In FTC v. Community Health Systems Inc. & Novant Health
Inc., No. 5:24-cv-0028 (W.D.N.C.), Judge Kenneth D. Bell of
the U.S. District Court for the Western District of North Carolina
on June 5, 2024, denied the Federal Trade Commission's (FTC)
motion to enjoin Novant Health Inc.'s $320 million acquisition
from Community Health Systems Inc. (CHS) of two hospitals in the
Lake Norman area north of Charlotte, North Carolina. This is only
the second time in the past decade that the FTC has lost a merger
challenge directed at competing hospitals.
As explained below, this was not a typical hospital merger case
and may be most remembered for breathing new life into the
"failing firm" defense, which, at least as articulated in
the Merger Guidelines, appears to require more from merging parties
than the court required in Novant Health. According to the
current Merger Guidelines, "[t]his defense applies when the
assets to be acquired would imminently cease playing a
