- On May 27, Cal Dive International, Inc. (“Cal Dive”) announced that it received a second request from the DOJ in connection with its pending acquisition of the Inspection, Maintenance and Repair (“IMR”) and Conventional assets, that form part of the North America and Mexico (“NAMEX”) business of Stolt Offshore, S.A. The parties intend to comply with the second request as soon as possible. Cal Dive, headquartered in Houston, Texas, is an energy service company which provides alternate solutions to the oil and gas industry worldwide for marginal field development, alternative development plans, field life extension and abandonment, with service lines including marine diving services, robotics, well operations, facilities ownership and oil and gas production. Stolt Offshore is a leading offshore contractor to the oil and gas industry, specializing in technologically sophisticated deepwater engineering, flow line and pipeline lay, construction, inspection and maintenance services. The Company operates in Europe, the Middle East, West Africa, Asia Pacific, and the Americas.
- On May 27, American Tower explained in a S-4 filing that its acquisition of SpectraSite for approximately $3.1 billion in an all stock deal that will create a network of 22,600 wireless and broadcast towers is not reportable under the Hart-Scott-Rodino Antitrust Improvement Act of 1976 (“HSR”), as amended, and have decided not to file. Even though the parties are not obligated to follow the normal HSR waiting periods that prevent merging parties from consummating a deal, the Antitrust Division has already contacted the parties and informed them that they will investigate the merger. American Tower and SpectraSite compete in the leasing and licensing of antenna space on multi tenant communications towers to wireless service providers and broadcasters. Both own communication towers in many of the same cities, counties, or metropolitan areas in the United States. The geographic markets, however, are very local in nature and the Antitrust Division is expected to focus on the size of each local market and will probably have to interview wireless providers as well as broadcasters to determine the answer. The parties have said that they are cooperating with the Antitrust Division to provide the staff with information and materials that have been requested to date. The Antitrust Division is expected to review the many potential overlaps that exist in many local markets throughout the United States. If the Antitrust Division finds that the parties towers in various local areas directly compete against each other, the parties might have to divest towers to resolve any antitrust concerns. The merger agreement requires American Tower and SpectraSite to satisfy any conditions or divestiture requirements imposed upon them by regulatory authorities, if any, unless the conditions or divestitures would reasonably be expected to have a material adverse effect on the combined company.
- On May 26, the DOJ filed a joint amicus brief with the FTC in Texaco, Inc. v. Dagher requesting that the Supreme Court grant a writ of certiorari. The question presented to the Supreme Court is whether an agreement between the owners of a lawful joint venture with respect to the pricing of the joint venture’s products may be treated as a per se violation of Section 1 of the Sherman Act, 15 U.S.C. 1, when the joint venture’s owners do not compete in the market for those products. The DOJ basically argues that the Ninth Circuit’s decision mistakenly holds that an agreement between the owners of a lawful joint venture respecting the pricing of their joint venture’s products may constitute a per se violation of Section 1 of the Sherman Act, 15 U.S.C. 1. The DOJ further stated that the Ninth Circuit’s error is serious because it upsets the previously well settled understanding of the scope of per se liability and the lawful operation of joint ventures, and it warrants the Supreme Court’s review and correction.
- On May 24, the DOJ announced that Reuters Ltd. (“Reuters”) and Moneyline Telerate (“Telerate”) will restructure Reuters’ planned acquisition of Telerate in order to resolve the Division’s antitrust concerns regarding market data distribution platforms. Under the restructuring, Telerate will license to HyperFeed Technologies Inc. (“Hyperfeed”) its TRS software platform, which is used by companies to distribute and analyze a broad range of financial information, and Active8, which users need to interact with the TRS software platform. Market data distribution platforms facilitate trading and analysis of financial instruments by numerous market participants by integrating, consolidating, and normalizing market data feeds for distribution within a customer’s enterprise. A customer that uses a market data platform has the flexibility to analyze, distribute, and republish market data from a variety of sources throughout its organization. Without the licensing agreement that allows Hyperfeed to compete with the merged firm, the DOJ was concerned that competition would be lessened in these software platforms.
- On May 19, the Antitrust Division presented Judge Robert H. Bork with the John Sherman Award for his lifetime contributions to the teaching and enforcement of antitrust law and the development of antitrust policy. The John Sherman Award was created in 1994 and is presented by the Department’s Antitrust Division to a person or persons in recognition of their outstanding contributions to the field of antitrust law, the protection of American consumers, and the preservation of economic liberty. The award is named for the author of the Sherman Act of 1890, the nation’s first and foremost antitrust law. John Sherman, a former congressman and senator, also served as Secretary of the Treasury from 1877 to 1881 and as Secretary of State from 1897 to 1898. Previous recipients have included Richard A. Posner (2003), Milton Handler (1998), Thomas Kauper and William Baxter (1996), Phillip Areeda (1995), and Senator Howard Metzenbaum (1994).
- On May 19, Gate Engineering Corporation (“Gate”) and its president, Albith Col, pleaded guilty to conspiring to commit mail fraud in connection with a kickback scheme used to defraud Tricon Restaurants International (“Tricon”), an owner of fast food restaurants in Puerto Rico. Tricon was recently purchased by Encanto Restaurants of Puerto Rico. According to the charge, from October 2000 until March 2004, Gate and Col made kickback payments to a Tricon employee in return for receiving electrical contracts totaling more than $1 million. Allegedly, the Tricon employee, a technical services supervisor, was responsible for soliciting bids for work to be performed in connection with Tricon’s construction and maintenance of its restaurants, and also was responsible for selecting the subcontractor who would be awarded the contract. The charge is the first to arise out of an ongoing investigation in Puerto Rico being conducted jointly by the Antitrust Division’s Atlanta Field Office, the U.S. Attorney’s Office for the District of Puerto Rico, the General Services Administration, the Office of Inspector General (New York Office), and the Small Business Administration, Office of Inspector General, in Puerto Rico.
- On May 18, a federal grand jury in Indianapolis indicted Lee’s Ready Mix & Trucking, Inc. (“Lee’s Ready Mix”), an Indiana producer and distributor of ready mixed concrete, for fixing the price of ready mixed concrete sold in certain counties in Indiana. According to the indictment, Lee’s Ready Mix was charged with participating in a conspiracy to fix the price at which ready mixed concrete was sold in the Indiana counties of Bartholomew, Jackson, and Jennings, beginning in or about February 2003 and continuing until approximately June 2004. As stated in the indictment, Lee’s Ready Mix and its co-conspirators agreed to specific price increases for ready mixed concrete as well as to the specific timing of those price increases. Allegedly, Lee’s Ready Mix and its co-conspirators had discussions, issued price announcements in accordance with the agreements reached, and sold ready mixed concrete according to those agreements.
On May 13, Larry Lee, the former president of Lee’s Ready Mix, agreed to plead guilty, to serve eight months in prison, and to pay a $70,000 criminal fine for his alleged role in a conspiracy to fix the price of ready mixed concrete sold in certain counties in Indiana. The Antitrust Division’s investigation of the ready mixed concrete industry is ongoing.
- On May 13, the Antitrust Division issued a statement announcing the closing of its investigation into the newspaper joint operating arrangement (“JOA”) between the Seattle Times Company and Hearst Communications, Inc. under the Newspaper Preservation Act (“NPA”). According to the statement, the Antitrust Division investigation examined whether the Seattle Times Company, as manager of the JOA, engaged in conduct that made no business sense but for its tendency to reduce competition, and if so, whether such conduct was likely to lead to the monopolization of the Seattle newspaper market. Because the Antitrust Division found that the Seattle Times Company’s conduct did not violate the articulated standard, the investigation was closed.
- On May 10, the DOJ announced that Assistant Attorney General R. Hewitt Pate of the Antitrust Division intends to resign effective June 30th. While Mr. Pate has been head of the Antitrust Division, the Division has emphasized criminal enforcement of the antitrust laws. Since Mr. Pate became Assistant Attorney General, the Division has collected more than $717 million in criminal fines from 31 corporations and 37 individuals. Mr. Pate was confirmed by the Senate and became Assistant Attorney General on June 16, 2003. He had served as Acting Assistant Attorney General from November 23, 2002 until his confirmation. Since June 3, 2001, until he became Acting Assistant Attorney General, he served as Deputy Assistant Attorney General overseeing matters including airline, transportation, energy, and regulatory issues.
Andre P. Barlow