Checking In on PeaceHealth: Providing Some Clearer Guidance to Bundling Sellers

21 October 2019
Dr. Lauren Stiroh and Cozen O’Connor Partner David Reichenberg

In 2007, the Antitrust Modernization Commission (AMC) published broad recommendations for changes and clarifications to antitrust enforcement in the United States. Since then, multiple courts have discussed the portion of the AMC Report relating to Section 2 of the Sherman Act recommending use of what has become known as the discount attribution test when evaluating the competitive effects of bundled discounts. In 2008, the Ninth Circuit adopted most of the AMC’s recommendations in Cascade Health v. PeaceHealth, finding the discount attribution test superior to the standard previously applied by the Third Circuit in LePage’s v. 3M. The Ninth Circuit did not follow the AMC’s recommendation to require that the plaintiff additionally prove that a defendant would likely recoup losses sustained.

In this article, published in the October 2019 edition of the American Bar Association’s Antitrust Source, NERA Managing Director Dr. Lauren Stiroh and Cozen O’Connor Partner David Reichenberg share their insight in the years following Cascade Health v. PeaceHealth and discuss several issues, including the subsequent application of PeaceHealth by courts, undesirable outcomes to avoid, and recommendations for courts.