The purchase of Santa Ana-based Westcliff Medical Laboratories Inc. by Laboratory Corporation of America can go through over regulatory objections, a federal judge ruled last week.
U.S. District Judge Andrew Guilford in Santa Ana denied a challenge last week by the Federal Trade Commission to LabCorp’s $57.5 million buy of Westcliff.
The FTC had argued in court that the deal would harm medical laboratory competition.
In December, the FTC had filed for an injunction to prevent Burlington, N.C.-based LabCorp from buying Westcliff, arguing the deal would lead to higher prices and lower quality.
Regulators said if LabCorp were allowed to buy Westcliff, it would leave only two big laboratories in Southern California—LabCorp and New Jersey’s Quest Diagnostics Inc., owner of San Juan Capistrano’s Quest Diagnostics Nichols Institute.
In a 40-page decision, Guilford dismissed the government’s concerns.
Westcliff, which processes blood and urine samples for doctors, filed for bankruptcy protection last May and made plans to sell its assets to LabCorp.
At the time of Westcliff’s filing, it had 170 sites throughout California and some 1,000 workers. Thirty were in Orange County, including in labs and service centers.
Westcliff had been hit by the downturn as it tried to keep costs for its clients low despite high operating expenses. In court papers, the laboratory said that it lost $13 million on revenue of $97 million in 2009.
LabCorp made another buy here in 2005 when it paid $155 million for US Labs Inc., an Irvine cancer testing laboratory.
