Last week, the U.S. Federal Trade Commission (FTC) unanimously agreed to dismiss its challenge to a West Virginia hospital merger between Cabell Huntington (W.Va.) Hospital and St. Mary’s Medical Center. The FTC’s vote to voluntarily dismiss its complaint is one of the exceedingly rare occasions on which the FTC has dropped an active challenge to a hospital merger and perhaps the first time it has done so on “state action” immunity grounds.
Proceedings before the FTC administrative law judge date back to November 2015 when FTC staff filed a complaint alleging that the combination of the two hospitals would create a near monopoly over general acute care inpatient hospital services and outpatient surgical services in Huntington, WV and adjacent counties. With overwhelming local support for the merger, including the support of the West Virginia Attorney General, the hospitals pursued a legislative path forward while also litigating against FTC staff and clearing state regulatory hurdles. The legislative solution ultimately resulted in West Virginia Gov. Earl Ray Tomblin signing a new law in March, placing the regulation of certain hospital mergers in the hands of a state agency and, in the process, immunizing those mergers from federal antitrust scrutiny, effectively allowing this merger to move forward.
Believing that the combined hospitals will improve quality of care and expand services for patients in the region in a cost-efficient manner, the Foley team navigated St. Mary’s through the complex merger review process and advocated to the FTC and West Virginia Attorney General that the deal would have significant benefits for the community.
The Foley antitrust litigation team representing St. Mary’s Medical Center was led by partner David W. Simon with support from senior counsel Holden H. Brooks and Benjamin Dryden and litigation partner Brett Ludwig.