___________

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; *
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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 Judge

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 under

Section 7 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, see

1

United States v. Mercy Health Serv., 902 F. Supp. 968, 989 (N.D. Iowa

1995), and the United States appeals. 
 In 1994 Mercy had approximately 320 staffed beds and an

2

average daily census of 127, while Finley was estimated to have 124

staffed beds and an average daily census of 63. The Regional

hospitals, which "generally offer the same or greater range of

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 an average daily census of between 70

and 677. By contrast, the rural hospitals, which "mainly provide

primary care services and do not provide the breadth of services

Mercy and Finley offer," id. at 971, had between 25 and 99 licensed

beds and an average daily census of between 3 and 12.4.

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Following the submission of this appeal, Finley formally announced its

abandonment of the proposed merger. Contrary to the positions of the

parties, we conclude that the appeal in this case is moot, and accordingly

we vacate the district court's decision and dismiss this appeal.

I.

Mercy and Finley operate the only two acute-care hospitals in

Dubuque, Iowa, a city of 86,403. While there are several small rural

hospitals near Dubuque, the closest comparable hospitals to Mercy and

Finley are regional hospitals located between 70 and 100 miles away in

Waterloo, 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 would

have merged the two entities into Dubuque Regional Hospital Systems. The

United States investigated the proposed merger and filed a complaint on

June 10, 1994, seeking to prevent the merger of Mercy and Finley under

Section 7 of the Clayton Act, 15 U.S.C. § 18 (1994), and Section 1 of the

Sherman Antitrust Act, 15 U.S.C. § 1 (1994).

Following a 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), this

3

Court described the relevant geographic market for antitrust

purposes:

The determination of the relevant market is a "necessary

predicate" to a finding of a Clayton Act violation.

Without a well-defined relevant market, an examination of

a transaction's competitive effects is without context or

meaning. . . . 

A relevant market consists of two separate

components: a product market and a geographic

market. . . . A geographic market is that geographic area

to which consumers can practically turn for alternative

sources of the product and in which the antitrust

defendants face competition. In order to meet its

burden, the FTC is required to present evidence

addressing the critical question of where consumers of

acute care inpatient hospital services could practicably

turn for alternative sources of the product should the

Hospitals' merger be consummated and [the] hospital

prices become anti-competitive.

Id. at 268 (quotations and citations omitted). 

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merger would have anticompetitive effects and denied the requested

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 include the Regional hospitals, a necessary prerequisite to finding

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 market, then the court would have rejected Mercy's and

Finley's argument that efficiencies stemming from 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 limited

geographic market. On cross-appeal, Mercy and Finley contend that the

district court erred in rejecting their efficiency arguments.
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On January 15, 1997, after this appeal had been submitted to this

Court, Finley formally announced that it had abandoned its proposed merger

with Mercy. In a press release, Kevin L. Rogols, the president and chief

executive officer of Finley, announced Finley's

decision to withdraw from the Dubuque Regional Health System

(DRHS), a planned partnership between Finley and Mercy Health

Center, where both hospitals would have shared operating

revenues. 

Reprinted in Resp. of the United States of America to Letter from the Court

Dated January 21, 1997 (Feb. 7, 1997). The release was circulated to the

national press, and was reported in the Wall Street 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 statement from counsel regarding

the nonmerger decision, counsel for Mercy and Finley explained that: 

Though [Mercy and Finley] have dissolved their partnership, the

parties desire to have the opportunity to combine some or all

of their operations in the future. They are unwilling to

commit that they would not do so. . . . A decision that the

case was moot would leave 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.
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II.

This Court does not have jurisdiction to hear an appeal in a matter

that no longer constitutes a live case or controversy. As the Supreme

Court has stated: 

The exercise of judicial power under Art. III of the

Constitution depends on the existence of a case or controversy.

. . . [A] federal court has neither the power to render

advisory opinions nor to decide questions that cannot affect

the rights of litigants in the case before them. Its judgments

must resolve a real and substantial controversy admitting of

specific relief through a decree of a conclusive character, as

distinguished from an opinion advising what the law would be

upon a hypothetical state of facts. . . . The rule in federal

cases is that an actual controversy must be extant at all

stages of review, not merely at the time the complaint is

filed.

Preiser v. Newkirk, 422 U.S. 395, 401 (1975) (quotations and citations

omitted). See also Keevan v. Smith, 100 F.3d 644, 647 (8th Cir. 1996) ("A

claim is 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. Missouri 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 power

to decide moot cases." (citations omitted)). We may not consider an

appeal, even if all of the parties involved wish us to, if the relief

ultimately obtained would be meaningless and the resultant opinion no more

than advisory.

Generally, the "voluntary cessation of allegedly illegal conduct 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 circumstances,

e.g., a dispute over the legality of the challenged 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 note 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 an 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 the

existence of judicial power." (note omitted)). Thus, where "resumption of

the challenged conduct depends solely on the defendants' capricious actions

by which 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 the

defendant's abandonment of allegedly illegal conduct.

A case "may nevertheless be moot if the defendant can demonstrate

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, 484

U.S. 49, 66 (1987) ("The defendant must demonstrate that it is absolutely

clear that the allegedly wrongful behavior could not reasonably be expected

to recur." (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

subsequent events made it absolutely clear that the allegedly wrongful

behavior could not reasonably be expected to recur." (quotations and

citations omitted)).

The parties suggest that this is a case where, despite Finley's

decision to abandon the proposed merger, Mercy and Finley are free to

"return to [their] old ways." W.T. Grant Co., 345 U.S. at 632 (note

omitted). We disagree. The genesis of this case is not any allegedly

anticompetitive conduct that Mercy and Finley have actually engaged in, but

the alleged threat that their proposed merger posed to competition. There

is no illegal conduct for Mercy and Finley to return to, and Mercy and

Finley have obviated the threat of illegal conduct by abandoning their

proposed merger. 

To be sure, Mercy and Finley could, at some time in the future, again

decide to merge. But this hypothetical renewed attempt to merge would

neither be prevented, nor allowed, by a decision of this Court at this

time. If we were to reverse the district court's judgment and direct the

imposition of an injunction, we would not be disabling Mercy and Finley

from ever again seeking a merger. See Association For Retarded Citizens

of North Dakota v. Sinner, 942 F.2d 1235, 1239 (8th Cir. 1991) ("It is well

settled that a district court retains authority under Rule 60(b)(5) to

modify or terminate a continuing, permanent injunction if the injunction

has become illegal or changed circumstances have caused it to operate

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 an

injunction even in the absence of changed conditions, the power should be

sparingly exercised."). Rather, we would be holding that the 1993 merger

attempt, which has now been abandoned, would have been anticompetitive.

Considering the significant changes experienced by the hospital industry

in the recent past and the profound changes likely facing the industry in
 Indeed, if the merging entities met certain statutory and

4

regulatory guidelines, they would be required to file with the

United States a statement of their intent to merge. See 16 C.F.R.

§§ 801-803 (1996) (regulations implementing the Hart-Scott-Rodino

Antitrust Improvements Act of 1976). Even if premerger

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).

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the near future, see Mercy Health Serv., 903 F. Supp. at 973-75 (discussing

health care market trends), we believe that a merger, deemed

anticompetitive today, could be considered procompetitive tomorrow.

Similarly, by affirming the district court's decision that, as of

October 27, 1995, the United States had failed to prove that the nowabandoned merger would have had anticompetitive effects, we would not be

granting a permanent license to Mercy and Finley to merge whenever they

would like, regardless of the passage of time or the change of

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 favorable

decision by this Court would not give Mercy and Finley an eternal license

to merge regardless of circumstances, the United States would have the

opportunity to investigate the anticompetitive effects of a proposed merger

in the future. The United States could then seek injunctive relief to

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 this

hypothetical future suit to determine if the new merger would have

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 uncertain

future. While we understand that the parties in this case have expended

significant resources in this litigation, and
 We note that the court in R.C. Bigelow, Inc. v. Unilever

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. Bigelow,

we do not believe that here the "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 would

prefer this Court to render a decision on the merits, and that the

timing of the decision to abandon the merger during the pendency of

the appeal was no more than coincidence.

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that each would like a favorable decision from this Court to influence

possible future litigation, the parties' mere desire for a ruling does not

revive a dead case into a live controversy. Now that the United States has

been given all of the relief it has sought by its party opponents' decision

to abandon the merger, the United States has no continuing stake in this

litigation. In discarding its merger attempt today, Mercy and Finley

cannot seek an advisory decision by this Court for 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 to

the district court with directions to dismiss this case as moot. See

United States v. Munsingwear, Inc., 340 U.S. 36, 39 (1950).

A true copy.

Attest:

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