Penn State Hershey: A Cautionary Tale for Antitrust Litigators

By Margaux Poueymirou

This article addresses a recent decision by the Court of Appeals for the Third Circuit, Fed. Trade Comm’n v. Penn State Hershey Med. Ctr., 914 F.3d 193 (3d Cir. 2019), upholding the denial of attorneys’ fees to the Commonwealth of Pennsylvania in an action filed by Pennsylvania and the Federal Trade Commission to enjoin the proposed merger of two major Pennsylvania hospital systems, on the grounds that it would substantially lessen competition for general acute care inpatient hospital services in the four-county area surrounding Harrisburg. It examines the clash between the district court and Third Circuit’s interpretation of what it means to “substantially prevail” under Section 16 of the Clayton Act and concludes by arguing that in joint actions brought by the Commission and State Attorneys General, it is now particularly incumbent on the latter to litigate under the more demanding Clayton Act standard for granting injunctive relief in order to protect future attorneys’ fee awards.

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