On October 31, 2016, the U.S. Court of Appeals for the Seventh Circuit overturned a district court decision that denied a motion by the Federal Trade Commission (FTC) and Illinois Attorney General (IL AG) to block the proposed merger between Advocate Health Care (Advocate) and NorthShore University Health System (NorthShore). 

In June 2016, the U.S. District Court for the Northern District of Illinois held that the FTC and IL AG had, among other things, failed to prove a relevant geographic market and did not meet the burden required for a preliminary injunction.  The Seventh Circuit reversed that decision and largely endorsed the FTC’s methodology for examining hospital mergers.

The Seventh Circuit decision is a significant victory for the FTC, and it is the second time this year that the FTC achieved an appellate victory in blocking a hospital merger.  In September, the Third Circuit overturned a lower court decision in FTC v. Penn State Hershey,holding the FTC had met its burden in challenging the merger of two hospitals in Pennsylvania.  The FTC’s winning streak means that the agency will continue to heavily scrutinize provider combinations and challenge those it considers to be anticompetitive.

Materials related to the litigation are available here.