Judge to Start Aetna-Humana Merger Trial Dec. 5

A federal judge said Wednesday that he would begin trial proceedings on Dec. 5 in the Justice Department’s antitrust challenge to the proposed merger of Aetna Inc. and Humana Inc.

The start date is a compromise between the proposals of the two sides, but it also amounted to a setback for the insurance companies. When he opened a scheduling hearing Wednesday, U.S. District Judge John Bates said he was leaning toward an early November trial, which would have allowed him to decide the case before the end of the year.

The health insurers had argued for such a time frame and applauded the judge’s initial proposal, noting that the current contractual agreement between the two companies is subject to a Dec. 31 deadline. If the merger isn’t approved by then, Humana would have the option of walking away from the deal and potentially collecting a $1 billion breakup fee.

But the Justice Department during the course of the hearing argued that such an accelerated timeline wouldn’t give it a fair chance to prove its case. The department also argued that nothing prevented the companies from extending their merger agreement a little longer to give the court time to issue a ruling.

The judge took a short break, then returned to the bench and said he had been persuaded by some of the department’s arguments. Judge Bates set the Dec. 5 start date and allotted 13 days for trial proceedings.

The judge pledged to rule in the case promptly but said he was making no promises that he would be able to decide it by the end of the year. Instead, he said the parties should proceed with the “expectation” that he will issue a ruling in mid-January.

The Justice Department filed suit last month to block two major proposed health insurance mergers, the Aetna-Humana deal and Anthem Inc.’s proposed acquisition ofCigna Corp., arguing the transactions would suppress competition and hurt consumers.

Both cases were initially assigned to Judge Bates, a George W. Bush appointee, but last week the judge sent the Anthem case for reassignment to another judge, saying it wasn’t feasible for him to handle both in an expeditious fashion.

Judge Amy Berman Jackson, an Obama appointee, is now presiding over the Anthem matter. She has set a hearing this Friday to discuss trial scheduling for that case.

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