In June, we discussed the Trump administration’s candidate for the top post in the Department of Justice’s Antitrust Division: Makan Delrahim. During Delrahim’s confirmation hearing, Sen. Amy Klobuchar pressed him, “What would you do, if you’re in this job, if the president, or the vice president, or a White House staffer calls, and wants to discuss a pending investigation of an antitrust matter?” Delrahim responded, “The role of the assistant attorney general for antitrust is a law enforcement function,” and that “politics will have no role in the enforcement of the antitrust laws.” Delrahim’s comment appeared to placate Klobuchar’s present concerns about White House intercession or interference in pending antitrust investigations, although a confirmation vote by the full Senate is still pending. However, viewed historically, the constitutional role of the executive branch and the president in particular in dictating, directing and controlling antitrust enforcement policy is far more complex and nuanced. As is often the case, history provides the necessary context to answer thorny constitutional questions. Continue Reading
Law360 featured an insightful article today on a recently unsealed court opinion blocking the $367 million merger of rival nuclear waste processing companies.
The court blocked the merger, while rejecting the parties’ argument that the deal should be approved because otherwise the acquired firm would collapse and the market would suffer. The merging companies did not meet the stringent requirements for raising this “failing firm” defense, the court ruled, because they had not shown the lack of other buyers that would not pose competitive concerns.
the opinion offers a lesson to competition attorneys and their clients, Foix said. Companies with a reason to believe that they may raise a failing firm defense in the future should make a legitimate and well-documented effort to seek out alternative offers, he said.
You need to confirm whether there are other buyers in the market, Foix said.
Of course, that may be easier said than done, Foix said. The bid solicitation process may take a year or longer, and by definition failing firms may not have that kind of time on their hands, he said.
The opinion is United States v. Energy Solutions Inc., et al., Civ. No. 16-1056-SLR (D. Del. June 21, 2017).
Last month, we discussed Makan Delrahim’s background, including his experience litigating antitrust and intellectual property matters at the Department of Justice during the George W. Bush administration and his extensive lobbying work at Brownstein, Hyatt, Farber and Schreck. On May 10, senators from the Senate Judiciary Committee held a hearing and asked Delrahim about several matters that pose potential challenges should he be confirmed as assistant U.S. attorney of the Antitrust Division of the DOJ. For the most part, Delrahim provided candid answers, at one point even offering, “I’m an open book on this issue.” Three discussions were particularly insightful.
PLEDGED TO RECUSE HIMSELF FROM PAST MATTERS
As we noted in last month’s article, Delrahim faces a number of potential conflicts if confirmed to the Antitrust Division. From August 2005 to January 2017, Delrahim lobbied on behalf of a number of large corporate clients facing controversial merger review such as health insurer Anthem in its proposed (and now defunct) combination with rival Cigna. Delrahim also represented clients in other high-profile transactions including AMC Entertainment in its merger with Loews Cineplex Entertainment; T-Mobile in its merger with MetroPCS Communications; US Airways in its failed merger with Delta Airlines; and Comcast in its merger with NBC Universal, as well as other corporate clients such as Microsoft, Oracle, Apple, Qualcomm, Pfizer, Neiman Marcus, Merck and Johnson & Johnson. Continue Reading
Ten years into litigation, a hospital has moved to decertify a class of plaintiffs who claim the hospital’s merger caused them to overpay for medical services. Arguing there is insufficient proof that class members were harmed, the hospital’s motion invites the court to jump into the fray about whether classes may be certified when they include members who were not actually injured.
Defendant NorthShore University HealthSystem and Highland Park Hospital, both located near Chicago, merged in 2000. After the Federal Trade Commission pursued a post-merger challenge in 2004 for alleged violations of Section 7 of the Clayton Act, a putative class of hospital patients filed suit in 2008 claiming the merger caused them to pay inflated prices for inpatient and outpatient hospital services. The District Court initially denied a motion to certify a class of patients who had paid for NorthShore’s services, but the Seventh Circuit vacated that denial in 2012 – see Messner v. NorthShore Univ. HealthSystem, 669 F.3d 802 (7th Cir. 2012) – and on remand the District Court then certified the class in 2013. Continue Reading
Last month we discussed Supreme Court Justice Neil Gorsuch’s confirmation hearings. Specifically, we noted the Senate Judiciary Committee’s failure to nail Gorsuch down on key antitrust issues, including issues he handled as an experienced antitrust lawyer and decided as a judge on the U.S. Court of Appeals for the Tenth Circuit, which we also wrote about. At one point, Gorsuch invoked the so-called “Ginsberg Rule” and simply declined to answer Sen. Amy Klobuchar’s question regarding, not a pending or prior case, but the Department of Justice’s 2008 report on monopolization, responding, “Oh, senator, I—there’s no way you’re [going to] get me to.” Klobuchar quickly changed the subject. Despite the senators’ reluctance to fulfill their “advise and consent” obligations under the Constitution by pressing Gorsuch on contemporary antitrust issues, the Judiciary Committee voted to send Gorsuch to the full Senate on April 3. Less than a week later, on April 7, the Senate confirmed him by a 54-45 vote, cementing Gorsuch’s place in history as the 113th justice of the Supreme Court.
A key player in shepherding Gorsuch through the confirmation process was Makan Delrahim, whom President Donald J. Trump nominated on March 27 to head the Department of Justice’s Antitrust Division. Since January, Delrahim has served the administration as deputy assistant and deputy counsel to the president, advising the Trump administration on the selection of a replacement for former Supreme Court Justice Antonin Scalia. Delrahim had reportedly taken on the role of “quarterback,” handling the administration’s Supreme Court strategy and acting as a liaison between the White House and the Senate. Delrahim attended the Senate Judiciary Committee hearings with Gorsuch. Continue Reading
Recently, we discussed in prior articles the antitrust legacy of Neil Gorsuch, currently a judge on the U.S. Court of Appeals for the Tenth Circuit and nominee for the Supreme Court of the United States. Gorsuch has significant antitrust experience, both in private practice and on the bench. While at Kellogg, Huber, Hansen, Todd, Evans & Figel, Gorsuch defended “Baby Bell” SBC Communications, a company formed after the Federal Trade Commission’s breakup of AT&T, and prosecuted (to a jury verdict) what is widely considered to be one of the largest private antitrust awards in Conwood v. United States Tobacco. As a judge on the Tenth Circuit, Gorsuch has written several high-profile antitrust opinions, among them Novell v. Microsoft, a case in which the Tenth Circuit concluded Microsoft had no duty under the Sherman Antitrust Act to share its intellectual property with rival software-developer Novell. Indeed, during Gorsuch’s four-day Senate confirmation hearing last week, Democratic Sen. Amy Klobuchar called Gorsuch as an antitrust expert. Continue Reading
Earlier this week, the Federal Trade Commission’s Acting Chair, Maureen K. Ohlhausen, announced new and potentially meaningful processes to be implemented by the agency for reviewing and ending some investigations.
Responding to President Trump’s directives aimed at eliminating wasteful and unnecessary regulations, Ohlhausen stated that the FTC would be “focusing our resources where they will do the most good for the public, and eliminating wasteful, legacy regulations and processes that have outlived their usefulness.” As part of this effort, Ohlhausen announced that the FTC’s Bureau of Competition would be implementing initiatives that include: Continue Reading
Last month, we discussed the antitrust jurisprudence of Neil Gorsuch, currently of the U.S. Court of Appeals for the Tenth Circuit judge and nominee to the Supreme Court of the United States. Our discussion focused on three of Gorsuch’s opinions during his decade-long tenure with the court of appeals. Even before Gorsuch was nominated to the Tenth Circuit, however, he had already made a name for himself in the antitrust world as a trial lawyer for both plaintiffs and defendants.
In Gorsuch’s early years in private practice at Kellogg Huber Hansen Todd Evans & Figel, he defended Bell Atlantic in an antitrust case named GTE New Media Services v. Ameritech.
The case arose out of allegations that the five regional Bell operating companies “illegally combined and conspired to restrain trade and to monopolize the internet Yellow Pages by controlling internet access points through which competing internet Yellow Pages providers offer their services.” Later, Gorsuch represented so-called “Baby Bell” SBC Communications, a company formed after the breakup of the AT&T Corp. in 1982 pursuant to AT&T’s consent decree with the Department of Justice. In that case, Z–Tel Communications v. SBC Communications, telecommunications carrier SBC Communications was charged with violating the Sherman Act by refusing to provide Z-Tel Communications with access to its telecommunications facilities and equipment as required by the Telecommunications Act of 1996. Both cases were resolved before trial. Continue Reading
Last March, we wrote a series of articles discussing Supreme Court Justice Antonin Scalia’s antitrust legacy on the Supreme Court. We noted Scalia’s admitted discomfort with the Sherman Act, specifically with holding corporate defendants, even monopolists, liable absent strong evidence of anti-competitive conduct. His likely successor appears to possibly hold similar views of the antitrust laws, ostensibly applying the Sherman Act to avoid replacing procompetitive, free-market behavior with judicially imposed, anti-competitive fiat, based on the record presented.
On Jan. 31, President Donald J. Trump nominated Neil M. Gorsuch, a judge on the U.S. Court of Appeals for the Tenth Circuit since 2006, to fill Scalia’s seat on the Supreme Court. Gorsuch has a long and storied background in antitrust work. Indeed, perhaps as much as former Justice John Paul Stevens. After graduating from Harvard Law School and eventually clerking for Supreme Court Justices Byron White and Anthony Kennedy (the most senior justice now on the Supreme Court), Gorsuch entered private practice where he brought and defended several major antitrust actions. Thereafter, upon his appointment to the Tenth Circuit, Gorsuch issued three high-profile antitrust opinions that shed light on his substantial expertise in the area. This article will focus on Gorsuch’s antitrust opinions. Future articles will focus on his antitrust experiences in the private sector and at the Department of Justice, where he briefly served. Continue Reading
On Jan. 25, President Trump named Maureen Ohlhausen as the Federal Trade Commission’s acting chairwoman. A recent speech by Ohlhausen, who has served as a commissioner for the FTC since 2012, shed some light on the role the FTC may have under her leadership during the new administration.
Ohlhausen briefly summarized a “few areas in which the Commission succeeded” under the Obama administration, including “clamping down on pay-for-delay agreements” and challenging potentially anticompetitive hospital mergers. See FTC v. Penn State Hershey Med. Ctr., 838 F.3d 327 (3d Cir. 2016); FTC v. Advocate Health Care Network, 841 F.3d 460 (7th Cir. 2016). Continue Reading