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House Passes GOP-Backed SMARTER ACT Aiming to Harmonize Merger Review Process for FTC and DOJ

On March 23, 2016, the U.S. House of Representatives passed the Standard Merger and Acquisition Reviews Through Equal Rules (SMARTER) Act by a vote of 235-171, despite strenuous objections from the Federal Trade Commission (FTC).  The FTC and the Department of Justice (DOJ) review proposed mergers and acquisitions.  Currently, the FTC can challenge transactions under different processes and standards than the DOJ, and those procedures provide several advantages to the FTC.  The SMARTER Act would neutralize those advantages for the FTC by: (1) eliminating the FTC’s ability to use its internal administrative proceedings to challenge unconsummated transactions; and (2) standardizing the criteria for the FTC and DOJ to obtain a preliminary injunction to block a merger in federal court. The FTC has the authority to pursue administrative relief to challenge a transaction.  Even if the FTC is denied a preliminary injunction in federal court, the agency may continue...

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FTC Rule Change Simplifies Process Following a Denial of a Preliminary Injunction Motion

On March 14, 2015, the Federal Trade Commission (FTC) announced procedural revisions governing the FTC process when it loses an injunction bid in federal court, to block the consummation of a merger pending its in-house administrative proceedings on the legality of the merger. When the FTC seeks to challenge a merger, the FTC generally seeks an injunction in court to prevent consummation of the merger pending the outcome of an internal administrative proceeding.  If the injunction is implemented, it prevents the parties from integrating the assets and preserves the FTC’s ability to effectively and efficiently fix the merger should it be warranted at the conclusion of the administrative proceeding. Under the new rules, when the FTC loses its request for an injunction, the pending in-house administrative proceeding will be automatically withdrawn or stayed at the request of the merging parties unless the FTC determines that continuing the litigation would serve...

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FTC Dismisses Complaint in LabCorp

by Stephen Wu Earlier today, the FTC dismissed its complaint against LabCorp after failing to obtain a preliminary injunction in federal district court to prevent LabCorp from further integrating with WestCliff.  LabCorp had acquired WestCliff, a bankrupt lab services competitor in Southern California, in 2010, but the FTC chose to challenge the transaction in front of one of its administrative law judges and had sought a preliminary injunction from a federal district court to prevent LabCorp from integrating WestCliff pending the outcome of the administrative trial.  After losing its bid for a preliminary injunction at the district court, the FTC filed an emergency motion for an injunction pending an appeal that the Ninth Circuit Court of Appeals denied.  This meant that LabCorp was free to integrate WestCliff pending the outcome of any appeal of the denial of the preliminary injunction or the FTC's related administrative trial on the merits...

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