Jackson, Tennessee Hosp. Co., LLC v. West Tennessee Healthcare, Inc.

ANTITRUST

Jackson, Tennessee Hosp. Co., LLC v. West
Tennessee Healthcare, Inc., No. 04-5387 (6th Cir. July 11, 2005)

The United States Court of Appeals for the Sixth Circuit upheld the dismissal
of a private antitrust lawsuit against a hospital district, its parent,
and Blue Cross Blue Shield of Tennessee. The lawsuit, brought by a hospital,
alleged that an exclusive contract between the Blues plan and the hospital
district’s parent, West Tennessee Healthcare, violated federal antitrust
laws.

A federal district court ruled, and the Sixth Circuit agreed, that West Tennessee
Healthcare was immune from antitrust liability under the "state-action
doctrine." The court found that political subdivisions of states may legally
engage in anti-competitive behavior "when there is a clearly expressed
state policy authorizing" such behavior. The Sixth Circuit court quoted
1995 and 1996 Tennessee laws expanding hospital districts’ authority "regardless
of the competitive consequences thereof" and said the laws clearly established
state-action protection for hospital districts.