A three-judge panel of the 6th U.S. Circuit Court of Appeals, Cincinnati, upheld the dismissal of a private antitrust lawsuit against Jackson-Madison County (Tenn.) General Hospital District, its parent and Blue Cross Blue Shield of Tennessee. The lawsuit by Regional Hospital of Jackson alleged that an exclusive contract between the Blues plan and the hospital district's parent, West Tennessee Healthcare, violated federal antitrust laws. A U.S. District Court judge ruled in February 2004 that West Tennessee Healthcare was immune from antitrust liability under "state-action doctrine." The appeals court panel agreed, saying that political subdivision of states may legally engage in anticompetitive behavior "when there is a clearly expressed state policy authorizing" such behavior.
The panel quoted 1995 and 1996 Tennessee laws expanding hospital districts' authority "regardless of the competitive consequences thereof" and said the laws clearly established state-action protection for hospital districts. A spokeswoman for Community Health Systems, Brentwood, Tenn., which owns Regional Hospital, said the company was evaluating its options for further appeals. -- by Vince Galloro