United States and State of Michigan v. Hillsdale Community Health Center, et al.; Proposed Final Judgment and Competitive Impact Statement, 38736-38745 [2015-16585]
Download as PDF
38736
Federal Register / Vol. 80, No. 129 / Tuesday, July 7, 2015 / Notices
BURDEN TABLE—Continued
Citation 30 CFR 250
Subpart O
Reporting & recordkeeping requirement
Hour burden
Average number of
annual responses
1503(d)(1) ............................
Upon request, provide BSEE with copies of training
documentation for personnel involved in well control,
deepwater well control, or production safety operations within the past 5 years.
Upon request, provide BSEE with a copy of your training plan.
Employee oral interview conducted by BSEE. ................
16 ................
1 ................................
16
16 ................
1 ................................
16
2 ..................
1 ................................
2
1507(c), (d); 1508; 1509 .....
Written testing conducted by BSEE or authorized representative.
Not considered information collection
under 5 CFR 1320.3(h)(7).
0
1510(b) ................................
250.1500–1510 ....................
Revise training plan and submit to BSEE. ......................
General departure or alternative compliance requests
not specifically covered elsewhere in subpart O.
40 ................
8 ..................
1 ................................
1 ................................
40
8
Total Hour Burden ........
...........................................................................................
.....................
6 ................................
202
1503(d)(2) ............................
tkelley on DSK3SPTVN1PROD with NOTICES
1507(b) ................................
Estimated Reporting and
Recordkeeping Non-Hour Cost Burden:
We have not identified any non-hour
cost burdens associated with this
collection of information.
Public Disclosure Statement: The PRA
(44 U.S.C. 3501, et seq.,) provides that
an agency may not conduct or sponsor
a collection of information unless it
displays a currently valid OMB control
number. Until OMB approves a
collection of information, you are not
obligated to respond.
Comments: Section 3506(c)(2)(A) of
the PRA (44 U.S.C. 3501, et seq.,)
requires each agency ‘‘. . . to provide
notice . . . and otherwise consult with
members of the public and affected
agencies concerning each proposed
collection of information . . .’’ Agencies
must specifically solicit comments to:
(a) Evaluate whether the collection is
necessary or useful; (b) evaluate the
accuracy of the burden of the proposed
collection of information; (c) enhance
the quality, usefulness, and clarity of
the information to be collected; and (d)
minimize the burden on the
respondents, including the use of
technology.
To comply with the public
consultation process, on April 10, 2015,
we published a Federal Register notice
(80 FR 19352) announcing that we
would submit this ICR to OMB for
approval. The notice provided the
required 60-day comment period. In
addition, § 250.199 provides the OMB
Control Number for the information
collection requirements imposed by the
30 CFR 250, subpart O regulations and
forms. The regulation also informs the
public that they may comment at any
time on the collections of information
and provides the address to which they
should send comments. We received
one comment in response to the Federal
Register notice or unsolicited comments
from respondents covered under these
regulations. The comment was from a
VerDate Sep<11>2014
21:40 Jul 06, 2015
Jkt 235001
private citizen and it was not germane
to the paperwork burden of this ICR.
Public Availability of Comments:
Before including your address, phone
number, email address, or other
personal identifying information in your
comment, you should be aware that
your entire comment—including your
personal identifying information—may
be made publicly available at any time.
While you can ask us in your comment
to withhold your personal identifying
information from public review, we
cannot guarantee that we will be able to
do so.
Dated: June 16, 2015.
Keith Good,
Acting Deputy Chief, Office of Offshore
Regulatory Programs.
[FR Doc. 2015–16599 Filed 7–6–15; 8:45 am]
BILLING CODE 4310–VH–P
DEPARTMENT OF JUSTICE
Antitrust Division
United States and State of Michigan v.
Hillsdale Community Health Center, et
al.; 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 Order,
and Competitive Impact Statement have
been filed with the United States
District Court for the Eastern District of
Michigan in United States and State of
Michigan v. Hillsdale Community
Health Center, et al., Civil Action No.
15–cv–12311 (JEL) (DRG). On June 25,
2015, the United States and the State of
Michigan filed a Complaint alleging that
Defendant Hillsdale Community Health
Center (‘‘Hillsdale’’) entered into
agreements with Defendants W.A. Foote
Memorial Hospital, d/b/a Allegiance
Health (‘‘Allegiance’’), Community
PO 00000
Frm 00076
Fmt 4703
Sfmt 4703
Annual burden
hours
Health Center of Branch County
(‘‘Branch’’), and ProMedica Health
System (‘‘ProMedica’’) that unlawfully
allocated territories for the marketing of
competing healthcare services in
violation of section 1 of the Sherman
Act, 15 U.S.C. 1, and section 2 of the
Michigan Antitrust Reform Act, MCL
445.772. The proposed Final Judgment,
submitted at the same time as the
Complaint, prohibits the settling
Defendants—Hillsdale, Branch, and
ProMedica—from agreeing with other
healthcare providers to prohibit or limit
marketing or to divide any geographic
market or territory. The proposed Final
Judgment also prohibits the settling
Defendants from communicating with
other Defendants about marketing plans,
with limited exceptions.
Copies of the Complaint, proposed
Final Judgment, and Competitive Impact
Statement are available for inspection at
the Department of Justice, Antitrust
Division, Antitrust Documents Group,
450 Fifth Street NW., Suite 1010,
Washington, DC 20530 (telephone: 202–
514–2481), on the Department of
Justice’s Web site at https://
www.justice.gov/atr, and at the Office of
the Clerk of the United States District
Court for the Eastern District of
Michigan. Copies of these materials may
be obtained from the Antitrust Division
upon request and payment of the
copying fee set by Department of Justice
regulations.
Public comment on the proposed
Final Judgment is invited within 60
days of the date of this notice. Such
comments, including the name of the
submitter, and responses thereto, will be
posted on the U.S. Department of
Justice, Antitrust Division’s internet
Web site, filed with the Court and,
under certain circumstances, published
in the Federal Register. Comments
should be directed to Peter J. Mucchetti,
Chief, Litigation I Section, Antitrust
Division, Department of Justice, 450
E:\FR\FM\07JYN1.SGM
07JYN1
Federal Register / Vol. 80, No. 129 / Tuesday, July 7, 2015 / Notices
Fifth Street NW., Suite 4100,
Washington, DC 20530 (telephone: 202–
307–0001).
Patricia A. Brink,
Director of Civil Enforcement.
UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF
MICHIGAN
UNITED STATES OF AMERICA and
STATE OF MICHIGAN, Plaintiffs, v.
HILLSDALE COMMUNITY HEALTH
CENTER, W.A. FOOTE MEMORIAL
HOSPITAL, D/B/A ALLEGIANCE
HEALTH, COMMUNITY HEALTH
CENTER OF BRANCH COUNTY, and
PROMEDICA HEALTH SYSTEM, INC.,
Defendants.
CASE NO.: 2:15-cv-12311
Hon. Judith E. Levy
tkelley on DSK3SPTVN1PROD with NOTICES
COMPLAINT
The United States of America and the
State of Michigan bring this civil
antitrust action to enjoin agreements by
Defendants Hillsdale Community Health
Center (‘‘Hillsdale’’), W.A. Foote
Memorial Hospital, d/b/a Allegiance
Health (‘‘Allegiance’’), Community
Health Center of Branch County
(‘‘Branch’’), and ProMedica Health
System, Inc. (‘‘ProMedica’’)
(collectively, ‘‘Defendants’’) that
unlawfully allocate territories for the
marketing of competing healthcare
services and limit competition among
Defendants.
NATURE OF THE ACTION
1. Defendants are healthcare providers
in Michigan that operate the only
general acute-care hospital or hospitals
in their respective counties. Defendants
directly compete with each other to
provide healthcare services to the
residents of south-central Michigan.
Marketing is a key component of this
competition and includes
advertisements, mailings to patients,
health fairs, health screenings, and
outreach to physicians and employers.
2. Allegiance, Branch, and
ProMedica’s Bixby and Herrick
Hospitals (‘‘Bixby and Herrick’’) are
Hillsdale’s closest Michigan
competitors. Hillsdale orchestrated
agreements to limit marketing of
competing healthcare services.
Allegiance explained in a 2013 oncology
marketing plan: ‘‘[A]n agreement exists
with the CEO of Hillsdale Community
VerDate Sep<11>2014
20:31 Jul 06, 2015
Jkt 235001
Health Center, Duke Anderson, to not
conduct marketing activity in Hillsdale
County.’’ Branch’s CEO described the
Branch agreement with Hillsdale as a
‘‘gentlemen’s agreement not to market
services.’’ A ProMedica
communications specialist described
the ProMedica agreement with Hillsdale
in an email: ‘‘The agreement is that they
stay our [sic] of our market and we stay
out of theirs unless we decide to
collaborate with them on a particular
project.’’
3. The Defendants’ agreements have
disrupted the competitive process and
harmed patients, physicians, and
employers. For instance, all of these
agreements have deprived patients,
physicians, and employers of
information they otherwise would have
had when making important healthcare
decisions. In addition, the agreement
between Allegiance and Hillsdale has
deprived Hillsdale County patients of
free medical services such as health
screenings and physician seminars that
they would have received but for the
unlawful agreement. Moreover, it
denied Hillsdale County employers the
opportunity to develop relationships
with Allegiance that could have allowed
them to improve the quality of their
employees’ medical care.
4. Defendants’ senior executives
created and enforced these agreements,
which lasted for many years. On certain
occasions when a Defendant violated
one of the agreements, executives of the
aggrieved Defendant complained about
the violation and received assurances
that the previously agreed upon
marketing restrictions would continue
to be observed going forward.
5. Defendants’ agreements are naked
restraints of trade that are per se
unlawful under Section 1 of the
Sherman Act, 15 U.S.C. 1, and Section
2 of the Michigan Antitrust Reform Act,
MCL 445.772.
JURISDICTION, VENUE, AND
INTERSTATE COMMERCE
6. The United States brings this action
pursuant to Section 4 of the Sherman
Act, 15 U.S.C. 4, to prevent and restrain
Defendants’ violations of Section 1 of
the Sherman Act, 15 U.S.C. 1. The State
of Michigan brings this action in its
sovereign capacity under its statutory,
equitable and/or common law powers,
and pursuant to Section 16 of the
Clayton Act, 15 U.S.C. 26, to prevent
PO 00000
Frm 00077
Fmt 4703
Sfmt 4703
38737
and restrain Defendants’ violations of
Section 2 of the Michigan Antitrust
Reform Act, MCL 445.772.
7. This Court has subject matter
jurisdiction over this action under
Section 4 of the Sherman Act, 15 U.S.C.
4 (as to claims by the United States);
Section 16 of the Clayton Act, 15 U.S.C.
26 (as to claims by the State of
Michigan); and 28 U.S.C. 1331, 1337(a),
1345, and 1367.
8. Venue is proper in the Eastern
District of Michigan under 28 U.S.C.
1391 and Section 12 of the Clayton Act,
15 U.S.C. 22. Each Defendant transacts
business within the Eastern District of
Michigan, all Defendants reside in the
State of Michigan, and at least two
Defendants reside in the Eastern District
of Michigan.
9. Defendants all engage in interstate
commerce and in activities substantially
affecting interstate commerce.
Defendants provide healthcare services
to patients for which employers, health
plans, and individual patients remit
payments across state lines. Defendants
purchase supplies and equipment from
out-of-state vendors that are shipped
across state lines.
DEFENDANTS
10. Hillsdale is a Michigan
corporation headquartered in Hillsdale,
Michigan. Its general acute-care
hospital, which is in Hillsdale County,
Michigan, has 47 beds and a medical
staff of over 90 physicians.
11. Allegiance is a Michigan
corporation headquartered in Jackson,
Michigan. Its general acute-care
hospital, which is in Jackson County,
Michigan, has 480 beds and a medical
staff of over 400 physicians.
12. Branch is a Michigan corporation
headquartered in Coldwater, Michigan.
Its general acute-care hospital, which is
in Branch County, Michigan, has 87
beds and a medical staff of over 100
physicians.
13. ProMedica is an Ohio corporation
headquartered in Toledo, Ohio, with
facilities in northwest Ohio and
southern Michigan. ProMedica’s Bixby
and Herrick Hospitals are both in
Lenawee County, Michigan. Bixby is a
general acute-care hospital with 88 beds
and a medical staff of over 120
physicians. Herrick is a general acutecare hospital with 25 beds and a
medical staff of over 75 physicians.
E:\FR\FM\07JYN1.SGM
07JYN1
Federal Register / Vol. 80, No. 129 / Tuesday, July 7, 2015 / Notices
BACKGROUND ON HOSPITAL
COMPETITION
14. Hillsdale competes with each of
the other Defendants to provide many of
the same hospital and physician
services to patients. Hospitals compete
on price, quality, and other factors to
sell their services to patients,
employers, and insurance companies.
An important tool that hospitals use to
compete for patients is marketing aimed
at informing patients, physicians, and
employers about a hospital’s quality and
scope of services. An executive from
each Defendant has testified at
deposition that marketing is an
important strategy through which
hospitals seek to increase their patient
volume and market share.
15. Defendants’ marketing includes
advertisements through mailings and
media such as local newspapers, radio,
television, and billboards. Allegiance’s
marketing to patients also includes the
provision of free medical services, such
as health screenings, physician
seminars, and health fairs. Some
Defendants also market to physicians
through educational and relationshipbuilding meetings that provide
physicians with information about those
Defendants’ quality and range of
services. Allegiance also engages in
these marketing activities with
employers.
VerDate Sep<11>2014
20:31 Jul 06, 2015
Jkt 235001
HILLSDALE’S UNLAWFUL
AGREEMENTS
16. Hillsdale has agreements limiting
competition with Allegiance,
ProMedica, and Branch.
Unlawful Agreement Between Hillsdale
and Allegiance
17. Since at least 2009, Hillsdale and
Allegiance have had an agreement that
limits Allegiance’s marketing for
competing services in Hillsdale County.
As Allegiance explained in a 2013
oncology marketing plan: ‘‘[A]n
agreement exists with the CEO of
Hillsdale Community Health Center,
Duke Anderson, to not conduct
marketing activity in Hillsdale County.’’
18. In compliance with this
agreement, Allegiance has excluded
Hillsdale County from marketing
campaigns since at least 2009. For
example, Allegiance excluded Hillsdale
County from the marketing plans
outlined in the above-referenced 2013
oncology marketing plan. And
according to a February 2014 board
report, Allegiance excluded Hillsdale
from marketing campaigns for
cardiovascular and orthopedic services.
19. On at least two occasions,
Hillsdale’s CEO complained to
Allegiance after Allegiance sent
marketing materials to Hillsdale County
residents. Both times—at the direction
PO 00000
Frm 00078
Fmt 4703
Sfmt 4703
of Allegiance CEO Georgia Fojtasek—
Allegiance’s Vice President of
Marketing, Anthony Gardner,
apologized in writing to Hillsdale’s
CEO. In one apology he said, ‘‘It isn’t
our style to purposely not honor our
agreement.’’ Mr. Gardner assured
Hillsdale’s CEO that Allegiance would
not repeat this mistake.
20. Allegiance also conveyed its
hands-off approach to Hillsdale in 2009
when Ms. Fojtasek told Hillsdale’s CEO
that Allegiance would take a
‘‘Switzerland’’ approach towards
Hillsdale, and then confirmed this
approach by mailing Hillsdale’s CEO a
Swiss flag.
21. Allegiance executives and staff
have discussed the agreement in
numerous correspondences and
business documents. For example,
Allegiance staff explained in a 2012
cardiovascular services analysis:
‘‘Hillsdale does not permit [Allegiance]
to conduct free vascular screens as they
periodically charge for screenings.’’ As
a result, around that time, Hillsdale
County patients were deprived of free
vascular-health screenings.
22. In another instance, in 2014
Allegiance discouraged one of its newly
employed physicians from giving a
seminar in Hillsdale County relating to
competing services. In response to the
physician’s request to provide the
E:\FR\FM\07JYN1.SGM
07JYN1
EN07JY15.099
tkelley on DSK3SPTVN1PROD with NOTICES
38738
Federal Register / Vol. 80, No. 129 / Tuesday, July 7, 2015 / Notices
tkelley on DSK3SPTVN1PROD with NOTICES
seminar, the Allegiance Marketing
Director asked the Vice President of
Physician Integration and Business
Development: ‘‘Who do you think is the
best person to explain to [the doctor]
our restrictions in Hillsdale? We’re
happy to do so but often our docs find
it hard to believe and want a higher
authority to confirm.’’
23. The agreement between Hillsdale
and Allegiance has deprived Hillsdale
County patients, physicians, and
employers of information regarding
their healthcare-provider choices and of
free health-screenings and education.
Unlawful Agreement Between Hillsdale
and ProMedica
24. Since at least 2012, Hillsdale and
ProMedica have agreed to limit their
marketing for competing services in one
another’s county.
25. This agreement has restrained
marketing in several ways. For example,
in June 2012, Bixby and Herrick’s
President asked Hillsdale’s CEO if he
would have any issue with Bixby
marketing its oncology services to
Hillsdale physicians. Hillsdale’s CEO
replied that he objected because his
hospital provided those services. Bixby
and Herrick’s President responded that
he understood. Bixby and Herrick then
refrained from marketing their
competing oncology services in
Hillsdale County.
26. Another incident occurred around
January 2012, when Hillsdale’s CEO
complained to Bixby and Herrick’s
President about the placement of a
ProMedica billboard across from a
physician’s office in Hillsdale County.
At the conclusion of the conversation,
Bixby and Herrick’s President assured
Hillsdale’s CEO that he would check
into taking down the billboard.
27. ProMedica employees have
discussed and acknowledged the
agreement in multiple documents. For
example, after Hillsdale’s CEO called
Bixby and Herrick’s President to
complain about ProMedica’s billboard, a
ProMedica communications specialist
described the agreement to marketing
colleagues via email: ‘‘According to
[Bixby and Herrick’s President] any
potential marketing (including network
development) efforts targeted for the
Hillsdale, MI market should be run by
him so that he can talk to Hillsdale
Health Center in advance. The
agreement is that they stay our [sic] of
our market and we stay out of theirs
unless we decide to collaborate with
them on a particular project.’’
28. The agreement between Hillsdale
and ProMedica deprived patients,
physicians, and employers of Hillsdale
and Lenawee Counties of information
VerDate Sep<11>2014
20:31 Jul 06, 2015
Jkt 235001
regarding their healthcare-provider
choices.
Unlawful Agreement Between Hillsdale
and Branch
29. Since at least 1999, Hillsdale and
Branch have agreed to limit marketing
in one another’s county. In the fall of
1999, Hillsdale’s then-CEO and Branch’s
CEO reached an agreement whereby
each hospital agreed not to market
anything but new services in the other
hospital’s county. Branch’s CEO
testified recently in deposition that
‘‘There’s a gentlemen’s agreement not to
market services other than new
services.’’
30. Branch has monitored Hillsdale’s
compliance with the agreement. For
example, in November 2004, Hillsdale
promoted one of its physicians through
an advertisement in the Branch County
newspaper. Branch’s CEO faxed
Hillsdale’s then-CEO a copy of the
advertisement, alerting him to the
violation of their agreement.
31. In addition to monitoring
Hillsdale’s compliance, Branch has
directed its marketing employees to
abide by the agreement with Hillsdale.
For example, Branch’s 2013 guidelines
for sending out media releases
instructed that it had a ‘‘gentleman’s
agreement’’ with Hillsdale and thus
Branch should not send media releases
to the Hillsdale Daily News.
32. The agreement between Hillsdale
and Branch deprived Hillsdale and
Branch County patients, physicians, and
employers of information regarding
their healthcare-provider choices.
NO PROCOMPETITIVE
JUSTIFICATIONS
33. The Defendants’ anticompetitive
agreements are not reasonably necessary
to further any procompetitive purpose.
VIOLATIONS ALLEGED
First Cause of Action: Violation of
Section 1 of the Sherman Act
34. Plaintiffs incorporate paragraphs 1
through 33.
35. Allegiance, Branch, and
ProMedica are each a horizontal
competitor of Hillsdale in the provision
of healthcare services in south-central
Michigan. Defendants’ agreements are
facially anticompetitive because they
allocate territories for the marketing of
competing healthcare services and limit
competition among Defendants. The
agreements eliminate a significant form
of competition to attract patients.
36. The agreements constitute
unreasonable restraints of trade that are
per se illegal under Section 1 of the
Sherman Act, 15 U.S.C. 1. No elaborate
PO 00000
Frm 00079
Fmt 4703
Sfmt 4703
38739
analysis is required to demonstrate the
anticompetitive character of these
agreements.
37. The agreements are also
unreasonable restraints of trade that are
unlawful under Section 1 of the
Sherman Act, 15 U.S.C. 1, under an
abbreviated or ‘‘quick look’’ rule of
reason analysis. The principal tendency
of the agreements is to restrain
competition. The nature of the restraints
is obvious, and the agreements lack
legitimate procompetitive justifications.
Even an observer with a rudimentary
understanding of economics could
therefore conclude that the agreements
would have anticompetitive effects on
patients, physicians, and employers,
and harm the competitive process.
Second Cause of Action: Violation of
MCL 445.772
38. Plaintiff State of Michigan
incorporates paragraphs 1 through 37
above.
39. Defendants entered into unlawful
agreements with each other that
unreasonably restrain trade and
commerce in violation of Section 2 of
the Michigan Antitrust Reform Act,
MCL 445.772.
REQUESTED RELIEF
The United States and the State of
Michigan request that the Court:
(A) judge that Defendants’ agreements
limiting competition constitute illegal
restraints of interstate trade in violation
of Section 1 of the Sherman Act, 15
U.S.C. 1, and Section 2 of the Michigan
Antitrust Reform Act, MCL 445.772;
(B) enjoin Defendants and their
members, officers, agents, and
employees from continuing or renewing
in any manner the conduct alleged
herein or from engaging in any other
conduct, agreement, or other
arrangement having the same effect as
the alleged violations;
(C) enjoin each Defendant and its
members, officers, agents, and
employees from communicating with
any other Defendant about any
Defendant’s marketing in its or the other
Defendant’s county, unless such
communication is related to the joint
provision of services, or unless the
communication is part of normal due
diligence relating to a merger,
acquisition, joint venture, investment,
or divestiture;
(D) require Defendants to institute a
comprehensive antitrust compliance
program to ensure that Defendants do
not establish any similar agreements
and that Defendants’ members, officers,
agents and employees are fully informed
of the application of the antitrust laws
E:\FR\FM\07JYN1.SGM
07JYN1
38740
Federal Register / Vol. 80, No. 129 / Tuesday, July 7, 2015 / Notices
to hospital restrictions on competition;
and
(E) award Plaintiffs their costs in this
action, including attorneys’ fees and
investigation costs to the State of
Michigan, and such other relief as may
be just and proper.
Dated: June 25, 2015
Respectfully submitted,
FOR PLAINTIFF UNITED STATES OF
AMERICA:
WILLIAM J. BAER
Assistant Attorney General for Antitrust
DAVID I. GELFAND
Deputy Assistant Attorney General
KATRINA ROUSE (D.C. Bar #1013035)
JENNIFER HANE
JOSEPH POTCHEN
Division Chief
BARRY JOYCE
Attorneys, Litigation I, Antitrust Division,
U.S. Department of Justice, 450 Fifth Street,
N.W., Suite 4100, Washington, D.C. 20530,
(202) 305–7498, E-mail: katrina.rouse@
usdoj.gov
LOCAL COUNSEL:
BARBARA L. McQUADE
United States Attorney
PETER CAPLAN
Assistant United States Attorney, 211 W. Fort
Street, Suite 2001, Detroit, Michigan 48226,
(313) 226–9784, P30643
FOR PLAINTIFF STATE OF MICHIGAN:
BILL SCHUETTE
Attorney General
State of Michigan
MARK GABRIELSE (P75163)
D.J. PASCOE,
Assistant Attorney Generals, Michigan
Department of Attorney General, Corporate
Oversight Division, G. Mennen Williams
Building, 6th Floor, 525 W. Ottawa Street,
Lansing, Michigan 48933, (517) 373–1160,
Email: gabrielsem@michigan.gov
UNITED STATES DISTRICT COURT FOR
THE EASTERN DISTRICT OF MICHIGAN
UNITED STATES OF AMERICA and
STATE OF MICHIGAN, Plaintiffs, v.
HILLSDALE COMMUNITY HEALTH
CENTER, W.A. FOOTE MEMORIAL
HOSPITAL, D/B/A ALLEGIANCE HEALTH,
COMMUNITY HEALTH CENTER OF
BRANCH COUNTY, and PROMEDICA
HEATLH SYSTEM, INC., Defendants.
Case No.: 2:15-cv-12311
tkelley on DSK3SPTVN1PROD with NOTICES
Hon. Judith E. Levy
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 June 25, 2015, the United States and
the State of Michigan filed a civil antitrust
Complaint alleging that Defendants Hillsdale
VerDate Sep<11>2014
20:31 Jul 06, 2015
Jkt 235001
Community Health Center (‘‘Hillsdale’’),
W.A. Foote Memorial Hospital, d/b/a
Allegiance Health (‘‘Allegiance’’),
Community Health Center of Branch County
(‘‘Branch’’), and ProMedica Health System,
Inc. (‘‘ProMedica’’) violated Section 1 of the
Sherman Act, 15 U.S.C. 1, and Section 2 of
the Michigan Antitrust Reform Act, MCL
445.772. The Complaint alleges that Hillsdale
agreed with its closest Michigan competitors
to unlawfully allocate territories for the
marketing of competing healthcare services
and to limit competition between them.
Specifically, according to the Complaint,
Hillsdale entered into agreements with
Allegiance, Branch, and ProMedica to limit
marketing of competing healthcare services.
The agreements eliminated a significant form
of competition to attract patients and overall
substantially diminished competition in
south-central Michigan. Defendants’
agreements to allocate territories for
marketing are per se illegal under Section 1
of the Sherman Act, 15 U.S.C. 1, and Section
2 of the Michigan Antitrust Reform Act, MCL
445.772.
With the Complaint, the United States and
the State of Michigan filed a Stipulation and
proposed Final Judgment with respect to
Hillsdale, Branch, and ProMedica
(collectively ‘‘Settling Defendants’’). The
proposed Final Judgment, as explained more
fully below, enjoins Settling Defendants from
(1) agreeing with any healthcare provider to
prohibit or limit marketing or to allocate
geographic markets or territories, and (2)
communicating with any other Defendant
about any Defendant’s marketing in its or the
other Defendant’s county, subject to narrow
exceptions.
The United States, the State of Michigan,
and the Settling Defendants have stipulated
that the proposed Final Judgment may be
entered after compliance with the APPA,
unless the United States and the State of
Michigan withdraw their consent. Entry of
the proposed Final Judgment would
terminate this action with respect to Settling
Defendants, except that this Court would
retain jurisdiction to construe, modify, and
enforce the proposed Final Judgment and to
punish violations thereof. The case against
Allegiance will continue.
II. DESCRIPTION OF THE EVENTS GIVING
RISE TO THE ALLEGED VIOLATIONS
A. Background on the Defendants and their
Marketing Activities
Allegiance, Branch, Hillsdale, and
ProMedica’s Bixby and Herrick Hospitals are
general acute-care hospitals in adjacent
counties in south-central Michigan.
Defendants are the only hospital or hospitals
in their respective counties. Hillsdale
directly competes with each of the other
Defendants to provide many of the same
hospital and physician services to patients.
An important tool that hospitals use to
compete for patients is marketing aimed at
informing patients, physicians, and
employers about a hospital’s quality and
scope of services. Defendants’ marketing
includes advertisements through mailings
and media, such as local newspapers, radio,
television, and billboards. Allegiance’s
marketing efforts have also included the
PO 00000
Frm 00080
Fmt 4703
Sfmt 4703
provision of free medical services, such as
health screenings, physician seminars, and
health fairs. Some Defendants also market to
physicians through educational and
relationship-building meetings that provide
physicians with information about
Defendants’ quality and range of services.
Allegiance also engages in these marketing
meetings with employers.
B. Defendants’ Unlawful Agreements to Limit
Marketing
Allegiance, Branch, and ProMedica’s Bixby
and Herrick Hospitals are Hillsdale’s closest
Michigan competitors. Hillsdale orchestrated
agreements with each to limit marketing of
competing healthcare services. Defendants’
senior executives created and enforced these
agreements, which have lasted for many
years.
1. Unlawful Agreement Between Hillsdale
and Allegiance
Since at least 2009, Hillsdale and
Allegiance have had an agreement that limits
Allegiance’s marketing for competing
services in Hillsdale County. As Allegiance
explained in a 2013 oncology marketing plan:
‘‘[A]n agreement exists with the CEO of
Hillsdale Community Health Center . . . to
not conduct marketing activity in Hillsdale
County.’’ In compliance with this agreement,
which Allegiance executives acknowledge in
numerous documents, Allegiance has
excluded Hillsdale County from marketing
campaigns since at least 2009. Allegiance has
on occasion apologized to Hillsdale for
violating the agreement and assured Hillsdale
that Allegiance would honor the previously
agreed upon agreement going forward. And
Allegiance has avoided giving free health
benefits, such as physician seminars and
health screenings, to residents of Hillsdale
County because of the agreement. For
example, Allegiance discouraged one of its
newly employed physicians from giving a
seminar relating to competing services in
Hillsdale County. This unlawful agreement
between Hillsdale and Allegiance has
deprived Hillsdale County patients,
physicians, and employers of information
regarding their healthcare provider choices
and of free health screenings and education.
1. Unlawful Agreement Between Hillsdale
and ProMedica
Since at least 2012, Hillsdale and
ProMedica have agreed to limit their
marketing for competing services in one
another’s county. As one ProMedica
communications specialist described: ‘‘The
agreement is that they stay our [sic] of our
market and we stay out of theirs unless we
decide to collaborate with them on a
particular project.’’ This agreement has
restrained the hospitals’ marketing in each
other’s county. For example, in June 2012,
Hillsdale’s CEO refused to allow ProMedica
to market competing oncology services in
Hillsdale County. This unlawful agreement
between Hillsdale and ProMedica deprived
patients, physicians, and employers of
Hillsdale and Lenawee Counties of
information regarding their healthcare
provider choices.
E:\FR\FM\07JYN1.SGM
07JYN1
Federal Register / Vol. 80, No. 129 / Tuesday, July 7, 2015 / Notices
tkelley on DSK3SPTVN1PROD with NOTICES
2. Unlawful Agreement Between Hillsdale
and Branch
Since at least 1999, Hillsdale and Branch
have agreed to limit their marketing for
competing services in one another’s county.
In the fall of 1999, Hillsdale’s then-CEO and
Branch’s CEO reached an agreement whereby
each hospital agreed not to market anything
but new services in the other hospital’s
county. Branch’s CEO testified recently in
deposition that ‘‘[t]here’s a gentlemen’s
agreement not to market services other than
new services.’’ Branch has monitored
Hillsdale’s compliance with the agreement
and directed its marketing employees to
abide by the agreement. This unlawful
agreement between Hillsdale and Branch
deprived Hillsdale and Branch County
patients, physicians, and employers of
information regarding their healthcare
provider choices.
3. Defendants’ Marketing Agreements Are Per
Se Illegal
Defendants’ agreements have disrupted the
competitive process and harmed patients,
physicians, and employers. For instance, the
agreements have deprived patients,
physicians, and employers of information
they otherwise would have had when making
important healthcare decisions. Another
impact of the agreement between Allegiance
and Hillsdale was to deprive Hillsdale
County patients of free medical services such
as health screenings and physician seminars
that they would have received but for the
unlawful agreement. Moreover, Allegiance’s
agreement with Hillsdale denied Hillsdale
County employers the opportunity to receive
information and to develop relationships that
could have allowed them to improve the
quality of their employees’ medical care.
Defendants’ anticompetitive agreements
are not reasonably necessary to further any
procompetitive purpose. Each of the
agreements among the Defendants 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, and Section 2 of the
Michigan Antitrust Reform Act, MCL
445.772. See United States v. Topco Assocs.,
Inc., 405 U.S. 596, 607–08 (1972) (holding
that naked market allocation agreements
among horizontal competitors are plainly
anticompetitive and illegal per se); United
States v. Cooperative Theatres of Ohio, Inc.,
845 F.2d 1367, 1371, 1373 (6th Cir. 1988)
(holding that the defendants’ agreement to
not ‘‘actively solicit[] each other’s customers’’
was ‘‘undeniably a type of customer
allocation scheme which courts have often
condemned in the past as a per se violation
of the Sherman Act’’); Blackburn v. Sweeney,
53 F.3d 825, 828 (7th Cir. 1995) (holding that
the ‘‘[a]greement to limit advertising to
different geographical regions was intended
to be, and sufficiently approximates[,] an
agreement to allocate markets so that the per
se rule of illegality applies’’).
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
VerDate Sep<11>2014
20:31 Jul 06, 2015
Jkt 235001
restore the competition restrained by Settling
Defendants’ anticompetitive agreements.
Section X of the proposed Final Judgment
provides that these provisions will expire
five years after its entry.
A. Prohibited Conduct
Under Section IV of the proposed Final
Judgment, Settling Defendants cannot agree
with any healthcare provider to prohibit or
limit marketing or to allocate geographic
markets or territories. Settling Defendants are
also prohibited from communicating with
any other Defendant about any Defendant’s
marketing in its or the other Defendant’s
county, subject to narrow exceptions. There
is an exception for communication about
joint marketing if the communication is
related to the joint provision of services, i.e.,
any past, present, or future coordinated
delivery of any healthcare services by two or
more healthcare providers. There is another
exception for communications about
marketing that are part of customary due
diligence relating to a merger, acquisition,
joint venture, investment, or divestiture.
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 Settling 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 a notice
explaining the obligations of the Final
Judgment to each Settling Defendant’s
officers, directors, and marketing managers at
the level of director and above. 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.
Additionally, each Antitrust Compliance
Officer shall annually brief each person
receiving a copy of the Final Judgment and
this Competitive Impact Statement on the
meaning and requirements of the Final
Judgment and the antitrust laws.
For a period of five years following the
date of entry of the Final Judgment, the
Settling 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,
Settling Defendants must within thirty days
file with the United States a statement
describing the violation, and must promptly
take action to terminate it.
To facilitate monitoring of the Settling
Defendants’ compliance with the Final
Judgment, Section VII of the proposed Final
Judgment requires each Settling Defendant to
grant the United States or the State of
Michigan access, upon reasonable notice, to
Settling Defendant’s records and documents
relating to matters contained in the Final
Judgment. Settling Defendants must also
make their employees available for
interviews or depositions and answer
PO 00000
Frm 00081
Fmt 4703
Sfmt 4703
38741
interrogatories and prepare written reports
relating to matters contained in the Final
Judgment upon request.
C. Settling Defendants’ Cooperation
Section VI of the proposed Final Judgment
provides that Settling Defendants must
cooperate fully and truthfully with the
United States and the State of Michigan in
any investigation or litigation alleging that
Defendants unlawfully agreed to restrict
marketing in violation of Section 1 of the
Sherman Act, as amended, 15 U.S.C. 1, or
Section 2 of the Michigan Antitrust Reform
Act, MCL 445.772. Such cooperation
includes, but is not limited to, producing
documents, making officers, directors,
employees, and agents available for
interviews, and testifying at trial and other
judicial proceedings fully, truthfully, and
under oath.
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 any subsequent private
lawsuit that may be brought against the
Settling Defendants.
V. PROCEDURES AVAILABLE FOR
MODIFICATION OF THE PROPOSED
FINAL JUDGMENT
The United States, the State of Michigan,
and the Settling 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:
E:\FR\FM\07JYN1.SGM
07JYN1
38742
Federal Register / Vol. 80, No. 129 / Tuesday, July 7, 2015 / Notices
Peter J. Mucchetti
Chief, Litigation I Section
Antitrust Division
United States Department of Justice
450 Fifth Street, N.W., 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 Settling
Defendants. The United States is satisfied,
however, that the relief proposed in the Final
Judgment will prevent the recurrence of the
violations alleged in the Complaint and
ensure that patients, physicians, and
employers benefit from competition between
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.
tkelley on DSK3SPTVN1PROD with NOTICES
VII. STANDARD OF REVIEW UNDER THE
APPA FOR THE PROPOSED FINAL
JUDGMENT
The Clayton Act, as amended by the APPA,
requires that proposed consent judgments in
antitrust cases brought by the United States
be subject to a sixty-day comment period,
after which the court shall determine
whether entry of the proposed Final
Judgment ‘‘is in the public interest.’’ 15
U.S.C. 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).1 In considering
these statutory factors, the court’s inquiry is
necessarily a limited one as the government
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).
VerDate Sep<11>2014
20:31 Jul 06, 2015
Jkt 235001
is entitled to ‘‘broad discretion to settle with
the Defendant within the reaches of the
public interest.’’ United States v. Microsoft
Corp., 56 F.3d 1448, 1461 (D.C. Cir. 1995);
see generally United States v. U.S. Airways
Group, Inc., 38 F. Supp. 3d 69, 75 (D.D.C.
2014) (noting the court has broad discretion
of the adequacy of the relief at issue); United
States v. SBC Commc’ns, Inc., 489 F. Supp.
2d 1 (D.D.C. 2007) (describing the publicinterest 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’’).
Under the APPA, a court considers, among
other things, the relationship between the
remedy secured and the specific allegations
set forth in the government’s complaint,
whether the decree is sufficiently clear,
whether enforcement mechanisms are
sufficient, and whether the decree may
positively harm third parties. See Microsoft,
56 F.3d at 1458–62. With respect to the
adequacy of the relief secured by the decree,
a court may not ‘‘engage in an unrestricted
evaluation of what relief would best serve the
public.’’ United States v. BNS, Inc., 858 F.2d
456, 462 (9th Cir. 1988) (quoting United
States v. Bechtel Corp., 648 F.2d 660, 666
(9th Cir. 1981)); see also Microsoft, 56 F.3d
at 1460–62; United States v. Alcoa, Inc., 152
F. Supp. 2d 37, 40 (D.D.C. 2001); InBev, 2009
U.S. Dist. LEXIS 84787, at *3. One court
explained:
[t]he balancing of competing social and
political interests affected by a proposed
antitrust consent decree must be left, in the
first instance, to the discretion of the
Attorney General. The court’s role in
protecting the public interest is one of
[e]nsuring that the government has not
breached its duty to the public in consenting
to the decree. The court is required to
determine not whether a particular decree is
the one that will best serve society, but
whether the settlement is ‘‘within the reaches
of the public interest.’’ More elaborate
requirements might undermine the
effectiveness of antitrust enforcement by
consent decree.
Bechtel, 648 F.2d at 666 (emphasis added)
(citations omitted).2 In determining whether
a proposed settlement is in the public
interest, a district court ‘‘must accord
deference to the government’s predictions
about the efficacy of its remedies, and may
not require that the remedies perfectly match
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’ ’’).
PO 00000
Frm 00082
Fmt 4703
Sfmt 4703
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-DanielsMidland 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 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
E:\FR\FM\07JYN1.SGM
07JYN1
Federal Register / Vol. 80, No. 129 / Tuesday, July 7, 2015 / Notices
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 publicinterest determination based on the
competitive impact statement and 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: June 25, 2015
Respectfully submitted,
FOR PLAINTIFF UNITED STATES OF
AMERICA
Katrina Rouse
Trial Attorney
Antitrust Division
U.S. Department of Justice
Litigation I Section
450 Fifth Street, N.W., Suite 4100
Washington, D.C. 20530
Phone: (202) 305–7498
D.C. Bar #1013035
Email: katrina.rouse@usdoj.gov
tkelley on DSK3SPTVN1PROD with NOTICES
CERTIFICATE OF SERVICE
I hereby certify that on June 25, 2015, 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.
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.’’).
VerDate Sep<11>2014
20:31 Jul 06, 2015
Jkt 235001
Counsel for Defendants Hillsdale
Community Health Center and Community
Health Center of Branch County:
Larry Jensen
Hall Render
201 West Big Beaver Rd.
Columbia Center, Suite 1200
Troy, MI 48084
Phone: (248) 457–7850
Email: ljenson@hallrender.com
Counsel for Defendant W.A. Foote
Memorial Hospital, d/b/a Allegiance Health:
James M. Burns
Dickinson Wright PLLC
1875 Eye St. NW., Suite 1200
Washington, DC 20006
Phone: (202) 659–6945
Email: JMBurns@dickinsonwright.com
Counsel for Defendant ProMedica Health
System, Inc.:
Stephen Y. Wu
McDermott Will & Emery LLP
227 West Monroe Street, Suite 4400
Chicago, IL 60606–5096
Phone: (312) 372–2000
Email: swu@mwe.com
Attorney
Litigation I
Antitrust Division
U.S. Department of Justice
450 Fifth Street, NW., Suite 4100
Washington, DC 20530
Phone: (202) 305–7498
DC Bar #1013035
Email: katrina.rouse@usdoj.gov
EXHIBIT A
UNITED STATES DISTRICT COURT FOR
THE EASTERN DISTRICT OF MICHIGAN
UNITED STATES OF AMERICA and
STATE OF MICHIGAN, Plaintiffs, v.
HILLSDALE COMMUNITY HEALTH
CENTER, W.A. FOOTE MEMORIAL
HOSPITAL, D/B/A ALLEGIANCE HEALTH,
COMMUNITY HEALTH CENTER OF
BRANCH COUNTY, and PROMEDICA
HEALTH SYSTEM, INC., Defendants.
Case No.: 2:15–cv–12311
Hon. Judith E. Levy
[PROPOSED] FINAL JUDGMENT
WHEREAS, Plaintiffs, the United States of
America and the State of Michigan, filed
their joint Complaint on June 25, 2015,
alleging that Defendants violated Section 1 of
the Sherman Act, 15 U.S.C. 1, and Section 2
of the Michigan Antitrust Reform Act, MCL
445.772;
AND WHEREAS, Plaintiffs and Defendants
Hillsdale Community Health Center,
Community Health Center of Branch County,
and ProMedica Health System, Inc.
(collectively, ‘‘Settling Defendants’’), by their
respective attorneys, have consented to the
entry of this Final Judgment without trial or
adjudication of any issue of fact or law;
AND WHEREAS, Plaintiffs require the
Settling 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
PO 00000
Frm 00083
Fmt 4703
Sfmt 4703
38743
constituting any evidence against or
admission by Settling 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
Settling Defendants under Section 1 of the
Sherman Act, 15 U.S.C. 1, and Section 2 of
the Michigan Antitrust Reform Act, MCL
445.772.
II. DEFINITIONS
As used in this Final Judgment:
(A) ‘‘Allegiance’’ means Defendant W. A.
Foote Memorial Hospital doing business as
Allegiance Health, a corporation organized
and existing under the laws of the State of
Michigan with its headquarters in Jackson,
Michigan, its (i) successors and assigns, (ii)
controlled subsidiaries, divisions, groups,
affiliates, partnerships, and joint ventures,
and (iii) their directors, officers, managers,
agents, and employees.
(B) ‘‘Agreement’’ means any contract,
arrangement, or understanding, formal or
informal, oral or written, between two or
more persons.
(C) ‘‘Branch’’ means Defendant Community
Health Center of Branch County, a municipal
health facility corporation formed under
Public Act 230 of the Public Acts of 1987
(MCL 331.1101, et. seq.) with its
headquarters in Coldwater, Michigan, its (i)
successors and assigns, (ii) controlled
subsidiaries, divisions, groups, affiliates,
partnerships, and joint ventures, and (iii)
their directors, officers, managers, agents,
and employees.
(D) ‘‘Communicate’’ means to discuss,
disclose, transfer, disseminate, or exchange
information or opinion, formally or
informally, directly or indirectly, in any
manner.
(E) ‘‘Hillsdale’’ means Defendant Hillsdale
Community Health Center, a corporation
organized and existing under the laws of the
State of Michigan with its headquarters in
Hillsdale, Michigan, its (i) successors and
assigns, (ii) controlled subsidiaries, divisions,
groups, affiliates, partnerships, and joint
ventures, and (iii) their directors, officers,
managers, agents, and employees.
(F) ‘‘Joint Provision of Services’’ means any
past, present, or future coordinated delivery
of any healthcare services by two or more
healthcare providers, including a clinical
affiliation, joint venture, management
agreement, accountable care organization,
clinically integrated network, group
purchasing organization, management
services organization, or physician hospital
organization.
(G) ‘‘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.
E:\FR\FM\07JYN1.SGM
07JYN1
38744
Federal Register / Vol. 80, No. 129 / Tuesday, July 7, 2015 / Notices
(H) ‘‘Marketing Manager’’ means any
company officer or employee at the level of
director, or above, with responsibility for or
oversight of Marketing.
(I) ‘‘Person’’ means any natural person,
corporation, firm, company, sole
proprietorship, partnership, joint venture,
association, institute, governmental unit, or
other legal entity.
(J) ‘‘ProMedica’’ means Defendant
ProMedica Health System, Inc., a corporation
organized and existing under the laws of the
State of Ohio with its headquarters in Toledo,
Ohio, its (i) successors and assigns, (ii)
controlled subsidiaries, divisions, groups,
affiliates, partnerships, and joint ventures,
including Emma L. Bixby Medical Center,
Inc. (d/b/a ProMedica Bixby Hospital), a
Michigan nonprofit corporation located in
Adrian, Michigan, and Herrick Hospital, Inc.
(d/b/a ProMedica Herrick Hospital), a
Michigan nonprofit corporation located in
Tecumseh, Michigan, but excluding
Paramount Health Care, and (iii) their
directors, officers, managers, agents, and
employees.
(K) ‘‘Provider’’ means any physician or
physician group and any inpatient or
outpatient medical facility including
hospitals, ambulatory surgical centers, urgent
care facilities, and nursing facilities.
(L) ‘‘Relevant Area’’ means Branch,
Hillsdale, Jackson, and Lenawee Counties in
the State of Michigan.
III. APPLICABILITY
This Final Judgment applies to the Settling
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.
tkelley on DSK3SPTVN1PROD with NOTICES
IV. PROHIBITED CONDUCT
(A) Each Settling Defendant shall not
attempt to enter into, enter into, maintain, or
enforce any Agreement with any other
Provider that:
(1) Prohibits or limits Marketing; or
(2) allocates any geographic market or
territory between or among the Settling
Defendant and any other Provider.
(B) Each Settling Defendant shall not
Communicate with any other Defendant
about any Defendant’s Marketing in its or the
other Defendant’s county, except each
Settling Defendant may:
(1) Communicate with any other Defendant
about joint Marketing if the communication
is related to the Joint Provision of Services;
or
(2) communicate with any other Defendant
about Marketing if the communication is part
of customary due diligence relating to a
merger, acquisition, joint venture,
investment, or divestiture.
V. REQUIRED CONDUCT
(A) Within thirty days of entry of this Final
Judgment, each Settling Defendant shall
appoint an Antitrust Compliance Officer and
identify to Plaintiffs his or her name,
business address, and telephone number.
(B) Each 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
VerDate Sep<11>2014
21:21 Jul 06, 2015
Jkt 235001
Exhibit 1 within sixty days of entry of the
Final Judgment to each Settling Defendant’s
officers, directors, and Marketing Managers,
and to any person who succeeds to any such
position, within thirty 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 sixty days of that
person’s receipt of the Final Judgment, a
certification that he or she (i) has read and,
to the best of his or her ability, understands
and agrees to abide by the terms of this Final
Judgment; (ii) is not aware of any violation
of the Final Judgment that has not already
been reported to the Settling 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 Settling
Defendant and/or any person who violates
this Final Judgment;
(4) maintain a record of certifications
received pursuant to this Section; and
(5) annually communicate to the Settling
Defendant’s employees that they may
disclose to the Antitrust Compliance Officer,
without reprisal, information concerning any
potential violation of this Final Judgment or
the antitrust laws.
(C) Each Settling 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) upon learning of any violation or
potential violation of any of the terms and
conditions contained in this Final Judgment,
file with the United States and the State of
Michigan a statement describing any
violation or potential violation within thirty
days of its 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 and the
State of Michigan annually on the
anniversary date of the entry of this Final
Judgment that the Settling Defendant has
complied with the provisions of this Final
Judgment.
VI. SETTLING DEFENDANTS’
COOPERATION
Each Settling Defendant shall cooperate
fully and truthfully with the United States
and the State of Michigan in any
investigation or litigation alleging that
Defendants unlawfully agreed to restrict
Marketing in the Relevant Area in violation
of Section 1 of the Sherman Act, as amended,
15 U.S.C. 1, or Section 2 of the Michigan
Antitrust Reform Act, MCL 445.772. Each
Settling Defendant shall use its best efforts to
PO 00000
Frm 00084
Fmt 4703
Sfmt 4703
ensure that all officers, directors, employees,
and agents also fully and promptly cooperate
with the United States and the State of
Michigan. The full, truthful, and continuing
cooperation of each Settling Defendant will
include, but not be limited to:
(A) Producing all documents and other
materials, wherever located, not protected
under the attorney-client privilege or the
work-product doctrine, in the possession,
custody, or control of that Settling Defendant,
that are relevant to the unlawful agreements
among Defendants to restrict Marketing in
the Relevant Area in violation of Section 1
of the Sherman Act, as amended, 15 U.S.C.
1, or Section 2 of the Michigan Antitrust
Reform Act, MCL 445.772, alleged in the
Complaint, upon the request of the United
States or the State of Michigan;
(B) making available for interview any
officers, directors, employees, and agents if
so requested by the United States or the State
of Michigan; and
(C) testifying at trial and other judicial
proceedings fully, truthfully, and under oath,
subject to the penalties of perjury (18 U.S.C.
1621), making a false statement or
declaration in court proceedings (18 U.S.C.
1623), contempt (18 U.S.C. 401–402), and
obstruction of justice (18 U.S.C. 1503, et
seq.), or the equivalent Michigan provisions,
when called upon to do so by the United
States or the State of Michigan;
(D) provided however, that the obligations
of each Settling Defendant to cooperate fully
with the United States and the State of
Michigan as described in this Section shall
cease upon the sooner of (i) when all
Defendants settle all claims in this matter
and all settlements have been entered by this
Court, or (ii) at the conclusion of all
investigations and litigation alleging the nonSettling Defendant unlawfully agreed to
restrict Marketing in the Relevant Area in
violation of Section 1 of the Sherman Act, as
amended, 15 U.S.C. 1, or Section 2 of the
Michigan Antitrust Reform Act, MCL
445.772, including exhaustion of all appeals
or expiration of time for all appeals of any
Court ruling in this matter.
VII. COMPLIANCE INSPECTION
(A) For the purposes of determining or
securing compliance with this Final
Judgment, or of determining whether the
Final Judgment should be modified or
vacated, and subject to any legally recognized
privilege, from time to time authorized
representatives of the United States
Department of Justice or the Office of the
Michigan Attorney General, including
consultants and other retained persons, shall,
upon the written request of an authorized
representative of the Assistant Attorney
General in charge of the Antitrust Division or
of the Office of the Michigan Attorney
General, and on reasonable notice to Settling
Defendants, be permitted:
(1) Access during Settling Defendants’
office hours to inspect and copy, or at the
option of the United States or the State of
Michigan, to require Settling Defendants to
provide hard copy or electronic copies of, all
books, ledgers, accounts, records, data, and
documents in the possession, custody, or
control of Settling Defendants, relating to any
E:\FR\FM\07JYN1.SGM
07JYN1
Federal Register / Vol. 80, No. 129 / Tuesday, July 7, 2015 / Notices
matters contained in this Final Judgment;
and
(2) to interview, either informally or on the
record, Settling 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 Settling Defendants.
(B) Upon the written request of an
authorized representative of the Assistant
Attorney General in charge of the Antitrust
Division or of the Office of the Michigan
Attorney General, Settling Defendants shall,
subject to any legally recognized privilege,
submit written reports or response to written
interrogatories, under oath if requested,
relating to any of the matters contained in
this Final Judgment as may be requested.
(C) No information or documents obtained
by the means provided in this section shall
be divulged by the United States or the State
of Michigan to any person other than an
authorized representative of the executive
branch of the United States or the State of
Michigan, except in the course of legal
proceedings to which the United States or the
State of Michigan is a party (including grand
jury proceedings), or for the purpose of
securing compliance with this Final
Judgment, or as otherwise required by law.
(D) If at the time information or documents
are furnished by Settling Defendants to the
United States or the State of Michigan,
Settling 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 Settling
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
and the State of Michigan shall give Settling
Defendants ten calendar days notice prior to
divulging such material in any legal
proceeding (other than a grand jury
proceeding).
VIII. INVESTIGATION FEES AND COSTS
Each Settling Defendant shall pay to the
State of Michigan the sum of $5,000.00 to
partially cover the attorney fees and costs of
investigation.
tkelley on DSK3SPTVN1PROD with NOTICES
IX. 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.
X. EXPIRATION OF FINAL JUDGMENT
Unless this Court grants an extension, this
Final Judgment shall expire five years from
the date of its entry.
XI. NOTICE
For purposes of this Final Judgment, any
notice or other communication required to be
filed with or provided to the United States
or the State of Michigan shall be sent to the
persons at the addresses set forth below (or
VerDate Sep<11>2014
20:31 Jul 06, 2015
Jkt 235001
38745
such other address as the United States or the
State of Michigan may specify in writing to
any Settling Defendant):
Chief
Litigation I Section
U.S. Department of Justice
Antitrust Division
450 Fifth Street, Suite 4100
Washington, DC 20530
it affects your activities, please contact me.
Thank you for your cooperation.
Sincerely,
[Settling Defendant’s Antitrust Compliance
Officer]
Division Chief
Corporate Oversight Division
Michigan Department of Attorney General
525 West Ottawa Street
P.O. Box 30755
Lansing, MI 48909
DEPARTMENT OF JUSTICE
XII. PUBLIC INTEREST DETERMINATION
The parties, as required, have complied
with the procedures 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: llllllllll
Court approval subject to procedures of
Antitrust Procedures and Penalties Act, 15
U.S.C. § 16
United States District Judge
Exhibit 1
[Letterhead of Settling Defendant]
[Name and Address of Antitrust Compliance
Officer]
Dear [XX]:
I am providing you this notice to make sure
you are aware of a court order recently
entered by a federal judge in lllll,
Michigan. This court order applies to our
institution and all of its employees, including
you, so it is important that you understand
the obligations it imposes on us. [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.
In a nutshell, the order prohibits us from
agreeing with other healthcare providers,
including hospitals and physicians, to limit
marketing or to divide any geographic market
or territory between healthcare providers.
This means you cannot give any assurance to
another healthcare provider that [Settling
Defendant] will refrain from marketing our
services, and you cannot ask for any
assurance from them that they will refrain
from marketing. The court order also
prohibits communicating with [list other
three defendants], or their employees about
our marketing plans or about their marketing
plans. There are limited exceptions to this
restriction on communications, such as
discussing joint projects, but you should
check with me before relying on those
exceptions.
A copy of the court order is attached.
Please read it carefully and familiarize
yourself with its terms. The order, rather than
the above description, is controlling. If you
have any questions about the order or how
PO 00000
Frm 00085
Fmt 4703
Sfmt 4703
[FR Doc. 2015–16585 Filed 7–6–15; 8:45 am]
BILLING CODE 4410–11–P
[OMB Number 1105–0091]
Agency Information Collection
Activities; Proposed eCollection
eComments Requested; Assumption
of Concurrent Federal Criminal
Jurisdiction In Certain Areas of Indian
Country
Office of Tribal Justice,
Department of Justice.
ACTION: 30-day notice.
AGENCY:
The Department of Justice,
Office of Tribal Justice, will be
submitting the following information
collection request to the Office of
Management and Budget (OMB) for
review and approval in accordance with
the Paperwork Reduction Act of 1995.
The proposed information collection is
published to obtain comments from the
public and affected agencies. This
proposed information collection was
previously published in the FR 80
23287, on April 27, 2015, allowing for
a 60 day comment period.
DATES: Comments are encouraged and
will be accepted for an additional 30
days until August 6, 2015.
FOR FURTHER INFORMATION CONTACT: If
you have additional comments
especially on the estimated public
burden or associated response time,
suggestions, or need a copy of the
proposed information collection
instrument with instructions or
additional information, please contact
Mr. Tracy Toulou, Director, Office of
Tribal Justice, Department of Justice,
950 Pennsylvania Avenue NW, Room
2310, Washington, DC 20530. Written
comments and/or suggestions can also
be directed to the Office of Management
and Budget, Office of Information and
Regulatory Affairs, Attention
Department of Justice Desk Officer,
Washington, DC 20530 or sent to OIRA_
submissions@omb.eop.gov.
SUPPLEMENTARY INFORMATION: Written
comments and suggestions from the
public and affected agencies concerning
the proposed collection of information
are encouraged. Your comments should
address one or more of the following
four points:
—Evaluate whether the proposed
collection of information is necessary
SUMMARY:
E:\FR\FM\07JYN1.SGM
07JYN1
Agencies
[Federal Register Volume 80, Number 129 (Tuesday, July 7, 2015)]
[Notices]
[Pages 38736-38745]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-16585]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF JUSTICE
Antitrust Division
United States and State of Michigan v. Hillsdale Community Health
Center, et al.; 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 Order, and Competitive Impact Statement have been filed
with the United States District Court for the Eastern District of
Michigan in United States and State of Michigan v. Hillsdale Community
Health Center, et al., Civil Action No. 15-cv-12311 (JEL) (DRG). On
June 25, 2015, the United States and the State of Michigan filed a
Complaint alleging that Defendant Hillsdale Community Health Center
(``Hillsdale'') entered into agreements with Defendants W.A. Foote
Memorial Hospital, d/b/a Allegiance Health (``Allegiance''), Community
Health Center of Branch County (``Branch''), and ProMedica Health
System (``ProMedica'') that unlawfully allocated territories for the
marketing of competing healthcare services in violation of section 1 of
the Sherman Act, 15 U.S.C. 1, and section 2 of the Michigan Antitrust
Reform Act, MCL 445.772. The proposed Final Judgment, submitted at the
same time as the Complaint, prohibits the settling Defendants--
Hillsdale, Branch, and ProMedica--from agreeing with other healthcare
providers to prohibit or limit marketing or to divide any geographic
market or territory. The proposed Final Judgment also prohibits the
settling Defendants from communicating with other Defendants about
marketing plans, with limited exceptions.
Copies of the Complaint, proposed Final Judgment, and Competitive
Impact Statement are available for inspection at the Department of
Justice, Antitrust Division, Antitrust Documents Group, 450 Fifth
Street NW., Suite 1010, Washington, DC 20530 (telephone: 202-514-2481),
on the Department of Justice's Web site at https://www.justice.gov/atr,
and at the Office of the Clerk of the United States District Court for
the Eastern District of Michigan. Copies of these materials may be
obtained from the Antitrust Division upon request and payment of the
copying fee set by Department of Justice regulations.
Public comment on the proposed Final Judgment is invited within 60
days of the date of this notice. Such comments, including the name of
the submitter, and responses thereto, will be posted on the U.S.
Department of Justice, Antitrust Division's internet Web site, filed
with the Court and, under certain circumstances, published in the
Federal Register. Comments should be directed to Peter J. Mucchetti,
Chief, Litigation I Section, Antitrust Division, Department of Justice,
450
[[Page 38737]]
Fifth Street NW., Suite 4100, Washington, DC 20530 (telephone: 202-307-
0001).
Patricia A. Brink,
Director of Civil Enforcement.
UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN
UNITED STATES OF AMERICA and STATE OF MICHIGAN, Plaintiffs, v.
HILLSDALE COMMUNITY HEALTH CENTER, W.A. FOOTE MEMORIAL HOSPITAL, D/B/A
ALLEGIANCE HEALTH, COMMUNITY HEALTH CENTER OF BRANCH COUNTY, and
PROMEDICA HEALTH SYSTEM, INC., Defendants.
CASE NO.: 2:15-cv-12311
Hon. Judith E. Levy
COMPLAINT
The United States of America and the State of Michigan bring this
civil antitrust action to enjoin agreements by Defendants Hillsdale
Community Health Center (``Hillsdale''), W.A. Foote Memorial Hospital,
d/b/a Allegiance Health (``Allegiance''), Community Health Center of
Branch County (``Branch''), and ProMedica Health System, Inc.
(``ProMedica'') (collectively, ``Defendants'') that unlawfully allocate
territories for the marketing of competing healthcare services and
limit competition among Defendants.
NATURE OF THE ACTION
1. Defendants are healthcare providers in Michigan that operate the
only general acute-care hospital or hospitals in their respective
counties. Defendants directly compete with each other to provide
healthcare services to the residents of south-central Michigan.
Marketing is a key component of this competition and includes
advertisements, mailings to patients, health fairs, health screenings,
and outreach to physicians and employers.
2. Allegiance, Branch, and ProMedica's Bixby and Herrick Hospitals
(``Bixby and Herrick'') are Hillsdale's closest Michigan competitors.
Hillsdale orchestrated agreements to limit marketing of competing
healthcare services. Allegiance explained in a 2013 oncology marketing
plan: ``[A]n agreement exists with the CEO of Hillsdale Community
Health Center, Duke Anderson, to not conduct marketing activity in
Hillsdale County.'' Branch's CEO described the Branch agreement with
Hillsdale as a ``gentlemen's agreement not to market services.'' A
ProMedica communications specialist described the ProMedica agreement
with Hillsdale in an email: ``The agreement is that they stay our [sic]
of our market and we stay out of theirs unless we decide to collaborate
with them on a particular project.''
3. The Defendants' agreements have disrupted the competitive
process and harmed patients, physicians, and employers. For instance,
all of these agreements have deprived patients, physicians, and
employers of information they otherwise would have had when making
important healthcare decisions. In addition, the agreement between
Allegiance and Hillsdale has deprived Hillsdale County patients of free
medical services such as health screenings and physician seminars that
they would have received but for the unlawful agreement. Moreover, it
denied Hillsdale County employers the opportunity to develop
relationships with Allegiance that could have allowed them to improve
the quality of their employees' medical care.
4. Defendants' senior executives created and enforced these
agreements, which lasted for many years. On certain occasions when a
Defendant violated one of the agreements, executives of the aggrieved
Defendant complained about the violation and received assurances that
the previously agreed upon marketing restrictions would continue to be
observed going forward.
5. Defendants' agreements are naked restraints of trade that are
per se unlawful under Section 1 of the Sherman Act, 15 U.S.C. 1, and
Section 2 of the Michigan Antitrust Reform Act, MCL 445.772.
JURISDICTION, VENUE, AND INTERSTATE COMMERCE
6. The United States brings this action pursuant to Section 4 of
the Sherman Act, 15 U.S.C. 4, to prevent and restrain Defendants'
violations of Section 1 of the Sherman Act, 15 U.S.C. 1. The State of
Michigan brings this action in its sovereign capacity under its
statutory, equitable and/or common law powers, and pursuant to Section
16 of the Clayton Act, 15 U.S.C. 26, to prevent and restrain
Defendants' violations of Section 2 of the Michigan Antitrust Reform
Act, MCL 445.772.
7. This Court has subject matter jurisdiction over this action
under Section 4 of the Sherman Act, 15 U.S.C. 4 (as to claims by the
United States); Section 16 of the Clayton Act, 15 U.S.C. 26 (as to
claims by the State of Michigan); and 28 U.S.C. 1331, 1337(a), 1345,
and 1367.
8. Venue is proper in the Eastern District of Michigan under 28
U.S.C. 1391 and Section 12 of the Clayton Act, 15 U.S.C. 22. Each
Defendant transacts business within the Eastern District of Michigan,
all Defendants reside in the State of Michigan, and at least two
Defendants reside in the Eastern District of Michigan.
9. Defendants all engage in interstate commerce and in activities
substantially affecting interstate commerce. Defendants provide
healthcare services to patients for which employers, health plans, and
individual patients remit payments across state lines. Defendants
purchase supplies and equipment from out-of-state vendors that are
shipped across state lines.
DEFENDANTS
10. Hillsdale is a Michigan corporation headquartered in Hillsdale,
Michigan. Its general acute-care hospital, which is in Hillsdale
County, Michigan, has 47 beds and a medical staff of over 90
physicians.
11. Allegiance is a Michigan corporation headquartered in Jackson,
Michigan. Its general acute-care hospital, which is in Jackson County,
Michigan, has 480 beds and a medical staff of over 400 physicians.
12. Branch is a Michigan corporation headquartered in Coldwater,
Michigan. Its general acute-care hospital, which is in Branch County,
Michigan, has 87 beds and a medical staff of over 100 physicians.
13. ProMedica is an Ohio corporation headquartered in Toledo, Ohio,
with facilities in northwest Ohio and southern Michigan. ProMedica's
Bixby and Herrick Hospitals are both in Lenawee County, Michigan. Bixby
is a general acute-care hospital with 88 beds and a medical staff of
over 120 physicians. Herrick is a general acute-care hospital with 25
beds and a medical staff of over 75 physicians.
[[Page 38738]]
[GRAPHIC] [TIFF OMITTED] TN07JY15.099
BACKGROUND ON HOSPITAL COMPETITION
14. Hillsdale competes with each of the other Defendants to provide
many of the same hospital and physician services to patients. Hospitals
compete on price, quality, and other factors to sell their services to
patients, employers, and insurance companies. An important tool that
hospitals use to compete for patients is marketing aimed at informing
patients, physicians, and employers about a hospital's quality and
scope of services. An executive from each Defendant has testified at
deposition that marketing is an important strategy through which
hospitals seek to increase their patient volume and market share.
15. Defendants' marketing includes advertisements through mailings
and media such as local newspapers, radio, television, and billboards.
Allegiance's marketing to patients also includes the provision of free
medical services, such as health screenings, physician seminars, and
health fairs. Some Defendants also market to physicians through
educational and relationship-building meetings that provide physicians
with information about those Defendants' quality and range of services.
Allegiance also engages in these marketing activities with employers.
HILLSDALE'S UNLAWFUL AGREEMENTS
16. Hillsdale has agreements limiting competition with Allegiance,
ProMedica, and Branch.
Unlawful Agreement Between Hillsdale and Allegiance
17. Since at least 2009, Hillsdale and Allegiance have had an
agreement that limits Allegiance's marketing for competing services in
Hillsdale County. As Allegiance explained in a 2013 oncology marketing
plan: ``[A]n agreement exists with the CEO of Hillsdale Community
Health Center, Duke Anderson, to not conduct marketing activity in
Hillsdale County.''
18. In compliance with this agreement, Allegiance has excluded
Hillsdale County from marketing campaigns since at least 2009. For
example, Allegiance excluded Hillsdale County from the marketing plans
outlined in the above-referenced 2013 oncology marketing plan. And
according to a February 2014 board report, Allegiance excluded
Hillsdale from marketing campaigns for cardiovascular and orthopedic
services.
19. On at least two occasions, Hillsdale's CEO complained to
Allegiance after Allegiance sent marketing materials to Hillsdale
County residents. Both times--at the direction of Allegiance CEO
Georgia Fojtasek--Allegiance's Vice President of Marketing, Anthony
Gardner, apologized in writing to Hillsdale's CEO. In one apology he
said, ``It isn't our style to purposely not honor our agreement.'' Mr.
Gardner assured Hillsdale's CEO that Allegiance would not repeat this
mistake.
20. Allegiance also conveyed its hands-off approach to Hillsdale in
2009 when Ms. Fojtasek told Hillsdale's CEO that Allegiance would take
a ``Switzerland'' approach towards Hillsdale, and then confirmed this
approach by mailing Hillsdale's CEO a Swiss flag.
21. Allegiance executives and staff have discussed the agreement in
numerous correspondences and business documents. For example,
Allegiance staff explained in a 2012 cardiovascular services analysis:
``Hillsdale does not permit [Allegiance] to conduct free vascular
screens as they periodically charge for screenings.'' As a result,
around that time, Hillsdale County patients were deprived of free
vascular-health screenings.
22. In another instance, in 2014 Allegiance discouraged one of its
newly employed physicians from giving a seminar in Hillsdale County
relating to competing services. In response to the physician's request
to provide the
[[Page 38739]]
seminar, the Allegiance Marketing Director asked the Vice President of
Physician Integration and Business Development: ``Who do you think is
the best person to explain to [the doctor] our restrictions in
Hillsdale? We're happy to do so but often our docs find it hard to
believe and want a higher authority to confirm.''
23. The agreement between Hillsdale and Allegiance has deprived
Hillsdale County patients, physicians, and employers of information
regarding their healthcare-provider choices and of free health-
screenings and education.
Unlawful Agreement Between Hillsdale and ProMedica
24. Since at least 2012, Hillsdale and ProMedica have agreed to
limit their marketing for competing services in one another's county.
25. This agreement has restrained marketing in several ways. For
example, in June 2012, Bixby and Herrick's President asked Hillsdale's
CEO if he would have any issue with Bixby marketing its oncology
services to Hillsdale physicians. Hillsdale's CEO replied that he
objected because his hospital provided those services. Bixby and
Herrick's President responded that he understood. Bixby and Herrick
then refrained from marketing their competing oncology services in
Hillsdale County.
26. Another incident occurred around January 2012, when Hillsdale's
CEO complained to Bixby and Herrick's President about the placement of
a ProMedica billboard across from a physician's office in Hillsdale
County. At the conclusion of the conversation, Bixby and Herrick's
President assured Hillsdale's CEO that he would check into taking down
the billboard.
27. ProMedica employees have discussed and acknowledged the
agreement in multiple documents. For example, after Hillsdale's CEO
called Bixby and Herrick's President to complain about ProMedica's
billboard, a ProMedica communications specialist described the
agreement to marketing colleagues via email: ``According to [Bixby and
Herrick's President] any potential marketing (including network
development) efforts targeted for the Hillsdale, MI market should be
run by him so that he can talk to Hillsdale Health Center in advance.
The agreement is that they stay our [sic] of our market and we stay out
of theirs unless we decide to collaborate with them on a particular
project.''
28. The agreement between Hillsdale and ProMedica deprived
patients, physicians, and employers of Hillsdale and Lenawee Counties
of information regarding their healthcare-provider choices.
Unlawful Agreement Between Hillsdale and Branch
29. Since at least 1999, Hillsdale and Branch have agreed to limit
marketing in one another's county. In the fall of 1999, Hillsdale's
then-CEO and Branch's CEO reached an agreement whereby each hospital
agreed not to market anything but new services in the other hospital's
county. Branch's CEO testified recently in deposition that ``There's a
gentlemen's agreement not to market services other than new services.''
30. Branch has monitored Hillsdale's compliance with the agreement.
For example, in November 2004, Hillsdale promoted one of its physicians
through an advertisement in the Branch County newspaper. Branch's CEO
faxed Hillsdale's then-CEO a copy of the advertisement, alerting him to
the violation of their agreement.
31. In addition to monitoring Hillsdale's compliance, Branch has
directed its marketing employees to abide by the agreement with
Hillsdale. For example, Branch's 2013 guidelines for sending out media
releases instructed that it had a ``gentleman's agreement'' with
Hillsdale and thus Branch should not send media releases to the
Hillsdale Daily News.
32. The agreement between Hillsdale and Branch deprived Hillsdale
and Branch County patients, physicians, and employers of information
regarding their healthcare-provider choices.
NO PROCOMPETITIVE JUSTIFICATIONS
33. The Defendants' anticompetitive agreements are not reasonably
necessary to further any procompetitive purpose.
VIOLATIONS ALLEGED
First Cause of Action: Violation of Section 1 of the Sherman Act
34. Plaintiffs incorporate paragraphs 1 through 33.
35. Allegiance, Branch, and ProMedica are each a horizontal
competitor of Hillsdale in the provision of healthcare services in
south-central Michigan. Defendants' agreements are facially
anticompetitive because they allocate territories for the marketing of
competing healthcare services and limit competition among Defendants.
The agreements eliminate a significant form of competition to attract
patients.
36. The agreements constitute unreasonable restraints of trade that
are per se illegal under Section 1 of the Sherman Act, 15 U.S.C. 1. No
elaborate analysis is required to demonstrate the anticompetitive
character of these agreements.
37. The agreements are also unreasonable restraints of trade that
are unlawful under Section 1 of the Sherman Act, 15 U.S.C. 1, under an
abbreviated or ``quick look'' rule of reason analysis. The principal
tendency of the agreements is to restrain competition. The nature of
the restraints is obvious, and the agreements lack legitimate
procompetitive justifications. Even an observer with a rudimentary
understanding of economics could therefore conclude that the agreements
would have anticompetitive effects on patients, physicians, and
employers, and harm the competitive process.
Second Cause of Action: Violation of MCL 445.772
38. Plaintiff State of Michigan incorporates paragraphs 1 through
37 above.
39. Defendants entered into unlawful agreements with each other
that unreasonably restrain trade and commerce in violation of Section 2
of the Michigan Antitrust Reform Act, MCL 445.772.
REQUESTED RELIEF
The United States and the State of Michigan request that the Court:
(A) judge that Defendants' agreements limiting competition
constitute illegal restraints of interstate trade in violation of
Section 1 of the Sherman Act, 15 U.S.C. 1, and Section 2 of the
Michigan Antitrust Reform Act, MCL 445.772;
(B) enjoin Defendants and their members, officers, agents, and
employees from continuing or renewing in any manner the conduct alleged
herein or from engaging in any other conduct, agreement, or other
arrangement having the same effect as the alleged violations;
(C) enjoin each Defendant and its members, officers, agents, and
employees from communicating with any other Defendant about any
Defendant's marketing in its or the other Defendant's county, unless
such communication is related to the joint provision of services, or
unless the communication is part of normal due diligence relating to a
merger, acquisition, joint venture, investment, or divestiture;
(D) require Defendants to institute a comprehensive antitrust
compliance program to ensure that Defendants do not establish any
similar agreements and that Defendants' members, officers, agents and
employees are fully informed of the application of the antitrust laws
[[Page 38740]]
to hospital restrictions on competition; and
(E) award Plaintiffs their costs in this action, including
attorneys' fees and investigation costs to the State of Michigan, and
such other relief as may be just and proper.
Dated: June 25, 2015
Respectfully submitted,
FOR PLAINTIFF UNITED STATES OF AMERICA:
WILLIAM J. BAER
Assistant Attorney General for Antitrust
DAVID I. GELFAND
Deputy Assistant Attorney General
KATRINA ROUSE (D.C. Bar #1013035)
JENNIFER HANE
JOSEPH POTCHEN
Division Chief
BARRY JOYCE
Attorneys, Litigation I, Antitrust Division, U.S. Department of
Justice, 450 Fifth Street, N.W., Suite 4100, Washington, D.C. 20530,
(202) 305-7498, E-mail: katrina.rouse@usdoj.gov
LOCAL COUNSEL:
BARBARA L. McQUADE
United States Attorney
PETER CAPLAN
Assistant United States Attorney, 211 W. Fort Street, Suite 2001,
Detroit, Michigan 48226, (313) 226-9784, P30643
FOR PLAINTIFF STATE OF MICHIGAN:
BILL SCHUETTE
Attorney General
State of Michigan
MARK GABRIELSE (P75163)
D.J. PASCOE,
Assistant Attorney Generals, Michigan Department of Attorney
General, Corporate Oversight Division, G. Mennen Williams Building,
6th Floor, 525 W. Ottawa Street, Lansing, Michigan 48933, (517) 373-
1160, Email: gabrielsem@michigan.gov
UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN
UNITED STATES OF AMERICA and STATE OF MICHIGAN, Plaintiffs, v.
HILLSDALE COMMUNITY HEALTH CENTER, W.A. FOOTE MEMORIAL HOSPITAL, D/
B/A ALLEGIANCE HEALTH, COMMUNITY HEALTH CENTER OF BRANCH COUNTY, and
PROMEDICA HEATLH SYSTEM, INC., Defendants.
Case No.: 2:15-cv-12311
Hon. Judith E. Levy
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 June 25, 2015, the United States and the State of Michigan
filed a civil antitrust Complaint alleging that Defendants Hillsdale
Community Health Center (``Hillsdale''), W.A. Foote Memorial
Hospital, d/b/a Allegiance Health (``Allegiance''), Community Health
Center of Branch County (``Branch''), and ProMedica Health System,
Inc. (``ProMedica'') violated Section 1 of the Sherman Act, 15
U.S.C. 1, and Section 2 of the Michigan Antitrust Reform Act, MCL
445.772. The Complaint alleges that Hillsdale agreed with its
closest Michigan competitors to unlawfully allocate territories for
the marketing of competing healthcare services and to limit
competition between them. Specifically, according to the Complaint,
Hillsdale entered into agreements with Allegiance, Branch, and
ProMedica to limit marketing of competing healthcare services. The
agreements eliminated a significant form of competition to attract
patients and overall substantially diminished competition in south-
central Michigan. Defendants' agreements to allocate territories for
marketing are per se illegal under Section 1 of the Sherman Act, 15
U.S.C. 1, and Section 2 of the Michigan Antitrust Reform Act, MCL
445.772.
With the Complaint, the United States and the State of Michigan
filed a Stipulation and proposed Final Judgment with respect to
Hillsdale, Branch, and ProMedica (collectively ``Settling
Defendants''). The proposed Final Judgment, as explained more fully
below, enjoins Settling Defendants from (1) agreeing with any
healthcare provider to prohibit or limit marketing or to allocate
geographic markets or territories, and (2) communicating with any
other Defendant about any Defendant's marketing in its or the other
Defendant's county, subject to narrow exceptions.
The United States, the State of Michigan, and the Settling
Defendants have stipulated that the proposed Final Judgment may be
entered after compliance with the APPA, unless the United States and
the State of Michigan withdraw their consent. Entry of the proposed
Final Judgment would terminate this action with respect to Settling
Defendants, except that this Court would retain jurisdiction to
construe, modify, and enforce the proposed Final Judgment and to
punish violations thereof. The case against Allegiance will
continue.
II. DESCRIPTION OF THE EVENTS GIVING RISE TO THE ALLEGED VIOLATIONS
A. Background on the Defendants and their Marketing Activities
Allegiance, Branch, Hillsdale, and ProMedica's Bixby and Herrick
Hospitals are general acute-care hospitals in adjacent counties in
south-central Michigan. Defendants are the only hospital or
hospitals in their respective counties. Hillsdale directly competes
with each of the other Defendants to provide many of the same
hospital and physician services to patients.
An important tool that hospitals use to compete for patients is
marketing aimed at informing patients, physicians, and employers
about a hospital's quality and scope of services. Defendants'
marketing includes advertisements through mailings and media, such
as local newspapers, radio, television, and billboards. Allegiance's
marketing efforts have also included the provision of free medical
services, such as health screenings, physician seminars, and health
fairs. Some Defendants also market to physicians through educational
and relationship-building meetings that provide physicians with
information about Defendants' quality and range of services.
Allegiance also engages in these marketing meetings with employers.
B. Defendants' Unlawful Agreements to Limit Marketing
Allegiance, Branch, and ProMedica's Bixby and Herrick Hospitals
are Hillsdale's closest Michigan competitors. Hillsdale orchestrated
agreements with each to limit marketing of competing healthcare
services. Defendants' senior executives created and enforced these
agreements, which have lasted for many years.
1. Unlawful Agreement Between Hillsdale and Allegiance
Since at least 2009, Hillsdale and Allegiance have had an
agreement that limits Allegiance's marketing for competing services
in Hillsdale County. As Allegiance explained in a 2013 oncology
marketing plan: ``[A]n agreement exists with the CEO of Hillsdale
Community Health Center . . . to not conduct marketing activity in
Hillsdale County.'' In compliance with this agreement, which
Allegiance executives acknowledge in numerous documents, Allegiance
has excluded Hillsdale County from marketing campaigns since at
least 2009. Allegiance has on occasion apologized to Hillsdale for
violating the agreement and assured Hillsdale that Allegiance would
honor the previously agreed upon agreement going forward. And
Allegiance has avoided giving free health benefits, such as
physician seminars and health screenings, to residents of Hillsdale
County because of the agreement. For example, Allegiance discouraged
one of its newly employed physicians from giving a seminar relating
to competing services in Hillsdale County. This unlawful agreement
between Hillsdale and Allegiance has deprived Hillsdale County
patients, physicians, and employers of information regarding their
healthcare provider choices and of free health screenings and
education.
1. Unlawful Agreement Between Hillsdale and ProMedica
Since at least 2012, Hillsdale and ProMedica have agreed to
limit their marketing for competing services in one another's
county. As one ProMedica communications specialist described: ``The
agreement is that they stay our [sic] of our market and we stay out
of theirs unless we decide to collaborate with them on a particular
project.'' This agreement has restrained the hospitals' marketing in
each other's county. For example, in June 2012, Hillsdale's CEO
refused to allow ProMedica to market competing oncology services in
Hillsdale County. This unlawful agreement between Hillsdale and
ProMedica deprived patients, physicians, and employers of Hillsdale
and Lenawee Counties of information regarding their healthcare
provider choices.
[[Page 38741]]
2. Unlawful Agreement Between Hillsdale and Branch
Since at least 1999, Hillsdale and Branch have agreed to limit
their marketing for competing services in one another's county. In
the fall of 1999, Hillsdale's then-CEO and Branch's CEO reached an
agreement whereby each hospital agreed not to market anything but
new services in the other hospital's county. Branch's CEO testified
recently in deposition that ``[t]here's a gentlemen's agreement not
to market services other than new services.'' Branch has monitored
Hillsdale's compliance with the agreement and directed its marketing
employees to abide by the agreement. This unlawful agreement between
Hillsdale and Branch deprived Hillsdale and Branch County patients,
physicians, and employers of information regarding their healthcare
provider choices.
3. Defendants' Marketing Agreements Are Per Se Illegal
Defendants' agreements have disrupted the competitive process
and harmed patients, physicians, and employers. For instance, the
agreements have deprived patients, physicians, and employers of
information they otherwise would have had when making important
healthcare decisions. Another impact of the agreement between
Allegiance and Hillsdale was to deprive Hillsdale County patients of
free medical services such as health screenings and physician
seminars that they would have received but for the unlawful
agreement. Moreover, Allegiance's agreement with Hillsdale denied
Hillsdale County employers the opportunity to receive information
and to develop relationships that could have allowed them to improve
the quality of their employees' medical care.
Defendants' anticompetitive agreements are not reasonably
necessary to further any procompetitive purpose. Each of the
agreements among the Defendants 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, and Section 2 of
the Michigan Antitrust Reform Act, MCL 445.772. See United States v.
Topco Assocs., Inc., 405 U.S. 596, 607-08 (1972) (holding that naked
market allocation agreements among horizontal competitors are
plainly anticompetitive and illegal per se); United States v.
Cooperative Theatres of Ohio, Inc., 845 F.2d 1367, 1371, 1373 (6th
Cir. 1988) (holding that the defendants' agreement to not ``actively
solicit[] each other's customers'' was ``undeniably a type of
customer allocation scheme which courts have often condemned in the
past as a per se violation of the Sherman Act''); Blackburn v.
Sweeney, 53 F.3d 825, 828 (7th Cir. 1995) (holding that the
``[a]greement to limit advertising to different geographical regions
was intended to be, and sufficiently approximates[,] an agreement to
allocate markets so that the per se rule of illegality applies'').
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 Settling Defendants' anticompetitive
agreements. Section X of the proposed Final Judgment provides that
these provisions will expire five years after its entry.
A. Prohibited Conduct
Under Section IV of the proposed Final Judgment, Settling
Defendants cannot agree with any healthcare provider to prohibit or
limit marketing or to allocate geographic markets or territories.
Settling Defendants are also prohibited from communicating with any
other Defendant about any Defendant's marketing in its or the other
Defendant's county, subject to narrow exceptions. There is an
exception for communication about joint marketing if the
communication is related to the joint provision of services, i.e.,
any past, present, or future coordinated delivery of any healthcare
services by two or more healthcare providers. There is another
exception for communications about marketing that are part of
customary due diligence relating to a merger, acquisition, joint
venture, investment, or divestiture.
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 Settling
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 a notice explaining the obligations of the Final
Judgment to each Settling Defendant's officers, directors, and
marketing managers at the level of director and above. 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. Additionally, each Antitrust Compliance
Officer shall annually brief each person receiving a copy of the
Final Judgment and this Competitive Impact Statement on the meaning
and requirements of the Final Judgment and the antitrust laws.
For a period of five years following the date of entry of the
Final Judgment, the Settling 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, Settling Defendants must within thirty days file
with the United States a statement describing the violation, and
must promptly take action to terminate it.
To facilitate monitoring of the Settling Defendants' compliance
with the Final Judgment, Section VII of the proposed Final Judgment
requires each Settling Defendant to grant the United States or the
State of Michigan access, upon reasonable notice, to Settling
Defendant's records and documents relating to matters contained in
the Final Judgment. Settling 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.
C. Settling Defendants' Cooperation
Section VI of the proposed Final Judgment provides that Settling
Defendants must cooperate fully and truthfully with the United
States and the State of Michigan in any investigation or litigation
alleging that Defendants unlawfully agreed to restrict marketing in
violation of Section 1 of the Sherman Act, as amended, 15 U.S.C. 1,
or Section 2 of the Michigan Antitrust Reform Act, MCL 445.772. Such
cooperation includes, but is not limited to, producing documents,
making officers, directors, employees, and agents available for
interviews, and testifying at trial and other judicial proceedings
fully, truthfully, and under oath.
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 any subsequent private lawsuit that may be brought against
the Settling Defendants.
V. PROCEDURES AVAILABLE FOR MODIFICATION OF THE PROPOSED FINAL JUDGMENT
The United States, the State of Michigan, and the Settling
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:
[[Page 38742]]
Peter J. Mucchetti
Chief, Litigation I Section
Antitrust Division
United States Department of Justice
450 Fifth Street, N.W., 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 Settling
Defendants. The United States is satisfied, however, that the relief
proposed in the Final Judgment will prevent the recurrence of the
violations alleged in the Complaint and ensure that patients,
physicians, and employers benefit from competition between
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 APPA FOR THE PROPOSED FINAL JUDGMENT
The Clayton Act, as amended by the APPA, requires that proposed
consent judgments in antitrust cases brought by the United States be
subject to a sixty-day comment period, after which the court shall
determine whether entry of the proposed Final Judgment ``is in the
public interest.'' 15 U.S.C. 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).\1\ In considering these statutory
factors, the court's inquiry is necessarily a limited one as the
government is entitled to ``broad discretion to settle with the
Defendant within the reaches of the public interest.'' United States
v. Microsoft Corp., 56 F.3d 1448, 1461 (D.C. Cir. 1995); see
generally United States v. U.S. Airways Group, Inc., 38 F. Supp. 3d
69, 75 (D.D.C. 2014) (noting the court has broad discretion of the
adequacy of the relief at issue); United States v. SBC Commc'ns,
Inc., 489 F. Supp. 2d 1 (D.D.C. 2007) (describing the public-
interest standard under the Tunney Act); United States v. InBev
N.V./S.A., No. 08-1965 (JR), 2009 U.S. Dist. LEXIS 84787, at *3
(D.D.C. Aug. 11, 2009) (noting that the court's review of a consent
judgment is limited and only inquires ``into whether the
government's determination that the proposed remedies will cure the
antitrust violations alleged in the complaint was reasonable, and
whether the mechanisms to enforce the final judgment are clear and
manageable'').
---------------------------------------------------------------------------
\1\ The 2004 amendments substituted ``shall'' for ``may'' in
directing relevant factors for courts to consider and amended the
list of factors to focus on competitive considerations and to
address potentially ambiguous judgment terms. Compare 15 U.S.C.
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 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
[[Page 38743]]
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: June 25, 2015
Respectfully submitted,
FOR PLAINTIFF UNITED STATES OF AMERICA
Katrina Rouse
Trial Attorney
Antitrust Division
U.S. Department of Justice
Litigation I Section
450 Fifth Street, N.W., Suite 4100
Washington, D.C. 20530
Phone: (202) 305-7498
D.C. Bar #1013035
Email: katrina.rouse@usdoj.gov
CERTIFICATE OF SERVICE
I hereby certify that on June 25, 2015, 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 Defendants Hillsdale Community Health Center and
Community Health Center of Branch County:
Larry Jensen
Hall Render
201 West Big Beaver Rd.
Columbia Center, Suite 1200
Troy, MI 48084
Phone: (248) 457-7850
Email: ljenson@hallrender.com
Counsel for Defendant W.A. Foote Memorial Hospital, d/b/a
Allegiance Health:
James M. Burns
Dickinson Wright PLLC
1875 Eye St. NW., Suite 1200
Washington, DC 20006
Phone: (202) 659-6945
Email: JMBurns@dickinsonwright.com
Counsel for Defendant ProMedica Health System, Inc.:
Stephen Y. Wu
McDermott Will & Emery LLP
227 West Monroe Street, Suite 4400
Chicago, IL 60606-5096
Phone: (312) 372-2000
Email: swu@mwe.com
Attorney
Litigation I
Antitrust Division
U.S. Department of Justice
450 Fifth Street, NW., Suite 4100
Washington, DC 20530
Phone: (202) 305-7498
DC Bar #1013035
Email: katrina.rouse@usdoj.gov
EXHIBIT A
UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN
UNITED STATES OF AMERICA and STATE OF MICHIGAN, Plaintiffs, v.
HILLSDALE COMMUNITY HEALTH CENTER, W.A. FOOTE MEMORIAL HOSPITAL, D/
B/A ALLEGIANCE HEALTH, COMMUNITY HEALTH CENTER OF BRANCH COUNTY, and
PROMEDICA HEALTH SYSTEM, INC., Defendants.
Case No.: 2:15-cv-12311
Hon. Judith E. Levy
[PROPOSED] FINAL JUDGMENT
WHEREAS, Plaintiffs, the United States of America and the State
of Michigan, filed their joint Complaint on June 25, 2015, alleging
that Defendants violated Section 1 of the Sherman Act, 15 U.S.C. 1,
and Section 2 of the Michigan Antitrust Reform Act, MCL 445.772;
AND WHEREAS, Plaintiffs and Defendants Hillsdale Community
Health Center, Community Health Center of Branch County, and
ProMedica Health System, Inc. (collectively, ``Settling
Defendants''), by their respective attorneys, have consented to the
entry of this Final Judgment without trial or adjudication of any
issue of fact or law;
AND WHEREAS, Plaintiffs require the Settling 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 Settling
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 Settling Defendants under
Section 1 of the Sherman Act, 15 U.S.C. 1, and Section 2 of the
Michigan Antitrust Reform Act, MCL 445.772.
II. DEFINITIONS
As used in this Final Judgment:
(A) ``Allegiance'' means Defendant W. A. Foote Memorial Hospital
doing business as Allegiance Health, a corporation organized and
existing under the laws of the State of Michigan with its
headquarters in Jackson, Michigan, its (i) successors and assigns,
(ii) controlled subsidiaries, divisions, groups, affiliates,
partnerships, and joint ventures, and (iii) their directors,
officers, managers, agents, and employees.
(B) ``Agreement'' means any contract, arrangement, or
understanding, formal or informal, oral or written, between two or
more persons.
(C) ``Branch'' means Defendant Community Health Center of Branch
County, a municipal health facility corporation formed under Public
Act 230 of the Public Acts of 1987 (MCL 331.1101, et. seq.) with its
headquarters in Coldwater, Michigan, its (i) successors and assigns,
(ii) controlled subsidiaries, divisions, groups, affiliates,
partnerships, and joint ventures, and (iii) their directors,
officers, managers, agents, and employees.
(D) ``Communicate'' means to discuss, disclose, transfer,
disseminate, or exchange information or opinion, formally or
informally, directly or indirectly, in any manner.
(E) ``Hillsdale'' means Defendant Hillsdale Community Health
Center, a corporation organized and existing under the laws of the
State of Michigan with its headquarters in Hillsdale, Michigan, its
(i) successors and assigns, (ii) controlled subsidiaries, divisions,
groups, affiliates, partnerships, and joint ventures, and (iii)
their directors, officers, managers, agents, and employees.
(F) ``Joint Provision of Services'' means any past, present, or
future coordinated delivery of any healthcare services by two or
more healthcare providers, including a clinical affiliation, joint
venture, management agreement, accountable care organization,
clinically integrated network, group purchasing organization,
management services organization, or physician hospital
organization.
(G) ``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.
[[Page 38744]]
(H) ``Marketing Manager'' means any company officer or employee
at the level of director, or above, with responsibility for or
oversight of Marketing.
(I) ``Person'' means any natural person, corporation, firm,
company, sole proprietorship, partnership, joint venture,
association, institute, governmental unit, or other legal entity.
(J) ``ProMedica'' means Defendant ProMedica Health System, Inc.,
a corporation organized and existing under the laws of the State of
Ohio with its headquarters in Toledo, Ohio, its (i) successors and
assigns, (ii) controlled subsidiaries, divisions, groups,
affiliates, partnerships, and joint ventures, including Emma L.
Bixby Medical Center, Inc. (d/b/a ProMedica Bixby Hospital), a
Michigan nonprofit corporation located in Adrian, Michigan, and
Herrick Hospital, Inc. (d/b/a ProMedica Herrick Hospital), a
Michigan nonprofit corporation located in Tecumseh, Michigan, but
excluding Paramount Health Care, and (iii) their directors,
officers, managers, agents, and employees.
(K) ``Provider'' means any physician or physician group and any
inpatient or outpatient medical facility including hospitals,
ambulatory surgical centers, urgent care facilities, and nursing
facilities.
(L) ``Relevant Area'' means Branch, Hillsdale, Jackson, and
Lenawee Counties in the State of Michigan.
III. APPLICABILITY
This Final Judgment applies to the Settling 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 Settling Defendant shall not attempt to enter into,
enter into, maintain, or enforce any Agreement with any other
Provider that:
(1) Prohibits or limits Marketing; or
(2) allocates any geographic market or territory between or
among the Settling Defendant and any other Provider.
(B) Each Settling Defendant shall not Communicate with any other
Defendant about any Defendant's Marketing in its or the other
Defendant's county, except each Settling Defendant may:
(1) Communicate with any other Defendant about joint Marketing
if the communication is related to the Joint Provision of Services;
or
(2) communicate with any other Defendant about Marketing if the
communication is part of customary due diligence relating to a
merger, acquisition, joint venture, investment, or divestiture.
V. REQUIRED CONDUCT
(A) Within thirty days of entry of this Final Judgment, each
Settling Defendant shall appoint an Antitrust Compliance Officer and
identify to Plaintiffs his or her name, business address, and
telephone number.
(B) Each 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 sixty days of entry of the Final Judgment to each
Settling Defendant's officers, directors, and Marketing Managers,
and to any person who succeeds to any such position, within thirty
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 sixty days of that person's receipt of the Final Judgment, a
certification that he or she (i) has read and, to the best of his or
her ability, understands and agrees to abide by the terms of this
Final Judgment; (ii) is not aware of any violation of the Final
Judgment that has not already been reported to the Settling
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 Settling Defendant
and/or any person who violates this Final Judgment;
(4) maintain a record of certifications received pursuant to
this Section; and
(5) annually communicate to the Settling Defendant's employees
that they may disclose to the Antitrust Compliance Officer, without
reprisal, information concerning any potential violation of this
Final Judgment or the antitrust laws.
(C) Each Settling 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) upon learning of any violation or potential violation of any
of the terms and conditions contained in this Final Judgment, file
with the United States and the State of Michigan a statement
describing any violation or potential violation within thirty days
of its 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 and the State of Michigan
annually on the anniversary date of the entry of this Final Judgment
that the Settling Defendant has complied with the provisions of this
Final Judgment.
VI. SETTLING DEFENDANTS' COOPERATION
Each Settling Defendant shall cooperate fully and truthfully
with the United States and the State of Michigan in any
investigation or litigation alleging that Defendants unlawfully
agreed to restrict Marketing in the Relevant Area in violation of
Section 1 of the Sherman Act, as amended, 15 U.S.C. 1, or Section 2
of the Michigan Antitrust Reform Act, MCL 445.772. Each Settling
Defendant shall use its best efforts to ensure that all officers,
directors, employees, and agents also fully and promptly cooperate
with the United States and the State of Michigan. The full,
truthful, and continuing cooperation of each Settling Defendant will
include, but not be limited to:
(A) Producing all documents and other materials, wherever
located, not protected under the attorney-client privilege or the
work-product doctrine, in the possession, custody, or control of
that Settling Defendant, that are relevant to the unlawful
agreements among Defendants to restrict Marketing in the Relevant
Area in violation of Section 1 of the Sherman Act, as amended, 15
U.S.C. 1, or Section 2 of the Michigan Antitrust Reform Act, MCL
445.772, alleged in the Complaint, upon the request of the United
States or the State of Michigan;
(B) making available for interview any officers, directors,
employees, and agents if so requested by the United States or the
State of Michigan; and
(C) testifying at trial and other judicial proceedings fully,
truthfully, and under oath, subject to the penalties of perjury (18
U.S.C. 1621), making a false statement or declaration in court
proceedings (18 U.S.C. 1623), contempt (18 U.S.C. 401-402), and
obstruction of justice (18 U.S.C. 1503, et seq.), or the equivalent
Michigan provisions, when called upon to do so by the United States
or the State of Michigan;
(D) provided however, that the obligations of each Settling
Defendant to cooperate fully with the United States and the State of
Michigan as described in this Section shall cease upon the sooner of
(i) when all Defendants settle all claims in this matter and all
settlements have been entered by this Court, or (ii) at the
conclusion of all investigations and litigation alleging the non-
Settling Defendant unlawfully agreed to restrict Marketing in the
Relevant Area in violation of Section 1 of the Sherman Act, as
amended, 15 U.S.C. 1, or Section 2 of the Michigan Antitrust Reform
Act, MCL 445.772, including exhaustion of all appeals or expiration
of time for all appeals of any Court ruling in this matter.
VII. COMPLIANCE INSPECTION
(A) For the purposes of determining or securing compliance with
this Final Judgment, or of determining whether the Final Judgment
should be modified or vacated, and subject to any legally recognized
privilege, from time to time authorized representatives of the
United States Department of Justice or the Office of the Michigan
Attorney General, including consultants and other retained persons,
shall, upon the written request of an authorized representative of
the Assistant Attorney General in charge of the Antitrust Division
or of the Office of the Michigan Attorney General, and on reasonable
notice to Settling Defendants, be permitted:
(1) Access during Settling Defendants' office hours to inspect
and copy, or at the option of the United States or the State of
Michigan, to require Settling Defendants to provide hard copy or
electronic copies of, all books, ledgers, accounts, records, data,
and documents in the possession, custody, or control of Settling
Defendants, relating to any
[[Page 38745]]
matters contained in this Final Judgment; and
(2) to interview, either informally or on the record, Settling
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 Settling Defendants.
(B) Upon the written request of an authorized representative of
the Assistant Attorney General in charge of the Antitrust Division
or of the Office of the Michigan Attorney General, Settling
Defendants shall, subject to any legally recognized privilege,
submit written reports or response to written interrogatories, under
oath if requested, relating to any of the matters contained in this
Final Judgment as may be requested.
(C) No information or documents obtained by the means provided
in this section shall be divulged by the United States or the State
of Michigan to any person other than an authorized representative of
the executive branch of the United States or the State of Michigan,
except in the course of legal proceedings to which the United States
or the State of Michigan is a party (including grand jury
proceedings), or for the purpose of securing compliance with this
Final Judgment, or as otherwise required by law.
(D) If at the time information or documents are furnished by
Settling Defendants to the United States or the State of Michigan,
Settling 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 Settling 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 and
the State of Michigan shall give Settling Defendants ten calendar
days notice prior to divulging such material in any legal proceeding
(other than a grand jury proceeding).
VIII. INVESTIGATION FEES AND COSTS
Each Settling Defendant shall pay to the State of Michigan the
sum of $5,000.00 to partially cover the attorney fees and costs of
investigation.
IX. 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.
X. EXPIRATION OF FINAL JUDGMENT
Unless this Court grants an extension, this Final Judgment shall
expire five years from the date of its entry.
XI. NOTICE
For purposes of this Final Judgment, any notice or other
communication required to be filed with or provided to the United
States or the State of Michigan shall be sent to the persons at the
addresses set forth below (or such other address as the United
States or the State of Michigan may specify in writing to any
Settling Defendant):
Chief
Litigation I Section
U.S. Department of Justice
Antitrust Division
450 Fifth Street, Suite 4100
Washington, DC 20530
Division Chief
Corporate Oversight Division
Michigan Department of Attorney General
525 West Ottawa Street
P.O. Box 30755
Lansing, MI 48909
XII. PUBLIC INTEREST DETERMINATION
The parties, as required, have complied with the procedures of
the Antitrust Procedures and Penalties Act, 15 U.S.C. 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
United States District Judge
Exhibit 1
[Letterhead of Settling Defendant]
[Name and Address of Antitrust Compliance Officer]
Dear [XX]:
I am providing you this notice to make sure you are aware of a
court order recently entered by a federal judge in _____, Michigan.
This court order applies to our institution and all of its
employees, including you, so it is important that you understand the
obligations it imposes on us. [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.
In a nutshell, the order prohibits us from agreeing with other
healthcare providers, including hospitals and physicians, to limit
marketing or to divide any geographic market or territory between
healthcare providers. This means you cannot give any assurance to
another healthcare provider that [Settling Defendant] will refrain
from marketing our services, and you cannot ask for any assurance
from them that they will refrain from marketing. The court order
also prohibits communicating with [list other three defendants], or
their employees about our marketing plans or about their marketing
plans. There are limited exceptions to this restriction on
communications, such as discussing joint projects, but you should
check with me before relying on those exceptions.
A copy of the court order is attached. Please read it carefully
and familiarize yourself with its terms. The order, rather than the
above description, is controlling. If you have any questions about
the order or how it affects your activities, please contact me.
Thank you for your cooperation.
Sincerely,
[Settling Defendant's Antitrust Compliance Officer]
[FR Doc. 2015-16585 Filed 7-6-15; 8:45 am]
BILLING CODE 4410-11-P