Legal Library: Cases and Proceedings

The Commission approved an administrative complaint, alleging that a combined Jostens/American Achievement Corp. ("AAC") would control an unduly high percentage of the high school and college rings markets, making it a dominant firm with only one smaller meaningful competitor in both markets.  The Commission charged that the proposed combination of Jostens and AAC would likely have been anticompetitive and led to higher prices and reduced service for both high school and college students who buy class rings.  The FTC also voted to seek a preliminary injunction in federal court to stop Jostens from proceeding with the proposed acquisition of its close rival, AAC.  On April 17, 2014, the parties abandoned their plans to merge.

Pharmaceutical companies Endo Health Sciences Inc. (Endo) and Boca Life Science Holdings, LLC and Boca Pharmacal, LLC (Boca) agreed to a settlement resolving FTC charges that Endo’s acquisition of Boca would be anticompetitive. Under the settlement, the companies will relinquish their rights to market and distribute four generic multivitamin fluoride drops for children, and will sell three other generic drugs in development.The proposed settlement preserves competition in the pharmaceutical markets for four prescription generic multivitamin drop products given to children in the United States who do not have access to fluoridated water.  In addition, the FTC’s settlement preserves future competition for three generic drugs where the proposed acquisition would eliminate one likely future entrant from a very limited pool of future entrants.

Oil refiner Tesoro Corporation and one of its subsidiaries agreed to sell their light petroleum products terminal in Boise, Idaho to settle charges that their $335 million acquisition of pipeline and terminal assets from Chevron Corporation would be anticompetitive. Without the divestitures required by the FTC, the deal would have given Tesoro ownership of two of the three full service light petroleum terminals in Boise, significantly reducing competition for local terminal services. The proposed order requires Tesoro to sell the terminal it currently owns in Boise to an FTC-approved buyer within six months of when the order becomes final.

In the matter of Polypore International/Daramic LLC, the Commission issued an administrative complaint challenging Polypore’s consummated acquisition of Microporous Products in the global market for battery separators, a key component in flooded lead-acid batteries. According to the Commission’s complaint, the acquisition, which occurred in February 2008, substantially lessened competition and led to higher prices in several North American product markets including 1) deep-cycle separators used in golf carts, 2) motive separators for batteries used primarily in forklifts, 3) automotive separators used in car batteries, and 4) uninterruptible power supply (UPS) separators used in batteries that provide backup power during power outages. Additionally, the complaint alleged that Polypore engaged in anticompetitive conduct by entering into a joint marketing agreement with a competitor, restricting the competitor’s entry into the polyethylene battery separator markets. The complaint also charged that Polypore sought to maintain monopoly power through anticompetitive means in several battery separator markets. On 3/8/2010, the ALJ announced an Initial Decision finding that Polypore International Inc.’s consummated acquisition – through its Daramic Acquisition Corporation subsidiary – of rival battery separator manufacturer Microporous L.P. was anticompetitive and violated federal law in four battery separator markets in North America. In an Order filed with the Initial Decision on 2/22/2010, Judge Chappell ordered Polypore to divest Microporous to an FTC-approved buyer within six months after the divestiture provisions of the Order become final. Judge Chappell also ruled that a 2001 joint marketing agreement between Polypore and a rival battery separator manufacturer illegally divided up the markets for particular types of battery separators in North America, and ordered Polypore to amend the agreement to terminate and declare null and void the covenant not to compete. Finally, the Judge dismissed a separate allegation that Polypore engaged in exclusionary conduct in specific battery separator markets. In December of 2010, the Commission voted to uphold in large part the March 2010 Initial Decision, finding that the acquisition reduced competition in three of the four relevant markets, and ordering divestiture. Polypore subsequently filed a petition for review of the Commission's Decision and Order in the US court of Appeals for the Eleventh Circuit. On 07/12/2012, the U.S. Court of Appeals upheld the FTC's Opinion and Order, and on 06/24/2013, the Supreme Court denied Polypore's petition for certioari. In December 2013, the FTC approved the sale of all stock and assets related to Microporous to Seven Mile Capital Partners.