Legal Library: Cases and Proceedings

The Commission authorized both an administrative complaint and a motion for a preliminary injunction to challenge the proposed merger of Inova Health System Foundation’s and Prince William Health System (PWHS), alleging that the acquisition would violate federal antitrust laws by reducing competition for general acute care inpatient hospital services in Northern Virginia. On June 17, 2008 the Commission approved an order dismissing its administrative complaint, as the respondents publicly announced their mutual decision to terminate the proposed acquisition agreement.

Nine West Group Inc. settled charges that it entered into agreements with retailers; coerced other retailers into fixing the retail prices for their shoes; and restricted periods when retailers could promote sales at reduced prices. The order, which lasts 20 years, prohibits Nine West from fixing the price at which dealers may advertise, promote or sell any product. Nine West is one of the country’s largest suppliers of women’s shoes. In 2008, Nine West petitioned to have the order modified in light of the 2007 Supreme Court decision, Leegin v. PSKS, Inc., which eliminated the per se rule for minimum resale pricing agreements.   The Commission modified the order in part to allow Nine West to enter into resale price maintenance agreements that do not unreasonably restrict competition, and requiring Nine West to provide periodic reports of any RPM agreements with retailers.

The Commission charged that a motor oil lubricant importer illegally conspired with its competitors to restrict the importation and sale of these products in Puerto Rico, which resulted in higher prices paid by consumers. According to the FTC’s complaint, during 2005 and 2006, American Petroleum joined with numerous others in the Puerto Rico lubricants industry to lobby for the delay, modification, or repeal of Puerto Rico Law 278, which imposes an environmental recovery fee of 50 cents per quart. With the effective date of the law approaching, the importers adopted a strategy of refusing to import lubricants as a means of forcing a change. The consent order settling the charges bars American Petroleum from conspiring with its competitors to restrict output, refuse to deal, or boycott any lubricant buyer or potential buyer.

In 2007, the Commission requested that the Department of Justice file a complaint seeking civil penalties against James D. Dondero for violating the filing requirements of the Hart-Scott-Rodino Pre-Merger Notification Act. A stipulation and proposed final judgment was also filed requiring Dondero, parent of Highland Capital Management, L.P., a hedge fund, to pay $250,000 to settle the charges. According to the Commission, Highland failed to file the appropriate premerger documents in 2003 when it acquired shares of Neighborcare, Inc, then known as Genesis Health Ventures, bringing its holdings above the $50 million filing threshold. Upon realizing the error, a corrective filing was made, and Highland outlined steps to avoid future violations. However, in 2005, Highland reported another such violation involving shares of Motient Corporation.

The Commission approved a final consent order to ensure the maintenance of competition in the market for prone stereotactic breast biopsy systems (SBBSs). The Commission had challenged this merger which was consummated in 2005. The order required the divestiture of all prone SBBS assets to Siemens, a company well-positioned to become a competitor in this market.

The consent order settles charges that the $27 billion acquisition of Guidant Corporation by Boston Scientific Corporation would harm competition and consumers in several significant medical device markets. Guidant Corporation by Boston Scientific Corporation are the largest market shareholders in several coronary medical device markets in the U.S., together accounting for 90% of the U.S. PTCA balloon catheter market and 85% of the U.S. coronary guidewire market.

The complaint alleged that Scott R. Sacane, a Connecticut hedge fund manager, failed to comply with notification and waiting period requirements before making acquisitions of two companies through an investment fund that he controlled. Sacane eventually held more than 50 percent of the voting securities of Aksys Ltd. and more than $100 million of voting securities of Esperion Therapeutics, Inc., without complying with the HSR Act. Under the terms of a consent decree filed simultaneously with the suit, Sacane agreed to pay a civil penalty of $350,000 to settle the charges.