[Federal Register: March 20, 2006 (Volume 71, Number 53)]
[Notices]
[Page 13991-14004]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
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DEPARTMENT OF JUSTICE
Antitrust Division
United States v. UnitedHealth Group Incorporated & PacifiCare
Health Systems, Inc.; Propoosed Final Judgment and Competitive Impact
Statement
Notice is hereby given, pursuant to the Antitrust Procedures and
Penalties Act, 15 U.S.C. 16(b)-(h), that a Complaint, proposed Amended
Final Judgment, and Competitive Impact Statement were filed with the
United States District Court for the District of Columbia in United
States v. UnitedHealth Group Incorporated & PacifiCare Health Systems,
Inc., Civ. Action No. 1:05CV02436. On December 20, 2005, the United
States filed a Complaint alleging that United's acquisition of
PacifiCare would violate Section 7 of the Clayton Act, 15 U.S.C. 18. A
proposed Final Judgment, filed on the same day, requires United to
divest certain health insurance contracts in Tucson, Arizona and
Boulder, Colorado. It also enjoins United from continuing to exchange
certain information with CareTrust Networks, a wholly owned subsidiary
of Blue Shield of California and requires United to terminate its
network rental agreement with CareTrust effective one year after entry
of the Final Judgment. On March 2, 2006, an Amended Final Judgment was
filed to permit United to add new members to the CareTrust network
until July 5, 2006. A Competitive Impact Statement filed by the United
States describes the Complaint, the proposed Amended Final Judgment,
the industry, and the remedies available to private litigants who may
have been injured by the alleged violation.
Copies of the Complaint, proposed Final Judgment and Competitive
Impact Statement are available for inspection at the U.S. Department of
Justice, Antitrust Division, 325 Seventh Street, NW., Suite 215,
Washington, DC 20530 (telephone: 202-514-2481), on the Internet at
http://www.usdoj.gov/atr, and at the Clerk's Office of the United
States District Court for the District of Columbia. Copies of these
materials may be obtained upon request and payment of a copying fee.
Public comment is invited within the statutory 60-day comment
period. Such comments and responses thereto will be published in the
Federal Register and filed with the Court. Comments should be directed
to Mark Botti, Chief, Litigation I Section, Antitrust Division, U.S.
Department of Justice, 1401 H Street, NW., Suite 4000, Washington, DC
20530 (telephone: 202-307-0001).
Dorothy B. Fountain,
Deputy Director of Operations, Antitrust Division.
United States District Court for the District of Columbia
Case Number 1:05CV02436
Judge: Ricardo M. Urbina
Deck Type: Antitrust
Date Stamp: 12/20/2005
United States of America, 1401 H Street, NW., Suite 4000,
Washington, DC 20036, Plaintiff, v. UnitedHealth Group Incorporated,
9900 Bren Road East, Minnetonka, MN 55343, PacifiCare Health
Systems, Inc., 5995 Plaza Drive, Cypress, CA 90630, Defendants
Complaint
The United States of America, acting under the direction of the
Attorney General of the United States, brings this civil action to
enjoin defendant UnitedHealth Group Incorporated (``United'') from
acquiring certain health insurance-related assets of its competitor,
defendant PacifiCare Health Systems, Inc. (``PacifiCare''), in
violation of section 7 of the Clayton Act, as amended, 15 U.S.C. 18.
1. United is one of the nation's largest health insurers, providing
health and wellness insurance and other services to more than 55
million people nationwide. PacifiCare has approximately 13 million
health insurance members in Arizona, California, Colorado, Nevada,
Oklahoma, Oregon, Texas, and Washington.
2. United and PacifiCare offer a variety of commercial health
insurance products, such as health maintenance organizations (``HMOs'')
and preferred provider organizations (``PPOs'').
3. Small businesses, to help recruit and retain good workers, seek
to offer health insurance benefits for their employees by sponsoring a
commercial health insurance plan. Health insurance benefits are
frequently one of the largest costs facing small businesses, who are
thus very price sensitive in purchasing health insurance. Small
businesses rely upon vigorous competition among commercial health
insurers to keep prices affordable. Small businesses' options for
providing health care benefits are often more limited than those
available to other employers; in many markets, there are commercial
health insurers selling health plans to larger employers that do not
sell to small-group employers.
4. United and PacifiCare compete against one another in the sale of
commercial health insurance plans to small-group employers in the
Tucson, Arizona Metropolitan Statistical Area (``MSA''), where the
sales of health insurance plans to all small-group employers is
estimated to exceed $250 million. United's acquisition of PacifiCare
will eliminate direct competition between them, and may permit United
to increase prices and reduce the quality of commercial health
insurance plans to small-group employers in Tucson.
5. In addition, United and PacifiCare purchase health care services
from physicians and other providers for their employer members.
United's acquisition of PacifiCare will eliminate direct competition
between them in the purchase of physician services in Tucson, Arizona,
and Boulder, Colorado, will consolidate their purchasing power, and may
permit United to acquire physician services at lower rates. Such lower
rates would likely to lead to a reduction in the quantity or a
degradation in the quality of physician services provided to patients
in those areas. Total annual expenditures for physician services is
estimated to exceed $1.5 billion in the Tucson MSA and $375 million in
the Boulder MSA.
6. In addition, PacifiCare competes directly with Blue Shied of
California, both for the purchase of health care provider services and
for the sale of commercial health insurance in the State of California.
United rents the provider networks of CareTrust Networks, a wholly-
owned subsidiary of Blue Shield of California. Under a network access
agreement, United has access to certain information about the CareTrust
networks and a power to confer with Blue Shield about United's product
development to the extent it affects the CareTrust networks. As a
result of this merger, United will compete directly with Blue Shield.
The continuation of the United/CareTrust network access agreement in
its current form after the merger may substantially reduce competition
in the markets for the purchase of health care provider services and
for sale of commercial health insurance in one or more MSAs in
California. In these markets, billions of dollars are spent annually on
both the purchase of commercial health insurance, and the provision of
health care providers services for members of health care benefit
plans.
I. Jurisdiction and Venue
7. The United States files this Complaint pursuant to Sections 15
and 16 of the Clayton Act, as amended, 15 U.S.C. 25 and 26, to prevent
and restrain
[[Page 13992]]
the defendants' violation of section 7 of the Clayton, as amended, 15
U.S.C. 18.
8. United and PacifiCare are engaged in interstate commerce, and
their activities substantially affect interstate commerce.
The Court has subject matter jurisdiction over this action and
jurisdiction over the parties pursuant to Section 12 of the Clayton
Act, 15 U.S.C. 22, and 28 U.S.C. 1331 and 1337(a).
10. Venue is proper in this District under 15 U.S.C. 22 and 28
U.S.C. 1391(c), in that each of the defendants is a corporation that
transacts business and is found in the District of Columbia.
II. The Defendants
11. United is a corporation organized under the laws of Minnesota,
and has its principal place of business in Minnetonka, Minnesota.
United is one of the country's leading commercial health insurers,
offering a variety of HMO, PPO, Point-of-Service (``POS''), Self-
Directed Health Plans (``SDHP''), and other products. United contracts
with over 460,000 physicians and other health care professionals, and
4,200 hospitals, nationwide. United reported in excess of $37 billion
in revenues of 2004.
12. PacifiCare is a corporation organized under Delaware law. Its
primary place of business is Cypress, California. PacifiCare offers
group health insurance products, such as HMOs, PPOs, Exclusive Provider
Organizations (``EPOs''), SDHP, and Medicare HMOs under the Secure
Horizons name, throughout the United States, PacifiCare reported $12.2
billion in revenues for 2004.
III. United Proposes to Merge with PacifiCare
13. United entered into an Agreement and Plan of Merger (the
``Transaction'') with PacifiCare dated July 6, 2005.
14. The Transaction provides that PacifiCare shall merger into
United. PacifiCare shareholders will receive 1.1 shares of United
stock, and $21.50 cash, for each PacifiCare share owned. The
acquisition price is $8.15 billion, based on closing share prices for
the day of the Transaction.
IV. Violations Alleged
Count 1: Anti-Competitive Effects in the Sale of Commercial Health
Insurance to Small-Group Employers in Tucson, Arizona
15. Plaintiff incorporated herein paragraphs 1-14.
A. Relevant Product Market
16. The relevant price market affected by the proposed Transaction
is the sale of commercial health insurance to small-group employers.
Commercial health insurers, brokers who assist employers in purchasing
health plans, and state insurance commissions view the market for the
sale of commercial health to small-group employers as distinct from the
large-group employer market. Commercial health insurers, such as United
and PacifiCare, employ staff dedicated to marketing and sales of
commercial health insurance plans to small-group employers, and develop
and implement separate strategic plans directed to such sales. Brokers
frequently specialize in working with small-group employers. Many state
insurance commissions, including Arizona's, have regulations applying
exclusively to the sale of commercial health insurance to small
employers. Arizona defines small employers as those having between 2-50
employees. Arizona regulations, for example, require that commercial
health insurers selling to small employers guarantee basic group health
insurance coverage. Arizona also limits the variance among premium
rates that a commercial health insurer can charge to its small employer
customers.
17. For some employers, an effective alternative to purchasing
commercial health insurance is self-funding. An employer self-funds its
health benefits when is assumes responsibility for paying the covered
health care expenses incurred by employees or their families, minus any
co-payment or co-insurance payment an employee may pay for a given
health care service.
Employers that self-fund their health benefit plans frequently
retain a company to provide administrative services for the plan (known
as ``administrative services only'' or ``ASO''). Many commercial health
insurance companies also sell ASO to self-funded employers.
18. Because most small employers do not have a sufficient employee
population across which they can spread the financial risk, and do not
have multiple locations to obtain geographic diversity for risk
reduction, self-funding is not a viable option for them.
19. Smaller employers are substantially less likely to have
dedicated benefit administrators. Smaller employers place principal
reliance upon brokers to assist in various aspects of their sponsorship
of a health benefit plan, such as plan design consultation, and
assistance with the bidding process.
20. Commercial health insurance contracts typically renew annually.
Small employers, through their brokers, will solicit competing bids
from various commercial insurers. Bidding occurs on an employer-by-
employer basis, with commercial health insurers able to conform their
bids to the characteristics of the employer and its employee
population. Because self-funding is not a viable option for most small
employers, they have a substantial stake in competition among
commercial health insurers to produce the best available plan at the
most affordable price.
21. An insufficient number of small-group employers would drop
sponsorship of commercial health insurance plans to make a small but
significant price increase to all small-group employers unprofitable.
Sale of commercial health insurance to small-group employers is a
relevant product market, and a line of commerce under section 7 of the
Clayton Act.
B. Relevant Geographic Market
22. Health care primarily occurs on an in-person basis. Employees
seek relationships with physicians and other health care professionals
and institutions that are located in the metropolitan area in which
they live and work.
23. Commercial health insurers and brokers consider the area in and
around Tucson, Arizona, to be a separate and distinct area for the sale
of health plans to small-group employers.
24. The United States Department of Commerce has defined the area
in and around Tucson, Arizona as a MSA. The Tucson MSA is comprised of
Pima County.
25. An insufficient number of small-group employers would purchase
commercial health insurance outside the Tucson MSA to make a small but
significant price increase to all small-group employers in Tucson
unprofitable. The Tucson MSA is a relevant geographic market, and a
section of the country under Section 7 of the Clayton Act.
C. Effects of the Proposed Transaction
26. United and PacifiCare are among the principal competitors in
the market for the sale of commercial health insurance to small-group
employers in Tucson, and they are among each other's principal
competitors. Besides United and PacifiCare, there are few other
substantial competitors. Many small-group employers have only one, or
in some cases two, additional competitive options.
27. United and PacifiCare are the second and third largest sellers
of commercial health insurance to small-group employers in Tucson.
United
[[Page 13993]]
currently has an approximate 16% share of the small-group employer
commercial health insurance lives in Tucson; PacifiCare's market share
is approximately 17%. If the proposed Transaction were consummated,
United would have an approximate 33% share, roughly equal to the market
share of the largest commercial health insurer in Tucson. The market
for the sale of commercial health insurance to small-group employers in
Tucson is highly concentrated. If the proposed Transaction were
consummated, the Herfindahl-Hirschman Index (``HHI''), which is
commonly employed in merger analysis and is defined and explained in
Appendix A to this Complaint, would be greater than 2,500, and the
change in the HHI resulting from the proposed Transaction would be in
excess of 500.
28. The market shares of other competitors are substantially
smaller than the shares of the top three firms. United and PacifiCare
are consistently competitive bidders to retain and obtain small-group
employer business.
29. PacifiCare is a particularly aggressive, low-price competitor
in the small-group employer market in Tucson. These are important
qualities to small-group employers, who are sensitive to price and
particularly reliant on competition to keep health benefit plans
affordable. Absent the proposed Transaction, PacifiCare would likely
take small-group employer business away from United and other
competitors in Tucson.
30. In Tucson, small-group employers and their employees benefit
from competition between United and PacifiCare, through better products
and lower prices. The proposed Transaction will eliminate this
competition, and may permit United to increase price and reduce quality
of commercial health insurance plans to small-group employers in
Tucson. The effect of the proposed Transaction may be substantially to
lessen competition in violation of Section 7 of the Clayton Act.
Count 2: Anti-Competitive Effects in the Purchase of Physician Services
in Tucson, Arizona, and Boulder, Colorado
31. Plaintiff incorporates herein Paragraphs 1-14.
32. One component of a commercial health insurance product is its
provider networks. Commercial health insurers contract with an array of
health care professionals and facilities in the various locations in
which they sell insurance products to form provider networks.
Physicians offer discounts from their usual fee schedule in order to
obtain access to a commercial health insurer's substantial volume of
members in need of health care services.
A. Relevant Product Market
33. There are no purchasers to whom physicians can sell their
services other than individual patients or the commercial and
governmental health insurers that purchase physician services on behalf
of their patients. A small but significant decrease in the price paid
to physicians would not cause physicians to seek other purchasers of
their services or to otherwise change their activities (away from
providing physician services) in numbers sufficient to make such a
price reduction unprofitable. Thus, the purchase of physician services
is a relevant product market, and a line of commerce under Section 7 of
the Clayton Act.
B. Relevant Geographic Markets
34. The patient preferences that result in localized geographic
markets for the sale of commercial health insurance also produce local
markets for the purchase of physician services. Physicians expend
considerable efforts to build a practice in a particular geographic
area. A physician cultivates relationships with patients, and gains
referrals in large part through a favorable reputation among peer
physicians and others in the community. These assets, which a physician
compiles over time, are not easily transportable.
35. The number of physicians who would sell their services outside
Boulder and Tucson, respectively (by relocation, attracting patients
from outside the physician's home MSA, or otherwise), would not be
sufficient to make a small but significant price decrease to all
physicians in those MSAs unprofitable. Similarly, a reduction in the
quantity or quality of physician services resulting from the price
decrease would not prompt a sufficient number of patients to obtain
physician services outside those areas to overcome such a price
decrease. Thus, the Boulder MSA and Tucson MSA are relevant geographic
markets, and sections of the country under Section 7 of the Clayton
Act.
C. Effects of the Proposed Transaction
36. The contract rates and other terms that a physician can obtain
from a commercial health insurer depend on the physician's ability to
terminate (or credibly threaten to terminate) the relationship if the
insurer demands lower rates or other disfavored contract terms. A
physician's ability to terminate a relationship with a commercial
health insurer depends on his or her ability to replace the amount of
business lost from the termination, and the time it would take to do
so. Failing to replace lost business expeditiously is costly.
37. Physicians have a limited ability to maintain the business of
patients enrolled in a health plan once the physician terminates.
Physicians could retain patients by encouraging them to switch to
another health plan in which the physician participates. This is
particularly difficult for patients employed by companies that sponsor
only one plan because the patient would need to persuade the employer
to sponsor an additional plan with the desired physician in the plan's
network. Alternatively, the patient may remain in the plan, visiting
the physician on an out-of-network basis. The patient would be faced
with the prospect of higher out-of-pocket costs, either in the form of
increased co-payments for use of an out-of-network physician, or by
absorbing the full cost of the physician care.
38. The difficulty of timely replacing the business lost from
terminating a plan increases as the plan's share of the physician's
total practice increases. The difficulty is even greater where the
insurer accounts for a large share of all physicians' business in a
given locality because of the effect on referrals from other
physicians.
39. In Tucson, the combined membership of United and PacifiCare
would comprise a significant percentage of physician revenues.
PacifiCare's membership in Tucson includes substantial commercial
health insurance members and managed care Medicare enrollees, which are
marketed under the name Secured Horizons. Many physicians and physician
groups derive a substantial percentage of their revenue from
PacifiCare's managed care Medicare plans.
40. In Boulder, PacifiCare's membership consists of a small number
of very large accounts, the largest of which is its contract with the
University of Colorado for the provision of commercial HMO coverage to
approximately 6,000 members residing in the Boulder area (the ``Boulder
Contract''). The Boulder Contract alone constitutes nearly half of
PacifiCare's entire commercial health insurance membership in Boulder.
Thus, PacifiCare's strong bargaining position in physician negotiations
results largely from the members it derives from the Boulder Contract.
41. As a result of the proposed Transaction, United will account
for a large share of total payments to all physicians in the Boulder
and Tucson areas, and a particularly large share of revenue, in excess
of 35% in the Tucson
[[Page 13994]]
MSA and in excess of 30% in the Boulder MSA, for a substantial number
of physicians in those areas. These revenue shares understate the
importance to physicians of payments from commercial health insurance
plans. The total payments made to physicians include revenue earned by
treating patients covered by Medicare and Medicaid, which account for a
substantial amount of revenue for many physicians. Physicians typically
consider commercial health insurance business more profitable than
Medicare and Medicaid business. Many physicians use their commercial
health insurance business to compensate for the lower revenue earned
from Medicare and Medicaid business.
42. The markets for the purchase of physician services in the
Tucson and Boulder MSAs are highly concentrated. If the proposed
Transaction were consummated, the HHI would exceed 1,800 for Tucson and
Boulder, and the change in HHI resulting from the proposed Transaction
would exceed 700 for Tucson and 400 for Boulder.
43. The proposed Transaction may enable United to pay lower rates
for physician services in Tucson and Boulder, which would likely lead
to a reduction in quantity or degradation in quality of physician
services provided to patients in these areas. Thus, the effect of the
Transaction may be substantially to lessen competition in violation of
Section 7 of the Clayton Act.
Count 3: Anti-Competitive Effects in the State of California
44. Plaintiff incorporates herein paragraphs 1-14.
45. United Currently does not actively sell commercial health
insurance in California. Its California membership consists of
employees of large, national or regional employers that self-fund their
health benefit plans and use United for ASO.
46. To serve its California-based commercial members, United does
not contract with health care providers directly. Since July 2000,
United has rented the provider networks of CareTrust Networks. Blue
Shield of California, which owns CareTrust Networks, is one of the
largest commercial health insurers in California, with substantial
membership throughout the State. In exchange for access to the
CareTrust provider networks, which permits United to remain a
competitive option for large self-funded employers with California-
based employees, United pays a substantial fee to Blue Shield.
47. Pursuant to the network access agreement between United and
CareTrust, United has access to certain information about the CareTrust
provider network. The two hold regular meetings to review provider
contract negotiations and terminations, reimbursement and claims
processing issues, and network development. Through these meetings,
United has gained access to information about the discounts that
CareTrust has negotiated with physicians, hospitals, and other health
care providers throughout California. On occasion, United has also
disclosed to CareTrust its plans to introduce new commercial health
insurance products in California to ensure that those new products
would not breach the terms of any CareTrust network provider contract.
48. PacifiCare is one of the largest health insurers in the State
of California, with substantial membership in its commercial and Secure
Horizons products throughout the State.
A. Relevant Product Markets
49. PacifiCare competes with Blue Shield of California to sell
commercial health insurance to groups of all sizes. The sale of
commercial health insurance comprises one or more relevant product
markets and lines of commerce under Section 7 of the Clayton Act.
50. Similarly, PacifiCare competes with Blue Shield of California
to acquire health care provider services. The purchase of health care
provider services, such as physician and hospital services, comprises
one or more relevant product markets, and lines of commerce under
Section 7 of the Clayton Act.
B. Relevant Geographic Markets
51. PacifiCare and Blue Shield of California compete in several
MSAs throughout the State of California both to sell commercial
insurance and to purchase physician and hospital services. Thus,
various MSAs within the State of California are relevant geographic
markets, and sections of the country under Section 7 of the Clayton
Act.
C. Effects of the Proposed Transaction
52. PacifiCare and Blue Shield of California are among each other's
principal competitors for the sale of commercial health insurance, and
for the purchase of physician and hospital services. In several areas,
PacifiCare and Blue Shield account for a substantial percentage of the
commercial health insurance business.
53. Under the proposed Transaction, United will acquire
PacifiCare's California membership, and thereby become one of Blue
Shield's principal competitors for the sale of commercial health
insurance and the purchase of provider services. The CareTrust alliance
requires that United and Blue Shield exchange information about
provider discounts and United's new products. The alliance also creates
opportunities and incentives for United and Blue Shield to coordinate
their competitive activities and for each to discipline the other by,
among other things, terminating the network access agreement in
response to competitive actions. The proposed Transaction, in light of
the CareTrust alliance, may reduce competition between United and Blue
Shield following the merger. Thus, the effect of the Transaction may be
substantially to lessen competition for the sale of commercial health
insurance and the purchase of provider services in California in
violation of Section 7 of the Clayton Act.
V. Prayer for Relief
54. To remedy the violations of Section 7 of the Clayton Act
alleged herein, the United States requests that the Court:
(a) Adjudge the proposed Transaction to violate Clayton Act Section
7, as amended, 15 U.S.C. 18;
(b) permanently enjoin and restrain defendants from consummating
the proposed Transaction, or from entering into or carrying out any
agreement, understanding, or endeavor, the purpose of which would be to
combine the health insurance businesses or assets of United and
PacifiCare; and
(c) award to plaintiff its costs of this action and such other and
further relief as may be appropriate and as the Court may deem
equitable, just, and proper.
Dated: December 20, 2005.
For Plaintiff United States of America:
Thomas O. Barnett,
Acting Assistant Attorney General, Antitrust Division.
J. Bruce McDonald,
Deputy Assistant Attorney General, Antitrust Division.
Dorothy B. Fountain,
Deputy Director of Operations, Antitrust Division.
Mark J. Botti (D.C. Bar 416948),
Chief, Litigation I Section, Antitrust Division.
Joseph Miller,
Assistant Chief, Litigation I Section, Antitrust Division.
Jon B. Jacobs (D.C. Bar 412249), Steven Brodsky, Richard S.
Martin, Paul J. Torzilli, Nicole S. Gordon.
Litigation I Section, Antitrust Division, United States Department of
Justice,
[[Page 13995]]
City Center Building, 1401 H Street, NW., Suite 4000, Washington, DC
20530, (p) 202-514-8349, (f) 202-307-5802.
APPENDIX A--Herfindahl-Hirschman Index
``HHI'' means the Herfindahl-Hirschman Index, a commonly
accepted measure of market concentration. It is calculated by
squaring the market share of each share of each firm, competing in
the market and then summing the resulting numbers. For example, for
a market consisting of four firms with shares of 30, 30, 20, and 20
percent, the HHI is 2600 (30\2\ + 30\2\ + 20\2\ + 20\2\ = 2600).
(Note: Throughout the Complaint, market share percentages have been
rounded to the nearest whole number, but HHIs have been estimated
using unrounded percentages in order to accurately reflect the
concentration of the various markets.) The HHI takes into account
the relative size distribution of the firms in a market and
approaches zero when a market consists of a large number of small
firms. The HHI increases both as the number of firms in the market
decreases and as the disparity in size between those firms
increases.
Markets in which the HHI is between 1000 and 1800 points are
considered to be moderately concentrated, and those in which the HHI
is in excess of 1800 points are considered to be highly
concentrated. See Horizontal Merger Guidelines ] 1.51 (revised Apr.
8, 1997). Transactions that increase the HHI by more than 100 points
in concentrated markets presumptively raise antitrust concerns under
the guidelines issued by the U.S. Department of Justice and Federal
Trade Commission. See id.
Filed: March 2, 2006.
Amended Final Judgment
Whereas, plaintiff, United States of America, filed its Complaint
on December 19, 2005, plaintiff and defendants, defendant UnitedHealth
Group Incorporated and defendant PacifiCare Health Systems, Inc., by
their respective attorneys, have consented to the entry of this Final
Judgment without trial or adjudication of any issue of fact or law and
without this Final Judgment constituting any evidence against or
admission by any party regarding any issue of fact or law;
And Whereas, defendants agree to be bound by the provisions of this
Final Judgment pending its approval by the Court;
And Whereas, the essence of this Final Judgment is the prompt and
certain Divestiture of certain rights or assets by defendants, and
their adherence to certain injunctions, to ensure that competition is
not substantially lessened;
And Whereas, plaintiff requires defendants to make certain
Divestitures for the purpose of remedying the loss of competition
alleged in the Complaint;
And whereas, defendants have represented to the United States that
the Divestitures required by this Final Judgment can and will be made,
and that defendants will later raise no claim of hardship or difficulty
as grounds for asking the Court to modify any of the Divestiture or
injunctive provisions contained herein;
Now therefore, before any testimony is taken, without trial or
adjudication of any issue of fact or law, and upon consent of the
parties, it is ordered, adjudged, and decreed:
I. Jurisdiction
This Court has jurisdiction over the subject matter of, and each of
the parties to, this action. The Complaint states a claim upon which
relief may be granted against defendants under Section 7 of the Clayton
Act, as amended, 15 U.S.C. 18.
II. Definitions
As used in this Final Judgment:
A. ``Boulder'' means the Metropolitan Statistical Area comprising
Boulder County, Colorado.
B. ``Boulder Contract'' means that portion of PacifiCare's current
contract with the Regents of the University of Colorado, effective
January 1, 2004, which covers the commercial HMO insurance of
approximately six thousand and sixty-six (6,066) members as of June 30,
2005 resident in Boulder.
C. ``Commercial Health Insurance Products'' means United or
PacifiCare products for comprehensive commercial health coverage
(whether Administrative Services Only (``ASO'') or fully insured)
including, but not limited to: (1) Health Maintenance Organization
(``HMO'') group products; (2) Preferred Provider Organization (``PPO'')
group products; (3) Point-of-Service (``POS'') group products; (4)
indemnity insurance group products; and (5) Exclusive Provider
Organization (``EPO'') group products, but does not include Medicare
Health Insurance Products.
D. ``CTN'' means CareTrust Networks, formerly known as California
Physicians' Service Agency, Inc. (``CPSA''), a California business
corporation that operates the CTN network in California, its successors
and assigns, and its parent, subsidiaries, divisions, groups,
affiliates, partnerships, and their respective directors, officers,
managers, agents, and employees.
E. ``Divestiture,'' ``Divest'' or ``Divesting'' means the sale,
transfer, ceding, assignment or disposition of the beneficial interest
in a contract or policy for health care coverage included in the
Divestiture Assets by commercially reasonable means in accordance with
applicable law.
F. ``Divestiture Assets'' means the Tucson Commercial Insurance
Contracts and the Boulder Contract, and may also include copies of all
relevant contracts, business records, data and information that
specifically relate to the Divestiture Assets, but excluding
defendants' proprietary assets and know-how used for general
application in defendants' businesses.
G. ``Legacy United Customers'' means existing or new customers that
have, prior to the closing of the Transaction, committed to purchase or
been issued a quote for health care services from United using the CTN
network in California.
H. ``Transition United Customers'' means any customers that have,
after the closing of the Transaction, received a quote for health care
services from United under a policy that has an effective date of July
5, 2006 or earlier. Such customers and their members may access the CTN
network until no later than July 5, 2006.
1. ``Medicare Health Insurance Product'' means any plan, whether
HMO, PPO, fee-for-service or other, providing managed care Medicare
coverage under any of the following: Medicare Part B, Medicare
Advantage, Medicare Cost Plans, or the Programs of All inclusive Care
(PACE).
J. ``PacifiCare'' means defendant PacifiCare Health Systems, Inc.,
a Delaware corporation with its headquarters in Cypress, California, in
successors and assigns, and its subsidiaries, divisions, groups,
affiliates, partnerships and joint ventures, and their respective
directors, officers, managers, agents, and employees.
K. ``Purchaser'' or ``Purchasers'' means the entity or entities to
whom the Divestiture Assets are Divested.
L. ``Transaction'' means the merger contemplated by the Agreement
and Plan of Merger dated July 6, 2005, by and among United, Point
Acquisition LLC and PacifiCare.
M. ``Tucson'' means the Metropolitan Statistical Area consisting of
Pima County, Arizona.
N. ``Tucson Commercial Insurance Contracts'' means contracts or
policies identified by United for the provision of any Commercial
Health Insurance Products covering at least fifty-four thousand five
hundred and seventeen (54,514) members who reside or work in Tucson,
representing the total number of residents commercially insured members
in Tucson that PacifiCare reported as of June 30, 2005. Such contracts
include contracts identified by
[[Page 13996]]
United covering at least 7,581 members that obtain health coverage
under United or PacifiCare contracts for Commercial Health Insurance
Products with small group employers (2-50 employees) situated in Tucson
(``Tucson Small Group Employers''), such 7,581 members representing the
total number of resident Tucson Small Group Employer members that
PacifiCare reported as of June 30, 2005. Such contracts may otherwise
include contracts identified by United for any Commercial Health
Insurance Products entered into by PacifiCare or United.
O. ``United'' means defendant UnitedHealth Group Incorporated, a
Minnesota corporation with its headquarters in Minnetonka, Minnesota,
its successors and assigns, and its subsidiaries, divisions, group,
affiliates, partnerships and joint ventures, and their respective
directors, officers, managers, agents, and employees.
III. Applicability
A. This Final Judgment applies to Pacificare and United, as defined
above, and to all other persons in active concert or participation with
any of them who receive actual notice of this Final Judgment by
personal service or otherwise.
B. Defendants shall require, as a condition of the sale or other
disposition of all or substantially all of their assets or of lesser
business units that include either the Divestiture Assets or any rights
under United's network access agreement with CareTrust Networks, that
the acquirer agrees to be bound by the provisions of this Final
Judgment. Defendants however, need not obtain such an agreement from
any Purchaser of the Divested Assets.
IV. Divestitures
A. Defendants are hereby ordered and directed to Divest the
Divestiture Assets in a manner consistent with this Final Judgment to
one or more Purchasers acceptable to the United States, in its sole
discretion, within: (i) one hundred and twenty (120) calendar days
after the date on which the Transaction closes; or (ii) within five (5)
days after notice of the entry of this Final Judgment by the Court,
whichever is later. If approval or consent from any government unit is
necessary with respect to Divestiture of the Divestiture Assets by
defendants or the Divestiture Trustee, and if applications or requests
for approval or consent have been filed with the appropriate
governmental unit within one hundred and twenty (120) calendar days
after the date on which the Transaction closes, but an order or other
dispositive action on such applications has not been issued before the
end of the period permitted for Divestiture, the period shall be
extended with respect to Divestiture of those Divestiture Assets for
which governmental approval or consent has not been issued until five
(5) business days after such approval or consent is received.
B. The United States, in its sole discretion, may agree to one or
more extensions of this time period not to exceed sixty-five (65) days
total and shall notify the Court in such circumstances. Defendants
agree to use their best efforts to Divest the Divestiture Assets as
expeditiously as possible.
C. In accomplishing the Divestitures ordered by this Final
Judgment, defendants promptly shall make know, by usual and customary
means, the availability of the Divestiture Assets. Defendants shall
inform any person making an inquiry regarding a possible purchase that
the Divestiture is being made pursuant to this Final Judgment and shall
provide such person with a copy of this Final Judgment. Defendants
shall offer to furnish to all prospective Purchasers, subject to
reasonable confidentiality assurances, all information and documents
relating to the Divestiture Assets customarily provided in a due
diligence process, except information and documents subject to the
attorney-client privilege or the attorney work-product privilege.
Defendants shall make available such non-privileged information to the
United States at the same time that such information is made available
to prospective Purchasers.
D. Defendants shall permit prospective Purchasers of the
Divestiture Assets to have reasonable access to personnel and access to
any and all financial, operational, or other documents and information
as is customarily provided as part of a due diligence process for a
transaction of this type.
E. Defendants shall provide to prospective Purchasers, and to the
United States, information relating to the personnel in the sales and
account management of the Divestiture Assets to enable such Purchasers
to make offers of employment to those persons. Prior to Divestiture,
defendants shall not interfere with any negotiations by any Purchasers
to employ any such persons. For a period of one year from the date of
the completion of each Divestiture, defendants shall not hire or
solicit to hire any such person who was hired by any Purchasers, unless
such individual has (1) a written offer of employment from a third
party in such capacity or (2) a written notice from such Purchaser
stating that the Purchaser does not intend to continue to employ the
individual in such capacity.
F. Defendants shall warrant to all Purchaser(s) that the contracts
included in the Divestiture Assets are in full force and effect on the
date that binding agreements for the Divestiture are signed.
G. Defendants shall use their best efforts to Divest the
Divestiture Assets and procure any consents and approvals required for
such Divestitures.
H. Pursuant to a transition services agreement on customary
commercial terms and conditions and approved by the United States, at
the Purchaser's request, defendants will provide certain transitional
support services for the Divestiture Assets for a period of time not to
exceed eighteen (18) months from the date of Divestiture. These
services may include claims processing, computer operations support,
eligibility, enrollment, utilization management and run-out
administration and such other services as are reasonably necessary to
operate the Divestiture Assets.
I. Unless the United States otherwise consents in writing, the
Divestiture pursuant to Section IV, or by trustee appointed pursuant to
Section V, shall include the entire Divestiture Assets and shall be
accomplished in such a way as to satisfy the United States, in its sole
discretion, that the Divestiture Assets can and will be used by the
Purchaser(s) as part of a viable, ongoing business engaged in the sale
of Commercial Health Insurance Products. The Divestiture of the
Divestiture Assets may be made to one or more Purchasers, provided that
in each instance it is demonstrated to the sole satisfaction of the
United States that the Divestiture Assets will remain viable and the
Divestitures will remedy the competitive harm alleged in the Complaint.
The Divestitures, whether pursuant to Section IV or Section V of this
Final Judgment; (1) Shall be made to Purchaser(s) that, in the United
States's sole judgment, each have the intent and capability (including
the necessary managerial, operational, technical, and financial
capability) to compete effectively in the sale of Commercial Health
Insurance Products; and (2) shall be accomplished so as to satisfy the
United States, in its sole discretion, that none of the terms of any
agreement between defendants and any Purchaser gives defendants the
ability to interfere with the Purchaser's ability to compete
effectively.
J. If, before defendants can Divest the Boulder Contract, the
University of Colorado has terminated its entire
[[Page 13997]]
contract with PacifiCare for commercial HMO insurance or the portion
thereof that relates to the Boulder membership as defined in this Final
Judgment and has awarded that entire contract or the Boulder portion to
a Commercial Health Insurance plan other than United or PacifiCare,
then defendants shall not be required to Divest the Boulder Contract or
any other contracts or assets in the Boulder MSA. If the University of
Colorado has not terminated the contract entirely or the Boulder
portion but, in the United State's sole discretion, Divesting the
Boulder Contract as it is defined in this Final Judgment would be
unreasonably disruptive to the University of Colorado, then defendants
shall instead be required to Divest contracts identified by United
covering at least, 6,066 members who reside or work in Boulder and who
obtain health coverage under United or PacifiCare contracts for
Commercial Health Insurance Products.
V. Appointment of Trustee
A. If defendants have not Divested the Divestiture Assets within
the time period specified in Section IV, defendants shall notify the
United States of that fact in writing. Upon application of the United
States, the Court shall appoint a trustee selected by the United States
and approved by the Court to effect the Divestiture of any of the
Divestiture Assets not already Divested or subject to a binding
Divestiture agreement.
B. After the appointment of a trustee becomes effective, only the
trustee shall have the right to Divest the Divestiture Assets. The
trustee shall have the power and authority to accomplish the
Divestitures to Purchaser(s) acceptable to the United States: (1) At
such price and on such terms as are then obtainable upon reasonable
effort by the trustee, subject to the provisions of Sections IV, V, and
VI of this Final Judgment; (2) subject to Section V.C below, by hiring
at the cost and expense of defendants any investment bankers,
attorneys, or other agents, who shall be solely accountable to the
trustee, reasonably necessary in the trustee's judgment to assist in
the Divestitures; and (3) with such other powers as the Court deems
appropriate.
C. Defendants shall not object to any Divestiture by the trustee on
any ground other than the trustee's malfeasance. Any such objections by
defendants must be conveyed in writing to the United States and the
trustee within ten (10) calendar days after the trustee has provided
the notice required under Section VI.
D. The trustee shall serve at the cost and expense of defendants,
on such terms and conditions as the United States approves, and shall
account for all monies derived from the sale of the Divestiture Assets
sold by the trustee and for all costs and expenses so incurred. After
approval by the Court of the trustee's accounting, including fees for
its services and those of any professionals and agents retained by the
trustee, all remaining money shall be paid to defendants and the trust
shall then be terminated. The compensation of the trustee and any
professionals and agents retained by the trustee shall be reasonable in
light of the value of the Divestiture Assets and based on a fee
arrangement providing the trustee with an incentive based on the price
and terms of the Divestitures and the speed with which they are
accomplished, but timeliness is paramount.
E. Defendants shall use their best efforts to assist the trustee in
accomplishing the required Divestitures, including best efforts to
effect all necessary regulatory approvals and consents. The trustee and
any consultants, accountants, attorneys, and other persons retained by
the trustee shall have full and complete access to the personnel,
books, and records that relate to the Divestiture Assets, and
defendants shall develop financial or other information relevant to the
Divestiture Assets as the trustee may reasonably request, subject to
customary confidentiality assurances.
F. After its appointment, the trustee shall file monthly reports
with the United States and the Court setting forth the trustee's
efforts to accomplish the Divestitures ordered under this Final
Judgment; provided, however, that to the extent such reports contain
information that the trustee deems confidential, such reports shall not
be filed in the public docket of the Court. Such reports shall include
the name, address and telephone number of each person who, during the
preceding month, made an offer to acquire, expressed an interest in
acquiring, entered into negotiations to acquire, or was contacted or
made an inquiry about acquiring, any interest in the Divestiture
Assets, and shall describe in detail each contact with any such person.
The trustee shall maintain full records of all efforts made to Divest
the Divestiture Assets.
G. If the trustee has not accomplished such Divestitures within six
(6) months after its appointment, the trustee thereupon shall file
promptly with the Court a report setting forth (1) the trustee's
efforts to accomplish the required Divestitures; (2) the reasons, in
the trustee's judgment, why the required Divestitures have not been
accomplished; and (3) the trustee;s recommendations; provided, however,
that to the extent such reports contain information that the trustee
deems confidential, such reports shall not be filed in the public
docket of the Court. The trustee shall at the same time furnish such
report to the United States, who shall have the right to be heard and
to make additional recommendations consistent with the purpose of the
trust. The Court shall enter thereafter such orders as it shall deem
appropriate in order to carry out the purpose of this Final Judgment
which may, if necessary, include extending the trust and the term of
the trustee's appointment by a period requested by the United States.
VI. Notice of Proposed Divestitures
A. Within two (2) business days following a execution of a
definitive Divestiture agreement, contingent upon compliance with the
terms of this Final Judgment, to effect, in whole or in part, any
proposed Divestitures pursuant to Section IV or Section V of this Final
Judgment, defendants or the trustee, whichever is then responsible for
effecting the Divestitures, shall notify the United States of the
proposed Divestitures. If the trustee is responsible, it shall
similarly notify defendants. The notice shall set forth the details of
the proposed Divestiture and list the name, address, and telephone
number of each person not previously identified who offered to, or
expressed an interest in or a desire to, acquire any ownership interest
in the Divestiture Assets that is the subject of the binding contract,
together with full details of same.
B. Within fifteen (15) calendar days of its receipt of such notice,
the United States may request from defendants, the trustee, the
proposed Purchaser(s), or any other third party additional information
concerning the proposed Divestitures, the proposed Purchaser(s), and
any other potential Purchaser(s). Defendants and the trustee shall
furnish any additional relevant information requested from them
promptly, and in all events within fifteen (15) calendar days of the
receipt of the request, unless the parties shall otherwise agree.
C. Within thirty (30) calendar days after receipt of the notice or
within twenty (20) calendar days after the United States has been
provided the additional information requested from defendants, the
trustee, the proposed Purchaser(s), and any third party, whichever is
later, the United States shall provide written notice to defendants and
the trustee, if there is
[[Page 13998]]
one, stating whether it objects to the proposed Divestitures. If the
United States provides written notice to defendants and the trustee
that it does not object, then the Divestitures may be consummated,
subject only to defendants' limited right to object to the Divestiture
under Section V.C of this Final Judgment. Absent written notice that
the United States does not object to the proposed Purchaser(s) or upon
objection by the United States, such Divestitures proposed under
Section IV or Section V shall not be consummated. Upon objection by
defendants under Section V.C, a Divestiture proposed under Section V
shall not be consummated unless approved by the Court.
VII. Injunctive Provisions
A. Effective one (1) year after the entry of this Final Judgment,
United shall discontinue renting the CTN provider network in the State
of California and shall not rent the CTN provider network for the
period of the Final Judgment.
B. Effective upon the closing of the Transaction, United shall not:
(1) Communicate with CTN in any regarding the introduction of new
United or CTN Commerical Health Insurance Products, in California or
elsewhere;
(2) Permit any United customer, other than a Legacy United Customer
or a Transition United Customer, to access the CTN network, except that
such access by a Transition United Customer shall cease on or before
July 5, 2006;
(3) Have any involvement with CTN relating to negotiations over
rates or other terms with any physician or hospital in any provider
network;
(4) Have any involvement with CTN relating to the development of
any provider network;
(5) Exchange with CTN any non-public information (including, but
not limited to, information relating to PacifiCare's network or the
sale or marketing of Commercial Health Insurance Products) that is not
necessary for United's rental of provider services from or access by
Legacy United Customers or Transition United Customers to CTN's
network;
(6) Engage in any joint efforts with CTN to sell or market
Commercial Health Insurance Products.
This Section VII.B shall not affect CTN's existing network maintenance
and network standards obligations and any other existing CTN
obligations to United with respect to providers in the CTN network.
C. United shall develop and enact procedures to ensure, during the
time period in which it continues to rent CTN's network in California,
that any non-public information obtained from CTN about CTN's network,
or any other provider network, is not disseminated to persons other
than those with a legitimate need for it. Such procedures shall ensure
that:
(1) Any non-public information obtained from CTN about CTN's
network is not disseminated to any United employee who has
responsibility for either: (a) Negotiating with physicians or hospitals
in any provider network; or (b) selling Commercial Health Insurance
Products to any customer other than a Legacy United Customer or a
Transition United Customer;
(2) Any non-public information about PacifiCare's network that is
not necessary for United's rental or provider services from or access
by Legacy United Customers or Transition United Customers to CTN's
network is not disseminated to any CTN employee; and
(3) Neither United nor CTN has any involvement in the marketing or
sale of Commercial Health Insurance Products by the other.
D. Within ten (10) business days of the entry of the Final
Judgment, United shall submit to the United States a document setting
forth in detail its proposed plan for complying with the injunctions in
this Section VII. The United States shall have the sole discretion to
approve or disapprove United's proposed compliance plan, and shall
notify United within five (5) business days of its decision. If
United's proposal is rejected, the United States shall state its
reasons for doing so, and United shall be given the opportunity to
submit, within five (5) business days of receiving the notice of
rejection, a revised compliance plan.
E. From the closing of the Transaction, United shall not require
any physician practicing in Tucson, as a condition for participating in
any of United's networks for its Commercial Health Insurance Products,
to agree to participate in United's network for any Medicare Health
Insurance Product. Similarly, United shall not require any physician
practicing in Tucson, as a condition for participating in United's
network for any Medicare Health Insurance Product, to agree to
participate in any of United's networks for its Commercial Health
Insurance Products. United may, however, permit any physician who
wants, and voluntarily agrees, to participate in one or more of its
networks to do so without violating this Final Judgment. This provision
does not apply to (i) contracts entered into by United or PacifiCare
prior to the closing of the Transaction that provide for participation
in both Commercial Health Insurance Products and Medicare Health
Insurance Products; or (ii) any contractual provision that obliges
physicians to participate with respect to all Commercial Health
Insurance Products of either defendant.
VIII. Affidavits
A. Within twenty (20) calendar days of the filing of the Complaint
in this matter and every thirty (30) calendar days thereafter until the
Divestitures and other remedies set forth herein have been completed,
whether pursuant to Section IV or Section V, defendants shall deliver
to the United States an affidavit as to the fact and manner of
compliance with Section IV or Section V of this Final Judgment. Each
such affidavit shall include the name, address, and telephone number of
each person who, during the preceding thirty days, made an offer to
acquire, expressed an interest in acquiring, entered into negotiations
to acquire, or was contacted or made an inquiry about acquiring any
interest in the Divestiture Assets, and shall describe in detail each
contact with any such person during that period. Each such affidavit
shall also include a description of the efforts that defendants have
made to solicit a Purchaser(s) for the Divestiture Assets and to
provide required information to prospective Purchasers including the
limitations, if any, on such information. Assuming the information set
forth in the affidavit is true and complete, any objection by the
United States to information provided by defendants, including
limitations on the information, shall be made within fourteen (14)
calendar days of receipt of such affidavit.
B. Within twenty (20) calendar days of the filing of the Complaint
in this matter, defendants shall deliver to the United States an
affidavit that describes in reasonable detail all actions defendants
have taken and all steps defendants have implemented on an ongoing
basis to comply with Section IX of this Final Judgment. The affidavit
also shall describe, but not be limited to, defendants' efforts to
maintain and operate the Divestiture Assets. Defendants shall deliver
to the United States an affidavit describing any changes to the efforts
and actions outlined in defendants' earlier affidavits filed pursuant
to this Section within fifteen (15) calendar days after the change is
implemented.
C. Until one (1) year after the Divestitures required by this Final
Judgment have been completed,
[[Page 13999]]
defendants shall preserve all records of all efforts made to preserve
the Divestiture Assets and effect the Divestitures.
IX. Preservation of Assets
Until the Divestitures required by the Final Judgment have been
accomplished, defendants shall: (1) Preserve and maintain the value and
goodwill of the Divestiture Assets; (2) operate the Divestiture Assets
in the ordinary course of business; and (3) take no action that would
jeopardize, delay, or impede the Divestiture of the Divestiture Assets.
X. Financing
Defendants shall not finance all or any part of any Purchase made
pursuant to Section IV or V of this Final Judgment.
XI. Compliance Inspection
A. For the purposes of determining or securing compliance with this
Final Judgment, or of determining whether the Final Judgment should be
modified or vacated, and subject to any legally recognized privilege,
from time to time duly authorized representatives of the United States
Department of Justice, including consultants and other persons retained
by the United States, shall, upon written request of a duly authorized
representative of the Assistant Attorney General in charge of the
Antitrust Division, and on reasonable notice to defendants, be
permitted:
(1) Access during defendants' office hours to inspect and copy, or
at the United States's option, to require that defendants provide
copies of, all books, ledgers, accounts, records and documents in the
possession, custody, or control of defendants, relating to any matters
contained in this Final Judgment; and
(2) To interview, either informally or on the record, defendants'
officers, employees, or agents, who may have their individual counsel
present, regarding such matters. The interviews shall be subject to the
reasonable convenience of the interviewee and without restraint or
interference by defendants.
B. Upon the written request of a duly authorized representative of
the Assistant Attorney General in charge of the Antitrust Division,
defendants shall submit written reports, or responses to written
interrogatories, under oath if requested, relating to any of the
matters contained in this Final Judgment as may be requested.
C. No information or documents obtained by the means provided in
this section shall be divulged by the United States to any person other
than an authorized representative of the executive branch of the United
States, except in the course of legal proceedings to which the United
States is a party (including grand jury proceedings), or for the
purpose of securing compliance with this Final Judgment, or as
otherwise required by law.
D. If at the time information or documents are furnished by
defendants to the United States, defendants represent and identify in
writing the material in any such information or documents to which a
claim of protection may be asserted under Rule 26(c)(7) of the Federal
Rules of Civil Procedure, and defendants mark each pertinent page of
such material, ``Subject to claim of protection under Rule 26(c)(7) of
the Federal Rules of Civil Procedure,'' then the United States shall
give defendants ten (10) calendar days notice prior to divulging such
material in any legal proceeding (other than grand jury proceedings).
XII. No Reacquisition
Defendants may not reacquire any of the Divestiture Assets during
the term of this Final Judgment, provided, however, that nothing herein
shall affect defendants' ability to bid or offer to provide health care
coverage or services, including to employers and members covered by
contracts or policies included in the Divestiture Assets.
XIII. Retention of Jurisdiction
The Court retains jurisdiction to enable any party to this Final
Judgment to apply to this Court at any time for further orders and
directions as may be necessary or appropriate to carry out or construe
this Final Judgment, to modify any of its provisions, to enforce
compliance, and to punish violations of its provisions.
XIV. Expiration of Final Judgment
Unless this Court grants an extension, this Final Judgment shall
expire five (5) years from the date of its entry.
XV. Public Interest Determination
The parties have complied with the requirements of the Antitrust
Procedures and Penalties Act, 15 U.S.C. 16, including making copies
available to the public of this Final Judgment, the Competitive Impact
Statement, and any comments thereon and the United States' response to
comments. Based upon the record before the Court, which includes the
Competitive Impact Statement and any comments and response to comments
filed with the Court, entry of this Final Judgment is in the public
interest.
Dated:
-----------------------------------------------------------------------
United States District Judge
Filed: March 3, 2006.
United States of America, Plaintiff, v. UnitedHealth Group,
Inc., and PacifiCare Health Systems, Inc., Defendants.
Competitive Impact Statement
Pursuant to Section 2(b) of the Antitrust Procedures and Penalties
Act (``APPA''), 15 U.S.C. 16(b)-(h), the United States submits this
Competitive Impact Statement to assist the Court in assessing the
proposed Amended Final Judgment submitted for entry in this civil
antitrust proceeding.
I. Nature and Purpose of This Proceeding
The United States filed a civil antitrust Complaint under section
15 of the Clayton Act, 15 U.S.C. 25, on December 20, 2005, alleging
that the proposed acquisition by UnitedHealth Group, Inc. (``United'')
of PacifiCare Health Systems, Inc. (``PacifiCare'') would violate
section 7 of the Clayton Act (``Section 7''), 15 U.S.C. 18.
The Complaint alleges that the proposed acquisition may
substantially lessen competition in the following markets: (i) The sale
of commercial health insurance plans to small-group employers (those
with 2-50 employees) in the Tucson, Arizona Metropolitan Statistical
Area (``MSA''); (ii) the purchase of physician services in the Tucson
MSA; (iii) the purchase of physician services in the Boulder, Colorado
MSA; and (iv) the sale of commercial health insurance plans and the
purchase of health care provider services in numerous MSAs throughout
California.
When the Complaint was filed, the United States also filed a
proposed settlement that would permit United to complete its
acquisition of PacifiCare but would require divestitures of certain
assets and injunctive relief sufficient to preserve competition in the
sale of commercial health insurance to small-group insurers in Tucson,
the purchase of physician services in Tucson and Boulder, and the sale
of health insurance and purchase of physician and hospital services in
California.
The United States filed a proposed Amended Final Judgment on March
2, 2006 which will allow United to offer in-network benefits to new
members requiring medical care in the State of California pending
completion of certain operational steps necessary for
[[Page 14000]]
United to transition to the PacifiCare network.
Plaintiff and Defendants have stipulated that the proposed Amended
Final Judgment may be entered after compliance with the APPA. Entry of
the proposed Amended Final Judgment would terminate this action, except
that the Court would retain jurisdiction to construe, modify, or
enforce the provisions of the proposed Amended Final Judgment and to
punish violations thereof.
II. The Alleged Violations
A. The Defendants
United is a Minnesota corporation with its principal place of
business in Minnetonka, Minnesota. It offers a variety of HMO, PPO,
Point-of-Service (``POS'') health plans Self-Directed Health Plans
(``SDHP''), and other products. United also purchases physician
services for its health plan members, which it offers to members
through United's health plans. United is one of the leading health
insurers in the United States and reported in excess of $37 billion in
revenues for 2004.
PacifiCare is a Delaware corporation with its principal place of
business in Cypress, California. Like United, PacifiCare offers group
health insurance products, such as HMOs, PPOs, Exclusive Provider
Organizations (``EPOs''), and SDHP, and also buys physician services,
which it offers to its members through PacifiCare's health plans.
PacifiCare reported $12.2 billion in revenues for 2004.
B. The Acquisition
United entered into an Agreement and Plan of Merger (``Agreement'')
with PacifiCare dated July 6, 2005. Pursuant to the terms of the
Agreement, PacifiCare merged into United on December 20, 2005, after
the defendants received all of the necessary regulatory approvals.
PacifiCare shareholders received 1.1 shares of United stock and $21.50
cash for each PacifiCare share owned.
C. Anticompetitive Effects of the Acquisition
1. The Sale of Health Insurance to Small-Group Employers in the Tucson
MSA
The Complaint alleges that United's proposed acquisition of
PacifiCare is likely to substantially lessen competition in the sale of
commercial health insurance to small-group employers in Tucson, Arizona
in violation of section 7 of the Clayton Act.
a. The Sale of Commercial Health Insurance to Small-Group Employers Is
a Relevant Product Market
Commercial health insurance companies, such as United and
PacifiCare, contract with employers and other groups to provide health
insurance services. The market for the sale of commercial health
insurance to small-group employers is separate from the market for the
sale of such insurance to larger groups.
Unlike larger-group employers, small-group employers cannot
feasibly self fund their employees' health benefits. They do not have a
sufficient employee population across which they can spread financial
risk, nor do they typically have multiple locations that reduce risk
through geographic diversity. Because self funding is not a viable
option for small-group employers, they would not switch to self funding
in sufficient numbers to make a small but significant increase in the
price of fully-insured health plans to all small-group employers
unprofitable.
The different markets are also evident in the ways that commercial
health insurance is regulated, sold, and purchased. Many states have
regulations that apply only to the sale of commercial health insurance
to small-group employers. In Arizona, state law defines small employers
as those having 2-50 employees, and certain statutes apply specifically
to insurance sold to those groups. A.R.S. section 20-2301(A)(22). See,
e.g., A.R.S. sections 20-2304, 20-2311.
The way in which commercial health insurance is sold also
distinguishes the small and large group markets. Commercial health
insurers, like United and PacifiCare, engage in extensive negotiations
over price and other contract terms with large employers. These
negotiations result in different large groups paying different prices
for health plans from the same insurer. In contrast, commercial health
plans conduct fewer and more limited negotiations with small-group
employers. The insurer often sets the price at which it offers its
health plans to small groups and those groups decide to accept or
reject largely based on public information.
Because of these differences in the way that commercial health
insurance is sold to large and small groups, health insurers employ
staff dedicated solely to marketing and selling commercial health
insurance plans to small-group employers, and develop and implement
separate strategic plans for such customers. Rather than employ
dedicated benefit administrators, small-group insurers are more likely
to rely on brokers, who frequently specialize in working with small-
group employers, to assist in various aspects of an employer's
sponsorship of a health benefit plan, such as plan design consultation,
and assistance with the bidding process.
Health insurers, brokers, state insurance commissions, and the
purchasers themselves consider the small-group market to be separate
and distinct.
b. The Tucson MSA Is a Relevant Geographic Market
Health insurance plan enrollees seek relationships with physicians
and other health care professionals and institutions that are located
in the metropolitan area in which they live and work. Commercial health
insurers and brokers consider the area in and around Tucson, Arizona to
be a separate and distinct area for the sale of health plans to small-
group employers. The United States Department of Commerce has defined
the area in and around Tucson, Arizona as an MSA.
c. Competitive Effects in the Market for the Sale of Commercial Health
Insurance to Small-Group Employers in the Tucson MSA
Small-group employers rely on competition to keep health benefit
plans affordable. Before the merger, small-group employers in Tucson
could choose between United, PacifiCare, and one or two other options.
PacifiCare was the low-price competitor in the market, an important
consideration for small-group employers, which tend to be especially
price-sensitive.
United and PacifiCare were the second and third largest sellers of
commercial health insurance in Tucson. Market shares drop off
substantially after the top three insurers. With few alternatives and
no low-cost alternative, the merged entity would have been able to
increase prices or reduce the quality of its health plans offered to
small-group employers.
2. The Purchase of Physician Services in the Tucson and Boulder MSAs
United's acquisition of PacifiCare will also increase its
purchasing power over physician services in the Tucson and Boulder
MSAs, which would enable United to reduce the rates paid for those
services.
a. The Purchase of Physician Services Is a Relevant Product Market
Physician services are those medical services provided and sold by
physicians. The only purchasers of
[[Page 14001]]
these services are individual patients or commercial and government
health insurers that purchase these services on behalf of individual
patients. As a result, physicians cannot seek other purchasers in the
event of a small but significant decrease in the prices paid by these
buyers. Nor will such a price decrease cause physicians to stop
providing their services or shift towards other activities in numbers
sufficient to make such a price reduction unprofitable.
b. The Tucson and Boulder MSAs Are Relevant Geographic Markets
Like the sale of commercial health insurance, the market for
physician services is local. Patients choose physicians in the
metropolitan area in which they live and work. Physicians invest time
and expense in building a practice and would incur costs in moving to a
new geographic area. Therefore, a decrease in the rice paid to
physicians in Tucson or Boulder would not cause physicians to relocate
their practices in numbers sufficient to make such a price reduction
unprofitable. The United States Department of Commerce has defined the
areas in and around Tucson, Arizona and Boulder, Colorado as MSAs.
c. Competitive Effects in the Market for the Purchase of Physician
Services in the Tucson and Boulder MSAs
The contract terms a physician can obtain from a commercial health
insurance company like United depend on the physician's ability to
terminate (or credibly threaten to terminate) the relationship if the
company demands unfavorable contract terms. A physician's ability to
terminate a relationship with a commercial health insurer depends on
his or her ability to replace the amount of business lost from the
terminated insurer's patients, and the time it would take to do so.
Failing to replace lost business expeditiously is costly.
Physicians have only a limited ability to encourage patients to
switch health plans. To retain a patient after terminating a plan
requires the physician to convince patients to either switch to another
employer-sponsored plan in which the physician participates or to pay
considerably higher out-of-pocket costs, whether in the form of
increased copayments for use of an out-of-network physician or by
absorbing the total cost of the services. As a result, a physician who
terminates his or her relationship with United, for example, could
expect to lose a significant share of his or her United patients. The
ability to make up the lost business is diminished when a physician's
non-United sources of patients are more limited. Consequently, the cost
of replacing United patients will be greater the larger United's share
of all patients in an area.
United's acquisition of PacifiCare will give it control over both a
large share of revenue of a substantial number of patients in Tucson
and Boulder and a large share of all patients in those areas. Since
physicians have a limited ability to encourage patient switching, the
merger will significantly increase the number of physicians in Tucson
and Boulder who are unable to reject United's demands for more adverse
contract terms. Thus, the acquisition will give United the ability to
unduly depress physician reimbursement rates in Tucson and Boulder,
likely leading to a reduction in quantity or degradation in the quality
of physician services.
3. The Sale of Commercial Health Insurance and the Purchase of Health
Care Provider Services in California
Before its acquisition of PacifiCare, United did not actively sell
commercial health insurance in California. Its California membership
consisted of employees of large, national or regional employers that
self-fund their health benefit plans and use United only for
administrative services.
Since 2000, United has rented the provider networks of CareTrust
Networks, a wholly-owned subsidiary of Blue Shield of California
(``Blue Shield''), to serve its California-based commercial members.
Blue Shield is one of the largest commercial health insurers in
California, with substantial membership throughout the state.
PacifiCare and Blue Shield are among each other's principal competitors
for the sale of commercial health insurance and for the purchase of
physician and hospital services. As a result of the transaction, United
obtained PacifiCare's California membership and became one of Blue
Shield's principal competitors for the sale of commercial health
insurance and the purchase of provider services.
a. Relevant Product Markets and Geographic Markets in California
PacifiCare, and now United, competed with Blue Shield in the sale
of commercial health insurance to groups of all sizes. Similarly,
PacifiCare competed with Blue Shield to acquire health care provider
services, from both physicians and hospitals, in MSAs throughout the
state.
b. Competitive Effects in the Markets for the Sale of Commercial Health
Insurance and the Purchase of Health Care Provider Services
United's acquisition of PacifiCare creates the potential for both
coordinated and unilateral anticompetitive effects. Through its
acquisition of PacifiCare, United assumed PacifiCare's place in the
California markets for the sale of commercial health insurance and the
purchase of healthcare provider services and thus became one of Blue
Shield's most important competitors. United and Blue Shield will have
access to highly sensitive competitive information about the other
company, dramatically increasing each company's ability to coordinate
prices charged for commercial health insurance and prices paid to
health care providers. Similarly, the importance of this relationship
may lead each company to be less aggressive when negotiating with
employer groups or assembling provider networks.
Pursuant to the network access agreement between United and
CareTrust, United has access to certain information about the CareTrust
provider network (and thus about Blue Shield's provider network),
including provider contract negotiations and terminations,
reimbursement and claims processing issues, new commercial health
insurance products, and network development. The network access
agreement requires Blue Shield to give United 90 days' notice if it
changes its fee schedules. Similarly, United must inform Blue Shield of
the development of any new products. In addition, the network access
agreement also ties United's hospital reimbursement levels to those of
Blue Shield by requiring Blue Shield to use its best efforts to
persuade hospitals to accept reimbursement levels at a certain
percentage of Blue Shield's reimbursement levels.
III. Explanation of The Proposed Amended Final Judgment
The proposed Amended Final Judgment is designed to eliminate the
anticompetitive effects identified in the Complaint by requiring United
to divest certain commercial health insurance contracts in the Tucson
and Boulder MSAs. It also requires United to stop exchanging certain
information with CareTrust Networks in California and, one year after
entry of the Amended Final Judgment, to discontinue renting the
CareTrust provider network.
In Tucson, the proposed Amended Final Judgment requires United to
identify and divest commercial health
[[Page 14002]]
insurance contracts covering at least 54,517 members who reside or work
in the Tucson MSA. This is the total number of commercially insured
members in Tucson that PacifiCare reported as of June 30, 2005.
Although United has some discretion in determining which contracts to
include in this divestiture package, it must include contracts covering
at least 7,581 members covered by contracts with small-group
employers--the number of Tucson-resident members covered under such
small-group contracts that PacifiCare reported as of June 30. This
divestiture addresses the competitive harms alleged in the Complaint by
requiring United to divest enough small-group contracts to leave it
with approximately the same market share of the small-group market, and
the same number of commercially insured lives, that it had before
acquiring PacifiCare.
The proposed Amended Final Judgment also prohibits United from
requiring any physician practicing in the Tucson MSA, as a condition
for participating in any of United's networks for its commercial health
insurance products, to agree to participate in United's network for any
Medicare health insurance product. Similarly, United will be prohibited
from requiring Tucson physicians, as a condition for participating in
any of its Medicare plans, to participate in any of its commercial
health insurance plans. The prohibition against using this type of
contractual requirement, commonly referred to as an ``all-products''
clause, was included in the proposed Judgment because a substantial
percentage of PacifiCare's overall membership in Tucson was enrolled in
its Medicare HMO plan marketed under the name Secure Horizons. Many
physicians in Tucson derived a substantial percentage of their revenue
from patients enrolled in this plan. This is relevant to the
competitive effects in the market for the purchase of physician
services because in calculating the percentage of a physician's revenue
represented by United and PacifiCare, a physician's total revenue was
taken into account--including from all commercial health plans,
government programs such as Medicare and Medicaid, and private Medicare
Advantage and Medicare HMO plans such as Secure Horizons. Without this
injunction, United might have been able to use an all-products clause
to force doctors in Tucson to participate in both its commercial and
Medicare plans. Had it done so, United might have accounted for a much
larger share of the total payments for many physician practices in
Tucson. The injunction against using such an all-products clause
ensures that Tucson-area doctors will be free to choose whether to
participate in United's networks for its commercial plans, its networks
for its Medicare plans, or both.
In Boulder, the proposed Amended Final Judgment requires United to
divest either the 6,066 members residing in the Boulder MSA who are
covered under PacifiCare's current HMO contract with the University of
Colorado, or an equivalent number of Boulder-area members covered under
other contracts. Unlike its Tucson membership, PacifiCare's membership
in the Boulder MSA is concentrated in a smaller number of very large
contracts. Its HMO contract with the University of Colorado is its
largest contract in Boulder; the 6,066 members residing in Boulder who
are covered under that contract account for nearly half of PacifiCare's
total commercial membership in Boulder. Thus, PacifiCare's bargaining
position in its negotiations with Boulder-area doctors would have been
very different had it not had this HMO contract. Without that contract,
PacifiCare's membership in Boulder would have been substantially less
and United's acquisition of that much smaller membership would not have
generated the same level of competitive concern that led the United
States to challenge this transaction in the Boulder market. That, in
addition to other facts relating to the insurance market in Boulder,
led the United States to conclude that the divestiture of the 6,066
members covered under the University HMO contract (or the divestiture
of an equivalent number of members covered under other contracts) will
be sufficient to remedy the competitive harm alleged in the Complaint.
Finally, an injunction against United using an all-products clause in
Boulder was unnecessary because PacifiCare's SecureHorizons enrollment
in Boulder constituted a significantly smaller percentage of its
overall membership in Boulder compared to Tucson.
The divestitures in both Tucson and Boulder must be accomplished by
selling or conveying the contracts to one or more purchasers that, in
the sole discretion of the United States, will be viable, ongoing
competitors in the relevant markets. The divestitures (i) shall be made
to purchasers that each have the intent and capability (including the
necessary managerial, operational, technical, and financial capability)
to compete effectively in the sale of commercial health insurance
products, and (ii) shall be accomplished so as to satisfy the United
States that none of the terms of any agreement between United and any
purchaser gives United the ability to interfere with the purchaser's
ability to compete effectively.
In California, the proposed Amended Final Judgment requires United
immediately to stop exchanging certain kinds of information with
CareTrust Networks, a wholly owned subsidiary of Blue Shield. United is
prohibited from communicating with CareTrust about, among other things,
new product introductions, negotiations over rates or other terms with
physicians, or the development of any new provider networks. Those
kinds of information exchanges were part of the basis for the
competitive harm alleged in the Complaint. The proposed Amended Final
Judgment also requires to discontinue renting the CareTrust provide
network entirely effective one year after entry of the Amended Final
Judgment for customers existing before the transaction was completed.
United is permitted to continue renting CareTrust's network for up to
one year in order to minimize any disruption caused by the transition
of its current members from the CareTrust provider network to the
PacifiCare network that United has acquired as part of this
transaction.
The United States filed a proposed Amended Final Judgment to allow
United's new customers (those receiving quotes after December 20, 2005,
the day the Complaint and original Proposed Final Judgment were filed)
to access the CareTrust Network until July 5, 2006. This modification
will allow United to continue to offer in-network benefits to those
members requiring such benefits in California. Using its newly acquired
PacifiCare network for this purpose is impractical until United can
complete the process of integrating certain features of the PacifiCare
network and providers with its existing United claims processing and
administrative systems.
IV. Remedies Available to Potential Private Litigants
Section 4 of the Clayton Act (15 U.S.C. 15) provides that any
person who has been injured as a result of conduct prohibited by the
antitrust laws may bring suit in federal court to recover three times
the damages the person has suffered as well as costs and reasonable
attorney's fees. Entry of the proposed Amended Final Judgment will
neither impair nor assist the bringing of any private antitrust damage
action. Under the provisions of Section 5(a) of the Clayton Act (15
U.S.C. 16(a)), entry of the proposed Amended Final Judgment
[[Page 14003]]
has no prima facia effect in any subsequent private lawsuit that may be
brought against United or PacifiCare.
V. Procedures Available for Modification of the Proposed Amended Final
Judgment
The parties have stipulated that the proposed Amended Final
Judgment may be entered by the Court after compliance with the
provisions of the APPA, provided that the plaintiff has not withdrawn
its consent. The APPA conditions entry upon the Court's determination
that the proposed Amended Final Judgment is in the public interest.
The APPA provides a period of at least sixty (60) days preceding
the effective date of the proposed Amended Final Judgment within which
any person may submit to the United States written comments regarding
the proposed Amended Final Judgment. Any person who wishes to comment
should do so within sixty (60) days of the date this Competitive Impact
Statement is published in the Federal Register. All comments received
during this period will be considered by the Department of Justice,
which remains free to withdraw its consent to the proposed Amended
Final Judgment at any time prior to the Court's entry of judgment. The
comments and the response of the United States will be filed with the
Court and published in the Federal Register.
Written comments should be submitted to: Mark J. Botti, Chief,
Litigation I Section, Antitrust Division, U.S. Department of Justice,
1401 H St., NW., Suite 4000, Washington, DC 20530.
The proposed Amended Final Judgment provides that the Court will
retain jurisdiction over this action and that the parties may apply to
the Court for any order necessary or appropriate for the modification,
interpretation, or enforcement of the Amended Final Judgment.
VI. Alternatives to the Proposed Amended Final Judgment
The Department considered, as an alternative to the proposed Final
Judgment, a full trial on the merits of the Complaint against the
defendants. The United States could have continued the litigation and
sought preliminary and permanent injunctions against United's
acquisition of PacifiCare. The Department is satisfied, however, that
the divestitures of the assets and other relief contained in the
proposed Amended Final Judgment will preserve viable competition in the
relevant markets alleged in the Compliant.
VII. Standard of Review Under the APPA for Proposed Amended Final
Judgment
The APPA requires that proposed consent judgments in antitrust
cases brought by the United States be subject to a sixty (60)-day
comment period, after which the Court shall determine whether entry of
the proposed Amended Final Judgment ``is in the public interest.'' 15
U.S.C. 16(e)(1). In making that determination, the Court shall
consider:
A. The competitive impact of such judgment, including
termination of alleged violations, provisions for enforcement and
modification, duration of relief sought, anticipated effects of
alternative remedies actually considered, whether its terms are
ambiguous, and any other competitive considerations bearing upon the
adequacy of such judgment that the court deems necessary to a
determination of whether the consent judgment is in the public
interest; and
B. The impact of entry of such judgment upon competition in the
relevant market or markets, upon the public generally and
individuals alleging specific injury from the violations set forth
in the complaint including consideration of the public benefit, if
any, to be derived from a determination of the issues at trial.
15 U.S.C. 16(e)(1).
As the United States Court of Appeals for the District of Columbia
Circuit has held, the APPA permits a court to consider, among other
things, the relationship between the remedy secured and the specific
allegations set forth in the government's complaint, whether the
consent judgment is sufficiently clear, whether enforcement mechanisms
are sufficient, and whether the consent judgment may positively harm
third parties. See United States v. Microsoft Corp., 56 F.3d 1448,
1458-62 (D.C. Cir. 1995).
``Nothing in this section shall be construed to require the court
to conduct an evidentiary hearing or to require the court to permit
anyone to intervene.'' 15 U.S.C. 16(e)(2). Thus, in conducting this
inquiry, ``[t]he court is nowhere compelled to go to trial or to engage
in extended proceedings which might have the effect of vitiating the
benefits of prompt and less costly settlement through the consent
decree process.'' 119 Cong. Rec. 24,598 (1973) (statement of Senator
Tunney). Rather,
[a]bsent a showing of corrupt failure of the government to discharge
its duty, the Court, in making its public interest finding, should *
* * carefully consider the explanations of the government in the
competitive impact statement and its responses to comments in order
to determine whether those explanations are reasonable under the
circumstances.
United States v. Mid-America Dairymen, Inc., 1977-1 Trade Cas. (CCH) ]
61,508, at 71,980 (W.D. Mo. 1977).
Accordingly, with respect to the adequacy of the relief secured by
the proposed Amended Final Judgment, a court may not ``engage in an
unrestricted evaluation of what relief would best serve the public.''
United States v. BNS Inc., 858 F.2d 456, 462 (9th Cir. 1988) (citing
United States v. Bechtel Corp., 648 F.2d 660, 666 (9th Cir. 1981)); see
also Microsoft, 56 F.3d at 1460-62. The law requires that:
[t]he balancing of competing social and political interests affected
by a proposed antitrust consent decree must be left, in the first
instance, to the discretion of the Attorney General. The court's
role in protecting the public interest is one of insuring that the
government has not breached its duty to the public in consenting to
the decree. The court is required to determine not whether a
particular decree is the one that will best serve society, but
whether the settlement is ``within the reaches of the public
interest.'' More elaborate requirements might undermine the
effectiveness of antitrust enforcement by consent decree.
Bechtel, 648 F.2d at 666 (emphasis added) (citations omitted).
A proposed final judgment, therefore, need not eliminate every
anticompetitive effect of a particular practice, nor guarantee free
competition in the future. Court approval of a final judgment required
a standard more flexible and less strict than the standard required for
a finding of liability: ``[A]proposed decree must be approved even if
it falls short of the remedy the court would impose on its own, as long
as it falls within the range of acceptability or is `within the reaches
of public interest.' '' United States v. AT&T Corp., 552 F. Supp. 131,
151 (D.D.C. 1982) (citations omitted) (quoting Gillette, 406 F. Supp.
at 716), aff'd sub nom. Maryland v. United States. 460 U.S. 1001
(1983); see also United States v. Alcan Aluminum Ltd., 605 F. Supp.
619, 622 (W.D. Ky. 1985) (approving the consent judgment even though
the court would have imposed a greater remedy).
Moreover, the Court's role under the APPA is limited to reviewing
the remedy in relationship to the violations that the United States has
alleged in its Complaint, and does not authorize the Court to
``construct [its] own hypothetical case and then evaluate the decree
against that case.'' Microsoft, 56 F.3d at 1459. Because the ``court's
authority to review the decree depends entirely on the government's
exercising its prosecutorial discretion by brinding a case in the first
place,'' it follows that
[[Page 14004]]
``the court is only authorized to review the decree itself,'' and not
to ``effectively redraft the complaint'' to inquire into other matters
that the United States did not pursue. Id. at 1459-60.
The proposed Amended Final Judgment here offers strong and
effective relief that fully addresses the competitive harm posed by the
transaction.
VIII. Determinative Documents
There are no determinative materials or documents of the type
described in section 2(b) of the APPA, 15 U.S.C. 16(b), that were
considered by the United States in formulating the proposed Amended
Final Judgment.
Dated: March 3, 2006.
Respectfully Submitted,
Nicole S. Gordon,
Jon B. Jacobs (DC Bar 412249),
Richard Martin,
Steven Brodsky,
Paul Torzilli,
Attorneys, Litigation I Section, Antitrust Division, United States
Department of Justice, City Center Building, 1401 H Street NW/,
Suite 4000, Washington, DC 20530, (p) 202.307.0001, (f)
202.307.5802.
Certificate of Service
I hereby certify that on March 3, 2006, I caused the foregoing to
be electronically filed with the Clerk of the Court by using the
Electronic Case Filing System, which will send a notice of electronic
filing to:
Laura A. Wilkinson, Weil, Gotshal & Manges LLP, 1300 Eye Street NW.,
Suite 900, Washington, DC 20005.
I further certify that I sent the foregoing via electronic mail to:
Fiona Schaeffer, Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New
York, NY 10153.
Nicole S. Gordon,
Attorney, Litigation I Section, Antitrust Division, United States
Department of Justice.
[FR Doc. 06-2591 Filed 3-17-06; 8:45 am]
BILLING CODE 4410-11-M