Court Should 'Weigh Equities' Before Deciding on Propel Buy Injunction: Iqvia
The FTC’s motion to strike certain affirmative defenses in its antitrust case to block Iqvia’s Propel Media buy is an “unnecessary distraction in the midst of fast-paced discovery” that’s “without any substantial legal basis,” said defendants Wednesday in a memorandum of law (docket 1:23-cv-06188) opposing the motion in U.S. District Court for Southern New York in Manhattan.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
The FTC filed a complaint for a temporary restraining order (TRO) blocking the buy in July (see 2307200024), saying the acquisition would give Iqvia control of two of the three leading healthcare demand-side platforms that deliver automated, programmatic, digital ads directly to U.S. healthcare professionals via websites, mobile apps and smart TVs.
Section 13(b) of the FTC Act allows a court to issue a TRO and preliminary injunction in favor of the FTC only after “weighing the equities” and considering its likelihood of success, said the memorandum. That means the court must consider whether the FTC is likely to ultimately succeed on its underlying claim that the acquisition would be anticompetitive, and it must weigh the equities of blocking the merger pending administrative proceedings, it said. Defendants’ constitutional defenses -- “challenging the constitutionality of the FTC itself as well as of the administrative proceedings in connection with which the FTC initiated this action -- plainly implicate both of those considerations,” it said.
The FTC took aim at two “equitable defenses” -- laches and estoppel -- asserted by defendants, said the memorandum, but “contrary to the FTC’s sweeping generalization, there is no categorical bar precluding the assertion of such defenses against the federal government,” it said. Application of the doctrines depends on the circumstances of each case, it said. "Defendants are concerned the FTC will use this action to collaterally attack long-closed transactions (laches) and that the FTC will take positions in this case that are inconsistent with those advanced by the Department of Justice in separate litigation (estoppel)”; the FTC doesn’t deny it may take either position, said the memorandum. The court's obligation to “weigh the equities” allows it to consider whether the agency is acting “inequitably,” it said.
In support of its position, the FTC relies almost exclusively on an “out-of-circuit district court decision,” FTC v. Meta Platforms, where “the court concluded that section 13(b) requires a showing of only interim success on the antitrust merits, and struck defenses regarding the alleged bias of the FTC Chairperson, with prejudice, as immaterial,” said the memorandum. But the court struck the defenses without prejudice, saying it couldn’t “ascertain that further factual amendments would be futile," said the memorandum. If the district court believed the constitutional defenses were irrelevant to the section 13(b) query, “it would not have allowed the defendants to replead those defenses,” it said.
The FTC has not identified any prejudice from maintenance of the affirmative defenses, arguing that the defenses threaten to “render the FTC’s administrative processes unconstitutional and thwart not only the agency’s ability to both enforce the antitrust laws, but also the agency’s actions to protect vulnerable consumers,” said the memorandum. The possibility that the defendants “might be right about the FTC’s unconstitutionality is a reason to sustain the defenses, not grounds for striking them,” it said.
The defendants don’t ask the court to make “sweeping pronouncements” that would prevent the FTC from doing its work, said the memorandum. The court can “avoid reaching the constitutional defenses altogether if it denies the motion for a preliminary injunction,” it said. Even if the court does consider granting an injunction, “which would require it to reach the constitutional issues, any ruling adverse to the FTC will be limited to this action,” it said: “The abstract possibility that other courts may in turn rely on this Court’s ruling to hold the FTC or other agencies unconstitutional in different contexts is the kind of ‘collateral consequences outside the courtroom’ that are irrelevant to assessing prejudice.”
The court should hear the evidence and consider the FTC’s motion for a preliminary injunction "in context,” said the memorandum. It will be in a better position to assess the affirmative defenses at the end of the hearing “with the benefit of the parties’ full briefing on all issues,” it said.