Assisting the Court in Evaluating A Proposed Consent Judgment Addressing Competition in the Business of Healthcare Services


In 2014 the Attorney General of Massachusetts invoked the rarely used anticompetitive branch of the state’s Consumer Protection Act, G.L. chapter 93A, to bring an action against Partners Healthcare System, Inc., a not-for-profit corporation that is the largest healthcare provider in the Commonwealth.  The Attorney General sought to block Partners’ acquisition of three hospitals outside of Boston, principally alleging that the acquisitions would have a substantial anticompetitive effect on the business of healthcare in the relevant state market and would therefore harm the public interest.  After intense negotiations, Partners and the Attorney General agreed to entry of a consent judgment that would permit the acquisitions to take place, but would subject Partners’ operations to a series of restrictions intended to lessen any anticompetitive effect of the acquisitions. 

When the trial judge then solicited comments from the public at large concerning the proposed consent judgment, NELF, in a classic instance of playing its role as amicus curiae in the public interest, responded by filing with the court a letter in which it discussed the legal standard by which the court should evaluate the agreement struck by the parties.  Having reviewed the submissions of the Attorney General and Partners on the question of the legal standard to be used, and after careful independent review of the relevant legal authorities, NELF opined to the court that the Attorney General and Partners had accurately stated consensus legal principles, drawn from a variety of federal and state antitrust cases, that have guided other courts in a range of similar situations and that ought to guide this court as well.  NELF summarized the court’s inquiry into two areas.  First, there were core judicial concerns, including whether the consent judgment was the product of genuine adversarial negotiations, whether the terms reasonably relate to issues over which the court has jurisdiction, whether the terms of any possible future enforcement envisioned under the consent judgment are sufficiently clear, and whether enforcement would be adequate and manageable.  Second, there were concerns relating to the public interest.  Here, the court should satisfy itself that the judgment does not clearly violate any well-established public policy, taking due account of the Attorney General’s unique discretionary powers in protecting the public interest through the prosecution and settlement of law suits (a discretion recently reaffirmed by the Legislature specifically as to healthcare providers and anticompetitive conduct under G.L. c. 93A).  One point that NELF thought especially important to emphasize was that the proposed consent judgment did not rest on either a finding or an admission of liability and therefore “the instrument must be construed as it is written, and not as it might have been written had the plaintiff established his factual claims and legal theories in litigation” (quoting U.S. v. Armour & Co., 402 U.S. 673, 682, 91 S.Ct. 1752, 1757 (1971)).

In February 2015, the judge declined to approve entry of the consent judgment, finding that its substantive terms failed to address adequately the likely anticompetitive effects of the acquisitions and finding, also, that the terms of the settlement were not sufficiently clear as to render possible future enforcement reasonably manageable by the court.