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Honigman wins important antitrust decision in U.S. Court of Appeals

February 10, 2015

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Susan Sherbow
T: 313.465.7048
ssherbow@honigman.com

Adopting arguments made by the Federal Trade Commission, the Idaho Attorney General, and Honigman Miller Schwartz and Cohn LLP on behalf of its client, Saint Alphonsus Health System, the U.S. Court of Appeals for the Ninth Circuit today issued an important decision in the health care field. The Court affirmed the ruling of the U.S. District Court for the District of Idaho that state and federal antitrust laws were violated when Idaho’s largest health care system, St. Luke’s Health System, acquired the Saltzer Medical Group. Among other rulings, the Appeals Court upheld the principle that mergers resulting in high market shares can create serious antitrust issues, even if the parties claim that they will achieve substantial efficiencies from the merger.

David A. Ettinger, a Honigman partner and head of its Antitrust and Trade Regulation Practice Group, argued in court on behalf of Saint Alphonsus, which is located in Idaho and Oregon. The opinion issued by Judge Andrew D. Hurwitz affirmed the District Court’s conclusion that efficiencies must be “merger specific,” i.e. that they cannot reasonably be achieved absent the merger, in order to present an antitrust defense. The Ninth Circuit also affirmed the district court’s finding that hospitals and physicians can work together to achieve efficiencies without acquisitions.

“The court ruling means that providers considering mergers and acquisitions will need to carefully analyze their markets to determine if they possess high market shares that create a prima facie antitrust case against them,” said Ettinger. “The prospect of significant efficiencies will likely not be enough to justify an otherwise anticompetitive merger.”

Ettinger added that a detailed market analysis can often provide significant antitrust defenses. “Parties considering acquisitions and mergers will have to carefully examine emerging trends in their markets to see if they provide defenses to otherwise anticompetitive mergers. This is especially true in health care, which is changing very rapidly,” added Ettinger.

Ettinger is nationally recognized as a leading antitrust attorney. Honigman’s Antitrust and Trade Regulation Practice Group has litigated antitrust cases and represented clients in antitrust matters in more than 30 states, arguing on behalf of both plaintiffs and defendants. Ettinger may be unique among antitrust lawyers in having won antitrust merger trials representing both plaintiff and defendant.