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Antitrust and
Trade Regulation

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For decades, Sheppard Mullin has been a leader in the antitrust bar. Gordon Hampton, one of the firm's name partners, was a founder of the Antitrust Section of the American Bar Association. That tradition continues today with a dynamic Antitrust and Trade Regulation practice spanning every aspect of antitrust law. Our practice currently encompasses matters involving mergers and structural issues, criminal grand jury proceedings, international antitrust enforcement, pricing practices, product distribution, joint ventures, class actions based on federal and state antitrust and unfair competition laws, among many other areas. We represent clients in a wide variety of industries, including healthcare, pharmaceuticals, financial services, aerospace, energy, technology, publishing, distribution, courier and food services.

Sheppard Mullin is respected nationwide for its strong expertise in the antitrust field. The firm's Antitrust lawyers both write and speak extensively before various legal, industry and trade groups. Recent publications include a book summarizing California Antitrust and Unfair Competition law and analyses of the DOJ/FTC Competitor Collaboration and Health Care Guidelines. Our Antitrust attorneys include former Antitrust Division lawyers, Federal Trade Commission lawyers, national practice leaders -- including one of the leading antitrust lawyers in the United States (Chambers and Partners) and a California Antitrust Lawyer of the Year (State Bar of California) -- and a former Chair of the Antitrust & Unfair Competition Section of the California State Bar.

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International Criminal Antitrust Litigation

Major recent international price fixing prosecutions, an unprecedented level of cooperation among prosecutors here and abroad and resulting multi-hundred million dollar fines and jail sentences have signaled a sharp increase in criminal antitrust enforcement and resulting civil cases.  The effective defense of criminal antitrust matters—and parallel private civil litigation—is a particular Sheppard Mullin strength.

Criminal antitrust enforcement actions can be more serious than civil cases because of potentially large fines for corporations, jail sentences for executives and the consequences of criminal dispositions for the civil litigation that typically follows.  Our first objective is to forestall criminal action by the enforcement agency or to obtain a determination from the government not to proceed with a criminal investigation that has already begun.  We are fully prepared, however, to defend our clients through trial and appeal, if necessary.

Related enforcement activity in the European Union, Brazil, Canada, Japan, Korea and other countries often occurs in major cartel cases.  For that reason, the defense of criminal antitrust litigation often requires knowledge of a complex array of laws, practices and procedures, both in the United States and abroad.  With competition lawyers in Asia, Sheppard Mullin is highly experienced in coordinating the worldwide defense of such cases.  This knowledge coupled with Sheppard Mullin's experience in defending national antitrust U.S. civil class actions permits a seamless global coordination of overall defense strategy.

Government Merger and Civil Conduct Investigations

Much of the enforcement of antitrust laws is done by government agencies, particularly the Federal Trade Commission and the Antitrust Division of the Department of Justice.  In addition, the California State Attorney General and local prosecutors often use California's Cartwright Act and Unfair Competition Laws to investigate and bring enforcement actions.

Sheppard Mullin counsels clients involved in government civil investigations and enforcement activities, including merger transactions, joint ventures and various types of pricing and distribution restraints.  Our understanding of and direct experience with merger enforcement allow us to steer clients successfully through what can often be a difficult and complicated process.  We also routinely represent our clients before the Federal Trade Commission and the Department of Justice, where we maintain a positive reputation and solid working relationships with government representatives.  Some of our attorneys have many years of experience practicing at enforcement agencies.

Private Civil Antitrust Litigation

Under both state and federal antitrust laws, private parties can bring antitrust claims seeking treble damages, injunctive relief and recovery of attorneys' fees. Such lawsuits may assert a variety of antitrust violations such as price fixing, price discrimination, distribution restraints, monopolization and the like. Sheppard Mullin typically represents defendants in such actions, although we sometimes prosecute such matters.

We currently represent various defendants in many of the most significant antitrust class actions in the country. These include actions relating to vitamins, wholesale electricity, Dynamic Random Access Memory ("DRAM") and cosmetics. In addition, we have recently defended—and prosecuted—monopolization and merger cases representing clients in industries ranging from sports to newspapers.  Our attorneys have also successfully tried numerous major antitrust cases.

California Antitrust and Unfair Competition Law

Sheppard Mullin routinely represents clients in defending and prosecuting state claims under California's Cartwright Act, Unfair Practices Act and Unfair Competition Law.  The firm has significant experience defending clients in such cases, including for instance, defending recent claims brought against energy producers and credit card associations.  We have also defended horizontal price fixing actions, both private actions and those brought by state government enforcement agencies, as well as defended predatory pricing and other actions under California's Unfair Practices Act.  The firm regularly provides advice to aid clients in complying with competition laws on pricing issues, such as discount, advertising and rebate programs.

While California antitrust law parallels federal antitrust law in many respects, there are important differences.  We regularly publish a booklet on California Antitrust and Unfair Competition Law.  Sometimes conduct which is permitted under federal law may not be allowed under state law, or vice versa.  Sheppard Mullin lawyers maintain expertise in both areas, which allows our firm to provide effective advice in a cost efficient manner.

International Counseling

With the globalization of business and the economy, many antitrust issues arise with respect to the application of foreign antitrust laws or with respect to foreign companies doing business in the United States. Sheppard Mullin represents clients in connection with such proceedings, and we frequently advise companies based in Europe, Asia, Australia and Africa on the application of U.S. antitrust laws to their businesses in the United States and elsewhere.

In recent years, we have represented merging companies in pre-merger compliance negotiations with the relevant government authorities in the European Union, Brazil, Argentina, Australia and Iceland. We have advised foreign companies from Germany, France, Japan, the United Kingdom, Russia and Canada with respect to pre-merger notification and review in the United States, as well as making certain that their pricing and distribution practices comply with domestic antitrust laws. We also have advised such clients with regard to the antitrust laws of Canada and the United Kingdom. We have also represented foreign entities in investigations brought by U.S. agencies, and private antitrust lawsuits under both federal and state law. Our lawyers in China and the United States also have closely watched the developments regarding China's Anti-Monopoly Law and pre-merger notification rules.

Intellectual Property

Intellectual property transactions and litigation can raise antitrust and trade regulation concerns where the acquisition, sale or enforcement of intellectual property rights might affect market power or lead to a restraint of trade.  Sheppard Mullin advises some of the most forward thinking and innovative clients in the country in connection with the antitrust and trade regulation issues that may have an impact on such transactions.  We represent many clients in the high tech industry on antitrust matters with respect to product distribution and licensing restraints, pricing practices, mergers and acquisitions, joint ventures and other competitor collaborations.

In addition to the wide range of computer and software businesses we represent, we have assisted healthcare, transportation, music, publishing, defense and utility companies in resolving complex problems pertaining to antitrust challenges.  We have defended our clients against alleged liability resulting from unlawful patent prosecution and the tying of IP assets; price maintenance and resale distribution problems; antitrust claims associated with the inappropriate use of copyrights, patents and trademarks; and the failure to meet the requirements of licensing agreements.

Healthcare

Since the adoption of the Department of Justice and Federal Trade Commission's Antitrust Enforcement Policy in Health Care in 1996, the application of the antitrust laws to physician groups, physician and hospital joint ventures, hospital joint ventures and joint purchasing arrangements among healthcare providers is determined by a set of principles derived from other aspects of antitrust law. Sheppard Mullin's Antitrust lawyers are highly experienced in the practical application of these Health Care Guidelines.

We advise physician groups on the spectrum of antitrust challenges, including how to structure their organizations so that they can effectively negotiate with major payors without running afoul of the antitrust laws. We have provided advice to medical supply companies on joint purchasing arrangements, including designing them in a manner that achieves the client's objective of reducing purchasing costs while still complying with the Health Care Guidelines.  We represented a company in the largest HMO merger in history involving the Medicare market. This merger was subject to scrutiny by the Federal Trade Commission, and our attorneys were successful in advocating the agency to permit the deal to close without taking an enforcement action.

Perhaps the largest area of our Antitrust practice is litigation, encompassing both private parties and with the government. Our expertise includes the defense of clients against price fixing and/or monopolization claims, as well as medical staff privilege cases raising issues under the Health Care Quality Improvement Act.

Consumer Protection

Our attorneys have counseled and represented numerous firms and individuals in connection with consumer protection matters before the Federal Trade Commission, state attorneys general and private sector self-regulatory bodies.  We have defended a myriad of companies and individuals that have been the subject of consumer protection investigations under Section 5 of the FTC Act.  In that capacity, we have assisted our clients negotiate a broad range of remedies with the FTC, including cease and desist orders, corrective advertising, more complete disclosures and consumer redress, in addition to helping reduce the financial remedies and civil penalties demanded by the government for alleged violations of Commission orders. We also counsel clients concerning compliance with the FTC Act and various state consumer protection and deceptive practices acts.

Antitrust Counseling

Because the best way to solve problems is to prevent them in the first place, Sheppard Mullin specializes in formulating and implementing effective antitrust compliance programs.  We offer a two hour compliance program to clients at no charge, as well as other more in-depth programs where appropriate.  We advise clients about whether specific proposals or conduct are consistent with the antitrust laws.  We can also "audit" a company's policies and procedures to be certain they comply with antitrust laws, as well as recommend solutions when and where they are needed.  State laws, particularly those in California, often have unique interpretations that companies should know.  Our antitrust compliance programs are company specific and cover both state and federal laws.

Representative Matters

Horizontal Restraint Cases

  • In re Lithium Ion Batteries Antitrust Litig., MDL No. 2420: national counsel defending industry-leading multinational electronics companies in criminal and civil price-fixing actions regarding lithium ion rechargeable battery products.
  • Motorola Mobility vs. Samsung SDI: secured dismissal of multi-billion dollar TFT-LCD price-fixing claims based on overseas purchases.
  • In re Dynamic Random Access Memory (DRAM) Antitrust Litigation: represented industry leading defendant in federal and state civil actions alleging price fixing in the memory chip market, as well as in related grand jury proceedings.
  • In re Cathode Ray Tube (CRT) Antitrust Litigation, MDL. No 1917: national counsel defending coordinated antitrust price-fixing class actions, opt-out actions, and state attorney general claims, as well as related grand jury proceedings.
  • In re TFT-LCD (Flat Panel) Antitrust Litigation, MDL. No 1827: served as national counsel and defense liaison counsel for coordinated antitrust price-fixing class actions, as well as in related grand jury proceedings.
  • In re Currency Conversion Fee Antitrust Litigation:  represented MasterCard International Incorporated in multidistrict litigation under federal antitrust laws and Truth In Lending Act. Reached comprehensive settlement, affirmed by the Second Circuit.
  • Schwartz v. Visa Int'l Inc., et al.: for MasterCard International Incorporated, obtained dismissal of representative action brought under Cal. Bus & Prof. Code § 17200 challenging currency conversion practices of MasterCard and Visa following lengthy state court trial and appeal.
  • In re Methionine Antitrust Litigation: represented the defendant in class actions alleging price fixing under federal and state antitrust laws.
  • In re Wholesale Electricity Antitrust Cases:  represented the defendant in a class action alleging price fixing and other anti-competitive conduct.
  • In re SRAM Antitrust Litigation, MDL No. 1819:  defended industry-leading international electronics company in civil price-fixing class actions regarding static random access memory chip products, and related grand jury proceedings.
  • Advanced Micro Devices: represented client in class action litigation relating to disclosures concerning microprocessor development.
  • Varian Semiconductor v. Applied Materials: represented Applied Materials in antitrust action alleging that client's pricing practices violated federal antitrust law.
  • In re Used CD Antitrust Litigation: represented record label in action alleging that labels conspired to eliminate sales of used CDs in violation of federal antitrust law.
  • In re Cosmetics Antitrust Litigation: represented national retailers and cosmetics manufacturer in coordinated state court litigation alleging price fixing of women's cosmetics.
  • McAllister v. Inland Health Plan: class action by doctors alleging price fixing by an HMO.
  • Bristol Hotels v. NCII, et al.: represented the defendants in actions alleging conspiracy among national commercial insurers to fix prices by passing on residual market loads on workers' compensation policies.
  • Warner Home Video: defendedcompany in a nationwide class action and related federal and state cases brought by independent video rental retailers claiming a group boycott and price fixing in connection with contracts entered into between movie studios and a national home video rental chain.
  • Digital Cinema Committee of Motion Picture Association of America: represented client in connection with antitrust issues relating to digital cinema transmission, security and exhibition issues.
  • The Gator Corporation: defended client in multidistrict nationwide direct and class action attacks on its targeted internet advertising business model under the Copyright Act, the Lanham Act and state unfair competition law.

Monopolization/Merger Cases

  • Rambus, Inc. v. Samsung Electronics, Inc.:  represented Samsung in multi-billion dollar horizontal boycott litigation regarding Rambus claims involving suppression of next generation of DRAM computer chip.
  • Healthcare Acquisitions: defending acquisitions involving healthcare entities, including ongoing antitrust litigation between competing hospitals and representing multiple hospitals and doctor groups in clinical integration and affiliation transactions in California and New York. 
  • The Hearst Corporation: successfully defended client in high profile San Francisco federal court trial in private antitrust action challenging acquisition of the San Francisco Chronicle.
  • Reilly v. MediaNews Group et al.: represented MediaNews Group and California Newspapers Partnership defending billion dollar acquisition of San Francisco Bay Area newspapers and corporate investment in private litigation with related DOJ proceedings.
  • Amgen, Inc.: represented Amgen in antitrust litigation involving a competitor arising out of a prior patent infringement settlement.
  • Advanced Micro Devices: assisted company in formulating and prosecuting a monopolization claim against a major competitor and defended multidistrict claim litigation with same competitor.
  • Carrier Airconditioning: provided antitrust counseling to overcome distributorship restrictions in the western United States.
  • DHL v. Estate of Larry Hillblom: represented DHL in federal court action to enforce terms of Shareholder Agreement permitting the Company to purchase outstanding shares from the Saipan estate of a deceased shareholder.
  • Paycom v. MasterCard International Incorporated: represented MasterCard in action alleging that MasterCard's chargeback practices violated Federal antitrust laws. Brought successful motion to dismiss the complaint in its entirety; affirmed by Second Circuit.
  • In re Taxol Antitrust Litigation: represented the defendant in a monopolization case involving generic competition for anti-cancer drugs and the operation of the Hatch Waxman Act.
  • Primadonna Resorts: represented directors in class and derivative litigation arising out of the sale of the Primadonna Resorts to MGM Grand Incorporated.
  • Pan Asia Venture Capital v. The Hearst Corporation:  below cost newspaper advertising case, prevailed following trial and appeal.
  • McDonnell Douglas v. Northrop: monopolization action involving teaming agreements between defense contractors.
  • Nestle Food v. Bristol Myers: monopolization case involving infant formula advertising.

Boycott/Tying/Vertical Restraint/Unfair Competition Claims

  • Cascades v. RPX: defending Samsung Electronics against boycott and monopsonization claims relating to smartphone patent licensing and membership in defensive patent aggregator RPX Corporation.
  • California Law Institute v. Visa USA, Inc. et al.: for MasterCard, obtained dismissal of putative representative action brought under CA UCL (§ 17200) alleging that MasterCard's chargeback policies were unfair and/or unlawful under UCL.
  • Schickel v. Sterling Jewelers, Inc.: represented Sterling Jewelers in consumer class action litigation alleging deceptive practices allegedly violating CA Unfair Competition Law. Claims voluntarily dismissed by plaintiffs.
  • Halprin v. Block Financial Services, Inc.: represented H&R Block and subsidiary in class action litigation asserting price-fixing claims regarding Block's TaxCut software products. Obtained dismissal at trial court level leading to a settlement favorable to Block.
  • Rambus, Inc. v. Samsung Electronics, Inc.:  represented Samsung in multi-billion dollar horizontal boycott litigation regarding Rambus claims involving suppression of next generation of DRAM computer chip.
  • Cartel State Law Claims: defending industry leading electronics companies in series of national indirect purchaser MDL class actions against numerous state law unfair competition claims regarding DRAM, LCD, CRT, SRAM and Lithium Ion batteries industries.
  • Schwartz v. Visa International Service Association, et al.: represented MasterCard International Incorporated in a series of actions challenging foreign currency conversion practices under California's Unfair Competition Law, including successful appeal of lower court's judgment and eventual dismissal.
  • Southern California Edison: defended against multidistrict claims by competitors in related, but unregulated, business segment and ultimately defeated the claims on state action immunity grounds.
  • Doss v. The Gap, et al.: defended a national department store company in federal and state court litigation brought by garment workers from the Island of Saipan, whose putative class contained 50,000 members and who sought to bring numerous charges based on alleged sweat shop conditions and improper labeling and advertising of garments.
  • DeBeers Antitrust Litigation: represented retail jeweler as amicus in a number of antitrust actions brought against DeBeers relating to its marketing of diamonds in the U.S. Assisted in obtaining nationwide class settlement that was affirmed by the Third Circuit. (Sullivan v. DB Investments, Inc. et al.).
  • In re Brand Name Prescription Drugs Antitrust Litigation: represented FoxMeyer Drug Co. (a pharmaceutical wholesaler) in an industry-wide multi-district antitrust litigation involving federal and state actions. Assisted in the coordination of the defense and was responsible for drafting motion for summary judgment, which resulted in a favorable summary judgment decision (later reversed by the Seventh Circuit) and ultimately in a directed verdict for the remaining defendants at trial (client was no longer actively involved in the action).
  • In re Credit/Debit Card Tying Cases representing MasterCard International in coordinated class actions and related appeals following settlement concerning alleged nationwide payment card tying practices and alleged network “exclusionary” rules.
  • PSW v. Visa U.S.A., Inc., et al.: represented MasterCard International Incorporated in action brought by internet billing services provider alleging that MasterCard's chargeback and related practices violated federal and state antitrust laws and also asserting a variety of state law claims. Action settled after successful motion to dismiss significantly narrowed the scope of plaintiffs' claims.
  • In re Western Asbestos Company: represented unsecured creditors' committee, successfully defending four objecting insurers' challenges to a reorganization plan with $985 million at stake; plan was confirmed after a 4‑week trial and primary objecting insurer agreed to pay an additional $1.15 billion after closing argument.
  • Metro-Goldwyn-Mayer: represented studio in copyright and trademark litigation arising from dispute with Samuel Goldwyn, Jr., the son of one of MGM's founders.
  • SureSafe v. McGrath, et al.: represented the defendant in a boycott case under the Cartwright Act that resulted in a Court of Appeals decision giving rule of reason, rather than per se, instructions on the question of injury to competition.
  • Vacanti v. State Compensation Insurance Fund:  represented the defendant in an action alleging conspiracy to drive medical providers out of business by refusing to pay bills for the treatment of workers.
  • MasterCard International Incorporated: secured dismissal of putative class action regarding data security breach under California consumer privacy laws.
  • Crown Homes v. L.C. Homes: tying claims under the Cartwright Act, establishes arbitrability of antitrust claims under state law.
  • Vinson v. Farmers' Insurance: class action by insurance agents alleging tying under the Sherman and Clayton Acts.
  • Hindju v. ARCO: obtained a unanimous jury verdict for ARCO on claims alleging violations of the Cartwright Act.

Price Discrimination Issues

  • In re Guida-Seibert Dairy: represented Guida-Seibert in antitrust investigation of alleged price-fixing in school milk industry. Represented company in debarment proceedings before U.S. Departments of Defense and Agriculture. Represented company in investigation by Connecticut Attorney General into alleged price discrimination among milk retailers.
  • Harris v. Duty Free Shoppers, Ltd.: defendedcommercial bribery claim under the Robinson-Patman Act and California Unfair Practices Act, dismissed following successful Ninth Circuit appeal.
  • Caribe BMW v. BMW AG, et al.: represented BMW AG in antitrust action alleging violation of Sherman and Robinson-Patman Acts brought by a Puerto Rico importer/distributor of BMW automobiles. Mr. Colbath assisted in developing a successful motion to dismiss involving an intricate analysis of the interplay between the Sherman and Robinson-Patman Acts, which was later reversed by the Court of Appeals for the First Circuit. See Caribe BMW, Inc. v. Bayerische Motoren Werke A.G., 19 F. 3d 745 (1st Cir. 1994)
  • Barnes & Noble: represented client in Robinson Patman multidistrict litigation brought by the American Booksellers Association and various individually owned bookstores throughout the United States.
  • Continental Toy v. Mattel, Inc.: price discrimination claims in the children's toy industry.
  • California Tire Company v. Continental General Tire:  price discrimination claims in the tire industry.
  • Taylor Made v. Jeff Buffoni: represented the plaintiff in a price discrimination lawsuit.
  • Crain v. Continental Casualty Company: represented the defendant in an alleged conspiracy among insurers and brokers to charge discriminatory rates for surety bonds and policies.
  • Frontier Enterprises v. Amador Stage Lines, Inc.:  sham litigation case against rival bus companies.
  • Rauser Distributing Co. v. G. Heileman Brewing Co.:  below cost beer distribution case.
  • In Re Cosmetics Antitrust Litigation: represented leading national department store retailer, defended client against charges of price of women's cosmetics brought in coordinated California state court proceedings.

Government Cases and Investigations

  • Successfully defended Samsung Electronics in Department of Justice investigation concerning Samsung’s mobile technology standards essential patents.
  • Auto Parts Antitrust Grand Jury and Litigation:  defending a senior auto parts executive in a DOJ grand jury investigation and a major Japanese auto parts company to defend related class action civil litigation.
  • Defended numerous DOJ Antitrust international cartel price fixing cases, including coordinating defense of related international investigations in the EC, Japan, Korea, Canada, Brazil and elsewhere.
  • Numerous successful representations of companies and individuals in confidential DOJ and state attorney general investigations.
  • Home Foreclosure Antitrust Grand Jury:  defending companies and a principal in a DOJ antitrust grand jury investigation into alleged bid rigging of home foreclosure sales and related proceedings.
  • Samsung Electronics: defended nationwide DRAM, TFT-LCD, SRAM, Flash DOJ grand jury and foreign enforcement investigations and related direct and indirect class action price fixing actions nationwide.
  • Samsung SDI: defending companies in DOJ Antitrust Division grand jury criminal price fixing and foreign enforcement investigations involving cathode ray tubes and lithium ion batteries.
  • People of the State of California v. Chevron, et al.: as co-counsel, tried a federal court antitrust case against Exxon in 1992 on behalf of the City of Long Beach as trustee for the State of California, and successfully argued appeals.
  • Mission Resources v. Texaco Trading and Transportation (unpublished): tried federal court jury case to dedicate Texaco's California crude oil transportation system to common carrier use and public utility status.
  • Credit Suisse First Boston: represented client in connection with litigation and SEC enforcement activity arising out of First Boston's role as an underwriter of bonds for Orange County prior to the County's declaration of bankruptcy.
  • In re Wholesale Electricity Antitrust Litigation:  represented an electricity wholesale generator in investigations by the Attorney General, state Senate, FERC and grand jury.
  • Hearst Corporation: represented the company in Hart-Scott-Rodino filings and an investigation regarding a newspaper merger.
  • In Re Ramtek Securities Litigation: as trial counsel, defended the chief financial officer of Ramtek, a Silicon Valley computer monitor component manufacturer, against class action claims, criminal charges and SEC enforcement proceedings.
  • Taxol Investigation: represented the company in an FTC investigation regarding the marketing of anti-cancer drugs.
  • FTC v. Toys "Я" Us:  represented Mattel in this FTC investigation.
  • Taylor Made Golf Co.: investigation of pricing and distribution practices by the California Attorney General.
  • United States v. Foley: Co-counsel for the United States in the first felony price fixing case under the Sherman Act (real estate commissions); convictions affirmed on appeal.
  • United States v. CBS Inc.: merger case involving the market for paperback books.
  • In re Guida-Seibert Dairy: represented Guida-Seibert in antitrust investigation of alleged price-fixing in school milk industry. Represented company in debarment proceedings before U.S. Departments of Defense and Agriculture.
  • Sterling Jewelers: represented Sterling Jewelers in investigation by NH AG into mall lease termination of a competing jeweler.

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