Five Lessons: Ninth Circuit Upholds Decision to Block Idaho Healthcare Merger

amurinoFeatured Expert Column – Antitrust/Federal Trade Commission

Andrea Agathoklis Murino, Wilson Sonsini Goodrich & Rosati*

On February 10, the United States Court of Appeals for the Ninth Circuit affirmed a lower court ruling blocking the merger of St. Luke’s Health Systems, Ltd. (St. Luke’s) and Saltzer Medical Group (Saltzer), and handed the Federal Trade Commission (FTC) yet another victory in its efforts to halt consolidation in the healthcare sector.  This opinion is instructive both because of what it reveals on the macro-level about merger review today, and for what it may portend in future healthcare consolidation cases. Continue reading

New Jersey High Court Confirms Proper Test for Defining “Independent Contractor”

body_TabakmanMEGuest Commentary

by Mark E. Tabakman, Fox Rothschild LLP

A November 2014 I authored for Washington Legal Foundation, New Jersey Supreme Court Set to Rule on Definition of “Independent Contractor”, analyzed questions that had been certified to the New Jersey Supreme Court on whether an individual was an independent contractor under New Jersey wage-hour laws. My reading of the tea leaves was that the Court would adopt the test already engrafted into the New Jersey Unemployment Law. That is in fact what the Court did.

On January 14, 2015, the Court in Hargrove v Sleepy’s, LLC (“Hargrove”) (Dkt. No. A-70-12) resolved the issue of when an individual may be properly classified as an independent contractor under the New Jersey Wage Payment Act (“WPA”) and the New Jersey Wage Hour Law (“WHL”) and held that the “ABC” test governs. Under the ABC test, services performed by an individual are deemed to be employment unless the following is shown:

(a) that the individual has been and will continue to be free from control…;

(b) that the services provided are either outside the usual course of business…or performed outside of all the places of business of the enterprise…; and,

(c) that the individual is customarily engaged in an independently established trade, occupation, profession, or business.

The Court noted that both of New Jersey’s wage and hour laws neither defined “employee” or “independent contractor” nor set forth the standards to be utilized in such analyses. The Court then examined the plain language of the laws and the implementing regulations of both laws, and concluded that deference should be given to the position of the New Jersey Department of Labor and Workforce Development (“NJDOL”), as it was the Agency charged with interpreting and enforcing these laws. On that basis, the Court concluded that the same test, under both laws, should be utilized to determine whether or not an employment relationship existed.

In holding that the ABC test governs, the Court rejected the common law “right to control” test and the “economic realities” test because the “right to control” test, as the Court noted, is incompatible with the legislature’s goal of ensuring economic security and the “economic realities” test, as the Court noted, could lead to inconsistent results.

By requiring that each element be satisfied, the ABC test (which NJDOL supports and utilizes) facilitated, as the Court explained, “greater income security” for workers—the underlying purpose of both laws at issue. The ABC test presumes that an employment relationship exists and places the burden on the employer to prove differently. The last prong (i.e. independently established business), is where the issue is joined most of the time and where (often) most of the cases flounder for the putative employer. Accordingly, the Hargrove decision has decidedly and emphatically increased the coverage and protection of New Jersey’s wage and hour laws in favor of “employees.”

Businesses in New Jersey that presently utilize or are considering use of independent contractors would be well advised to work with experienced employment counsel to ensure compliance with the Court’s holding.

Seventh Circuit Sheds Light on Foreign Reach of Federal Antitrust Laws

Dugan_Brady-WEB135AlfanoFeatured Expert Contributor – Antitrust & Competition, U.S. Department of Justice

Sitting in for Featured Expert Contributor Mark J. Botti on this post are Squire Patton Boggs partner J. Brady Dugan and associate Peter C. Alfano, both in the firm’s DC office.

Whether U.S. antitrust laws reach wholly foreign conduct is a question that has been addressed by all levels of the federal court system over the past decade, including by the U.S. Supreme Court.1 Nevertheless, it is a question as to which many companies, in the U.S. and abroad, may feel there is not a clear answer. Consider, for example, a corporation that purchases a product in the U.S. that was finished or assembled overseas. If the finished product includes a component that the assembler purchased at a price that had been inflated by an overseas price-fixing conspiracy among the component manufactures, can the U.S. purchaser of the finished product sue the component seller in U.S. court for treble damages? Can the overseas assembler recover damages from the overseas component manufacturer in the U.S.? Or to put it another way, can a foreign corporation that manufactured and sold a product overseas, to an overseas assembler, be sued for price-fixing in the U.S. by a U.S. customer of the foreign assembler? It will come as no surprise that the answers to these questions are very fact-specific. But recently, a panel of the U.S. Court of Appeals for the Seventh Circuit issued a decision that helps clarify the law. Continue reading

The 2015 Dietary Guidelines: Another Federal Food Activism Vehicle?

MyPlateEvery five years, the U.S. Department of Health and Human Services (HHS) and the U.S. Department of Agriculture (USDA) jointly issue the latest iteration of the federal government’s formal guidance on healthy eating, the Nutrition Guidelines. These Guidelines not only inform as to how government feeds its millions of employees (including the military) and those who eat in a government facility (i.e. public schools, prisons), but they also influence food-related laws and regulations.

A federal advisory committee is expected to report its recommended updates for the 2015 Guideline to HHS and USDA this month. If the committee’s proceedings and its December 15, 2014 interim report are any indication, the 2015 “My Plate” will feature supersized, empty-calorie portions of activism and food-nanny nagging.  We should expect to be lectured on the need to eat “sustainably,” the imperative for mandated “added sugars” food labeling, and the importance of imposing marketing restrictions on certain foods.

The advisory committee. None of this comes as a surprise, given the makeup of the Dietary Guidelines Advisory Committee (DGAC) and the motivations of the regulators at HHS and USDA who appointed its 15 members. Every single member hails from academia, and as one assessment of the DGAC and its work published by Capital Research Center noted,

There is not a single business owner, family physician, working nutritionist, food services executive, or federal nutrition program director in the mix.

Continue reading

WLF Developments You May Have Missed During the Holidays

new yearHere’s some things you may have missed from Washington Legal Foundation during the December 2014 holidays season.

WLF Amicus Briefs:

  • King v. Burwell (On December 29, 2014, WLF asked the U.S. Supreme Court to reverse an appeals court ruling that, if upheld, would allow IRS to appropriate billions of dollars a year without authorization from Congress.)
  • In re: Deepwater Horizon (On December 24, 2014, WLF filed a brief in the U.S. Court of Appeals for the Fifth Circuit, urging it to remove the court-appointed Claims Administrator who evaluates all claims filed by those seeking to recover economic losses suffered as a result of the 2010 Gulf of Mexico oil spill. )

WLF Publications

WLF Legal Pulse Posts

“Perez v. MBA”: Clashing Perspective on Administrative Law Meet at the Supreme Court

supreme courtThe contrasting perspectives of the stakes in Perez v. Mortgage Bankers Ass’n, an administrative law case that the U.S. Supreme Court will hear on Monday, December 1, could not be starker. Law professors are allegedly unanimous that the Court should reverse the U.S. Court of Appeals for the D.C. Circuit doctrine at issue, a doctrine that, in their view, severely hampers the ability of federal administrative agencies to respond to changing conditions. On the other hand, lawyers representing regulated entities have rallied to the defense of the D.C. Circuit’s doctrine; they view it as an essential check on arbitrary agency rulemaking. What explains these contrasting visions? The explanation could lie in the ongoing battle over how much deference courts should accord to agencies’ interpretations of their own rules. At time when courts are increasingly deferential to agencies, regulated entities will forcefully act to preserve other tools—such as the D.C. Circuit doctrine at issue in Perez—to keep federal agencies in check.

Perez concerns the scope of notice-and-comment rulemaking. The Administrative Procedure Act (APA) requires federal agencies, before they adopt a “substantive” or “legislative” rule, to provide notice of the proposed rule and a meaningful opportunity for members of the public to comment on the proposal. Exempted from the APA’s notice-and-comment requirement are “interpretive” rules. Agencies seek to avoid notice-and-comment requirements where possible; it is a burdensome process that can delay rulemaking for months and even years. Yet, despite nearly 70 years of APA litigation, the meaning of exempt “interpretive” rules has never been fully pinned down. Continue reading

Antitrust and Health Care: FTC’s Off-Again, On-Again Challenge to Georgia Hospital Merger

amurinoFeatured Expert Column – Antitrust/Federal Trade Commission

Andrea Agathoklis Murino, Wilson Sonsini Goodrich & Rosati

Consolidation in the health care industry, and the Federal Trade Commission’s (“FTC” or “Commission”) perspective on such activity, are being closely watched in antitrust law and policy circles. In April 2011, the FTC challenged the acquisition of Palmyra Park Hospital by Phoebe Putney Health System Inc. (“Phoebe”) in Albany, Georgia. The Commission argued that the combination would result in unduly high market shares (>85%) in the provision of acute care services in a six-county region and result in anticompetitive price increases. Shortly thereafter, the FTC sought and obtained a preliminary injunction (“PI”) from the United States District Court for the Middle District of Georgia halting the transaction pending trial. Typical enough. But here’s where our story starts to take some strange twists. What began that April in a federal district court is an adventure leading from the Supreme Court to local Georgia healthcare regulatory bodies…and possibly, back again. Here’s what happened.

Phoebe responded to the PI not by throwing itself into a trial on the merits, but rather by filing a motion to dismiss on the grounds that by virtue of the state action doctrine, Phoebe’s conduct was permissible. Generally, the state action doctrine provides that where (1) there is a clearly articulated state policy to displace competition and (2) there is active supervision by the state of the policy or activity, otherwise anticompetitive activity will be permitted. Here, Phoebe argued that because it was owned by the Hospital Authority of Albany-Dougherty County, and operated under Georgia’s Hospital Authorities Law, it was immune. Phoebe prevailed on its motion to dismiss in the district court and then again at the U.S. Court of Appeals for the Eleventh Circuit. Phoebe then completed its purchase of Palmyra, closing the transaction. Continue reading