PRINTER'S NO. 3301
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2677
Session of
2022
INTRODUCED BY INNAMORATO, PISCIOTTANO, SANCHEZ, D. WILLIAMS,
KENYATTA, SCHLOSSBERG, DELLOSO, MADDEN, OTTEN, A. DAVIS, LEE,
HERRIN, DALEY, HOWARD, KINKEAD AND ISAACSON, JUNE 24, 2022
REFERRED TO COMMITTEE ON CONSUMER AFFAIRS, JUNE 24, 2022
AN ACT
Providing for cause of action for antitrust conduct, for
indirect purchaser recovery under State antitrust laws and
for premerger notice of health care mergers and transactions;
and imposing criminal penalties.
TABLE OF CONTENTS
Section 1. Short title.
Section 2. Declaration of purpose.
Section 3. Definitions.
Section 4. Prohibited acts.
Section 5. Enforcement by Attorney General.
Section 6. Measurement of damages.
Section 7. Premerger notification regarding health care.
Section 8. Civil investigation.
Section 9. Criminal penalties.
Section 10. Standing.
Section 11. Cooperation with Federal Government and other
states.
Section 12. Exceptions.
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Section 13. Applicability.
Section 14. Action not barred as affecting or involving
interstate or foreign commerce.
Section 15. Remedies cumulative.
Section 16. Effective date.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Short title.
This act shall be known and may be cited as the Pennsylvania
Open Markets Act.
Section 2. Declaration of purpose.
The purpose of this act is to promote free enterprise and
free trade in the marketplaces of this Commonwealth by
prohibiting restraints of trade that are secured through
monopolistic or collusive practices and that act or tend to act
to decrease competition between and among persons engaged in
commerce and trade.
Section 3. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Monopoly." The power to control prices and exclude
competition as a buyer or seller.
"Monopsony." A market structure in which a firm is the sole
purchaser of a good or service.
"Person." A natural person, corporation, trust, partnership,
an incorporated or unincorporated association, the Commonwealth,
a State agency, municipal authority, political subdivision and
any other legal entity.
"Trade or commerce." Economic activity directly or
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indirectly affecting the people of this Commonwealth.
Section 4. Prohibited acts.
(a) Restraints of trade.--A contract, a combination in the
form of trust or otherwise or a conspiracy in restraint of trade
or commerce shall be unlawful.
(b) Monopolize or monopsonize.--It shall be unlawful for a
person to monopolize or monopsonize, to attempt to monopolize or
monopsonize or to combine or conspire with another person to
monopolize or monopsonize in any part of trade or commerce.
(c) Acquisitions.--It shall be unlawful for a person to
acquire, directly or indirectly, the whole or any part of the
stock, share capital or other equity interest of another person
or the whole or any part of the assets of another person if any
of the following apply:
(1) The effect of the acquisition may be substantially
to lessen competition.
(2) The effect of the acquisition tends to create a
monopoly or monopsony of any part of trade or commerce.
(d) Market power.--It shall be unlawful for any person or
persons with market power in the conduct of any business, trade
or commerce, in any labor market, or in the furnishing of any
service in this Commonwealth to abuse that market power.
Section 5. Enforcement by Attorney General.
(a) Action on behalf of Commonwealth.--If the Attorney
General has reason to believe that a person, foreign or
domestic, has engaged in, is engaging in or is about to engage
in an act or practice that is unlawful under this act, the
Attorney General may bring a civil action in the name of the
Commonwealth against the person to:
(1) Obtain a declaratory judgment that the action or
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practice violates this act.
(2) Enjoin an act or practice that violates this act by
issuing a temporary restraining order, an ex parte temporary
restraining order or a preliminary or permanent injunction,
without bond.
(3) Recover a civil penalty, not less than $100,000, for
each violation of this act or of an injunction, judgment or
consent agreement issued or entered into under this act.
(4) Obtain an order requiring divestiture of assets:
(i) acquired in violation of this act and after the
court determines that divestiture is necessary to avoid
the creation or continuation of a monopoly or to avoid a
likely substantial lessening of competition that results
from a transaction found to be in violation of this act;
or
(ii) to restore competition to a line of commerce
that has been eliminated by a violation of this act.
(5) Recover actual damages or restitution, and
disgorgement, on behalf of the Commonwealth and its agencies
that are injured either directly or indirectly through a
violation of this act.
(b) Action on behalf of resident.--The Attorney General may
bring a civil action in the name of the Commonwealth on behalf
of a person residing within this Commonwealth to secure damages
or restitution, and disgorgement, for losses incurred directly
or indirectly through any violation of this act.
(c) Recovery authorized.--The Attorney General shall recover
the costs of an investigation, expert costs and reasonable
attorney fees and costs if successful in an action initiated
under this section.
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(d) Jurisdiction.--A civil action under this section may be
brought in Commonwealth Court and in the court of common pleas
of the county in which any party resides or has a principal
place of business or in the Court of Common Pleas of Dauphin
County.
Section 6. Measurement of damages.
If a court has found a violation of this act, damages may be
proved and assessed in the aggregate by statistical or sampling
methods, by the computation of illegal overcharges or by other
reasonable systems of estimating aggregate damages, as the court
in its discretion may permit, without the necessity of
separately proving the individual claim of, or amount of damage
to, persons on whose behalf the suit was brought.
Section 7. Premerger notification regarding health care.
(a) Legislative intent.--
(1) It is the intent of the General Assembly to ensure
that competition beneficial to consumers in health care
markets across this Commonwealth remains vigorous and robust.
(2) The General Assembly supports that intent through
this section, which provides the Office of Attorney General
with notice of all material health care transactions in this
Commonwealth so that the Office of Attorney General has the
information necessary to determine whether an investigation
under this act is warranted for potential anticompetitive
conduct and consumer harm.
(3) This section is intended to supplement the Hart-
Scott-Rodino Act by requiring notice of transactions not
reportable under the Hart-Scott-Rodino Act's reporting
thresholds and by providing the Office of Attorney General
with a copy of any filings made pursuant to the Hart-Scott-
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Rodino Act.
(b) Notice of material change.--
(1) Not less than 120 days prior to the effective date
of a transaction that results in a material change, the
parties to the transaction shall submit written notice to the
Office of Attorney General of the material change.
(2) For the purposes of this section, a material change
includes a merger, acquisition or contracting affiliation
between two or more entities of the following types:
(i) health care facilities;
(ii) health care facility systems; or
(iii) provider organizations.
(3) A material change includes proposed changes
identified in paragraph (2) between a Pennsylvania entity and
an out-of-state entity where the out-of-state entity
generates at least $10,000,000 in health care services
revenue from patients residing in this Commonwealth and the
entities are of the types identified in paragraph (2). A
party to a material change that is licensed or operating in
this Commonwealth shall submit a notice as required under
this section.
(4) For purposes of paragraph (2), a merger, acquisition
or contracting affiliation between two or more health care
facilities, health care facility systems or provider
organizations only qualifies as a material change if the
health care facilities, health care facility systems or
provider organizations did not previously have common
ownership or a contracting affiliation.
(c) Notice requirements.--
(1) The written notice provided by the parties, as
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required by subsection (b), shall include:
(i) The names of the parties and their current
business addresses.
(ii) Identification of all locations where health
care services are currently provided by each party.
(iii) Identification of all health care
practitioners who currently provide health care services
for each party.
(iv) A brief description of the nature and purpose
of the proposed material change.
(v) The anticipated effective date of the proposed
material change.
(2) Nothing in this section shall be construed to
prohibit the parties to a material change from voluntarily
providing additional information to the Office of Attorney
General.
(d) Requests for additional information.--
(1) The Office of Attorney General must make a request
for additional information from the parties under this act
within 30 days of the date notice is received under
subsections (b) and (c).
(2) Nothing in this subsection shall be construed to
preclude the Office of Attorney General from conducting an
investigation or enforcing Federal or State antitrust laws at
a later date.
(e) Premerger notification.--A health care practitioner or
provider organization conducting business in this Commonwealth
that files a premerger notification with the Federal Trade
Commission or the United States Department of Justice, in
compliance with the Hart-Scott-Rodino Act, shall provide a copy
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of the filing to the Office of Attorney General. Providing a
copy of the Hart-Scott-Rodino Act filing to the Office of
Attorney General satisfies the notice requirement under
subsection (c).
(f) Materials submitted to the Office of Attorney General.--
(1) Information submitted to the Office of Attorney
General pursuant to this section shall be maintained and used
by the Office of Attorney General in the same manner and
under the same protections as provided under this act.
(2) Nothing in this section shall be construed to limit
the Office of Attorney General's authority under this act.
(3) Failure to comply with this section does not provide
a private cause of action.
(g) Penalty for noncompliance.--A person that fails to
comply with this section is liable to the Commonwealth for a
civil penalty of not more than $200 per day for each day of
noncompliance.
(h) Definitions.--As used in this section, the following
words and phrases shall have the meanings given to them in this
subsection unless the context clearly indicates otherwise:
"Acquisition." An agreement, arrangement or activity, the
consummation of which results in a person acquiring, directly or
indirectly, the control of another person or the ability to
influence the competitive conduct of the target firm, and
includes the acquisition of voting securities and noncorporate
interests, such as assets, capital stock, membership interests,
or equity interests.
"Contracting affiliation." The formation of a relationship
between two or more entities that permits the entities to
negotiate jointly with insurers or third-party administrators
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over rates for professional medical services or for one entity
to negotiate on behalf of the other entity with insurers or
third-party administrators over rates for professional medical
services.
"Hart-Scott-Rodino Act." Title II of the Clayton Antitrust
Act (Public Law 63-212, 15 U.S.C. ยง 18a).
"Health care facility." As defined in section 103 of the act
of July 19, 1979 (P.L.130, No.48), known as the Health Care
Facilities Act.
"Health care facility system." Either of the following:
(1) a parent corporation of one or more health care
facilities and an entity affiliated with the parent
corporation through ownership or control; or
(2) a health care facility and an entity affiliated with
the health care facility through ownership.
"Health care practitioner." As defined in section 103 of the
Health Care Facilities Act.
"Health care services." Medical, surgical, chiropractic,
hospital, optometric, podiatric, pharmaceutical, ambulance,
mental health, substance use disorder, therapeutic,
preventative, diagnostic, curative, rehabilitative, palliative,
custodial and other services relating to the prevention, cure or
treatment of illness, injury or disease.
"Health care services revenue." The total revenue received
for health care services in the previous 12 months.
"Insurer." As defined in 40 Pa.C.S. ยง 9103 (relating to
definitions).
"Merger." A consolidation of two or more organizations,
including two or more organizations joining through a common
parent organization or two or more organizations forming a new
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organization. The term does not include a corporate
reorganization.
"Person." Where applicable, a natural person, corporation,
trust and partnership.
"Provider organization." A corporation, partnership,
business trust, association or organized group of persons,
whether incorporated or not, that is in the business of health
care delivery or management and that represents seven or more
health care practitioners in contracting with insurers or third-
party administrators for the payments of health care services.
The term includes a physician organization, physician-hospital
organization, independent practice association, provider network
and accountable care organization.
"Third-party administrator." An entity that administers
payments for health care services on behalf of a client in
exchange for an administrative fee.
Section 8. Civil investigation.
(a) Power of Attorney General to conduct.--
(1) If the Attorney General has reason to believe that a
person, whether foreign or domestic, has engaged in or is
engaging in a violation of this act or of a Federal antitrust
law that may be enforced by the Attorney General, the
Attorney General may initiate an investigation.
(2) As part of an investigation under this section, the
Attorney General may administer oaths and affirmations,
subpoena witnesses and documentary material, propound
interrogatories to be answered in writing under oath and
collect evidence.
(3) The Attorney General may use the information
obtained under this section as the Attorney General
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determines necessary in the civil enforcement of this act or
Federal antitrust law that may be enforced by the Attorney
General, including presentation before a court.
(4) An interrogatory or subpoena served under this
subsection shall inform the party served of the right to file
a petition as provided in subsection (b).
(b) Petition authorized.--
(1) Not later than five business days after the service
of an interrogatory or subpoena, or at any time before the
return date specified in the interrogatory or subpoena, the
party served under this section may file in Commonwealth
Court a petition for an order modifying or setting aside the
interrogatory or subpoena.
(2) The party must serve the Attorney General with a
copy of the petition.
(3) The petitioner may raise an objection or privilege
that would be available under this act or upon service of a
subpoena in a civil action.
(c) Location for production of documentary material.--
(1) If documentary material that the Attorney General
seeks to obtain by subpoena is not located within this
Commonwealth and is not reducible to electronic reproduction
and transmission, the party subpoenaed may make the
documentary material available to the Attorney General to
examine the documentary material at the place where the
documentary material is located.
(2) The Attorney General may designate representatives,
including officials of the state in which the documentary
material is located, to inspect the documentary material on
the Attorney General's behalf.
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(3) The Attorney General may respond to similar requests
from officials of other states and may inspect documentary
material on their behalf.
(d) Investigation enforcement order.--
(1) The Attorney General may apply to Commonwealth Court
for an order compelling compliance of any party who fails to
obey a subpoena or answer an interrogatory issued under this
section without lawful excuse and upon reasonable notice to
all persons affected by the subpoena or interrogatory.
(2) The Attorney General may request that an individual
who refuses to comply with a subpoena or answer an
interrogatory on the grounds that the testimony or
documentary material may incriminate the individual be
ordered by the court to provide the testimony or documentary
material.
(3) Except for a prosecution for perjury, an individual
who complies with a court order to provide testimony or
matter after asserting a privilege against self-incrimination
to which the individual is entitled by law shall not have the
testimony or documentary material provided, or evidence
derived therefrom, or received against the individual used in
a criminal investigation or proceeding.
(e) Duty to comply.--A person, whether foreign or domestic,
upon whom an interrogatory or subpoena is served pursuant to
this section shall comply with the terms of the interrogatory or
subpoena unless otherwise provided by this section or by court
order.
(f) Liability.--
(1) A person who:
(i) fails to appear with the intent to avoid, evade
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or prevent compliance, in whole or in part, with an
investigation under this act or who removes from a place,
conceals, withholds, mutilates, alters, destroys or by
other means falsifies a matter or documentary material in
the possession, custody or control of a person subject to
the request or subpoena; or
(ii) knowingly conceals relevant information with
the intent to avoid, evade or prevent compliance shall be
liable for a civil penalty as provided in this
subsection.
(2) The Attorney General may, upon petition to
Commonwealth Court, recover a civil penalty not to exceed
$25,000. If a civil penalty is assessed in or as the result
of litigation, the Attorney General is entitled to reasonable
attorney fees and costs.
(g) Access to information of other agencies and
confidentiality.--
(1) If criminal or civil intelligence, records of
investigations, investigative information or other
information held by a Federal or State agency is available to
the Attorney General on a confidential or restricted basis,
the Attorney General may obtain and use the information
unless otherwise prohibited by law.
(2) A record of an investigation or intelligence or
investigative information that is exempt from disclosure
under the act of February 14, 2008 (P.L.6, No.3), known as
the Right-to-Know Law, shall remain confidential and be
exempt from disclosure under that act.
(h) Records of investigation.--A written response, testimony
or document obtained by the Attorney General under this section,
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or information derived directly or indirectly from a written
response, testimony or document obtained by the Attorney
General, shall be deemed a record of an investigation and shall
be exempt from disclosure under the Right-to-Know Law.
Section 9. Criminal penalties.
A person, including an agent or officer of the person, who
knowingly commits an unlawful act under section 4(a) or (b) is
guilty of a felony of the third degree and, upon conviction,
shall be sentenced to a term of imprisonment of not more than
four years or sentenced to pay a fine of not more than
$1,000,000, or both. If the person who knowingly committed an
unlawful act under section 4(a) or (b) is a corporation, the
corporation shall be sentenced to pay a fine of not more than
$1,000,000. An indictment or information based on a violation of
any of the provisions of this act must be found within five
years after the violation. No criminal proceeding barred by a
prior limitation shall be revived by this act.
Section 10. Standing.
An individual or entity who has suffered damages as a result
of prohibited acts enumerated in section 4 shall have standing
to commence an action in a court of competent jurisdiction.
Section 11. Cooperation with Federal Government and other
states.
The Attorney General may cooperate with and coordinate
enforcement of this act and Federal antitrust law that may be
enforced by the Attorney General with the Federal Government and
the several states, including using and sharing information and
evidence obtained under this act.
Section 12. Exceptions.
This act shall not make illegal an activity or conduct exempt
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under any statute of the United States or the Commonwealth.
Section 13. Applicability.
This act shall not apply to a cooperative association or an
employee-owned enterprise, corporate or otherwise, of farmers,
gardeners or dairy producers, including livestock farmers and
fruit growers, nor to a contract, agreement or arrangement made
by the association or enterprise, nor to a bona fide labor
union.
Section 14. Action not barred as affecting or involving
interstate or foreign commerce.
No action under this act shall be barred on the grounds that
the activity or conduct complained of affects or involves
interstate or foreign commerce.
Section 15. Remedies cumulative.
The remedies afforded by this act are cumulative.
Section 16. Effective date.
This act shall take effect in 60 days.
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