On June 4, 2018, the United States Court of Appeals for the Fourth Circuit affirmed the dismissal of antitrust claims brought by Providence Hospital alleging that Palmetto Health carried out an anticompetitive scheme to dominate the healthcare market in areas of South Carolina.

In SCPH Legacy Corp. et al. v. Palmetto Health et al., case number 3:16-cv-02863, Providence Hospital brought an antitrust action against Palmetto Health alleging that in connection with its July 2015 acquisition of Providence Hospital’s orthopedic surgery business, Palmetto Health eliminated competition provided by Providence Hospital, thereby violating § 4 of the Clayton Act, 15 U.S.C. § 15, as it provides private enforcement of §§ 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2, and § 7 of the Clayton Act, 15 U.S.C. § 18, as well as claims under South Carolina law. Among other things, Providence Hospital alleged that Palmetto Health conspired to take over its orthopedic services business and recruited hundreds of Providence Hospital employees. Providence Hospital further alleged that Palmetto Health’s actions reduced competition for orthopedic surgery services for residents and that, as a result of the allegedly illegal conduct, Providence Hospital’s business suffered a $50 million reduction in value.

In February 2017, the United States District Court for the District of South Carolina granted Palmetto Health’s motion to dismiss. The Fourth Circuit decision affirmed the dismissal, explaining that the injuries alleged by Providence Health, namely the departure of employees and loss of $50 million when Palmetto Health acquired Providence Health’s orthopedic surgery business, were not the type of injury that antitrust laws are designed to protect. Moreover, the court found that Providence Hospital did not have standing to sue under the antitrust laws, as any harm to competition would be borne by patients and their health plans, not by Providence Hospital.

The June 4 opinion is available here.