Judicial Relief and Remedies

• Pages: 475-546

CHAPTER XIV

JUDICIAL RELIEF AND REMEDIES

Most mergers that raise antitrust concern are resolved without

litigation.1Merging 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.2In 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 2013HSR Report], available athttp://www.ftc.

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

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

Commission) challenged twenty-threemergers, resulting in sixteen

consent agreements, twowithdrawn or abandoned transactions, one

complaint in federal court to permanently enjoin the acquisition, and four

in which the FTCinitiated administrativelitigation; the Antitrust Division

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

fifteenmergers, resulting in threeabandoned transactions, three

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

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

to an additional fiveconsent decrees, one success in the Bazaarvoice/

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

of administrative procedures and remedies, seeABASECTION OF

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

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

ABA,THE MERGER REVIEW PROCESS].

2. See, e.g.,U.S.DEP’T OF JUSTICE,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/negotiating-merger-remed

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

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

of Achieving Effective Antitrust Outcomes, Remarks as Prepared for the

Georgetown Law 7th Annual Global Antitrust Enforcement 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

475

476Mergers 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)5establishes 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 atransaction from the

remainder.”); Deborah L. Feinstein, Director, Bureau 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.”); Joseph F. Wayland, Acting 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: Litigation in the

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

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

generally seek to resolve our concerns about likely competitive harm

through agreement, rather than litigation.”); FED.TRADE COMM’N,

BUREAU OF COMPETITION,ASTUDY OF THE COMMISSION’S DIVESTITURE

PROCESS10-11 (1999), available athttp://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 relief . . . against threatened loss

or damage by a violation of the antitrust laws . . . when and under the

same conditions and principles as injunctive relief against threatened

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

equity. . . .”).

4. See15 U.S.C. §25 (“It shall be the duty of the . . . United States

attorneys, in their respective districts, under the direction ofthe Attorney

General, to institute proceedings . . . to prevent and restrain . . . 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 such [violation].”). See,

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

5. 15 U.S.C. §18a.

Judicial Relief and Remedies477

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 Act6has allowed the federal government to act more

effectively by providing it with the relevant information before the

consummation of most mergers.7Where 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.8Agency

merger challenges are not limited to transactions that are reportable

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

mergers that fall below the HSR thresholds and are therefore not

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

6. Id.

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

THE MERGER REVIE W PROCESS, supranote1; ABASECTION OF

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

2007); FED.TRADE COMM’N,INTRODUCTORY GUIDE ITO THE

PREMERGER NOTIFICATION PROGRAM,WHAT IS THE PREMERGER

NOTIFICATION PROGRAM? (Jan. 2002). See also2013HSR Report, supra

note 1.

8. 15 U.S.C. §18a. In addition to strengthening the agencies’ hand, the HSR

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

unionsto 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). Seepart 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 Petrol., Ltd.,

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

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

Co., 138F.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