Bona Law Asks U.S. Supreme Court to Decide Scope of State Action Immunity from Antitrust

Bona Law attorneys Jarod Bona and Aaron Gott filed a petition for writ of certiorari at the U.S. Supreme Court January 8, 2019, asking it to weigh in on the scope of the state action immunity from federal antitrust law in a case involving city ambulance monopolies.

The firm represents AmeriCare MedServices, Inc. in its lawsuits against 12 Orange County, California cities who monopolized the market for ambulance services within their jurisdictions, despite orders from a state agency that required those markets to be open to competition. The cases were originally filed in the U.S. District Court for the Central District of California, which held that the California EMS Act shields the cities from antitrust liability.

Under the state action immunity test, a municipality seeking immunity must show, at a minimum, that it acted pursuant to a clearly articulated state policy to displace competition. The purpose of the test is to ensure that the federal antitrust laws are not set aside except where there is a state regulatory interest at stake. Under recent Supreme Court cases, immunity only applies to conduct that “can fairly be attributed to the state” as sovereign. Municipalities are not sovereign and, for purposes of state action immunity, they do not get a free pass to violate the antitrust laws.

On appeal to the U.S. Court of Appeals for the Ninth Circuit, the California Emergency Medical Services Authority, the state agency that administers the EMS Act and coordinates the statewide emergency services plan, participated in the case as amicus curiae in support of AmeriCare. In its brief, the state told the Ninth Circuit, in no uncertain terms, that the cities were not authorized under state law to do what they did. Nevertheless, the Ninth Circuit affirmed the district court’s grant of immunity.

The petition filed at the Supreme Court brings this issue front and centre:

“This case presents the remarkable scenario in which the court of appeals granted state action immunity from antitrust liability to municipalities despite the fact that the State of California expressly explained—as amicus curiae—that it did not authorize any anticompetitive municipal conduct.”

The petition presents three questions for consideration by the Court. The first concerns the bounds of the clear articulation requirement as described above. The second and third questions ask the Court to take the next logical step in their recent state action immunity jurisprudence, which is to recognize that market participants should not be automatically trusted to implement state policy because they have their own self-interests. Here, as alleged, the cities make millions in profit through their ambulance monopolies, and their decisions clearly diverge from those of the state (as evidenced by the state’s decision to appear in the case and go on record against the cities).

The Supreme Court grants certiorari sparingly: each year, it receives thousands of petitions and grants less than a hundred. The Court has granted three petitions concerning state action immunity issues since 2012, which is proportionately high given the relatively few cases in which the immunity is raised. “We’re hopeful the Court will grant certiorari here because it’s a clear case in which a city invoked the immunity after going against state policy—and the Court’s latest decisions show a trend of narrowing the doctrine,” said Mr. Bona.

The case is AmeriCare MedServices, Inc. v. City of Anaheim, et al. The Supreme Court has not yet assigned a case number.

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Contributing Advisors