United States v. Rockford Memorial Corp.
United States Court of Appeals for the Seventh Circuit
898 F.2d 1278 (1990)

- Written by Sean Carroll, JD
Facts
The two largest hospitals in Rockford, Illinois (the hospitals) (defendants) agreed to merge. The United States (plaintiff) brought suit to enjoin the merger. The district court found that the combined market share of the hospitals would be between 64 and 72 percent after the merger. Despite these findings, the hospitals argued that traditional antitrust standards were not useful in analyzing mergers of nonprofits because nonprofits’ profit-maximization incentives were different than those of for-profit entities. Generally, the hospitals argued that antitrust law did not apply to mergers between nonprofit organizations. The district court disagreed, finding that § 7 of the Clayton Act applied to nonprofit organizations even though the section applied to acquisitions of stock or other share capital, which nonprofits did not have. Having found that the Clayton Act was grounds for an injunction, the district court did not reach the question of whether the Sherman Act applied to mergers of nonprofit organizations. The district court enjoined the merger. The hospitals appealed.
Rule of Law
Issue
Holding and Reasoning (Posner, J.)
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