Loose Lips Sink Ships and Careless E-mails Torpedo a Transaction

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Federal antitrust laws prohibit hospital systems, like other businesses, from using a dominant market position to exclude competitors and restrain trade. Recently, e-mail communications exchanged between a hospital system and a physician group helped convince a federal judge to unwind a hospital system’s completed acquisition of a physician practice.

St. Luke’s Health System, Ltd. (“St. Luke’s”) is a not-for-profit health system that owns and operates seven hospitals in Idaho and eastern Oregon. Saint Alphonsus Health System, Inc. is St. Luke’s competitor. It joined with another hospital to form an outpatient surgery center in the St. Luke’s service area. The two systems vied for referrals from Saltzer Medical Group, P.A, (“Saltzer”) the largest, independent multi-specialty physician group in Idaho. In 2008, St. Luke’s decided to acquire the Saltzer group.

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