Cleary Gottlieb represented Change Healthcare (Change) at trial in a lawsuit filed in the U.S. District Court for the District of Columbia by the U.S. Department of Justice (DOJ) and two states seeking to enjoin the procompetitive $13 billion merger of Change and UnitedHealth Group (United).
On September 19, 2022, U.S. District Judge Carl J. Nichols issued a decision finding that the plaintiffs failed to show that any aspect of the merger was unlawful and denying their request for an injunction. United and Change closed the transaction on October 3, 2022.
Plaintiffs filed their complaint on February 24, 2022. The complaint alleged that United’s acquisition of Change would substantially lessen competition in violation of Section 7 of the Clayton Act. The complaint asserted both “horizontal” and “vertical” antitrust theories.
The horizontal theory was that the acquisition would lead to the elimination of head-to-head competition between claims editing products owned by Change and United. The court rejected this theory because it found that the parties’ proposed divestiture of Change’s claims editing business to TPG Capital would preserve competition in the relevant market.
The vertical theories included allegations that the merger would substantially lessen competition in certain insurance markets by giving United’s insurance subsidiary access to competitors’ competitively sensitive information, causing those rivals to innovate less; and that the merger would result in United withholding innovations from its insurance competitors. The court held that these theories were speculative and meritless.
Trial lasted 11 days, from August 1-15, 2022, and closing arguments took place on September 8, 2022. Cleary was trial counsel for Change along with co-counsel from Simpson Thacher & Bartlett. United was represented at trial by attorneys from Kirkland & Ellis, Hogan Lovells, and Clifford Chance.