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Saint Alphonsus Medical Center-Nampa Inc. v. St. Luke's Health System, Ltd.

778 F.3d 775 (2015)

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Saint Alphonsus Medical Center-Nampa Inc. v. St. Luke’s Health System, Ltd.

United States Court of Appeals for the Ninth Circuit

778 F.3d 775 (2015)

Facts

St. Luke's Health System (St. Luke’s) (defendant) was a nonprofit healthcare system that operated an emergency clinic in Nampa, Idaho. Saltzer Medical Group (Saltzer) was large physician group in Idaho, with several dozen physicians practicing in Nampa. The only hospital in Nampa was operated by Saint Alphonsus Health System, (Saint Alphonsus) (plaintiff). Saltzer was the largest provider of primary care physicians in the Nampa market. St. Luke’s and Saint Alphonsus each employed roughly half of the number of primary care physicians as Saltzer. Several other primary care physicians had solo practices in the area. St. Luke’s acquired Saltzer’s assets and entered into an agreement with Saltzer’s physicians. Saint Alphonsus, the Federal Trade Commission, and the State of Idaho (plaintiffs) filed a complaint seeking to enjoin the merger. The plaintiffs argued that the agreement was prohibited by § 7 of the Clayton Act because of its anticompetitive effects on the Nampa primary care physician market. St. Luke’s countered that anticipated post-merger efficiencies excused the potential anticompetitive price effects. The trial court agreed with the plaintiffs and ordered divestiture. The trial court also held that St. Luke’s proposed efficiencies were not dependent on the merger. St. Luke’s then appealed to the United States Court of Appeals for the Ninth Circuit.

Rule of Law

Issue

Holding and Reasoning (Hurwitz, J.)

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