Federal Trade Commission v. Phoebe Putney Health System

Date: August 28, 2012

This case raises the question of whether federal antitrust laws apply to state and local governments engaged in business practices. Here the defendant operates under a grant of general corporate power from a Georgia state hospital authority. The Federal Trade Commission asserts that the defendant violated antitrust laws, but the defendant argues that those laws cannot apply to it because it is a quasi-governmental entity.

Generally quasi-governmental entities, like the defendant in this case, are deemed exempt from antitrust laws under the “state action immunity doctrine,” so long as it is clear that they are operating in the furtherance of a state policy, and under active supervision from the state. But, we argue that there can be no "state action immunity" in cases like this, when the quasi-governmental defendant is unquestionably competing with other businesses in the market. Small businesses are put at a competitive disadvantage when taxpayer-funded government actors or quasi-governmental entities directly compete with private businesses. NFIB believes that the state action immunity doctrine only applies if the defendant acts to advance legitimate regulatory policy, as opposed to some policy or program designed solely to benefit a public enterprise.

For more information, commentary and insight view our August 27, 2012 press release

Status: Pending - U.S. Supreme Court.

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