Antitrust Legacy of High Court Nominee Gorsuch in Private Practice

Last month, we discussed the antitrust jurisprudence  of Neil Gorsuch, currently of the U.S. Court of Appeals for the Tenth Circuit judge and nominee to the Supreme Court of the United States. Our discussion focused on three of Gorsuch’s opinions during his decade-long tenure with the court of appeals. Even before Gorsuch was nominated to the Tenth Circuit, however, he had already made a name for himself in the antitrust world as a trial lawyer for both plaintiffs and defendants.

In Gorsuch’s early years in private practice at Kellogg Huber Hansen Todd Evans & Figel, he defended Bell Atlantic in an antitrust case named GTE New Media Services v. Ameritech.

The case arose out of allegations that the five  regional Bell operating companies “illegally combined and conspired to restrain trade and to monopolize  the internet Yellow Pages by controlling internet access points through which competing internet Yellow Pages providers offer their services.” Later, Gorsuch represented so-called “Baby Bell” SBC Communications, a company formed after the breakup of the AT&T Corp. in 1982 pursuant to AT&T’s consent decree with the Department of Justice. In that case, ZTel Communications v. SBC Communications, telecommunications carrier SBC Communications was charged with violating the Sherman Act by refusing to provide Z-Tel Communications with access to its telecommunications facilities and equipment as required by the Telecommunications Act of 1996. Both cases were resolved before trial. Continue Reading

The Antitrust Points of View of Supreme Court Nominee Neil Gorsuch

Last March, we wrote a series of articles discussing Supreme Court Justice Antonin Scalia’s antitrust legacy on the Supreme Court. We noted Scalia’s admitted discomfort with the Sherman Act, specifically with holding corporate defendants, even monopolists, liable absent strong evidence of anti-competitive conduct. His likely successor appears to possibly hold similar views of the antitrust laws, ostensibly applying the Sherman Act to avoid replacing procompetitive, free-market behavior with judicially imposed, anti-competitive fiat, based on the record presented.

On Jan. 31, President Donald J. Trump nominated Neil M. Gorsuch, a judge on the U.S. Court of Appeals for the Tenth Circuit since 2006, to fill Scalia’s seat on the Supreme Court. Gorsuch has a long and storied background in antitrust work. Indeed, perhaps as much as former Justice John Paul Stevens. After graduating from Harvard Law School and eventually clerking for Supreme Court Justices Byron White and Anthony Kennedy (the most senior justice now on the Supreme Court), Gorsuch entered private practice where he brought and defended several major antitrust actions. Thereafter, upon his appointment to the Tenth Circuit, Gorsuch issued three high-profile antitrust opinions that shed light on his substantial expertise in the area. This article will focus on Gorsuch’s antitrust opinions. Future articles will focus on his antitrust experiences in the private sector and at the Department of Justice, where he briefly served. Continue Reading

What to Expect From FTC during Trump Administration: New Leader Illuminates

On Jan. 25, President Trump named Maureen Ohlhausen as the Federal Trade Commission’s acting chairwoman. A recent speech by Ohlhausen, who has served as a commissioner for the FTC since 2012, shed some light on the role the FTC may have under her leadership during the new administration.

Ohlhausen briefly summarized a “few areas in which the Commission succeeded” under the Obama administration, including “clamping down on pay-for-delay agreements” and challenging potentially anticompetitive hospital mergers. See FTC v. Penn State Hershey Med. Ctr., 838 F.3d 327 (3d Cir. 2016); FTC v. Advocate Health Care Network, 841 F.3d 460 (7th Cir. 2016). Continue Reading

Carl Hittinger Examines American Monopolists through the Lens of History, Politics

Partner Carl Hittinger has authored a series of articles for The Legal Intelligencer that explores the history of select American monopolists by posing two fundamental questions: Why have some monopolists succeeded in gaining, maintaining and increasing monopoly power where others have failed? Why does history keep repeating itself and the basic lessons taught have not been learned by subsequent monopolists?” Further, Hittinger writes about the legal, social, political, marketing and public relations factors that are part and parcel of the monopoly conundrum.

Read more.

Abrams, Commins, Foix Author Article on Antitrust Suit Counterclaims

Partners Robert Abrams, Gregory Commins and Danyll Foix authored an article published in “The Antitrust Review of the Americas 2017,” published by Global Competition Review. Their article, “United States: Private Antitrust Litigation,” reviews counterclaims in antitrust litigation in the United States and discusses the strategies behind their use in intellectual property, franchise, distribution and other types of antitrust cases for which counterclaims should be considered by both plaintiffs and defendants.

Read the article.

FTC Still Ramping Up Antitrust Review of Health Care Mergers

Last month, we reported on the Federal Trade Commission’s (FTC) steady filing of injunctions to block what are effectively local mergers of small health care providers. In 2007, the FTC filed suit in Saint Alphonsus Medical Center v. St. Luke’s Health System, its first successful challenge to a hospital merger in recent history. Since then, the Obama administration-appointed FTC has appeared bolder in its approach to health care mergers, which have been on the uptick since the passage of the still-existing Affordable Care Act has encouraged providers to coordinate health care services and provide better service at a lower cost.

The Saint Adolphus case was followed by two notable FTC filings to enjoin health care mergers in the Chicago, Illinois and Harrisburg, Pennsylvania areas. In both cases, the district courts denied the FTC’s request for preliminary injunction, which the U.S. Court of Appeals for the Third Circuit in Federal Trade Commission v. Penn State Hershey Medical Center, 838 F.3d 327 (3d Cir. 2016), and the U.S. Court of Appeals for the Seventh Circuit in Federal Trade Commission v. Advocate Health Care Network, 841 F.3d 460 (7th Cir. 2016), reversed. Since those decisions were handed down, Advocate Health Care and NorthShore University Health System—the entities involved in the proposed Seventh Circuit merger—are ­continuing to pursue the merger on remand to the district court. In contrast, Penn State Hershey Medical Center and Pinnacle Health System—the entities involved in the proposed Third Circuit merger—have apparently decided not to pursue the merger any further, citing the time and cost required to continue litigating the matter. Continue Reading

BakerHostetler Antitrust Lawyer Reviews Unusual Incentive Payment/Failing Firm Defense Remedy in Recent Hospital Merger

FOIX_Danyll_CAM_1_3402Antitrust Partner Danyll W. Foix wrote an article, published November 17, 2016 by Law360, reviewing the Federal Trade Commission’s acceptance of an unusual settlement for a challenged hospital merger, explaining that “the settlement ends the FTC’s challenge of a transaction that was too small to be reportable under the Hart-Scott-Rodino Act, and the settlement is premised on a unique combination of the acquirer’s promise to give financial assistance to potential new entrants and the reliance on the ‘failing firm’ defense that infrequently is accepted by government enforcers.”

Read more at Law360 here.

 

FTC Takes Action to Block Hospital Mergers

In the 1990s, Federal Trade Commission (FTC) enforcement actions to block mergers between health care providers were a rare phenomenon successfully obtained. In many instances, state Attorneys General filled the role of watchdog, especially since hospital mergers were relatively small and implicated local markets. Many, like the Pennsylvania Attorney General, were unable to convince the courts that the mergers should be stopped. That scoreboard has changed dramatically in the last decade and, even more so, over the last several months.

In 2007, the FTC came out on top in In re Matter of Evanston Northwestern Healthcare, Fed. Trade Commn., Docket No. 9315, (Aug. 6, 2007), an administrative agency action that represented the FTC’s first successful challenge to a hospital merger in recent history. Seven years later, in a bench trial in the District of Idaho, Saint Alphonsus Medical Center v. St. Luke’s Health System, the FTC with the Idaho Attorney General successfully challenged an already consummated merger between two small health care organizations, forcing them to divest, albeit with incriminating documents at center stage. Continue Reading

FTC Accepts Practical ‘Failing Firm’ Defense in Ending Challenge of Nonreportable Transaction

The Federal Trade Commission’s recently announced proposed settlement of its challenge of CentraCare Health’s acquisition of St. Cloud Medical Group (SCMG) is doubly noteworthy. The settlement ends the challenge of a transaction that apparently was not reportable under the Hart-Scott-Rodino (HSR) Act, and the settlement is premised on a “failing firm” defense that infrequently is accepted by government enforcers.

CentraCare is a nonprofit health system in central Minnesota that includes a multispecialty physician practice group, and SCMG is a physician-owned, multispecialty practice group with about 40 physicians who operate four clinics in central Minnesota. In early 2016, CentraCare announced its planned acquisition of SCMG. According to the FTC, this acquisition would combine the two largest providers of adult primary care, pediatric and OB/GYN services in the St. Cloud area. After the Minnesota Attorney General reportedly began an investigation of the acquisition and asked for the closing to be delayed, the FTC filed a complaint alleging that the acquisition agreement was an unfair method of competition in violation of Section 5 of the FTC Act, and that the acquisition, if consummated, would substantially lessen competition in violation of Section 7 of the Clayton Act. Continue Reading

How to Avoid Antitrust Trouble in Wake of North Carolina Dental Ruling on State Action Immunity

US Private Antitrust LitigationBakerHostetler Antitrust Litigation Partners Robert Abrams, Gregory Commins, and Danyll Foix authored an article for The Antitrust Review of the Americas 2016, published by Global Competition Review. The article, headlined “United States: Private Antitrust Litigation,” analyzes emerging cases in the wake of North Carolina State Board of Dental Examiners v. Federal Trade Commission. These cases, the authors note, “provide a roadmap for how quasi-government entities can avoid antitrust trouble ― including making sure their actions are consistent with state policy and actively supervised by the state.”

Read the article.

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