
might still run again one more time this
Sunday. I can’t call the HD [Herald
Dispatch] and make sure because they
could challenge this type of handshake
agreement That [sic] prevents them from
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getting advertising dollars from a
different advertiser. We’ll see and I’ll
follow up from there but after Sunday
I am confident we won’t see CAMC
again in HD.’’ Consistent with its
agreement with St. Mary’s, and as
described by St. Mary’s Director of
Marketing, CAMC asked the Herald
Dispatch to remove the advertisement.
In June 2014, when a CAMC-owned
physicians’ group requested marketing
in Cabell County, a CAMC marketing
department employee responded by
telling the group’s representative that
CAMC does not market specialist
physicians in Cabell County and St.
Mary’s does not market specialists in
Kanawha County. Consistent with its
agreement with St. Mary’s, CAMC
refused to market that physicians’ group
in Cabell County.
In August 2014, when another CAMCowned physicians’ group requested
billboard advertising in Cabell County,
a CAMC marketing representative wrote
to CAMC’s Director of Marketing, ‘‘They
had asked for print and billboard
placement in Huntington. I explained
our informal agreement. They
understood.’’ CAMC’s Director of
Marketing replied, ‘‘Just watch the
county line my friend.’’ Consistent with
its agreement with St. Mary’s, CAMC
did not place print or billboard
advertising for the physician practice in
Cabell County.
Defendants’ anticompetitive
agreement is not reasonably necessary to
further any procompetitive purpose.
Defendants’ agreement allocates
territories for marketing and constitutes
a naked restraint of trade that is per se
unlawful under Section 1 of the
Sherman Act, 15 U.S.C. 1. 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’’).
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III. EXPLANATION OF THE
PROPOSED FINAL JUDGMENT
The proposed Final Judgment will
prevent the continuation and recurrence
of the violations alleged in the
Complaint and restore the competition
restrained by Defendants’
anticompetitive agreement. Section VIII
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, Defendants cannot
agree with any healthcare provider to
prohibit or limit marketing or to allocate
any service, customer, or geographic
market or territory, unless such
agreement is reasonably necessary to
further a procompetitive purpose
concerning the joint provision of
services. The joint provision of services
is any past, present, or future
coordinated delivery of any healthcare
services by two or more healthcare
providers. Defendants also are
prohibited from communicating with
each other about any Defendant’s
marketing, subject to three narrow
exceptions. There is an exception for
communication about joint marketing if
the communication is related to the
joint provision of services. In addition,
there are exceptions for
communications about marketing that
are part of customary due diligence
relating to a merger, acquisition, joint
venture, investment, or divestiture, and
communications about false or
misleading statements made in a
Defendant’s marketing.
These prohibited conduct provisions
will restore the competition lost as a
result of CAMC’s and St. Mary’s
unlawful agreement to allocate
territories for the marketing of
competing healthcare services.
B. Compliance and Inspection
The proposed Final Judgment sets
forth various provisions to ensure
Defendants’ compliance with the
proposed Final Judgment. Section V of
the proposed Final Judgment requires
each Defendant to appoint an Antitrust
Compliance Officer within 30 days of
the Final Judgment’s entry. The
Antitrust Compliance Officer must
furnish copies of this Competitive
Impact Statement, the Final Judgment,
and an approved notice explaining the
obligations of the Final Judgment to
each Defendant’s officers, directors, and
marketing managers, and to any person
who succeeds to any such position. The
Antitrust Compliance Officer must also
obtain from each recipient a
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24639
certification that he or she has read and
agreed to abide by the terms of the Final
Judgment, and must maintain a record
of all certifications received. Recipients
must also certify that they are not aware
of any violation of the Final Judgment.
Additionally, each Antitrust
Compliance Officer shall annually brief
each person required to receive a copy
of the Final Judgment and this
Competitive Impact Statement on the
meaning and requirements of the Final
Judgment and the antitrust laws. Each
Antitrust Compliance Officer shall also
annually communicate to all employees
that any employee may disclose,
without reprisal, information
concerning any potential violation of
the Final Judgment or the antitrust laws.
For a period of five years following
the date of entry of the Final Judgment,
the Defendants separately must certify
annually to the United States that they
have complied with the provisions of
the Final Judgment. Additionally, upon
learning of any violation or potential
violation of the terms and conditions of
the Final Judgment, Defendants must
within thirty days file with the United
States a statement describing the
violation or potential violation, and
must promptly take action to terminate
or modify the activity in order to
comply with the Final Judgment.
To facilitate monitoring of the
Defendants’ compliance with the Final
Judgment, Section VI of the proposed
Final Judgment requires each Defendant
to grant the United States access, upon
reasonable notice, to Defendant’s
records and documents relating to
matters contained in the Final
Judgment. Defendants must also make
their employees available for interviews
or depositions and answer
interrogatories and prepare written
reports relating to matters contained in
the Final Judgment upon request.
These provisions are designed to
prevent recurrence of the type of illegal
conduct alleged in the Complaint.
IV. REMEDIES AVAILABLE TO
POTENTIAL PRIVATE LITIGANTS
Section 4 of the Clayton Act, 15
U.S.C. 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. 16(a), the proposed Final
Judgment has no prima facie effect in
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any subsequent private lawsuit that may
be brought against the Defendants.
V. PROCEDURES AVAILABLE FOR
MODIFICATION OF THE PROPOSED
FINAL JUDGMENT
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The United States and the Defendants
have stipulated that the proposed Final
Judgment may be entered by the Court
after compliance with the provisions of
the APPA, provided that the United
States has not withdrawn its consent.
The APPA 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, which remains free to withdraw
its consent to the proposed Final
Judgment at any time prior to the
Court’s entry of judgment. 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
Web site and, under certain
circumstances, published in the Federal
Register.
Written comments should be
submitted to:
Peter J. Mucchetti
Chief, Litigation I Section
Antitrust Division
United States Department of Justice
450 Fifth Street, NW., Suite 4100
Washington, DC 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 the Defendants. The United
States is satisfied, however, that the
relief proposed in the Final Judgment
will prevent the recurrence of the
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violation alleged in the Complaint and
ensure that patients and physicians
benefit from competition between the
Defendants. 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 APA 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 sixtyday comment period, after which the
court shall determine whether entry of
the proposed Final Judgment ‘‘is in the
public interest.’’ 15 U.S.C. 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 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. 16(e)(1)(A) & (B). In
considering these statutory factors, the
court’s inquiry is necessarily a limited
one, because 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 over 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
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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
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
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. 16(e) (2004), with 15 U.S.C. 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).
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’’’).
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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).
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
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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 a
court 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. 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
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
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.’’).
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response to public comments alone.
U.S. Airways, 38 F. Supp. 3d at 76.
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: April 14, 2016
Respectfully submitted,
For PlaintiffUnited States of America
Kathleen Kiernan,
Trial Attorney, Antitrust Division, U.S.
Department of Justice, Litigation I Section,
450 Fifth Street NW., Suite 4100,
Washington, DC 20530, Phone: (202) 353–
3100, DC Bar # 1003748, Email:
Kathleen.Kiernan@usdoj.gov
CAROL A. CASTO,
Acting United States Attorney for the
Southern District of West Virginia
Matthew Lindsay,
Assistant United States Attorney, Robert C.
Byrd U.S. Courthouse, Suite 4000, 300
Virginia Street, Charleston, WV 25301, Tel.
No. 304–340–2338, Matthew.Lindsay@
usdoj.gov
CERTIFICATE OF SERVICE
I hereby certify that on April 14, 2016,
I electronically filed the foregoing paper
with the Clerk of the Court using the
ECF system and sent it via email to the
following counsel at the email addresses
below.
Counsel for Defendant Charleston
Area Medical Center, Inc.:
Robert W. McCann
Drinker Biddle & Reath LLP
Robert.McCann@dbr.com
Counsel for Defendant St. Mary’s
Medical Center, Inc.:
David Simon
Foley & Lardner LLP
DSimon@foley.com
Kathleen Kiernan,
Trial Attorney, Antitrust Division, U.S.
Department of Justice, Litigation I Section,
450 Fifth Street NW., Suite 4100,
Washington, DC 20530, Phone: (202) 353–
3100, DC Bar # 1003748, Email:
Kathleen.Kiernan@usdoj.gov
UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF
WEST VIRGINIA
CHARLESTON DIVISION
UNITED STATES OF AMERICA,
Plaintiff, v. CHARLESTON AREA
MEDICAL CENTER, INC. and ST.
MARY’S MEDICAL CENTER, INC.,
Defendants.
CASE NO.: 2:16–cv–03664
JUDGE: John T. Copenhaver, Jr.
FILED: 04/14/2016
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[PROPOSED] FINAL JUDGMENT
Whereas, Plaintiff the United States of
America filed its Complaint on April 14,
2016, alleging that Defendants violated
Section 1 of the Sherman Act, 15 U.S.C.
§ 1;
And whereas, Plaintiff and
Defendants Charleston Area Medical
Center, Inc. and St. Mary’s Medical
Center, Inc., 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, Plaintiff requires the
Defendants to agree to undertake certain
actions and refrain from certain conduct
for the purpose of remedying the
anticompetitive effects alleged in the
Complaint;
Now therefore, before any testimony
is taken, without this Final Judgment
constituting any evidence against or
admission by Defendants regarding any
issue of fact or law, and upon consent
of the parties to this action, it is ordered,
adjudged, and decreed:
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I. JURISDICTION
This Court has jurisdiction over the
subject matter of and each of the parties
to this action. The Complaint states a
claim upon which relief may be granted
against the Defendants under Section 1
of the Sherman Act, 15 U.S.C. § 1.
II. DEFINITIONS
As used in this Final Judgment:
(A) ‘‘Agreement’’ means any contract,
arrangement, or understanding, formal
or informal, oral or written, between
two or more persons.
(B) ‘‘CAMC’’ means Defendant
Charleston Area Medical Center, Inc., a
nonprofit hospital system organized and
existing under the laws of West Virginia
with its headquarters in Charleston,
West Virginia, its successors and
assigns, and its controlled subsidiaries,
divisions, groups, affiliates,
partnerships, and joint ventures, and
their respective directors, officers,
managers, agents, and employees.
(C) ‘‘Communicate’’ means to discuss,
disclose, transfer, disseminate, or
exchange information or opinion,
formally or informally, directly or
indirectly, in any manner.
(D) ‘‘Joint Provision of Services’’
means any past, present, or future joint
health education campaign or
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.
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(E) ‘‘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.
(F) ‘‘Marketing Manager’’ means any
company employee or manager with
management responsibility for or
oversight of Marketing.
(G) ‘‘Person’’ means any natural
person, corporation, firm, company, sole
proprietorship, partnership, joint
venture, association, institute,
governmental unit, or other legal entity.
(H) ‘‘Provider’’ means any health care
professional or group of professionals
and any inpatient or outpatient medical
facility including hospitals, ambulatory
surgical centers, urgent care facilities,
and nursing facilities. A health
insurance plan, health maintenance
organization, or other third party payor
of health care services, acting in that
capacity, is not a ‘‘Provider.’’
(I) ‘‘Relevant Area’’ means the state of
West Virginia; Boyd County, Kentucky;
and Lawrence County, Ohio.
(J) ‘‘St. Mary’s’’ means Defendant St.
Mary’s Medical Center, Inc., a nonprofit
hospital organized and existing under
the laws of West Virginia with its
headquarters in Huntington, West
Virginia, its successors and assigns, and
its controlled subsidiaries, divisions,
groups, affiliates, partnerships, and joint
ventures, and their respective directors,
officers, managers, agents, and
employees.
III. APPLICABILITY
This Final Judgment applies to the
Defendants, and all other persons in
active concert or participation with any
of them who receive actual notice of this
Final Judgment by personal service or
otherwise.
IV. PROHIBITED CONDUCT
(A) Each Defendant 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 the Defendant and any other
Provider, unless such Agreement is
reasonably necessary to further a
procompetitive purpose concerning the
Joint Provision of Services.
(B) Each Defendant shall not
communicate with the other Defendant
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about any Defendant’s Marketing,
except each Defendant may:
(1) communicate with the other
Defendant about joint Marketing if the
communication is related to the Joint
Provision of Services;
(2) communicate with the other
Defendant about Marketing if the
communication is part of customary due
diligence relating to a merger,
acquisition, joint venture, investment,
or divestiture; or
(3) communicate with the other
Defendant about claims or statements
made in the other Defendant’s
Marketing that the Defendant believes
are false or misleading, or to respond to
such communications from the other
Defendant.
V. REQUIRED CONDUCT
(A) Within 30 days of entry of this
Final Judgment, each Defendant shall
appoint, subject to the approval of the
United States, an Antitrust Compliance
Officer. In the event such person is
unable to perform his or her duties, each
Defendant shall appoint, subject to the
approval of the United States, a
replacement within ten (10) working
days.
(B) Each Defendant’s Antitrust
Compliance Officer shall:
(1) furnish a copy of this Final
Judgment, the Competitive Impact
Statement, and a cover letter that is
identical in content to Exhibit 1 within
60 days of entry of the Final Judgment
to that Defendant’s officers, directors,
and Marketing Managers, and to any
person who succeeds to any such
position, within 30 days of that
succession;
(2) annually brief each person
designated in Section V(B)(1) on the
meaning and requirements of this Final
Judgment and the antitrust laws;
(3) obtain from each person
designated in Section V(B)(1), within 60
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 the Defendant; 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
each Defendant and/or any person who
violates this Final Judgment;
(4) maintain a record of certifications
obtained pursuant to this Section; and
(5) annually communicate to all of the
Defendant’s employees that they may
disclose to the Antitrust Compliance
Officer, without reprisal, information
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concerning any potential violation of
this Final Judgment or the antitrust
laws.
(C) Each Defendant shall:
(1) upon learning of any violation or
potential violation of any of the terms
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) file with the United States a
statement describing any violation or
potential violation within 30 days of a
violation or potential violation
becoming known. Descriptions of
violations or potential violations of this
Final Judgment shall include, to the
extent practicable, a description of any
communications 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 the United States
annually on the anniversary date of the
entry of this Final Judgment that the
Defendant has complied with all of the
provisions of this Final Judgment.
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VI. COMPLIANCE INSPECTION
(A) For the purposes of determining
or securing compliance with this Final
Judgment, or of any related orders, 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, 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, and on
reasonable notice to Defendants, be
permitted:
(1) access during Defendants’ office
hours to inspect and copy, or at the
option of the United States, to require
Defendants to provide hard copy or
electronic copies of, all books, ledgers,
accounts, records, data, and documents
in the possession, custody, or control of
Defendants, relating to any matters
contained in this Final Judgment; and
(2) to interview, either informally or
on the record, Defendants’ 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
Defendants.
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(B) Upon the written request of an
authorized representative of the
Assistant Attorney General in charge of
the Antitrust Division, Defendants 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 to any person other than an
authorized representative of the
executive branch of the United States,
except in the course of legal proceedings
to which the United States 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 Defendants
to the United States, Defendants
represent and identify 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 Defendants mark 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
shall give Defendants ten calendar days
notice prior to divulging such material
in any legal proceeding (other than a
grand jury proceeding).
VII. RETENTION OF JURISDICTION
This Court retains jurisdiction to
enable any party to this Final Judgment
to apply to this Court at any time 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.
VIII. EXPIRATION OF FINAL
JUDGMENT
Unless this Court grants an extension,
this Final Judgment shall expire five
years from the date of its entry.
IX. NOTICE
For purposes of this Final Judgment,
any notice or other communication
required to be filed with or provided to
the United States shall be sent to the
person at the addresses set forth below
(or such other address as the United
States may specify in writing to any
Defendant):
Chief
Litigation I Section
U.S. Department of Justice
Antitrust Division
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450 Fifth Street, Suite 4100
Washington, DC 20530
X. PUBLIC INTEREST
DETERMINATION
The parties have complied with the
requirements of the Antitrust
Procedures and Penalties Act, 15 U.S.C.
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: lllllllllllllll
Court approval subject to procedures of
Antitrust Procedures and Penalties Act,
15 U.S.C. § 16
llllllllllllllllll
l
Hon. Dwane L. Tinsley
United States Magistrate Judge
Exhibit 1
[Letterhead of Defendant]
[Name and Address of Antitrust
Compliance Officer]
Dear [XX]:
I am providing you this letter to make
sure you know about a court order
recently entered by a federal judge in
Charleston, West Virginia. This order
applies to [Defendant] and all of its
employees, including you, so it is
important that you understand the
obligations it imposes on us. [CEO
Name] has asked me to let each of you
know that s/he expects you to take these
obligations seriously and abide by them.
Under the order, we are prohibited
from agreeing with other healthcare
providers (including hospitals and
physicians) to limit marketing or to
divide any services, customers, or
geographic markets or territories
between us and other healthcare
providers. This means you may not
promise, tell, agree with, or give any
assurance to another healthcare
provider that [Defendant] will refrain
from marketing our services to any
customer or in any particular geographic
area, and you may not ask for any
promise, agreement, or assurance from
them that they will refrain from
marketing their services to any customer
or in any particular geographic area. In
addition, you may not communicate
with [other Defendant] or its employees
about our marketing plans or their
marketing plans. (While there are a few
limited exceptions to this rule, such as
discussing joint projects, you must
check with me before you communicate
E:\FR\FM\26APN1.SGM
26APN1
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Federal Register / Vol. 81, No. 80 / Tuesday, April 26, 2016 / Notices
with anyone from [other Defendant]
about marketing plans.)
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,
[Defendant’s Antitrust Compliance Officer]
[FR Doc. 2016–09728 Filed 4–25–16; 8:45 am]
Consent Decree. Comments should be
addressed to the Assistant Attorney
General, Environment and Natural
Resources Division, and should refer to
United States and State of South Dakota
v. CoCa Mines, Inc. and Thomas E.
Congdon, D.J. Ref. No. 90–11–3–11179.
All comments must be submitted no
later than thirty (30) days after the
publication date of this Notice.
Comments may be submitted either by
email or by mail:
To submit
comments:
Send them to:
By e-mail .......
BILLING CODE P
pubcomment-ees.enrd@
usdoj.gov.
Assistant Attorney General,
U.S. DOJ—ENRD, P.O.
Box 7611, Washington,
DC 20044–7611.
DEPARTMENT OF JUSTICE
By mail ...........
mstockstill on DSK4VPTVN1PROD with NOTICES
Notice of Lodging of Proposed
Consent Decree Under the
Comprehensive Environmental
Response, Compensation, and Liability
Act
On April 15, 2016, the Department of
Justice lodged a proposed Consent
Decree with the United States District
Court for the District of South Dakota,
Western Division in the lawsuit entitled
United States and State of South Dakota
v. CoCa Mines, Inc. and Thomas E.
Congdon, Civil Action No. 5:16–cv–
05022–JLV.
This case was brought under Sections
107(a) and 113(g)(2) of the
Comprehensive Environmental
Response, Compensation, and Liability
Act (‘‘CERCLA’’), 42 U.S.C. 9607(a) and
9613(g)(2), for the recovery of response
costs related to the cleanup at the Gilt
Edge Mine Site (‘‘Site’’) in Lawrence
County, South Dakota.
The United States and the State of
South Dakota filed a Complaint in this
case on April 14, 2016 alleging that the
Defendants are jointly and severally
liable for response costs related to the
cleanup at the Site. 42 U.S.C. 9607(a)
and 9613(g)(2). The Complaint requests
recovery of costs that the United States
and the State incurred responding to
releases of hazardous substances at the
Site near Lead, South Dakota. Both
Defendants signed the Consent Decree
and will pay a combined $10.3 million
in cash, with CoCa Mines paying up to
an additional $700,000 in future
insurance recovery. The money will be
used to help pay for response costs
related to the cleanup at the Site. In
return, the United States and the State
of South Dakota agree not to sue the
Defendants under Sections 106 and 107
of CERCLA, 42 U.S.C. 9606 and 9607.
The Consent Decree would resolve the
claims against the Defendants as
described in the Complaint.
The publication of this Notice opens
a period for public comment on the
VerDate Sep<11>2014
22:08 Apr 25, 2016
Jkt 238001
During the public comment period,
the Consent Decree may be examined
and downloaded at this Justice
Department Web site: https://
www.justice.gov/enrd/consent-decrees.
We will provide a paper copy of the
Consent Decree upon written request
and payment of reproduction costs.
Please mail your request and payment
to: Consent Decree Library, U.S. DOJ—
ENRD, P.O. Box 7611, Washington, DC
20044–7611.
Please enclose a check or money order
for $8.25 (25 cents per page
reproduction cost) payable to the United
States Treasury.
Jeffrey K. Sands,
Assistant Section Chief, Environmental
Enforcement Section, Environment and
Natural Resources Division.
Mines, Inc. will pay $5.4 million to the
U.S. Environmental Protection Agency
(‘‘EPA’’) and $600,000 to the Colorado
Department of Public Health and
Environment (‘‘CDPHE’’) for response
costs incurred and to be incurred at the
Site. The settlement extends a covenant
not to sue under Sections 106 and 107
of CERCLA, 42 U.S.C. 9606 and 9607, to
the Settling Defendant, CoCa Mines,
Inc., and to the Settling Defendant’s
Related Parties a term defined, subject
to specific limitations, to include Hecla
Limited and Creede Resources, Inc. The
settlement further extends, subject to
specific limitations, to Settling
Defendant’s successors and assigns, and
to the officers, directors, and employees
of Settling Defendant and Settling
Defendant’s Related Parties.
The publication of this notice opens
a period for public comment on the
Consent Decree. Comments should be
addressed to the Assistant Attorney
General, Environment and Natural
Resources Division, and should refer to
United States and State of Colorado v.
CoCa Mines, Inc., D.J. Ref. No. 90–11–
3–10841. All comments must be
submitted no later than thirty (30) days
after the publication date of this notice.
Comments may be submitted either by
email or by mail:
To submit
comments:
Send them to:
By e-mail .......
pubcomment-ees.enrd@
usdoj.gov.
Assistant Attorney General,
U.S. DOJ—ENRD, P.O.
Box 7611, Washington,
D.C. 20044–7611.
By mail ...........
[FR Doc. 2016–09565 Filed 4–25–16; 8:45 am]
BILLING CODE 4410–15–P
DEPARTMENT OF JUSTICE
Notice of Lodging of Proposed
Consent Decree Under the
Comprehensive Environmental
Response, Compensation, and Liability
Act
On April 14, 2016, the Department of
Justice lodged a proposed Consent
Decree with the United States District
Court for the District of Colorado in the
lawsuit entitled United States and State
of Colorado v. CoCa Mines, Inc., Civil
Action No. 1:16–cv–00847WJM.
The case concerns the Nelson Tunnel/
Commodore Waste Rock Pile Superfund
Site (‘‘Site’’) located near Creede,
Colorado, and the potential liability of
CoCa Mines, Inc. under Section 107(a)
of CERCLA, 42 U.S.C. 9607(a), as a past
owner or operator at the Site from 1973
to 1993. Under the settlement CoCa
PO 00000
Frm 00091
Fmt 4703
Sfmt 9990
During the public comment period,
the Consent Decree may be examined
and downloaded at this Justice
Department Web site: https://
www.justice.gov/enrd/consent-decrees.
We will provide a paper copy of the
Consent Decree upon written request
and payment of reproduction costs.
Please mail your request and payment
to:
Consent Decree Library, U.S. DOJ—
ENRD, P.O. Box 7611, Washington,
DC 20044–7611.
Please enclose a check or money order
for $6.75 (25 cents per page
reproduction cost) payable to the United
States Treasury for a copy of the
Consent Decree.
Jeffrey K. Sands,
Assistant Section Chief, Environmental
Enforcement Section, Environment and
Natural Resources Division.
[FR Doc. 2016–09564 Filed 4–25–16; 8:45 am]
BILLING CODE 4410–15–P
E:\FR\FM\26APN1.SGM
26APN1
]]>Agencies
[Federal Register Volume 81, Number 80 (Tuesday, April 26, 2016)]
[Notices]
[Pages 24636-24644]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-09728]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF JUSTICE
Antitrust Division
United States v. Charleston Area Medical Center, Inc. and St.
Mary's Medical Center, Inc.: 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,
Stipulation, and Competitive Impact Statement have been filed with the
United States District Court for the Southern District of West Virginia
in United States of America v. Charleston Area Medical Center, Inc. and
St. Mary's Medical Center, Inc., Civil Action No. 2:16-cv-03664. On
April 14, 2016, the United States filed a Complaint alleging that
Charleston Area Medical Center, Inc. and St. Mary's Medical Center,
Inc. unlawfully agreed to allocate territories for the marketing of
competing healthcare services and unlawfully limited competition. The
proposed Final Judgment, filed at the same time as the Complaint,
enjoins Defendants from limiting competition in this manner and
requires Defendants to institute comprehensive antitrust compliance
programs to ensure that Defendants do not establish similar unlawful
agreements and similar limitations on competition in the future.
Copies of the Complaint, proposed Final Judgment, and Competitive
Impact Statement are available for inspection on the Antitrust
Division's Web site at https://www.justice.gov/atr and at the Office of
the Clerk of the United States District Court for the Southern District
of West Virginia. 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 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 Web site,
filed with the Court, and, under certain circumstances, published in
the Federal Register. Comments should be directed to Peter Mucchetti,
Chief, Litigation I, 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 SOUTHERN DISTRICT OF WEST VIRGINIA
CHARLESTON DIVISION
UNITED STATES OF AMERICA, Plaintiff, v. CHARLESTON AREA MEDICAL
CENTER, INC. and ST. MARY'S MEDICAL CENTER, INC., Defendants.
CASE NO.: 2:16-cv-03664
JUDGE: John T. Copenhaver, Jr.
FILED: 04/14/2016
COMPLAINT
The United States of America brings this civil antitrust action to
enjoin an agreement by Charleston Area Medical Center, Inc. (``CAMC'')
and St. Mary's Medical Center, Inc. (``St. Mary's) (collectively,
``Defendants'') that unlawfully allocated territories for the marketing
of competing healthcare services and limited competition between the
Defendants.
NATURE OF THE ACTION
1. Defendants CAMC and St. Mary's are healthcare providers that
operate general acute-care hospitals in Charleston, Kanawha County,
West Virginia, and Huntington, Cabell County, West Virginia,
respectively. CAMC and St. Mary's compete with each other to provide
healthcare services. Marketing is a key component of this competition
and includes both print and outdoor advertising, such as newspaper
advertisements and billboards.
2. CAMC and St. Mary's agreed to limit marketing of competing
healthcare services. According to St. Mary's Director of Marketing, St.
Mary's ``had an agreement with CAMC that St. Mary's would not advertise
on billboards or in print in Kanawha County and that CAMC would not
advertise on billboards or in print in Cabell County.'' He also
testified that ``the agreement between St. Mary's and CAMC is still in
place today.''
3. Defendants' agreement has disrupted the competitive process and
harmed patients and physicians. Among other things, the agreement has
deprived patients of information they otherwise would have had when
making important healthcare decisions and has denied physicians working
for the Defendants the opportunity to advertise their services to
potential patients.
4. Defendants' agreement is a naked restraint of trade that is per
se unlawful under Section 1 of the Sherman Act, 15 U.S.C. 1.
JURISDICTION, VENUE, AND INTERSTATE COMMERCE
5. The United States brings this action pursuant to Section 4 of
the Sherman Act, 15 U.S.C. 4, to prevent and restrain Defendants'
violations of Section 1 of the Sherman Act, 15 U.S.C. 1.
6. This Court has subject matter jurisdiction over this action
under Section 4 of the Sherman Act, 15 U.S.C. 4, and 28 U.S.C. 1331,
1337(a), 1345, and 1367.
7. Venue is proper in the Southern District of West Virginia,
Charleston Division, under 28 U.S.C. 1391 and Section 12 of the Clayton
Act, 15 U.S.C. 22. Each Defendant transacts business within the
Southern District of West Virginia, and all Defendants reside in the
Southern District of West Virginia.
8. Defendants 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
[[Page 24637]]
also purchase supplies and equipment from out-of-state vendors that are
shipped across state lines.
DEFENDANTS AND THEIR MARKETING
9. CAMC is a nonprofit West Virginia corporation headquartered in
Charleston, Kanawha County, West Virginia. It operates four general
acute-care hospitals (CAMC General Hospital, CAMC Memorial Hospital,
CAMC Women and Children's Hospital, and CAMC Teays Valley Hospital)
with a total of 908 beds and a medical staff of over 120 employed
physicians.
10. St. Mary's is a nonprofit West Virginia corporation
headquartered in Huntington, Cabell County, West Virginia. It operates
a general acute-care hospital located in Cabell County with 393 beds
and a medical staff of over 50 employed physicians. St. Mary's also
serves as a teaching hospital for medical students and residents from
Marshall University School of Medicine.
11. CAMC and St. Mary's compete with each other to provide hospital
and physician services to patients. Hospitals compete through price,
quality, and other factors to sell their services to patients,
employers, and insurance companies.
12. Marketing is an important tool that hospitals use to compete
for patients, and this competition can lead hospitals to invest in
providing better care and a broader range of services. Hospitals use
marketing to inform patients about a hospital's quality, scope of
services, and the expertise of its physicians. An executive of each
Defendant testified at deposition that marketing is an important
strategy through which hospitals seek to increase patient volume and
market share.
13. Defendants' marketing methods include print advertisements,
such as newspaper advertisements, and outdoor advertisements, such as
billboards.
UNLAWFUL AGREEMENT BETWEEN
ST. MARY'S AND CAMC
14. Since at least 2012, CAMC and St. Mary's have agreed to limit
their marketing for competing services. CAMC agreed not to place print
or outdoor advertisements in Cabell County, and St. Mary's agreed not
to place print or outdoor advertisements in Kanawha County. Defendants'
marketing departments have monitored and enforced this agreement.
15. For example, in January 2012, a CAMC urology group asked CAMC's
marketing department to advertise its physicians in The Herald
Dispatch, a Cabell County newspaper. In response, a CAMC marketing
department employee emailed the CAMC Director of Marketing, noting that
CAMC does not typically advertise in The Herald Dispatch because of its
`` `gentleman's agreement' '' with St. Mary's. Consistent with its
agreement with St. Mary's, CAMC did not place the newspaper
advertisement.
16. In May 2013, St. Mary's Director of Marketing complained to
CAMC's Director of Marketing after CAMC ran a newspaper ad promoting a
CAMC physicians' group in The Herald Dispatch, and succeeded in getting
CAMC to agree to remove the advertisement. In an email from St. Mary's
Director of Marketing to other St. Mary's senior executives, he wrote,
``I talked with CAMC and they agreed this ad violated our agreement not
to advertise in Charleston paper if they didn't advertise in Huntington
paper. Their director of marketing Says she pulled the ad but was
concerned it might still run again one more time this Sunday. I can't
call the HD [Herald Dispatch] and make sure because they could
challenge this type of handshake agreement That [sic] prevents them
from getting advertising dollars from a different advertiser. We'll see
and I'll follow up from there but after Sunday I am confident we won't
see CAMC again in HD.'' Consistent with its agreement with St. Mary's,
and as described by St. Mary's Director of Marketing, CAMC asked the
Herald Dispatch to remove the advertisement.
17. In June 2014, when a CAMC-owned physicians' group requested
marketing in Cabell County, a CAMC marketing department employee
responded by telling the group's representative that CAMC does not
market specialist physicians in Cabell County and St. Mary's does not
market specialists in Kanawha County. Consistent with its agreement
with St. Mary's, CAMC refused to market that physicians' group in
Cabell County.
18. In August 2014, when another CAMC-owned physicians' group
requested billboard advertising in Cabell County, a CAMC marketing
representative wrote to CAMC's Director of Marketing, ``They had asked
for print and billboard placement in Huntington. I explained our
informal agreement. They understood.'' CAMC's Director of Marketing
replied, ``Just watch the county line my friend.'' Consistent with its
agreement with St. Mary's, CAMC did not place print or billboard
advertising for the physician practice in Cabell County.
19. The agreement between CAMC and St. Mary's has eliminated a
significant form of competition to attract patients by depriving
patients in Kanawha and Cabell Counties of information regarding their
healthcare-provider choices and physicians in those counties the
opportunity to advertise their services to potential patients.
NO PROCOMPETITIVE JUSTIFICATIONS
20. The Defendants' anticompetitive agreement is not reasonably
necessary to further any procompetitive purpose.
VIOLATION ALLEGED
Violation of Section 1 of the Sherman Act
21. The United States incorporates paragraphs 1 through 20.
22. CAMC and St. Mary's compete to provide healthcare services.
Defendants' agreement is facially anticompetitive because it limits
competition between the Defendants by allocating territories for the
marketing of competing healthcare services. As a result, the agreement
eliminates a significant form of competition to attract patients.
23. The agreement constitutes an unreasonable restraint of trade
that is per se illegal under Section 1 of the Sherman Act, 15 U.S.C. 1.
No elaborate analysis is required to demonstrate the anticompetitive
effect of this agreement.
REQUESTED RELIEF
The United States requests that the Court:
(A) judge that Defendants' agreement limiting competition
constitutes an illegal restraint of interstate trade in violation of
Section 1 of the Sherman Act, 15 U.S.C. 1;
(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, unless such communication: is related to the
legitimate joint provision of services; is part of normal due diligence
relating to a merger, acquisition, joint venture, investment, or
divestiture; or is related to claims or statements made in a
Defendant's Marketing that the other Defendant believes are false or
misleading;
(D) require Defendants to institute a comprehensive antitrust
compliance program to ensure that Defendants do
[[Page 24638]]
not enter into or attempt to enter into any similar agreements and that
Defendants' members, officers, agents, and employees are fully informed
of the application of the antitrust laws to the Defendants' businesses;
and
(E) award Plaintiff its costs in this action and such other relief
as may be just and proper.
Dated: April 14, 2016
Respectfully Submitted,
For Plaintiff United States of America:
WILLIAM J. BAER,
Assistant Attorney General for Antitrust
DAVID I. GELFAND,
Deputy Assistant Attorney General
PATRICIA A. BRINK,
Director of Civil Enforcement
PETER J. MUCCHETTI,
Chief, Litigation I
RYAN M. KANTOR,
Assistant Chief, Litigation I
MICHELLE R. SELTZER,
Assistant Chief, Litigation I
CAROL A. CASTO,
Acting United States Attorney for the Southern District of West
Virginia
Matthew Lindsay,
Assistant United States Attorney, Robert C. Byrd U.S. Courthouse,
Suite 4000, 300 Virginia Street, Charleston, WV 25301, Tel. No. 304-
340-2338, Matthew.Lindsay@usdoj.gov
KATHLEEN KIERNAN,*
BARRY L. CREECH,
JOHN LOHRER,
GLENN HARRISON,
Attorneys for the United States Antitrust Division, U.S. Department of
Justice, 450 Fifth Street, N.W., Suite 4100, Washington, D.C. 20530
(202) 353-3100 (phone), (202) 307-5802 (fax),
Kathleen.kiernan@usdoj.gov
Attorneys for the United States
* Attorney of Record
UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
CHARLESTON DIVISION
UNITED STATES OF AMERICA, Plaintiff, v. CHARLESTON AREA MEDICAL
CENTER, INC. and ST. MARY'S MEDICAL CENTER, INC., Defendants.
CASE NO.: 2:16-cv-03664
JUDGE: John T. Copenhaver, Jr.
FILED: 04/14/2016
COMPETITIVE IMPACT STATEMENT
Plaintiff United States of America, pursuant to Section 2(b) of the
Antitrust Procedures and Penalties Act (``APPA'' or ``Tunney Act''), 15
U.S.C. 16(b)-(h), files this Competitive Impact Statement relating to
the proposed Final Judgment submitted for entry in this civil antitrust
proceeding.
I. NATURE AND PURPOSE OF THE PROCEEDING
On April 14, 2016, the United States filed a civil antitrust
Complaint alleging that Defendants Charleston Area Medical Center
(``CAMC'') and St. Mary's Medical Center (``St. Mary's'') violated
Section 1 of the Sherman Act, 15 U.S.C. 1. The Complaint alleges that
CAMC and St. Mary's agreed to unlawfully allocate territories for the
marketing of competing healthcare services and to limit competition
between themselves. Specifically, according to the Complaint, CAMC and
St. Mary's entered into an agreement under which they agreed not to
advertise on billboards or in print in each others' home counties in
West Virginia. The agreement eliminated a significant form of
competition to attract patients and overall substantially diminished
competition to provide healthcare services. Defendants' agreement to
allocate territories for marketing is per se illegal under Section 1 of
the Sherman Act, 15 U.S.C. 1.
With the Complaint, the United States filed a Stipulation and
proposed Final Judgment that, as explained more fully below, enjoins
Defendants from (1) agreeing with any healthcare provider to prohibit
or limit marketing or to allocate any service, customer, or geographic
market or territory, and (2) communicating with each other about
marketing, subject to narrow exceptions.
The United States and the Defendants have stipulated that the
proposed Final Judgment may be entered after compliance with 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
VIOLATIONS
A. Background on Defendants and Their Marketing Activities
Defendants CAMC and St. Mary's are healthcare providers that
operate general acute-care hospitals in Charleston, Kanawha County,
West Virginia, and Huntington, Cabell County, West Virginia,
respectively. CAMC and St. Mary's compete with each other to provide
hospital and physician services to patients. Hospitals compete through
price, quality, and other factors to sell their services to patients,
employers, and insurance companies.
Marketing is an important tool that hospitals use to compete for
patients. Hospitals use marketing to inform patients about a hospital's
quality, scope of services, and the expertise of its physicians.
Defendants' marketing methods include print advertisements, such as
newspaper advertisements, and outdoor advertisements, such as
billboards. Healthcare provider advertisements on billboards and
newspapers helps enable patients to make more informed healthcare
choices, including choosing healthcare providers that offer higher
quality care and more convenient services. Advertising also spurs
competition for patients, which can lead hospitals to invest in
providing better care and a broader range of services.
B. Defendants' Unlawful Agreement to Limit Marketing
Since at least 2012, CAMC and St. Mary's have agreed to limit their
marketing for competing services. CAMC agreed not to place print or
outdoor advertisements in Cabell County, and St. Mary's agreed not to
place print or outdoor advertisements in Kanawha County. Defendants'
marketing departments have monitored and enforced this agreement.
Defendants' documents show the impact of this agreement on the
Defendants' marketing.
In January 2012, a CAMC urology group asked CAMC's marketing
department to advertise its physicians in The Herald Dispatch, a Cabell
County newspaper. In response, a CAMC marketing department employee
emailed the CAMC Director of Marketing, noting that CAMC does not
typically advertise in The Herald Dispatch because of its
```gentleman's agreement''' with St. Mary's. Consistent with its
agreement with St. Mary's, CAMC did not place the newspaper
advertisement.
In May 2013, St. Mary's Director of Marketing complained to CAMC's
Director of Marketing after CAMC ran a newspaper ad promoting a CAMC
physicians' group in The Herald Dispatch, and succeeded in getting CAMC
to agree to remove the advertisement. In an email from St. Mary's
Director of Marketing to other St. Mary's senior executives, he wrote,
``I talked with CAMC and they agreed this ad violated our agreement not
to advertise in Charleston paper if they didn't advertise in Huntington
paper. Their director of marketing Says she pulled the ad but was
concerned it might still run again one more time this Sunday. I can't
call the HD [Herald Dispatch] and make sure because they could
challenge this type of handshake agreement That [sic] prevents them
from
[[Page 24639]]
getting advertising dollars from a different advertiser. We'll see and
I'll follow up from there but after Sunday I am confident we won't see
CAMC again in HD.'' Consistent with its agreement with St. Mary's, and
as described by St. Mary's Director of Marketing, CAMC asked the Herald
Dispatch to remove the advertisement.
In June 2014, when a CAMC-owned physicians' group requested
marketing in Cabell County, a CAMC marketing department employee
responded by telling the group's representative that CAMC does not
market specialist physicians in Cabell County and St. Mary's does not
market specialists in Kanawha County. Consistent with its agreement
with St. Mary's, CAMC refused to market that physicians' group in
Cabell County.
In August 2014, when another CAMC-owned physicians' group requested
billboard advertising in Cabell County, a CAMC marketing representative
wrote to CAMC's Director of Marketing, ``They had asked for print and
billboard placement in Huntington. I explained our informal agreement.
They understood.'' CAMC's Director of Marketing replied, ``Just watch
the county line my friend.'' Consistent with its agreement with St.
Mary's, CAMC did not place print or billboard advertising for the
physician practice in Cabell County.
Defendants' anticompetitive agreement is not reasonably necessary
to further any procompetitive purpose. Defendants' agreement allocates
territories for marketing and constitutes a naked restraint of trade
that is per se unlawful under Section 1 of the Sherman Act, 15 U.S.C.
1. 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'').
III. EXPLANATION OF THE PROPOSED FINAL JUDGMENT
The proposed Final Judgment will prevent the continuation and
recurrence of the violations alleged in the Complaint and restore the
competition restrained by Defendants' anticompetitive agreement.
Section VIII 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, Defendants cannot
agree with any healthcare provider to prohibit or limit marketing or to
allocate any service, customer, or geographic market or territory,
unless such agreement is reasonably necessary to further a
procompetitive purpose concerning the joint provision of services. The
joint provision of services is any past, present, or future coordinated
delivery of any healthcare services by two or more healthcare
providers. Defendants also are prohibited from communicating with each
other about any Defendant's marketing, subject to three narrow
exceptions. There is an exception for communication about joint
marketing if the communication is related to the joint provision of
services. In addition, there are exceptions for communications about
marketing that are part of customary due diligence relating to a
merger, acquisition, joint venture, investment, or divestiture, and
communications about false or misleading statements made in a
Defendant's marketing.
These prohibited conduct provisions will restore the competition
lost as a result of CAMC's and St. Mary's unlawful agreement to
allocate territories for the marketing of competing healthcare
services.
B. Compliance and Inspection
The proposed Final Judgment sets forth various provisions to ensure
Defendants' compliance with the proposed Final Judgment. Section V of
the proposed Final Judgment requires each Defendant to appoint an
Antitrust Compliance Officer within 30 days of the Final Judgment's
entry. The Antitrust Compliance Officer must furnish copies of this
Competitive Impact Statement, the Final Judgment, and an approved
notice explaining the obligations of the Final Judgment to each
Defendant's officers, directors, and marketing managers, and to any
person who succeeds to any such position. The Antitrust Compliance
Officer must also obtain from each recipient a certification that he or
she has read and agreed to abide by the terms of the Final Judgment,
and must maintain a record of all certifications received. Recipients
must also certify that they are not aware of any violation of the Final
Judgment. Additionally, each Antitrust Compliance Officer shall
annually brief each person required to receive a copy of the Final
Judgment and this Competitive Impact Statement on the meaning and
requirements of the Final Judgment and the antitrust laws. Each
Antitrust Compliance Officer shall also annually communicate to all
employees that any employee may disclose, without reprisal, information
concerning any potential violation of the Final Judgment or the
antitrust laws.
For a period of five years following the date of entry of the Final
Judgment, the Defendants separately must certify annually to the United
States that they have complied with the provisions of the Final
Judgment. Additionally, upon learning of any violation or potential
violation of the terms and conditions of the Final Judgment, Defendants
must within thirty days file with the United States a statement
describing the violation or potential violation, and must promptly take
action to terminate or modify the activity in order to comply with the
Final Judgment.
To facilitate monitoring of the Defendants' compliance with the
Final Judgment, Section VI of the proposed Final Judgment requires each
Defendant to grant the United States access, upon reasonable notice, to
Defendant's records and documents relating to matters contained in the
Final Judgment. Defendants must also make their employees available for
interviews or depositions and answer interrogatories and prepare
written reports relating to matters contained in the Final Judgment
upon request.
These provisions are designed to prevent recurrence of the type of
illegal conduct alleged in the Complaint.
IV. REMEDIES AVAILABLE TO POTENTIAL PRIVATE LITIGANTS
Section 4 of the Clayton Act, 15 U.S.C. 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.
16(a), the proposed Final Judgment has no prima facie effect in
[[Page 24640]]
any subsequent private lawsuit that may be brought against the
Defendants.
V. PROCEDURES AVAILABLE FOR MODIFICATION OF THE PROPOSED FINAL JUDGMENT
The United States and the Defendants have stipulated that the
proposed Final Judgment may be entered by the Court after compliance
with the provisions of the APPA, provided that the United States has
not withdrawn its consent. The APPA 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, which remains free to
withdraw its consent to the proposed Final Judgment at any time prior
to the Court's entry of judgment. 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 Web site and, under certain circumstances, published in the
Federal Register.
Written comments should be submitted to:
Peter J. Mucchetti
Chief, Litigation I Section
Antitrust Division
United States Department of Justice
450 Fifth Street, NW., Suite 4100
Washington, DC 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 the Defendants. The
United States is satisfied, however, that the relief proposed in the
Final Judgment will prevent the recurrence of the violation alleged in
the Complaint and ensure that patients and physicians benefit from
competition between the Defendants. 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 APA 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. 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 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. 16(e)(1)(A) & (B). In considering these statutory factors,
the court's inquiry is necessarily a limited one, because 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 over 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\
---------------------------------------------------------------------------
\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.
16(e) (2004), with 15 U.S.C. 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
[[Page 24641]]
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 a court 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. 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 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: April 14, 2016
Respectfully submitted,
For PlaintiffUnited States of America
Kathleen Kiernan,
Trial Attorney, Antitrust Division, U.S. Department of Justice,
Litigation I Section, 450 Fifth Street NW., Suite 4100, Washington,
DC 20530, Phone: (202) 353-3100, DC Bar # 1003748, Email:
Kathleen.Kiernan@usdoj.gov
CAROL A. CASTO,
Acting United States Attorney for the Southern District of West
Virginia
Matthew Lindsay,
Assistant United States Attorney, Robert C. Byrd U.S. Courthouse,
Suite 4000, 300 Virginia Street, Charleston, WV 25301, Tel. No. 304-
340-2338, Matthew.Lindsay@usdoj.gov
CERTIFICATE OF SERVICE
I hereby certify that on April 14, 2016, I electronically filed the
foregoing paper with the Clerk of the Court using the ECF system and
sent it via email to the following counsel at the email addresses
below.
Counsel for Defendant Charleston Area Medical Center, Inc.:
Robert W. McCann
Drinker Biddle & Reath LLP
Robert.McCann@dbr.com
Counsel for Defendant St. Mary's Medical Center, Inc.:
David Simon
Foley & Lardner LLP
DSimon@foley.com
Kathleen Kiernan,
Trial Attorney, Antitrust Division, U.S. Department of Justice,
Litigation I Section, 450 Fifth Street NW., Suite 4100, Washington,
DC 20530, Phone: (202) 353-3100, DC Bar # 1003748, Email:
Kathleen.Kiernan@usdoj.gov
UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
CHARLESTON DIVISION
UNITED STATES OF AMERICA, Plaintiff, v. CHARLESTON AREA MEDICAL CENTER,
INC. and ST. MARY'S MEDICAL CENTER, INC., Defendants.
CASE NO.: 2:16-cv-03664
JUDGE: John T. Copenhaver, Jr.
FILED: 04/14/2016
[[Page 24642]]
[PROPOSED] FINAL JUDGMENT
Whereas, Plaintiff the United States of America filed its Complaint
on April 14, 2016, alleging that Defendants violated Section 1 of the
Sherman Act, 15 U.S.C. Sec. 1;
And whereas, Plaintiff and Defendants Charleston Area Medical
Center, Inc. and St. Mary's Medical Center, Inc., 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, Plaintiff requires the Defendants to agree to
undertake certain actions and refrain from certain conduct for the
purpose of remedying the anticompetitive effects alleged in the
Complaint;
Now therefore, before any testimony is taken, without this Final
Judgment constituting any evidence against or admission by Defendants
regarding any issue of fact or law, and upon consent of the parties to
this action, it is ordered, adjudged, and decreed:
I. JURISDICTION
This Court has jurisdiction over the subject matter of and each of
the parties to this action. The Complaint states a claim upon which
relief may be granted against the Defendants under Section 1 of the
Sherman Act, 15 U.S.C. Sec. 1.
II. DEFINITIONS
As used in this Final Judgment:
(A) ``Agreement'' means any contract, arrangement, or
understanding, formal or informal, oral or written, between two or more
persons.
(B) ``CAMC'' means Defendant Charleston Area Medical Center, Inc.,
a nonprofit hospital system organized and existing under the laws of
West Virginia with its headquarters in Charleston, West Virginia, its
successors and assigns, and its controlled subsidiaries, divisions,
groups, affiliates, partnerships, and joint ventures, and their
respective directors, officers, managers, agents, and employees.
(C) ``Communicate'' means to discuss, disclose, transfer,
disseminate, or exchange information or opinion, formally or
informally, directly or indirectly, in any manner.
(D) ``Joint Provision of Services'' means any past, present, or
future joint health education campaign or 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.
(E) ``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.
(F) ``Marketing Manager'' means any company employee or manager
with management responsibility for or oversight of Marketing.
(G) ``Person'' means any natural person, corporation, firm,
company, sole proprietorship, partnership, joint venture, association,
institute, governmental unit, or other legal entity.
(H) ``Provider'' means any health care professional or group of
professionals and any inpatient or outpatient medical facility
including hospitals, ambulatory surgical centers, urgent care
facilities, and nursing facilities. A health insurance plan, health
maintenance organization, or other third party payor of health care
services, acting in that capacity, is not a ``Provider.''
(I) ``Relevant Area'' means the state of West Virginia; Boyd
County, Kentucky; and Lawrence County, Ohio.
(J) ``St. Mary's'' means Defendant St. Mary's Medical Center, Inc.,
a nonprofit hospital organized and existing under the laws of West
Virginia with its headquarters in Huntington, West Virginia, its
successors and assigns, and its controlled subsidiaries, divisions,
groups, affiliates, partnerships, and joint ventures, and their
respective directors, officers, managers, agents, and employees.
III. APPLICABILITY
This Final Judgment applies to the Defendants, and all other
persons in active concert or participation with any of them who receive
actual notice of this Final Judgment by personal service or otherwise.
IV. PROHIBITED CONDUCT
(A) Each Defendant 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 the Defendant and any other Provider, unless
such Agreement is reasonably necessary to further a procompetitive
purpose concerning the Joint Provision of Services.
(B) Each Defendant shall not communicate with the other Defendant
about any Defendant's Marketing, except each Defendant may:
(1) communicate with the other Defendant about joint Marketing if
the communication is related to the Joint Provision of Services;
(2) communicate with the other Defendant about Marketing if the
communication is part of customary due diligence relating to a merger,
acquisition, joint venture, investment, or divestiture; or
(3) communicate with the other Defendant about claims or statements
made in the other Defendant's Marketing that the Defendant believes are
false or misleading, or to respond to such communications from the
other Defendant.
V. REQUIRED CONDUCT
(A) Within 30 days of entry of this Final Judgment, each Defendant
shall appoint, subject to the approval of the United States, an
Antitrust Compliance Officer. In the event such person is unable to
perform his or her duties, each Defendant shall appoint, subject to the
approval of the United States, a replacement within ten (10) working
days.
(B) Each Defendant's Antitrust Compliance Officer shall:
(1) furnish a copy of this Final Judgment, the Competitive Impact
Statement, and a cover letter that is identical in content to Exhibit 1
within 60 days of entry of the Final Judgment to that Defendant's
officers, directors, and Marketing Managers, and to any person who
succeeds to any such position, within 30 days of that succession;
(2) annually brief each person designated in Section V(B)(1) on the
meaning and requirements of this Final Judgment and the antitrust laws;
(3) obtain from each person designated in Section V(B)(1), within
60 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 the Defendant; 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 each
Defendant and/or any person who violates this Final Judgment;
(4) maintain a record of certifications obtained pursuant to this
Section; and
(5) annually communicate to all of the Defendant's employees that
they may disclose to the Antitrust Compliance Officer, without
reprisal, information
[[Page 24643]]
concerning any potential violation of this Final Judgment or the
antitrust laws.
(C) Each Defendant shall:
(1) upon learning of any violation or potential violation of any of
the terms 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) file with the United States a statement describing any
violation or potential violation within 30 days of a violation or
potential violation becoming known. Descriptions of violations or
potential violations of this Final Judgment shall include, to the
extent practicable, a description of any communications 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 the United States annually on the anniversary date
of the entry of this Final Judgment that the Defendant has complied
with all of the provisions of this Final Judgment.
VI. COMPLIANCE INSPECTION
(A) For the purposes of determining or securing compliance with
this Final Judgment, or of any related orders, 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, 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, and on reasonable notice to
Defendants, be permitted:
(1) access during Defendants' office hours to inspect and copy, or
at the option of the United States, to require Defendants to provide
hard copy or electronic copies of, all books, ledgers, accounts,
records, data, and documents in the possession, custody, or control of
Defendants, relating to any matters contained in this Final Judgment;
and
(2) to interview, either informally or on the record, Defendants'
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 Defendants.
(B) Upon the written request of an authorized representative of the
Assistant Attorney General in charge of the Antitrust Division,
Defendants 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 to any person other
than an authorized representative of the executive branch of the United
States, except in the course of legal proceedings to which the United
States 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
Defendants to the United States, Defendants represent and identify 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 Defendants mark 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 shall give Defendants ten calendar days notice prior to
divulging such material in any legal proceeding (other than a grand
jury proceeding).
VII. RETENTION OF JURISDICTION
This Court retains jurisdiction to enable any party to this Final
Judgment to apply to this Court at any time 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.
VIII. EXPIRATION OF FINAL JUDGMENT
Unless this Court grants an extension, this Final Judgment shall
expire five years from the date of its entry.
IX. NOTICE
For purposes of this Final Judgment, any notice or other
communication required to be filed with or provided to the United
States shall be sent to the person at the addresses set forth below (or
such other address as the United States may specify in writing to any
Defendant):
Chief
Litigation I Section
U.S. Department of Justice
Antitrust Division
450 Fifth Street, Suite 4100
Washington, DC 20530
X. PUBLIC INTEREST DETERMINATION
The parties have complied with the requirements of the Antitrust
Procedures and Penalties Act, 15 U.S.C. 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:-----------------------------------------------------------------
Court approval subject to procedures of Antitrust Procedures and
Penalties Act, 15 U.S.C. Sec. 16
-----------------------------------------------------------------------
Hon. Dwane L. Tinsley
United States Magistrate Judge
Exhibit 1
[Letterhead of Defendant]
[Name and Address of Antitrust Compliance Officer]
Dear [XX]:
I am providing you this letter to make sure you know about a court
order recently entered by a federal judge in Charleston, West Virginia.
This order applies to [Defendant] and all of its employees, including
you, so it is important that you understand the obligations it imposes
on us. [CEO Name] has asked me to let each of you know that s/he
expects you to take these obligations seriously and abide by them.
Under the order, we are prohibited from agreeing with other
healthcare providers (including hospitals and physicians) to limit
marketing or to divide any services, customers, or geographic markets
or territories between us and other healthcare providers. This means
you may not promise, tell, agree with, or give any assurance to another
healthcare provider that [Defendant] will refrain from marketing our
services to any customer or in any particular geographic area, and you
may not ask for any promise, agreement, or assurance from them that
they will refrain from marketing their services to any customer or in
any particular geographic area. In addition, you may not communicate
with [other Defendant] or its employees about our marketing plans or
their marketing plans. (While there are a few limited exceptions to
this rule, such as discussing joint projects, you must check with me
before you communicate
[[Page 24644]]
with anyone from [other Defendant] about marketing plans.)
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,
[Defendant's Antitrust Compliance Officer]
[FR Doc. 2016-09728 Filed 4-25-16; 8:45 am]
BILLING CODE P
