Chapter 13. Judicial Relief and Remedies

Private parties can often resolve the investigating agency’s concerns
about their merger short of litigation.1 Through “fix-it-first”
restructuring of their transaction, or through the negotiation of a consent
decree, the parties to a contested merger can address the agency’s
concerns and avoid the need for litigation.2 These prelitigation remedies
are employed in the majority of mergers that raise anticompetitive
concerns.3 In cases where the investigating agency or the parties to a
1.For a thorough discussion of those administrative procedures and
2.See also, R. Hewitt Pate, Ass’t Att’y Gen., Antitrust Div., Concerning
Antitrust Enforcement Oversight, Statement Before the House Committee
on the Judiciary (July 24, 2003), at The Antitrust Div. has
initiated a similar review of its practices and policies regarding remedies.
See Charles A. James, Ass’t Att’y Gen., Antitrust Div., Recent
Developments and Future Challenges at the Antitrust Division, Remarks
Before the Dallas Bar Ass’n (Sept. 17, 2002); at; BUREAU OF
PROCESS 10-11 (1999) (FTC’s study of divestiture orders from 1990 to
1994 indicates that divestiture of an entire business is more likely to
result in a viable operation than divestiture of selected assets of the
business); Richard G. Parker, Senior Deputy Director, Bureau of
Competition, FTC, Global Merger Enforcement, Remarks Before the
International Bar Association (Sept. 28, 1999) (discussing the FTC
Divestiture Study in the context of cases during the mid-1990s), at
3.See, e.g., A Positive Agenda for Consumers: The FTC Year in Review
(Apr. 2003), at (indicating that in
2002, 31 antitrust enforcement actions were taken and 19 consent decrees
entered into); Deborah D. Marjoras, Dep. Ass’t Att’y Gen., Antitrust
Div., Merger Enforcement at the Antitrust Division (Sept. 27, 2002), at (noting that 2001 the
DOJ opened 131 preliminary investigations and challenged 21 mergers);
John M. Nannes, Deputy Ass’t Att’y Gen., Antitrust Div., Last Year and
This Year: The View from the Antitrust Trenches, Remarks Before the
New York State Bar Ass’n (Jan. 27, 2000), at
Judicial Relief and Remedies 429
transaction cannot reach a negotiated settlement, however, litigation
seeking preliminary or permanent relief may be initiated by the agency,
by state attorneys general, or by private parties.4 With the statutory
increase in the Hart-Scott-Rodino Antitrust Improvements Act of 1976
(HSR Act) “size of transaction” filing threshold in 2001 from $15
million to $50 million, there is now a greater likelihood of litigation
involving non-HSR reportable transactions.5 (noting that in FY 1999 the
DOJ challenged or advised parties of its intention to challenge 46
transactions, most of which were resolved by consent decrees); Richard
G. Parker, Senior Deputy Director, Bureau of Competition, FTC, Trends
in Merger Enforcement and Litigation, Remarks Before the Annual
Briefing for Corporate Counsel (Sept. 16, 1998), at (pointing out that, as the FTC
neared the close of FY 1998, over 4,400 HSR filings had been received
and 23 enforcement actions had been initiated, resulting in 20 consent
agreements); see also Appendix O for selected merger enforcement
4.See, e.g., Richard G. Parker, Senior Deputy Director, Bureau of
Competition, FTC, Trends in Merger Enforcement and Litigation,
Remarks Before the Annual Briefing for Corporate Counsel (Sept. 16,
1998), at (discussing FTC
merger litigation).
5.See, e.g., Aspen Tech. Inc., Docket No. 9310 (F.T.C. Aug. 7, 2003)
(complaint), at (FTC post-merger
investigation of transaction despite exemption from the reporting
obligations of the HSR Act); Chicago Bridge & Iron Co., Docket No.
9300 (F.T.C. Oct. 5, 2001) (complaint), at (same); see also
Joseph J. Simons, Director, Bureau of Competition, FTC, Report from the
Bureau of Competition, Remarks Before The 51st Annual ABA Antitrust
Section Spring Meeting (Apr. 4, 2003), at (“The number of
investigations of mergers not reported under HSR is up sharply since the
change in reporting thresholds”); see also FTC v. Hearst Trust, No.
1:01CV00734 (D.D.C. Nov. 9, 2001) (requiring Hearst to divest acquired
party and to disgorge $19 million in illegal profits); United States v. 3D
Systems Corp., No. 1:01CV01237 (D.D.C. Aug. 16, 2001) (DOJ blocking
3D’s $45 million acquisition of DTM until certain patents were licensed
to a third party competitor); FTC v. MSC Software, Docket No. 9299
(F.T.C. Aug. 14, 2002) (requiring MSC to divest two companies it had
A. Preliminary Relief
1. Preliminary Injunctions
Preliminary injunction actions, which seek to preserve the status quo
by preventing the consummation of a merger, are a powerful and
frequently used tool in Section 7 enforcement. They are particularly
important because many Section 7 cases do not survive beyond the
preliminary injunction stage. An unsuccessful effort to obtain a
preliminary injunction can be the plaintiff’s final battle in an effort to
block a merger (although the Federal Trade Commission (FTC or
Commission) may pursue administrative litigation against a merger even
after losing an action for preliminary injunction),6 and an unsuccessful
effort to defend against a preliminary injunction very often means the
proposed deal will be scuttled, given the costs, delay, and uncertainty of
a full-blown Section 7 trial.7
6.See FTC, Statement of Federal Trade Commission Policy Regarding
Administrative Merger Litigation Following the Denial of a Preliminary
Injunction, 1995 WL 369485 (F.T.C. June 21, 1995). The FTC has
adopted “fast-track” procedures for certain cases, 16 C.F.R. § 3.11A, to
respond to concerns about the “glacial place” of FTC administrative
proceedings; see, e.g., FTC v. Occidental Petroleum Corp., 1986-1 Trade
Cas. (CCH) ¶ 67, 071 (D.D.C.).
7.See, e.g., Missouri Portland Cement Co. v. Cargill, Inc., 498 F.2d 851,
870 (2d Cir. 1994) (“Experience seems to demonstrate that . . . the grant
of a temporary injunction in a Government antitrust suit is likely to spell
the doom of an agreed merger”); FTC v. Exxon Corp., 636 F.2d 1336,
1343 (D.C. Cir. 1980) (“[T]he issuance of a preliminary injunction
blocking an acquisition or merger may prevent the transaction from ever
being consummated”). Even the announcement of a government
challenge can end a planned acquisition. In fiscal years 1989 to 1994, the
FTC “voted to seek a preliminary injunction to block 32 transactions,”
and in 23 of those cases, “the parties either entered into a negotiated
settlement or withdrew from the transaction before a court decision on the
complaint.” FTC, Mergers: A View from the Federal Trade
Commission, 1995 WL 122744, at *3 (F.T.C. Mar. 15, 1995) (Remarks
of Commissioner Azcuenaga); FTC v. Staples, 970 F. Supp. 1066, 1093
(D.D.C. 1997) (“This decision [to grant a preliminary injunction] will
most likely kill the merger”).

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