___________ No. 95-4253

___________
United States of America, * * Appellant, * * v. * * Mercy Health Services; Finley * Tri-States Health Group, Inc., * * Appellees. * *

--------------------- * * Appeal from the United States State of Arkansas; State of * District Court for the Delaware; State of Florida; * Northern District of Iowa. State of Illinois; State of * Louisiana; State of Maryland; * Commonwealth of Massachusetts; * State of Minnesota; State of * Missouri; State of New * Hampshire; State of New Mexico; * State of North Carolina; State * of North Dakota; State of Ohio; * State of Oregon; Commonwealth * of Pennsylvania; State of Rhode * Island; State of South Dakota; * State of Texas; State of * Virginia; State of Washington; * State of West Virginia; State * of Wisconsin; State of New York;* American Association of Health * Plans; Missouri Managed Health * Care Association; California * Association of HMOs; * Massachusetts Association of * HMOs; Oklahoma Association of * HMOs; Deere & Company; John * Deere Health Care, Inc.; * International Union, United * Automobile, Aerospace & * Agricultural Implement Workers * of America; Iowa Managed Care * Association; Illinois * Association of Health * Maintenance Organizations; * American Hospital Association; *

### -2-

Association of Iowa Hospitals * and Health Systems; Barnstead/ * Thermolyne; Dubuque Bank and * Trust; FDL Foods, FDL Foods, * Inc.; Flexsteel Industries, * Flexsteel Industries * Incorporated; Flynn Ready-Mix; * Galena State Bank; Interstate * Power Company; The Metrix * Company; Molo Companies; Myers- * Cox and Portzen Construction, * * Amici Curiae. *

___________ No. 96-1051

___________
United States of America, * * Appellee, * * v. * * Mercy Health Services; Finley * Tri-States Health Group, Inc., * * Appellants. * *

--------------------- * * State of Texas; State of * Virginia; State of Washington; * State of West Virginia; State * of Wisconsin; State of Arkansas;* State of Delaware; State of * Florida; State of Illinois; * State of Louisiana; State of * Maryland; Commonwealth of * Massachusetts; State of * Minnesota; State of Missouri; * State of New Hampshire; State * of New Mexico; State of North * Carolina; State of North Dakota;* State of Ohio; State of Oregon; * Commonwealth of Pennsylvania; * State of Rhode Island; State of * South Dakota; State of New York;* American Association of Health * Plans; Missouri Managed Health *

### The Honorable Michael J. Melloy, United States Chief Judg e 1 

### for the Northern District of Iowa.
-3- Care Association; California * Association of HMOs; * Massachusetts Association of * HMOs; Oklahoma Association of * HMOs; Deere & Company; John * Deere Health Care, Inc.; * International Union, United * Automobile, Aerospace & * Agricultural Implement Workers * of America; Iowa Managed Care * Association; Illinois * Association of Health * Maintenance Organizations; * American Hospital Association; * Association of Iowa Hospitals * and Health Systems; Barnstead/ * Thermolyne; Dubuque Bank and * Trust; FDL Foods; Flexsteel * Industries; Flynn Ready-Mix; * Galena State Bank; Interstate * Power Company; The Metrix * Company; Molo Companies; Myers- * Cox and Portzen Construction, * * Amici Curiae. *

___________ Submitted: October 24, 1996 Filed: February 26, 1997

___________ Before FAGG, ROSS, and MAGILL, Circuit Judges.

___________ MAGILL, Circuit Judge.

The United States brought this action for injunctive relief unde r Section7 of the Clayton Act and Section 1 of the Sherman Act to prevent Mercy Health Services (Mercy) and Finley Tri-States Health Group, Inc

. (Finley) from merging. The district court denied the injunction, se e 1 Uni ted States v. Mercy Health Serv. , 902 F. Supp. 968, 989 (N.D. Iow a 1995), and the United States appeals.

### In 1994 Mercy had approximately 320 staffed beds and a n 2 

### average daily census of 127, while Finley was estimated to h ave 124 staffed be ds and an average daily census of 63. The Regiona l hospitals, which "generally offer the same or greater range o f services as provided by Mercy and Finley," United States v. Mercy Health Serv. , 902 F. Supp. 968, 972 (N.D. Iowa 1995), had between 143 and 868 staffed beds and a n average daily census of between 70 and 677. By contrast, the rural hospitals, which "mainly provide primarycare services and do not provide the breadth of service s Mercy and Finley offer," id. at 971, had between 25 and 99 l icensed beds and an average daily census of between 3 and 12.4.
-4- Follow ing the submission of this appeal, Finley formally announced it s abandonmen t of the proposed merger. Contrary to the positions of th e parties, we conclude that the appeal in this cas e is moot, and accordingly we vacate the district court's decision and dismiss this appeal.

I.

Mercyand Finley operate the only two acute-care hospitals i n Dub uque, Iowa, a city of 86,403. While there are several small rura l hospit als near Dubuque, the closest comparable hospitals to Mercy an d Finle yare regional hospitals located between 70 and 100 miles away i n Waterl oo, Iowa, Cedar Rapids, Iowa, Iowa City, Iowa, Davenport, Iowa , Madison, Wisconsin, and Freeport, Illinois (Regional hospitals). 2

In 1993, Mercy and Finley began pursuing a partnership which woul d have merged the two e ntities into Dubuque Regional Hospital Systems. The Uni ted States investigated the proposed merger and filed a complaint o n June 10, 1994, seeking to prevent the merger of Mercy and Finley unde r Section 7 of the Clay ton Act, 15 U.S.C. § 18 (1994), and Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1 (1994).

Followinga two-week trial, the district court held that the United States had failed to carry its burden of proving that the

### In FTC v. Freeman Hosp. , 69 F.3d 260 (8th Cir. 1995), thi s 3 

### Cou rt described the relevant geographic market for antitrus t purposes: The determination of the relev ant market is a "necessary predicate" to a finding of a Clayton Act violation

. Without a well-defined relevant market, an examination o f a transaction's competitive effects is without context o r meaning. . . .

Arelevant market consists of two separat e components: a product market and a geographi c market.

. . . A geographic market is that geographic are a to which consumers can practically turn for alternative sour ces of the product and in which the antitrus t defend ants face competition. In order to meet it s bu rden, the FTC is required to present evidenc e ad dressing the critical question of where consumers o f acute care inpatient hospital services could practicably turn f or alternative sources of the product should th e Hospitals' merger be consummated and [the] hospita l prices become anti-competitive.

Id. at 268 (quotations and citations omitted).
-5- merger would have anticompetitive effects and denied the requeste d injunction. Key to the district court's conclusion was its finding that the United States had not proven that the relevant geographic market did not in clude the Regional hospitals, a necessary prerequisite to findin g anticompetitive effects. See Mercy Health Serv. , 902 F. Supp. at 987. 3 The district court also held that if the United States had proven a more limited geographic ma rket, then the court would have rejected Mercy's and Finley's argument that efficiencies stemming fro m the merger justified any anticompetitive effects. Id. at 989.

On appeal , the United States argues that the district court clearly erred in finding that the United States failed to prove a more limite d geographic market. On cross-appeal, Mercy and Finley contend that th e district court erred in rejecting their efficiency arguments.

### -6- On January 15, 1997, after this appeal had been submitted to thi s Court, Finley formally announced that it had aba ndoned its proposed merger with Mercy. In a pre ss release, Kevin L. Rogols, the president and chief executive officer of Finley, announced Finley's

decisi onto withdraw from the Dubuque Regional Health Syste m (DRHS), a planned partnership between Finley and Mercy Health Cente r, where both hospitals would have shared operatin g revenues.
Reprinted inResp. of the United States of America to Letter from the Cour t Dated January 21, 199 7 (Feb. 7, 1997). The release was circulated to the national press, and was reported in the Wall Str eet Journal. See Two Iowa Hospitals Drop Plan to Merge Operations , Wall St. J., Jan. 21, 1997, at A4

. In response to this Court's request for a statem ent from counsel regarding the nonmerger decision, counsel for Mercy and Finley explained that:

Though [Mercy and Finley] have dissolved their part nership, the parties desire to have the opportunity to combine some or all of their operations in the future. They are unwilling t o commi t that they would not do so. . . . A decision that th e case was moot would leav e an issue unresolved that could be of great importance to the parties in the future.

Defs.' Position Statement Regarding Status of the Case at 2 (Feb. 7, 1997)

. The United States also asserted that the appeal was not rendered moot by Finley's decision to abandon the merger. See Resp. of the United States of America to Letter from the Court Dated January 21, 1997 at 1.

### -7- II.

This Cour t does not have jurisdiction to hear an appeal in a matter that no longer constitutes a live case or controversy. As the Suprem e Court has stated:

The exercise of judicial power under Art. III of th e Constitution depends on the existence of a case or controversy.

. . . [A] federal court has neither the power to rende r adviso ryopinions nor to decide questions that cannot affec t the rights of litigants in the case before them. I ts judgments must r esolve a real and substantial controversy admitting o f specific relief through a decree of a conclusive character, as dis tinguished from an opinion advising what the law would b e upona hypothetical state of facts. . . . The rule in federal cases is that an actual controversy must be extant at al l stages of review, not merely at the time the complaint i s filed.

Preiser v. Newkirk , 422 U.S. 395, 401 (1975) (quotations and citation s omitted). See also Keevan v. Smith , 100 F.3d 64 4, 647 (8th Cir. 1996) ("A claimis properly dismissed as moot if it has lost its character as a present, live controversy of the kind that must exist if we are to avoid advisory opinions on abstract questions of law." (citations and quotations omitted)); Beck v. Mi ssouri State H.S. Activities Ass'n , 18 F.3d 604, 605 (8th Cir. 1994) (per curiam) ("During the course of litigation, the issues presented in a case may lose their life because of the passage of time or

a change in circumstances. When this happens and a federal court can no longer grant effective relief, the case is moot. Federal courts lack powe r to d ecide moot cases." (citations omitted)). We may not consider a n appeal, e ven if all of the parties involved wish us to, if the relie f ultimately obtained would be meaningless and the resultant opinion no more than advisory.

Generally, the "voluntary cessation of allegedly illegal conduc t does not deprive the tribunal of power to hear and

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determine the case, i .e. , does not make the case moot." United States v. W.T. Grant Co. , 345 U.S. 629, 632 (1953). This is because

[a] controversy may remain to be settled in such ci rcumstances, e.g. , a dispute over the legality of the challenge d practices. The defendant is free to return to his old ways. This , together with a public interest in having the legality of the practices settled, militates against a mootness conclusion.

Id. (citations and no te omitted). See also City of Mesquite v. Aladdin's Castle, Inc. , 455 U.S. 283, 289 (1982) ("It is well settled that a defendant's voluntary cessation of a challenged practice does not deprive

a federal court of its power to determine the legality of the practice

. Such abandonment is a n important factor bearing on the question whether a court should exercise its power to enjoin the defendant from renewing the practice, but that is a matter relating to the exercise rather than th e existence of judicial power." (note omitted)). Thus, where "resumption of the challenged conduct depends solely on the defendants' capricious action s bywhich they are free to return to their old ways," Steele v. Van Buren Pub. Sch. Dist. , 845 F.2d 1492, 1494 (8th Cir. 1988) (quotations , citations, and alterations omitted), a case is not rendered moot by th e defendant's abandonment of allegedly illegal conduct.

Acas e "may nevertheless be moot if the defendant can demonstrat e that there is no reasonable expectation that the wrong will be repeated. The burden is a heavy one." W.T. Grant Co. , 345 U.S. at 633 (quotations and note omitted). See also Gwaltney v. Chesapeake Bay Foundation , 48 4 U.S. 49, 66 (1987) (" The defendant must demonstrate that it is absolutely clear that the allegedly wrongful behavior could not reasonably be expecte d to r ecur." (quotations and citations omitted) (emphasis in original)) ; Aladdin's Castle , 455 U.S. at 289 n.10 ("The test for mootness in

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cases such as this is a stringent one. . . . A case might become moot if subseq uent events made it absolutely clear that the allegedly wrongfu l behavi or could not reasonably be expected to recur." (quotations an d citations omitted)).

The parti es suggest that this is a case where, despite Finley' s decision t o abandon the proposed merger, Mercy and Finley are free t o "return to [their] old ways." W.T. Grant Co. , 345 U.S. at 632 (not e omitted)

. We disagree. The genesis of this case is not any allegedl y anticompetitive conduct that Mercy and Finley have actually engaged in, bu t the alleged threat that their proposed merger po sed to competition. There is no il legal conduct for Mercy and Finley to return to, and Mercy an d Finleyhave obviated the threat of illegal conduct by abandoning thei r proposed merger.

To be sure, Mercy and Finley could, at some time in the future, again decid e to merge. But this hypothetical renewed attempt to merge woul d neither be prevented, nor allowed, by a decision of this Court at thi s time. If we were to reverse the district court's judgment and direct the impositionof an injunction, we would not be disabling Mercy and Finle y fromever again seeking a merger. See Association For Retarded Citizens of North Dakota v. Sinner , 942 F.2d 1235, 1239 (8th Cir. 1991) ("It is wel l settled that a district court retains authority under Rule 60(b)(5) t o modifyor terminate a continuing, permanent injunction if the injunction has bec ome illegal or changed circumstances have caused it to operat e unjustly."); see also King-Seeley Thermos Co. v. Aladdin Indus., Inc. , 418 F.2d 31, 35 (2d Cir. 1969) ("While we hold there is power to modify a n injunction even in th e absence of changed conditions, the power should be sparingly exercised." ). Rather, we would be holding that the 1993 merger attemp t, which has now been abandoned, would have been anticompetitive

. Considering the significant changes experienced by the hospital industry in the recent past an d the profound changes likely facing the industry in

### Indeed, if the merging entities met certain statutory an d 4 

### regulatoryguidelines, they would be required to file with th e United States a statement of t heir intent to merge. See 16 C.F.R. §§ 801-803 (1996) (regulations implementing the Hart-Scott-Rodino Anti trust Improvements Act of 1976). Even if premerge r notification was not mandated, the hospitals could request a review of the proposed merger by the United States. See 28 C.F.R. § 50.6 (1996) (Antitrust Division business review procedure).
-10- the near future, see Mercy Health Serv. , 903 F. Supp. at 973-75 (discussin g health care market trends), we believe that a merger, deeme d anticompetitive today, could be considered procompetitive tomorrow.

Similarly, by affirming the district court's decision that, as o f Oct ober 27, 1995, the United States had failed to prove that the now

abandoned merger would have had anticompetitive effects, we would not be granting a permanent license to Mercy and Finley to merge whenever the y would like, regardless of the passage of time or the change o f circumstances. It is beyond argument that a merger which would have been legal in the past may well be anticompetitive in the future; indeed, the district court's denial of injunctive relief was heavily informed by the volatile nature of the hospital industry. See id. Because a favorabl e decision by this Cour t would not give Mercy and Finley an eternal license to merge regardless of circumstances, the United States would have th e opportunity to investigate the anticompetitive effects of a proposed merge r in the f uture. The United States could then seek injunctive relief t o 4 halt this new merger attempt. A district court trying the case would then have to examine the factual circumstances extant at the time of thi s hypothet ical future suit to determine if the new merger would hav e anticompetitive effects. We decline to issue a judgment which has no present relevance on the
mere chance that it could have some marginal utility in an uncertai n future. While we understand that the parties in this case have expended significant resources in this litigation, and

### We no te that the court in R.C. Bigelow, Inc. v. Unileve r 5 

### N.V. , 867 F.2d 102 (2d Cir. 1989), came to a contrary conclusion, and held that the abandonment of a proposed merger did not moot a challenge to the merger. Unlike the circumstances in R.C. B igelow , we do not believe that here th e "abandonment of challenged conduct seems timed to head off an adverse determination on the merits. " Id. at 106. Indeed, it is apparent that Mercy and Finley woul d prefer this Court to render a decision on the merits, and that the timing of the decision to abandon the merger during the pend ency of the appeal was no more than coincidence.
-11- that each would like a favorable decision from this Court to influenc e possible future litigation, the parties' mere de sire for a ruling does not revive a dead case into a live controversy. Now that the United States ha s been given all of the relief it has sought by its party opponents' decisio n to abandon the merger, the United States has no continuing stake in this litigat ion. In discarding its merger attempt today, Mercy and Finle y cannot seek an advisory decision by this Court f or their use tomorrow. We conclude, in all of the circumstances, that this case is moot. 5

III.

Accordingly, we vacate the district court's decision and remand t o the district court with directions to dismiss this case as moot. Se e United States v. Munsingwear, Inc. , 340 U.S. 36, 39 (1950).

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.