Though the merger of CVS and Aetna received conditional approval from the DOJ’s Antitrust Division back in October, the road to final approval has been rocky as the court’s exasperation with the parties appears to grow. Last week, Judge Richard J. Leon of the District Court for the District of Columbia ordered the Antitrust Division to respond to public comment on the merger by February 15, 2019—notwithstanding the fact that appropriations to the Antitrust Division lapsed on January 4, leaving the Division without funding.
The Tunney Act requires the court reviewing a consent judgment like the one sought here to consider the impact on competition, the relevant market, and “the public generally.” Judge Leon made clear that this included consideration of all public comments received in response to the merger and DOJ’s conditional approval thereof. The Antitrust Division assured the court in a hearing on December 18 that it would respond to public comments by early February 2019. But on January 8, 2019, the Division informed the court that it “cannot work on its response to public comments…until funding is restored by Congress, …unless otherwise ordered the Court.”
Judge Leon deemed “this pronouncement…surprising,” “[t]o stay the least,” since the Government had previously argued that “slowing implementation of the CVS-Aetna merger could ‘delay any efficiencies that might result from the transaction’ and ‘create uncertainty for customers, employers, and shareholders.’” Interpreting the Government’s status report as a motion to stay, Judge Leon denied it, firmly stating that, “[i]n short, the Government’s internal, political squabble over funding is NO reason to postpone the congressionally mandated evaluation of the Government’s proposal to remedy the antitrust concerns allegedly raised by the merger’s consummation!” He ordered a response to public comments by February 15.
Judge Leon’s blistering message reflected his continued impression that the Antitrust Division is not taking seriously enough the court’s role in reviewing consent judgments. He declared that “the public interest would seem to require more than the indefinite stay of the proceedings the Government is effectively seeking,” particularly given the merger’s $69 billion price tag, and the fact that it involves the acquisition of “the nation’s third-largest health insurance company” by “one of the largest companies in the United States.” Judge Leon “expect[s] the Government attorneys working on this case to roll up their sleeves[ and] respond to the public’s concerns about the CVS-Aetna merger.”
The judge’s latest action underscores two points—first, merger parties cannot assume that the Tunney Act is a mere formality (as we reported last month, Judge Leon previously took the parties to task for assuming the court would “rubber-stamp” the consent judgment). Second, courts typically place a very low priority on the convenience (or paychecks) of attorneys of record when clients will be prejudiced or the public interest disserved by requests for delay—and this is just as true of government attorneys as those in private practice.