California v. Sutter Health System (Summary)

California v. Sutter Health System, No. C99-03803 MMC (N.D. Cal. Feb. 17, 2000)

The state of California sought a preliminary injunction to prevent a merger between Alta Bates Medical Center, which is owned by Sutter Health System, and Summit Medical Center. Sutter 
Health System, a nonprofit corporation, is the largest operator of general acute care hospitals in Northern California. Summit Medical Center is the third largest hospital in the East Bay area of San Francisco.

The court ruled that the state could not prevail on its motion for preliminary injunction because it “failed to prove its prima facie case that the proposed merger between Alta Bates and Summit would substantially lessen competition in the acute inpatient services product market.” The court went on to rule that, even if the state had made a prima facie case, it would not prevail on its
motion for preliminary injunction because the defendants successfully established a “failing company” defense.