Maryland District Court Denies DOJ’s Attempt To Halt Merger Based On Competition For A Single NSA Contract
On October 11, 2022, Judge Catherine C. Blake of the United States District Court for the District of Maryland denied the U.S. Department of Justice’s (“DOJ”) motion to preliminarily enjoin the $440 million acquisition of a company with expertise in specialized software development, cyber, and analytics by a larger consulting firm. Ruling that DOJ failed to show that the proposed transaction would cause anticompetitive harm in violation of federal antitrust laws, the Court was unwilling to grant the “extraordinary remedy” of blocking the merger and permitted the parties to close the transaction. United States v. Booz Allen Hamilton Inc. et al., No. 1:22-cv-01603 (D. Md. Oct. 11, 2022).
FTC’s Cancer Detection Antitrust Suit Transferred To California Southern District
On April 20, 2021, the United States District Court for the District of Columbia granted defendants’ motion to transfer a motion for preliminary injunction brought by the Federal Trade Commission (“FTC”) alleging that defendants’ plans to enter into a merger agreement violated Section 5 of the FTC Act and Section 7 of the Clayton Act. Federal Trade Commission v. Illumina, et al., No. 21-873 (D.D.C. 2021). The Court found that the U.S. District Court for the Southern District of California was a more appropriate venue for litigation of the case on the basis that it would be easier for most of the witnesses to get to that district, among other factors. Preliminary injunction hearings are currently set for August 24, 2021.
Eastern District Of Pennsylvania Allows Hospital Merger To Proceed
On December 14, 2020, Judge Gerald Pappert of the United States District Court for the Eastern District of Pennsylvania denied the Federal Trade Commission’s (“FTC”) emergency motion for an injunction pending appeal. Federal Trade Commission, et al. v. Thomas Jefferson University, et al., 2:20-cv-01113 (E.D. Pa. Dec. 14, 2020). The decision comes after the district court, on December 8, denied the FTC’s request to enjoin Jefferson Health from acquiring Albert Einstein Healthcare Network. The FTC has appealed the December 8 decision and sought an injunction pending that appeal to prevent the acquisition from going forward on December 15 in accordance with the stipulated terms of a prior temporary restraining order entered in the case. The Court denied the FTC’s motion, explaining that the emergency motion—rather than maintaining the status quo—would alter the parties’ circumstances by imposing an injunction where there was none.
Federal Trade Commission Orders Otto Bock To Unwind Consummated Merger
On November 6, 2019, the Federal Trade Commission (“FTC” or “Commission”) unanimously upheld an Administrative Law Judge’s decision requiring Otto Bock HealthCare North America, Inc. (“Otto Bock”) to unwind its consummated acquisition of Freedom Innovations (“Freedom”).The Commission concluded that the transaction resulted in anticompetitive harm in the market for microprocessor-equipped prosthetic knees (“MPKs”), which offer certain improvements over conventional, mechanical prosthetic knees.The decision represents the first time that the current slate of Commissioners has ordered the unwinding of a consummated transaction.
D.C. Circuit Holds That DOJ Failed To Prove AT&T/Time Warner Merger Is Anticompetitive
On February 26, 2019, a panel of the D.C. Circuit Court of Appeals affirmed the district court’s denial of the government’s request for a permanent injunction against the merger of AT&T and Time Warner. The opinion by Judge Judith Rodgers, joined by Judges Robert Wilkins and David Sentelle, rejected the government’s argument that the district court misunderstood and misapplied economic principles and erroneously disregarded testimony by key government witnesses. United States v. AT&T, Inc., Docket No. 1:17-cv-02511 (D.C. Cir. 2019).
Ninth Circuit Upholds Dismissal Of Antitrust Suit Against The Anheuser-Busch InBev And SABMiller Merger
On August 8, 2018, the United States Court of Appeals for the Ninth Circuit upheld a dismissal of an antitrust class action by beer consumers that challenged the acquisition of SABMiller (“SAB”) by Anheuser-Busch InBev (“ABI”). In an opinion by Judge Margaret McKeown, the Ninth Circuit held that the beer consumers failed to state a claim under Section 7 of the Clayton Act because: (1) ABI did not actually acquire a competitor in the U.S. beer market; (2) ABI did not acquire a “potential competitor” in the U.S. beer market; and (3) the consumers’ concern that the acquisition would significantly increase the threat of post-merger coordination between the last remaining market players, ABI and Molson Coors Brewing Company (“Molson”), was speculative.
United States District Court For The District Of Columbia Rejects DOJ Challenge To AT&T-Time Warner Merger
On June 12, 2018, following a six-week-long bench trial, Judge Richard J. Leon of the United States District Court for the District of Columbia ruled that AT&T’s proposed acquisition of Time Warner does not violate the antitrust laws, rejecting the United States Department of Justice’s (DOJ) challenge to the merger. United States v. AT&T Inc
., Civil Case No. 17-2511 (RJL) (D.D.C. June 12, 2018). This case—the first vertical merger challenge tried by the Justice Department since 1977—demonstrates the difficulty in challenging mergers where a competitor is not eliminated by the transaction.