Alaska v. Lynden Inc.
State challenged the acquisition by Lynden, which operates Alaska Marine Lines, of Northland. The companies are the only two competitors in the market for marine cargo delivery to Southeast Alaska. The parties reached a settlement under which Northland will operate as an independent company under Lynden. Sitka-based Samson Tug and Barge will lease space and equipment that previously belonged to Northland, effectively replacing Northland as Lynden’s competitor in Southeast Alaska. The Attorney General’s office will monitor shipping in Southeast to make sure the market remains competitive.
U.S. and Plaintiff States v. US Airways Group et al., No. 1:13-CV-01236 (D.D.C. Aug. 13, 2013)
US DOJ and plaintiff states filed a complaint in federal court challenging the proposed merger between American Airlines and U.S. Airways. The complaint alleged the proposed merger would result in decreased competition, higher airfares and fees, reduced service and downgraded amenities. The dollar impact nationwide could exceed $100 million a year. The merger would make a combined U.S. Airways/American Airlines the largest worldwide carrier and reduce the number of the larger “legacy” airlines from four to three – U.S. Airways/American, United/Continental and Delta/Northwest – and the number of major airlines from five to four. If the merger were approved, the three remaining legacy airlines combined with Southwest Airlines would account for more than 80 percent of domestic travel. American Airlines is U.S. Airways’ chief competitor in the marketplace, meaning that the merger will likely only serve to increase fares and fees. Texas settled its case, entering into an agreement under which the merged airlines would maintain their operations at Texas airports, maintain DFW as a hub, and maintain its corporate headquarters in the Dallas area. DOJ and the remaining states reached settlements with the merging parties. The settlement requires US Airways and American to divest or transfer to low cost carrier purchasers approved by the department: 1) All 104 air carrier slots (i.e. slots not reserved for use only by smaller, commuter planes) at Reagan National and rights and interest in other facilities at the airport necessary to support the use of the slots; 2) Thirty-four slots at LaGuardia and rights and interest in other facilities at the airport necessary to support the use of the slots; and 3) Rights and interests to two airport gates and associated ground facilities at each of Boston Logan, Chicago O’Hare, Dallas Love Field, Los Angeles International and Miami International. The settlement reached by the states requires maintenance of existing hubs in those states, consistent with their historical operations, for three years, and continued daily service for five years to each airport in the affected states that American and US Airways serviced at the time of filing.
Commonwealth of Pennsylvania v. Geisinger Health System Foundation et al., No. 1:13-cv-02647 (M.D. Pa. Oct. 25, 2013)
State challenged merger of two hospitals that would have reduced competition in two Pennsylvania counties. Hospitals agreed to settlement.
Hawaii v. American International Group (AIG) Inc., No. 08-1-0191-01 (Haw. Cir. Ct. 1st. Dist. Jan. 29, 2008)
State court proceedings to implement settlement reached with AIG, resolving alleged bid-rigging and false insurance quotes, as well as payment of secret “contingent commissions” to brokers. See also NY v. AIG, Ohio v. AIG, Hawaii v. ACE Holdings.
Board of Regents v. Atlantic Coast Conference, No. (Cir. Ct. Pr. George’s Cty. Maryland, Jan. 18, 2013)
After the University of Maryland decided to leave the Atlantic Coast Conference (ACC) for the Big Ten Conference for its collegiate athletics, the ACC sued the university in North Carolina. The state then sued in Maryland courts, seeking a declaratory judgment that the fee imposed by the ACC on the university was excessive and was a violation of state antitrust laws because the fee was an illegal restraint of trade. The case has been stayed and the stay has been appealed.
FTC and State of Ohio v. Promedica health System, No. 3:11CV0047 (N.D. Ohio Jan. 7, 2011)
State and FTC sought preliminary injunction in connection with an already consummated acquisition by Promedica of St. Luke’s hospital. The complaint alleged that ProMedica’s acquisition of St. Luke’s eliminated significant price and non-price competition between the two firms in both the general acute-care and inpatient obstetrical markets in Lucas County. According to the complaint, the acquisition also vests ProMedica with the ability to demand higher rates for services performed at its other hospitals as well, because the addition of St. Luke’s to the ProMedica hospital system has made ProMedica a “must-have” system for health plans seeking to do business in Lucas County, as plans can no longer offer consumers a viable provider network without including ProMedica’s hospitals. The preliminary injunction was granted, and the FTC proceeded with an administrative proceeding.
Massachusetts v. McMullen et al., No. 12-512B (Comm. Ct. of Mass. Apr. 27, 2012)
State settled bid-rigging allegations with former county commissioner and pest-control company owner. According to the complaint, Plymouth County put its pest control contract for seven county buildings out for quotes and received three quotes of which Capeway Pest was not the lowest. The complaint alleges that in the days before the vote on the contract by the Board of Commissioners, Burgess spoke on multiple occasions with then Commissioner McMullen. During at least one of their phone conversations McMullen allegedly provided non-public inside information by informing Burgess that Capeway Pest did not submit the lowest quote. Using this inside information, Capeway Pest submitted a new quote that exactly matched the previous low quote. The attempt to subvert the procurement process was uncovered prior to the vote on the pest control contract, and the original low quote was accepted. McMullen and Burgess agreed to pay $5000 each in civil penalties and $2500 each in costs.
South Carolina v. AU Optronics et al.,
Plaintiff state filed complaint in state court, alleging that the defendant manufacturers of liquid crystal display (“LCD”) panels had engaged in a price-fixing conspiracy from 1996 through 2006. The State sought civil forfeitures for violations of the state Antitrust Act; statutory penalties for violations of SCUTPA and restitution on behalf of South Carolina citizens for violations of SCUTPA, Defendants removed the case pursuant to CAFA, alleging it was a class action and mass action under CAFA because the real parties in interest are the state citizens who will receive restitution. The district court remanded the case to state court, on the grounds that the state had a quasi sovereign interest in the case and was the real party in interest. The Fourth Circuit affirmed the decision, in part because the relief available to the state was available to it alone. The case is stayed pending a decision by the Supreme Court in Mississippi ex rel. Hood v. AU Optronics.
South Carolina v. LG Display Col, Ltd. et al.
Plaintiff state filed complaint in state court, alleging that the defendant manufacturers of liquid crystal display (“LCD”) panels had engaged in a price-fixing conspiracy from 1996 through 2006. The State sought civil forfeitures for violations of the state Antitrust Act; statutory penalties for violations of SCUTPA and restitution on behalf of South Carolina citizens for violations of SCUTPA, Defendants removed the case pursuant to CAFA, alleging it was a class action and mass action under CAFA because the real parties in interest are the state citizens who will receive restitution. The district court remanded the case to state court, on the grounds that the state had a quasi sovereign interest in the case and was the real party in interest. The Fourth Circuit affirmed the decision, in part because the relief available to the state was available to it alone. The case is stayed pending a decision by the Supreme Court in Mississippi ex rel. Hood v. AU Optronics.
Commonwealth of Pennsylvania v. Geisinger Health System Foundation et al., No. 4:CV-12-1081 (M.D. Pa.
State alleged that the the acquisition of Bloomsburg Hospital by Geisinger Heath System Foundation may substantially lessen or eliminate competition in the region. Geisinger is a non-profit parent of four hospitals, including its flagship Geisinger Medical Center which is located only 10 miles from Bloomsburg Hospital. It also owns the Geisinger Clinic, a multi-specialty physician group practice with more than 900 primary care and specialty physicians and the Geisinger Heath Plan. Geisinger is one of the largest providers of inpatient acute-care hospital services in northeastern Pennsylvania. The state was concerned that Geisinger would be able to raise prices for hospital and physician services to Columbia County residents and their health plans. The parties reached a settlement under which Geisinger agreed to continue to operate Bloomsburg Hospital as an acute care hospital for eight years, six years longer than the term agreed to by the parties. The agreement also requires that all physicans with privileges at Bloomsburg Hospital will keep their privileges. The original merger agreement with the Bloomsburg Board only protected certain physicians. Geisinger also agreed to negotiate and contract with health plans for Bloomsburg Hospital separately from Geisinger Medical Center. Bloomsburg Hospital historically had lower rates than Geisinger Medical Center. By contracting separately, Bloomsburg’s rates will be comparable to other community hospitals, not a large tertiary hospital like Geisinger.
