Federal Trade Commission et al v. ProMedica Health System, Inc.

Filing 132

ORDER denying Motion for modification of preliminary injunction order (Related Doc # 125 ). Judge David A. Katz on 2/3/12.(G,C)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OHIO
WESTERN DIVISION

FEDERAL TRADE COMMISSION, et al.,
Plaintiff,

Case No. 3:11 CV 47

-vsO R D E R
PROMEDICA HEALTH SYSTEM, INC.,
Defendant.
KATZ, J.
This matter is before the Court on Plaintiff’s motion for modification of the preliminary
injunction order, Defendant’s opposition and Plaintiff’s reply thereto.
On March 29, 2011, this Court granted the Federal Trade Commission’s (“FTC”)motion
for a preliminary injunction as follows:
Plaintiffs’ motion for preliminary injunction (Doc. No. 4) is granted in
substantial part.
FURTHER ORDERED that the parties are to abide by the terms of the Hold
Separate Agreement, as amended, until further order of this Court or an agreement
by the parties, subject to Court approval, which shall supercede this Order.
FURTHER ORDERED that this Order shall remain in effect until either (1)
completion of all legal proceedings by the Commission challenging the
Acquisition, including all appeals, or (2) further order of the Court, including upon
the request of the Commission before completion of all such legal proceedings.
(Doc. No. 122.)
The Court did not order the appointment of a Hold Separate Monitor as originally
requested by the FTC.
Following a full administrative trial on the merits, on December 12, 2011, FTC
Administrative Law Judge D. Michael Chappell issued an Initial Decision finding that

ProMedica’s acquisition of St. Luke’s Hospital to be in violation of Section 7 of the Clayton Act,
15 U.S.C. §18. Part of the Judge Chappell’s order provides as follows:
At any time after this Order becomes final and effective (without regard to
the finality of the divestiture requirements therein), the Commission may appoint a
Person (“Monitor”) to monitor ProMedica’s compliance with its obligations under
this Order, consult with the Commission staff, and report to the Commission
regarding ProMedica’s compliance with its obligations under this Order.
(Doc. No. 125, Attachment 1 at pp. 255-256.) The Order goes on to clarify the duties of the
Monitor, if appointed.
The FTC now moves for modification of the preliminary injunction order, specifically,
seeking temporary appointment of a monitor.
The Court’s power to modify its own injunction was addressed by the Supreme Court in
System Federation No. 91 Ry. Emp. Dept., AFL-CIO v. Wright, 364 U.S. 642, 647-48 (1961):
The source of the power to modify is of course the fact that an
injunction often requires continuing supervision by the issuing court and always a
continuing willingness to apply its powers and processes on behalf of the party who
obtained that equitable relief. Firmness and stability must no doubt be attributed to
continuing injunctive relief based on adjudicated facts and law, and neither the
plaintiff nor the court should be subjected to the unnecessary burden of reestablishing what has once been decided. Nevertheless the court cannot be
required to disregard significant changes in law or facts if it is “satisfied that what
it was[sic] has been doing has been turned through changing circumstances into an
instrument of wrong.” United States v. Swift & Co., supra, 286 U.S. at pages 114115, 52 S.Ct. at page 462. A balance must thus be struck between the policies of
res judicata and the right of the court to apply modified measures to changed
circumstances.
The district court is granted “wide discretion” in this determination. Id.
The FTC argues that Judge Chappell’s decision constitutes changed circumstances but
concedes there is no evidence ProMedica has violated the Hold Separate Agreement. ProMedica

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contends the Initial Decision is not a changed circumstance and that imposition of a monitor is
burdensome, expensive and unnecessary at this time.
Having considered both sides memoranda, the Court finds that while it has the authority to
amend the injunction order, it will not exercise the right to do so at this juncture. This Court does
not believe that the ALJ’s Initial Decision constitutes a changed circumstance. That will occur
when the FTC makes a final ruling.
The assertion of a probability of violations is, under the circumstances, neither appropriate
nor convincing. A violation of an injunction order triggers the “court’s power to punish
disobedience by civil contempt, which is remedial in nature and designed to both coerce
obedience and to compensate the complainant for losses sustained, and by criminal contempt,
whose purpose is to vindicate the court’s authority and dignity.” 13 JAMES WM. MOORE ET AL.,
MOORE’S FEDERAL PRACTICE ¶ 65.80 (3D ED. 2011).
The history in this case and the actions of the parties do not describe a situation, pursuant
to which, this kind of order is appropriate. In the present action, the parties are well represented
by significantly experienced counsel. There is no evidence of any violations by ProMedica or
actions which would suggest a propensity to violate the present injunction order. Should that
situation change, the Court will reconsider this Order.
For these reasons, Plaintiff’s motion for modification (Doc. No. 125) is denied.
s/ David A. Katz
DAVID A. KATZ
U. S. DISTRICT JUDGE

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