Legal Library: Cases and Proceedings

DaVita, Inc. agreed to divest its ownership interest in seven dialysis clinics – five in suburban and urban areas of New Jersey and two on the outskirts of Dallas, Texas – to proceed with its $358 million acquisition of competitor Renal Ventures Management, LLC. DaVita is the second-largest  provider of outpatient dialysis services in the United States and Renal Ventures is the seventh-largest. DaVita will divest the seven clinics to PDA-GMF Holdco, LLC, a joint venture between Physicians Dialysis and GMF Capital LLC. Physicians Dialysis has been in business since 1990 and currently operates several outpatient dialysis clinics. According to the FTC's complaint, the acquisition would lead to significant anticompetitive effects in the New Jersey markets of Brick, Clifton, Somerville, Succasunna, and Trenton, and in the Dallas-area markets of Denton and Frisco. Currently, DaVita and Renal Ventures clinics compete directly with each other in these markets, and the merger would represent either a merger to monopoly or a reduction of competitors from three to two. Without that competition, the likely result would be reduced quality and higher prices for dialysis patients. Under the terms of the proposed settlement, DaVita, Inc. must obtain agreements from the medical director of each divested clinic to continue providing physician services after it transfers ownership to PDA-GMF Holdco; obtain consent from the relevant landlords to transfer leases for the facilities to the buyer; and provide the buyer an opportunity to interview and hire employees from the divested clinics. Also under the proposed settlement, DaVita is barred from contracting with the medical directors of the seven clinics for three years, and it must provide transition services for up to 24 months.

The American Guild of Organists agreed to eliminate rules that restrict its members from competing for opportunities to perform to settle charges that the guild’s rules restrained competition and harmed consumers in violation of the FTC Act. The guild represents approximately 15,000 member organists and choral directors in 300 chapters in the US and abroad. Under the guild’s code of ethics, if a consumer wished to have someone other than an “incumbent musician” play at a venue for a wedding, funeral or other service, the consumer was required to pay both the incumbent and the consumer’s chosen musician. The code of ethics stated that “members are advised to protect themselves as incumbents” through contracts that secure fees even if they don’t perform. The guild also developed and publicized compensation schedules and formulas, and instructed its chapters and members to develop and use regionally applicable versions to determine charges for their services. The Commission's consent order requires the American Guild of Organists to stop restraining its members from soliciting work as musicians, and to stop issuing compensation schedules, guidance, or model contract provisions for members to use to determine their compensation. The guild must implement an antitrust compliance program, and is required under the order to stop recognizing chapters that fail to certify their compliance with the order’s provisions.