(Slip Opinion)              OCTOBER TERM, 2012                                       1

                                       Syllabus

         NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
       being done in connection with this case, at the time the opinion is issued.
       The syllabus constitutes no part of the opinion of the Court but has been
       prepared by the Reporter of Decisions for the convenience of the reader.
       See United States v. Detroit Timber & Lumber Co., 

, 337.


SUPREME COURT OF THE UNITED STATES

                                       Syllabus

FEDERAL TRADE COMMISSION v. PHOEBE PUTNEY
         HEALTH SYSTEM, INC., ET AL.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
                THE ELEVENTH CIRCUIT

No. 11–1160. Argued November 26, 2012—Decided February 19, 2013
Under Georgia’s Hospital Authorities Law (Law), political subdivisions
 may create special-purpose public entities called hospital authorities
 to provide “for the operation and maintenance of needed health care
 facilities in the several counties and municipalities of th[e] state.”
 The Law permits authorities to “exercise public and essential gov-
 ernmental functions” and delegates to them numerous general pow-
 ers, including the ability to acquire and lease hospitals and other
 public health facilities. Ga. Code Ann. §31–7–75.
    The Hospital Authority of Albany-Dougherty County (Authority)
 owns Phoebe Putney Memorial Hospital (Memorial), one of two hos-
 pitals in the county. The Authority formed two private nonprofit cor-
 porations to manage Memorial: Phoebe Putney Health System, Inc.
 (PPHS) and Phoebe Putney Memorial Hospital, Inc. (PPMH). After
 the Authority decided to purchase the second hospital in the county
 and lease it to a subsidiary of PPHS, the Federal Trade Commission
 (FTC) issued an administrative complaint alleging that the transac-
 tion would substantially reduce competition in the market for acute-
 care hospital services, in violation of §5 of the Federal Trade Com-
 mission Act and §7 of the Clayton Act. The FTC and Georgia subse-
 quently sued the Authority, PPHS, PPMH, and others (collectively
 respondents), seeking to enjoin the transaction pending administra-
 tive proceedings. The District Court denied the request for a prelim-
 inary injunction and granted respondents’ motion to dismiss, holding
 that respondents are immune from antitrust liability under the state-
 action doctrine. The Eleventh Circuit affirmed. It concluded that the
 Authority, as a local governmental entity, was entitled to state-action
 immunity because the challenged anticompetitive conduct was a fore-
2          FTC v. PHOEBE PUTNEY HEALTH SYSTEM, INC.

                                 Syllabus

    seeable result of the Law. The court reasoned that the state legisla-
    ture could have readily anticipated an anticompetitive effect, given
    the breadth of the powers delegated to hospital authorities, particu-
    larly leasing and acquisition powers that could lead to consolidation
    of hospital ownership.
Held: Because Georgia has not clearly articulated and affirmatively
 expressed a policy allowing hospital authorities to make acquisitions
 that substantially lessen competition, state-action immunity does not
 apply. Pp. 6–19.
    (a) This Court recognized in Parker v. Brown, 

, 350–
 352, that the federal antitrust laws do not prevent States from impos-
 ing market restraints “as an act of government . . . .” Under the
 state-action doctrine, immunity from federal antitrust law may ex-
 tend to nonstate actors carrying out the State’s regulatory program.
 See, e.g., Patrick v. Burget, 

, 99–100. But given the anti-
 trust laws’ values of free enterprise and economic competition, “state-
 action immunity is disfavored,” FTC v. Ticor Title Ins. Co., 

, 636, and is recognized only when it is clear that the challenged
 anticompetitive conduct is undertaken pursuant to the “State’s own”
 regulatory scheme, 

will attach only to activi-
 ties of substate governmental entities that are undertaken pursuant
 to a “clearly articulated and affirmatively expressed” state policy to
 displace competition. Community Communications Co. v. Boulder,
 

, 52. A state legislature need not “expressly state” that
 intent, Hallie v. Eau Claire, 

, 43, but the anticompetitive
 effect must have been the “foreseeable result” of what the State au-
 thorized, 

6–9.
    (b) Respondents’ state-action immunity defense fails under the
 clear-articulation test because there is no evidence the State affirma-
 tively contemplated that hospital authorities would displace competi-
 tion by consolidating hospital ownership. The Authority’s powers, in-
 cluding its acquisition and leasing powers, mirror general powers
 routinely conferred by state law on private corporations. More is re-
 quired to establish state-action immunity; the Authority must show
 that it has been delegated authority not just to act, but to act or regu-
 late anticompetitively. Columbia v. Omni Outdoor Advertising, Inc.,
 

, 372. In Boulder, this Court concluded that a Colorado
 law granting municipalities the power to enact ordinances governing
 local affairs did not satisfy the clear-articulation 

, because, when a State’s position “is one of mere neutrality re-
 specting the municipal actions challenged as anticompetitive,” the
 State cannot be said to have “ ‘contemplated’ ” those anticompetitive
 actions, 

principle controls here. Grants of general corporate power al-
                    Cite as: 568 U. S. ____ (2013)                      3

                               Syllabus

lowing substate governmental entities to participate in a competitive
marketplace are typically used without raising federal antitrust con-
cerns, so a State cannot be said to have contemplated that such pow-
ers will be used anticompetitively. Here, though the Law allows the
Authority to acquire hospitals, it does not clearly articulate and af-
firmatively express a state policy empowering the Authority to make
acquisitions of existing hospitals that will substantially lessen com-
petition. Pp. 9–10.
   (c) In concluding otherwise, the Eleventh Circuit applied the con-
cept of “foreseeability” too loosely. This Court, recognizing that no
legislature “can be expected to catalog all of the anticipated effects” of
a statute delegating authority to a substate governmental entity,

, has approached the clear-articulation inquiry
practically, but without diluting the ultimate requirement that the
State must have affirmatively contemplated the displacement of
competition such that the challenged anticompetitive effects can be
attributed to the “state itself,” 

. Thus, the
Court has found a state policy to displace federal antitrust law was
sufficiently expressed where the displacement of competition was the
inherent, logical, or ordinary result of the exercise of authority dele-
gated by the state legislature. In that scenario, the State must have
foreseen and implicitly endorsed the anticompetitive effects as con-
sistent with its policy goals. See 

; 

. By contrast, when a State grants an entity a general
power to act, it does so against the backdrop of federal antitrust law.
Entities might transgress antitrust requirements by exercising their
powers anticompetitively, but a reasonable legislature’s ability to an-
ticipate that possibility falls well short of clearly articulating an af-
firmative state policy to displace competition. The Eleventh Circuit’s
argument, echoed by respondents, that the case falls within the fore-
seeability standard used in Hallie and Omni is rejected. Pp. 11–14.
   (d) Respondents’ additional arguments are also unpersuasive.
They contend that because hospital authorities are granted unique
powers and responsibilities to fulfill Georgia’s objective of providing
access to adequate and affordable health care, it was foreseeable that
they would decide that the best way to serve their communities was
to acquire an existing local hospital, instead of incurring the addi-
tional expense and regulatory burden of expanding, or constructing, a
facility. But even though the authorities may differ from private cor-
porations offering hospital services, neither the Law nor any other
state-law provision clearly articulates a state policy allowing authori-
ties to exercise their general corporate powers without regard to anti-
competitive effects. Respondents also contend that when there is
doubt about whether the clear-articulation test is satisfied, federal
4          FTC v. PHOEBE PUTNEY HEALTH SYSTEM, INC.

                                 Syllabus

    courts should err on the side of recognizing immunity to avoid im-
    proper interference with state policy choices. But the Law here is not
    ambiguous, and respondents’ suggestion is inconsistent with the
    principle that “state-action immunity is disfavored,” Ticor 

. Pp. 14–19.

, reversed and remanded.

    SOTOMAYOR, J., delivered the opinion for a unanimous Court.
                        Cite as: 568 U. S. ____ (2013)                              1

                             Opinion of the Court

     NOTICE: This opinion is subject to formal revision before publication in the
     preliminary print of the United States Reports. Readers are requested to
     notify the Reporter of Decisions, Supreme Court of the United States, Wash­
     ington, D. C. 20543, of any typographical or other formal errors, in order
     that corrections may be made before the preliminary print goes to press.


SUPREME COURT OF THE UNITED STATES
                                   _________________

                                   No. 11–1160
                                   _________________


   FEDERAL TRADE COMMISSION, PETITIONER v.

     PHOEBE PUTNEY HEALTH SYSTEM, INC.,

                   ET AL. 


 ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF 

          APPEALS FOR THE ELEVENTH CIRCUIT

                              [February 19, 2013]


  JUSTICE SOTOMAYOR delivered the opinion of the Court.
  Under this Court’s state-action immunity doctrine,
when a local governmental entity acts pursuant to a clearly
articulated and affirmatively expressed state policy to
displace competition, it is exempt from scrutiny under
the federal antitrust laws. In this case, we must decide
whether a Georgia law that creates special-purpose public
entities called hospital authorities and gives those entities
general corporate powers, including the power to acquire
hospitals, clearly articulates and affirmatively expresses a
state policy to permit acquisitions that substantially lessen
competition. Because Georgia’s grant of general cor-
porate powers to hospital authorities does not include
permission to use those powers anticompetitively, we hold
that the clear-articulation test is not satisfied and state­
action immunity does not apply.
                              I
                             A
  In 1941, the State of Georgia amended its Constitution
to allow political subdivisions to provide health care ser­
2       FTC v. PHOEBE PUTNEY HEALTH SYSTEM, INC.

                      Opinion of the Court

vices. 1941 Ga. Laws p. 50. The State concurrently enacted
the Hospital Authorities Law (Law), 

Code Ann. §31–7–70 et seq. (2012), “to provide a mecha­
nism for the operation and maintenance of needed health
care facilities in the several counties and municipalities
of th[e] state.” §31–7–76(a). “The purpose of the constitu­
tional provision and the statute based thereon was to . . .
create an organization which could carry out and make
more workable the duty which the State owed to its in-
digent sick.” DeJarnette v. Hospital Auth. of Albany,

, 200, 

, 723 (1942) (citations
omitted). As amended, the Law authorizes each county
and municipality, and certain combinations of counties
or municipalities, to create “a public body corporate and
politic” called a “hospital authority.” §§31–7–72(a), (d).
Hospital authorities are governed by 5- to 9-member
boards that are appointed by the governing body of the
county or municipality in their area of operation. §31–7–
72(a).
   Under the Law, a hospital authority “exercise[s] public
and essential governmental functions” and is delegated
“all the powers necessary or convenient to carry out and
effectuate” the Law’s purposes. §31–7–75. Giving more
content to that general delegation, the Law enumerates 27
powers conferred upon hospital authorities, including the
power “[t]o acquire by purchase, lease, or otherwise and to
operate projects,” §31–7–75(4), which are defined to in­
clude hospitals and other public health facilities, §31–7–
71(5); “[t]o construct, reconstruct, improve, alter, and
repair projects,” §31–7–75(5); “[t]o lease . . . for operation
by others any project” provided certain conditions are
satisfied, §31–7–75(7); and “[t]o establish rates and charges
for the services and use of the facilities of the authority,”
§31–7–75(10). Hospital authorities may not operate or
construct any project for profit, and accordingly they must
set rates so as only to cover operating expenses and create
                 Cite as: 568 U. S. ____ (2013)          3

                     Opinion of the Court

reasonable reserves. §31–7–77.
                               B
   In the same year that the Law was adopted, the city of
Albany and Dougherty County established the Hospital
Authority of Albany-Dougherty County (Authority) and
the Authority promptly acquired Phoebe Putney Memorial
Hospital (Memorial), which has been in operation in Al-
bany since 1911. In 1990, the Authority restructured its
operations by forming two private nonprofit corporations
to manage Memorial: Phoebe Putney Health System, Inc.
(PPHS), and its subsidiary, Phoebe Putney Memorial
Hospital, Inc. (PPMH). The Authority leased Memorial
to PPMH for $1 per year for 40 years. Under the lease,
PPMH has exclusive authority over the operation of Me­
morial, including the ability to set rates for services.
Consistent with §31–7–75(7), PPMH is subject to lease
conditions that require provision of care to the indigent
sick and limit its rate of return.
   Memorial is one of two hospitals in Dougherty County.
The second, Palmyra Medical Center (Palmyra), was estab­
lished in Albany in 1971 and is located just two miles
from Memorial. At the time suit was brought in this case,
Palmyra was operated by a national for-profit hospital
network, HCA, Inc. (HCA). Together, Memorial and Pal­
myra account for 86 percent of the market for acute-care
hospital services provided to commercial health care plans
and their customers in the six counties surrounding Al-
bany. Memorial accounts for 75 percent of that market on
its own.
   In 2010, PPHS began discussions with HCA about
acquiring Palmyra. Following negotiations, PPHS pre­
sented the Authority with a plan under which the Author­
ity would purchase Palmyra with PPHS controlled funds
and then lease Palmyra to a PPHS subsidiary for $1 per
year under the Memorial lease agreement. The Authority
4        FTC v. PHOEBE PUTNEY HEALTH SYSTEM, INC.

                         Opinion of the Court

unanimously approved the transaction.
   The Federal Trade Commission (FTC) shortly there­
after issued an administrative complaint alleging that the
proposed purchase-and-lease transaction would create a
virtual monopoly and would substantially reduce competi­
tion in the market for acute-care hospital services, in
violation of §5 of the Federal Trade Commission Act, 38
Stat. 719, 

. §45, and §7 of the Clayton Act, 38
Stat. 731, 

. §18. The FTC, along with the State
of Georgia,1 subsequently filed suit against the Authority,
HCA, Palmyra, PPHS, PPMH, and the new PPHS subsid­
iary created to manage Palmyra (collectively respondents),
seeking to enjoin the transaction pending administrative
proceedings. See 

. §§26, 53(b).
   The United States District Court for the Middle District
of Georgia denied the request for a preliminary injunction
and granted respondents’ motion to dismiss. 

1356 (2011). The District Court held that respondents
are immune from antitrust liability under the state-action
doctrine. See 

United States Court of Appeals for the Eleventh
Circuit affirmed. 

(2011). As an initial
matter, the court “agree[d] with the [FTC] that, on the
facts alleged, the joint operation of Memorial and Palmyra
would substantially lessen competition or tend to create,
if not create, a monopoly.” 

the court con­
cluded that the transaction was immune from antitrust
liability. See 

Court of Appeals
explained that as a local governmental entity, the Author­
ity was entitled to state-action immunity if the challenged
anticompetitive conduct was a “ ‘foreseeable result’ ” of
Georgia’s legislation. 

to the court,
anticompetitive conduct is foreseeable if it could have been
——————
  1 Georgia did not join the notice of appeal filed by the FTC and is no

longer a party in the case.
                     Cite as: 568 U. S. ____ (2013)                   5

                         Opinion of the Court

“ ‘reasonably anticipated’ ” by the state legislature; it is not
necessary, the court reasoned, for an anticompetitive effect
to “ be ‘one that ordinarily occurs, routinely occurs, or is
inherently likely to occur as a result of the empowering
legislation.’ ” 

FTC v. Hospital
Bd. of Directors of Lee Cty., 

, 1188, 1190–
1191 (CA11 1994)). Applying that standard, the Court of
Appeals concluded that the Law contemplated the anti­
competitive conduct challenged by the FTC. The court
noted the “impressive breadth” of the powers given to
hospital authorities, which include traditional powers of
private corporations and a few additional capabilities,
such as the power to exercise eminent domain. 

. More specifically, the court reasoned that
the Georgia Legislature must have anticipated that the
grant of power to hospital authorities to acquire and lease
projects would produce anticompetitive effects because
“[f]oreseeably, acquisitions could consolidate ownership
of competing hospitals, eliminating competition between
them.” 

Court of Appeals also rejected the FTC’s alternative
argument that state-action immunity did not apply be­
cause the transaction in substance involved a transfer of
control over Palmyra from one private entity to another,
with the Authority acting as a mere conduit for the sale to
evade antitrust liability. See 

12.
    We granted certiorari on two questions: whether the

——————
  2 In tension with the Court of Appeals’ decision, other Circuits have

held in analogous circumstances that substate governmental entities
exercising general corporate powers were not entitled to state-action
immunity. See Kay Elec. Cooperative v. Newkirk, 

, 1043,
1045–1047 (CA10 2011); First Am. Title Co. v. Devaugh, 

,
456–457 (CA6 2007); Surgical Care Center of Hammond, L. C. v.
Hospital Serv. Dist. No. 1, 

, 235–236 (CA5 1999) (en banc);
Lancaster Community Hospital v. Antelope Valley Hospital Dist., 

, 402–403 (CA9 1991).
6             FTC v. PHOEBE PUTNEY HEALTH SYSTEM, INC.

                          Opinion of the Court

Georgia Legislature, through the powers it vested in hos­
pital authorities, clearly articulated and affirmatively
expressed a state policy to displace competition in the
market for hospital services; and if so, whether state­
action immunity is nonetheless inapplicable as a result of
the Authority’s minimal participation in negotiating the
terms of the sale of Palymra and the Authority’s limited
supervision of the two hospitals’ operations. See 567
U. S. ___ (2012). Concluding that the answer to the first
question is “no,” we reverse without reaching the second
question.3
                             II
  In Parker v. Brown, 

(1943), this Court
held that because “nothing in the language of the Sher­
man Act [

. §1 et seq.] or in its history” suggested
that Congress intended to restrict the sovereign capacity
of the States to regulate their economies, the Act should
not be read to bar States from imposing market restraints
“as an act of government.” 

Following
Parker, we have held that under certain circumstances,
immunity from the federal antitrust laws may extend to
nonstate actors carrying out the State’s regulatory pro­
gram. See Patrick v. Burget, 

, 99–100 (1988);
Southern Motor Carriers Rate Conference, Inc. v. United
States, 

, 56–57 (1985).
——————
    3 After
          issuing its decision, the Court of Appeals dissolved the tempo­
rary injunction that it had granted pending appeal and the transaction
closed. The case is not moot, however, because the District Court on
remand could enjoin respondents from taking actions that would
disturb the status quo and impede a final remedial decree. See Knox v.
Service Employees, 567 U. S. ___, ___ (2012) (slip op., at 7) (“A case
becomes moot only when it is impossible for a court to grant any effec­
tual relief whatever to the prevailing party” (internal quotation marks
omitted)); see also FTC v. Whole Foods Market, Inc., 

,
1033–1034 (CADC 2008) (opinion of Brown, J.) (rejecting a mootness
argument in a similar posture).
                   Cite as: 568 U. S. ____ (2013)              7

                       Opinion of the Court

   But given the fundamental national values of free en­
terprise and economic competition that are embodied in
the federal antitrust laws, “state-action immunity is disfa­
vored, much as are repeals by implication.” FTC v. Ticor
Title Ins. Co., 

, 636 (1992). Consistent with
this preference, we recognize state-action immunity only
when it is clear that the challenged anticompetitive con­
duct is undertaken pursuant to a regulatory scheme that
“is the State’s own.” 

“[c]loser
analysis is required when the activity at issue is not di­
rectly that of ” the State itself, but rather “is carried out by
others pursuant to state authorization.” Hoover v. Ronwin,

, 568 (1984). When determining whether
the anticompetitive acts of private parties are entitled
to immunity, we employ a two-part test, requiring first
that “the challenged restraint . . . be one clearly articu­
lated and affirmatively expressed as state policy,” and second
that “the policy . . . be actively supervised by the State.”
California Retail Liquor Dealers Assn. v. Midcal Alumi-
num, Inc., 

, 105 (1980) (internal quotation
marks omitted).
   This case involves allegedly anticompetitive conduct
undertaken by a substate governmental entity. Because
municipalities and other political subdivisions are not
themselves sovereign, state-action immunity under Parker
does not apply to them directly. See Columbia v. Omni
Outdoor Advertising, Inc., 

, 370 (1991); Lafay-
ette v. Louisiana Power & Light Co., 

, 411–
413 (1978) (plurality opinion). At the same time, however,
substate governmental entities do receive immunity from
antitrust scrutiny when they act “pursuant to state policy
to displace competition with regulation or monopoly public
service.” 

rule “preserves to the States
——————
  4 An amicus curiae contends that we should recognize and apply

a “market participant” exception to state-action immunity because
8        FTC v. PHOEBE PUTNEY HEALTH SYSTEM, INC.

                          Opinion of the Court

their freedom . . . to use their municipalities to administer
state regulatory policies free of the inhibitions of the fed­
eral antitrust laws without at the same time permitting
purely parochial interests to disrupt the Nation’s free­
market goals.” 

with private parties, immunity will only attach to the
activities of local governmental entities if they are under­
taken pursuant to a “clearly articulated and affirmatively
expressed” state policy to displace competition. Community
Communications Co. v. Boulder, 

, 52 (1982).
But unlike private parties, such entities are not subject to
the “active state supervision requirement” because they
have less of an incentive to pursue their own self-interest
under the guise of implementing state policies. Hallie v.
Eau Claire, 

, 46–47 (1985).5
   “[T]o pass the ‘clear articulation’ test,” a state legisla­
ture need not “expressly state in a statute or its legislative
history that the legislature intends for the delegated
action to have anticompetitive effects.” 

we explained in Hallie that state-action immunity applies
if the anticompetitive effect was the “ foreseeable result” of
what the State authorized. 

applied that
——————
Georgia’s hospital authorities engage in proprietary activities. Brief for
National Federation of Independent Business 6–24; see also Columbia
v. Omni Outdoor Advertising, Inc., 

, 374–375, 379 (1991)
(leaving open the possibility of a market participant exception). Be­
cause this argument was not raised by the parties or passed on by the
lower courts, we do not consider it. United Parcel Service, Inc. v.
Mitchell, 

, 60, n. 2 (1981).
   5 The Eleventh Circuit has held that while Georgia’s hospital authori­

ties are “unique entities” that lie “somewhere between a local, general­
purpose governing body (such as a city or county) and a corporation,”
they qualify as “an instrumentality, agency, or ‘political subdivision’ of
Georgia for purposes of state action immunity.” Crosby v. Hospital
Auth. of Valdosta & Lowndes Cty., 

, 1524–1526 (1996).
The FTC has not challenged that characterization of Georgia’s hospital
authorities, and we accordingly operate from the assumption that hos­
pital authorities are akin to political subdivisions.
                    Cite as: 568 U. S. ____ (2013)                   9

                         Opinion of the Court

principle in Omni, where we concluded that the clear­
articulation test was satisfied because the suppression of
competition in the billboard market was the foreseeable
result of a state statute authorizing municipalities to
adopt zoning ordinances regulating the construction of
buildings and other 

.
                              III

                               A

   Applying the clear-articulation test to the Law before
us, we conclude that respondents’ claim for state-action
immunity fails because there is no evidence the State
affirmatively contemplated that hospital authorities would
displace competition by consolidating hospital ownership.
The acquisition and leasing powers exercised by the Au­
thority in the challenged transaction, which were the
principal powers relied upon by the Court of Appeals in
finding state-action immunity, 

,
mirror general powers routinely conferred by state law
upon private corporations.6 Other powers possessed by
hospital authorities that the Court of Appeals character­
ized as having “impressive breadth,” 

fit
this pattern, including the ability to make and execute
contracts, §31–7–75(3), to set rates for services, §31–7–
75(10), to sue and be sued, §31–7–75(1), to borrow money,
§31–7–75(17), and the residual authority to exercise any
or all powers possessed by private corporations, §31–7–
75(21).
   Our case law makes clear that state-law authority to
act is insufficient to establish state-action immunity; the
——————
  6 Compare Ga. Code Ann. §§31–7–75(4), (7) (2012) (authorizing hospi­

tal authorities to acquire projects and enter lease agreements), with
§14–2–302 (outlining general powers of private corporations in Georgia,
which include the ability to acquire and lease property), §14–2–1101
(allowing corporate mergers), and §§14–2–1201, 14–2–1202 (allowing
sales of corporate assets to other corporations).
10      FTC v. PHOEBE PUTNEY HEALTH SYSTEM, INC.

                      Opinion of the Court

substate governmental entity must also show that it has
been delegated authority to act or regulate anticompeti­
tively. See 

. In Boulder, we held
that Colorado’s Home Rule Amendment allowing munici­
palities to govern local affairs did not satisfy the clear­
articulation 

. There was no doubt
in that case that the city had authority as a matter of
state law to pass an ordinance imposing a moratorium on
a cable provider’s expansion of service. 

we rejected the proposition that “the general grant of
power to enact ordinances necessarily implies state au­
thorization to enact specific anticompetitive ordinances”
because such an approach “would wholly eviscerate the
concepts of ‘clear articulation and affirmative expression’
that our precedents require.” 

explained
that when a State’s position “is one of mere neutrality
respecting the municipal actions challenged as anticom­
petitive,” the State cannot be said to have “ ‘contemplated’ ”
those anticompetitive actions. 

principle articulated in Boulder controls this case.
Grants of general corporate power that allow substate
governmental entities to participate in a competitive
marketplace should be, can be, and typically are used in
ways that raise no federal antitrust concerns. As a result,
a State that has delegated such general powers “can
hardly be said to have ‘contemplated’ ” that they will be
used anticompetitively. 

P. Areeda &
H. Hovenkamp, Antitrust Law ¶225a, p. 131 (3d ed. 2006)
(hereinafter Areeda & Hovenkamp) (“When a state grants
power to an inferior entity, it presumably grants the pow­
er to do the thing contemplated, but not to do so anticom­
petitively”). Thus, while the Law does allow the Authority
to acquire hospitals, it does not clearly articulate and
affirmatively express a state policy empowering the Au­
thority to make acquisitions of existing hospitals that will
substantially lessen competition.
                 Cite as: 568 U. S. ____ (2013)           11

                     Opinion of the Court

                               B
   In concluding otherwise, and specifically in reasoning
that the Georgia Legislature “must have anticipated”
that acquisitions by hospital authorities “would produce
anticompetitive 

, the Court of
Appeals applied the concept of “foreseeability” from our
clear-articulation test too loosely.
   In Hallie, we recognized that it would “embod[y] an
unrealistic view of how legislatures work and of how stat­
utes are written” to require state legislatures to explicitly
authorize specific anticompetitive effects before state­
action immunity could 

. “No legis­
lature,” we explained, “can be expected to catalog all of the
anticipated effects” of a statute delegating authority to
a substate governmental entity. 

approached the clear-articulation inquiry more practically,
but without diluting the ultimate requirement that the
State must have affirmatively contemplated the displace­
ment of competition such that the challenged anticompeti­
tive effects can be attributed to the “state itself.” 

. Thus, we have concluded that a state
policy to displace federal antitrust law was sufficiently
expressed where the displacement of competition was the
inherent, logical, or ordinary result of the exercise of
authority delegated by the state legislature. In that sce­
nario, the State must have foreseen and implicitly en­
dorsed the anticompetitive effects as consistent with its
policy goals.
   For example, in Hallie, Wisconsin statutory law regulat­
ing the municipal provision of sewage services expressly
permitted cities to limit their service to surrounding unin­
corporated areas. 

. While unincorpo­
rated towns alleged that the city’s exercise of that power
constituted an unlawful tying arrangement, an unlawful
refusal to deal, and an abuse of monopoly power, we had
no trouble concluding that these alleged anticompetitive
12       FTC v. PHOEBE PUTNEY HEALTH SYSTEM, INC.

                          Opinion of the Court

effects were affirmatively contemplated by the State be­
cause it was “clear” that they “logically would result” from
the grant of authority. 

described by the
Wisconsin Supreme Court, the state legislature “ ‘viewed
annexation by the city of a surrounding unincorporated
area as a reasonable quid pro quo that a city could require
before extending sewer services to the area.’ ” 

n. 8 (quoting Hallie v. Chippewa Falls, 

, 540–541, 

, 325 (1982)). Without
immunity, federal antitrust law could have undermined
that arrangement and taken completely off the table the
policy option that the State clearly intended for cities to
have.
  Similarly, in Omni, where the respondents alleged that
the city had used its zoning power to protect an incumbent
billboard provider against competition, we found that the
clear-articulation test was easily satisfied even though the
state statutes delegating zoning authority to the city did
not explicitly permit the suppression of competition. We
explained that “[t]he very purpose of zoning regulation is
to displace unfettered business freedom in a manner that
regularly has the effect of preventing normal acts of com­
petition” and that a zoning ordinance regulating the size,
location, and spacing of billboards “necessarily protects
existing billboards against some competition from new­

. Other cases in which we have
found a “clear articulation” of the State’s intent to displace
competition without an explicit statement have also in­
volved authorizations to act or regulate in ways that were
inherently anticompetitive.7
——————
  7 See Southern Motor Carriers Rate Conference, Inc. v. United States,

, 64, 65, and n. 25 (1985) (finding that a state commission’s
decision to encourage collective ratemaking by common carriers was
entitled to state-action immunity where the legislature had left “[t]he
details of the inherently anticompetitive rate-setting process . . . to
the agency’s discretion”); Hallie v. Eau Claire, 

, 42 (1985)
                     Cite as: 568 U. S. ____ (2013)                   13

                         Opinion of the Court

  By contrast, “simple permission to play in a market”
does not “foreseeably entail permission to roughhouse
in that market unlawfully.” Kay Elec. Cooperative v.
Newkirk, 

, 1043 (CA10 2011). When a State
grants some entity general power to act, whether it is a
private corporation or a public entity like the Authority, it
does so against the backdrop of federal antitrust law. See
Ticor 

. Of course, both private
parties and local governmental entities conceivably may
transgress antitrust requirements by exercising their
general powers in anticompetitive ways. But a reasonable
legislature’s ability to anticipate that (potentially undesir­
able) possibility falls well short of clearly articulating an
affirmative state policy to displace competition with a
regulatory alternative.
  Believing that this case falls within the scope of the
foreseeability standard applied in Hallie and Omni, the
Court of Appeals stated that “[i]t defies imagination to
suppose the [state] legislature could have believed that
every geographic market in Georgia was so replete with
hospitals that authorizing acquisitions by the authorities
could have no serious anticompetitive 

. Respondents echo this argument, noting
that each of Georgia’s 159 counties covers a small geo­
graphical area and that most of them are sparsely popu­
lated, with nearly three-quarters having fewer than
50,000 residents as of the 2010 Census. Brief for Re­
spondents 46.
  Even accepting, arguendo, the premise that facts about
a market could make the anticompetitive use of general 

—————— 

(describing New Motor Vehicle Bd. of Cal. v. Orrin W. Fox Co., 

(1978), as a case where there was not an “express intent to displace
the antitrust laws” but where the regulatory structure at issue restrict­
ing the establishment or relocation of automobile dealerships “inher­
ently displaced unfettered business freedom” (internal quotation marks
and brackets omitted)).
14      FTC v. PHOEBE PUTNEY HEALTH SYSTEM, INC.

                      Opinion of the Court

corporate powers “foreseeable,” we reject the Court of
Appeals’ and respondents’ conclusion because only a rela­
tively small subset of the conduct permitted as a matter of
state law by Ga. Code Ann. §31–7–75(4) has the potential
to negatively affect competition. Contrary to the Court of
Appeals’ and respondents’ characterization, §31–7–75(4) is
not principally concerned with hospital authorities’ ability
to acquire multiple hospitals and consolidate their opera­
tions. Section 31–7–75(4) allows authorities to acquire
“projects,” which includes not only “hospitals,” but also
“health care facilities, dormitories, office buildings, clinics,
housing accommodations, nursing homes, rehabilitation
centers, extended care facilities, and other public health
facilities.” §31–7–71(5). Narrowing our focus to the mar­
ket for hospital services, the power to acquire hospitals
still does not ordinarily produce anticompetitive effects.
Section 31–7–75(4) was, after all, the source of power for
newly formed hospital authorities to acquire a hospital in
the first instance—a transaction that was unlikely to raise
any antitrust concerns even in small markets because the
transfer of ownership from private to public hands does
not increase market concentration. See 1A Areeda &
Hovenkamp ¶224e(c), at 126 (“[S]ubstitution of one mo­
nopolist for another is not an antitrust violation”). While
subsequent acquisitions by authorities have the potential
to reduce competition, they will raise federal antitrust
concerns only in markets that are large enough to support
more than one hospital but sufficiently small that the
merger of competitors would lead to a significant increase
in market concentration. This is too slender a reed to
support the Court of Appeals’ and respondents’ inference.
                           IV
                            A
 Taking a somewhat different approach than the Court of
Appeals, respondents insist that the Law should not be
                     Cite as: 568 U. S. ____ (2013)                   15

                          Opinion of the Court

read as a mere authorization for hospital authorities to
participate in the hospital-services market and exercise
general corporate powers. Rather, they contend that hos­
pital authorities are granted unique powers and respon-
sibilities to fulfill the State’s objective of providing all
residents with access to adequate and affordable health
and hospital care. See, e.g., Ga. Code Ann. §31–7–75(22).
Respondents argue that in view of hospital authorities’
statutory objective, their specific attributes, and the regu­
latory context in which they operate, it was foreseeable
that authorities facing capacity constraints would decide
they could best serve their communities’ needs by acquir­
ing an existing local hospital rather than incur the addi­
tional expense and regulatory burden of expanding a
facility or constructing a new one. See Brief for Respond­
ents 33–39.
   In support of this argument, respondents observe that
hospital authorities are simultaneously empowered to act
in ways private entities cannot while also being subject to
significant regulatory constraints. On the power side, as
the Court of Appeals 

,
hospital authorities may acquire through eminent domain
property that is “essential to the [authority’s] purposes.”
§31–7–75(12).8 On the restraint side, hospital authorities
are managed by a publicly accountable board, §§31–7–
74.1, 31–7–76, they must operate on a nonprofit basis,
§31–7–77, and they may only lease a project for others to

——————
   8 The Court of Appeals also invoked Ga. Code Ann. §31–7–84, which

provides that hospital authorities do not have the power to assess
taxes, but allows the applicable governing body in the authority’s area
of operation to impose taxes to cover the authority’s expenses. 

. This provision applies in cases in which the county or
municipality has entered into a contract with a hospital authority for
the use of its facilities. See §§31–7–84(a), 31–7–85. No such contract
exists in this case, and respondents have not relied on this provision in
briefing or argument before us.
16        FTC v. PHOEBE PUTNEY HEALTH SYSTEM, INC.

                           Opinion of the Court

operate after determining that doing so will promote the
community’s public health needs and that the lessee will
not receive more than a reasonable rate of return on its
investment, §31–7–75(7). Moreover, hospital authorities
operate within a broader regulatory context in which
Georgia requires any party seeking to establish or signifi­
cantly expand certain medical facilities, including hospi­
tals, to obtain a certificate of need from state regulators.
See §31–6–40 et seq.9
   We have no doubt that Georgia’s hospital authorities
differ materially from private corporations that offer
hospital services. But nothing in the Law or any other
provision of Georgia law clearly articulates a state policy
to allow authorities to exercise their general corporate
powers, including their acquisition power, without regard
to negative effects on competition. The state legislature’s
objective of improving access to affordable health care does
not logically suggest that the State intended that hospital
authorities pursue that end through mergers that create
monopolies. Nor do the restrictions imposed on hospital
authorities, including the requirement that they operate
on a nonprofit basis, reveal such a policy. Particularly in
light of our national policy favoring competition, these
——————
  9 Georgia  first adopted certificate of need legislation in 1978 in part to
comply with a since-repealed federal law conditioning federal funding
for a number of health care programs on a State’s enactment of certifi­
cate of need laws. See 1978 Ga. Laws p. 941, as amended, Ga. Code
Ann. §31–6–40 et seq. (2012); see also National Health Planning and
Resources Development Act of 1974, 88 Stat. 2246, repealed by §701(a),
100 Stat. 3799. Many other States also have certificate of need laws.
See National Conference of State Legislatures, Certificate of Need:
State Health Laws and Programs, online at http://www.ncsl.org/issues­
research/health/con-certificate-of-need-state-laws.aspx (as visited Feb.
15, 2013, and available in Clerk of Court’s case file) (indicating in
“States with CON Programs” table that 35 States retained some type of
certificate of need program as of December 2011 while 15 other States
had such programs but have repealed them).
                  Cite as: 568 U. S. ____ (2013)           17

                      Opinion of the Court

restrictions should be read to reflect more modest aims.
The legislature may have viewed profit generation as
incompatible with its goal of providing care for the indi­
gent sick. In addition, the legislature may have believed
that some hospital authorities would operate in markets
with characteristics of natural monopolies, in which case
the legislature could not rely on competition to control
prices. See Cantor v. Detroit Edison Co., 

,
595–596 (1976).
  We recognize that Georgia, particularly through its
certificate of need requirement, does limit competition in
the market for hospital services in some respects. But
regulation of an industry, and even the authorization of
discrete forms of anticompetitive conduct pursuant to a
regulatory structure, does not establish that the State has
affirmatively contemplated other forms of anticompetitive
conduct that are only tangentially related. Thus, in Gold-
farb v. Virginia State Bar, 

(1975), we re-
jected a state-action defense to price-fixing claims where a
state bar adopted a compulsory minimum fee schedule.
Although the State heavily regulated the practice of law,
we found no evidence that it had adopted a policy to dis­
place price competition among lawyers. 

in Cantor, we concluded that a state commission’s
regulation of rates for electricity charged by a public utili­
ty did not confer state-action immunity for a claim that
the utility’s free distribution of light bulbs restrained
trade in the light-bulb 

.
  In this case, the fact that Georgia imposes limits on
entry into the market for medical services, which apply to
both hospital authorities and private corporations, does
not clearly articulate a policy favoring the consolidation of
existing hospitals that are engaged in active competition.
Accord, FTC v. University Health, Inc., 

,
1213, n. 13 (CA11 1991). As to the Authority’s eminent
domain power, it was not exercised here and we do not
18     FTC v. PHOEBE PUTNEY HEALTH SYSTEM, INC.

                     Opinion of the Court

find it relevant to the question whether the State author­
ized hospital authorities to consolidate market power
through potentially anticompetitive acquisitions of exist­
ing hospitals.
                               B
  Finally, respondents contend that to the extent there
is any doubt about whether the clear-articulation test is
satisfied in this context, federal courts should err on the
side of recognizing immunity to avoid improper interfer­
ence with state policy choices. See Brief for Respondents
43–44. But we do not find the Law ambiguous on the
question whether it clearly articulates a policy authorizing
anticompetitive acquisitions; it does not.
  More fundamentally, respondents’ suggestion is incon­
sistent with the principle that “state-action immunity is
disfavored.” Ticor 

. Parker and its
progeny are premised on an understanding that respect
for the States’ coordinate role in government counsels
against reading the federal antitrust laws to restrict the
States’ sovereign capacity to regulate their economies and
provide services to their citizens. But federalism and state
sovereignty are poorly served by a rule of construction
that would allow “essential national policies” embodied in
the antitrust laws to be displaced by state delegations of
authority “intended to achieve more limited 

. As an amici brief filed by 20 States in sup­
port of the FTC contends, loose application of the clear­
articulation test would attach significant unintended
consequences to States’ frequent delegations of corporate
authority to local bodies, effectively requiring States to
disclaim any intent to displace competition to avoid inad­
vertently authorizing anticompetitive conduct. Brief for
State of Illinois et al. as Amici Curiae 12–17; see also
Surgical Care Center of Hammond, L. C. v. Hospital Serv.
Dist. No. 1, 

, 236 (CA5 1999) (en banc). We
                 Cite as: 568 U. S. ____ (2013)             19

                     Opinion of the Court

decline to set such a trap for unwary state legislatures.
                        *    *    *
   We hold that Georgia has not clearly articulated and
affirmatively expressed a policy to allow hospital authori­
ties to make acquisitions that substantially lessen compe­
tition. The judgment of the Court of Appeals is reversed,
and the case is remanded for further proceedings con­
sistent with this opinion.
                                           It is so ordered.