Federal Trade Commission v. Phoebe Putney Health System, Inc. et al.
Oral argument transcript · No. 11-1160 · October Term 2012 · argued November 26, 2012 · the petitioner won
Decision: votes, opinion and citations · Official transcript (PDF) · Argument audio at the Supreme Court
Advocates
- Benjamin J. Horwich, Assistant to the Solicitor General, for the petitioner
- Seth P. Waxman, Washington, D.C., for the respondent
Transcript
From the Court's official transcript; speaker labels as in the transcript, with advocates' full names from its list of appearances.
Chief Justice Roberts: We'll hear argument first this morning in Case 11-1160, the Federal Trade Commission v. Phoebe Putney Health System. Mr. Horwich? ORAL ARGUMENT OF BENJAMIN J. HORWICH ON BEHALF OF THE PETITIONER
Benjamin J. Horwich: Thank you, Mr. Chief Justice, and may it please the Court: The State Action Doctrine provides a defense to a Federal antitrust suit when a State has clearly articulated and affirmatively expressed an intent to displace competition with respect to the particular activity at issue in the suit. Now, in practical terms, what that comes down to is whether application of Federal competition law would somehow subvert a sovereign State policy choice that's clearly evident in State law. Now, that policy might be expressed in mandatory or compulsory terms, but, short of that, it would also be enough, if the -- the State had specifically permitted conduct that is inherently anticompetitive. But a grant of general power to act - Alderson Reporting Company Official
Justice Sotomayor: You don't think that the grant of powers in this case would permit the hospital authorities, the corporation, to set prices for their services that are below the competitive prices in order to serve the needy?
Benjamin J. Horwich: Well, Justice --
Justice Sotomayor: Isn't that inherent in the regulations?
Benjamin J. Horwich: I think it is, although for reasons that don't affect the analysis of the question about an anticompetitive acquisition. And let me explain why the analysis might be different with respect to prices. There is specific authorization in the statute for the hospital authorities, in conjunction with the counties, to partly fund -- or, I guess, entirely, in principle -- fund their services through tax revenues. So they have another source of funding that would allow them to price in ways that a competitive actor would not necessarily price its services. So if we're talking about particular pricing decisions, say -- I guess it would be below cost pricing that is alleged to somehow be anticompetitive -- then there might very well be a State action defense to that Alderson Reporting Company Official because it -- because the State -- the power to price services subsidized in a way that an ordinary actor wouldn't be able to do --
Justice Scalia: Do you have --
Benjamin J. Horwich: -- might very well displace competition in that regard.
Justice Scalia: Do you have any cases in which we -- we slice it that fine --
Benjamin J. Horwich: Well, I do think --
Justice Scalia: -- that -- that you are a State actor for some anticompetitive purposes and not for others?
Benjamin J. Horwich: Yeah, absolutely, Justice Scalia. I think -- I think the best -- the best example comes from Goldfarb v. Virginia State Bar. So, in that case, the -- the issue was a challenge to a practice of minimum fee schedules that were set by -- not by the State, but -- but agreed upon by a bar organization. Now, the State in that case, of course, regulated the practice of law. It regulated admission into the practice of law. It regulated certain aspects of the conduct of the practice of law. And this Court held, in Bates v. Arizona State Bar, that those sort of regulations do constitute State action. Alderson Reporting Company Official But the Court did not accept the submission that the State action defense covered the setting of minimum prices that was at issue in that case because that was not something that there was State action over. And as a -- and, taking a step back, the justification for the State Action Doctrine is that the State is trying to pursue some policy that is part of its traditional sovereign prerogatives to regulate its own economy and that Federal law was not understood to intrude upon that. But, if the State is not actually trying to advance some other policy, with respect to the particular conduct at issue, then it can't be said that the State has done something that Federal law should stand aside for. The -- the --
Justice Ginsburg: Mr. Horwich, you said in -- in your reply brief that, if the Hospital Authorities Law specifically authorized local hospital authorities to acquire any and all hospitals within their geographic area, then the clear articulation requirement would be satisfied. But the Authorities Law does authorize the acquisition of other hospitals. And it doesn't say one or two; it says other -- other facilities. Alderson Reporting Company Official So why doesn't the hospital laws law do exactly what you said would satisfy the -- the clear articulation requirement?
Benjamin J. Horwich: Well, I think the key difference there, Justice Ginsburg, between the hypothetical we offered in the -- the reply brief and the statute here is that the -- the additional words "any and all" make it clear that the State is contemplating that there could -- the county might opt for socializing its hospital services, putting all of them under the control of the hospital authority. And, by contrast, what we have here is an ordinary corporate power to acquire property. And, like all of the ordinary corporate powers that the authority possesses that are -- that resemble those that -- that an ordinary business corporation would have, the most natural understanding of them is that the State expects them to be exercised in conformity with the background principles that -- that bind everybody. So --
Chief Justice Roberts: Just so I understand your answer to Justice Ginsburg, you're saying there would be a difference if the charter said the authority may require -- acquire any properties to fulfill its mission and if it said the authority may acquire properties to promote its mission? Alderson Reporting Company Official
Benjamin J. Horwich: Well, I think it's probably in our -- the hypothetical offered in our reply brief, it's probably the "all" -- the "any and all" that -- that would, I think, be what communicates the State's --
Chief Justice Roberts: So you think a general saying they may acquire properties doesn't implicitly say they may acquire all properties? That seems a pretty thin --
Benjamin J. Horwich: No, I don't think it does -- well -- but I think, in this area, it's -- it's important, for a couple reasons, that we actually have -- have some substantial assurance of what the State is trying to do here. And a power to grant proper -- excuse me -- a power to acquire properties, generally speaking, unadorned with any particular expression from the State about how -- how that power is to be used, is -- is something that can be used competitively or anticompetitively. And you can't infer from that that the State really has an objective of, as I say, such as socializing its hospital services because -- and -- and it's -- and that clarity of expression from the State is really important here, for several reasons. First of all, this is an odd rule, to begin Alderson Reporting Company Official with, in that it allows State law to displace Federal law. So we would want some clarity from --
Justice Scalia: I assume -- I assume that the normal corporate charter contains such a provision, the authority to acquire property, right?
Benjamin J. Horwich: Yeah, it absolutely does. And --
Justice Scalia: And we don't -- that -- that charter is issued by the State, right?
Benjamin J. Horwich: It is issued by the State.
Justice Scalia: And we don't -- we don't think that that enables all corporations to ignore the Sherman Act, do we?
Benjamin J. Horwich: No, we don't. And we don't generally think that those corporate powers express an intent to displace any other background -- if I could give some examples, maybe we could look at some --
Justice Kagan: Mr. Horwich, could I just --
Benjamin J. Horwich: Yes.
Justice Kagan: -- before you give examples, just make sure I understand your basic position? Suppose the State had said, very clearly, that these hospital authorities had the power to engage in acquisitions of hospitals that, for a normal actor, Alderson Reporting Company Official would violate the antitrust laws, but -- but basically said the -- the hospital authorities had the discretion to do that or not. And the State didn't know the hospital authority might do it, but it also might not do it. That would be subject to the immunity; is that correct?
Benjamin J. Horwich: I -- I think the defense would be available if -- if the beginning of your hypothetical was kind of quoting the statute, yes.
Justice Kagan: Yes. It's a clear grant of authority --
Benjamin J. Horwich: Yes.
Justice Kagan: But the authority is completely discretionary. So the State is basically saying, we don't know, we're going to let the hospital authority figure it out.
Benjamin J. Horwich: Well, it's certainly -- the hospital authority can figure it -- figure out, but what it's figuring out is whether to actually invoke a displacement of competition that the State has expressly put on the table. And that's what is different in this case --
Justice Kagan: What -- but what I'm trying to get at is the State has put it on the table only as a completely discretionary action. The State has not Alderson Reporting Company Official expressed a preference for it. The State has only said that the hospital authority can think about conditions on the ground in its particular locality and can decide whether such an anticompetitive acquisition is appropriate.
Benjamin J. Horwich: Yes, that's fine. We don't have any quarrel with -- with States setting up a clear set of tools, some of which, in your example, might inherently displace competition --
Justice Kagan: So all of this language --
Benjamin J. Horwich: -- and having it exercised, actually, at a local level. That's fine.
Justice Kagan: So all this language in your brief about necessarily and inherently and compelled, all of those things really are not part of your -- your governing test?
Benjamin J. Horwich: No. I -- I disagree with that. The reason they are part of our governing test is this: Is that a State can certainly give a -- a menu of specific options that sub-State entities can -- can select from. And it might be that some of those are, in fact, not anticompetitive. Let me give you an example from -- from this Court's cases. Southern Motor Carriers involved the submission of -- by motor carriers, of their rates to a Alderson Reporting Company Official public service commission that was -- that would accept them as filed rates. Now, the States -- some of the States there said, well, you can file them individually, or you can file them jointly, and we don't necessarily have a preference, one way or the other, for it. But the fact that the States had said you can file them jointly, which is a horizontal agreement among competitors and sure looks anticompetitive, the fact that the State had said that and put that option on the table qualified as a clear articulation from the State that it intended the displacement of competition to occur if that specific option was chosen. The difference here is that, if you are willing to say, in a case like what we have here with a statute that -- that confers a -- a power that is entirely neutral as to how it would be -- how it could be exercised, you have the problem of not really knowing what the State would intend. And so you can't say that the State clearly intended that there be displacement of competition --
Justice Breyer: Well, what about the other? The next line that they give is they give to the hospital authority the power to acquire and operate projects and the power to form and operate one or more Alderson Reporting Company Official networks of hospitals, physicians, and other healthcare providers. Now, as I read that, it certainly includes the rather specific power of acquiring a hospital. And having read that -- not -- not just something you might see in General Motors' charter.
Benjamin J. Horwich: Well --
Justice Breyer: And -- and those -- that's the language of the -- of the grant of power. Now, I want to know what you want us to do because, in my mind, reading this, it's a statute that provides for regulation -- price regulation of hospitals. And you say -- and I have no doubt you thought of one way in which that could be -- I can think of 100 -- that you could have prices that are different from those set by a free market. So I have no doubt that this sets -- I start there. Now, what is it -- I go back to Justice Scalia's original question: What is it you want us to say? Even though this -- this statute is immune, does grant immunity from attack on a basis of cost and price regulation, it is not immune in respect to mergers, okay?
Benjamin J. Horwich: Well, I think --
Justice Breyer: I can, unfortunately, think Alderson Reporting Company Official of about 50 examples, where a merger might be anticompetitive, and yet, it would lead to lower prices. And the Department of Justice might attack it, but this statute -- and that's what's bothering me -- seems to want to further that kind of thing.
Benjamin J. Horwich: Well, I --
Justice Breyer: That -- that's where I am, and I -- I'm not at all decided.
Benjamin J. Horwich: Sure. Well, I guess I would -- I guess I would first point out that -- that price competition is not the be-all and end-all of anticompetitive consequences, right?
Justice Breyer: Yes, I think I know that.
Benjamin J. Horwich: I mean, we have this concern -- obviously, we have a concern here that without -- and this is detailed, very clearly, in the complaint, I mean, I think starting with paragraph -- paragraph 8, that talks about some of the price -- some of the pricing constraints. But you get on to the later paragraphs of the complaint, you have all these descriptions of loss of quality competition here. So you have -- you have --
Justice Breyer: You are not understanding my question, I guess. You have to take as a given that, even though what you say is true, I would find that this Alderson Reporting Company Official statute clearly prohibits the application of the antitrust laws to pricing decisions. That's the job of the authority. Now, if I start with that, then you will say, okay, I have to decide against you. Or you might say, even so, I win because mergers are different. Now, that -- that's what I'm trying to get you to say.
Benjamin J. Horwich: Yes, and I guess that is what I'm -- I guess that is what I'm trying to say, is that mergers are different because the challenged anticompetitive act here is not a pricing decision by the hospitals that --
Justice Breyer: I want to ask you: Why are they different?
Benjamin J. Horwich: They are different --
Justice Breyer: After all, we have, one, the specific language I read; and, two, I can think of examples where a merger would be anticompetitive under the DOJ and your FTC rules --
Benjamin J. Horwich: Yeah.
Justice Breyer: -- and yet, probably would further the purposes of the statute by lowering the cost.
Benjamin J. Horwich: Well, that's --
Justice Breyer: Do you think that's the Alderson Reporting Company Official null set? I -- I don't think that's --
Benjamin J. Horwich: No, I -- well, I don't -- I don't know whether that is -- I don't know whether that is true or not, but I think -- I think we're relying on a more -- I think you can't simply start with the idea that, well -- well, you can't start with the premise that this act exists to pursue an objective and to pursue it at any cost, without regard to whether it displaces competition in the market for paid healthcare services, without regard to whether it displaces competition for quality among these hospitals. I mean, on that logic -- and I -- I think it might help to look at some of the other powers here. If we -- if you go to the back of the government's brief, on page 6A, the authority has the power to make and -- and execute contracts. Well, I don't think that that implies a privilege to enter price-fixing contracts. That's part of the background principles of antitrust law. I also don't think it implies the power to enter contracts against public policy. A State, presumably, doesn't wish to abandon that background principle, simply because it wants the authority to pursue its mission.
Chief Justice Roberts: Well, you've already Alderson Reporting Company Official told us that there can be State action for some purposes and not others.
Benjamin J. Horwich: Exactly.
Chief Justice Roberts: So the fact that you have examples where you might conclude, no, they didn't mean to do that, doesn't seem to categorically suggest that you prevail with respect to another one of the powers that are granted.
Benjamin J. Horwich: No, I agree with that, that it doesn't categorically, but it does -- it does seem to me that -- that if we're looking through this list of powers that -- that the hospital authority has, there is not anything meaningfully different about the power to acquire -- acquire property versus make contracts versus, as Justice Scalia said, any other powers that are -- that exist in a general corporation's business charter.
Chief Justice Roberts: I -- this may be completely wrong. You can tell me. I would -- would doubt that, in counties or municipalities of this size, you are going to have -- you know, five hospitals, and so that a -- the authority could acquire a hospital and yet still it not have any significant merger consequences on its face. In other words, when this law was passed, Alderson Reporting Company Official giving them the power to acquire hospitals, wasn't it the case that there would likely be only one other hospital or two, so that any acquisition of another hospital would have the merger consequences that this one had?
Benjamin J. Horwich: Well, no, because I think the -- the baseline when the statute was enacted was that the hospital authorities didn't even exist. So they didn't own any hospitals. And the first acquisition of a hospital can't raise a competitive concern because it's not concentrating the market in any way. It's simply transferring ownership of the hospital from one actor to another.
Justice Kennedy: Well, but to -- to follow the Chief Justice's question, suppose it were shown that there were many rural counties -- rural areas in Georgia, very much like this one. Would that change this case? I thought that was the purport of the -- the thrust of the question.
Benjamin J. Horwich: I think you'd have to imagine a very stylized hypothetical, to see that the State had clearly intended to displace competition. You would want to see, for example -- let me give you an example - Alderson Reporting Company Official
Justice Kennedy: Well, I know Georgia has 158 counties or something.
Benjamin J. Horwich: Right.
Justice Kennedy: So I think they probably have many rural areas with one or two hospitals. That's just a guess.
Benjamin J. Horwich: Well, right, but I suppose that -- that guesswork is not going to be a basis for saying a State has clearly intended to displace competition. The situation in which I think you might recognize it is, if the hospital authorities were already in existence, but they -- and they all each owned a hospital, but they had never had the power to acquire a hospital, and you knew that they were all -- that each of them had their neighboring competitor, and then the legislature comes in and says -- you know, we -- we would like you now to actually be able to acquire -- acquire additional hospitals. I mean, the power here is not the power to acquire additional hospitals. But, if the legislature had said, we have the power to acquire additional hospitals and we know you already have one and we know that the one you are going to acquire is going to be your neighbor and we know there is not lots of hospitals Alderson Reporting Company Official out there, then you might say that, yes, the -- the clear implication of that is that that's going --
Justice Breyer: What does the words mean, "to form and operate one or more major networks of hospitals"?
Benjamin J. Horwich: Well, I think the networks --
Justice Breyer: Which follow -- which follow the words "to acquire and operate projects, defined to include hospitals." So -- so what about those words? Why aren't they good enough?
Benjamin J. Horwich: Well, I guess I'm not sure where Your Honor is looking. They -- they aren't actually -- they don't follow themselves in the statute, but --
Justice Breyer: I'm looking at Section 30 -- well, where are we? 31-7-75(3).
Benjamin J. Horwich: Right. And so I think what you are referring to is number -- number 27 on the list. And -- and I think, in the healthcare industry, the idea of forming a network is not the idea of socializing all of the available resources under government control. A network is an integrated system where you can go to the hospital for your emergency care, and they can refer you to an outpatient clinic that they have somewhere else, and there is a physician Alderson Reporting Company Official who has an arrangement with both of those who can track your care, and you can go acquire your durable medical equipment from some -- from some store they operate.
Justice Sotomayor: Tying.
Benjamin J. Horwich: That's what a network is. That's not vertical integration.
Justice Sotomayor: A network is tying products, to tie products.
Benjamin J. Horwich: Yes, that's exactly right. That's a tying situation. This is -- this is a merger within -- within one relevant market. And -- and that's what's different. So I don't think the 27 --
Justice Breyer: And this falls within the words "to acquire and operate projects"?
Benjamin J. Horwich: It does. But so --
Justice Breyer: And --
Benjamin J. Horwich: It does, but there is nothing about acquiring a project that is inherently -- that's inherently anticompetitive. Acquisitions are not always anticompetitive.
Justice Sotomayor: I -- I guess that just adds on to the issues that we have a price-fixing mechanism, we have a tying mechanism that is expressed, so what's left after that? Just this? Mergers and Alderson Reporting Company Official acquisitions?
Benjamin J. Horwich: Well, I -- well, no, I think -- I think horizontal --
Justice Sotomayor: At -- at what point --
Benjamin J. Horwich: -- generally horizontal agreements, I think you -- so the contracting power doesn't -- doesn't allow the hospital authority to go -- I don't think the -- the hospital here could any more merge with Palmyra than it could go enter into a contract with Palmyra that says, hey, we are going to -- you know, fix the prices that we --
Justice Breyer: And can't -- in other words, the -- the two hospitals in the town, when they say, the price here -- you shall see that the price is not higher than 38 cents, whatever, and would you please get together and be certain that you have similar terms and you have similar agreements and similar prices there, we don't want either of you to be higher, that -- you would then proceed against them for that?
Benjamin J. Horwich: Absolutely, Your Honor. This -- this statute -- and take a step back --
Justice Breyer: And would you also do the same if -- if the electricity regulator in any State or telephone -- a local telephone regulator --
Benjamin J. Horwich: No, Your Honor. I think Alderson Reporting Company Official that --
Justice Breyer: -- or gas pipeline regulator -- what they did is the same thing; they said, our prices are -- you're to file tariffs, and the tariffs are to be reached after you go meet in committee; and that -- that would also fall within the antitrust laws?
Benjamin J. Horwich: No, I think those would likely be very different. I want to be clear about --
Justice Breyer: How is that?
Benjamin J. Horwich: -- the point. The point of this law is to grant counties the opportunity to participate in this market by providing care to indigents. This is not a law about public utility regulation. If you think that this is a law about public utility regulation, that all hospitals are supposed to be -- that the State intends counties to be able to elect to put all hospitals under their control and -- and manage them as such and manage them in the way that a -- that a public service commission would regulate all of the utilities --
Justice Breyer: Well, the language is awfully similar to what you find in public utility Alderson Reporting Company Official statutes, to set reasonable rates, to be certain that nobody is higher than a reasonable rate.
Benjamin J. Horwich: Well, this -- the authority does not have the power to -- Justice Breyer, the authority does not have the power to establish rates at private hospitals. And that -- that would be a signal difference between the -- the authority's power in this -- in this case and the power of a public service regulator over a -- over a utility.
Justice Breyer: Well, what does it mean to establish rates and charges for the services and use of the facilities of the authority?
Benjamin J. Horwich: The facilities of the authority, yes, but not other hospitals within the jurisdiction. It's only -- it's only the hospitals that the authority itself is -- is operating. And so -- so I guess we -- we also have here -- I want -- I want to be clear that, in all of this discussion, we are -- we are operating on the premise that it's actually the authority itself that is operating the hospital. Of course, that is not what this case is. The -- the hospital --
Justice Sotomayor: Could you define "necessity," as you use it? I am harkening back to Alderson Reporting Company Official Justice Kagan. We have plenty of cases that say you don't need to find out whether the exemption is necessary to make the program work.
Benjamin J. Horwich: Right. No, we don't think it means that.
Justice Sotomayor: We don't make that judgment.
Benjamin J. Horwich: No, it's not a normative judgment.
Justice Sotomayor: The State makes that judgment. Exactly.
Benjamin J. Horwich: Correct.
Justice Sotomayor: And, in your answer, you conceded that whether -- if -- if there is discretion, it's not necessary to make it work because the -- the authority can say yes or no -- it's not --
Benjamin J. Horwich: Exactly.
Justice Sotomayor: So what's your definition of "necessity"?
Benjamin J. Horwich: Our definition -- our definition -- well, I have to be honest with you, it's hard to define it because it's going to arise in a number of different contexts. But what this -- but the times where this Court has used it, it has -- it has used it to convey Alderson Reporting Company Official the idea that the choice that the State is offering is no choice at all, if Federal law is going to come in; that -- that Federal law would just negate the choice. So to be concrete about this, in -- in Hallie, for example, the choice that the State provided at the end of kind of a complicated line of -- of statutory rules about how -- how cities do or don't have to provide their sewage treatments to -- to their neighbors, at the end of the day the city had a choice to say, fine, we will give you sewage treatment services, but you have to be annexed to us and -- you know, take the other things that come with annexation to the city. Now, if that choice is -- is -- if that choice is anticompetitive, it's going to be taken away by Federal law. And the choice that the State has tried to offer is no choice at all. It's going to be negated, and the only choice left for the -- the city in Hallie is going to be to -- to opt --
Justice Alito: If the State --
Benjamin J. Horwich: To just relent and get the sewage treatment service --
Justice Alito: If a State legislature articulates clearly and expresses affirmatively that it wants municipalities to share the State's antitrust Alderson Reporting Company Official immunity, is that sufficient? Or is there a degree of specificity that's necessary as to the particular anticompetitive conduct that the State wants to cover?
Benjamin J. Horwich: Well, I think, in your hypothetical, we are imagining kind of a municipality enabling act that just has -- you know, a section in it that says, municipalities shall enjoy the State's exemption from the --
Justice Alito: Well, Georgia does seem to have such a statute.
Benjamin J. Horwich: Yes. So -- so that -- that's not a clear articulation problem because it's plenty clear what the State's trying to do. There might be what I would call an affirmative expression problem there because simply saying that the State doesn't want the antitrust laws to apply, that's not the basis in federalism for the -- for the State Action Doctrine. The basis in federalism is that the State has made some affirmative choice that it wants to accomplish something else, and that it's offered some principle on which the sub-State actors can -- can act to serve the State's policy interests. And so I think you might have to hesitate in a case like that to say, well, if the -- if the State is Alderson Reporting Company Official just passing out indulgences to -- to get out of Federal competition law, that may not be something that, substantively, Federal law will stand aside for.
Justice Alito: Well, I don't want to take up your rebuttal time, but I don't see how that's consistent with your answer to Justice Kagan about a grant of discretionary authority.
Benjamin J. Horwich: Well, I -- I was assuming, in Justice Kagan's hypothetical, that we had some of the other things going on here that -- that manifested a particular objective that the State was trying to pursue. So sort of the State trying to pursue municipal governance doesn't seem to me to be enough of an affirmative State policy to say that works. So I think that would distinguish the two. And if I could reserve? Thank you.
Chief Justice Roberts: Thank you, counsel. Mr. Waxman. ORAL ARGUMENT OF SETH P. WAXMAN ON BEHALF OF THE RESPONDENTS
Seth P. Waxman: Mr. Chief Justice, and may it please the Court: In the specific area of local hospital services, the Georgia legislature has adopted a model of Alderson Reporting Company Official local public choice, including the choice to reduce or eliminate competition. There is no issue here, Justice Scalia, with respect to your earlier question, of general corporate powers. The Hospital Authorities Law creates local public authorities to, quote, "exercise public and essential government functions to provide hospital care for residents, especially residents who cannot pay. It empowers authorities to acquire projects" -- plural -- "specifically including each authority the ability to acquire hospitals" -- plural -- but with limitations. They have to -- it has to be within a very confined geographic and demographic jurisdiction. And for authority hospitals, it replaces any pure market model with statutory mandates, a mandate to provide services to all indigent in the community and to price all services on a not-for-profit basis and with a statutory limitation on rate of return. There are --
Justice Scalia: Well, I -- I don't see how any of that pertains to whether they can create a hospital monopoly. You can do all of that, even though you are not the only hospital in the area.
Seth P. Waxman: The -- I guess my point here is that the -- that the legislature's -- the powers that Alderson Reporting Company Official the -- the legislature has given hospital authorities are not, by any means, general corporate powers. They are broader than what a corporation may have in certain respects and much narrower in other respects. And they --
Justice Scalia: Well, but the only respect relevant here is -- is -- the only respect relevant is the ability to acquire other hospitals.
Seth P. Waxman: That's right. And there is --
Justice Scalia: Right? And that's -- and that's a general corporate power. Every corporation in Georgia has the power to acquire, including acquire other businesses.
Seth P. Waxman: There -- there -- these -- these are -- the supervening wish, mandate, of the legislature -- and this is well-explained in Georgia Supreme Court cases, particularly DeJarnette, which was decided right after Georgia amended its constitution, enacted the Hospital Authorities Law -- was the desire to -- the goal to provide adequate hospital services, particularly for the indigent --
Justice Ginsburg: Georgia wasn't so sure because didn't it come in originally on the side of the FTC in this case?
Seth P. Waxman: It did. And Georgia's Alderson Reporting Company Official complaint and its theory in the district court, which it did not pursue in the court of appeals or here, not -- was not that the authorities weren't exercising State power, but that the contention that the operation of the hospital by the -- the special purpose corporations that the hospital authority created was not adequately supervised. That is what the State was arguing in the district court. And when it lost that point, it withdrew from the case and has remained absent ever since.
Justice Kagan: Mr. Waxman, we do have a brief from quite a number of States, and the brief basically says, we do this all the time, we set up these local authorities, and then we give them powers because they have to act in the world, and we give them normal powers, like the ability to make contracts and the ability to buy property. And when we do that, we don't mean that they can do anything they want, notwithstanding the antitrust laws. And to construe these very normal powers that we would give to a State entity, in order to allow it to operate as a permission to violate the antitrust laws, is not at all consistent with our own intentions.
Seth P. Waxman: I -- I have no problem with the Alderson Reporting Company Official amicus brief filed by the States supporting the FTC in this case, which is positive, quite expressly and at the outset, on an understanding that what is involved here is simply a State authorization of creation of a local entity with general corporate powers and nothing more. That could not be farther from this case. These special purpose authorities do not simply have general corporate powers. They have a mandate. There is a Georgia constitutional amendment that coincided with the enactment of the Hospital Authorities Law that derogated the State's duty to provide indigent care to its -- hospital care to its citizens.
Justice Kagan: But I'm --
Justice Kennedy: Well, is it a fair characterization of your argument -- is it a fair characterization of your argument to say that the possibility that the hospital authority can use this general power in this way is tantamount to or equivalent to the legislature intending that it be used that way? Is that your argument?
Seth P. Waxman: No. We take seriously the standard that this Court announced in self-consciously clarifying the level of explicitness that a legislature has to use in Town of Hallie. This Court said -- the Court asked whether, Alderson Reporting Company Official quote, "suppression of competition was a foreseeable result of what the State legislature authorized," and it derived that formulation expressly from its earlier decision in City of Lafayette, which explained that a, quote, "adequate State mandate exists when it can reasonably be inferred," quote, "from the authority given a local entity to operate in a given area that the legislature contemplated the kind of action complained of." In other words, as I understand this Court's test, whether what was done by the hospital authority or any sub-State entity was foreseeable by a reasonable legislator, which in this case is that -- was it foreseeable that in -- in pursuing the State-imposed mandate to serve the indigent in a -- in a confined jurisdiction, especially in rural counties which abound in Georgia, a hospital authority might require market power or even a public service monopoly because that --
Justice Sotomayor: Could you --
Seth P. Waxman: -- is the natural way to acquit the statutory mandate.
Justice Sotomayor: There's -- there is a problem here, which is, I understand the public mandate to serve the indigent, but you are asking us to take this a step further. You're elevating that public Alderson Reporting Company Official mandate to a public command, that serving the indigent has to override the needs of the majority, in terms of price competition.
Seth P. Waxman: No. I don't -- I don't --
Justice Sotomayor: And -- and that -- that step -- that further step that the State intended to immunize their -- the monopoly power, is the step we are trying to find in this grant. And that's what I don't see. I see the -- the compulsion to serve the needy.
Seth P. Waxman: Uh-huh.
Justice Sotomayor: I hear that much of Georgia is rural, but your adversary says, in most instances, there is only one hospital, so the municipality's taking it over is not going to be a merger issue. To the extent that they step in and take over one of two hospitals, there is no merger issue because it's only substituting one owner for another. This situation, they claim, is a rarity, where there are only two or three providers and a hospital's going to -- and a public -- a municipality is going to then get monopoly power by an acquisition.
Seth P. Waxman: So, Justice Sotomayor, as to your first point, our position is not that the only mandate is to serve the indigent. The actual mandate in the constitution and the Hospital Authorities Law is to Alderson Reporting Company Official provide hospital services for all residents, with a particular note to the obligation to serve indigent clients. Second of all, we are not here to -- I mean, I don't know where the government is coming up with its speculation that, out of Georgia's -- I think it's 154 counties, for a population of 10 million people, it is the rare instance in which there will be anything other than just one or -- you know, a multiplicity of hospitals. I mean, the Federal Trade Commission guidelines for market concentration is anything up to four, four or fewer participants. The notion that the legislature, in 1941, was providing the express authority to acquire multiple hospitals in a single municipality or county was focused only on huge metropolises, of which there was only one, or on counties that were so small that they couldn't otherwise even attempt to support more than one hospital is just fanciful; it's made up. And --
Justice Kagan: Mr. Waxman, could -- could I understand where you think this expressed approval is coming from? Because you said general corporate powers is not enough. So the general ability to buy property, you said, is insufficient. Alderson Reporting Company Official Then you have this idea they have a mission. But the mission can be accomplished in all kinds of ways that are perfectly consistent with the antitrust laws, so that doesn't seem to get you all that far. So what else have you got to show that the State actually thought about this issue and approved this power for the hospital authorities?
Seth P. Waxman: Okay. I mean, for one -- one other thing is in Section 7 -- 7-77, as -- as was noted before, the authorities are subject to regulation of rate of return. Now, if that doesn't bespeak the foreseeable consequence of market power, I don't know what -- what does. That is the hallmark of a regulated public service monopoly or at least the regulation of a return by a participant with market power. The other thing that exists -- and the government pooh-poohs this as somehow not part of the Hospital Authorities Law -- is that the Georgia State legislature has -- this is -- this law was enacted in the backdrop of other laws in which Georgia has quite deliberately displaced, quote, "unfettered private market competition." The certificate of need law is the paradigmatic example of the imposition of regulation at the expense of free market competition and, in fact - Alderson Reporting Company Official
Justice Scalia: Well, a lot of States have that. You can't open a new hospital without getting a certificate of need. Are you saying that, in all of those, States the -- the result is that the antitrust laws can be ignored?
Seth P. Waxman: No, no, no. Our argument is not that the certificate -- that the existence of a certificate of need law indicates an intent by the legislature to fully displace the antitrust laws with respect to anybody else. My point is, in the context of other Georgia systems that strictly limit entry into -- or expansion into these local markets, combined with very severe rate restrictions and obligations and mandates to serve -- excuse me.
Justice Breyer: Your point -- I don't mean to interrupt, but the point that he's making in response to my earlier questions along these lines, I think, was the following: Where do they get their hospitals, these authorities? The -- the law sets up a hospital authority. All right. Where did they get their hospitals?
Seth P. Waxman: They can -- I mean, the legislature permits them to be built, bought --
Justice Breyer: Well, do you know what Alderson Reporting Company Official actually happened? Do you -- do you know, in fact, where these hospital authorities got their hospitals from?
Seth P. Waxman: You mean all of the hospitals authorities in Georgia?
Justice Breyer: No, not all of them, but -- I now am in a county, and suddenly, I'm the mayor, and I see this law, and it says we can set up a hospital authority. So Joe, I say, you are -- you are the boss, you are the hospital authority guy. And he says -- you are to run the hospital. And he says, what hospital? We don't have a hospital. (Laughter.)
Justice Breyer: So I want to know where did they get their hospitals?
Seth P. Waxman: The -- the answer, Justice Breyer, I think -- I mean, there is nothing in the record to indicate where all the hospitals --
Justice Breyer: I don't need to know all of them. I just want some rough idea where do they come from.
Seth P. Waxman: Well, let's take -- let's take the example --
Justice Breyer: You may not know.
Seth P. Waxman: No, no, no. Let's take the example of this county, in terms of what was done and Alderson Reporting Company Official what is now being challenged. So when the hospital -- there was a public hospital, beginning in 1911, in Dougherty County.
Justice Breyer: Yes.
Seth P. Waxman: When the State constitution was amended to impose on counties the State's obligation to provide adequate hospitalization care, it enacted the Hospital Authority Law for counties that chose to make use of that device, in order to acquit their public service mandate. And Dougherty County did, soon thereafter --
Justice Breyer: Okay.
Seth P. Waxman: -- establish a -- an authority, and the assets -- all of the assets and all of the operations of the existing hospital, were transferred. There then -- and there was a natural monopoly in that county.
Justice Breyer: Okay. I've got it. I've got it. Then --
Seth P. Waxman: Then --
Justice Breyer: Then he says this: I --
Seth P. Waxman: Yes. Then --
Justice Breyer: He says, I have been thinking of it the wrong way. I have been thinking of it like the California State Public Utilities Alderson Reporting Company Official Commission. They regulate all the electricity producers. That isn't this.
Seth P. Waxman: Right.
Justice Breyer: These were a group of people that ran some hospitals -- some municipal hospitals, and now, they can acquire, not just general -- I agree with you, it isn't just general. They have a lot of power there to acquire other hospitals from outside the system. But, when they do that, there's no reason to think that that gives them the power to acquire it, where it's anticompetitive.
Seth P. Waxman: Well, I think that --
Justice Breyer: Now, the fact that you can regulate your own hospitals, which is one track and one group, doesn't say that you have to bring in anticompetitive people -- I mean, you have to bring in others, where they're anticompetitive. That -- that, I think, is his point.
Seth P. Waxman: Yes.
Justice Breyer: Don't think of it as one thing; think of it as two separate systems.
Seth P. Waxman: We're not arguing that the Hospital Authority Law gives the hospital authorities the right to regulate non-authority hospitals. We're Alderson Reporting Company Official not arguing that. We're not arguing --
Justice Breyer: No, no. I know that. But once you don't -- once you don't -- he says, you see, they don't regulate prices at non-authority hospitals, they don't do this for non-authority, they don't do that for non-authority, even though they might have the power to bring them in; but, when they have the power to bring them in, why read this -- it's at least ambiguous -- why read this as saying you can bring them in, where it's anticompetitive to do so?
Seth P. Waxman: I mean, this doesn't say, you can bring them in where it's anticompetitive to do so. That's their any and all hypothetical. And this Court has never required, for good reason, express authority. That was the whole point of City of Hallie and City of Lafayette -- Town of Hallie and City of Lafayette. The point here is, okay, so they created a hospital authority, it ran a public hospital, it was a natural monopoly. The county grew. A private hospital developed. The public hospital, which is serving more than ten times the number of indigent patients than the private hospital, which is very underused, the county hospital has been -- the hospital authority has been saying, for years and years and years, we need more capacity, we need more capacity. Alderson Reporting Company Official There are -- in order to accomplish our mission, there are two ways to do it. We can only operate in this confine. We can build a new hospital, and here's what it would cost, and here's what we would get. And we would, by the way, have to satisfy the State authorities that we are entitled to a certificate of need in the context in which the private hospital is severely underutilized. Or we can talk with the private hospital about whether they would like to be acquired. And the record shows that they did that for many, many years, even before the Phoebe Putney entities were created.
Justice Sotomayor: Mr. Waxman, I'm showing my ignorance. Is this -- would this merger be subject to the rule of reason?
Seth P. Waxman: You mean if it --
Justice Sotomayor: If it were -- if we were not to find State immunity, would the merger be subject to the rule of reason?
Seth P. Waxman: I am embarrassed to say I don't know enough about Sherman Act laws --
Justice Sotomayor: I was embarrassed to ask the question, but I was taught to ask the question. If it is -- I'm going to assume that we'll both be -- we'll both be corrected by our respective colleagues, soon Alderson Reporting Company Official enough. (Laughter.)
Justice Sotomayor: But -- but if it --
Seth P. Waxman: Probably me sooner than you.
Justice Sotomayor: That's likely. (Laughter.)
Justice Sotomayor: But -- but my question is really more fundamental, which is, yes, I understand that you have a great defense, potentially, to a rule of reason challenge that -- that there was necessity in its truest sense, in its economic sense, in this situation. So why should we undo our decades of writings that say that we should construe immunity narrowly and not broadly, when it comes to displacing our antitrust laws?
Seth P. Waxman: Because the point of State action immunity, which is respect for the sovereign choices of sovereign States, is -- exists not only to provide a -- an ultimate defense in litigation on the merits, it's to protect States and sub-State entities from the cost of litigating. I mean, the question, ultimately, in this case -- and in all these cases -- is who gets to decide? Who gets to decide if this is reasonable or not?
Justice Kagan: Well, if that - Alderson Reporting Company Official
Seth P. Waxman: Is it the Federal Trade Commission that comes in and files a lawsuit for this poor hospital authority?
Justice Kagan: Mr. Waxman, I mean, that's right, it is about choices, but -- but the question is whether the State has made a choice. And that's what all these cases are about --
Seth P. Waxman: Right.
Justice Kagan: -- is our trying to find whether the State has made a choice as to this kind of conduct.
Seth P. Waxman: Right.
Justice Kagan: So now, we have your corporate powers aren't enough, your general mission isn't enough. You said a certificate of need, but a certificate of need, it isn't even given out by this authority. It's something that has nothing to do with the powers of this authority. Then you said there -- there's some kind of a price regulation that happens as to the -- the hospitals that the authority owns, but not with respect to other hospitals. So I guess I'm still looking for the things that show that the State has made a choice that it wants Alderson Reporting Company Official these -- these hospital authorities to be able to make anticompetitive purchases. Where do I find that?
Seth P. Waxman: I may not be able to convince you, but let me take another run. I think it's the combination because, as this Court has expressed repeatedly, it's -- one has to look at the specific power granted, which here is the power to acquire hospitals within a very circumscribed jurisdiction, in the context of the law as a whole. The context of the law as a whole here -- and I hope this works for the Court, but if it doesn't -- you know, perhaps I am wrong; it certainly makes this a stronger case than Hallie -- here, we have a law that says counties have the obligation now, unlike the State, to provide adequate hospitalization services. They will exercise -- what they do is deemed to exercise public and essential government function within strictly limited areas. And they have the power to acquire hospitals in those areas, subject to very strict rate of return regulations and very, very strict conditions on how they operate those hospitals, including the power to lease to an operator for -- in order to serve the public mission. And they do that against the backdrop of a series of -- they have eminent domain power. They can Alderson Reporting Company Official take another hospital, if it is essential to fulfill their mission.
Justice Ginsburg: Mr. Waxman --
Seth P. Waxman: And they do this in a backdrop of a State that has -- notwithstanding the advocacy of the Federal Trade Commission, has repeatedly strengthened, rather than abrogated, a -- a certificate of need law that leads --
Justice Ginsburg: Mr. Waxman, you are essentially interpreting the Georgia statute that sets up the hospital authority. And you -- you're saying this is how we read it. We start with the antitrust exemption is for the State, not subdivisions, so the State has to give it to the subdivision, for the subdivision to have it. Could the Federal court have said, we -- we'd like to know what the Georgia legislature -- what the Georgia authorities think this statute means? So, could a question have been certified -- I don't know if Georgia has a certification procedure, but to the Georgia Supreme Court, and said, tell us, does this statute, is it intended to transfer the State's immunity to the locality -- to the local unit?
Seth P. Waxman: I don't -- I mean, I -- I assume that the Georgia State courts could do that; but, Alderson Reporting Company Official Justice Ginsburg, I think it's important to recognize that the FTC doesn't dispute that the -- that hospital authority -- county hospital authorities are, in fact, agents or arms of the State --
Justice Ginsburg: But the question is does this -- does this legislature mean that the State is transferring its immunity to this local unit?
Seth P. Waxman: And I believe the FTC -- Mr. Horwich can correct me if I'm wrong -- but I believe the FTC's position is, generally, yes, but not with respect to the -- what is alleged to be a merger to monopoly. And the question in this case is whether or not the acts, under this law and applying the foreseeable result standard, whether the acts of the hospital authority in this case in approving and acquiring the second hospital are fairly attributable to the State. And if I could just --
Justice Scalia: Mr. Waxman, if you don't want to be interrupted, you have to pause between sentences. (Laughter.)
Seth P. Waxman: I was taking a cue from Your Honor the last argument. Alderson Reporting Company Official
Justice Scalia: I understand. That's right. You've given a -- you know, an appealing example of a small county that has one -- one hospital, and this operation purchases that one -- one hospital. Seems nothing wrong with that; although, as Justice Sotomayor suggests, I doubt whether the FTC would be pursuing a situation in which there is a natural monopoly. It's a question of whether the monopoly would be owned by the State or not. But your argument, if we follow it, embraces a quite different situation, a very large county which has five hospitals that are competing vigorously in price, in specialties, they advertise on the radio, as some hospitals do. And what you're saying is that this operation can take over all of those hospitals and eliminate all of that competition. Isn't that so?
Seth P. Waxman: Well, I -- for purposes of Federal antitrust law, yes.
Justice Scalia: Yes.
Seth P. Waxman: But for purposes of State law, almost certainly no. And the point here is -- and that is the point here. The point is that Georgia, either through both private suits and actions authorized by its Alderson Reporting Company Official attorney general, can take steps in order to restrain hospital authorities from doing what they -- and, in fact --
Justice Scalia: We have no -- we have no idea whether they are willing to do that.
Seth P. Waxman: Oh, yes, we do.
Justice Scalia: And we have a Federal antitrust law.
Seth P. Waxman: We -- we absolutely do, Justice Scalia. There is a solid line of cases in which the Georgia Supreme Court has -- has quite rigorously enforced the limitations of the Hospital Authority Law, in order to prevent hospital authorities from doing things that it says the legislature didn't intend. The Tift County case is the best example, but there are others cited in our brief. The last point --
Justice Scalia: Why -- why didn't it intend this? I don't understand. You -- you've told us that they did intend this, that they did intend to displace competition.
Seth P. Waxman: Yes.
Justice Scalia: And now, you say, but Georgia will say, oh, no, they didn't intend to displace competition. Alderson Reporting Company Official
Seth P. Waxman: No, no, no. My --
Justice Scalia: Which is it?
Seth P. Waxman: My point is that, with respect to your hypothetical, whether the hospital authority of Fulton County -- and I believe there is more than one hospital authority in Fulton County, and they are authorized to merge, in any event -- but could they acquire, by purchase or eminent domain, all of the hospitals in metropolitan Atlanta to do so? And my point is that for purposes of Federal antitrust law the answer is you are out -- that's -- you are not the authority to inquire. The question is -- just as this Court -- you explained for the Court in Omni, there may be very many things that a local authority can do that would violate State law, and there are State law remedies. And my point only was that the Georgia Supreme Court has been very quick to enforce the limitations. But as a matter of Federal antitrust law, the only question is were they -- were they authorized to do things like this? And if I --
Justice Breyer: And they -- they say on that, that it's a sham. Well, just say 30 seconds on their argument, that the FTC looked into it, these people had never regulated anything, they'd never looked Alderson Reporting Company Official at any price anywhere, they've never done a single thing, it's a sham; and therefore, that's the end of it. What about that?
Seth P. Waxman: Okay. If I can just finish my answer to Justice -- I have one other point to make for -- to Justice Kagan, who has asked it twice. The -- my last point I want to make -- and then I will answer this -- is that this county -- this hospital authority, like many, facing a capacity constraint and a -- and a nondiscretionary mandate to serve the public needs for hospitalization, had two choices. It could have tried to convince the State to spend three times as much money to get half the number of beds, notwithstanding the existence of excess capacity; or it could buy the other hospital and get that capacity in a consensual transaction by the authority. And here's my point, Justice Scalia, this case is on all fours with this Court's decision in Omni. The notion that this may have long been desired by this -- this special-purpose entity is totally irrelevant. This -- this acquisition was proposed to, considered by, and -- and approved by the hospital authority. Alderson Reporting Company Official And not only that, when the FTC came and complained about it, they reconvened another public meeting and discussed it again and came to the conclusion again that they wanted to acquire this hospital. And before they signed the lease, they issued a notice and comment period. There was three months for people to tell the authority whether this lease was or was not consistent with community interests. They had a public meeting, and they approved it. And that is the act of the State.
Chief Justice Roberts: Can the State -- does the State have a procedure where it can give real-time approval? In other words, this is going on, and the hospital authority says, boy, the FTC is sending us these letters. State, could you do something to show that you approve this transaction, whether it's a special law or there is some organization, I guess, in some other case, setup, that could give its approval? Is there --
Seth P. Waxman: I mean, this is -- the Hospital Authorities Law says, counties, this is your responsibility, here are your powers. If anybody in the State or any competitor or the attorney general thinks that you are abusing those statutory powers, the courts Alderson Reporting Company Official are open and quite receptive to those concerns. But there's no --
Chief Justice Roberts: No, I know. But I guess my point is can the burden of going forward be switched the other way? And can this hospital authority say -- you know, to the State, we would like some blessing on this, so that we can go ahead with it? So the choices aren't really build your own hospital or acquire the other one, in the abstract, but ask the State -- you know, what do you want us to do? Do you want us to build a new hospital? Or is it okay if we acquire this one?
Seth P. Waxman: I don't believe there is any such mechanism, and I believe that the -- the State -- the legislature didn't contemplate anything like that, because the mandate and the responsibility and the authorization was devolved to the counties. Now, Mr. Chief Justice, what the -- what the hospital authority could do and did do, although it's not in the record of this case, is evaluate the likelihood of getting a certificate of need to build the additional required facilities. Thank you.
Chief Justice Roberts: Thank you, counsel. Mr. Horwich, you have 4 minutes remaining. Alderson Reporting Company Official REBUTTAL ARGUMENT OF BENJAMIN J. HORWICH ON BEHALF OF THE PETITIONER
Benjamin J. Horwich: Thank you. I guess I -- I heard several members of the Court asking Mr. Waxman, specifically, Where do you find this? Where can you locate this intent to displace competition in the statute? And I would like to just run through, if I could, each of his answers and why I think they are insufficient. So the first one, of course, we've talked a lot about the existence of general corporate powers, but the most natural inference there is that the State expects those to be exercised in conformity with the background principles that anybody else who has general powers has. Now, the idea that the authority has a mandate, a purpose it's supposed to serve, of course, that's always true. States always have some purpose in mind when they set up some sub-State entity. The question isn't whether there is particular ends the State is trying to pursue. The question here is whether the State intended to pursue those ends through the particular means of displacing competition, here, displacing competition in the market for paid healthcare services. Alderson Reporting Company Official And see Mr. Waxman also pointed to the rate of return provision in the statute. Now, as a sort of a threshold matter, there's -- if past is prologue, there is not any reason to think that that will be not be rigorously enforced with respect to the privately controlled operations here. But -- and that's sort of the second question presented, and we can set that aside for the moment, I guess. But it seems to me there are two far more natural explanations for the presence of the rate of return provision in the statute than the one Mr. Waxman would like you to -- to give to it. The first explanation is this is a statute about providing public care for indigents. Nobody should be making a profit off of that, and the State wants to say that. And that seems to be a very natural explanation that doesn't depend at all on the State intending to displace competition completely. The -- the rate -- the price regulation provision also can be naturally understood as a response to the recognition that there will be some de facto monopolies in the situation where there is only one hospital in the county. But it does not mean that the State wants there to be more monopolies, so that it can bring in the Alderson Reporting Company Official unfortunate medicine of rate regulation to respond to those. Presumably, the State intends, as is the accepted background principle of free market competition in this country, that there won't be monopolies, unless they -- unless they arise of necessity.
Justice Sotomayor: Counsel, can I interrupt --
Benjamin J. Horwich: Yes.
Justice Sotomayor: -- you, just a moment, to address a question raised by Justice Breyer, which is your alternative argument?
Benjamin J. Horwich: Yes.
Justice Sotomayor: You have lots of evidence that the authority does very little oversight of these hospitals when they move forward. But is that the issue before us? Is the question of immunity as to what happens in the operation of the hospital or in their merger and acquisition, their actual formation? And -- so that to the extent that we were to conclude that the State has delegated immunity on the basis of merger, why do we need to look any further at whether there has or has not been an appropriate degree of supervision of that decision?
Benjamin J. Horwich: Right. Well, the -- the -- I -- I don't think the two are entirely -- are entirely Alderson Reporting Company Official separable, as a matter of competition law, because the reason the competition law is concerned with mergers is not because of the transaction as such, but it's because of what it does going forward to the structure of the market and the competitive behavior of those in the market. And so the State Action Doctrine says that the State -- if the State's going to go create monopoly, it needs to take ownership of that monopoly. And I'm using ownership not in the literal sense, but at least ownership in the sense of actively supervising the monopoly, to be sure that it is pursuing the -- the objectives that the State has in mind for creating it. So that's -- that's why we are still concerned there. Mr. Waxman referred to the Certificate of Need Law. I think there is a very close analogy to be drawn to Goldfarb here. That is the -- the question of minimum fee schedules agreed to by lawyers. The State of -- the State of Virginia regulated entry into the market for the practice of law, just as the certificate of need regulates entry into the hospital market. But horizontal agreements among people already in the market, such as here and such as the minimum fee schedule in Goldfarb, are not exempt just because of it. Alderson Reporting Company Official Thank you.
Chief Justice Roberts: Thank you, counsel. The case is submitted. (Whereupon, at 11:05 a.m., the case in the above-entitled matter was submitted.)