9805014 Informal Interpretation

Mr. Patrick Sharpe
Premerger Notification Office
Bureau of Competition
Federal Trade Commission
600 Pennsylvania Avenue, NW, Room 303
Washing ton, D.C. 20580

            Re:      Exemption from Premerger Notification and Waiting Period Requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”)

Dear Mr. Sharpe:

            This firm represents a health care authority (the “Authority”) organized pursuant to Alabama’s Health Care Authorization Act of 1982 (“the Health Care Act”). Footnote The Authority is currently negotiating with a third party to purchase several hospitals owned and operated by that entity (the”Proposed Transaction”).

            The HSR Act expressly exempts several classes of transaction from its requirements, including “transfers to or from a Federal agency or a state of political subdivision thereof. Footnote

            The Health Care Acts provides, in relevant part, as follows:

                                    (c) . . . [The Alabama] Legislature hereby:

                                    (2)       Determines, as an expression of the public policy of the state with respect to displacement of competition in the field of health care, that each authority, when exercising its powers hereunder with respect to the operation and management of health care facilities, acts as an agency or instrumentality of its authorizing subdivisions and as a political subdivision of the state. Footnote

            In Askew v. DCH Regional Health Care Authority, Footnote several plaintiffs brought an antitrust action to prevent a health care authority incorporated pursuant to the Health Care Act from completing its proposed acquisition of a health care facility. After a through analysis of the Health Care Act, the United States Court of Appeals for the Eleventh Circuit concluded that the health care authority was a “political subdivision for purposes of antitrust immunity.” Footnote

            Based on the Health Care Act and the Askew case, we have concluded that the Authority is a political subdivision of the State of Alabama and that the Proposed Transaction is therefore, exempt from the requirements of the HSR Act. As you and I discussed subdivisions such as the Authority are exempt from the requirements of the HSR Act.

            If I have misunderstood your office’s position on this issue, please contact me at your earliest convenience. We certainly appreciate your assistance with this matter.

                                                                                    Sincerely,

                                                                                    (redacted)

_{Alabama Code 22-21-310 (not legible)}

_{5 USCA §18s(c)(4)}

_{Ala. Cod § 22-21 (not legible) (emphasis added)}

_{995 F. 2d 1033 (11th Cir. (Ala.) 1993) Cert. denied 510 U.S. 1012}

_{Id. at 1039.}