Tuesday, November 12, 2013

Federal Trade Commission v. Tenet Health Care Corporation case brief

Federal Trade Commission v. Tenet Health Care Corporation case brief summary
186 F.3d 1045 (1999)

Appellants, two hospitals, sought review of the order of the United States District Court for the Eastern District of Missouri, which granted the motion for a preliminary injunction filed by appellee Federal Trade Commission, and enjoined the merger between appellants, and which found that the merger would substantially lessen competition in the area in violation of § 7 of the Clayton Act, 15 U.S.C.S. § 18.


Appellants, the only two hospitals in a small city, filed a pre-merger certificate with appellee Federal Trade Commission (FTC) pursuant to the Hart-Scott-Rodino Act, 15 U.S.C.S. § 18a. Appellee FTC filed a complaint under § 7 of the Clayton Act, 15 U.S.C.S. § 18, to enjoin the merger. After a hearing, the district court granted appellee FTC's motion for a preliminary injunction, and enjoined the merger.


  • On appeal, the court held that the evidence showed that appellants were underutilized, and that a significant percentage of the residents in the market area, as defined by appellee FTC, used a number of other hospitals just outside the market area. 
  • In addition, because of the way the health care industry was changing, the merger of the hospitals was likely to increase the services available in the merged hospital so that it would be more competitive with the other hospitals in the area. 
  • Thus, because appellee FTC did not show that it was likely to succeed on its complaint that the merger was anti-competitive, it was not entitled to an injunction. 
  • The court reversed the order, and remanded the case for further proceedings.

The court reversed the order, dissolved the injunction, and remanded the case, because appellee FTC failed to show that enjoining the merger would be in the public interest and that it was likely to succeed at trial, because the evidence disclosed that area residents were already using other hospitals, and that the merger would enable appellant hospitals to provide those services that would increase competition among all the hospitals.

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