In an apparent victory for Fairfax County, the Supreme Court yesterday directed an appeals court to reconsider a ruling that would have permitted Fairfax City to pursue a suit contesting the sale of Commonwealth Doctors Hospital to the county.
The high court said that the 4th U.S. Circuit Court of Appeals should consider the hospital case in light of a recent Supreme Court ruling that may exempt the county taxpayer-financed Fairfax Hospital Association from provisions of the Sherman AntiTrust Act.
Six doctors, an oral surgeon and Fairfax City claimed in their suit that the association's purchase of Commonwealth Doctors violated the Sherman act and constituted a restraint of trade and a monopoly. The hospital association also operates Fairfax Hospital, Mount Vernon Hospital and a Reston health care facility in Fairfax County.
In sending the case back to the appeals court, the justices told the court to review a case between the city of Lafayette, La., and the Louisiana Power and Light Co.
In that case, the Supreme Court ruled that "to the extent that the actions of a state's subdivisions are the actions of the state," then the state exemption from antitrust laws applies.
The conflict began in July 1974 when the hospital association, a nonprofit corporation, was contacted by members of the board of directors of Commonwealth Doctors and told that the hospital was for sale.
In September 1974 the association's board of trustees decided to buy the hospital for $7.5 million and the county acquired the hospital through an industrial development authority it created.
U.S. District Court Judge Richard B. Kellam ruled in 1976 that a lease between the hospital association and the industrial authority was a valid state action and was therefore immune from antitrust laws.But the 4th Circuit reversed Kellam's ruling last year and later denied the county's request for a rehearing.