Judicial Relief and Remedies

• Pages: 475-546

CHAPTER XIV

JUDICIAL RELIEF AND REMEDIES

Most mergers that raise antitrust concern are resolved without

litigation.1 Merging firms can often resolve a federal or state

enforcement agency’s concerns without litigation through “fix-it-first”

restructuring of their transaction, or by addressing the agency’s concerns

through a divestiture or other remedy pursuant to a negotiated consent

decree.2 In cases where the enforcement agency and merging firms

1. See, e.g., FTC and DOJ Hart-Scott-Rodino Annual Report—Fiscal Year

2013 (2013) [hereinafter 2013 HSR Report], available at http://www.ftc.

gov/system/files/documents/reports/36th-report-fy2013/140521hsr

report.pdf (in FY 2013, the Federal Trade Commission (FTC or the

Commission) challe nged twenty-three mergers, resulting i n sixteen

consent agreements, two withdrawn or abandoned transactions, one

complaint in federal c ourt to permanently enj oin the acquisition, a nd four

in which the FTC initiated administrative litigation; the Antitrust Division

of the U.S. Department of Justice (DOJ or the Division) c hallenged

fifteen mergers, resulting i n three abandoned transactions, three

restructurings of t he proposed transactions, and two c hanges in conduct to

resolve competitive concerns, and initiated litigation in seven, which led

to an additional five consent decrees, one success in the Bazaarvoice/

Power Reviews acquisition, and one pending trial). For a full discussion

of administrative procedures and remedies, see ABA SECTION OF

ANTITRUST LAW, THE MERGER REVIEW PROCESS: A STEP-BY-STEP

GUIDE TO U.S. AND FOREIGN MERGER REVIE W (4th ed. 2012) [hereinafter

ABA, THE MERGER REVIEW PROCESS].

2. See, e.g., U.S. DEP’T OF JUST ICE, ANTITRUST DIV., POLICY GUIDE TO

MERGER REMEDIES (2011) [hereinafter 2011 POLICY GUIDE], available at

http://www.justice.gov/atr/public/guidelines/ 272350.pdf; FED. TRADE

COMM’N, NEGOTIATIN G MERGER REMEDIES (2012), available at

http://www.ftc.gov/system/files/attachments/negotiati ng-merger-remed

ies/merger-remediesstmt.pdf. See also Bill Baer, Ass’t Att’y Gen.,

Antitrust Div., U.S. Dep’t of Justice, Remedie s Matter: The Importance

of Achieving Effective Antitrust Outcomes, Remarks as Prepared for the

Georgetown Law 7th Annual Global Antitrust Enforce ment Symposium,

(Sept. 25, 2013), available at http://www.justice.gov/atr/public/speeches/

300930.pdf (“Litigation is not our preferred option. In most cases, we are

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476 Mergers and Acquisitions

cannot negotiate a settlement, however, the enforcement agency (or a

private third party3) must initiate litigation to block or unwind the

transaction.4

The Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR

Act)5 establishes a procedure for notifying mergers that meet certain

able to work with the parties and preserve competition through a consent

decree that separates the anticompetitive parts of a transaction from the

remainder.”); Deborah L. Feinstein, Director, B ureau of Competition,

Federal Trade Commission, The Significance of Consent Orders in the

Federal Trade Commission’s Competition Enforcement Efforts (Sept. 17,

2013), available at http://www.ftc.gov/sites/default/files/doc uments/

public_statements/significance-consent-orders-federal-trade-commi ssion

%E2%80%99s-competition-enforcement-efforts-gcr-live/130917gcr

speech.pdf (“FTC consent orders are every bit as important in preserving

competition and protecting consumers as are our successful litigation

efforts.”); Josep h F. Wayland, Actin g Ass’t Att’y Gen., Antitrust Div.,

U.S. Dep’t Justice, Remarks as Prepared for the Georgetown Law 6th

Annual Global Antitrust Enforcement Symposium: Litiga tion in the

Antitrust Division (Sept. 19, 2012), available at http://www.

justice.gov/atr/public/speeches/287117. pdf (“In our investigations, we

generally seek to resolve our concerns about likely competitive harm

through agreement, r ather than litigat ion.”); FED. TRADE COMM’N,

BUREAU OF COMPETITION , A STUDY OF THE COMMISSION’S DIVESTITURE

PROCESS 10-11 (1999), available at http://www.ftc.gov/sites/default/files/

attachments/merger-review/divestiture.pdf (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).

3. See 15 U.S.C. §26 (“Any person, firm, corporation, or association shall

be entitled to sue for and have injunctive relie f . . . against threatened loss

or damage by a violation of the antitrust la ws . . . when and under t he

same conditions and principles as injunct ive relief against t hreatened

conduct that will cause loss or damage is granted by courts of

equity. . . .”).

4. See 15 U.S.C. §25 (“It shall be the duty of the . . . United States

attorneys, in their respective districts, under the d irection of the Attorney

General, to institute proceedings . . . to prevent and restra in . . . violations

[of the Clayton Act].”); 15 U.S.C. §53(b) (“Whenever . . . any person . . .

is violating, or is about to violate, any provision of law enforced by the

Federal Trade Commission . . . the Commission . . . may bring suit in a

district court of the United States to enjoin any s uch [violation].”). See,

e.g., California v. American Stores Co., 495 U.S. 271 (1990).

5. 15 U.S.C. §18a.

Judicial Relief and Remedies 477

monetary thresholds to the FTC and the DOJ. It imposes a mandatory

waiting period, during which the merging parties cannot consummate the

transaction, which enables the agencies to investigate and challenge a

merger before such consummation. The merger review process instituted

under the HSR Act6 has allowed the federal government to act more

effectively by providing it with the relevant information before the

consummation of most mergers.7 Where the information thus supplied

indicates that the transaction raises competitive concerns, the FTC or the

DOJ may seek a preliminary injunction to stop the transaction rather than

having to attempt to undo it after it has been consummated.8 Agency

merger challenges are not limited to transactions that are reportable

under the HSR Act.9 The agencies regularly investigate and challenge

mergers that fall below the HSR thresholds and are therefore not

notifiable.10 The DOJ has encouraged parties to transactions that raise

6. Id.

7. For a detailed discussion of the premerger notification process, see ABA,

THE MERGER REVIE W PROCESS, supra note 1; ABA SECTION OF

ANTITRUST LAW, PREMERGER NOTIFICATION PRACTICE MANUAL (4th ed.

2007); FED. TRADE COM M’N, INTRODUCTORY GUIDE I TO THE

PREMERGER NOTIFICATION PROGRAM, WHAT IS THE PREMERGER

NOTIFICATION PROGR AM? (Jan. 2002). See also 2013 HSR Report, supra

note 1.

8. 15 U.S.C. §18a. In addition to str engthening the agenci es’ hand, the HSR

Act process helps private parties by “making it easier for businesses and

unions to predict the consequences of mergers and to conform their

economic strategies in accordance with the probable outcome.” California

v. American Stores Co., 495 U.S. 271, 297 (1990) (Kennedy, J.,

concurring). See part A.1.c of this chapter for a discussion of the legal

standards that apply to preliminary injunction actions in merger cases.

9. See, e.g., Decision and Order, Hologic Inc., 2006 FTC LEXIS 46 (FTC

2006) (FTC postmerger investigation of transaction despite exemption

from the reporting obligations of the HSR Act); Aloha Petro l., Ltd.,

140 F.T.C. 1195 (2005) (same); Aspen Tech., 138 F.T.C. 959 (2004)

(same); Commission Opinion and Final Order, Chicago Bridge & Iron

Co., 138 F.T.C. 1024 (2004), (same), modified, 140 F.T.C. 1161 (2005),

aff’d, No. 05-60192 (5th Cir. Jan. 25, 2008), available at

http://www.ftc.gov/os/adjpro/d9300/080125opinion.pdf.

10. Leslie C. Overton, Dep. Ass’t. Att’y Gen., Antitrust Div., U.S. Dep’t of

Justice, Remarks as Prepared for the 14th Annual Loyola Antitrust

Colloquium, Institute for Consumer Antitrust Studies (Apr. 25, 2014),

available at http://www.justice.gov/atr/public/speeches/305472.pdf;

Deborah Platt Majoras, Chairman, Fed. Trade Comm’n, Remarks of FTC