0

Phoebe: Order should be affirmed

ALBANY, Ga. -- Now that the appeal process has begun regarding a ruling that came down from the U.S. District Court for the Middle District of Georgia on the purchase of Palmyra Medical Center, Phoebe Putney Health System is continuing to maintain its ground.

The Federal Trade Commission filed a brief Wednesday with the U.S. 11th Circuit Court of Appeals to Phoebe's anticipated purchase of Palmyra, contending that the buyout would result in a health care monopoly in Southwest Georgia.

Tommy Chambless, senior vice president and general counsel at Phoebe, issued a response to the filing Thursday.

"We believe the 11th Circuit will adhere to previous 11th Circuit decisions in rejecting these arguments," his statement emailed to The Albany Herald through a spokeswoman read. "(U.S. District Court) Judge (Louis) Sands followed previous decisions of the 11th Circuit in rejecting the FTC position, and we believe his order should be affirmed on appeal."

The document gives an explanation of the FTC's position and why it believes Sands, from the U.S. District Court for the Middle District of Georgia, erred in his June 27 ruling -- which stated that Phoebe was immune from attempts by the FTC to block the purchase of Palmyra.

"The district court's ruling, on defendants' motions to dismiss pursuant to Fed.R. Civ. P. 12(b)(6), is erroneous for a number of reasons," the brief stated. "The court misconstrued the Commission's theory of the case; it relied on factual inferences that contradict the complaint's allegations; and it misapplied well settled legal principles.

"If allowed to stand, the district court's ruling could provide a roadmap for private parties wishing to bypass any antitrust scrutiny, by structuring their hospital mergers as nominal acquisition-and-leases by the many state hospital authorities empowered to do such transactions, not only in Georgia but in other states as well."

In roughly 50 pages, the FTC states in the brief its contentions that the Hospital Authority of Albany-Dougherty County acted as a "strawman" in its approval of the deal -- which its officials have stated since filing a complaint to that effect on April 20.

The next day, a temporary restraining order was issued on the transaction. On May 16, Phoebe and Hospital Corporation of America -- the current owner of Palmyra -- filed separate motions to dismiss the injunction the FTC had requested.

In the brief, the FTC is requesting an opportunity to present an oral argument to aid in the Court of Appeals' resolution.

"The Court should reverse the district court's decision, and issue a preliminary injunction requiring the merging parties to maintain the status quo during the pendency of the Commission's administrative proceedings," the brief concluded.

The FTC, along with the Georgia Attorney General's Office, both stepped in to halt the acquisition. Following the ruling by Sands, the attorney general opted to not appeal the district court's decision.