On December 13, 2017, a federal district court issued an order preliminarily enjoining the merger of North Dakota healthcare providers, Sanford Health, Sanford Bismarck, (Sanford) and Mid Dakota Clinic, P.C. (MDC). The order prohibits the merging parties from consummating their transaction until an administrative trial before the Federal Trade Commission (FTC) is complete. The administrative trial was scheduled to begin on November 28, 2017, but has been continued to January 17, 2018. The North Dakota Attorney General had also joined as a plaintiff in the complaint for a preliminary injunction.

The complaint alleges that Sanford and MDC are the largest providers of certain healthcare services in the Bismarck-Mandan region. The FTC claims that the merger would harm competition in several services lines and would result in a combined entity possessing a 75 percent market share for adult primary care physicians, and a 100 percent market share for general surgery physicians.

The FTC has enjoyed a recent string of litigation wins in the healthcare space, including successful appeals in Penn State Hershey Medical Center/PinnacleHealth and Advocate/NorthShore. Moreover, the current action is one of several merger challenges filed in 2017, including the recent case filed by the Department of Justice to block the AT&T/Time Warner merger and the FTC’s action against the merger of titanium dioxide companies, Tronox/Cristal. These cases further reaffirm the continued aggressive approach to merger enforcement under the Trump administration.

Materials related to the litigation are available by clicking here.  King & Spalding’s detailed Client Alert on this development is available by clicking here.