In the Spirit of Fairness. . . .

. . . .I ought to report that Pfizer and Wyeth have, overnight, filed a pretty solid motion to dismiss the rather unusual claims made by some California pharmacies seeking to block the Pfizer/Wyeth deal, on TARP, and antitrust grounds.

It was first reported as a surprising use of supposed TARP prohibitions, to block a pending merger, by Bloomberg -- but it turned out to be much more an ordinary antitrust case.

And, upon review, not a very careful, or well-pleaded one, at that. From the motion to dismiss, then:

. . . .Plaintiffs’ eleventh-hour antitrust Complaint, filed seven months after Pfizer Inc.’s proposed acquisition of Wyeth was announced, seeks relief that would be unprecedented—an injunction in a private, non-government case barring completely a major transaction that was notified to and reviewed by the U.S. Federal Trade Commission, an agency charged with enforcing the U.S. antitrust laws. Plaintiffs claim that the proposed transaction would violate the U.S. antitrust laws by “lessening competition” in the manufacture and sale of prescription drug products in the United States. The Complaint is facially and fatally defective in at least two respects.

First, Plaintiffs fail to plead a plausible “relevant market” in which to assess the competitive significance of Pfizer Inc.’s proposed acquisition of Wyeth. That alone is dispositive and requires dismissal of the Complaint. Defining an appropriate “relevant market” is a requisite element of any challenge to a merger or acquisition under Section 7 of the Clayton Act or Section 1 of the Sherman Act. . . .

Second, Plaintiffs allege no evidentiary facts plausibly suggesting that the proposed acquisition will, in fact, reduce competition for the sale of prescription drugs in any economically substantial way. . . .

The Complaint is littered with allegations that the proposed transaction will be financed by banks that have received so-called TARP funds from the federal government. Those allegations are incorrect as a matter of fact. No bank loans will ultimately be used to finance the transaction.

Even if the transaction were financed with TARP funds, however, the allegations regarding purported use of TARP funds are irrelevant to Plaintiffs’ claims. They make it neither more nor less likely that the proposed transaction will “substantially lessen competition” in any relevant market, and they do not even hint at any other possible anticompetitive conduct or effect.

The banks alleged to be providing financing for the transaction do not compete with Defendants, and there are no allegations that they colluded with one another in any respect. There is not a single case holding that the use of TARP funds to finance a merger constitutes a violation of Section 7 or Section 1. That is for good reason, as such allegations have nothing to do with whether competition may be substantially lessened in a relevant product market.

It is also not clear how Plaintiffs would be injured by the use of TARP funds in this case. Plaintiffs have no standing to challenge the use of these funds based on their status as taxpayers. See Hein v. Freedom From Religion Foundation, 551 U.S. 587, 599 (2007). And the use of TARP funds to finance the proposed transaction, if such funds were actually used, certainly would not cause Plaintiffs “antitrust injury” – i.e., “injury of the type the antitrust laws were intended to prevent and that flows from that which makes the defendant’s acts unlawful.” Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 334 (1990). Even if the use of TARP funds were somehow generally relevant, therefore, Plaintiffs would not have standing to challenge the use of those funds. . . .

All of the above seems to be a very-plausible alternative view of the law -- and probably the correct one. [The full-text PDF of the motion to dismiss, prepared by several Morgan Lewis lawyers, is here.]

So, this should suggest that Merck/Schering-Plough would be immune from an attack -- at least as to the oddly-phrased TRAP claim -- or on any generally similar grounds.