Legal Library: Cases and Proceedings

A physician group in the Dallas/Fort Worth, Texas area settled charges that it collectively bargained on behalf of its members to negotiate fee schedules with third party payers and other health insurance companies. According to the complaint, issued with the consent order, these practices decreased competition and increased prices for the provision of medical services to area consumers.

MSC settled charges that its 1999 acquisitions of Universal Analytics, Inc. and Computerized Structural Analysis & Research Corp. eliminated competition between the three firms in the development and application of engineering software. The administrative complaint issued October 2001, alleged that the two acquisitions would eliminate competition for advanced versions of Nastran, an engineering simulation software program used throughout the aerospace and automotive industries. The consent order required MSC to divest at least one clone copy of its current advance Nastran through royalty-free perpetual, non-exclusive licenses to one or two acquirers approved by the Commission.

Under the terms of a consent order, The Institute of Store Planners must remove from its Code of Ethics any provision that prohibits its members from providing their services for free and any provision that prohibits competition with other members for work on the basis of price. According to the complaint, these rules unreasonably restrained price and nonprice competition among the members, depriving consumers of the benefits of competition among store planners. Its members provide architectural store design and store and merchandise planning to retail stores.

The consent order requires FMC to divest its phosphorus pentasulfide business in Lawrence, Kansas to Peak Investments, LLC and Solutia Inc.’s phosphate assets in Augusta, Georgia to Societe Chemique Prayon-Rupel to settle charges that the proposed FMC/Solutia joint venture could substantially lessen competition in the United States market for pure phosphoric acid and phosphorus pentasulfide.

Quest Diagnostics settled FTC charges that its proposed acquisition of Unilab Corporation would substantially increase concentration in the clinical laboratory testing services market by agreeing to divest clinical laboratory testing assets in Northern California to Laboratory Corporation of America.

Dainippon agreed to divest the perylene business of its U.S. subsidiary, Sun Chemical Corporation, to Ciba Specialty Chemicals Inc. and Ciba Specialty Chemicals Corporation to settle allegations that its proposed acquisition of Bayer Corporation's high-performance pigment manufacturing facility would eliminate competition in the highly concentrated world market for perylenes -organic pigments used to impart unique shades of red color to products, including coatings, plastics and fibers.

A consent order settled Commission charges that Wal-Mart's proposed acquisition of the largest supermarket chain in Puerto Rico, Supermercados Amigo, Inc., would eliminate competition between supercenters and club stores owned or controlled by Wal-Mart and supermarkets owned or controlled by Arnigo. Under the consent order, Wal-Mart must divest four Amigo supermarkets in Cidra, Ponce, Manati, and Vega Baja, Puerto Rico to Supermercados Maximo.

Baxter settled Commission concerns stemming from its $316 million proposed acquisition of Wyeth Corporation's generic injectable drug business and agreed to divest several pharmaceutical products. The Commission charged that the acquisition would reduce competition in the manufacture and sale of propofol (a general anesthetic); new injectable iron replacement therapies; metocloprarnide (used to treat nausea); and vecuronium and pancuronium (neuromuscular blocking agents used to temporarily freeze muscles during surgery). The consent order requires divestitures in each of the pharmaceutical markets.

A consent order permits the acquisition of Global Industrial Technologies, Inc. and requires the divestiture of two refractories manufacturing facilities – Global’s Hammond, Indiana and Marelan, Quebec plants – to Resco Products, Inc. According to the complaint, the proposed acquisition would create the largest producer of refractories in North America with dominant positions in the magnesia - carbon brick refractory market and in the high alumina brick refractory market. Refractories are used to line furnaces in many industries that involve the heating or containment of solids, liquids, or gases at high temperatures.

To settle charges that its rules unreasonably restrict competition among its members, the National Academy of Arbitrators is prohibited from adopting policies that restrict its members from advertising truthful information about their services, including prices and conditions of services, under terms of a consent order. The association is required to remove all provisions that do not conform to the provisions in the consent order from: (1) its Code of Professional Responsibility for Arbitrators of Labor-Management Disputes; (2) its Formal Advisory Opinions; (3) any Statements of Policy; and (4) its Web site.

A consent order settled charges that the American Institute for Conservation of Historic and Artistic Works adopted and enforced provisions in its rules of conduct that prohibited professional conservators to work for free or at reduced fees. The association agreed to remove all provisions from its Code of Ethics, and its Commentaries to the Guidelines for Practice that are inconsistent with the order. Professional conservators manage and preserve cultural objects (including historical scientific, religious, archaeological and artistic objects).

System Health Providers and its parent corporation, Genesis Physicians Group, Inc., settled charges that they collectively bargained with health insurance firms to accept proposed fee schedules; discouraged members from entering into contracts directly with payers; and refused to deal with health insurance firms and other third-party payers except on collectively agreed upon terms. The order prohibits the recurrence of the alleged practices and actions.

The Commission authorized staff to seek a preliminary injunction to block the proposed acquisition of Claussen Pickle Company by Hicks, Muse, Tate & Furst Equity Fund V L.P., the owner of Vlasic Pickle Company on grounds that the transaction would combine the dominant firm in the market for refrigerated pickles (Claussen) with its most significant competitor in refrigerated pickles (Vlasic). Six days after the complaint was filed in federal district court, the parties abandoned the transaction.

The Commission authorized staff to seek a preliminary injunction to block Libbey’s proposed $332 million acquisition of Anchor Hocking, a subsidiary of Newell Rubbermaid, Inc., on grounds that the acquisition would substantially lessen competition in the market for soda-lime glassware sold to the food service industry in the United States. A complaint was filed in the U.S. District Court for the District of Columbia on January 14, 2002. The district court granted the Commission’s request for an injunction on April 22, 2002. An administrative complaint, issued on May 9, extend the injunction until the conclusion of the administrative proceedings. Pursuant to the delegation of authority, the Commission withdrew the matter from adjudication on July 25, 2002, to consider a proposed consent agreement. A consent order was finalized October 7, 2002.

Amgen settled antitrust charges that its proposed $16 billion acquisition of Immunex Corporation would reduce competition and tend to create a monopoly in the biopharmaceutical markets for neutrophil (white blood cell) regeneration factors; tumor necrosis factor (TNF) inhibitors; and interleukin-1 (IL-1) inhibitors. The consent order requires the firms to sell all of Immunex's assets related to Leukine -a neutrophil regeneration factor -to Schering AG; license certain intellectual property rights to TNF inhibitors to Serono S.A.; and license certain intellectual property rights related to IL-1 inhibitors to Regeneron Pharmaceuticals Inc.