December Antitrust Bulletin

December 15, 2010

FTC Challenges Consummated Merger Approved by Bankruptcy Court

On Dec. 1, 2010, the Federal Trade Commission (FTC) challenged Laboratory Corp. of America’s $57.5 million acquisition of Westcliff Medical Laboratories Inc., a rival clinical laboratory testing company, alleging that the transaction would harm competition in Southern California. The FTC brought this action even though the transaction had been approved by the bankruptcy court in connection with Westcliff’s Chapter 11 proceedings. The case is the latest in a series of challenges to consummated mergers by the federal antitrust agencies, and serves as a reminder that even bankruptcy court approval will not prevent antitrust scrutiny of a transaction.

Joint DOJ/USDA Workshops Conclude

On Dec. 8, 2010, the U.S. Departments of Agriculture and Justice held their fifth and final joint public workshop on competition and regulation in the agricultural sector. This workshop examined margins at various levels of the agricultural supply chain. Earlier workshops concentrated on grain farming and hog production, and the poultry, dairy and livestock industries. Transcripts and videos for all of the workshops are publicly available.

Foreign Documents Produced in Civil Litigation Subject to Grand Jury Subpoena

A federal appeals court recently ruled that the U.S. Department of Justice can subpoena non-privileged documents that law firms obtained through civil discovery in antitrust litigation, even though the materials originated outside of the United States. The documents at issue in In re: Grand Jury Subpoenas had been produced by defendants in a private civil action filed after the government’s criminal antitrust investigation became public. The court—applying its “per se rule that a grand jury subpoena takes precedence over a civil protective order”—held that the subpoenas may be enforced because “[b]y chance of litigation, the documents have been moved from outside the grasp of the grand jury to within its grasp.” This ruling could have a significant impact on unindicted foreign companies facing follow-on civil litigation.

European Commission’s Post-acquisition Remedies Not Limited to Competition Concerns

Remedies imposed by the European Commission as a condition for approval of a merger or acquisition may cover business areas broader than just the activities found to raise competitive concerns. For example, in the recent acquisition by Unilever of the household and body care businesses of Sara Lee, the Commission found competition concerns relating to overlaps in the sale of deodorants in a number of EU countries, but did not limit its remedy to a deodorant brand in those countries and instead required Unilever to sell its interest in Sara Lee’s entire “Sanex” brand throughout Europe. Additional information is available in our December 2010 EU/UK Competition Law Newsletter.

For more information, please contact the lawyers in the Antitrust & Trade Regulation Department at McGuireWoods.