US Hospital Mergers

Mergers

The United States Court of Appeals for the Second Circuit vacates and reverses an antitrust verdict (Chinese vitamin C)
Baker McKenzie (Brussels)
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Baker McKenzie (New York)
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Baker McKenzie (Washington)
The United States Court of Appeals for the Second Circuit (the Second Circuit) in New York has vacated and reversed a USD 147 million antitrust verdict against a Chinese vitamin C manufacturer and its holding company, ruling that the district court should have granted Defendants’ original motion (...)

The US District Court for the Northern District of Illinois Eastern Division denies preliminary injunction on the basis that geographic market analysis was erroneous in a hospital merger case (Advocate Health / NorthShore)
Constantine Cannon (Washington)
Geographic market definition trips up FTC as Federal Court rejects challenge to Advocate-NorthShore Hospital merger*The loss of the Federal Trade Commission (“FTC”) in a hospital merger case in the U. S. District Court for the Northern District of Illinois last week highlights just how tricky (...)

The U.S. District Court for the Northern District of Ohio denies the FTC’s bid to prevent company from acquiring its alleged potential competitor (Steris / Synergy Health)
Skadden, Arps, Slate, Meagher & Flom (New York)
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Skadden, Arps, Slate, Meagher & Flom (New York)
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Skadden, Arps, Slate, Meagher & Flom (Washington DC)
On September 24, 2015, the U.S. District Court for the Northern District of Ohio denied the Federal Trade Commission’s (FTC) bid to enjoin Steris Corporation (Steris) from acquiring its alleged potential competitor, Synergy Health plc (Synergy). The loss breaks a string of victories in merger (...)

The U.S. District Court for the Northern District of Ohio denies the Federal Trade Commission’s bid to enjoin a company from acquiring its alleged potential competitor (Steris/Synergy)
Skadden, Arps, Slate, Meagher & Flom (Washington DC)
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Skadden, Arps, Slate, Meagher & Flom (New York)
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Skadden, Arps, Slate, Meagher & Flom (New York)
On September 24, 2015, the U.S. District Court for the Northern District of Ohio denied the Federal Trade Commission’s (FTC) bid to enjoin Steris Corporation (Steris) from acquiring its alleged potential competitor, Synergy Health plc (Synergy). The loss breaks a string of victories in merger (...)

The U.S. District Court for the Northern District of Ohio denies the FTC bid for a preliminary injunction in a merger case (Steris / Synergy)
Squire Patton Boggs (Washington)
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Proskauer (Washington)
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Proskauer (Washington)
"Prophesy is a good line of business, but it is full of risks." Mark Twain could have been speaking about the FTC’s recent challenge to a merger between the second- and third- largest sterilization companies in the world, Steris Corporation and Synergy Health. FTC v. Steris Corp., 2015 WL (...)

The US Department of Justice sues four hospitals for an anticompetitive agreement in South-Central Michigan (Hillsdale / Branch / ProMedica / Allegiance)
Constantine Cannon (New York)
Antitrust Enforcers Sue Four Hospitals For Carving Up South-Central Michigan* The Antitrust Division of the U.S. Department of Justice and the Michigan Attorney General’s Office are suing four Michigan hospital systems for allegedly engaging in antitrust violations by agreeing to refrain from (...)

A US District Court grants preliminary injunction, reminding that if a group of competitors excludes another class of competitors, the question of whether competition is harmed turns on whether the excluded class offers competitive benefits to the market (Teladoc / Texas Medical Board)
Bona Law (San Diego)
Texas Federal Court Acts for Teladoc in Antitrust Case Against State Medical Board* It is easier to succeed in business without competition than with it. And if you are used to practicing your profession in a particular way, it is quite uncomfortable when new approaches develop that undercut (...)

The US Court of Appeals for the Second Circuit addresses pharmaceutical “product hopping” in decision barring a producer from pulling older version of drug from shelves (Actavis)
Winston & Strawn (Washington)
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Winston & Strawn (Washington)
Few courts have addressed antitrust challenges to pharmaceutical “product hopping,” i.e., the practice of shifting customers from a drug nearing the end of its patent protection to a modified version that is covered by newer patents and thus is protected from generic competition for a longer (...)

The FTC expresses “strong concerns” over State regulations offering to provide antitrust immunity to certain healthcare collaborations undertaken with Department of health’s approval and supervision (COPA)
Sheppard Mullin (Los Angeles)
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Sheppard Mullin (Century City)
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Sheppard Mullin (Century City)
State Regulatory Scheme Offering Antitrust Immunity to Healthcare Collaborations Creates Tension Between Federal and State Antitrust Enforcement* On April 22, 2015, the Federal Trade Commission submitted a public letter to the New York State Department of Health (DOH) expressing “strong (...)

The US Supreme Court holds that state agencies that are controlled by active market participants are not immune from antitrust laws unless the state also provides active supervision (North Carolina State Board of Dental Examiners)
Womble Carlyle Sandridge & Rice (Washington D.C.)
Supreme Court Rules NC Dentist Board Not Immune From Antitrust Scrutiny* Earlier this morning, in a 6-3 decision, the Supreme Court ruled that state professional boards comprised of active market participants are not immune from antitrust laws even though the boards are formally designated as (...)

The US Supreme Court decides on whether nominally public body must show “active supervision” by the state government to enjoy antitrust immunity (North Carolina State Board of Dental Examiners)
Cleveland-Marshall School of Law
North Carolina Dentists is in the Hizzouse, Y’all! Woot Woot!* So, the only real surprise about yesterday’s opinion in North Carolina State Bd of Dental Examiners v. FTC is that it wasn’t unanimous. The strongly worded six-member majority opinion, already receiving early applause (see here and (...)

The US Court of Appeals for the Ninth Circuit provides significant judicial guidance for future health care mergers, casting serious doubt on the viability of a “post-merger efficiencies defense” to a prima facie case of a Section 7 violation (St. Luke’s Health System, Saltzer Medical Group)
Sheppard Mullin (Los Angeles)
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Sheppard Mullin (Century City)
In Highly-Anticipated Decision, Ninth Circuit Affirms That Hospital-Physician Group Merger in St. Luke’s Violated Section 7 And Casts Serious Doubt on Viability of Efficiencies Defense* On February 10, 2015, the Ninth Circuit issued its highly-anticipated decision at the intersection of health (...)

A US Court of Appeals upholds that the theory of harm articulated by the FTC in hospital merger cases is fully applicable to physician acquisition cases and that the positive impact on competition of the claimed efficiencies must be clearly demonstrated (St. Luke’s Health System, Saltzer Medical Group)
BakerHostetler (Washington)
“Oh help me, please doctor, I’m damaged”—What does the Future Hold for Hospital-Physician Acquisitions?* With the ink still drying on the Ninth Circuit’s opinion affirming the Idaho federal district court’s order requiring St. Luke’s Health System to unwind its acquisition of Saltzer Medical Group—a (...)

The US District Court for the Northern District of California receives a complaint likely to provide lessons about manufacturers’ efforts regarding resale prices (Costco / Johnson & Johnson)
University of Michigan
Costco v. J&J: The Latest and Largest in a Long Line of Pricing Cases* It’s not often that one Fortune 50 company sues another – but that’s what happened earlier this week when Costco sued Johnson & Johnson (J&J) in California federal court over J&J’s attempts to limit Costco’s (...)

A US State Court rejects a proposed consent judgement for under-addressing the competitive harm (Commonwealth / Partners Healthcare System)
Simpson Thacher & Bartlett (New York)
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New York State Executive Chamber
Massachusetts Court Unsettles Partners’ Hospital Merger By Nixing Consent Judgment* A Massachusetts state court on Thursday derailed the settlement of a challenge to the proposed merger of Partners Health System with rivals South Shore Health and Educational Corp. (South Shore Hospital) and (...)

U.S. Federal Court Provides Guidance on Treating Joint Ventures as a "Single Entity" for Antitrust Purposes (Premier)
Jones Day (Washington DC)
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Jones Day (Washington DC)
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Jones Day (Cleveland)
The United States District Court for the Southern District of Ohio has unsealed its summary judgment opinion in The Medical Center at Elizabeth Place v. Premier Health Partners. The Court granted summary judgment in favor of the defendants—four hospital systems that operated pursuant to a joint (...)

The US District Court for the Southern District of Ohio holds that undertakings, even previously competing against each other, cease to be separate economic actors once they contractually agree to share in risks and profits by combining all of their income into a single bottom line (Premier Health)
Sheppard Mullin (Los Angeles)
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Sheppard Mullin (Century City)
District Court Weighs in on Level of Integration Required to Shield Health Care Collaborations from Section 1 Scrutiny* In Medical Center at Elizabeth Place v. Premier Health Partners et. al, Case No. 12-cv-26 (S.D. Oh. Oct. 20, 2014), the Southern District of Ohio held that (...)

The US Supreme Court hears oral arguments before interpreting the state action exemption to the antitrust laws (North Carolina Board of Dental Examiners)
University of Michigan
On October 14, 2014, the Supreme Court will hear oral arguments in North Carolina Board of Dental Examiners v. FTC, the latest in its long line of cases interpreting the state action exemption to the antitrust laws. Dozens of amici have written briefs supporting both parties. Those briefs (...)

The US Sixth Circuit Court of Appeals strikes down Ohio hospital merger as anticompetitive (ProMedica Health System)
Norton Rose Fulbright (Washigton)
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Norton Rose Fulbright (Austin)
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Norton Rose Fulbright (Austin)
Continuing the Federal Trade Commission’s (the FTC’s) string of wins in hospital merger cases, the United States Court of Appeals for the Sixth Circuit (the Sixth Circuit) upheld an FTC decision ordering the largest hospital provider in the Toledo, Ohio area to divest a smaller independent (...)

The US Court of Appeals for the Sixth Circuit confirms the decision of the FTC regarding a merger in the healthcare sector (ProMedica)
Skadden, Arps, Slate, Meagher & Flom (Washington DC)
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Skadden, Arps, Slate, Meagher & Flom (New York)
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General Electric (Washington)
On April 22, 2014, the United States Court of Appeals for the Sixth Circuit handed the Federal Trade Commission (FTC or Commission) another significant victory in a hospital merger, ruling that the FTC’s decision and order requiring that ProMedica divest St. Luke’s, another Lucas County, (...)

The US District Court for the Eastern District of Virginia denies motion to dismiss hearing in a case concerning an alleged exclusion from competing in health care markets (Dr. Yvoune Kara Petrie / Virginia Board of Medicine)
Bona Law (San Diego)
The Virginia Board of Medicine Violated the Antitrust Laws* Last week (17-23 March 2014) was a big antitrust week for the new law firm of Bona Law PC. First, it was the ABA Antitrust Spring Meeting, where antitrust lawyers from all over the world descend upon Washington, DC to obsess over (...)

The US Supreme Court grants petitions for writs of certiorari in a case dealing with the question whether a state regulatory board created by state law can be treated as a private actor under antitrust law (North Carolina Board of Dental Examiners)
Bona Law (San Diego)
Applying the Antitrust Laws to Anticompetitive State and Local Government Conduct* Update: The Supreme Court granted review in North Carolina Board of Dental Examiners v. FTC on March 3, 2014 Lawyers, judges, economists, law professors, policy-makers, business leaders, trade-association (...)

The US Supreme Court grants petition in a case concerning alleged exclusion of non-dentists from offering tooth-whitening services (North Carolina Board of Dental Examiners)
Orrick, Herrington & Sutcliffe (San Francisco)
U.S. Supreme Court to Decide When Professional Licensing Bodies Have Antitrust Immunity* The state action immunity doctrine shields private actors from antitrust liability if their activities are actively supervised by a state. But arms of the state itself generally don’t have to satisfy the (...)

The Court of Appeals for the 9th Circuit upholds the judgment of the lower court dismissing claims of conspiracy to restrain trade and attempted monopolization on the market for prosthetic microprocessor knees (DAW Industries / Hanger Orthopedic Group)
Sheppard Mullin (Los Angeles)
Ninth Circuit Once Again Affirms That Malicious Actions To Destroy A Competitor Do Not State An Antitrust Claim Unless Accompanied By Injury To Competition* On February 24, 2014, the Ninth Circuit Court of Appeals affirmed the lower court’s grant of summary judgment dismissing DAW Industries’ (...)

A US District Court orders the largest care system in Idaho to divest independent multi-specialty physician practice (St. Luke’s Health System / Saltzer Medical)
Wolters Kluwer (Riverwoods)
Combination of Idaho’s Largest Health System and Largest Physician Practice Must Be Unwound* Within the span of about two weeks, each of the federal antitrust agencies has been handed a major win in their merger enforcement efforts. Last Friday, it was the Federal Trade Commission’s turn. The (...)

The United States District Court for the District of Idaho orders to unwind a hospital/physician group merger (St. Luke’s Health System / Saltzer Medical)
Paul Hastings (Washington)
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Paul Hastings (San Francisco)
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Paul Hastings (Los Angeles)
On January 24, 2014, the United States District Court for the District of Idaho ordered St. Luke’s Health System to unwind a merger with the Saltzer Medical Group. The outcome represented a significant victory for the various parties, including the Federal Trade Commission (“FTC”) and the State (...)

The US Patient Protection and Affordable Care Act is entering into force and affecting the numbers of market entrants into different States’ health insurance markets
CRA International (Boston)
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CRA International (Boston)
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CRA International (Boston)
The health insurance exchange landscape* Background A central feature of the Patient Protection and Affordable Care Act (ACA) is the establishment of exchanges to “offer Americans competition, choice, and clout” when purchasing health insurance. These exchanges are intended to provide access to (...)

The US FTC agrees to "unusual" remedy in hospitals merger case (Phoebe Putney Health System)
Jones Day (Washington DC)
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Jones Day (Washington DC)
The U.S. Federal Trade Commission has settled its long running dispute with the Phoebe Putney Health System, Palmyra Park Hospital, and the Hospital Authority of Albany-Dougherty County over the Hospital Authority’s acquisition of Palmyra in Albany, Georgia. Memorialized in a consent decree, the (...)

The US Supreme Court issues first ruling on antitrust legality of reverse-payment drug patent settlements (Actavis)
Rutgers University
On June 17, 2013, in FTC v. Actavis, the U.S. Supreme Court for the first time examined the antitrust legality of agreements by which brand-name drug companies pay generics to delay entering the market. Justice Stephen Breyer wrote the majority opinion for five Justices, concluding that these (...)

A U.S. Court of Appeals narrows the state action exemption (North Carolina State Board of Dental Examiners)
Jones Day (Washington DC)
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Jones Day (Washington DC)
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Columbia University (New York)
The Fourth Circuit Court of Appeals has ruled that North Carolina’s Dental Board cannot ban non-dentists from offering teeth-whitening service, upholding the Federal Trade Commission’s finding that the practice was anticompetitive. The ruling represents the FTC’s latest victory in its push to (...)

The US District Court, 9th Circuit refuses to dismiss the plaintiffs’ below-cost pricing claims raised under Unfair Practices Act in respect of clinical laboratory testing services (Rheumatology Diagnostic Laboratory/Aetna)
Orrick, Herrington & Sutcliffe (San Francisco)
Is the California Unfair Practices Act a Free Pass on Motions to Dismiss?* Probably not, but UPA claims can be tough to defeat at the motion to dismiss stage. Witness Rheumatology Diagnostics Laboratory, Inc. v. Aetna, Inc., 2013 U.S. Dist. LEXIS 151128 (N.D. Cal. Oct. 18, 2013) (Orrick, J.), (...)

The US FTC settles illegal information exchange allegations with hair restoration company (Bosley)
Kirkland & Ellis (New York)
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Skadden, Arps, Slate, Meagher & Flom (New York)
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General Electric (Washington)
On April 8, 2013, the Federal Trade Commission (FTC) announced a proposed settlement with hair restoration company Bosley, Inc. to resolve allegations that Bosley illegally exchanged competitively sensitive, nonpublic business information with competitor HC (USA), Inc., commonly known as Hair (...)

The US Supreme Court confirms the narrow scope of "State Action" doctrine (FTC v. Phoebe Putney)
Jones Day (Washington DC)
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Jones Day (Washington DC)
In FTC v. Phoebe Putney, the Supreme Court has unanimously reversed the Eleventh Circuit holding that a Georgia hospital authority’s acquisition of a hospital was covered by state-action immunity, emphasizing that "state-action immunity is disfavoured". The Supreme Court held that, as the State (...)

The US Court of Appeals for the 9th Circuit affirms judgment that incompatibility of products did not constitute monopolization on the market for pulse oximetry monitors (Tyco Health)
Stanford University - Stanford Law School
U.S. 9th Circuit affirms judgment that incompatibility of products did not constitute monopolization* On 6 January 2010 the U.S. Court of Appeals for the 9th Circuit affirmed a U.S. District Court (Central District of California) grant of summary judgment on a monopoly maintenance claim (...)

The US FTC jointly with the Pennsylvania Attorney General oppose proposed acquisition in the health care industry (RHS / SIR)
Sheppard Mullin (Los Angeles)
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Sheppard Mullin (Century City)
Large General Acute-Care Hospital Abandons Acquisition Of 15-Bed Surgical Specialty Center As A Result Of FTC Challenge* Just three days after the Federal Trade Commission, jointly with the Pennsylvania Attorney General, issued an administrative complaint challenging Reading Health System’s (...)

A US Attorney General launches a wide investigation into whether increasing consolidation among hospitals and physician groups may be resulting in supra-competitive prices for medical care
Sheppard Mullin (Los Angeles)
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Sheppard Mullin (Century City)
California Attorney General Becomes the Latest Antitrust Enforcer to Investigate Hospital/Doctor Group Combinations* California’s Attorney General has recently launched a broad investigation into whether increasing consolidation among hospitals and physician groups may be resulting in (...)

The US District Court of Detroit dismisses antitrust claims against practice of requiring hospitals to enter into "MFN-Plus" contracts (City of Pontiac / Blue Cross Blue Shield)
Sheppard Mullin (Los Angeles)
District Court Dismisses Follow-On Suit Challenging Blue Cross’s “MFN-Plus’ Contracts Under Both Per Se and Rule of Reason Standards* The District Court for the Eastern District of Michigan recently dismissed antitrust claims brought by the City of Pontiac against Blue Cross Blue Shield of (...)

The US FTC announces consent agreement to address its concerns that a proposed acquisition would reduce competition in the provision of acute inpatient psychiatric services in three local markets (Universal Health Services / Psychiatric Solutions)
Skadden, Arps, Slate, Meagher & Flom (Washington DC)
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Skadden, Arps, Slate, Meagher & Flom (Palo Alto)
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Kirkland & Ellis (New York)
On November 15, the Federal Trade Commission (FTC) announced a proposed consent agreement to address the agency’s allegations that the $3.1 billion acquisition of Psychiatric Solutions, Inc. by Universal Health Services, Inc. (UHS) would reduce competition in the provision of acute inpatient (...)

The US DoJ issues in conjunction with the Department of Health and Human Services final statement as regards collaborations of independent health care providers and provider groups
Sheppard Mullin (Los Angeles)
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Sheppard Mullin (Century City)
No Mandatory Antitrust Review for ACOs* The Department of Justice and Federal Trade Commission recently issued their final "Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program" pursuant to the 2010 Patient (...)

The US FTC and the US DOJ issue final policy statement of antitrust enforcement policy regarding "accountable care organizations"
Mayer Brown (Washington)
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Mayer Brown (Washington)
Analysis of Policy Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations* Section 2706 of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 ("PPACA" or the "Act") authorizes physicians, hospitals and other (...)

The US Supreme Court denies petition to review alleged antitrust conspiracy case in the health care sector (UPMC / West Penn Allegheny Health System)
Wolters Kluwer (Riverwoods)
Antitrust Decision from Supreme Court Unlikely During Current Term* It is beginning to look like the U.S. Supreme Court will not be taking up any antitrust cases in the current term. Last week, the Court denied six petitions for review in antitrust-related matters. Just yesterday, the Court (...)

The US District Court for the Eastern District of Michigan explains its denial of motion to dismiss in Most Favored Nation -MFN- clauses decision in the health care industry (Blue Cross Blue Shield of Michigan)
Wolters Kluwer (Riverwoods)
Federal/State Antitrust Suit Against Blue Cross Blue Shield of Michigan Can Proceed* Last week, the federal district court in Detroit denied Blue Cross Blue Shield of Michigan’s motion to dismiss a federal/state antitrust action challenging the health insurer’s use of most favored nation (MFN) (...)

A US Court of Appeals precludes tying claims brought by an hospital upholding the direct-purchaser rule under the Illinois Brick doctrine (Warren General Hospital/Amgen)
Wolters Kluwer (Riverwoods)
Illinois Brick Direct-Purchaser Rule Precludes Tying Claims by Hospital* The U.S. Court of Appeals in Philadelphia earlier this week reaffirmed the “bright-line” rule limiting federal antitrust standing to direct purchasers. The court upheld dismissal (CCH 2010-1 Trade Cases ¶77,043) of an (...)

A US Court of Appeals rules for an hospital holding that its campaign to block a potential rival does not violate s. 2 of the Sherman Act and is protected from antitrust liability under the Noerr-Pennington doctrine (Mercatus Group, Lake Forest Hospital)
Wolters Kluwer (Riverwoods)
First Amendment Rights Provide Antitrust Shield for Successful Petitioning to Block Potential Rival* How far can a competitor go in an effort to convince a local government to block a potential rival from setting up shop in its area without running afoul of the antitrust laws? Last week, the (...)

The US FTC issues an opinion denying antitrust exemption to a dental board blocking non-dentists from providing teeth-whitening services in accordance to the state action doctrine and democracy rules (The North Carolina State Board of Dental Examiners)
Cleveland-Marshall School of Law
North Carolina Dentists and the FTC’s Anti-Exemptions Mission: Is Antitrust Consistent With Democracy? (Yes, actually. It is.)* Some commentators are pretty alarmed over the Federal Trade Commission’s ruling earlier this year denying antitrust immunity for a North Carolina regulatory board’s (...)

A US Federal Court of Appeals issues a decision in healthcare sector clarifying the bounds of lawful information exchanges in pre-merger due diligence (Omnicare, UnitedHealth)
White & Case (Washington)
Federal Appeals Court Clarifies the Bounds of Lawful Information Exchanges in Pre-Merger Due Diligence* Information sharing between merging parties is a crucial part of pre-merger due diligence, yet courts have rarely weighed in to clarify when, if ever, such information exchanges run afoul of (...)

The US FTC sues to undo completed acquisition in the healthcare industry approved by bankruptcy court (LabCorp, Westcliff)
Jones Day (Washington DC)
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Jones Day (Washington DC)
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Skadden, Arps, Slate, Meagher & Flom (Washington DC)
The Federal Trade Commission has filed an administrative lawsuit seeking to undo Laboratory Corporation of America’s (« LabCorp ») acquisition of Westcliff Medical Laboratories, Inc. (« Westcliff »). According to the agency’s December 1 complaint, the merger will substantially lessen competition (...)

The US FTC sues to undo completed acquisition in the healthcare industry approved by bankruptcy court (LabCorp, Westcliff)
Jones Day (Washington DC)
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Jones Day (Washington DC)
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Skadden, Arps, Slate, Meagher & Flom (Washington DC)
The Federal Trade Commission has filed an administrative lawsuit seeking to undo Laboratory Corporation of America’s (« LabCorp ») acquisition of Westcliff Medical Laboratories, Inc. (« Westcliff »). According to the agency’s December 1 complaint, the merger will substantially lessen competition (...)

The US DoJ challenges "most favoured nations" clauses in the healthcare sector, analyzing their anticompetitive effects under section 1 of the Sherman Act (Blue Cross Blue Shield of Michigan)
Richard Wolfram, Esq. (New York)
‘Most Favored Nations’ (MFN) Clauses under the Spotlight: U.S. v. Blue Cross Blue Shield of Michigan — When Might Otherwise Competitively Neutral or Procompetitive MFN Clauses Violate the Antitrust Laws?* On October 18, 2010, the U.S. Department of Justice and the State of Michigan sued Blue (...)

The US DoJ and the State of Michigan file a complaint against health insurance provider alleging that its most favored nation clauses violate section 1 of the Sherman Act (Blue Cross Blue Shield of Michigan)
Wolters Kluwer (Riverwoods)
Health Insurer Sued over Most Favored Nation Clauses* It has been more than a decade since the U.S. Justice Department has brought an antitrust challenge to enjoin the use of “most favored nation” clauses in the health care industry. Many of the more recent, civil non-merger actions against (...)

The US DoJ targets so-called “most favored nation” - MFN - agreements in the health care industry (Blue Cross Blue Shield of Michigan - BCBSM)
Gibson Dunn (New York)
U.S. Dep’t of Justice Targets MFN Agreements* The U.S. Department of Justice (DOJ) is seeking to curb the use of so-called “most favored nation” (MFN) agreements — a common business practice that the DOJ believes can sometimes result in anticompetitive effects when entered into by a dominant (...)

The US District Court for the District of Minnesota dismisses FTC complaint seeking divestiture and disgorgement remedy in consummated acquisition in the healthcare industry (Lundbeck)
Jones Day (Washington DC)
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Jones Day (Washington DC)
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Jones Day (Washington DC)
In a decision that was filed under seal in late August but released publicly just last week, the U.S. District Court for the District of Minnesota dismissed with prejudice the complaint filed by the Federal Trade Commission (FTC) and the State of Minnesota challenging the already-consummated (...)

A US Court of Appeals follows a judicial trend applying the "attribution" test under s. 2 of the Sherman Act concerning bundled discounts in the healthcare sector (Southeast Missouri Hospital)
University of Pennsylvania (Philadelphia)
Are the Courts Moving Toward a Consensus on Bundled Discounts and §2 of the Sherman Act?* The Eighth Circuit’s recent decision in Southeast Missouri Hospital v. C.R. Bard, Inc., ___ F.3d ___, 2010 WL 3220600 (8th Cir. Aug. 17, 2010), aligns this Circuit with the Ninth Circuit’s decision in (...)

The California Supreme Court rejects pass-on defense under Cartwright Act in price fixing case in the pharmaceutical industry (Clayworth, Pfizer)
Wolters Kluwer (Riverwoods)
California Supreme Court Rejects Pass-On Defense in Price Fixing Case* By Jeffrey May, Wolters Kluwer Law & Business In a case of first impression, the California Supreme Court recently decided that alleged victims of a price fixing scheme can pursue treble damages claims under the (...)

The US FTC requires an unusual method of testing for a less anticompetitive purchaser by offering the sale before completing the requisite due diligence, then clearing the merger in the acute care facilities industry (King’s Daughters Hospital / Scott & White)
Milbank, Tweed, Hadley & McCloy (New York)
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Jones Day (San Francisco)
Healthcare reform and concerns about consolidation in the health care industry juxtaposed with continuing economic distress provided a fascinating backdrop for the Federal Trade Commission’s (FTC’s) recent investigation of Scott & White Healthcare’s consummated acquisition of King’s (...)

The US FTC employs a creative remedy, requiring the offer of divestiture to determine the existence of a viable alternative purchaser, before approving the merger of acute care hospitals (King’s Daughters Hospital / Scott & White)
Cleary Gottlieb Steen & Hamilton (Cologne)
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Cleary Gottlieb Steen & Hamilton (Washington)
After a decade of what was perceived by many as relatively restrained merger enforcement, the Obama administration has repeatedly and vocally vowed to “reinvigorate antitrust enforcement” and to “take effective action to stop or restructure mergers that are likely to harm consumer[s]”. Many (...)

The US Nevada Attorney General, operating in conjunction with the US DOJ, imposes divestiture and other conduct remedies, such as making charitable contributions and prohibiting most-favored nation clauses, as conditions precedent to approving a merger of health plan insurance companies (UnitedHealth / Sierra Health)
Attorney General - State of Nevada
On February 25, 2008, Nevada Attorney General Catherine Cortez Masto filed a complaint in federal court in Nevada, alleging that the proposed acquisition of Sierra Health Services, Inc. (“Sierra”) by UnitedHealth Group Incorporated (“United”) violated federal and state antitrust laws, reducing (...)

The US DoJ requires divestiture of the Medicare Advantage line, while the Attorney General of Nevada adds conduct remedies, such as the implementation of internal firewalls, before clearing a merger in the market for health plans (UnitedHealth / Sierra Health)
Mintz Levin Cohn Ferris Glovsky and Popeo PC (Washington)
UnitedHealth Group Inc. (UnitedHealth) recently entered into a consent decree with federal and stateantitrust enforcement authorities in connection with its proposed acquisition of Sierra Health Services, Inc. (Sierra). The remedies secured by theDepartment of Justice and the Nevada State (...)

The US DoJ seeks divestiture and conduct remedies after breaking new ground by analyzing the anticompetitive impact on the Medicare Advantage system (UnitedHealth / Sierra Health)
Baker Botts (Washington)
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U.S. Department of Health and Human Services (Washington DC)
On February 25, 2008, UnitedHealth Group (United) and Sierra Health Services, Inc. (Sierra) announced that they would proceed with a merger whereby United will acquire all outstanding shares of Sierra in a transaction valued at $2.6 billion. Their statement came shortly after the United States (...)

A US District Court dismisses based on the statute of limitations an antitrust complaint alleging a refusal to deal with a professional association of cardiologists expressed by an operator of five hospitals in Arkansas (Little Rock Cardiology Clinic / Baptist Health)
Sheppard Mullin (Los Angeles)
What Part of “No” Don’t You Understand? Unequivocal Refusal to Deal Triggers Statute of Limitations* Little Rock Cardiology Clinic v. Baptist Health, 573 F. Supp. 2d 1125 (E.D. Ark., August 29, 2008). Little Rock Cardiology Clinic (“LRCC”) is a professional association of cardiologists practicing (...)

The US FTC dismisses merger challenge after parties publicly announced to abandon the proposed acquisition in the healthcare industry (Inova / PWHS)
Skadden, Arps, Slate, Meagher & Flom (Washington DC)
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Skadden, Arps, Slate, Meagher & Flom (New York)
Inova Health System Foundation (Inova) and Prince William Health System, Inc. (PWHS) announced today that they will abandon their proposed merger. This announcement comes after the Federal Trade Commission sought to preliminarily enjoin the merger so that it could conduct a “Fast Track” (...)

The US Court of Appeals for the 9th Circuit rules that bundled discounts will not support a claim under s. 2 of the Sherman Act unless the discounts are below an appropriate measure of costs (Cascade Health Solutions/PeaceHealth)
Winston & Strawn (New York)
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Haug Partners (New York)
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Winston & Strawn (New York)
On September 4, 2007 the United States Court of Appeals for the Ninth Circuit issued its much-anticipated decision in Cascade Health Solutions (fka McKenzie- Williamette Hospital) v. PeaceHealth, et al., No. 05-35627, 2007 WL 2473229 (9th Cir. Sept. 4, 2007). The court held that bundled pricing (...)

The US Court of Appeals for the 9th Circuit applies a cost-based test to attempted monopolization claim premised on multiproduct discounting (Cascade Health Solutions / PeaceHealth)
Skadden, Arps, Slate, Meagher & Flom (Washington DC)
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Skadden, Arps, Slate, Meagher & Flom (New York)
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Skadden, Arps, Slate, Meagher & Flom (New York)
The Ninth Circuit evaluated the antitrust implications of multiproduct or “bundled” discounts in Cascade Health Solutions v. PeaceHealth, CV-02-06032 (Sept. 4, 2007). In doing so, the Ninth Circuit rejected the controversial Third Circuit rule of LePage’s Inc. v. 3M, 324 F.3d 141 (3d Cir. 2003), (...)

The US DOJ requires termination of West Virginia Medical Center market allocation agreement (Charleston Area Medical Center, CAMC)
Jones Day (Washington DC)
On February 6, 2006, the Department of Justice (« DOJ ») filed a lawsuit in U.S. District Court in Charleston, West Virginia alleging that a market allocation agreement between Charleston Area Medical Center, Inc. (« CAMC ») and HCA Inc. (« HCA ») violated Section 1 of the Sherman Act. The DOJ (...)

A US Court of Appeals finds unlawful maintenance of dominant position on the market for sale of prefabricated artificial teeth (Dentsply International)
Sheppard Mullin (Los Angeles)
Dentsply International, Inc. In Violation Of Section 2 For Monopoly Maintenance Through Use Of Exclusivity Clauses* In a reversal of the dismissal of the Department of Justice Antitrust Division (DOJ) complaint, alleging violations of Section 1 and 2 of the Sherman Act and Section 3 of the (...)

The US District Court for the Northern District of California hold that the State failed to establish prima facie case that a hospital merger would have anticompetitive effects (Sutter Health / Summit / Alta Bates)
Kentucky Department of Financial Institutions
The State of California brought suit against two hospitals claiming that the proposed merger would have anticompetitive effect in violation of Clayton Act. The State moved for preliminary injunction preventing merger from happening. Background: Defendants Summit and Alta Bates are hospitals (...)

The US Court of Appeals for the Eighth Circuit reverses a district court’s order enjoining the merger of two hospitals (Tenet Healthcare / Poplar Bluff Physicians Group)
Kentucky Department of Financial Institutions
The FTC filed a motion for a preliminary injunction to block the proposed acquisition of Tenet Healthcare and Poplar Bluff Physicians Group, doing business as Doctors’ Regional Medical Center, in Poplar Bluff, Missouri. The FTC alleged that the proposed merger of the only two general hospitals (...)

The US District Court for the Eastern District of New York allows the two largest most prestigious hospitals on Long Island to merge (Long Island Jewish Medical Center / Norton Shore Health)
Kentucky Department of Financial Institutions
The FTC brought antitrust action under Section 7 of the Clayton Act to prevent merger of two not-for-profit hospitals in Long Island, New York. The New York healthcare industry has experience significant changes prior to the proposed merger of the two hospitals. Further complicating the (...)

The US District Court hold that the government had failed to establish the geographic market, and therefore, failed to establish that a hospital merger would have anticompetitive effects (Mercy / Finley)
Kentucky Department of Financial Institutions
Mercy Health Center (Mercy) and Finley Hospital (Finley) are the only two general acute care hospitals in Dubuque, Iowa. The two hospitals agreed to merge and form a partnership, Dubuque Regional Health Services. On June 10, 1994, the government filed a complaint seeking injunctive relief (...)

The US Eighth Circuit Court of Appeals affirms a district court decision in concluding that the FTC’s proposed market definition for a hospital merger was an unreasonable approach (Freeman / Oak Hill)
Kentucky Department of Financial Institutions
The FTC brought suit seeking a preliminary injunction to prevent the merger of two hospitals in Joplin, Missouri, contending the transaction would have anticompetitive effects in violation of Section 7 of the Clayton Act. The City of Joplin, Missouri, a community of approximately 40,000 (...)

The US Eleventh Circuit Court of Appeals hold that a hospital’s decision to acquire a competing hospital in the same county was not vioaltive of the Clayton Act under the state action exemption to federal antitrust laws (Hospital Board of Directors of Lee County / Cape Coral Medical Center)
Kentucky Department of Financial Institutions
The FTC filed a complaint for a preliminary injunction and a temporary restraining order to prevent the Hospital Board of Directors of Lee County, a nonprofit public organization which owns and operates Lee Memorial Hospital, from acquiring the assets of Cape Coral Medical Center, Inc., which (...)

The Pennsylvania Attorney General negotiates creative consent decrees that allowed hospital mergers to be consummated in exchange for the merging parties agreeing to a number of conditions (Providence Health System / North Central Pennsylvania Health System)
Kentucky Department of Financial Institutions
In two hospital merger cases, the Pennsylvania Attorney General negotiated fairly novel and creative consent decrees, which permitted the mergers to be consummated in exchange for the merging parties agreeing to a number of conditions. These conditions included numerous provisions to protect (...)

The US 11th Circuit rejects the proposed acquisition of a nonprofit hospital of another area hospital (University Hospital / St Joseph Hospital)
Kentucky Department of Financial Institutions
The Federal Trade Commission (“FTC”) sought preliminary injunction to prevent defendants University Hospital and St. Joseph Hospital of August, Georgia from consummating a proposed asset acquisition agreement, alleging the proposed merger acquisition would violate Section 7 of the Clayton Act. (...)

The US Court of Appeals Seventh Circuit affirms lower court’s decision to enjoin proposed consolidation of nonprofit hospitals as violative of antitrust laws (RMC / SAC)
Kentucky Department of Financial Institutions
On September 27, 1987, Rockford Memorial Corporation (“RMC”), a not-for-profit corporation which owns and operates a general acute care hospital in Rockford, Illinois, and SwedishAmerican Corporation (“SAC”), a not-for-profit corporation which also owns and operates a general acute care hospital in (...)

The US District Court for the Western District of Virginia rejects the government’s attempt to stop a proposed merger of two not-for-profit hospitals (Carilion Health System / Community Hospital of Roanoke Valley)
Kentucky Department of Financial Institutions
The United States Justice Department (“DOJ”) filed suit to prevent defendants, Carilion Health System, a not-for-profit corporation which owns and operates Roanoke Memorial Hospitals, and Community Hospital of Roanoke Valley, a not-for-profit corporation which owns and operates Community Hospital (...)

The US FTC holds that a for-profit hospital chain’s acquisition of a competing hospital is in violation of § 7 of the Clayton Act and § 5 of the FTC Act (AMI / AMISUB)
Kentucky Department of Financial Institutions
American Medical International, Inc. (“AMI”) is a Delaware corporation engaged in the operation and management of proprietary hospitals in the United States and in foreign countries. AMI owns approximately 64 hospitals in the United States and abroad and it is the third largest proprietary (...)

Procedures

The US Supreme Court says that judges who determine foreign law in federal courts are not strictly bound by foreign government’s statements (Animal Science Products / Hebei Welcome Pharmaceutical)
Bona Law (San Diego)
In an antitrust case deciding a non-antitrust-specific issue, the US Supreme Court held in Animal Science Products, Inc. v. Hebei Welcome Pharmaceutical Co.(the Vitamin C Antitrust Litigation) that to determine foreign law in federal courts, judges are not strictly bound by that foreign (...)

The US Court of Appeal for the Ninth Circuit overturns judgment of the District Court which rejected a class action on the basis of lack of evidence on potential substitutes in geographic markets (Sutter Health)
Constantine Cannon (New York)
Health Plan Members Convince Ninth Circuit to Revive Antitrust Class Action Against Dominant Northern California Healthcare Provider Sutter Health*An antitrust class action challenging the dominance of healthcare provider Sutter Health in Northern California received a new lease on life Friday (...)

The US Court of Appeals for the Ninth Circuit opens new window for removal of State court cases to federal court (Roth / CHA Hollywood Medical Center)
Jones Day (Los Angeles)
A defendant generally may remove a civil action from state court to federal district court if the district court would have had jurisdiction had the action been originally filed in that court. 28 U.S.C. § 1441(a). For years it seemed that a defendant had only two windows of time in which to (...)

The US Supreme Court decides a case interpreting the doctrine of state action immunity from federal antitrust liability (Phoebe Putney Health System)
University of Indiana - Maurer School of Law (Indianapolis)
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University of Indiana - Maurer School of Law (Indianapolis)
I. The State Action Doctrine State Action immunity from the application of U.S. antitrust law was established by the U.S. Supreme Court’s decision in Parker v. Brown. Based on principles of federalism and deference to state powers to structure their own economic policy, the doctrine allows (...)

The US Supreme Court unanimously rejects a Georgia state-sanctioned hospital authority’s claim that its acquisition of a competing hospital was immune from antitrust scrutiny under the state-action doctrine (FTC / Phoebe Putney)
Cleveland-Marshall School of Law
Phoebe Putney: A Quick Post-Mortem, and Some Thoughts on the Next Justice Stevens* I often feel a certain deflation after the Supreme Court decides an antitrust case. After watching a case for months, prognosticating about it with other antitrusters, reading umpteen blog posts, reading the (...)

The US Supreme Court limits state-action immunity in hospital merger (Phoebe Putney Health System)
Paul Hastings (San Francisco)
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Paul Hastings (San Francisco)
On February 19, 2013, the Supreme Court visited a corner of the antitrust map that it last glimpsed during the Reagan Administration—the state action doctrine. The case that prompted this sojourn, FTC v. Phoebe Putney Health System, Inc., arose when a hospital authority in Albany-Dougherty (...)

The US Supreme Court narrows "State-Action" doctrine in hospital merger challenged by the US FTC (Phoebe Putney)
Skadden, Arps, Slate, Meagher & Flom (New York)
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Skadden, Arps, Slate, Meagher & Flom (Palo Alto)
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General Electric (Washington)
In a unanimous decision issued on February 19, 2013, the U.S. Supreme Court ruled that the state-action doctrine did not immunize Phoebe Putney Health System’s acquisition of Palmyra Park Hospital in Albany, Georgia. The decision immediately was hailed by FTC Chairman Jon Leibowitz as "a big (...)

The US Southern District of New York addresses the question of standing for named class representatives (DDAVP Indirect Purchaser Antitrust Litigation)
Cohen Milstein (Washington)
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Cohen Milstein (New York)
When class actions in recent years have been brought asserting claims on behalf of indirect purchasers under state laws that have repealed Illinois Brick, defendants have frequently argued that named class representatives lack "standing" to assert claims in a class action under the laws of (...)

The US District Court for the Eastern District of Pennsylvania certifies a class in a price-fixing conspiracy case against two leading blood reagent producers (Blood Reagents Antitrust Litigation)
Cohen Milstein (Washington)
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Cohen Milstein (New York)
The plaintiffs, who alleged a price-fixing conspiracy between two leading blood reagent producers, moved for class certification. The court began by noting its duty to perform a rigorous analysis and to find by a preponderance of the evidence that each requirement of Rule 23 had been satisfied (...)

The US Third Circuit answers whether a distributor is a direct purchaser (Hypodermic Products Antitrust Litigation)
Cohen Milstein (Washington)
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Cohen Milstein (New York)
In this judgment, the Third Circuit was asked to answer an increasingly common question in antitrust litigation in the medical industry: whether a distributor who purchases a product from a manufacturer, albeit pursuant to prices negotiated by a group purchasing organization at the behest of (...)

The US Seventh Circuit clarifies the expert testimony standards in connection with class certification (Mesner/Northshore Univ. Health)
Cohen Milstein (Washington)
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Cohen Milstein (New York)
In this opinion, addressed above with respect to the class certification element of predominance, the Seventh Circuit also clarified the standards trial courts should use in evaluating expert testimony submitted in connection with class certification. The plaintiffs filed a motion seeking to (...)

The US Seventh Circuit clarifies the standards trial courts should use in evaluating expert testimony submitted in connection with class certification (Mesner/Northshore Univ. Health)
Cohen Milstein (Washington)
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Cohen Milstein (New York)
In this opinion overturning the district court’s denial of class certification, the Seventh Circuit clarified the standards trial courts should use in evaluating expert testimony submitted in connection with class certification. The plaintiffs filed a motion seeking to exclude the defendant’s (...)

A US Court of Appeals rules that the District Court did not err in dismissing the antitrust claims based on an alleged economic retaliation against a nurse after she rebuffed his sexual advances (Stark / Ear Nose & Throat Specialists of Northwestern Penn)
Sheppard Mullin (San Francisco)
Asserted Economic Retaliation Against Plaintiff Based on Plaintiff’s Rejection of the Defendant’s Sexual Advances Did Not Violate Section 1 or 2 of the Sherman Act* In an unpublished opinion, designated as "not precedential," the Third Circuit recently affirmed the District Court’s dismissal (...)

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