Legal Library: Cases and Proceedings

Cemex S.A. agreed to settle concerns stemming from its proposed $5.8 billion acquisition of RMC Group PLC. Under terms of the proposed consent order, Cemex will divest RMC's five ready-mix concrete plants in the Tucson, Arizona area, at no minimum price to a Commission- approved buyer.

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.

The Commission authorized staff to seek a preliminary injunction to block the merger of Nestlé and Dreyer’s Grand Ice Cream, Inc. on grounds that the merger would reduce competition in the highly concentrated market for super-premium ice cream. Nestlé markets super-premium ice cream under the Häagen Dazs brand; Dreyer’s super-premium brands include Dreamery, Godiva and Starbucks. Before the complaint was filed in a federal district court, the parties agreed to enter into a consent agreement to settle the charges. The final order requires the divestiture of super-premium ice cream brands Dreamery and Godiva, the Whole Fruit sorbet brand, and Nestlé’s distribution assets to CoolBrands International, Inc.

The Commission settled charges with two small groups of orthopedic physicians in the Cincinnati area that had formed an independent practice association that jointly negotiated contracts regarding the rates its physician members would charge health plans and other payors for their services. In addition to the usual prohibitions on joint negotiations, the Commission’s order disbanded the IPA and prohibited future collective bargaining.

The Commission authorized staff to file a complaint to block Arch Coal, Inc.’s proposed acquisition of Triton Coal Company, L.L.C. from New Vulcan Holdings, L.L.C. on grounds that the acquisition would increase concentration and tend to create a monopoly in the market for coal mined from the Southern Powder River Basin and in the production of 8800 British Thermal Unit coal. On April 1, 2004, the complaint was filed in the U.S. District Court for the District of Columbia; the court denied the FTC's motion for a preliminary injunction. On June 13, 2005 the Commission announced that it was closing its investigation, saying that it will not continue with administrative litigation challenging the deal.

A final order settled charges stemming from Hoechst's merger with Rhone-Poulenc S.A. According to the complaint, the merger (the merged firm would be renamed Aventis S.A.) raised antitrust concerns in the market for cellulose acetate and direct thrombin acetate. The order requires the divestiture of the 'subsidiary, Rhodia, a specialty chemicals firm that produces cellulose acetate.

The order prohibits Preferred Health Services from orchestrating collective agreements and other terms for physician services when negotiating with health insurance plans and other third party payers. According to the complaint these agreements among the physician-hospital organization of doctors and the Oconee Memorial Hospital in northwestern South Carolina to collectively negotiate fees and terms of services could lead to higher health care costs and limited physician access.

With an administrative complaint issued on July 8, 2003 the Commission charged a San Francisco, California physicians’ organization with engaging in an agreement under which its competing members agreed collectively on the price and other terms on which they would enter into contracts with health plans or other third party payers. The complaint also alleged that Brown and Toland directed its physicians to end their preexisting contracts with payers and required its physician members to charge specified prices in all Preferred Provider Organization contracts. A final consent order prohibits Brown and Toland from negotiating with payers on behalf of physicians, refusing to deal with payers, and setting terms for physicians to deal with payers, unless the physicians are clinically or financially integrated.

A consent order allowed Genzyme’s acquisition of ILEX Oncology, Inc., but requires the companies to divest certain assets in the market for solid organ transplant acute therapy drugs. Specifically, Genzyme is required to divest all contractual rights related to ILEX’s Campath®, an immunosuppressant antibody used in solid organ transplants to Schering AG.

General Electric was permitted to acquire InVision Technologies, Inc. with conditions that it divest InVision's YXLON x-ray nondestructive testing and inspection equipment to a Commission approved acquirer. According to the complaint issued with the consent order, the two firms are direct competitors in a highly concentrated market. The consent order protects competition in the United States market for specialized x-ray testing and inspection including standard x-ray cabinets; x-ray systems equipped with automated defect recognition software; and high-energy x-ray generators.

The consent order settled charges that Cephalon's proposed acquisition of Cima Labs, Inc. would allow Cephalon to continue its monopoly in the United States market for drugs that eliminate or reduce the spikes of severe pain that chronic cancer patients experience. The consent order required Cephalon to grant Barr Laboratories, Inc. a fully paid, irrevocable license to make and sell a generic version of Cephalon's breakthrough cancer pain drug, Actiq, in the United States.

The consent order settled charges that Buckeye's proposed acquisition of five refined petroleum products pipelines and 24 petroleum products terminals in the United States from Shell Oil Company would reduce competition in the market for the terminaling of gasoline, diesel fuel, and other light petroleum products in the area of Niles, Michigan. Buckeye agreed to notify the Commission before acquiring any interest in the Niles petroleum terminal for a period of ten years.