The FTC Loses (Again): Lessons Learned From LabCorp

Last week, Judge Andrew Guilford of the United States District Court for the Central District of California rejected a motion by the Federal Trade Commission (FTC) to issue a preliminary injunction preventing Laboratory Corporation of America (LabCorp) from purchasing Westcliff Medical Laboratories. Federal Trade Commission v. Laboratory Corporation of America, Case No. SACV 10-1873 AG, slip op, (C.D.C.A. February 22, 2011). The LabCorp investigation and decision reveal several important trends in U.S. merger control, including a broadening gap between regulatory and judicial views on horizontal merger analysis.

Background

LabCorp and Westcliff are each independent clinical laboratories that provide clinical laboratory testing services in California. In late May 2010, Westcliff filed for bankruptcy and, shortly thereafter, publicly announced an agreement to be acquired by LabCorp for $57.5 million. The bankruptcy court approved the sale, which, because the