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.

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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.

Caution: Sealed Package – There Is More At Risk Than Unsealing

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Parties litigating in courts across the country routinely file some documents under seal as a matter of course. Sealing filed documents often is a practical necessity – parties need not disclose certain confidential information in the public domain, and parsing through filings and conferring with opposing counsel and third parties to determine what is truly confidential can be contentious, expensive, time-consuming and ultimately burdensome for the courts. While these are valid reasons for filing sealed documents, a recent Sixth Circuit decision, although rising from unusual facts, should give parties pause before filing large numbers of documents under seal.

Shane Group, Inc. v. Blue Cross Blue Shield of Michigan, No. 15-1544, 2016 U.S. App. LEXIS 10264 (6th Cir. June 7, 2016), is a class action alleging that Blue Cross Blue Shield of Michigan (“BCBS MI”) used its market power to require hospitals in Michigan to enter most favored nation agreements that resulted in higher rates for “Blue Cross’s customers and everyone else – while preserving or expanding Blue Cross’s market share.” The class actions commenced following a similar lawsuit by the U.S. Department of Justice (“DOJ”). Information generated during the DOJ litigation, which had been designated “confidential,” was provided to the private litigants. Given the information had been designated confidential, BCBS MI, while defending itself against this class action, submitted voluminous filings under seal. Likewise, the plaintiffs filed the operative complaint (which cited previously designated confidential information) plus many other documents under seal. After the parties reached a class settlement, objecting class members claimed they were unable to scrutinize the settlement due to the broad extent of the sealed court filings. Regardless, the district court approved the settlement. Continue Reading

Antitrust, Appointments and Presidential Front-Runners: Part 1

Substantial and substantive issues of national importance are often ­obscured by the usual myopic and frenzied focus on political talking points, sensational sound bites and collateral name-calling. This is perhaps better exemplified in presidential elections than contests for other political offices. The current race to the presidency is plainly setting a new high (or low) watermark in that regard. In an ­effort to bring some clarity to a whirlpool of contentiousness clouded by the blue smoke and mirrors fueled by political pundits, our next columns will be offering an ­objective assessment of the presidential front-runners, Hillary Clinton and Donald Trump, and their views regarding antitrust, ­competition and related consumer protection issues. Such key issues affect the daily lives of millions of people and businesses, from the single consumer to the largest global ­corporations, yet are often ­overlooked in more sensational campaign news coverage. We begin this month by reviewing just a few of the key antitrust and consumer protection issues that will ultimately be decided by the next administration.

First, as we previously discussed, the death of U.S. Supreme Court Justice Antonin Scalia earlier this year creates an opening on the nation’s highest bench, which currently has only eight Supreme Court justices. The impact of this vacancy is at least twofold. For one, the court no longer has the unique voice of Scalia, a critic of the antitrust laws, and as we have explained, one who was often unlikely to find antitrust injury and harm where the relevant facts painted a colorable competition claim even where a jury had reached the opposite conclusion and found antitrust liability. Conversely, a new member of the court will of course bring his or her own unique voice to the court, and we have previously examined President Obama’s Supreme Court nominee, Chief Judge Merrick Garland of the U.S. Court of Appeals for the D.C. Circuit, and his own antitrust perspective and expertise.

In addition to bringing a necessary unique perspective to the bench, the newest justice will also find himself or herself in the midst of a court frequently divided over antitrust issues. By our own rough count, approximately 40 percent of the court’s substantive antitrust opinions in the last 10 years have been decided along 5-4 or 6-3 votes. Thus, the next Supreme Court justice has the potential to be a key swing vote in important cases, thereby ­amplifying his or her potential impact on the court, particularly in the wake of Scalia’s death. Continue Reading

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