City of New York v. Group Health Inc., 2011 U.S. App. LEXIS 17116

City of New York sues GHI and HIP under federal and New York antitrust laws to block a merger.
City’s Health Benefits Program covers about 1.2 million individuals; City pays premiums for HIP and GHI plans.
Merger would combine two dominant carriers offering low-cost plans in the City’s program.
City defines the relevant market as the ‘low-cost municipal health benefits market’ and seeks injunction.
District court granted summary judgment for defendants, ruling market definition legally deficient, and denied City’s motion to amend.
City appeals, arguing the market definitions and proposed amendments are legally adequate.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Market sufficiency	City argues market is broader and interchangeable with others.	GHI/HIP contend market is legally deficient and defined by City’s preferences.	Market definition legally deficient; not a plausible relevant market.
Denial of amendment	City contends amendments would not be futile and should be allowed.	GHI/HIP argue amendments would be prejudicial, prejudge facts, and be futile.	District court did not abuse discretion; denial affirmed.

United States v. E.I. du Pont de Nemours & Co., 353 U.S. 586 (U.S. Supreme Court, 1957) (necessity of market definition for antitrust pleadings)
Chapman v. New York State Div. for Youth, 546 F.3d 230 (2d Cir. 2008) (must define market by reasonable interchangeability and cross-elasticity)
Geneva Pharm. Tech. Corp. v. Barr Labs. Inc., 386 F.3d 485 (2d Cir. 2004) (interchangeability and demand cross-elasticity define relevant market)
Hack v. President and Fellows of Yale College, 237 F.3d 81 (2d Cir. 2000) (single purchaser market argument rejected)
Queen City Pizza, Inc. v. Domino's Pizza, Inc., 124 F.3d 430 (3d Cir. 1997) (market definition must capture interchangeable substitutes)
AEP Energy Servs. Gas Holding Co. v. Bank of Am., N.A., 626 F.3d 699 (2d Cir. 2010) (leave to amend denied for futility and prejudice grounds)