Fourth Circuit Affirms that City of Richmond, Va., Not Liable under Federal Antitrust Laws

On Tuesday, Judge Diana Gribbon Motz of the Fourth Circuit affirmed a decision by the Eastern District of Virginia that the defendants, Richmond Ambulance Authority (RAA) and the city of Richmond, have immunity from federal antitrust liability in a suit brought by Metro Health EMS that alleged Sherman Antitrust Act and Supremacy Clause violations.

The plaintiff brought the suit after the city refused to grant Metro Health a permit to operate emergency medical service (EMS) vehicles; Metro Health was trying to obtain a license because the VA Medical Center in 2018, after nearly 30 years of using public entity RAA, requested quotes from other EMS providers. Metro Health made a bid, which the VA Medical Center selected conditionally, “but simultaneously reiterated that no contract would result unless Metro Health first obtained a permit from the City,” the judge explains. So, Metro Health “pressed the City” for a process to apply as a private entity, to which, in response, the city uploaded a permit application on the fire department’s website.

“Metro Health perceived the application as unfair and deliberately engineered to prevent it from obtaining a permit. Accordingly, rather than submitting an application, Metro Health immediately filed this suit,” according to the judge. After a hearing, Metro Health was able to apply for a permit; however, the City Council unanimously voted against an ordinance that would have granted it.

After a complaint alleging state and federal law violations, the district agreed with the defendants and dismissed the allegations, concluding that the city and RAA have immunity from being liable under federal antitrust laws. The circuit court affirmed, citing case law which held that “federal antitrust law would impose an impermissible burden on the States’ power to regulate,” forcing states to “promot(e) competition at the expense of other values a State may deem fundamental.”

The judge noted that municipal divisions are not sovereign as states may be, but they still may be immune from federal antitrust liability if they are acting “pursuant to state policy to displace competition with regulation or monopoly public service,” according to City of Lafayette v. La. Power & Light Co. The judge said Richmond is doing just that, as the “Virginia legislature has expressly conferred broad authority on local governing bodies to engage in anticompetitive conduct in the EMS vehicle services market.”

Metro Health argued that the legislature only authorizes local regulation of emergency services and not nonemergency services — but the judge disagreed, finding that local regulation expressly includes EMS vehicle services regardless of whether the service is for an emergency or nonemergency. The plaintiff’s other attempted arguments also failed according to the court. Among them was a proposal to observe a “market participant” exception to state action immunity; the Supreme Court has never adopted an exception such as this, so the court declined “to steer federal antitrust law into uncharted waters.”

Regarding the Supremacy Clause claim, the court found no violation because before the plaintiff applied for a permit, the city, “of its own volition, impose(d) a contract condition consistent with federal law” in simply requiring that Metro Health get a permit.

The plaintiff is represented by Bona Law. The city of Richmond is represented by the city attorney’s office, and the RAA is represented by Harman Claytor Corrigan & Wellman and Christian & Barton.