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Court Overturns Previous Injunction Against Federal Trade Commission’s Noncompete Ban
Bruce Allain, Managing Editor July 25, 2024
The convoluted journey of the FTC’s attempt to ban noncompete agreements has taken another turn. On July 23, a Federal District Court Judge reversed a ruling from a lower Federal Court in Texas that had temporarily blocked the FTC from enforcing the rule, pending ongoing litigation. The most recent ruling states that the FTC has the power to ban anticompetitive practices, including noncompete agreements. The ruling also states that the plaintiff had not shown that it would suffer irreparable harm from the rule if it were allowed to go into …
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Could a District Court ruling against the FTC in a hospital merger challenge revive the failing firm defense?
Bruce Allain, Managing Editor July 15, 2024
In late June Novant announced it would abandon attempts to buy two Community Health Systems (CHS) hospitals in North Carolina. This announcement followed a preliminary ruling in Federal District Court for Novant and a subsequent appellate court ruling for the Federal Trade Commission (FTC). Regardless of the final outcome of the merger, the preliminary Novant win is significant because it represents a successful use of the often cited, rarely successful, “failing firm” defense – which parties can potentially use to push through a merger that would otherwise create an unacceptable …
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Preliminary Injunction Temporarily Halts Federal Trade Commission’s Noncompete Ban
Bruce Allain, Managing Editor July 8, 2024
On Wednesday, July 3, 2024, a Texas Federal Court issued a preliminary injunction against the FTC’s noncompete ban in the case brought by Ryan LLC and the U.S. Chamber of Commerce, preventing the rule from taking effect on September 4. The decision, made by U.S. District Judge Ada Brown, stated that the plaintiffs were likely to succeed on the merits that the FTC lacks authority to promulgate the rule, which the Judge called “arbitrary and capricious”, and that that blocking the rule temporarily is in the public interest. Although the …
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June Joint Legislative Update on the California 2024-2025 State Budget
Kassie Miller, Student Fellow July 8, 2024
Despite substantial proposed budget cuts to cover the $45 billion deficit, the California legislature released a $297 billion joint budget proposal responding to Governor Newsom’s May Revision. The final bill lays out a $46.9 billion dollar solution for the 2024-2025 fiscal year made up of program reductions, delays, & deferrals; revenue; fund shifts; and reserve utilization. In opposition to the Governor’s May Revise, the shortfall will be covered by alternative means including a temporary tax increase on businesses allowing for a $5 billion revenue increase, and a $1 billion cut …
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The Source Roundup: July 2024 Edition
Kassie Miller, Student Fellow July 1, 2024
Mergers, Acquisitions and Healthcare Competition Is There Too Little Antitrust Enforcement in the U.S. Hospital Sector? (American Economic Association) Zarek Brot-Goldberg, Zack Cooper, Stuart Craig, Lev Klarnet From 2002 to 2020, there were more than 1,100 hospital mergers with a 1% enforcement rate by the FTC resulting in only 13 blocked transactions. The authors of this study speculate low rates of enforcement could be due to factors including budgetary issues and jurisprudence that favors mergers. It is estimated these mergers resulted in a high concentration of hospital markets in “90% …
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U.S. Supreme Court Overturns the Chevron Deference: What it Could Mean for Federal Healthcare Agencies
Bruce Allain, Managing Editor June 28, 2024
On a 6-3 decision following party lines, the conservative majority of the U.S. Supreme Court overturned a long-standing legal precedent that required courts to generally defer to regulations issued by Federal agencies that interpret and enact Congressional statutes, commonly referred to as Chevron deference. Chevron deference required courts to defer to an agency’s “reasonable interpretations” of ambiguous statutes passed by Congress. The end of the precedent opens the doors to legal challenges of existing Federal administrative law, and will likely weaken the ability of Federal agencies to issue administrative regulations …
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Federal Court Dismisses Case Challenging Oregon’s Merger Review Law
Bruce Allain, Managing Editor June 14, 2024
On May 16, 2024, a Federal District Court Judge dismissed a case filed in 2022 by the Oregon Association of Hospitals and Health Systems (OAHHS, the trade group representing hospitals in Oregon) against the State of Oregon and the Oregon Health Authority (OHA). The suit challenged the law created by Oregon HB 2362, 2021 legislation that required health care entities that meet minimum thresholds to obtain state approval before any mergers or acquisitions. The new law created the Health Care Market Oversight (HCMO) program, housed within the Oregon Health Authority …
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Verdict in Sidibe v. Sutter Health Overturned by 9th Circuit Court of Appeals
Bruce Allain, Managing Editor June 5, 2024
On Tuesday, June 4, 2024, the 9th U.S. Circuit Court of Appeals overturned Sutter Health’s win in a $411 million antitrust suit, saying that the jury that found in favor of Sutter in 2022 was given improper jury instructions, and that the plaintiffs were improperly prevented from presenting relevant evidence. In September 2012, a class of individuals and employers who purchased fully insured plans from the five largest commercial health insurance companies in California filed this lawsuit alleging that Sutter Health restricted competition in the healthcare market using anticompetitive tactics. A similar lawsuit, …
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The Source Roundup: June 2024 Edition
Kassie Miller, Student Fellow June 1, 2024
Effects of Market Consolidation Cost, Quality, and Utilization After Hospital-Physician and Hospital-Post Acute Care Vertical Integration: A Systematic Review (Medical Care Research and Review) Alexandra Harris, Sarah Philbin, Brady Post, Neil Jordan, Molly Beestrum, Richard Epstein, Megan McHugh To determine the impact of vertical integration, the authors examine the associations between two types of integration, hospital-physician and hospital-Post Acute Care (PAC), and their effect on cost, quality, and utilization of healthcare services as they relate to affordable care. Assessment of these impacts through the lens of financial benefits the found …
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Governor Newsom’s May Revision to the California 2024-2025 State Budget
Kassie Miller, Student Fellow May 29, 2024
On May 10, California Governor Gavin Newsom released the “May Revise” to his initial January proposal for California’s 2024-2025 budget. The revised budgetary proposal lays out $288 billion in total spending [1], a reduction of $3.5 billion from his initial January proposal [2]. The decreased budget proposal reflects the increase in the state deficit, originally projected to be $38 billion, now forecasted to exceed $45 billion, [1]. This is a $17.6 billion difference from the Governor’s estimated shortfall of $27.6 billion [3]. Throughout 2021, California’s revenue experienced a surplus following …
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