Legal Library: Cases and Proceedings

Fresenius AG settled charges that its purchase of rival dialysis provider Renal Care Group, Inc. would likely have resulted in higher prices for dialysis services. The consent order requires that Fresenius AG will sell 91 outpatient kidney dialysis clinics and financial interests in 12 more.

Consent order permits the acquisition of MAPCO, Inc. but requires Williams to lease its pipeline to Kinder Morgan Energy Partners, a terminal competitor of MAPCO, to ensure that Kinder Morgan can continue to exist as an independent competitor in the transportation and terminaling of propane in certain Midwest markets. Under terms of the consent order Williams agreed to connect its Wyoming gas processing plant to any new competing pipeline in the future.

The consent order requires that Allergan and Inamed divest the rights to develop and distribute Reloxin, a potential Botox rival, to settle charges that Allergan’s $3.2 billion purchase of Inamed would reduce competition and force consumers to pay higher prices for botulinum toxin type A products. Under the terms of the FTC settlement, the companies will return the development and distribution rights to Reloxin to Ipsen Ltd., its U.K.- based manufacturer.

The consent order allowed Teva to acquire IVAX Corporation, provided the companies sell the rights and assets needed to manufacture and market 15 generic pharmaceutical products. Among the drugs sold were several forms of generic amoxicillin and amoxicillin clavulanate potassium that are widely used in the United States.

After an administrative trial, the administrative law judge found that a group of affiliated intrastate movers had engaged in horizontal price-fixing by filing collective rates on behalf of its member motor common carriers for the intrastate transportation of property within the Commonwealth of Kentucky. The judge also ruled that the association’s conduct was not protected by the state action doctrine because the State of Kentucky did not supervise the rate-making practices of the group. On July 12, 2004, the Kentucky Household Goods Carriers Association, Inc. filed an appeal of the initial decision with the Commission. On June 22, 2005, the Commission issued a unanimous opinion finding that the Kentucky Household Goods Carriers Association, Inc. engaged in illegal price-fixing by jointly filing tariffs containing collective rates on behalf of its members, and that the state action doctrine does not immunize that activity from antitrust liability. On August 22, 2006, the Sixth Circuit Court of Appeals affirmed the opinion of the Commission.

Under the terms of the consent orders Chevron and Unocal will cease enforcing Unocal’s patents covering reformulated gasoline that complies with California Air resources Board Standard, will not undertake any new enforcement efforts related to the particular patents, and will cease all attempts to collect damages, royalties, or other payments related to the use of any of the patents. In addition, the companies will dismiss all pending legal actions related to alleged infringement of the patents. According to the complaint, the acquisition of the Unocal patents by Chevron would have facilitated coordinated interaction among downstream refiners and marketers of CARB gasoline.

An administrative law judge dismissed a complaint in its entirety against Union Oil of California that charged the company with committing fraud in connection with regulatory proceedings before the California Air Resources Board regarding the development of reformulated gasoline. The judge ruled much of Unocal’s conduct was permissible activity under the Noerr-Pennington doctrine and that the resolution of the issues outlined in the complaint would require an in depth analysis of patent law which he believed were not with the jurisdiction of the Commission. In July 2004, the Commission reversed the judge’s ruling and reinstated charges that Unocal illegally acquired monopoly power in the technology market for producing a “summer-time” low-emissions gasoline mandated for sale and use by the CARB for use in the state for up to eight months of the year. While the case was pending before the administrative law judge, Unocal agreed to settle the claims and cease and desist enforcing Unocal’s patents covering reformulated gasoline that complies with California Air resources Board Standard, will not undertake any new enforcement efforts related to the particular patents, and will cease all attempts to collect damages, royalties, or other payments related to the use of any of the patents.  The settlement in this case was related to the settlement of FTC charges that Chevron's acquisition of Unocal would substantially lessen competition in the refining and marketing of CARB reformulated gasoline, as Chevron would acquire the relevant Unocal patents through the acquisition and would be able to use its position to coordinate with its downstream competitors, to the detriment of consumers.  See In the Matter of Chevron Corporation and Unocal Corporation.

A consent order settles allegations that Entergy-Koch LP's (a limited partnership owned equally by Entergy Corporation and Koch) acquisition of 50 percent of the Gulf South Pipeline Company, LP from Koch would lessen competition for the sale of electricity to consumers in Louisiana and western Mississippi and the distribution of natural gas to consumers in New Orleans and Baton Rouge. Entergy is the regulated electric and natural gas utility in parts of Louisiana and Mississippi. The order requires Entergy to establish a transparent process to buy natural gas and natural gas transportation that will assist state regulators in determining whether Entergy purchased gas supplies at inflated prices from its Entergy-Koch partnership.