U.S. District Judge RichardLeon, appearing livid at times, accused the Justice Department andthe two companies of treating his antitrust review of theacquisition as a “rubber stamp operation. (Photo: Diego M.Radzinschi / NLJ)

A Washington federal judge excoriated a U.S. Justice Departmentlawyer Thursday for keeping him “in the dark” about theconsummation of CVS Health's $69 billion acquisition of Aetna Inc. and urgedthe companies to wait for a final judgment on the deal beforeintegrating their operations.

U.S. District Judge Richard Leon, appearing livid at times,accused the Justice Department and the two companies of treatinghis antitrust review of the acquisition as a “rubber stampoperation.” And he expressed concern about how the integration ofCVS and Aetna, which completed their mergerWednesday, would be unwound in the event that he rejects theirmerger.

“You need to slow this down,” Leon said. “You're like a freighttrain out of control.”

The Justice Department approved the deal in October onthe condition that Aetna sell its Medicare Part D prescription drugplan business.

Leon had scheduled Thursday's hearing in response to the JusticeDepartment's request to appoint Julie MyersWood, chief executive of the the monitoring firm GuidepostSolutions, to oversee the insurance giant divestiture of thatbusiness to WellCare Health Plans Inc. After receiving the motionto appoint Myers as the monitor, Leon said he “kind of got thisuneasy feeling about being kept in the dark, kind of like amushroom.”

Leon asked Justice Department lawyer Jay Owen about the“practical consequences” of the merger. When Owen said CVS andAetna had closed their deal, Leon sarcastically replied, “Thanksfor telling me.”

Leon, who approved AT&T Inc.'sacquisition of Time Warner in June, stressed that he had not issueda final judgment approving the CVS-Aetna merger and noted that thepublic comment period on the Justice Department's settlementallowing the deal was not set to close until mid-December. Thejudge pointed to what he described as a “140-page” opposition filed by theAmerican Medical Association, saying that he would take commentsand other evidence into account before handing down a final rulingon the acquisition.

“Let's make it clear, Mr. Owen: This court's not a rubberstamp,” Leon said.

“Who knows where this is going. No one knows,” Leon said laterin the hearing. “And you all are treating this like a rubber stampoperation.”

Owen declined to comment after the hearing.

Lawyers for CVS and Aetna were not called to speak during thehearing. CVS was represented in court Thursday by Dechert partner RaniHabash. Davis Polk & Wardwellpartners Howard Shelanski and Jesse Solomon appeared for Aetna.

Leon suggested his ruling might not come for several months. Heasked, “If I rule against it, how do you untangle seven months ofintegration?”

“Very difficult,” Leon said, answering his own question.

Owen described the possibility of the deal's rejection as a“business risk” that the companies were bearing.

Leon urged the Justice Department to meet with Aetna and CVS andconsider how to account for the possibility of the merger beingrejected, before scheduling a follow-up hearing for Dec. 3.

When Owens asked if Leon would still appoint Myers to overseeAetna's divestiture, the judge said the companies also needed toconsider what ramifications a denial of the merger would have forthe insurer's planned sale of the prescription drug plan businessto WellCare.

“You need to think about that, frankly,” Leon said. “See youMonday.”

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