On May 9, 2016, the Middle District of Pennsylvania in FTC et al. v. Hershey Medical Center et al. (“Hershey”) denied a preliminary injunction request by the FTC to block a merger between Penn State Hershey Medical Center and PinnacleHealth System. The District Court rejected the FTC’s request based on its finding that the FTC’s geographic market definition was “unrealistically narrow and does not assume the commercial realities faced by consumers in the region.” The proper geographic market is one from which the defendant hospitals draw the bulk of their patients, with few patients entering in from outside that area to seek medical care and few patients within that area leaving to seek care from other hospitals. The District Court found the FTC’s proposed geographic market to be “starkly narrow,” particularly “given the realities of living in Central Pennsylvania, which is largely rural and requires driving distances for specific goods and services.” By failing to set forth a relevant geographic market, the District Court held that the FTC could not demonstrate a likelihood of success on the merits of its Clayton Act case against the merger and denied the preliminary injunction.
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