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By: Vorys.
Last Tuesday, the U.S. Court of Appeals for the Third Circuit reversed a Pennsylvania district court’s decision denying a preliminary injunction in the Federal Trade Commission’s (FTC) and Commonwealth of Pennsylvania’s (collectively, the government) challenge to a merger between Pinnacle Health System (Pinnacle) and Penn State Hershey Medical Center (Hershey) (collectively the hospitals). In denying the preliminary injunction, the district court concluded that the Government failed to define a cognizable geographic market and that the equities supported denying the injunction.
On appeal, the Third Circuit determined that the lower court erred in the formulation and application of the “hypothetical monopolist” test used to define the relevant geographic market. Specifically, the court of appeals concluded that the district court improperly used an analysis closely resembling an outdated economic method, and did not sufficiently take into account and make allowances for the intricacies of the healthcare marketplace. Read more.
