Butterworth Health Corporation

Text (OCR of the scan at left; may contain errors)

IN THE MATTER OF BUTTERWORTH HEALTH CORPORATION, ET AL.

Docket 9283. 1nt.erlocut.ory Order, Sept.member 1997 ORDER GRANTING MOTION TO DISMISS On July 22 1997, respondents Butterworth Health Corporation and Blodgett Memorial Medical Center ("the Hospitals ) filed a Motion to Dismiss the complaint in the above-captioned case pursuant to Section 3.26(d) of the Commission s Rules. Complaint counsel fied an Opposition to Respondents' Motion to Dismiss the Proceedings on August 5 , 1997. On August 15 , 1997, the Hospitals moved for leave to file a Reply Memorandum and on September 2 1997, complaint counsel moved for leave to file a Response to Respondents' Reply Memorandum. Both motions for leave to file supplemental pleadings are granted.

These proceedings follow the Commission s filing of an action in the United States District Court for the Western District of Michigan seeking a preliminary injunction under Section 13(b) of the Federal Trade Commission Act, 15 U.S. c. 53(b), to prevent a proposed merger of the Hospitals pending completion of an administrative proceeding to detennine whether the proposed merger violates Section 7 of the Clayton Act. 15 U.S.c. 18. On September 26, 1996 the district court issued an opinion denying a preliminary injunction. FTC v. Butterworth Health Corp. 946 F. Supp. 1285 (W.D. Mich. 1996). Thereafter, the United States Court of Appeals for the Sixth Circuit affnned the district court' s decision in an unpublished per curiam opinion. FTC v. Butterworth Health Corp. No. 96-2440 (6th Cir. July 8 , 1997) (per curiam).

The rationale for Rule 3 .26( d), pursuant to which the Hospitals move, is that although denial of injunctive relief by the courts does not compel the Commission, as a matter of law, to tenninate its administrative case, such judicial action justifies respondents in asking the Commission to review closely whether further proceedings are appropriate. The Commission Policy Statement on Administrative Merger Litigation Following the Denial of a Preliminary Injunction, which was published with Rule 3 . 26( d), states that Ihe Commission must detennine whether to continue or tenninate BUTTERWORTH HEALTH CORPORATION, ET AL. 425 424 Interlocutory Order an administrative proceeding on a case-by-case basis. 60 Fed. Reg. 741 , 39 743 (1995); 4 Trade Reg. Rep. (CCH) 242 at 20 994. In detennining whether to continue the administrative litigation the Commission has considered the following factors set forth in the Commission s Policy Statement:

(i) The factual rmdings and legal conclusions of the district court or any appellate court, (ii) any new evidence developed during the course of the preliminary injunction proceeding, (iii) whether the transaction raises important issues offact, law, or merger policy that need resolution in admstrative litigation (iv) an overall assessment of the costs and benefits offurther proceedings, and (v) any other matter that bears on whether it would be in the public interest to proceed with the merger challenge.

Id. After considering the pleadings and each of these five factors, the Commission has detennined that further administrative litigation is not in the public interest.

Accordingly, It is ordered That respondents' motion for leave to file a reply and complaint counsel's motion for leave to file a response to the reply be, and they hereby are, granted;

It is That respondents' motion to dismiss be, and further ordered it hereby is, granted.

Chainnan Pitofsky recused.

Complaint 124 FTC.