On March 2, 2017, the U.S. District for the District of South Carolina dismissed all of Providence’s antitrust and State law claims against Palmetto Health stemming from Palmetto Health’s employment of more than 330 employees from a large orthopedic group, the Moore Clinic, previously owned by Providence.  Providence was a smaller hospital system serving the citizens residing in the midlands of South Carolina that in 2014 decided to sell all of its assets to LifePoint Health (LifePoint).  However, in July 2015, all but two employees of the Moore Clinic left Providence and became employees of Palmetto Health.  As a result, Providence’s discussions with LifePoint fell through and then, ten months later, Providence sold its assets to LifePoint for $50 million less than LifePoint’s original offer.  Providence subsequently filed a lawsuit against Palmetto Health alleging federal antitrust claims and other State law causes of action.  The District Court’s decision is available here.

Palmetto Health filed a motion to dismiss alleging that Providence lacked standing and an antitrust injury.  The District Court agreed with Palmetto Health and dismissed all of Providence’s Federal antitrust claims.  The District Court concluded that although Providence may have suffered an injury by losing the Moore Clinic, any injury was not an antitrust injury caused by Palmetto Health’s increased size and market presence and the monopolization of orthopedic services.  Moreover, the District Court concluded that Providence lacked “antitrust standing,” which it reasoned requires the court to consider five factors.  The first two factors address the injury and whether the laws were designed to protect against such injury.  As previously explained, the District Court found that Providence failed to show that it had suffered an antitrust injury.  According to the District Court, the last three factors used to show antitrust standing attempt to restrict the pool of persons who can bring antitrust claims.  The District Court concluded that even if Providence had suffered an antirust injury, it probably still would have lacked antitrust standing because more direct plaintiffs exist that could bring antitrust claims (such as patients, health plans, or employers).  

Accordingly, the District Court dismissed all of Providence’s Federal antitrust claims.  Given that the remaining claims were State law claims, the District Court declined to exercise supplemental jurisdiction over such claims and dismissed them without prejudice for refiling in State court.