Antitrust Update for
In-House Counsel
American Bar Association
Section of Antitrust Law
Corporate Counseling Committee
June 28, 2006
Presented by:
Merril Hirsh
Edward B. Mullen III
Christopher H. White
Gabriela A. Richeimer
Melissa M. McGuane
Washington, D.C. ● Orange County ● San Diego ● Chicago
On Monday
• The Supreme Court …
Granted Cert in Weyerhaeuser v. Ross-Simmons
Hardwood Lumber Co., Inc.,No. 05-381
•
•
•
•
Is predatory bidding like predatory pricing?
Ninth Circuit said “no”
Weyerhaeuser, the DOJ, business groups say “yes”
Why does it matter?
– Under Brooke Group Ltd. v. Brown & Williamson Tobacco Corp.,
509 U.S. 209 (1993), (1) short term loss + (2) dangerous
probability of recoupment = plaintiff usually loses predatory
pricing claim
– Even though plaintiff might win this claim anyway
• Where might this go? The sacrifice test spawns…
Granted Cert. in Bell Atlantic Corp. v. Twombly,
No. 05-1126
• How much is a enough to plead past a motion to
dismiss in a Section 1 case?
• Second Circuit says “allege conspiracy, prove it
later”
• Bell Atlantic, DOJ, economists (represented by
former Asst. AG Hewitt Pate), business groups
say have to allege more…
• How much more?
• Is this the sacrifice standard????
Denied Cert. in FTC v. Schering-Plough
Corp., No. 05-273
• Or perhaps FTC v. DOJ
• Under what circumstances (if any?) is it
unlawful for a brand drug company to
settle its patent claim against a generic
company by paying the generic.
• Why is this a big issue?
• Have we sacrificed enough?
• Will it be back?
On the merger front …
• Nestlē
• and
• Jenny Craig
•?
Laboratory Corp. Holdings v. Metabolite Laboratories, Inc.,
No. 04-607, 548 U.S. ___ (2006)
•
On June 22, 2006, the Supreme Court dismissed writ of certiorari as having
been improvidently granted.
•
Issue before the Supreme Court: “whether the [respondent’s] patent claim
is invalid on the ground that it improperly seeks to ‘claim a monopoly over a
basic scientific relationship.’”
•
Justice Ginsburg joined Justices Scalia, Alito, Kennedy and Thomas in
dismissing the writ (Chief Justice Roberts recused himself).
•
The Supreme Court had granted certiorari notwithstanding the Solicitor
General’s view that the question presented was not before the Court
because the petitioner had failed to reference Section 101 of the Patent Act
as the statutory basis of its claim of an invalid monopoly over a scientific
principal or naturally occurring phenomenon.
•
Justice Breyer wrote a dissent from the dismissal of certiorari, and his
dissent was joined by Justices Stevens and Souter.
Laboratory Corp. Holdings v. Metabolite Laboratories, Inc.,
No. 04-607, 548 U.S. ___ (2006)
•
Patent case; no antitrust claim.
•
Plaintiff alleged that the patent created an unfair monopoly over a scientific
phenomenon, i.e., all doctors who considered the natural relationship violated
respondent’s patent.
•
Disputed whether the issue before the Court was raised below and whether the
record was sufficiently developed.
•
Dissent argued that subject of patent was a scientific phenomenon, and thus,
not patentable.
•
Dissent cited FTC’s 2003 Patent Report.
•
Likely this issue will reach the Supreme Court again, with all arguments raised
below and a full record created.
•
Did Court signal a desire to “clarify” or “change” law in appropriate case?
New Case Developments/Opinions
• Hillenbrand Industries, Inc. – $316.3 million settlement
of antitrust class action
• Reifert v. South Central Wisconsin MLS Corp., 2006 U.S.
App. LEXIS 14327 (7th Cir. June 12, 2006)
• Jung v. Association of American Medical Colleges, 2006
U.S. App. LEXIS 14079 (D.C. Cir. June 1, 2006)
• Yangtze Optical Fibre & Cable Co. v. Ganda, LLC, 2006
U.S. Dist. LEXIS 38510 (D.R.I. June 9, 2006)
Repeal the Federal Antitrust
Exemption for Insurers?
•
Hearing on Senator Leahy’s bill to
repeal antitrust exemption for
medical malpractice insurers and
only for the most egregious cases
of price fixing, bid rigging and
market allocation.
•
Bill based on perceived “abuses”
of medical malpractice insurers.
•
However, testimony was broader;
over antitrust exemption generally.
•
Only 3 witnesses for each side;
real threat of passing significant
repeal?
•
ABA supports repeal and
implementation of safe harbors.
•
Insurance industry testified it is
willing to exchange antitrust
exemption for federal system of
regulation that insurers may opt
into.
•
Consumer advocacy and law
enforcement representatives
support repeal.
New FTC Director of
Congressional Relations
• Jeanne Bumpus
– Currently Staff
Director, Senate
Committee on
Indian Affairs
– Replaces Anna
Davis, who was
Director for five
years
Joint FTC/DOJ Hearings
on Single-Firm Conduct
• First two hearings in ongoing series held
on June 20th and 22nd.
• Topics include:
– Loyalty and market share discounts
– Predatory pricing
– Product tying and bundling
– Exclusive dealing/refusals to deal
– Product design
HSR Premerger Notifications
May Be E-Filed
• Hart-Scott-Rodino filers may submit form
and/or attachments electronically
• No need to file separately with FTC and
DOJ
• http://www.hsr.gov
Merger Enforcement News
• McClatchy-Knight Ridder
(newspapers)
• Exelon-PSEG (electricity)
• Inco Limited-Falconbridge
Limited (nickel)
Airline Price Fixing Investigation
• DOJ and British authorities investigating
alleged price-fixing on fuel surcharges for
trans-Atlantic flights
• United, American, British Airways, Virgin
Atlantic acknowledge being contacted
ABA Law School Accreditation
• DOJ and ABA stipulate that ABA violated
1996 consent decree
• ABA agrees to pay $185,000
• Focus of consent decree on fixing of
faculty salaries and boycotts of stateaccredited and for-profit law schools
• Structural and compliance violations
DOJ Will Not Challenge Retailers’ Plan to
Share Information on Factory Conditions
• Fair Factories Clearinghouse
• Voluntary database with information on work
conditions (wages, hours, safety, etc.) to promote
labor law compliance
• Unlike retailers, factories only receive aggregate data
• Warned members about concerted action
Antitrust Modernization
Commission
www.amc.gov
See also
www.abanet.org/antitrust/at-links/at-mod.html
The AMC Gets Busy in June
• Meeting of June 7, 2006
– International
– State action doctrine
• Meeting of June 16, 2006
– Substantive merger law and HSR
– New economy - patents
Upcoming AMC Meetings
• Meeting of June 22-23, moved to July 13
– Exclusionary conduct
– Regulated industries
– Statutory immunities and exemptions
(state action doctrine)
Community Involvement
• Antitrust Modernization Symposium held
on June 8 - 9
• Supplemental requests for public comment
– Criminal remedies (due June 30, 2006)
– Civil remedies (due July 10, 2006)
•
•
•
•
Reforms to indirect purchaser litigation
Limit antitrust plaintiffs to single damages
Permit greater than treble damages
No private actions against federal criminal targets
Recent European Developments
MICROSOFT
• Potential antitrust lawsuit against Microsoft
by Adobe
• European Commission is scheduled to
issue a ruling finding Microsoft guilty of
breaking EU competition rules
European Commissioner for Competition Policy’s
2005 Review and 2006 Outlook
• Issued this month
• Contains an overview of the main policy and
legislative initiatives and decisions adopted by
the European Commission in application of EU
competition law in 2005
–
–
–
–
–
State Aid Action Plan
Antitrust Enforcement
Merger Enforcement
Proactive Application of Competition Law
2006 Outlook
European Commission’s Directorate-General for
Competition’s Public Meeting Regarding the
Application of Article 82 to Exclusionary Abuses
• Meeting held on June 14 to give third parties the
opportunity to comment on the DG’s December
2005 discussion paper on the application of Article
82 EC to exclusionary abuses
• Commission will take a position by year end on
whether it will publish formal guidelines on
exclusionary abused under Article 82
Other Inquiries and Investigations
• Telecom Sector
• Financial Industry – Card Issuer Profits
Merril Hirsh
•
Merril Hirsh is a partner in Ross, Dixon & Bell, LLP's Washington, DC office. He
joined the firm in 1989, after 7 years as a Trial Attorney in the Civil Division of the
United States Department of Justice.
•
Mr. Hirsh litigates on behalf of plaintiffs and defendants in antitrust, intellectual
property, securities, insurance, corporate, discrimination, class action, and other
cases. For example, he has been part of the team representing a company and its
principals in antitrust and False Claims Act litigation alleging price fixing for carbon
fiber. He represents the Financial Planning Association in a challenge to the SEC’s
Broker-Dealer rule before the District of Columbia Circuit. He has been the lead
counsel representing primary insurers in health care and asbestos bankruptcies.
•
Mr. Hirsh also edits the RDB Antitrust Alert; he is a chapter editor of the ABA's Illinois
Brick Monograph, in publication, and the author or co-author with other RDB
attorneys of: a chapter of the ABA’s Antitrust and Telecommunications Practice
Guide; “I Didn’t Say Orphan Often: The Benefits of a Bright-Line Rule Banning Brand
to Generic Payments in Hatch-Waxman Payment Settlements,” ABA Antitrust Health
Care Chr., V. 19, No. 2 (Summer 2005); "Are False Positives Really So Negative? A
Response to Kevin McDonald," Antitrust, Vol. 17 No. 3, at 83 (Summer 2003); In re
High Fructose Corn Syrup: New Form of Chicago School Education,
http://articles.corporate.findlaw.com/articles/file/00295/008510.html sum. in
Corporation Counsel Mag. (Dec. 2002) and Nat. L. J. (Dec. 2002). He can be
reached at (202) 662-2032 or mhirsh@rdblaw.com.
Edward B. Mullen III
•
Ed Mullen is a partner in the Chicago office of Ross, Dixon & Bell, LLP. He
litigates complex commercial cases in federal and state courts throughout
the country, and he has litigated cases involving intellectual property, unfair
competition, securities fraud, insurance coverage and bad faith, and
numerous other substantive areas of law. He has also defended several
major U.S. corporations in class actions alleging claims such as unfair trade
practices, false advertising, fraud and misrepresentation.
•
For most of the past year, Mr. Mullen has been a member of the RDB team
trying a cutting edge insurance coverage case with more than $1 billion at
issue. In addition to his trial experience, Mr. Mullen has also drafted
successful appellate briefs in the Third and Eleventh Circuit Courts of
Appeal and the California Court of Appeal.
•
Mr. Mullen contributes to the firm’s antitrust alerts and is particularly
knowledgeable about the relationship between intellectual property and
antitrust law. He can be reached at (312) 759-1833 or
emullen@rdblaw.com.
Christopher H. White
• Christopher White is an associate in the Chicago office
of Ross, Dixon & Bell, LLP. He joined the firm in 2005
after completing a two-year clerkship with the United
States Court of Appeals for the Seventh Circuit.
• Mr. White graduated from the Northwestern University
School of Law in 2003, where he was a member of the
Order of the Coif and an Associate Editor of the
Northwestern University Law Review. He received a
degree in Economics from Princeton University in 1999.
Mr. White was previously employed in the bank mergers
unit of the Antitrust Division of the United States
Department of Justice. He can be reached at (312) 7595936 or cwhite@rdblaw.com.
Gabriela A. Richeimer

Gabriela Richeimer is a partner in the Washington, DC office of Ross, Dixon
& Bell, LLP. Ms. Richeimer graduated summa cum laude from the
Washington College of Law (American University) in 1997.

Since joining RDB in 1998, Ms. Richeimer has represented corporate and
association clients in many areas of the firm’s practice, including Antitrust,
Insurance Coverage, Bad Faith, Intellectual Property, Professional Liability,
Employment and Commercial Litigation. Ms. Richeimer has represented
corporate clients as both defendants and plaintiffs, including competitive
telecommunications carrier in antitrust, patent and business tort litigation
with large regional incumbent.

Ms. Richeimer is a member of the Antitrust Section of the American Bar
Association and has authored or co-authored books, articles and case-law
updates in Antitrust field. She is admitted in Maryland and the District of
Columbia and in numerous federal district and appellate courts. She can be
reached at (202) 662-2075 or gricheimer@rdblaw.com.
Melissa M. McGuane
•
Melissa McGuane is an associate in Ross, Dixon & Bell, LLP’s Chicago
office. She joined the firm in 2002 and works primarily on the firm's
antitrust, insurance and litigation matters. Ms. McGuane has a diverse civil
litigation practice in state and federal courts. As defense counsel, Ms.
McGuane has represented corporate clients in a wide variety of matters,
including constitutional, insurance coverage and general torts. As plaintiff's
counsel, she has spent a significant part of the past two years litigating an
antitrust price-fixing case.
•
Ms. McGuane graduated from American University’s Washington College of
Law in 2002, where she was a member of the American University Law
Review and Moot Court Board. Ms. McGuane is the co-author of Attorneys
Talk About Representing Accountants in the Era of Enron and Other
Corporate Scandals, The CPA Journal, March 2003, and contributes to the
firm’s Antitrust Alert newsletters. She can be reached at (312) 759-1929 or
mmcguane@rdblaw.com.