Appeal from the United States District Court for the Eastern District of Wisconsin. No. 87-C-0053--Terence T. Evans, Judge.
Cummings and Flaum, Circuit Judges, and Grant, Senior District Judge.*fn*
ROBERT A. GRANT, SENIOR DISTRICT JUDGE
West Allis Memorial Hospital, Inc. ("West Allis") brought suit against St. Luke's Hospital, Inc. ("St. Luke's"), the Secretary of Health and Human Services, Otis Bowen, and the Attorney General of the United States, Edwin Meese (the "federal defendants"), challenging the applicability of the Medicare-Medicaid antifraud provisions of 42 U.S.C. § 1395nn(b)(2)(B) to a program instituted and advertised by St. Luke's and known as "Freedom 55/65."*fn1
The "Freedom 55/65" program was commenced on or about January 1, 1987,*fn2 and offers a number of advantages to Medicare patients who enroll in the program. This lawsuit focuses on but one of those advantages--the waiver of the deductible and coinsurance obligations of Medicare patients who receive items or services from St. Luke's in the event the patient does not have supplemental insurance which would otherwise pay those obligations. The waiver program applies to items and services covered under both Medicare Part A and B.*fn3
As a competitor for Medicare patients in the Milwaukee area, West Allis fears the effects St. Luke's waiver program will have on its ability to remain competitive. West Allis maintains that it is prepared to meet that threat by implementing its own waiver program, but believes such a program to be violative of the anti-fraud provisions of 42 U.S.C. § 138=95nn(b)(2)(B) and fears criminal prosecution under the statute if it chooses to implement such a program.
Fearing the loss of business on the one hand, and the risk of prosecution on the other, West Allis turned to the courts for resolution of its dilemma. In its complaint, West Allis alleges that St. Luke's waiver program is violative of not only § 1395nn(b)(2)(B), but also federal and state antitrust laws, and the Wisconsin common law against conspiracy, tortious interference with prospective contractual relations, and unfair competition. West Allis moved for preliminary injunctive relief against St. Luke's under each count of the complaint, and for alternative injunctive relief against the federal defendants under § 1395nn(b)(2)(B). With respect to the § 1395nn claim, West Allis asked that the district court either declare St. Luke's waiver program violative of the statute and enjoin St. Luke's continuation of that program, or alternatively declare such programs nonviolative of § 1395nn(b)(2)(B) and enjoin the federal defendants from enforcing the provisions thereof against Medicare such as West Allis which may seek to implement a similar program.
A hearing on West Allis' motion for preliminary injunction was conducted on January 23, 1987, and on May 28, 1987, the district court issued an order denying the motion in its entirety. West Allis Memorial Hospital, Inc. v. Bowen, 660 F. Supp. 936 (E.D. Wis. 1987). This appeal followed.
"In reviewing the decision of a district court to grant or deny a preliminary injunction, this court has continued to invoke the phrase 'abuse or discretion' in articulating the applicable standard." Darryl H. v. Coler, 801 F.2d 893, 897 (7th Cir. 1986); see also Baja Contractors, Inc. v. City of Chicago, 830 F.2d 667, 674 (7th Cir. 1987), cert. denied, 485 U.S. 993, 108 S. Ct. 1301, 99 L. Ed. 2d 511 (1988). Under Fed. R. Civ. P. 52(a), the district court is required to make findings of face and conclusions of law in support of its decision to grant or refuse preliminary injunctive relief. The ultimate decision, however, rests within the court's discretion. Baja Contractors, 830 F.2d at 674; Lawson Products, Inc. v. Avnet, Inc., 782 F.2d 1429, 1436-37 (7th Cir. 1986). The district court's findings of fact are reviewed under the clearly erroneous standard of Fed. R. Civ. P. 52(a); with the legal conclusions subject to de novo review. Baja Contractors, 830 F.2d at 674; Manbourne, Inc. v. Conrad, 796 F.2d 884, 887 (7th Cir. 1986); Lawson Products, 782 F.2d at 1437. "[A] factual or legal error may alone be sufficient to establish that the court 'abused its discretion' in making its final determination . . . . However, in the absence of such an error, the district judge's weighing and balancing of the equities should be disturbed on appeal only in the rarest of cases." Lawson Products, 782 F.2d at 1437. We review the district court's denial of a preliminary injunction in the present case with these principles in mind.
West Allis, as the party seeking a preliminary injunction, bears the burden of showing:
(1) that it has no adequate remedy at law; (2) that it will suffer irreparable harm if the preliminary injunction is not issued; (3) that the irreparable harm it will suffer if the preliminary injunction is not granted outweighs the irreparable harm the defendant will suffer if the injunction is granted; (4) that it has a reasonable likelihood of prevailing on the merits; and (5) that the injunction will not harm the public interest.
Baja Contractors, 830 F.2d at 675; Manbourne, Inc., 796 F.2d at 887; Roland Machinery Co. v. Dresser Industries, Inc., 749 F.2d 380, 386-88 (7th Cir. 1984). Under the "sliding scale" approach adopted by this circuit, the likelihood of success that West Allis needs to show will vary inversely with the degree of harm it will suffer if the injunction is not granted. Illinois Psychological Ass'n v. Falk, 818 F.2d 1337, 1340 (7th Cir. 1987); Brunswick Corp. v. Jones, 784 F.2d 271, 275 (7th Cir. 1986); Roland Machinery Co., 749 F.2d at 387. If, however, "both parties are likely to suffer the same amount of irreparable harm, so far as estimation is possible, then likelihood of ...