Tuesday, December 06, 2011

Competitor Could Not Join State's Antitrust Challenge to Hospital Acquisition

This posting was written by Darius Sturmer, Editor of CCH Trade Regulation Reporter.

A private medical center did not have the right to intervene in an enforcement action by the State of Maine, challenging a proposed acquisition of two cardiology practices by the state's largest health system and its affiliated hospital, Maine's Supreme Court has held. Denial of the medical center's motion to intervene was therefore affirmed.

The medical center seeking to intervene asserted that it was the defending hospital's principal competitor and would potentially be driven from the market as a result of the proposed merger. However, the medical center failed to show that the disposition of the action would impair or impede its ability to protect its interests through independent litigation.

Maine law authorized only the state attorney general—not private parties—to institute proceedings in equity to prevent and restrain antitrust violations, the state's high court explained.

Because private parties were not bound by the government litigation, any liability to private parties could be determined separately under Maine's statutory framework. Thus, there was no entitlement in a private party to intervene as of right in a state antitrust enforcement action in Maine without evidence of bad faith or malfeasance on the part of the government such that intervention was necessary to protect the public's interests. The medical center made no such evidentiary showing, the court said.

The private medical center also was properly refused permissive intervention into the matter, in the court's view. Such a joinder would have unduly burdened the proceedings, and the medical center had been given an adequate alternative method to participate in the enforcement action—the submission of oral and written comments to the trial court overseeing the action.

The case, State of Maine v. MaineHealth, appears in the CCH Trade Regulation Reporter at 2011-2 Trade Cases ¶77,702.

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