30832 Federal Register / Vol. 72, No. 106 / Monday, June 4, 2007 / Notices 

Participation in the investigations and 

public service list. Persons (other than 

petitioners) wishing to participate in the 

investigations as parties must file an 

entry of appearance with the Secretary 

to the Commission, as provided in 

sections 201.11 and 207.10 of the 

Commission’s rules, not later than seven 

days after publication of this notice in 

the Federal Register. Industrial users 

and (if the merchandise under 

investigation is sold at the retail level) 

representative consumer organizations 

have the right to appear as parties in 

Commission antidumping 

investigations. The Secretary will 

prepare a public service list containing 

the names and addresses of all persons, 

or their representatives, who are parties 

to these investigations upon the 

expiration of the period for filing entries 

of appearance. 

Limited disclosure of business 

proprietary information (BPI) under an 

administrative protective order (APO) 

and BPI service list. Pursuant to section 

207.7(a) of the Commission’s rules, the 

Secretary will make BPI gathered in 

these investigations available to 

authorized applicants representing 

interested parties (as defined in 19 

U.S.C. 1677(9)) who are parties to the 

investigations under the APO issued in 

these investigations, provided that the 

application is made not later than seven 

days after the publication of this notice 

in the Federal Register. A separate 

service list will be maintained by the 

Secretary for those parties authorized to 

receive BPI under the APO. 

Conference. The Commission’s 

Director of Operations has scheduled a 

conference in connection with these 

investigations for 9:30 a.m. on June 19, 

2007, at the U.S. International Trade 

Commission Building, 500 E Street, 

SW., Washington, DC. Parties wishing to 

participate in the conference should 

contact Fred Ruggles (202–205–3187/ 

fred.ruggles@usitc.gov) not later than 

June 15, 2007, to arrange for their 

appearance. Parties in support of the 

imposition of antidumping duties in 

these investigations and parties in 

opposition to the imposition of such 

duties will each be collectively 

allocated one hour within which to 

make an oral presentation at the 

conference. A nonparty who has 

testimony that may aid the 

Commission’s deliberations may request 

permission to present a short statement 

at the conference. 

Written submissions. As provided in 

sections 201.8 and 207.15 of the 

Commission’s rules, any person may 

submit to the Commission on or before 

June 22, 2007, a written brief containing 

information and arguments pertinent to 

the subject matter of the investigations. 

Parties may file written testimony in 

connection with their presentation at 

the conference no later than three days 

before the conference. If briefs or 

written testimony contain BPI, they 

must conform with the requirements of 

sections 201.6, 207.3, and 207.7 of the 

Commission’s rules. The Commission’s 

rules do not authorize filing of 

submissions with the Secretary by 

facsimile or electronic means, except to 

the extent permitted by section 201.8 of 

the Commission’s rules, as amended, 67 

FR 68036 (November 8, 2002). Even 

where electronic filing of a document is 

permitted, certain documents must also 

be filed in paper form, as specified in 

II(C) of the Commission’s Handbook on 

Electronic Filing Procedures, 67 FR 

68168, 68173 (November 8, 2002). 

In accordance with sections 201.16(c) 

and 207.3 of the rules, each document 

filed by a party to these investigations 

must be served on all other parties to 

the investigations (as identified by 

either the public or BPI service list), and 

a certificate of service must be timely 

filed. The Secretary will not accept a 

document for filing without a certificate 

of service. 

Authority: These investigations are being 

conducted under authority of title VII of the 

Tariff Act of 1930; this notice is published 

pursuant to section 207.12 of the 

Commission’s rules. 

Issued: May 29, 2007. 

By order of the Commission. 

Marilyn R. Abbott, 

Secretary to the Commission. 

[FR Doc. E7–10684 Filed 6–1–07; 8:45 am] 

BILLING CODE 7020–02–P 

INTERNATIONAL TRADE 

COMMISSION 

[Investigation Nos. 731–TA–919 and 920 

(Review)] 

Welded Large Diameter Line Pipe From 

Japan and Mexico 

AGENCY: United States International 

Trade Commission. 

ACTION: Revised schedule for the subject 

five-year reviews. 

DATES: Effective Date: Date of 

Commission action. 

FOR FURTHER INFORMATION CONTACT: 

Dana Lofgren (202–205–3185), Office of 

Investigations, U.S. International Trade 

Commission, 500 E Street, SW., 

Washington, DC 20436. Hearingimpaired persons can obtain 

information on this matter by contacting 

the Commission’s TDD terminal on 202–

205–1810. Persons with mobility 

impairments who will need special 

assistance in gaining access to the 

Commission should contact the Office 

of the Secretary at 202–205–2000. 

General information concerning the 

Commission may also be obtained by 

accessing its Internet server (http:// 

www.usitc.gov). The public record for 

these reviews may be viewed on the 

Commission’s electronic docket (EDIS) 

at http://edis.usitc.gov. 

SUPPLEMENTARY INFORMATION: On 

February 22, 2007, the Commission 

established a schedule for the conduct 

of the subject reviews (72 FR 9357, 

March 1, 2007). Due to a subsequent 

scheduling conflict, however, the 

Commission is revising its schedule. 

Under the Commission’s new schedule 

for the reviews, the hearing will be held 

at the U.S. International Trade 

Commission building at 9:30 a.m. on 

July 25, 2007. The Commission’s 

original schedule is otherwise 

unchanged. 

For further information concerning 

the conduct of these reviews and rules 

of general application, see the 

Commission’s notice cited above and 

the Commission’s Rules of Practice and 

Procedure, part 201, subparts A through 

E (19 CFR part 201), and part 207, 

subparts A and C (19 CFR part 207). 

Authority: These five-year reviews are 

being conducted under authority of title VII 

of the Tariff Act of 1930; this notice is 

published pursuant to section 207.62 of the 

Commission’s rules. 

Issued: May 29, 2007. 

By order of the Commission. 

Marilyn R. Abbott, 

Secretary to the Commission. 

[FR Doc. E7–10685 Filed 6–1–07; 8:45 am] 

BILLING CODE 7020–02–P 

DEPARTMENT OF JUSTICE 

Antitrust Division 

United States of America, et al. v. 

Arizona Hospital and Healthcare 

Association, et al.; Proposed Final 

Judgment and Competitive Impact 

Statement 

Notice is hereby given pursuant to the 

Antitrust Procedures and Penalties Act, 

15 U.S.C. Section 16(b) through (h), that 

a proposed Final Judgment, Stipulation 

and Competitive Impact Statement have 

been filed with the United States 

District Court for the District of the 

District of Arizona in United States of 

America, et al. v. Arizona Hospital and 

Healthcare Association, et al., Civil 

Action No. 2:07–cv–1030. On May 22, 

2007, the United States filed a 


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Complaint alleging the Arizona Hospital 

and Healthcare Association and its 

subsidiary, the AzHHA Service 

Corporation, violated Section 1 of the 

Sherman Act, 15 U.S.C. § 1. The 

proposed Final Judgment, filed the same 

time as the Complaint, requires the 

Defendants to terminate their illegal 

agreements and to end their illegal ratesetting and information-sharing 

activities, and to create a program to 

monitor their compliance with the 

antitrust laws. Copies of the Complaint, 

proposed Final Judgment and 

Competitive Impact Statement are 

available for inspection at the 

Department of Justice in Washington, 

DC in Room 215, 325 Seventh Street, 

NW., at the Office of the Clerk of the 

United States District Court for the 

District of Arizona, in Phoenix, and via 

the internet at http://www.usdoj.gov/atr/ 

cases.html. 

Public comment is invited within 60 

days of the date of this notice. Such 

comments, and responses thereto, will 

be published in the Federal Register 

and filed with the Court. Comments 

should be directed to Joseph M. Miller, 

Acting Chief, Litigation I Section, 

United States Department of Justice, 

Suite 4000, 1401 H Street, NW., 

Washington, DC 20530, (telephone: 

202–307–0001). 

J. Robert Kramer, II, 

Director of Operations, Antitrust Division. 

Ryan Danks, Steven Kramer, Seth Grossman, 

Rebecca Perlmutter 

U.S. Department of Justice Antitrust Division, 

1401 H Street, NW., Suite 4000, 

Washington, DC 20530, (202) 305–0128 

Attorneys for the United States 

Terry Goddard, Attorney General, Nancy 

Bonnell, Antitrust Unit Chief, ID #016382, 

Consumer Protection and Advocacy 

Section, Department of Law Building, 

Room #259, 1275 West Washington Street, 

Phoenix, AZ 85007–2997, (602) 542–7728 

Attorneys for the State of Arizona 

United States District Court 

District of Arizona 

United States of America and the State of 

Arizona, Plaintiffs, v. Arizona Hospital and 

Healthcare, Association and AzHHA 

Service, Corporation, Defendants. 

[Case No. CV07–1030–PHX] 

Complaint 

1. The United States of America, 

acting under the direction of the 

Attorney General of the United States, 

and the State of Arizona, acting under 

the direction of the Attorney General of 

the State of Arizona, bring this civil 

actio to obtain equitable and other relief 

against Defendants Arizona Hospital 

and Healthcare Association (‘‘AzHHA’’) 

and its subsidiary the AzHHA Service 

Corporation to restrain Defendants’

violation of Section 1 of the Sherman 

Act, 15 U.S.C. § 1, and the State of 

Arizona seeks relief also under Section 

44–1402 of Arizona’s Uniform State 

Antitrust Act, A.R.S. § 44–1402. 

I. Introduction 

2. AzHHA, through its subsidiary the 

AzHHA Service Corporation, runs the 

AzHHA Registry Program (‘‘AzHHA 

Registry’’), a group purchasing 

organization, which contracts with 

nursing agencies to provide temporary 

nursing services for most Arizona 

hospitals. Through the Registry, AzHHA 

and its participation member hospitals 

have jointly set prices and other terms 

governing the hospitals’ purchases of 

per diem and travel nursing services. 

3. For nearly ten years after AzHHA 

started the Registry in 1988, it focused 

on setting uniform quality standards for 

per diem and travel nursing personnel, 

and enforcing those standards through 

regular audits. During this time, AzHHA 

allowed each participating agency that 

employed per diem and travel nurses to 

set its own bill rates, provided that the 

agency offered the same rates to every 

hospital participating in the Registry. 

Since 1997, however, AzHHA has 

imposed the same bill rates on each 

participating agency, which the agency 

must offer each participating hospital. 

4. Acting collectively on behalf of 

most of the hospitals in Arizona, 

AzHHA has set bill rates below the 

levels its member hospitals could 

otherwise have achieved by negotiating 

independently with each agency. 

AzHHA also has imposed other 

noncompetitive contractual terms on 

participating agencies. 

5. Efficiencies do not explain or 

justify the Registry’s conduct. Agencies 

have not obtained significant 

transactional efficiencies or scale 

economies as a result of the imposition 

of uniform bill rates by the Registry. The 

Registry’s practice of imposing uniform 

bill rates has not been reasonably 

necessary to achieve any benefits, such 

as greater quality assurance. Neither 

agencies nor hospitals have acted as 

though the Registry’s rate setting creates 

efficiences. 

6. Through this suit, the United States 

and the State of Arizona ask this Court 

to declare the Defendant’s conduct 

illegal and enter injunctive relief to 

prevent further violations of the 

antitrust laws. 

II. Defendants 

7. AzHHA is a nonprofit corporation 

existing under the laws of the State of 

Arizona and headquartered in Phoenix. 

The association describes itself as 

dedicated to providing leadership on 

issues affecting the delivery, quality, 

accessibility, and cost effectiveness of 

healthcare. Active members of AzHHA 

include more than 100 hospitals and 

health systems in Arizona. Executives 

from member hospitals control the 

AzHHA Board of Directors. 

8. The AzHHA Service Corporation is 

a for-profit corporation existing under 

the laws of the State of Arizona and is 

a wholly owned subsidiary of AzHHA; 

it is also headquartered in Phoenix. The 

AzHHA Service Corporation runs the 

AzHHA Registry, which helps member 

hospitals purchase the services of 

temporary healthcare personnel, 

including per diem and travel nurses. 

Executives from AzHHA member 

hospitals control the AzHHA Service 

Corporation Board of Directors. 

III. Jurisdiction and Venue 

9. The Court has subject-matter 

jurisdiction over this action under 15 

U.S.C. § 4 and 15 U.S.C. § 26, which 

authorize the United States and the 

State of Arizona, respectively, to bring 

actions in district courts to prevent and 

restrain violations of Section 1 of the 

Sherman Act, 15 U.S.C. § 1. Subject 

matter jurisdiction also exists pursuant 

to 28 U.S.C. §§ 1331, 1337. 

10. Venue is proper in the District of 

Arizona, under Section 12 of the 

Clayton Act, 15 U.S.C. § 22, and 28 

U.S.C. § 1391(b) & (c), because the 

defendant corporations reside there. 

11. The Court has jurisdiction over 

the State of Arizona’s claim under the 

Uniform Arizona Antitrust Act, A.R.S. 

§§ 44–1402, et seq., under the doctrine 

of pendent jurisdiction, 28 U.S.C. 

§ 1367. 

IV. Conspirators 

12. Various firms and individuals, not 

named as defendants in this Complaint, 

have knowingly participated as 

conspirators with Defendants in the 

violation alleged in this Complaint, and 

have done acts and made statements in 

furtherance of the alleged conspiracy. 

V. Trade and Commerce 

13. Arizona hospitals employ various 

types of nursing personnel to treat and 

care for patients. Hospitals are the 

primary employers in Arizona of 

registered nurses (RNs), who must 

graduate from an approved professional 

nursing program to obtain a license in 

Arizona. Specialty RNs are RNs who 

receive additional education and 

training and become certified to practice 

in a specialty unit, such as critical care, 

neonatal intensive care, or telemetry. 

Specialty RNs and RNs account for most 

of the nursing staff employed by 


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Arizona hospitals. Besides RNs and 

specialty RNs, Arizona hospitals employ 

several other types of nursing personnel, 

including licensed practical nurses 

(LPNs), certified nursing assistants 

(CNAs), operating room technicians, 

behavioral health technicians, and 

sitters. 

14. Arizona hospitals frequently 

cannot meet their nursing needs with 

their own regularly employed nurses. 

Hospitals cannot meet their needs 

because of, for example, temporary 

absences of the hospitals’ regularly 

employed nursing staff, daily variations 

in hospitals’ censuses, an influx of 

visitors to Arizona during the winter 

months, and a rapidly increasing 

population. 

15. Most Arizona hospitals try to fill 

their needs for nursing services by 

having their regularly employed nurses 

work overtime and by using internal 

pools of employees who ‘‘float’’ among 

units as needed (and as qualified). Some 

Arizona hospitals also maintain their 

own in-house list of nurses who may be 

available to work at the hospitals 

temporarily. 

16. These measures do not satisfy the 

hospitals’ demands for nursing services. 

At such times, the hospitals will 

purchase the services of temporary 

nursing personnel through nurse 

staffing agencies. Temporary nursing 

personnel fall usually into two 

categories: per diem nurses and travel 

nurses. 

17. Per diem nurses are typically local 

nurses who work on short notice to fill 

hospitals’ immediate needs on a single 

shift. In contrast, travel nurses contract 

to work at hospitals for longer periods, 

usually thirteen weeks. Unlike per diem 

nurses, travel nurses generally live 

outside Arizona and receive short-term 

housing in Arizona while employed 

there. Arizona hospitals purchase the 

services of travel nurses to satisfy their 

demand for nursing services, including 

responding to the influx of seasonal 

residents, and covering planned 

absences of regularly employed nursing 

staff, such as those on maternity leave. 

Along with California, Florida, and 

Texas, Arizona hospitals have the 

highest demand for travel nursing 

services. 

18. Nurse staffing agencies coordinate 

most placements of per diem and travel 

nurses with Arizona hospitals. Many 

nurse staffing agencies focus on 

providing either per diem or travel 

nurses. Arizona hospitals pay agencies 

an hourly bill rate for the work done by 

the agencies’ nursing personnel. 

Agencies pass most of that bill rate 

directly to nursing personnel as wages 

and benefits, and allocate the balance to 

their overhead and profit. Temporary 

nurses’ compensation is directly 

correlated to the bill rate paid by 

hospitals to nurse staffing agencies, and 

a decrease in temporary nursing agency 

bill rates results in lower compensation 

for temporary nurses. 

19. Dozens of nurse staffing agencies 

work with hospitals in Arizona. Before 

the Registry, Arizona hospitals used to 

compete on price with each other to 

purchase temporary nursing services 

from nurse staffing agencies. 

20. Some hospitals use third parties to 

coordinate their procurement of 

temporary nursing personnel from 

multiple nurse staffing agencies. Until 

2004, the AzHHA Registry Program was 

the only major provider of such services 

in Arizona. 

VI. The AzHHA Nurse Registry 

Program 

21. The AzHHA Registry operates 

separate registries for per diem nursing 

personnel in Northern Arizona (mainly 

Phoenix) and Southern Arizona (mainly 

Tucson), together called the ‘‘Per Diem 

Registry.’’ The Registry also operates a 

registry for travel nursing personnel 

throughout Arizona, called the ‘‘Travel 

Registry.’’ These registries cover various 

types of nursing personnel, including 

RNs, specialty RNs, LPNs, CNAs, 

operating room technicians, behavioral 

health technicians, and sitters. 

22. Since 2000, most of AzHHA’s 

member hospitals have purchased 

services of temporary nursing personnel 

through the AzHHA Registry. In 2005, 

65 Arizona hospitals participated in at 

least one part of the Registry. The 

hospitals then participating in the Per 

Diem Registry controlled approximately 

80 percent of hospital beds in the 

Phoenix area and approximately 84 

percent of hospital beds in the Tucson 

area. Hospitals then participating in the 

Travel Registry controlled 

approximately 78 percent of all hospital 

beds in Arizona. From May 2004 to May 

2005, these hospitals purchased 

approximately 850,000 hours of per 

diem nursing services (worth about $43 

million) and approximately 2.3 million 

hours of travel nursing services (worth 

about $116 million) through the AzHHA 

Registry. 

23. The AzHHA Registry began in 

1988 with a focus on quality assurance. 

The Registry seeks to provide quality 

assurance by establishing standards for 

agencies’ temporary nursing personnel 

and agencies’ personnel recordkeeping 

requirements. AzHHA employees 

monitor the agencies’ quality assurance 

through annual audits. These audits 

verify that each agency properly 

maintains files on its nursing 

personnel’s education, background, 

work experience, skill level, and 

references. 

24. Hospitals participating in the 

AzHHA Registry commit to turn first to 

participating agencies when purchasing 

temporary nursing services. If the 

participating agencies cannot fill a 

participating hospital’s needs promptly, 

then a hospital may purchase services 

from a nonparticipating agency, 

provided that its total purchases of per 

diem nursing services remain above 50 

percent. Most participating hospitals 

have fulfilled this contractual obligation 

and have purchased most of their 

temporary nursing services through the 

Registry. Overall, participating hospitals 

have purchased about 70 percent of 

their per diem nursing services through 

the Registry. The Travel Registry has 

accounted for about 90 percent of travel 

nurse agency sales to hospitals in 

Arizona. 

25. The participating hospitals 

regularly meet to select agencies to 

participate in the AzHHA Registry. In 

2005, the participating hospitals 

selected approximately 80 different 

nurse staffing agencies to participate in 

at least one part of the Registry, out of 

approximately 170 completed 

applications. 

26. The AzHHA Service Corporation 

has collected an administrative fee from 

each agency based on the amount that 

each agency bills hospitals through the 

Registry. For per diem personnel, 

AzHHA has collected a flat 2 percent 

fee. For travel nurses, AzHHA has 

collected fees based on a tiered structure 

starting at 2 percent and decreasing to 

0.5 percent, depending on the total 

amount an agency bills participating 

hospitals. The fees collected from the 

agencies fund the Registry and other 

AzHHA activities. 

27. When the AzHHA Registry began, 

each participating agency submitted a 

set of standard bill rates that the agency 

agreed to charge all participating 

hospitals. Starting from the bill rates 

submitted by an agency, each hospital 

could then individually negotiate 

discounted bill rates with each agency. 

28. In 1997, with the support of 

participating hospitals, AzHHA began 

collectively setting the rates agencies 

could bill hospitals through the Per 

Diem Registry. To do so, AzHHA began 

requiring all participating agencies to 

accept a uniform bill rate schedule, set 

by the Registry, for all participating 

hospitals. In 1998, AzHHA imposed a 

similar, uniform rate schedule for the 

Travel Registry. 

29. The AzHHA Registry has 

formulated uniform nurse agency bill 

rates through a three-step process. First, 


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AzHHA employees surveyed the bill 

rates from each participating agency, 

averaged the rates, and forwarded the 

averaged rate information to 

participating hospitals. Each hospital 

then provided its own desired agency 

bill rates to AzHHA. Finally, AzHHA set 

the uniform agency bill rates, based only 

on the average rates submitted by 

participating hospitals. 

30. At the insistence of the CEOs of 

several participating hospitals, AzHHA 

employees sometimes prepared and 

circulated usage reports detailing 

hospitals’ usage of per diem personnel 

though the Per Diem Registry, and 

outside it. The reports included 

estimates of the cost of hiring per diem 

personnel outside the Registry. In May 

2002, participating hospitals agreed to 

expel any hospital using participating 

agencies for less than 50 percent of its 

total per diem hours. This new rule 

affected six hospitals. Four hospitals 

responded by immediately increasing 

their use of participating agencies to at 

least 50 percent of their total per diem 

needs. One system, comprising two 

hospitals, chose to leave the Per Diem 

Registry rather than face expulsion. 

31. In 2005, AzHHA altered the Per 

Diem Registry’s rate structure by 

eliminating the bill rate differential 

between weekday and weekend shifts. 

In addition, AzHHA significantly 

reduced overtime and holiday bill rates. 

AzHHA made these changes over 

objections from many participating 

agencies. Several per diem agencies 

subsequently left the Registry. 

32. AzHHA has taken other steps to 

further coordinate how participating 

hospitals deal with agencies. The 

AzHHA Registry contract requires 

participating agencies to accept certain 

competitively sensitive contract 

provisions relating to, among others, 

payment terms between participating 

hospitals and participating agencies, 

indemnification, and cancellation 

policies. AzHHA also gathers from and 

shares with participating hospitals 

competitively sensitive information 

such as bonuses offered to temporary 

nursing personnel. 

33. In November 2006, while under 

investigation by the Plaintiffs and 

defending a private antitrust action, 

AzHHA reverted to its pre-1997 

approach to pricing for the Per Diem 

Registry. It now requires each agency to 

submit bill rates that it will charge all 

participating hospitals. The revised 

pricing method applies only to per diem 

agencies, and AzHHA retains the right 

to reject an agency’s rate submission. 

The Travel Registry continues to impose 

a uniform bill rate schedule applicable 

to all participating hospitals’ purchases 

from travel nurse staffing agencies. 

VII. Interstate Commerce 

34. The activities of the Defendants 

that are the subject of this Complaint are 

within the flow of, and have 

substantially affected, interstate trade 

and commerce. 

The AzHHA Service Corporation has 

transmitted contracts to nurse staffing 

agencies across state lines and has 

communicated with nurse staffing 

agencies by mail and telephone across 

state lines. AzHHA employees have 

traveled across state lines to audit nurse 

staffing agencies. 

36. The Travel Registry contracts with 

agencies that arrange for nurses to travel 

from outside Arizona to provide 

temporary nursing services in Arizona 

hospitals. 

37. Many AzHHA member hospitals 

that purchase services from nurse 

staffing agencies through the AzHHA 

Registry remit substantial payments 

across state lines to nurse staffing 

agencies. Nurse staffing agencies also 

remit substantial payments in the form 

of administrative fees across state lines 

to the AzHHA Service Corporation. 

VIII. Relevant Markets 

A. Hospitals’ Purchases of Per Diem 

Nursing Services in the Phoenix and 

Tucson Metropolitan Areas 

38. Per diem nursing services is a 

relevant service market within the 

meaning of the antitrust laws. 

39. Positions as regularly employed 

RNs at hospitals are generally not 

attractive alternatives for per diem 

nurses because they do not offer the 

scheduling flexibility or pay attractive 

to per diem nurses. Many per diem 

nurses work part-time as secondary 

wage earners for their families and 

highly value flexible work schedules. 

Per diem nurses generally are paid 

higher hourly wages compared to 

regularly employed nursing staff, but 

typically do not receive benefits such as 

health insurance or retirement 

contributions. Although some per diem 

nurses also work full-time at a hospital, 

many do not. 

40. Nursing positions in non-hospital 

settings tend to pay even lower wages, 

are generally less prestigious, and 

usually offer less professionally 

challenging work environments than RN 

positions in hospitals. Thus hospital per 

diem nurse openings are generally more 

attractive than per diem nurse openings 

in other settings, such as in-home 

nursing visits or care, physician offices, 

freestanding outpatient care facilities, 

skilled-nursing facilities, schools, and 

prisons. Moreover, there are relatively 

few employment opportunities for per 

diem nurses in non-hospital settings. 

41. The Per Diem Registry has 

collectively imposed per diem bill rates 

below competitive levels, and lowered 

the compensation paid to per diem 

nurses. Those reduced bill rates have 

not induced per diem nurses to stop 

offering their services in sufficient 

quantities to make the reduction in bill 

rates unprofitable. Purchases of per 

diem nursing services by hospitals is, 

therefore, a relevant service market. 

This service market aggregates, for 

analytic convenience, several relevant 

service markets, including hospitals’

purchases of discrete types of temporary 

nursing services, such as per diem 

medical/surgical RN services, various 

per diem specialty RN services, per 

diem LPN services, and per diem CNA 

services. 

42. The Phoenix and Tucson 

metropolitan areas are relevant and 

distinct geographic markets, within the 

meaning of the antitrust laws, for the 

purchase of per diem nursing services. 

43. Phoenix and Tucson are distinct 

relevant geographic markets for the 

purchase of per diem nursing services in 

part because they are located about 120 

miles from each other. Per diem nurses 

generally must live within a reasonable 

commute of the hospitals where they 

work to ensure their work is profitable 

and they are available on short notice. 

In Arizona, per diem nurses generally 

reside in either Phoenix or Tucson and 

live in the metropolitan area where they 

work. More distant hospitals are not 

good substitutes for per diem nurses 

living in the Phoenix or Tucson 

metropolitan areas. 

44. The Per Diem Registry 

consequently has operated distinct 

purchasing programs centered in 

Phoenix and Tucson. Participating 

hospitals and per diem nurse staffing 

agencies have considered the Phoenix 

and Tucson metropolitan areas to be 

distinct markets for the purchase of per 

diem nursing personnel services, and 

the Registry has priced them differently. 

45. The Per Diem Registry has 

collectively imposed per diem bill rates 

below competitive levels in Phoenix. 

Those reduced bill rates have not 

induced per diem nurses in Phoenix to 

stop offering their per diem services in 

Phoenix in sufficient quantities to make 

the reduction in bill rates unprofitable. 

Similarly, the reduced bill rates in 

Tucson have not induced per diem 

nurses to stop offering their per diem 

services in that city in sufficient 

quantities to make the reduction in bill 

rates there unprofitable. 


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B. Hospitals’ Purchases of Travel 

Nursing Services in Arizona 

46. Travel nursing services is a 

relevant service market within the 

meaning of the antitrust laws. 

47. No other nursing position offers 

the benefits that travel nursing provides: 

temporary residence in a new or 

attractive are of the country, the ability 

to work near friends or relatives in the 

area, and the chance to try out a hospital 

for future long-term employment. Travel 

nurses usually earn a higher hourly rate 

than regularly employed nurses, and 

often receive health benefits and paid 

vacation from their agency. Many 

hospitals in Arizona also pay travel 

nurses through their agencies bonuses 

upon completion of their assignments. 

48. The Travel Registry has 

collectively imposed travel bill rates 

below competitive levels and lowered 

the compensation to travel nurses. 

Those reduced bill rates have not 

induced travel nurses to stop offering 

their services in sufficient quantities to 

make the reduction in bill rates 

unprofitable. Purchases of travel nursing 

services by hospitals in Arizona is, 

therefore, a relevant service market. 

This service market aggregates, for 

analytic convenience, several relevant 

service markets, including hospitals’

purchases of discrete types of travel 

nursing services, such as medical/ 

surgical RN services, and various 

specialty RN services. 

49. Arizona is a relevant geographic 

market, within the meaning of the 

antitrust laws, for the purchase of travel 

nursing services. 

50. Most of the thousands of travel 

nurses throughout the country have 

strong preferences for assignments in a 

particular location at any given time. A 

substantial number of travel nurses 

prefer Arizona over other warm-weather 

locations with high demands for travel 

nurses, such as Southern California, 

Texas, and Florida. Nurses prefer 

Arizona for any number of reasons, 

including previous work experience, 

preferred recreational opportunities, 

and proximity to friends and relatives. 

Also, Arizona, unlike California and 

Florida, is a member of the multistate 

Nurse Licensure Compact. This means 

that nurses licensed in Compact states 

face lower transaction costs to provide 

services in Arizona, and incur higher 

costs when choosing Florida or 

California instead of Arizona for their 

thirteen-week travel assignments. 

51. Travel nurse agencies’ experiences 

in Arizona further corroborate that 

Arizona is a relevant market for travel 

nurses. Starting in 1998, the Travel 

Registry collectively imposed bill rates 

in Arizona lower than they would have 

been absent the Registry, while 

hospitals in comparable states 

continued to pay relatively higher bill 

rates. That change has had a significant 

negative effect on the margins of the 

travel nurse agencies and reduced 

somewhat the hourly wages those 

agencies paid to travel nurses working 

in Arizona. Despite the travel Registry’s 

adverse effects, travel nurse agencies 

have not been able to steer a sufficient 

number of travel nurses to other states 

to defeat the small but significant 

nontransitory decrease imposed by the 

Travel Registry on travel nurse billing 

rates in Arizona. 

52. For instance, in 1998, one of the 

nation’s largest travel nurse agencies, 

which provided a substantial number of 

travel nurses to AzHHA participating 

hospitals, withdrew from the Travel 

Registry in response to the collectively 

imposed bill rates. Because about 90 

percent of travel nursing services sold 

by travel nurse agencies in Arizona are 

purchased by hospitals through the 

Travel Registry, the travel nurse agency 

was effectively shut out of Arizona 

hospitals. The agency found that it 

could not redirect nurses with a 

preference for Arizona in sufficient 

numbers to other states, and so lost 

business to other agencies. The travel 

nurse agency was ultimately forced to 

rejoin the travel Registry and accept its 

collectively imposed bill rats. 

53. The Travel Registry has 

collectively imposed travel bill rates 

below the competitive levels in Arizona. 

Those reduced bill rates have not 

induced travel nurses to stop offering 

their travel nursing services in Arizona 

in sufficient quantities to make the 

reduction in bill rates unprofitable. 

IX. Market Power 

54. As of 2005, the Arizona hospitals 

that participated in the Per Diem 

Registry controlled approximately 80 

percent of all hospital beds in the area 

in and around Phoenix and 

approximately 84 percent of all hospital 

beds in the area in and around Tucson. 

(The number of hospital beds serves as 

a proxy for the demand for nursing 

services.) As the dominant purchasers of 

per diem nursing services in the areas 

in and around both Phoenix and 

Tucson, the hospitals participating in 

the Registry possessed market power in 

those relevant markets. 

55. As of 2005, the Arizona hospitals 

that participated in the Travel Registry 

controlled approximately 78 percent of 

all hospital beds in Arizona. As the 

dominant purchasers of travel nursing 

services in Arizona, the hospitals 

participating in the Registry possessed 

market power in that relevant market. 

56. The high percentage of Arizona 

hospitals that participate in the AzHHA 

Registry has allowed the Registry to 

impose uniform rates and 

noncompetitive contract terms, despite 

objections from many large nurse 

staffing agencies in Arizona, because 

there are not enough alternative 

purchasers of per diem and travel 

nursing services to thwart AzHHA’s 

exercise of market power. Indeed, the 

managers of the Registry have 

recognized that the ‘‘more [hospitals 

they] can bring into the program the 

more purchasing power [the hospitals] 

can have as a group.’’ In 

communications to its member 

hospitals, AzHHA executives have 

‘‘emphasize[d] the importance of 

functioning as a group,’’ and stressed 

that the Registry’s ‘‘strength lies in the 

group’s ability to stay consistent in [its] 

purchasing decisions when contracting 

for agency nurses, including travelers.’’

X. Anticompetitive Effects 

57. Through the Registry, AzHHA and 

its participating hospitals have 

decreased prevailing wages for 

temporary nursing personnel below 

competitive levels. 

58. By AzHHa’s own estimate, the 

AzHHA Registry has forced agency bill 

rates below competitive levels. In 

communications to other state hospital 

associations and to its own member 

hospitals, AzHHA has admitted that 

participating hospitals paid much lower 

bill rates for temporary nursing services 

than they would have paid absent the 

Registry. In advertising materials, 

AzHHA has estimated the bill rates its 

member hospitals paid agencies were as 

much as 12 percent lower than they 

would have been if agencies had been 

able to negotiate competitively with 

hospitals. AzHHA has reported to 

participating hospitals that the bill rates 

paid through the Per Diem Registry were 

9 percent to 16 percent lower than they 

otherwise would have been. (The 

elimination of shift differentials and 

reduced overtime and holiday rates 

imposed since 2005 further lowered the 

effective per diem agency bill rates.) In 

its communications, AzHHA has 

reported similar savings, 7 percent or 

more, in the bill rate paid through the 

Travel Registry. In sum, AzHHA has 

estimated that participating hospitals 

lowered payments to nurse staffing 

agencies by 10 to 12.7 million dollars 

per year through the reduced bill rates 

provided by the AzHHA Registry. 

Notably, AzHHA has attributed these 

savings to its collective price-setting and 


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not to any administrative or 

transactional efficiencies. 

59. Hospitals have recognized that the 

AzHHA Registry forced agency bill rates 

below competitive levels. Indeed, 

multiple hospitals, including two of the 

largest hospital systems in Arizona, 

concluded that leaving the Registry 

would have forced them to pay much 

higher rates for temporary nursing 

personnel. Instances where participating 

hospitals have left the Registry confirm 

that hospitals usually have paid higher 

bills rates outside it. In the last two 

years, several hospitals have left the 

Registry and signed contracts with 

AzHHA competitors; the new contracts 

generally have included higher bill rates 

for agencies. 

60. Temporary nurse staffing agencies 

in Arizona have observed that AzHHA 

forced bill rates below competitive 

levels. Agencies that were not part of 

the Registry, including several former 

participating agencies, have received 

higher bill rates from the hospitals 

through arrangements outside the 

Registry. A comparison of per diem 

rates done several years ago by AzHHA 

showed that the bill rates paid by 

AzHHA hospitals to agencies operating 

outside the Per Diem Registry ranged 

from 5 percent to 40 percent higher than 

the Registry’s rates. Still, many agencies 

have continued to participate in the 

Registry because they feared that failure 

to do so would effectively exclude them 

from the Arizona market, namely, the 

more than 3 million temporary nursing 

hours paticipating hospitals purchase 

through the Registry each year. Agencies 

that left the Registry Program have 

reported sharp declines in their overall 

sales. 

61. To maintain agency bill rates 

below competitive levels, AzHHA has 

monitored participating hospitals’ use of 

nonparticipating nurse staffing agencies 

and directed hospitals to increase their 

purchases of temporary nursing services 

through the Registry using the 

collectively determined, depressed bill 

rates. For instance, in March 2000, an 

AzHHA representative warned hospitals 

that ‘‘[t]he more that non-contract 

agency usage increase, the less powerful 

our contract becomes because agencies 

will drop and follow suit with ‘higher 

bill rate’ agencies. The final result 

would be the Registry Program ceasing 

to exist.’’

62. As a result of the Registry’s 

lowering bill rates paid to nurse staffing 

agencies, those agencies have paid 

temporary nurses lower wages. Thus 

temporary nurses hired through the 

Registry have earned a lower hourly 

wage rate than temporary nurses not 

hired through the Registry. 

63. The low agency bill rates imposed 

by AzHHA and resulting lower wages 

have reduced agencies’ ability to recruit 

temporary nurses. The Registry’s 

reduced agency bill rates and the 

resulting lower temporary nurse wages 

likely have distorted the incentives of 

hospitals and nurses, with significant 

long-run adverse consequences to the 

overall supply and mix of nursing 

services in Arizona. 

64. The AzHHA Registry’s downward 

effect on agency bill rates and nursing 

personnel wages has not resulted from 

efficiency-enhancinig behavior. 

65. The transactional efficiencies and 

scale economies AzHHA claims the 

Registry has generated do not account 

for, nor are they produced by, the lower 

bill rates the Registry has imposed on 

participating agencies. Some 

transactional efficiencies may have 

accrued to participating agencies 

because they can deal with most of the 

market through a single contact. But the 

anticompetitive effects of the AzHHA 

Registry have substantially outweighed 

any potential transactional efficiencies 

that have accrued to the temporary 

nursing agencies. 

66. The Registry also has not created 

significant economies of scale accruing 

to agencies because those agencies have 

not obtained appreciable per unit 

reductions in cost because of their 

participation in the AzHHA Registry, 

much less as a result of the Registry’s 

collective rate setting. The Registry has 

not resulted in an increase in the supply 

of temporary nurses in Arizona. 

67. AzHHA’s imposition of uniform 

rate schedules and other competitively 

sensitive contract terms was not 

reasonably necessary to achieve any 

efficiencies that may have resulted from 

the Registry’s credentialing and qualityassurance activities. AzHHA conducted 

its quality-assurance activities for nearly 

a decade before it began setting uniform 

bill rates. Its adoption of uniform rate 

schedules starting in 1997 did not relate 

to the Registry’s quality-assurance 

process. In November 2006, AzHHA 

ceased imposing uniform agency bill 

rates through the Per Diem Registry 

while maintaining the same qualityassurance activities, which reconfirmed 

that uniform pricing is not reasonably 

necessary to achieve the Registry’s 

quality-assurance goals. 

XI. Violations Alleged 

68. AzHHA, the AzHHA Service 

Corporation, and AzHHA’s participating 

member hospitals, acting through the 

AzHHA Registry Program, agreed to fix 

certain terms and conditions relating to 

the purchase of temporary nursing 

personnel, including temporary nurse 

staffing agency bill rates. 

69. The agreement among AzHHA, the 

AzHHA Service Corporation, and 

AzHHA’s participating member 

hospitals, acting through the AzHHA 

Registry Program, has caused and 

continues to cause: 

i. A reduction in competition for 

hospitals’ purchases of per diem nursing 

services in and around Phoenix, 

Arizona, and accompanying reductions 

in bill rates paid to temporary nursing 

agencies and wages paid to per diem 

nurses in that area; 

ii. A reduction in competition for 

hospitals’ purchases of per diem nursing 

services in and around Tucson, Arizona, 

and accompanying reductions in bill 

rates paid to temporary nursing agencies 

and wages paid to per diem nurses in 

that area; 

iii. A reduction in competition for 

Arizona hospitals’ purchases of services 

provided by travel nurses, and 

accompanying reductions in bill rates 

paid to temporary nursing agencies and 

wages paid to travel nurses in that state; 

and, in view of these effects, 

Defendants’ actions have violated 

Section 1 of the Sherman Act, 15 U.S.C. 

§ 1, and Section 44–1402 of Arizona’s 

Uniform State Antitrust Act, A.R.S. 

§ 44–1402. 

XII. Request for Relief 

70. To remedy the violations of 

Section 1 of the Sherman Act, 15 U.S.C. 

§ 1, and Section 44–1402 of Arizona’s 

Uniform State Antitrust Act, A.R.S. 

§ 44–1402, alleged herein, the United 

States and the State of Arizona request 

that the Court: 

i. Adjudge the Defendants AzHHA 

and AzHHA Service Corporation as 

constituting and having engaged in an 

unlawful combination, or conspiracy in 

unreasonable restraint of trade in 

violation of Section 1 of the Sherman 

Act, 15 U.S.C. § 1, and Section 44–1402 

of Arizona’s Uniform State Antitrust 

Act, A.R.S. § 44–1402; 

ii. Order that the Defendants AzHHA 

and AzHHA Service Corporation, their 

officers, directors, agents, employees, 

and successors, and all others acting or 

claiming to act on their behalf, be 

permanently enjoined from engaging in, 

carrying out, renewing, or attempting to 

engage in, carry out, or renew the 

combination and conspiracy alleged 

herein or any other combination or 

conspiracy having a similar purpose or 

effect in violation of Section 1 of the 

Sherman Act, 15 U.S.C. § 1, and Section 

44–1402 of Arizona’s Uniform State 

Antitrust Act, A.R.S. § 44–1402, 

iii. Award costs of this action; and 


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iv. Such other and further relief as 

may be required and the Court may 

deem just and proper. 

Dated: May 22, 2007. 

Thomas O. Barnett, Assistant Attorney 

General, Antitrust Division. 

J. Robert Kramer II, Director of Operations, 

Antitrust Division. 

Joseph M. Miller, Acting Chief, Litigation 1 

Section, Antitrust Division. 

Ryan Danks, Steven Kramer, Seth A. 

Grossman, Rebecca Perlmutter, 

Attorneys, Litigation I Section, 

United States Department of Justice, 

Antitrust Division, 1401 H Street, NW., 

Suite 4000, Washington, DC 20530, 

Telephone: (202) 305–0128, Facsimile: 

(202) 307–5802. 

Terry Goddard, Attorney General, Nancy 

Bonnell, Antitrust Unit Chief (Arizona Bar 

#016382), 

Consumer Protection and Advocacy Section, 

Department of Law Building, Room #259, 

1275 West Washington Street, Phoenix, AZ 

85007, Telephone: (602) 542–7728, 

Facsimile (602) 542–9088. 

Certificate of Service 

I hereby certify that on May 22, 2007, 

I electronically transmitted the attached 

document to the Clerk’s Office using the 

CM/ECF System for filing and 

transmittal of a Notice of Electronic 

Filing to the following CM/ECF 

registrants: 

Nancy Bonnell, Antitrust Unit Chief, ID 

#016382, Consumer Protection and 

Advocacy Section, Department of Law 

Building, Room #259, 1275 West 

Washington Street, Phoenix, AZ 85007–

2997, (602) 542–7728. 

Attorney for the State of Arizona 

Andrew S. Gordon, Coopersmith Gordon 

Schermer & Brockelman PLC, 2800 North 

Central Avenue, Suite 1000, Phoenix, AZ 

85004, (602) 381–5460, Facsimile: (602) 

224–6020, 

Attorney for the Defendants. 

Ryan Danks, United States Department of 

Justice, Antitrust Division. 

United States of America and the State of 

Arizona, Plaintiffs, v. Arizona Hospital and 

Healthcare Association and AzHHA 

Service Corporation, Defendants 

[Case No. CV07–1030–PHX] 

Final Judgment 

Exhibit A 

Whereas, Plaintiffs, United States of 

America and the State of Arizona, filed 

their Complaint on May 22, 2007, 

alleging Defendants’ violation of Section 

I of the Sherman Act, 15 U.S.C. § 1, and 

the State of Arizona has also alleged 

Defendants’ violated Section 44–1402 of 

Arizona’s Uniform State Antitrust Act, 

A.R.S. § 44–1402, and Plaintiffs and 

Defendants, by their respective 

attorneys, have consented to the entry of 

this Final Judgment without trial or 

adjudication of any issue of fact or law, 

and without this Final Judgment 

constituting any evidence against or 

admission by Defendants, or any other 

entity, as to any issue of fact or law; 

And whereas, the essence of this Final 

Judgment is the prohibition of certain 

agreements on bill rates and 

competitively sensitive contract terms, 

and actions coordinating and supporting 

those agreements, by the Arizona 

Hospital and Healthcare Association, its 

subsidiary the AzHHA Service 

Corporation, and their participating 

member hospitals; 

Now therefore, before any testimony 

is taken, without trial or adjudication of 

any issue of fact or law, and upon 

consent of the parties, it is ordered, 

adjudged and decreed: 

I. Jurisdiction 

This Court has jurisdiction over the 

subject matter of and the parties to this 

action. Defendants stipulate that the 

Complaint states a claim upon which 

relief may be granted against Defendants 

under Section I of the Sherman Act, as 

amended, 15 U.S.C. § 1, and A.R.S. 

§ 44–1402. 

II. Definitions 

As used in this Final Judgment, 

A. ‘‘AzHHA’’ means the Arizona 

Hospital and Healthcare Association, its 

successors and assigns, and its 

subsidiaries, divisions, groups, 

affiliates, partnerships, and joint 

ventures, and their directors, officers, 

managers, agents, and employees. 

B. ‘‘AzHHA Service Corporation’’

means the AzHHA Service Corporation, 

its successors and assigns, and its 

subsidiaries, divisions, groups, 

affiliates, partnerships, and joint 

ventures, and their directors, officers, 

managers, agents, and employees. 

C. ‘‘Competitively Sensitive Contract 

Terms’’ means those contractual terms, 

and any information related to those 

terms, that, as specified in Section IV(A) 

of this Final Judgment, cannot be 

included in the Program Contract and 

must be negotiated independently 

between each Participating Hospitals 

and each Participating Agency. 

D. ‘‘Defendants’’ means AzHHA and 

the AzHHA Service Corporation, jointly 

or individually. 

E. ‘‘Non-Participating Agencies’’

means temporary staffing agencies that 

sell services to Participating Hospitals 

or other AzHHA members outside the 

Registry Program. 

F. ‘‘Participating Agencies’’ means 

temporary staffing agencies that sell 

services to Participating Hospitals 

through the Registry Program. 

G. ‘‘Participating Hospitals’’ means 

hospitals or hospitals systems that are 

members of AzHHA that use the 

Registry Program to purchase 

Temporary Nursing Personnel. 

H. ‘‘Per Diem Registry’’ means the 

Registry Program used by Participating 

Hospitals for the purchase of Temporary 

Nursing Personnel on an ad hoc or as 

needed basis, including both the 

Northern and Southern regions of the 

Registry Program. 

I. ‘‘Program Contract’’ means any 

contract used by the Defendants to set 

the terms and conditions of the 

contractual relationship between 

Participating Hospitals and Participating 

Agencies for the Per Diem Registry and 

the Travel Registry. 

J. ‘‘Registry Program’’ means the 

program for the purchase of Temporary 

Nursing Personnel through the Per Diem 

Registry or the Travel Registry operated 

by the AzHHA Service Corporation, or 

any such program operated by AzHHA 

or the AzHHA Service Corporation in 

the future. 

K. ‘‘Temporary Nursing Personnel’’

means registered nurses, licensed 

practical nurses, certified nurse 

assistants, operating room technicians, 

behavioral health technicians, and 

sitters whom offer their services on a 

temporary basis. 

‘‘Travel Registry’’ means the Registry 

Program used by Participating Hospitals 

for the purchase of Temporary Nursing 

Personnel for thirteen weeks or longer. 

III. Applicability 

This Final Judgment applies to 

AzHHA, the AzHHA Service 

Corporation, and all other persons in 

active concert or participation with any 

of them who receive actual notice of this 

Final Judgment by personal service or 

otherwise. 

IV. Prohibited Conduct 

A. The Defendants shall not include 

in any Program Contract any provision 

setting, prescribing, or imposing, 

directly or indirectly: 

1. Rates paid by Participating 

Hospitals to Participating Agencies, 

including the process or manner by 

which Participating Agencies submit, 

negotiate, or contract for rates with 

Participating Hospitals; 

2. A common rate structure, including 

shift differentials; 

3. Payment terms between 

Participating Hospitals and Participating 

Agencies; 

4. Any cancellation policy or penalty 

for cancellation by Participating 

Hospitals or Participating Agencies; 

5. The payment of bonuses by 

Participating Hospitals or Participating 

Agencies; or, 

6. Any requirement or encouragement 

of Participating Hospitals to give 


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priority to or deal with Participating 

Agencies, including any minimum 

usage requirements of Participating 

Hospitals or Participating Agencies. 

B. The Defendants shall not: 

1. Impose on, encourage, facilitate, 

induce, or require, directly or indirectly, 

Participating Hospitals to (a) use any 

Registry Program or Participating 

Agencies exclusively, or grant right of 

first refusal to any Registry Program or 

Participating Agencies, (b) boycott, 

exclude, refuse to deal with, or 

discriminate against Non-Participating 

Agencies, or (c) meet any minimum 

requirements for use of Participating 

Agencies, or (c) meet any minimum 

requirements for use of Participating 

Agencies; except that the Defendants 

may promote features of the Registry 

Program to Participating Hospitals, 

Participating Agencies, and other 

persons, provided such promotion does 

not include rebates or other financial 

incentives for participation; 

2. Require, encourage, or induce 

Participating Agencies to deal with 

Participating Hospitals through the 

Registry Program; 

3. Encourage, facilitate, induce, 

participate in, or undertake any 

understanding or agreement among 

AzHHA members or Participating 

Hospitals (a) to adopt the Program 

Contract or participate in the Registry 

Program, or (b) regarding Competitively 

Sensitive Contract Terms; 

4. Provide any rebates or other direct 

financial incentives to Participating 

Hospitals to encourage or increase their 

participation in the Registry Program or 

use of Participating Agencies, except 

that, if the Defendants change the 

Registry Program so that fees are paid by 

Participating Hospitals rather than by 

Participating Agencies, then the fee 

structure may recognize Participating 

Hospitals’ volume of usage of the 

Register Program; 

5. Receive, gather, or collect 

Competitively Sensitive Contract Terms, 

except for such Competitively Sensitive 

Contract Terms as are necessary to 

operate the Register Program, provided 

access to the Competitively Sensitive 

Contract Terms obtained is restricted to 

those AzHHA employees performing 

ministerial tasks for the Register 

Program; 

6. Communicate, convey, announce, 

share, or disseminate to any AzHHA 

member, Participating Hospital, or 

Participating Agency; the Competitively 

Sensitive Contract Terms of any other 

AzHHA member, Participating Hospital 

Participating Agency; 

7. Select, or consider selection of, 

agencies for participation in the Registry 

Program, directly or indirectly, on the 

basis of Competitively Sensitive 

Contract Terms; 

8. Select, or consider selection of, 

agencies for participation in the Registry 

Program based on the amount of hours 

provided to Participating Hospitals 

through Registry Program before or after 

the entry of this Final Judgment, except 

that the Defendants may establish a 

required annual minimum volume of 

commerce, measured by the aggregate 

fees paid to the Defendants by a 

Participating Agency, which agencies 

must meet to continue their 

participation in the Registry Program, 

provided that those requirements are 

uniformly applied to all Participating 

Agencies and are based on the objective 

costs of operating the Registry Program; 

or, 

9. Communicate, convey, announce, 

share, or disseminate information 

regarding Registry Program usage by 

Participating Hospitals or Participating 

Agencies, except that the Defendants 

may tabulate and disseminate the total 

annual usage of the Registry Program by 

all Participating Hospitals. 

V. Mandated Conduct 

The Final Judgment is effective upon 

entry, except that the Defendants shall 

have ninety days (90) days from entry to 

amend the Program Contract to comply 

with Section IV(A)(1)–(6) of this Final 

Judgment. 

VI. Permitted Conduct 

A. Subject to Sections IV and V of this 

Final Judgment, the Program Contract 

may: 

1. Establish definitions of nurse types, 

e.g., ‘‘specialty’’ and ‘‘non-specialty’’; 

2. Establish payment terms between 

the Registry Program and Participating 

Agencies, including any participation 

fees; 

3. Establish a credentialing program, 

including auditing and file retention 

requirements required of Participating 

Agencies; 

4. Establish requirements for 

personnel hired from Participating 

Agencies, including background checks, 

drug panel screens, and prior 

experience; 

5. Establish insurance and 

indemnification requirements to be met 

by Participating Agencies; and 

6. Allow Participating Hospitals and 

Participating Agencies to independently 

and individually negotiate and reach 

agreement on Competitively Sensitive 

Contract Terms. 

B. The Defendants may: 

1. Solicit information and views from 

Participating Hospitals about the 

Registry Program or the Program 

Contract, so long as the Defendants do 

so consistently with Sections IV and V 

of this Final Judgment, and do not share 

any Participating Hospital’s information 

or views about any Competitively 

Sensitive Contract Terms with any other 

Participating Hospital; 

2. Establish the terms of the Program 

Contract, and create mechanisms for its 

administration, consistently with 

Sections IV, V and VI(A) of this Final 

Judgment; 

3. Meet with Participating Hospitals 

to choose criteria for selecting 

Participating Agencies, provided those 

criteria conform with the requirements 

given in Section IV(A) of this Final 

Judgment and the meetings are 

conducted in accordance with the 

prohibitions found in Section IV(B) of 

this Final Judgment; 

4. Communicate with Participating 

Hospitals the results of audits of file 

reviews performed on Participating 

Agencies; and 

5. Communicate to Participating 

Hospitals or Participating Agencies any 

information or message from a 

Participating Hospital or Participating 

Agency, provided that the 

communication does not otherwise 

violate Section IV of this Final 

Judgment. 

C. Nothing in this Final Judgment 

shall prohibit AzHHA or its members, 

the AzHHA Service Corporation, 

Participating Agencies, or Participating 

Hospitals, from advocating or 

discussing, in accordance with the 

doctrine established in Eastern Railroad 

Presidents Conference v. Noerr Motor 

Freight, Inc., 365 U.S. 127 (1961), 

United Mine Workers v. Pennington, 381 

U.S. 657 (1965), and their progeny, any 

legislative, judicial, or regulatory 

actions, or other governmental policies 

or actions. 

VII. Antitrust Compliance and 

Notification 

A. AzHHA shall establish an Antitrust 

Compliance Office, including 

appointment of an Antitrust Compliance 

Officer (‘‘Antitrust Compliance Officer’’) 

within thirty (30) days of entry of this 

Final Judgment, and a successor within 

thirty (30) days of entry of this Final 

Judgment, and a successor within thirty 

(30) days of a predecessor’s vacating the 

appointment. Each Antitrust 

Compliance Officer appointed shall not 

have had previous involvement with the 

Registry Program prior to the entry of 

this Final Judgment. 

B. Each Antitrust Compliance Officer 

appointed pursuant to Section VII(A) 

shall be responsible for establishing and 

implementing an antitrust compliance 

program for the Defendants and 

ensuring the Defendants’ compliance 


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with this Final Judgment, including the 

following: 

1. The Defendants shall furnish a 

copy of this Final Judgment (a) within 

thirty (30) days of entry of this Final 

Judgment to each of Defendants’

directors and officers, and each 

employee of the Defendants who is 

involved in the Registry Program, and 

(b) within thirty (30) days of their 

appointment to each person who 

succeeds to any such position. 

2. Within thirty (30) days of 

furnishing a copy of this Final Judgment 

to any person pursuant to Section 

VII(B)(1), the Defendants shall obtain 

from such person a signed certification 

that the person has read, understands, 

and agrees to comply with the 

provisions of this Final Judgment, to the 

best of his/her knowledge at the time 

the certification is made is not aware of 

any violations of this Final Judgment by 

Defendants that has not already been 

reported to the Antitrust Compliance 

Officer, and understands that failure to 

comply with this Final Judgment may 

result in conviction for criminal 

contempt of court. 

3. Upon learning of any potential 

violation of any provision of this Final 

Judgment, the Antitrust Compliance 

Officer shall forthwith take appropriate 

action to terminate or modify the 

activity so as to comply with this Final 

Judgment. Any such action shall be 

reported in the annual compliance 

report required by Section VII(B)(4) of 

this Final Judgment. 

4. For each year during the term of 

this Final Judgment, on or before the 

anniversary date of this Final Judgment, 

the Antitrust Compliance Officer shall 

file with the Plaintiffs a report as to the 

fact and manner of its compliance with 

the provisions of this Final Judgment. 

5. The defendants shall furnish a copy 

of this Final Judgment to each current 

Participating Hospital and current 

Participating Agency, and shall in the 

future furnish a copy of this Final 

Judgment to new Participating Hospitals 

or Participating Agencies within thirty 

(30) days of their agreement to the 

Program Contract. The Defendants shall 

require all Participating Hospitals to 

furnish a copy of this Final Judgment to 

managerial employees involved in 

hiring or contracting Temporary 

Nursing Personnel within thirty (30) 

days of entry of this Final Judgment or 

of succeeding to the position. Within 

forty-five (45) days of entry of this Final 

Judgment, the Defendants shall require 

each Participating Hospital to certify 

that it has received copy of this Final 

Judgment and has furnished a copy of 

this Final Judgment to managerial 

employees then involved in temporary 

nurse hiring or contracting. 

VIII. Compliance Inspection 

A. For purposes of determining or 

securing compliance with this Final 

Judgment, or of determining whether 

this Final Judgment should be modified 

or vacated, and subject to any legally 

recognized privilege, from time to time 

authorized representatives of the 

Plaintiffs, including consultants and 

other persons retained by the United 

States or the State of Arizona, shall, 

upon written request of an authorized 

representative of the Assistant Attorney 

General in charge of the Antitrust 

Division, or the Attorney General of the 

State of Arizona, and on reasonable 

notice to the Defendants be permitted: 

1. Access during the Defendants’

office hours to inspect and copy, or at 

the option of the Plaintiffs, to require 

the Defendants to provide copies of all 

documents, as defined by Rule 34 of the 

Federal Rules of Civil Procedure, in the 

possession, custody, or control of the 

Defendants, relating to any matters 

contained in this Final Judgment; and 

2. To interview, either informally or 

on the record, the Defendants’ officers, 

employees, agents, or other 

representatives, who may have their 

individual counsel present, regarding 

such matters. Any interview shall be 

subject to the reasonable convenience of 

the interviewee and without restraint or 

interference by the Defendants. 

B. Upon the written request of an 

authorized representative of the 

Assistant Attorney General in charge of 

the antitrust Division, or the Attorney 

General of the State of Arizona, the 

Defendants shall submit written reports 

and interrogatory responses, under oath 

if requested, relating to any of the 

matters contained in this Final 

Judgment, as may be requested. 

C. No information or documents 

obtained by the means provided in this 

section shall be divulged by the United 

States to any person other than an 

authorized representative of the 

executive branch of the United States, 

except in the course of legal proceedings 

to which the United States is a party 

(including grand jury proceedings), or 

for the purpose of securing compliance 

with this Final Judgment, or as 

otherwise required by law. 

D. No information or documents 

obtained by the means provided in this 

section shall be divulged by the State of 

Arizona to any person other than an 

authorized representative of the 

executive branch of the State of Arizona, 

except in the course of legal proceedings 

to which the State of Arizona is a party 

(including grand jury proceedings), or 

for the purpose of securing compliance 

with this Final Judgment, or as 

otherwise required by law. 

E. When information or documents 

are furnished by the Defendants to the 

Plaintiffs, if the Defendants represent 

and identify in writing the material in 

any such information or documents to 

which a claim of protection may be 

asserted under Rule 26(c)(7) of the 

Federal Rules of Civil Procedure, and 

the Defendants mark each pertinent 

page of such material, ‘‘Subject to claim 

of protection under Rule 26(c)(7) of the 

Federal Rules of Civil Procedure,’’ then 

the Plaintiffs shall give Defendants ten 

(10) calendar days notice prior to 

divulging such material in any legal 

proceeding other than a grand jury 

proceeding. 

IX. Retention of Jurisdiction 

This Court retains jurisdiction to 

enable any party to this Final Judgment 

to apply to this Court at any time for 

further orders and directions as may be 

necessary or appropriate to carry out or 

construe this Final Judgment, to modify 

any of its provisions, to enforce 

compliance, and to punish violations of 

this provisions. 

X. Term 

This Final Judgment shall expire ten 

(10) years after the date of its entry. 

XI. Public Interest Determination 

The parties have complied with the 

requirements of the Antitrust 

Procedures and Penalties Act, 15 U.S.C. 

§ 16, including making copies available 

to the public of this Final Judgment, the 

Competitive Impact Statement, and any 

comments thereon and the United 

States’ response to comments. Based 

upon the record before this Court, 

which includes the Competitive Impact 

Statement and any comments and 

response to comments filed with this 

Court, entry of this Final Judgment is in 

the public interest. 

Dated: llll 

Court approval subject to procedures 

of Antitrust Procedures and Penalties 

Act, 15 U.S.C. § 16. 

United States District Judge 

Ryan Danks, Steven Kramer, Seth 

Grossman, Rebecca Perlmutter, 

U.S. Department of Justice Antitrust 

Division, 1401 H Street, NW., Suite 

4000, Washington, DC 20530, (202) 

307–0001, 

Attorneys for the United States. 


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Federal Register / Vol. 72, No. 106 / Monday, June 4, 2007 / Notices 30841 

United States of America and the State 

of Arizona, Plaintiffs, v. Arizona 

Hospital and Healthcare Association 

and AzHHA Service Corporation, 

Defendants. 

[Case No. CV07–1030–PHX] 

Competitive Impact Statement 

Plaintiff United States of America, 

pursuant to Section 2(b) of the Antitrust 

Procedures and Penalties Act (‘‘APPA’’), 

15 U.S.C. § 16(b)–(h), files this 

Competitive Impact Statement relating 

to the proposed Final Judgment 

submitted for entry in this civil antitrust 

proceeding. The Plaintiffs in this case 

lodged the proposed Final Judgment 

with this Court on May 22, 2007, for 

eventual entry in this civil antitrust 

proceeding, following the parties’

compliance with the APPA, and if this 

Court determines, pursuant to the 

APPA, that the proposed Final 

Judgment is in the public interest. 

I. Nature and Purpose of the Proceeding 

The United States, accompanied by 

the State of Arizona, filed a civil 

antitrust complaint on May 22, 2007, 

alleging that Defendants Arizona 

Hospital and Healthcare Association 

and AzHHA Service Corporation 

(collectively ‘‘AzHHA’’), by operation of 

their Registry for hospitals’ purchases of 

temporary nursing services, violated 

Section 1 of the Sherman Act, 15 U.S.C. 

§ 1. The State of Arizona has also 

alleged that the Defendants violated 

Section 44–1402 of Arizona’s Uniform 

State Antitrust Act, A.R.S. § 44–1402. 

Through the Registry, AzHHA and 

participating member hospitals agreed 

to set uniform bill rates and other 

competitively sensitive contract terms 

for the purchase of temporary nursing 

services from nurse staffing agencies. 

The United States, the State of 

Arizona, and AzHHA have stipulated 

that this court may enter the proposed 

Final Judgment after compliance with 

the APPA. Entry of the proposed Final 

Judgement would terminate the action, 

except that this Court would retain 

jurisdiction to construe, modify, or 

enforce the provisions of the proposed 

Final Judgment and to punish violations 

of it. 

II. Description of Events Giving Rise to 

the Alleged Violation 

A. The Market for Temporary Nursing 

Services in Arizona 

Nurses providing services on a 

temporary basis generally fall into two 

categories, per diem nurses and travel 

nurses. Per diem nurses are local nurses 

who typically work on short notice to 

fill the immediate needs of nearby 

hospitals. Travel nurses work for 

hospitals for longer periods, usually 

thirteen weeks, and generally live 

outside Arizona. They usually receive 

short-term housing near the hospital 

where they work. Although all hospitals 

use temporary nursing services to cover 

needs created by illness, census 

fluctuations, and planned absences, 

Arizona hospitals have a particular need 

for temporary nursing services because 

of an annual influx of wintertime 

tourists and residents into the state. 

Hospitals purchase temporary nursing 

services through nurse staffing agencies, 

which are the per diem and travel 

nurses’ direct employers. A hospital 

will convey its needs for temporary 

nurse staffing to agencies, which in turn 

try to fill those needs with available 

nurses. 

Besides acting as clearinghouses, 

agencies recruit nurses, conduct 

background checks, maintain 

administrative and employment-related 

records, and compensate nurses. 

Agencies bill hospitals hourly for 

work done by the agencies’ nurses. 

Agencies pass most of the bill rates 

directly to their nursing personnel as 

wages and benefits, and use the 

remainder for overhead and profit.There 

is a direct correlation between bill rates 

and nurse wages: when bill rates 

change, so do wages. 

B. The Formation and Operation of the 

AzHHA Registry 

AzHHA started the AzHHA Registry 

in 1988 to help member hospitals 

impose minimum quality standards on 

temporary nursing personnel hired from 

nurse staffing agencies. AzHHA began 

with the Per Diem Registry, which 

focused on credentialing per diem 

nursing personnel in two distinct 

regions: Northern Arizona (for 

participating hospitals around Phoenix) 

and Southern Arizona (for participating 

hospitals around Tucson). The next year 

AzHHA began the Travel Registry, 

which focused on credentialing travel 

nursing personnel and worked with 

participating hospitals throughout 

Arizona. 

Hospitals that participate in the 

AzHHA Registry met once a year or 

more to discuss its operation and select 

which nurse staffing agencies would 

participate. In addition, AzHHA staff 

have talked with employees of 

participating hospitals about bill rates 

and other competitively sensitive 

contract terms, and shared the results of 

those conversations with employees of 

other hospitals. AzHHA employees 

sought agreement among participating 

hospitals before changing the Registry’s 

operations or its contract terms. 

The Registry focused on qualityassurance and credentialing activities 

for its first ten years. It required nurse 

staffing agencies to, among other things, 

keep updated records of nurses’

certifications, perform drug tests, and 

conduct background checks. AzHHA 

monitored the agencies’ compliance 

through annual audits performed by 

AzHHA employees. To pay for these 

activities, AzHHA has charged agencies 

participating in the Per Diem Registry a 

fee of two percent of their sales to 

participating hospitals. (The Travel 

Registry has charged a similar fee, but 

allows for discounts depending on the 

amount of sales agencies make to 

participating hospitals.) 

Between 1988 and 1997, the AzHHA 

Registry allowed participating agencies 

to set their own bill rates, provided that 

they agreed to offer the same bill rates 

to every hospital. In 1997, with the 

approval of participating hospitals, 

AzHHA restructured the Per Diem 

Registry to further coordinate bill rates 

and other contract terms with its 

member hospitals. Under the new 

system, the Per Diem Registry and its 

participating hospitals agreed to require 

all participating agencies to accept the 

same maximum bill rate from all 

participating hospitals, which it 

established through an annual threestep process. First, AzHHA surveyed the 

participating agencies’ desired rates and 

averaged their responses. AzHHA then 

forwarded those averages to the 

participating hospitals and asked what 

prices they were willing to pay. Finally, 

AzHHA averaged the hospitals’

responses and imposed those averages 

as the new bill rates for the Per Diem 

Registry. In 1998, AzHHA and the 

participating hospitals extended this 

new pricing scheme to the Travel 

Registry. 

Between 1998 and 2005, AzHHA 

attempted to keep participating 

hospitals and participating agencies 

from negotiating deals outside the 

Registry or abandoning the Registry 

entirely. AzHHA always required 

participating hospitals to try to purchase 

nursing services first from participating 

agencies, and deal with other agencies 

only after participating agencies failed 

to meet their needs. But this 

requirement did not stop some 

participating hospitals from reaching 

agreements with agencies outside the 

Registry; and in 2002, to prevent the 

Registry’s collapse, AzHHA and its 

participating hospitals agreed to expel 

any participating hospital that did not 

use the Per Diem Registry for at least 50 

percent of its per diem nursing services 

needs. At the participating hospitals’

request, AzHHA monitored compliance 


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with this rule, including gathering and 

distributing reports detailing each 

member hospital’s usage. These reports 

revealed that after 2002 participating 

hospitals purchased 70 percent of their 

per diem nursing needs through the Per 

Diem Registry. 

AzHHA’s member hospitals may 

choose to participate in the Per Diem 

Registry, the Travel Registry, or both. 

Over time, more hospitals joined the 

AzHHA Registry: By 2005, 65 hospitals 

participated in either the Travel or Per 

Diem Registry, or both. The hospitals 

participating in the Per Diem Registry 

that year controlled about 80 percent of 

the hospital beds in the Phoenix area 

and about 84 percent of the hospital 

beds in the Tucson Area. Hospitals 

participating in the Travel Registry that 

year controlled about 78 percent of 

hospital beds statewide. Through the 

Per Diem Registry, hospitals purchased 

about 850,000 nursing hours annually, 

totaling approximately $43 million; 

through the Travel Registry, hospitals 

purchased about 2.3 million nursing 

hours annually, totaling approximately 

$116 million. 

In 2005, after AzHHA and 

participating hospitals imposed new bill 

rate structures on agencies participating 

in the Per Diem Registry, including 

reduced overtime and weekend shift 

pay, many of the largest participating 

agencies left the Per Diem Registry. 

Finally, in 2006, while under 

investigation by the United States and 

the State of Arizona, and facing a 

private antitrust lawsuit, AzHHA 

returned the Per Diem Registry to its 

pre-1997 pricing model. To date, 

AzHHA has not revised the Travel 

Registry’s pricing model. The Per Diem 

Registry’s current pricing system, like 

the one in effect until 1997, has allowed 

some price comeptition among agencies, 

but it still has reduced price 

competition among participating 

hospitals purchasing temporary nursing 

services. 

C. The Relevant Markets for Temporary 

Nursing Personnel 

‘‘Per diem nursing’’ is a relevant 

service market. Per diem work offered to 

nurses by nurse staffing agencies is 

distinct from work offered directly to 

nurses by hospitals. Because of the 

distinctive appeal of per diem work, 

when the Per Diem Registry caused bill 

rates to be lower, per diem nurses in 

Phoenix and tucson accepted the 

resulting stagnant or lower wages and 

did not switch to other types of work in 

sufficient quantities to render such a 

reduction in wages unprofitable. 

There are at least two relevant 

geographic markets for per diem nursing 

services in Arizona. Phoenix and 

Tucson are the center of two separate 

geographic markets for per diem nursing 

services because nurses selling per diem 

services are commonly hired on short 

notice, for one or perhaps several days 

of work, and so will not commute more 

than about 75 miles. 

‘‘Travel nursing’’ is a relevant service 

market. Travel work offered to nurses is 

distinct from all other types of work 

available. Because of the distinctive 

nature of travel work, when the Travel 

Registry caused bill rates to be lower, 

travel nurses in Arizona accepted the 

resulting stagnant or lower wages and 

did not switch to other types of work in 

sufficient quantities to render such a 

reduction in wages unprofitable. 

Arizona is the relevant geographic 

market for travel nursing services. 

Travel nurse agencies have not been 

able to defeat AzHHA’s collectively 

imposed bill rates because of the 

number of travel nurses who strongly 

prefer Arizona hospitals, whether due to 

climate, location of friends and family, 

previous work experience, or other 

factors. In addition, Arizona, unlike the 

two other states with the largest demand 

for travel nurses, California and Florida, 

is a member of a multistate nurse 

licensing compact. This compact allows 

nurses licensed in compact states to 

accept a thirteen week assignment in 

Arizona without the licensure hurdles 

imposed by California and Florida. 

Travel nurse agencies incur lower 

margins to contract with participating 

hospitals through the Travel Registry, 

and have not been able to steer travel 

nurses to other states in sufficient 

numbers to defeat AzHHA’s collectively 

imposed bill rates. One of the nation’s 

largest travel nurse agencies left the 

Travel Registry in 1998, but was unable 

over the following two years to redirect 

sufficient numbers of nurses to 

assignments outside Arizona to sustain 

the withdrawal. 

D. The Competitive Effects of the 

AzHHA Registry 

Because most Arizona hospitals 

participated in the AzHHA Registry, it 

has been able, by acting collectively, to 

exercise market power in both the per 

diem and travel nurse markets. The Per 

Diem Registry has accounted for about 

70 percent of participating hospitals’

purchases of per diem nursing services, 

and the Travel Registry has accounted 

for about 90 percent of travel nurse 

agency sales of travel nursing services to 

hospitals in Arizona. The Registry and 

its participating hospitals have imposed 

on nurse staffing agencies contract 

terms, including but not limited to 

lower bill rates, that those agencies 

would otherwise have been able to 

successfully resist. 

AzHHA has lowered bill rates for 

temporary nursing services below 

competitive levels and allowed 

participating hospitals to impose lower 

bill rates on participating agencies than 

the hospitals would have been able to 

negotiate on their own. AzHHA has 

recognized and promoted these reduced 

bill rates as a benefit of participating in 

the Registry. Participating hospitals 

have recognized and viewed these 

reduced bill rates as a reason to join or 

stay in the Registry, in addition to the 

benefits they claim to receive from the 

Registry’s quality-assurance process. As 

an immediate consequence of reducing 

bill rates below the competitive level, 

AzHHA has also caused the wages paid 

to temporary nurses to decrease below 

competitive levels. 

AzHHA has enforced participation in 

the price-setting function of the 

Registry. It tried initially to do so 

through its ‘‘first use’’ policy, which 

required participating hospitals to deal 

with participating agencies before nonparticipating ones. This met with 

limited success, but ultimately proved 

inadequate to restrain some 

participating hospitals’ purchases 

outside the Per Diem Registry. As a 

result, the Registry then adopted a rule 

that each participating hospital had to 

use the Per Diem Registry for at least 50 

percent of its per diem nurse purchases. 

Thus, hospitals cannot freely make 

additional purchases outside the 

Registry because they must maintain a 

50-percent usage rate—for every 

purchase outside the Registry they must 

make another purchase within it. 

Finally, AzHHA expels hospitals that 

fail to meet and maintain the 50-percent 

usage level, thus depriving the hospitals 

of access to the reduced rates negotiated 

with the agencies and also of 

participation in the Registry’s qualityassurance process, which the hospitals 

assert they value. Two years after one of 

the nation’s largest travel nurse agencies 

left the Travel Registry in 1998, it 

rejoined the Travel Registry when it 

found that it lost significant market 

share in Arizona and was hurt in its 

national efforts to recruit travel nurses 

because it could not offer sufficient 

opportunities for those nurses to work 

in Arizona. 

The absence of efficiencies 

corroborates the anticompetitive nature 

of this suppression of bill rates for 

temporary nursing services. ‘‘Volume 

discounts’’ do not explain the lower 

prices the AzHHA Registry has 

commanded because it has not created 

any substantial volume-related 

efficiencies that allow agencies to 


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significantly reduce their per unit (or 

per nurse-hour) costs. Participating 

agencies have not generated significant 

cost savings related to the volume of 

services they have provided through the 

Registry. 

Nor do the efficiencies AzHHA has 

claimed for the AzHHA Registry 

generally explain or justify the rate 

reductions it has imposed on agencies. 

To the extent there are savings from 

negotiating and administering contract 

terms that are not competitively 

sensitive, such savings are minor. 

Moreover, any savings agencies have 

accrued from their participation in 

AzHHA’s quality-assurance process do 

not justify the anticompetitive rate 

agreements: AzHHA’s operations in 

both the Per Diem and Travel Registry 

before 1997, and the Per Diem Registry 

since November 2006, have 

demonstrated that agreements on 

competitively sensitive terms, including 

bill rates, are not reasonably necessary 

for AzHHA, participating hospitals, or 

participating agencies to create quality 

assurance savings. In addition to 

evidence showing that these various 

specific efficiencies do not justify the 

reduction in bill rates, there is generally 

no evidence of any increase in the 

availability of temporary nurse services 

in the relevant markets as a result of the 

Registry. All relevant evidence has 

pointed in the opposite direction. 

In short, the cost savings accruing to 

participating agencies have not 

accounted for the reduction in bill rates 

imposed by the concerted action of the 

Registry and its participating hospitals, 

nor for the reduction in the wages paid 

to temporary nurses. 

E. The Antitrust Laws Apply to 

Agreements Among Buyers 

Buyers as well as sellers may violate 

the antitrust laws. ‘‘Conceptually, 

monopsony power is the mirror image 

of monopoly power.’’ Department of 

Justice Antitrust Division & Federal 

Trade Commission, Improving Health 

Care: A Dose of Competition, ch. 6, at 

13 (2004). As Judge Posner has 

explained, ‘‘[j]ust as a sellers’ cartel 

enables the charging of monopoly 

prices, a buyers’ cartel enables the 

charging of monopsony prices; and 

monopoly and monopsony are 

symmetrical distortions of competition 

from an economic standpoint.’’ Vogel v. 

American Soc. of Appraisers, 744 F.2d 

598, 601 (7th Cir. 1984). And as the 

Supreme Court has recently recognized, 

similar legal standards apply to these 

same basic economic principles. 

Weyerhaeuser Co. v. Ross-Simmons 

Hardwood Lumber Co., 549 U.S. —, 127 

S.Ct. 1069, 1076 (2007) (noting the 

‘‘close theoretical connection between 

monopoly and monopsony’’ and that 

‘‘[t]he kinship between monopoly and 

monopsony suggests that similar legal 

standards should apply to claims of 

monopolization and to claims of 

monopsonization’’); see also North 

Jackson Pharmacy, Inc. v. Caremark RX, 

Inc., 385 F. Supp. 2d 740, 747 (N.D. III. 

2005); Blair & Harrison, Antitrust Policy 

and Monopsony, 76 Cornell Law Rev. 

297, 300 (1991). 

The Supreme Court has also 

recognized that agreements among 

buyers do not necessarily violate the 

antitrust laws, and, in some cases, they 

may promote consumer welfare. In 

Northwest Wholesale Stationers, in the 

context of reviewing a non-price 

agreement among buyers, the Court 

recognized that the agreement could 

help create economies of scale in 

purchasing and logistics, and help 

smaller buyers compete more effectively 

with larger stores by ensuring access to 

inventory that otherwise might not be 

available when it was needed Northwest 

Wholesale Stationers, Inc. v. Pacific 

Stationery and Printing Co., 472 U.S. 

284, 295 (1985). 

Some group purchasing agreements 

may lower the price participating buyers 

pay for goods and services without 

creating deadweight losses. For 

example, the purchasing agreement may 

guarantee a specific volume of 

purchases that allows sellers to realize 

economies of scale and lower their 

average cost of production. Because the 

sellers’ costs are lower, they can accept 

a lower price from the buyers taking 

part in the group purchasing agreement 

without reducing production. Thus both 

the buyers and sellers may benefit from 

the buyers’ agreement, or at least be no 

wore off than they were previously. Cf. 

Broadcast Music, Inc. v. Columbia 

Broadcasting System, Inc., 441 U.S. 1, 

21 (1979) (noting that the substantially 

lowered costs created by blanket 

licensing is ‘‘potentially beneficial to 

both buyers and sellers’’); see also Blair 

& Harrison, Public Policy: Cooperative 

Buying, Monopsony Power, and 

Antitrust Policy, 86 Nw. U. Law Rev. 

331, 338 (1992) (concluding that both 

buyers and sellers should benefit from 

an efficiency-enhancing buying 

cooperative). 

On the other hand, a buyers’ cartel 

forces sellers to accept prices below that 

those sellers would receive in a 

competitive market, or are otherwise not 

explained by sellers’ efficiencies, 

because the cartel members collectively 

exercise market power. See, e.g., Telcor 

Communications, Inc. v. Southwestern 

Bell Telephone Co., 305 F.3d 1124, 

11347–36 (10th Cir. 2002). Just as the 

collective exercise of seller-side market 

power absent sufficient countervailing 

efficiencies will violate section 1 of the 

Sherman Act, the Act prohibits the 

collective exercise of buyer-side 

monopsony power. 

III. Explanation of the Proposed Final 

Judgment 

The proposed Final Judgment will 

prohibit AzHHA and persons with 

notice of the Final Judgment acting in 

concert with AzHHA, including 

hospitals, from reaching agreement on 

bill rates and other competitively 

sensitive contract terms. It will also 

prohibit AzHHA and such persons 

acting in concert with AzHHA from 

boycotting, discriminating against, or 

excluding hospitals or agencies that 

choose not to participate in the Registry, 

or from boycotting or discriminating 

against hospitals based on the extent of 

their participation in the Registry. While 

accomplishing these goals, the proposed 

Final Judgment will allow AzHHA to 

continue is quality-assurance activities. 

Sections III–VII of the proposed Final 

Judgment prescribe what conduct by 

AzHHA and others is prohibited, and 

what is permitted. 

Section III applies the proposed Final 

Judgment, when entered, to AzHHA and 

the AzHHA Service Corporation. The 

language found in Section III tracks that 

found in Federal Rule of Civil Procedure 

65(d), which governs the scope of 

injunctions entered by this Court. It 

confirms that the applicability of the 

proposed Final Judgment extends to the 

limits of this Court’s jurisdiction, and 

includes in its reach any person or 

company not a party, with notice of the 

Final Judgement, who acts in concert 

with AzHHA to violate the terms of the 

proposed Final Judgment. 

Section IV(A) prohibits AzHHA from 

including in the Registry contracts any 

competitively sensitive contract terms, 

including those relating to bill rates, rate 

structures, payment terms between 

hospitals and agencies, cancellation 

policies, bonuses paid to nurses, and 

‘‘first use’’ policies. These prohibitions 

will prevent AzHHA and its 

participating hospitals from jointly 

negotiating bill rates or other 

competitively sensitive contract terms. 

Section IV(B) prohibits AzHHA and 

those acting in concert with AzHHA 

from circumventing the proposed Final 

Judgment, engaging in other 

anticompetitive activity, or exercising 

market power through the Registry. 

Section IV(B) prohibits exclusionary 

behavior or boycotts and stops AzHHA 

from establishing minimum usage levels 

for the Registry. It also prohibits AzHHA 

from collecting competitively sensitive 


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information, except to the extent that 

such information is required to operate 

the Registry, and flatly prohibits 

AzHHA from sharing a Registry 

participant’s competitively sensitive 

information with any hospital, agency, 

or other third party. Finally, Section 

IV(B) requires that AzHHA select 

participating agencies on the basis of 

their compliance with the quality 

assurance activities and not on the basis 

of any competitively sensitive 

information, like bill rates. 

Section V requires AzHHA to comply 

with the proposed Final Judgment upon 

entry by this Court, except for Section 

IV(A)(1)–(6). The proposed Final 

Judgment grants AzHHA ninety (90) 

days from entry of the proposed Final 

Judgment to comply with Section 

IV(A)(1)–(6) by amending the Registry’s 

contract to remove competitively 

sensitive contract terms. The 90-day 

setback will allow AzHHA to make an 

orderly transition to a compliant 

contracting system while still enabling 

relief much more reliably, quickly, and 

inexpensively than would result from 

litigation. 

Section IV of the proposed Final 

Judgment clarifies the scope of the 

prohibitions in Sections IV and V by 

identifying specified activities that 

those sections do not prohibit. Section 

VI(A) lists terms that AzHHA may 

include in the Registry contracts, and 

Section VI(B) describes actions AzHHA 

may take to operate the Registry. Section 

VI(A) and (B) are not intended to be 

exclusive lists of actions permitted to 

AzHHA. 

Section VII of the proposed Final 

Judgment establishes an antitrust 

compliance and notification scheme. It 

requires AzHHA to appoint an Antitrust 

Compliance Officer, and ensure that 

AzHHA’s officers and employees, as 

well as participating hospitals and 

agencies, receive copies of the proposed 

Final Judgment after it has been entered. 

IV. Remedies Available to Potential 

Private Litigants 

Section 4 of the Clayton Act (15 

U.S.C. § 15) provides that any person 

who has been injured as a result of 

conduct prohibited by the antitrust laws 

may bring suit in federal court to 

recover three times the damages the 

person has suffered, as well as costs and 

reasonable attorneys’ fees. Entry of the 

proposed Final Judgment will neither 

impair nor assist the bringing of any 

private antitrust damage action. Under 

the provisions of Section 5(a) of the 

Clayton Act (15 U.S.C. § 16(a)), the 

proposed Final Judgment has no prima 

facie effect in any subsequent private 

lawsuit that may be brought against the 

Defendants. 

V. Procedures Available for 

Modification of the Proposed Final 

Judgment 

The United States, the State of 

Arizona, and Defendants have 

stipulated that the proposed Final 

Judgment may be entered by this Court 

after compliance with the provisions of 

the APPA, provided that the United 

States has not withdrawn its consent. 

The APPA conditions entry upon this 

Court’s determination that the proposed 

Final Judgment is in the public interest. 

The APPA provides a period of at 

least sixty (60) days preceding the 

effective date of the proposed Final 

Judgment within which any person may 

submit to the United States written 

comments regarding the proposed Final 

Judgment. Any person who wishes to 

comment should do so within sixty days 

of the date of publication of this 

Competitive Impact Statement in the 

Federal Register, or the last date of 

publication in a newspaper of the 

summary of this Competitive Impace 

Statement, whichever is later. All 

comments received during this period 

will be considered by the Department of 

Justice, which remains free to withdraw 

its consent to the proposed Final 

Judgment at any time prior to this 

Court’s entry of judgment. The 

comments and the United States’

response to them will be filed with this 

Court and published in the Federal 

Register. 

Written comments should be 

submitted to: Joseph M. Miller, Acting 

Chief, Litigation I Section, Antitrust 

Division, United States Department of 

Justice, 1401 H Street NW., Suite 4000, 

Washington, DC 20530 

The proposed Final Judgment 

provides that this Court retains 

jurisdiction over this action, and the 

parties may apply to this Court for any 

order necessary or appropriate for the 

modification, interpretation, or 

enforcement of the Final Judgment. 

VI. Alternatives to the Proposed Final 

Judgment 

The United States considered, as an 

alternative to the proposed Final 

Judgment, a continuing investigation 

and potential full trial on the merits. 

The United States could also have 

sought preliminary and permanent 

injunctions against the operation of the 

entire Registry. The United States is 

satisfied, however, that the prohibitions 

and requirements required by the 

proposed Final Judgment will 

reestablish competition in the markets 

for temporary nursing services. 

The United States also considered, as 

an alternative to the proposed Final 

Judgment, continuing the investigation 

and naming the participating hospitals 

as defendants. The United States is 

satisfied, however, that the proposed 

Final Judgment, including Section III, 

will adequately reestablish competition 

in the relevant markets for temporary 

nursing services. 

The United States also considered 

requiring the Defendants comply with 

Section IV(A) of the proposed Final 

Judgment within sixty (60) days. 

Ultimately, the United States concluded 

that it was reasonable to allow the 

Defendants 90 days to make an orderly 

transition to a new Program Contract, 

and that giving immediate effect to the 

prohibitions on cartel maintenance 

found in Section IV(B) was adequate 

immediate relief. 

Entry of the proposed Final Judgment 

will avoid the time, expense, and 

uncertainty of litigation or a full trial on 

the merits. 

VII. Standard of Review Under the 

APPA for the Proposed Final Judgment 

The APPA requires that proposed 

consent judgments in antitrust cases 

brought by the United States be subject 

to a 60-day comment period, after which 

the Court shall determine whether entry 

of the proposed Final Judgment ‘‘is in 

the public interest.’’ 15 U.S.C. § 16(e)(1). 

In making that determination, the Court 

shall consider: 

(A) The competitive impact of such 

judgment, including termination of alleged 

violations, provisions for enforcement and 

modification, duration of relief sought, 

anticipated effects of alternative remedies 

actually considered, whether its terms are 

ambiguous, and any other competitive 

considerations bearing upon the adequacy of 

such judgment that the court deems 

necessary to a determination of whether the 

consent judgment is in the public interest; 

and 

(B) The impact of entry of such judgment 

upon competition in the relevant market or 

markets, upon the public generally and 

individuals alleging specific injury from the 

violations set forth in the complaint 

including consideration of the public benefit, 

if any, to be derived from a determination of 

the issues at trial. 

15 U.S.C. § 16(e)(1)(A) & (B). In 2004, 

Congress amended the APPA to ensure 

that courts take into account the abovequoted list of relevant factors when 

making a public interest determination. 

Compare 15 U.S.C. § 16(e) (2004) with 

15 U.S.C. § 16(e)(1) (2006) (substituting 

‘‘shall’’ for ‘‘may’’ in directing relevant 

factors for court to consider and 

amending list of factors to focus on 

competitive considerations and to 

address potentially ambiguous judgment 


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Federal Register / Vol. 72, No. 106 / Monday, June 4, 2007 / Notices 30845 

terms). On the points next discussed, 

the 2004 amendments did not alter the 

substance of the Tunney Act, and the 

pre-2004 precedents cited below remain 

applicable. 

As the United States Court of Appeals 

for the District of Columbia Circuit has 

held, under the APPA a court considers, 

among other things, the relationship 

between the remedy secured and the 

specific allegations set forth in the 

government’s complaint, whether the 

decree is sufficiently clear, whether 

enforcement mechanisms are sufficient, 

and whether the decree may positively 

harm third parties. See United States v. 

Microsoft Corp., 56 F.3d 1448, 1458–62 

(D.C. Cir. 1995). 

With respect to the adequacy of the 

relief secured by the decree, a court may 

not ‘‘engage in an unrestricted 

evaluation of what relief would best 

serve the public.’’ United States v. BNS, 

Inc., 858 F.2d 456, 462 (9th Cir. 1988) 

(citing United States v. Bechtel Corp., 

648 F.2d 660, 666 (9th Cir. 1981)); see 

also Microsoft, 56 F.3d at 1460–62. 

Courts have held that: 

[t]he balancing of competing social and 

political interests affected by a proposed 

antitrust consent decree must be left, in the 

first instance, to the discretion of the 

Attorney General. The court’s role in 

protecting the public interest is one of 

insuring that the government has not 

breached its duty to the public in consenting 

to the decree. The court is required to 

determine not whether a particular decree is 

the one that will best serve society, but 

whether the settlement is ‘‘within the reaches 

of the public interest.’’ More elaborate 

requirements might undermine the 

effectiveness of antitrust enforcement by 

consent decree. 

Bechtel 648 F.2d at 666 (emphasis 

added) (citations omitted); Cf. BNS, 858 

F.2d at 464 (holding that the court’s 

‘‘ultimate authority under the [APPA] is 

limited to approving or disapproving 

the consent decree’’); United States v. 

Gillette Co., 406 F. Supp. 713, 716 (D. 

Mass. 1975) (noting that, in this way, 

the court is constrained to ‘‘look at the 

overall picture not hypercritically, nor 

with a microscope, but with an artist’s 

reducing glass’’); see generally 

Microsoft, 56 F.3d at 1461 (discussing 

whether ‘‘the remedies [obtained in the 

decree are] so inconsonant with the 

allegations charged as to fall outside of 

the ‘reaches of the public interest’ ’’). In 

making its public interest 

determination, a district court must 

accord due respect to the government’s 

prediction as to the effect of proposed 

remedies, its perception of the market 

structure, and its views of the nature of 

the case. United States v. ArcherDaniels-Midland Co., 272 F. Supp. 2d 1, 

6 (D.D.C. 2003). 

Court approval of a final judgment 

requries a standard more flexible and 

less strict than the standard required for 

a finding of liability. ‘‘[A] proposed 

decree must be approved even if it falls 

short of the remedy the court would 

impose on its own, as long as it falls 

within the range of acceptability or is 

‘within the reaches of public interest.’ ’’

United States v. Am. Tel. & Tel. Co., 552 

F. Supp. 131, 151 (D.D.C. 1982) 

(citations omitted) (quoting United 

States v. Gillette Co., 406 F. Supp. 713, 

716 (D. Mass. 1975)), aff’d sub nom. 

Maryland v. United States, 460 U.S. 

1001 (1983); see also United States v. 

Alcan Aluminum Ltd., 605 F.Supp. 619, 

622 (W.D. Ky. 1985) (approving the 

consent decree even though the court 

would have imposed a greater remedy). 

Moreover, the Court’s role under the 

APPA is limited to reviewing the 

remedy in relationship to the violations 

that the United States has alleged in its 

Complaint, and does not authorize the 

Court to ‘‘construct [its] own 

hypothetical case and then evaluate the 

decree against that case.’’ Microsoft, 56 

F.3d at 1459. Because the ‘‘court’s 

authority to review the decree depends 

entirely on the government’s exercising 

its prosecutorial discretion by bringing 

a case in the first place,’’ it follows that 

‘‘the court is only authorized to review 

the decree itself,’’ and not to ‘‘effectively 

redraft the complaint’’ to inquire into 

other matters that the United States did 

not pursue. Id. at 1459–60. 

In its 2004 amendments to the 

Tunney Act, Congress made clear its 

intent to preserve the practical benefits 

of utilizing consent decrees in antitrust 

enforcement, adding the unambiguous 

instruction ‘‘[n]othing in this section 

shall be construed to require the court 

to conduct an evidentiary hearing or to 

require the court to permit anyone to 

intervene.’’ 15 U.S.C. § 16(e)(2). This 

language codified the intent of the 

original 1974 statute, expressed by 

Senator Tunney in the legislative 

history: ‘‘[t]he court is nowhere 

compelled to go to trail or to engage in 

extended proceedings which might have 

the effect of vitiating the benefits of 

prompt and less costly settlement 

through the consent decree process.’’

119 Cong. Rec. 24,598 (1973) (statement 

of Senator Tunney). Rather: 

[a]bsent a showing of corrupt failure of the 

government to discharge its duty, the Court, 

in making its public interest finding, should 

* * * carefully consider the explanations of 

the government in the competitive impact 

statement and its responses to comments in 

order to determine whether those 

explanations are reasonable under the 

circumstances. 

United States v. Mid-America 

Dairymen, Inc., 1977–1 Trade Cas. 

(CCH) ¶ 61,508, at 71,980 (W.D. Mo. 

1977); see also United States v. SBC 

Commc’ns, Inc., Nos. 05–2102 and 05–

2103, 2007 WL 1020746, at *9 (D.D.C. 

Mar. 29, 2007) (confirming that 2004 

amendments to the APPA ‘‘effected 

minimal changes[ ] and that th[e] 

Court’s scope of review remains sharply 

proscribed by precedent and the nature 

of [APPA] proceedings.’’). 

VIII. Determinative Documents 

There are no determinative materials 

or documents within the meaning of the 

APPA that were considered by the 

United States in formulating the 

proposed Final Judgment. 

Dated: May 22, 2007. 

Respectfully submitted, 

Ryan Danks, 

Steven Kramer, 

Seth Grossman, 

Rebecca Perlmutter, 

Attorneys, Litigation I Section, 

United States Department of Justice, 

Antitrust Division, 1401 H Street, NW., 

Suite 4000, Washington, DC 20530, (202) 

307–0001. 

Certificate of Service 

I hereby certify that on May 22, 2007, 

I electronically transmitted the attached 

document to the Clerk’s Office using the 

CM/ECF System for filing and 

transmittal of a Notice of Electronic 

Filing to the following CM/ECF 

registrants: 

Nancy Bonnell, Antitrust Unit Chief, ID 

#016382, Consumer Protection and 

Advocacy Section, Department of Law 

Building, Room #259, 1275 West 

Washington Street, Phoenix, AZ 85007–

2997, (602) 542–7728, Attorney for the 

State of Arizona. 

Andrew S. Gordon, Coppersmith Gordon 

Schermer & Brockelman PLC, 2800 North 

Central Avenue, Suite 1000, Phoenix, AZ 

85004, (602) 381–5460, Facsimile: (602) 

224–6020, Attorney for the Defendants. 

Ryan Danks, 

United States Department of Justice, Antitrust 

Division. 

[FR Doc. 07–2686 Filed 6–1–07; 8:45 am] 

BILLING CODE 4410–11–M 

DEPARTMENT OF JUSTICE 

Drug Enforcement Administration 

Manufacturer of Controlled 

Substances; Notice of Registration 

By Notice dated November 21, 2006, 

and published in the Federal Register 

on December 1, 2006, (71 FR 69592), 

Johnson Matthey Inc., Custom 

Pharmaceuticals Department, 2003 


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