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SUPREME COURT OF THE UNITED STATES
_________________
No. 11–1160
_________________
FEDERAL TRADE COMMISSION, PETITIONER
v.
PHOEBE PUTNEY HEALTH SYSTEM, INC., et al.
on writ of certiorari to the united states
court of appeals for the eleventh circuit
[February 19, 2013]
Justice Sotomayor delivered the opinion of the
Court.
Under this Court’s state-action immunity
doctrine, when a local governmental entity acts pursuant to a
clearly articulated and affirmatively expressed state policy to
displace competition, it is exempt from scrutiny under the federal
antitrust laws. In this case, we must decide whether a Georgia law
that creates special-purpose public entities called hospital
authorities and gives those entities general corporate powers,
including the power to acquire hospitals, clearly articulates and
affirmatively expresses a state policy to permit acquisitions that
substantially lessen competition. Because Georgia’s grant of
general cor- porate powers to hospital authorities does not include
permission to use those powers anticompetitively, we hold that the
clear-articulation test is not satisfied and state-action immunity
does not apply.
I
A
In 1941, the State of Georgia amended its
Constitution to allow political subdivisions to provide health care
services. 1941 Ga. Laws p. 50. The State concurrently enacted the
Hospital Authorities Law (Law),
id., at 241, Ga. Code Ann.
§31–7–70
et seq. (2012), “to
provide a mechanism for the operation and maintenance of needed
health care facilities in the several counties and municipalities
of th[e] state.” §31–7–76(a). “The
purpose of the constitutional provision and the statute based
thereon was to . . . create an organization which could
carry out and make more workable the duty which the State owed to
its in- digent sick.”
DeJarnette v.
Hospital Auth.
of Albany, 195 Ga. 189, 200, 23 S.E.2d 716, 723 (1942)
(citations omitted). As amended, the Law authorizes each county and
municipality, and certain combinations of counties or
municipalities, to create “a public body corporate and
politic” called a “hospital authority.”
§§31–7–72(a), (d). Hospital authorities are
governed by 5- to 9-member boards that are appointed by the
governing body of the county or municipality in their area of
operation. §31–7–72(a).
Under the Law, a hospital authority
“exercise[s] public and essential governmental
functions” and is delegated “all the powers necessary
or convenient to carry out and effectuate” the Law’s
purposes. §31–7–75. Giving more content to that
general delegation, the Law enumerates 27 powers conferred upon
hospital authorities, including the power “[t]o acquire by
purchase, lease, or otherwise and to operate projects,”
§31–7–75(4), which are defined to include
hospitals and other public health facilities,
§31–7–71(5); “[t]o construct, reconstruct,
improve, alter, and repair projects,”
§31–7–75(5); “[t]o lease . . . for
operation by others any project” provided certain conditions
are satisfied, §31–7–75(7); and “[t]o
establish rates and charges for the services and use of the
facilities of the authority,” §31–7–75(10).
Hospital authorities may not operate or construct any project for
profit, and accordingly they must set rates so as only to cover
operating expenses and create reasonable reserves.
§31–7–77.
B
In the same year that the Law was adopted, the
city of Albany and Dougherty County established the Hospital
Authority of Albany-Dougherty County (Authority) and the Authority
promptly acquired Phoebe Putney Memorial Hospital (Memorial), which
has been in operation in Al- bany since 1911. In 1990, the
Authority restructured its operations by forming two private
nonprofit corporations to manage Memorial: Phoebe Putney Health
System, Inc. (PPHS), and its subsidiary, Phoebe Putney Memorial
Hospital, Inc. (PPMH). The Authority leased Memorial to PPMH for $1
per year for 40 years. Under the lease, PPMH has exclusive
authority over the operation of Memorial, including the ability to
set rates for services. Consistent with
§31–7–75(7), PPMH is subject to lease conditions
that require provision of care to the indigent sick and limit its
rate of return.
Memorial is one of two hospitals in Dougherty
County. The second, Palmyra Medical Center (Palmyra), was estab-
lished in Albany in 1971 and is located just two miles from
Memorial. At the time suit was brought in this case, Palmyra was
operated by a national for-profit hospital network, HCA, Inc.
(HCA). Together, Memorial and Palmyra account for 86 percent of the
market for acute-care hospital services provided to commercial
health care plans and their customers in the six counties
surrounding Al- bany. Memorial accounts for 75 percent of that
market on its own.
In 2010, PPHS began discussions with HCA about
acquiring Palmyra. Following negotiations, PPHS presented the
Authority with a plan under which the Authority would purchase
Palmyra with PPHS controlled funds and then lease Palmyra to a PPHS
subsidiary for $1 per year under the Memorial lease agreement. The
Authority unanimously approved the transaction.
The Federal Trade Commission (FTC) shortly
there- after issued an administrative complaint alleging that the
proposed purchase-and-lease transaction would create a virtual
monopoly and would substantially reduce competition in the market
for acute-care hospital services, in violation of §5 of the
Federal Trade Commission Act, 38Stat. 719, 15 U. S. C.
§45, and §7 of the Clayton Act, 38Stat. 731, 15
U. S. C. §18. The FTC, along with the State of
Georgia,[
1] subsequently filed
suit against the Authority, HCA, Palmyra, PPHS, PPMH, and the new
PPHS subsidiary created to manage Palmyra (collectively
respondents), seeking to enjoin the transaction pending
administrative proceedings. See 15 U. S. C.
§§26, 53(b).
The United States District Court for the Middle
District of Georgia denied the request for a preliminary injunction
and granted respondents’ motion to dismiss. 793 F. Supp. 2d
1356 (2011). The District Court held that respondents are immune
from antitrust liability under the state-action doctrine.
See
id., at 1366–1381.
The United States Court of Appeals for the
Eleventh Circuit affirmed. 663 F.3d 1369 (2011). As an initial
matter, the court “agree[d] with the [FTC] that, on the facts
alleged, the joint operation of Memorial and Palmyra would
substantially lessen competition or tend to create, if not create,
a monopoly.”
Id., at 1375. But the court con-cluded
that the transaction was immune from antitrust liability. See
id., at 1375–1378. The Court of Appeals explained that
as a local governmental entity, the Authority was entitled to
state-action immunity if the challenged anticompetitive conduct was
a “ ‘foreseeable result’ ” of
Georgia’s legislation.
Id., at 1375. According to the
court, anticompetitive conduct is foreseeable if it could have been
“ ‘reasonably anticipated’ ” by
the state legislature; it is not necessary, the court reasoned, for
an anticompetitive effect to “ be ‘one that
ordinarily occurs, routinely occurs, or is inherently likely to
occur as a result of the empowering
legislation.’ ”
Id., at 1375–1376
(quoting
FTC v.
Hospital Bd. of Directors of Lee
Cty.,
38 F.3d 1184, 1188, 1190–1191 (CA11 1994)). Applying that
standard, the Court of Appeals concluded that the Law contemplated
the anticompetitive conduct challenged by the FTC. The court noted
the “impressive breadth” of the powers given to
hospital authorities, which include traditional powers of private
corporations and a few additional capabilities, such as the power
to exercise eminent domain. See 663 F. 3d, at 1376. More
specifically, the court reasoned that the Georgia Legislature must
have anticipated that the grant of power to hospital authorities to
acquire and lease projects would produce anticompetitive effects
because “[f]oreseeably, acquisitions could consolidate
ownership of competing hospitals, eliminating competition between
them.”
Id., at 1377.[
2]
The Court of Appeals also rejected the
FTC’s alternative argument that state-action immunity did not
apply because the transaction in substance involved a transfer of
control over Palmyra from one private entity to another, with the
Authority acting as a mere conduit for the sale to evade antitrust
liability. See
id., at 1376, n. 12.
We granted certiorari on two questions: whether
the Georgia Legislature, through the powers it vested in hospital
authorities, clearly articulated and affirmatively expressed a
state policy to displace competition in the market for hospital
services; and if so, whether state-action immunity is nonetheless
inapplicable as a result of the Authority’s minimal
participation in negotiating the terms of the sale of Palymra and
the Authority’s limited supervision of the two
hospitals’ operations. See 567 U. S. ___ (2012).
Concluding that the answer to the first question is
“no,” we reverse without reaching the second
question.[
3]
II
In
Parker v.
Brown,
317 U.S.
341 (1943), this Court held that because “nothing in the
language of the Sherman Act [ 15 U. S. C. §1
et seq.] or in its history” suggested that
Congress intended to restrict the sovereign capacity of the States
to regulate their economies, the Act should not be read to bar
States from imposing market restraints “as an act of
government.”
Id., at 350, 352. Following
Parker, we have held that under certain circumstances,
immunity from the federal antitrust laws may extend to nonstate
actors carrying out the State’s regulatory program. See
Patrick v.
Burget,
486 U.S.
94, 99–100 (1988);
Southern Motor Carriers Rate
Conference, Inc. v.
United States,
471 U.S.
48, 56–57 (1985).
But given the fundamental national values of
free enterprise and economic competition that are embodied in the
federal antitrust laws, “state-action immunity is disfavored,
much as are repeals by implication.”
FTC v.
Ticor
Title Ins. Co.,
504 U.S.
621, 636 (1992). Consistent with this preference, we recognize
state-action immunity only when it is clear that the challenged
anticompetitive conduct is undertaken pursuant to a regulatory
scheme that “is the State’s own.”
Id., at
635. Accordingly, “[c]loser analysis is required when the
activity at issue is not directly that of” the State itself,
but rather “is carried out by others pursuant to state
authorization.”
Hoover v.
Ronwin,
466 U.S.
558, 568 (1984)
. When determining whether the
anticompetitive acts of private parties are entitled to immunity,
we employ a two-part test, requiring first that “the
challenged restraint . . . be one clearly articu- lated and
affirmatively expressed as state policy,” and second that
“the policy . . . be actively supervised by the State.”
California Retail Liquor Dealers Assn. v.
Midcal
Aluminum, Inc.,
445 U.S.
97, 105 (1980) (internal quotation marks omitted).
This case involves allegedly anticompetitive
conduct undertaken by a substate governmental entity. Because
municipalities and other political subdivisions are not themselves
sovereign, state-action immunity under
Parker does not apply
to them directly. See
Columbia v.
Omni Outdoor
Advertising, Inc.,
499
U.S. 365, 370 (1991);
Lafay- ette v.
Louisiana Power
& Light Co.,
435 U.S.
389, 411–413 (1978) (plurality opinion). At the same
time, however, substate governmental entities do receive immunity
from antitrust scrutiny when they act “pursuant to state
policy to displace competition with regulation or monopoly public
service.”
Id., at 413.[
4] This rule “preserves to the States their freedom
. . . to use their municipalities to administer state
regulatory policies free of the inhibitions of the federal
antitrust laws without at the same time permitting purely parochial
interests to disrupt the Nation’s free-market goals.”
Id., at 415–416.
As with private parties, immunity will only
attach to the activities of local governmental entities if they are
undertaken pursuant to a “clearly articulated and
affirmatively expressed” state policy to displace
competition.
Community Communications Co. v.
Boulder,
455 U.S.
40, 52 (1982). But unlike private parties, such entities are
not subject to the “active state supervision
requirement” because they have less of an incentive to pursue
their own self-interest under the guise of implementing state
policies.
Hallie v.
Eau Claire,
471 U.S.
34, 46–47 (1985).[
5]
“[T]o pass the ‘clear
articulation’ test,” a state legislature need not
“expressly state in a statute or its legislative history that
the legislature intends for the delegated action to have
anticompetitive effects.”
Id., at 43. Rather, we
explained in
Hallie that state-action immunity applies if
the anticompetitive effect was the “ foreseeable
result” of what the State authorized.
Id., at 42. We
applied that principle in
Omni, where we concluded that the
clear-articulation test was satisfied because the suppression of
competition in the billboard market was the foreseeable result of a
state statute authorizing municipalities to adopt zoning ordinances
regulating the construction of buildings and other structures. 499
U. S., at 373.
III
A
Applying the clear-articulation test to the
Law before us, we conclude that respondents’ claim for
state-action immunity fails because there is no evidence the State
affirmatively contemplated that hospital authorities would displace
competition by consolidating hospital ownership. The acquisition
and leasing powers exercised by the Authority in the challenged
transaction, which were the principal powers relied upon by the
Court of Appeals in finding state-action immunity, see 663
F. 3d, at 1377, mirror general powers routinely conferred by
state law upon private corporations.[
6] Other powers possessed by hospital authorities that the
Court of Appeals characterized as having “impressive
breadth,”
id., at 1376, also fit this pattern,
including the ability to make and execute contracts,
§31–7–75(3), to set rates for services,
§31–7–75(10), to sue and be sued,
§31–7–75(1), to borrow money,
§31–7–75(17), and the residual authority to
exercise any or all powers possessed by private corporations,
§31–7–75(21).
Our case law makes clear that state-law
authority to act is insufficient to establish state-action
immunity; the substate governmental entity must also show that it
has been delegated authority to act or regulate anticompetitively.
See
Omni, 499 U. S., at 372. In
Boulder, we held
that Colorado’s Home Rule Amendment allowing municipalities
to govern local affairs did not satisfy the clear-articulation
test. 455 U. S., at 55–56. There was no doubt in that
case that the city had authority as a matter of state law to pass
an ordinance imposing a moratorium on a cable provider’s
expansion of service.
Id., at 45–46. But we rejected
the proposition that “the general grant of power to enact
ordinances necessarily implies state authorization to enact
specific anticompetitive ordinances” because such an approach
“would wholly eviscerate the concepts of ‘clear
articulation and affirmative expression’ that our precedents
require.”
Id., at 56. We explained that when a
State’s position “is one of mere
neutrality
respecting the municipal actions challenged as
anticompetitive,” the State cannot be said to have
“ ‘contemplated’ ” those
anticompetitive actions.
Id., at 55.
The principle articulated in
Boulder
controls this case. Grants of general corporate power that allow
substate governmental entities to participate in a competitive
marketplace should be, can be, and typically are used in ways that
raise no federal antitrust concerns. As a result, a State that has
delegated such general powers “can hardly be said to have
‘contemplated’ ” that they will be used
anticompetitively.
Ibid. See also 1A P. Areeda & H.
Hovenkamp, Antitrust Law ¶225a, p. 131 (3d ed. 2006)
(hereinafter Areeda & Hovenkamp) (“When a state grants
power to an inferior entity, it presumably grants the power to do
the thing contemplated, but not to do so anticompetitively”).
Thus, while the Law does allow the Authority to acquire hospitals,
it does not clearly articulate and affirmatively express a state
policy empowering the Authority to make acquisitions of existing
hospitals that will substantially lessen competition.
B
In concluding otherwise, and specifically in
reasoning that the Georgia Legislature “must have
anticipated” that acquisitions by hospital authorities
“would produce anticompetitive effects,” 663
F. 3d, at 1377, the Court of Appeals applied the concept of
“foreseeability” from our clear-articulation test too
loosely.
In
Hallie, we recognized that it would
“embod[y] an unrealistic view of how legislatures work and of
how statutes are written” to require state legislatures to
explicitly authorize specific anticompetitive effects before
state-action immunity could apply. 471 U. S., at 43. “No
legislature,” we explained, “can be expected to catalog
all of the anticipated effects” of a statute delegating
authority to a substate governmental entity.
Ibid.
Instead, we have approached the clear-articulation inquiry more
practically, but without diluting the ultimate requirement that the
State must have affirmatively contemplated the displacement of
competition such that the challenged anticompetitive effects can be
attributed to the “state itself.”
Parker, 317
U. S., at 352. Thus, we have concluded that a state policy to
displace federal antitrust law was sufficiently expressed where the
displacement of competition was the inherent, logical, or ordinary
result of the exercise of authority delegated by the state
legislature. In that scenario, the State must have foreseen and
implicitly endorsed the anticompetitive effects as consistent with
its policy goals.
For example, in
Hallie, Wisconsin
statutory law regulating the municipal provision of sewage services
expressly permitted cities to limit their service to surrounding
unincorporated areas. See 471 U. S., at 41. While
unincorporated towns alleged that the city’s exercise of that
power constituted an unlawful tying arrangement, an unlawful
refusal to deal, and an abuse of monopoly power, we had no trouble
concluding that these alleged anticompetitive effects were
affirmatively contemplated by the State because it was
“clear” that they “logically would result”
from the grant of authority.
Id., at 42. As described by the
Wisconsin Supreme Court, the state legislature
“ ‘viewed annexation by the city of a surrounding
unincorporated area as a reasonable
quid pro quo that a city
could require before extending sewer services to the
area.’ ”
Id., at 44–45, n. 8
(quoting
Hallie v.
Chippewa Falls, 105 Wis. 2d 533,
540–541,
314 N.W.2d 321, 325 (1982)). Without immunity, federal
antitrust law could have undermined that arrangement and taken
completely off the table the policy option that the State clearly
intended for cities to have.
Similarly, in
Omni, where the respondents
alleged that the city had used its zoning power to protect an
incumbent billboard provider against competition, we found that the
clear-articulation test was easily satisfied even though the state
statutes delegating zoning authority to the city did not explicitly
permit the suppression of competition. We explained that
“[t]he very purpose of zoning regulation is to displace
unfettered business freedom in a manner that regularly has the
effect of preventing normal acts of competition” and that a
zoning ordinance regulating the size, location, and spacing of
billboards “necessarily protects existing billboards against
some competition from newcomers.” 499 U. S., at 373.
Other cases in which we have found a “clear
articulation” of the State’s intent to displace
competition without an explicit statement have also involved
authorizations to act or regulate in ways that were inherently
anticompetitive.[
7]
By contrast, “simple permission to play in
a market” does not “foreseeably entail permission to
roughhouse in that market unlawfully.”
Kay Elec.
Cooperative v.
Newkirk, 647 F.3d 1039, 1043 (CA10 2011).
When a State grants some entity general power to act, whether it is
a private corporation or a public entity like the Authority, it
does so against the backdrop of federal antitrust law. See
Ticor
Title, 504 U. S., at 632. Of course, both private parties
and local governmental entities conceivably may transgress
antitrust requirements by exercising their general powers in
anticompetitive ways. But a reasonable legislature’s ability
to anticipate that (potentially undesirable) possibility falls well
short of clearly articulating an affirmative state policy to
displace competition with a regulatory alternative.
Believing that this case falls within the scope
of the foreseeability standard applied in
Hallie and
Omni, the Court of Appeals stated that “[i]t defies
imagination to suppose the [state] legislature could have believed
that every geographic market in Georgia was so replete with
hospitals that authorizing acquisitions by the authorities could
have no serious anticompetitive consequences.” 663
F. 3d, at 1377. Respondents echo this argument, noting that
each of Georgia’s 159 counties covers a small geographical
area and that most of them are sparsely populated, with nearly
three-quarters having fewer than 50,000 residents as of the 2010
Census. Brief for Respondents 46.
Even accepting,
arguendo, the premise
that facts about a market could make the anticompetitive use of
general corporate powers “foreseeable,” we reject the
Court of Appeals’ and respondents’ conclusion because
only a relatively small subset of the conduct permitted as a matter
of state law by Ga. Code Ann. §31–7–75(4) has the
potential to negatively affect competition. Contrary to the Court
of Appeals’ and respondents’ characterization,
§31–7–75(4) is not principally concerned with
hospital authorities’ ability to acquire multiple hospitals
and consolidate their operations. Section 31–7–75(4)
allows authorities to acquire “projects,” which
includes not only “hospitals,” but also “health
care facilities, dormitories, office buildings, clinics, housing
accommodations, nursing homes, rehabilitation centers, extended
care facilities, and other public health facilities.”
§31–7–71(5). Narrowing our focus to the market for
hospital services, the power to acquire hospitals still does not
ordinarily produce anticompetitive effects. Section
31–7–75(4) was, after all, the source of power for
newly formed hospital authorities to acquire a hospital in the
first instance—a transaction that was unlikely to raise any
antitrust concerns even in small markets because the transfer of
ownership from private to public hands does not increase market
concentration. See 1A Areeda & Hovenkamp ¶224e(c), at 126
(“[S]ubstitution of one monopolist for another is not an
antitrust violation”). While subsequent acquisitions by
authorities have the potential to reduce competition, they will
raise federal antitrust concerns only in markets that are large
enough to support more than one hospital but sufficiently small
that the merger of competitors would lead to a significant increase
in market concentration. This is too slender a reed to support the
Court of Appeals’ and respondents’ inference.
IV
A
Taking a somewhat different approach than the
Court of Appeals, respondents insist that the Law should not be
read as a mere authorization for hospital authorities to
participate in the hospital-services market and exercise general
corporate powers. Rather, they contend that hos- pital authorities
are granted unique powers and respon- sibilities to fulfill the
State’s objective of providing all residents with access to
adequate and affordable health and hospital care. See,
e.g.,
Ga. Code Ann. §31–7–75(22). Respondents argue that
in view of hospital authorities’ statutory objective, their
specific attributes, and the regulatory context in which they
operate, it was foreseeable that authorities facing capacity
constraints would decide they could best serve their
communities’ needs by acquiring an existing local hospital
rather than incur the additional expense and regulatory burden of
expanding a facility or constructing a new one. See Brief for
Respondents 33–39.
In support of this argument, respondents observe
that hospital authorities are simultaneously empowered to act in
ways private entities cannot while also being subject to
significant regulatory constraints. On the power side, as the Court
of Appeals noted, 663 F. 3d, at 1376–1377, hospital
authorities may acquire through eminent domain property that is
“essential to the [authority’s] purposes.”
§31–7–75(12).[
8] On the restraint side, hospital authorities are managed
by a publicly accountable board, §§31–7–74.1,
31–7–76, they must operate on a nonprofit basis,
§31–7–77, and they may only lease a project for
others to operate after determining that doing so will promote the
community’s public health needs and that the lessee will not
receive more than a reasonable rate of return on its investment,
§31–7–75(7). Moreover, hospital authorities
operate within a broader regulatory context in which Georgia
requires any party seeking to establish or significantly expand
certain medical facilities, including hospitals, to obtain a
certificate of need from state regulators. See
§31–6–40
et seq.[
9]
We have no doubt that Georgia’s hospital
authorities differ materially from private corporations that offer
hospital services. But nothing in the Law or any other provision of
Georgia law clearly articulates a state policy to allow authorities
to exercise their general corporate powers, including their
acquisition power, without regard to negative effects on
competition. The state legislature’s objective of improving
access to affordable health care does not logically suggest that
the State intended that hospital authorities pursue that end
through mergers that create monopolies. Nor do the restrictions
imposed on hospital authorities, including the requirement that
they operate on a nonprofit basis, reveal such a policy.
Particularly in light of our national policy favoring competition,
these restrictions should be read to reflect more modest aims. The
legislature may have viewed profit generation as incompatible with
its goal of providing care for the indigent sick. In addition, the
legislature may have believed that some hospital authorities would
operate in markets with characteristics of natural monopolies, in
which case the legislature could not rely on competition to control
prices. See
Cantor v.
Detroit Edison Co.,
428 U.S.
579, 595–596 (1976).
We recognize that Georgia, particularly through
its certificate of need requirement, does limit competition in the
market for hospital services in some respects. But regulation of an
industry, and even the authorization of discrete forms of
anticompetitive conduct pursuant to a regulatory structure, does
not establish that the State has affirmatively contemplated other
forms of anticompetitive conduct that are only tangentially
related. Thus, in
Goldfarb v.
Virginia State Bar,
421 U.S.
773 (1975), we re- jected a state-action defense to
price-fixing claims where a state bar adopted a compulsory minimum
fee schedule. Although the State heavily regulated the practice of
law, we found no evidence that it had adopted a policy to displace
price competition among lawyers.
Id., at 788–792. And
in
Cantor, we concluded that a state commission’s
regulation of rates for electricity charged by a public utility did
not confer state-action immunity for a claim that the
utility’s free distribution of light bulbs restrained trade
in the light-bulb market. 428 U. S., at 596.
In this case, the fact that Georgia imposes
limits on entry into the market for medical services, which apply
to both hospital authorities and private corporations, does not
clearly articulate a policy favoring the consolidation of existing
hospitals that are engaged in active competition. Accord,
FTC v.
University Health, Inc., 938 F.2d 1206, 1213,
n. 13 (CA11 1991). As to the Authority’s eminent domain
power, it was not exercised here and we do not find it relevant to
the question whether the State authorized hospital authorities to
consolidate market power through potentially anticompetitive
acquisitions of existing hospitals.
B
Finally, respondents contend that to the
extent there is any doubt about whether the clear-articulation test
is satisfied in this context, federal courts should err on the side
of recognizing immunity to avoid improper interference with state
policy choices. See Brief for Respondents 43–44. But we do
not find the Law ambiguous on the question whether it clearly
articulates a policy authorizing anticompetitive acquisitions; it
does not.
More fundamentally, respondents’
suggestion is inconsistent with the principle that
“state-action immunity is disfavored.”
Ticor
Title, 504 U. S., at 636.
Parker and its progeny
are premised on an understanding that respect for the States’
coordinate role in government counsels against reading the federal
antitrust laws to restrict the States’ sovereign capacity to
regulate their economies and provide services to their citizens.
But federalism and state sovereignty are poorly served by a rule of
construction that would allow “essential national
policies” embodied in the antitrust laws to be displaced by
state delegations of authority “intended to achieve more
limited ends.” 504 U. S., at 636. As an
amici
brief filed by 20 States in support of the FTC contends, loose
application of the clear-articulation test would attach significant
unintended consequences to States’ frequent delegations of
corporate authority to local bodies, effectively requiring States
to disclaim any intent to displace competition to avoid
inadvertently authorizing anticompetitive conduct. Brief for State
of Illinois et al. as
Amici Curiae 12–17; see
also
Surgical Care Center of Hammond, L. C. v.
Hospital
Serv. Dist. No. 1,
171
F.3d 231,
236
(CA5 1999) (en banc). We decline to set such a trap for unwary
state legislatures.
* * *
We hold that Georgia has not clearly
articulated and affirmatively expressed a policy to allow hospital
authorities to make acquisitions that substantially lessen
competition. The judgment of the Court of Appeals is reversed, and
the case is remanded for further proceedings consistent with this
opinion.
It is so ordered.
