Justia Mergers & Acquisitions Opinion Summaries

The FTC and the State of North Dakota moved to enjoin Sanford Bismarck's acquisition of Mid Dakota, alleging that the merger violated section 7 of the Clayton Act. The district court determined that plaintiffs would likely succeed in showing the acquisition would substantially lessen competition in four types of physician services in the Bismarck-Mandan area.The Eighth Circuit affirmed the district court's grant of a preliminary injunction, holding that the district court did not improperly shift the ultimate burden of persuasion to defendants and properly followed the analytical framework in U.S. v. Baker Hughes, Inc., 908 F.ed 981 (D.C. Cir. 1990); the district court did not clearly err in defining the relevant market; and the district court's finding on merger-specific efficiencies was not clear error. View "Federal Trade Commission v. Sanford Health" on Justia Law

The Supreme Court reversed two orders of the circuit court unsealing an index of 349 documents and directing the Attorney General to produce eighty-nine of those documents.Steel of West Virginia, Inc. (Steel) brought this action to enforce its request for production of material under West Virginia’s Freedom of Information Act (FOIA). The Attorney General received the 349 documents at issue in connection with his investigative powers under the West Virginia Antitrust Act regarding the proposed merger of St. Mary’s Medical Center, Inc. and Cabell Huntington Hospital, Inc. The Attorney General and St. Mary’s contended that the index of the 349 documents and the eighty-nine documents to be produced were exempt from disclosure. The circuit court awarded the production of the index as a sanction against the Attorney General for sharing part of the index with the Federal Trade Commission. The Supreme Court held (1) the sanction was inappropriate; and (2) the eighty-nine documents were not subject to rpdocution because the statutory exemption set forth in W.Va. Code 29B-1-4, which incorporates the confidentiality provisions of the Antitrust Act. View "St. Mary's Medical Center, Inc. v. Steel of West Virginia" on Justia Law

The Supreme Court reversed two orders of the circuit court unsealing an index of 349 documents and directing the Attorney General to produce eighty-nine of those documents.Steel of West Virginia, Inc. (Steel) brought this action to enforce its request for production of material under West Virginia’s Freedom of Information Act (FOIA). The Attorney General received the 349 documents at issue in connection with his investigative powers under the West Virginia Antitrust Act regarding the proposed merger of St. Mary’s Medical Center, Inc. and Cabell Huntington Hospital, Inc. The Attorney General and St. Mary’s contended that the index of the 349 documents and the eighty-nine documents to be produced were exempt from disclosure. The circuit court awarded the production of the index as a sanction against the Attorney General for sharing part of the index with the Federal Trade Commission. The Supreme Court held (1) the sanction was inappropriate; and (2) the eighty-nine documents were not subject to rpdocution because the statutory exemption set forth in W.Va. Code 29B-1-4, which incorporates the confidentiality provisions of the Antitrust Act. View "St. Mary's Medical Center, Inc. v. Steel of West Virginia" on Justia Law

The court affirmed the issuance of a permanent injunction enjoining the merger of Anthem and Cigna under Section 7 of the Clayton Act, 15 U.S.C. 18. The court held that the district court did not abuse its discretion in enjoining the merger based on Anthem's failure to show the kind of extraordinary efficiencies necessary to offset the conceded anticompetitive effect of the merger in the fourteen Anthem states: the loss of Cigna, an innovative competitor in a highly concentrated market. The court also held that the district court did not abuse its discretion in enjoining the merger based on its separate and independent determination that the merger would have a substantial anticompetitive effect in the Richmond, Virginia large group employer market. View "United States v. Anthem" on Justia Law

The Hart-Scott-Rodino Antitrust Improvements Act of 1976 (Act), 15 U.S.C. 18a, added section 7A to the Clayton Antitrust Act of 1914, 15 U.S.C. 12 et seq., to establish notification and waiting requirements for large acquisitions and mergers. The principal purpose of the Act is to facilitate Government identification of mergers and acquisitions likely to violate federal antitrust laws before the proposed deals are consummated. In 2013, the FTC modified its reportable asset acquisition regulations to clarify that, even if patent holders retain limited manufacturing rights or co-rights, transfers of patent rights within the pharmaceutical industry constitute reportable asset acquisitions if all commercially significant rights are transferred. PhRMA filed suit challenging the FTC's Rule and the district court granted summary judgment in favor of the FTC. The court concluded that the Rule does not violate the plain terms of the Act; the court owes deference to the FTC because the contested rule embodies a permissible construction of the Act; and the Commission's action also survives review under the arbitrary and capricious standard. Because the FTC's action is supported by reasoned decisionmaking and PhRMA's claims are without merit, the court affirmed the judgment of the district court. View "Pharmaceutical Research v. FTC" on Justia Law

The FTC and the State filed suit alleging that the 2012 merger of two health care providers in Nampa, Idaho violated section 7 of the Clayton Act, 15 U.S.C. 18, and state law. The district court found that the merger violated section 7 and ordered divestiture. The court affirmed the judgment, concluding that the district court's determination that Nampa was the relevant geographic market was supported by the record; the district court did not clearly err in holding that plaintiffs established a prima facie case that the merger will probably lead to anticompetitive effects in the market; and defendant failed to rebut the prima facie case by demonstrating that efficiencies resulting from the merger would have a positive effect on competition. Therefore, in this case, the district court did not abuse its discretion in choosing divestiture. View "St. Alphonsus Med. Ctr. v. St. Luke's Health Sys." on Justia Law

Dragon Systems, Inc. (Dragon), a voice recognition software company that faced a deteriorating financial situation, hired Goldman Sachs (Goldman) to provide financial advice and assistance in connection with a possible merger. In 2000, Lernout & Hauspie Speech Products N.V. (Lernout & Hauspie) acquired Dragon. When it was discovered that Lernout & Hauspie had fraudulently overstated its earnings, the merged company filed for bankruptcy, and the Dragon name and technology were sold from the estate. Plaintiffs, two groups of Dragon shareholders, filed suit against Goldman, alleging negligent and intentional misrepresentation, negligence, gross negligence, breach of fiduciary duty, and violations of Mass. Gen. Laws ch. 93A. A jury found in favor of Goldman on Plaintiffs’ common law claims, and district court found that Goldman had not violated chapter 93A. The First Circuit affirmed, holding (1) the district court correctly articulated the legal standard applicable to Plaintiffs’ chapter 93A claims and correctly applied that standard to its factual findings; and (2) Plaintiffs’ arguments that they were entitled to a new trial on their common law claims because of evidentiary errors and erroneous jury instructions were without merit. View "Baker v. Goldman, Sachs & Co." on Justia Law

The City of New York sued defendants under federal and New York State antitrust laws, seeking to prevent the companies from merging. The city appealed from a judgment of the district court granting summary judgment to defendants and dismissing the city's complaint without leave to amend. The court agreed with the district court that the alleged relevant market definition, as the "low-cost municipal health benefits market[,]" was legally deficient and concluded that the district court's denial of leave to amend was not an abuse of discretion. Accordingly, the court affirmed the judgement of the district court. View "City of New York v. Group Health Inc., et al." on Justia Law