Category: Antitrust

Long-Awaited Foreign Corrupt Practices Act (FCPA) Guidance Offers Clarity But Few Revelations

Interagency guide provides a blend of statutory interpretation, case analysis, and practice recommendations for corporations and their advisors but lacks definitive answers to many FCPA questions.

On November 14, the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) released “A Resource Guide to the U.S. Foreign Corrupt Practices Act”[1] (Guidance)—the regulators’ long-anticipated guide to theForeign Corrupt Practices Act’s (FCPA’s) criminal and civil enforcement provisions.

Although the Guidance—which Assistant Attorney General Lanny Breuer championed as “the boldest manifestation of [the DOJ’s] transparent approach to enforcement”[2]—is essentially a nonbinding compilation of past positions taken by the regulators,[3] it does blend statutory interpretation, case analysis, and practice recommendations in a comprehensive and teachable manner. Key Guidance takeaways are summarized below.

Key Takeaways from the Guidance

Definition of “Foreign Official” – Focus on Ownership and Control for “Instrumentalities”

The focus of the Guidance’s section on “foreign officials” concerns when a government “instrumentality” constitutes a foreign official for the purposes of the FCPA. The Guidance provides the following assistance for making this determination:

  • Whether a particular entity constitutes an “instrumentality” under the FCPA requires a fact-specific analysis of an entity’s ownership, control, status, and function.[4]
  • A nonexclusive list of factors to be considered in determining whether a foreign entity is an “instrumentality,” which includes the following:
    • The foreign state’s extent of ownership or control of the entity
    • The foreign state’s characterization of the entity and its employees
    • The circumstances surrounding the entity’s creation
    • The level of financial support by the foreign state[5]
  • No one factor is dispositive, but, as a practical matter, an entity is unlikely to qualify as an “instrumentality” if a government does not own or control a majority of its shares—although past enforcement actions have demonstrated that an entity may qualify as an “instrumentality” even absent 50% ownership by a foreign government.[6]

Gifts and Expenses – Focus on Intent

The Guidance reiterates that the critical element in giving a thing of value is a finding of corrupt intent—the intent to improperly influence a government official.[7]However, the Guidance offers the following new practical guidance as to what gift-giving may be considered corrupt intent:

  • Appropriate gift-giving practices include transparency, proper recordation in the giver’s books and records, and gifts that are provided only to reflect esteem and are permitted under local law.[8]
  • Provision of items of nominal value, such as cups of coffee, taxi fare, and company promotional items are unlikely to ever evidence corrupt intent, and neither the DOJ nor the SEC has pursued an enforcement action on the basis of such conduct. Reasonable meal and entertainment expenses, without more, also are unlikely to influence government officials.[9]
  • Examples of improper travel and entertainment expenses include the following:
    • A $12,000 birthday trip for a government decisionmaker from Mexico that included visits to wineries and dinners
    • A trip to Italy for eight Iraqi government officials that consisted primarily of sightseeing and included $1,000 in “pocket money”
    • A trip to Paris for a government official and his wife that consisted primarily of tourist activities and involved a chauffeur-driven vehicle[10]

Charitable Contributions

The Guidance makes clear that charitable contributions are often a hallmark of legitimate community outreach and are not prohibited by the FCPA. Such contributions, however, may trigger scrutiny by regulators. The following are explained in the Guidance:

  • Charitable contributions should not be used as a pretense for funneling bribes to foreign officials or as a vehicle to conceal corrupt payments to foreign officials.[11]
  • Proper due diligence and controls for charitable giving are critical, and, in the past, the DOJ has approved charitable giving in foreign countries where appropriate diligence is implemented.[12]
  • Questions companies should consider when making charitable contributions in foreign countries include, among others, the following:
    • What is the purpose of the payment?
    • Is the payment at the request of the foreign official?
    • Is a foreign official associated with the charity, and, if so, can the foreign official make decisions regarding a company’s business in the country?[13]

Affirmative Defenses – Bona Fide Expenditures

The Guidance provides advice regarding both the local law and bona fide business expenditure affirmative defenses, with a particular focus on safeguards that will help to ensure that expenses are appropriate (bona fide). Such safeguards include:

  • Not selecting the particular officials who will participate in the proposed trip or program, or selecting them using predetermined, merit-based criteria
  • Paying all costs directly to travel and lodging vendors and/or reimbursing costs only upon presentation of a receipt
  • Not advancing funds or paying for reimbursements in cash[14]

Corporate Liability – Parents, Successors, and Agents

The Guidance provides a lengthy discussion of corporate liability and reaffirms the regulators’ long-held positions that general principles of corporate criminal and civil liability apply to the FCPA, including principles of successor liability and agency liability under a theory of respondeat superior. Highlights of these discussions include the following:

  • Proof of “willfulness” is not required to establish corporate criminal or civil liability, although proof of corrupt intent is.[15]
  • A company will remain liable for the acts of its agents, including employees, for acts undertaken within the scope of their employment and intended, at least in part, to benefit the company.[16]
  • Regulators have taken action in the past against successors in interest generally in cases involving egregious and sustained violations or where the successor company directly participated in the violations or failed to stop them from continuing postacquisition.[17]

In listing what is critical to determining successor liability, the Guidance places emphasis on preacquisition due diligence adequately designed to detect improper conduct and implement remedial steps to ensure that such conduct does not continue.[18]

Payments to Third Parties

The Guidance reiterates that corrupt payments made to third parties or intermediaries are prohibited under the FCPA and provides that common red flags include excess commissions to third parties, unreasonably large discounts to distributors, “consulting agreements” that only vaguely describe the terms of service, and third parties that are closely affiliated with a foreign government official.[19]

The Guidance emphasizes the need for appropriate due diligence and vetting before engaging third parties. Guiding principles for such programs include the following:

  • Companies should understand the qualifications of their third-party business partners, including their reputations and relationships with government officials.
  • Companies should have an understanding of the business rationale for including the third party, including its role and the services to be performed, and ensure their payment terms compare to typical terms in the industry and country.
  • Companies should monitor third-party relationships, such as by updating due diligence, exercising audit rights, providing training, and requesting annual compliance certifications.[20]

Hallmarks of Effective Compliance Programs

The Guidance emphasizes the importance of effective anticorruption compliance programs and notes that regulators often consider the adequacy of a company’s program when determining what action, if any, to take. Recognizing there is no “one size fits all” approach,[21] a message that was recently reinforced by Kara Brockmeyer, the chief of the SEC’s FCPA Unit, and Charles Duross, the deputy chief of the DOJ’s Fraud Section,[22] the Guidance provides a list of elements for an effective program:

  • Commitment from senior management and clearly articulated policy against corruption[23]
  • An updated code of conduct and compliance policies and procedures that outline internal control requirements, audit practices, and disciplinary procedures[24]
  • Dedicated executives with oversight responsibilities of the compliance program who are vested with sufficient authority, autonomy, and resources to ensure the program is implemented effectively[25]
  • Programs that may be tailored for relative risk of a given transaction[26]
  • Steps to ensure relevant policies and procedures have been communicated, including through periodic training for employees and business partners[27]
  • Implementation through appropriate disciplinary procedures and incentives for ethical and lawful behavior[28]
  • Third-party due diligence and the extent to which third parties and agents are informed of the company’s program and commitment to ethical conduct[29]
  • Mechanism for confidential reporting and effective procedures for investigating whistleblower tips when made[30]
  • Programs that evolve and are updated based on the company’s business model, its industry, and the environment in which it operates[31]

In addition to these hallmarks, the Guidance also endorses compliance program advice issued by other federal agencies, including the U.S. Departments of Commerce and State, as well as those published by international agencies and multinational organizations.[32]

Declinations Decisions – Real-World Examples

One of the Guidance’s distinctive features is its presentation of six anonymized cases in which regulators declined to take enforcement action.[33] In each of those cases, the companies in question either self-reported the offending conduct or voluntarily disclosed that the conduct had occurred. In addition, all of the companies conducted thorough internal investigations, revised their compliance programs, and proactively remediated the violations by terminating employees, severing third-party relationships, and/or withdrawing bid proposals. In several of the cases, declinations were attributed in part to existing robust compliance programs and effective internal controls.

For further discussion on the highlights discussed above, as well as analysis of the Guidance’s impact on FCPA reform efforts and recent FCPA actions, please visit http://www.morganlewis.com/pubs/SummaryDOJ-SECResourceGuidetoFCPA.pdf.

[1]. Crim. Div. of the U.S. Dep’t of Justice & Enforcement Div. of the U.S. Sec. & Exch. Comm’n, A Resource Guide to the U.S. Foreign Corrupt Practices Act (Nov. 14, 2012), availablehere [hereinafter FCPA Guidance]. See also U.S. Dep’t of Justice, A Resource Guide to the U.S. Foreign Corrupt Practices Act Fact Sheet (Nov. 14, 2012), available here.

[2]. Lanny A. Breuer, Assistant Attorney Gen., U.S. Dep’t of Justice, Remarks at the American Conference Institute’s 28th National Conference on the Foreign Corrupt Practices Act (Nov. 16, 2012), available here.

[3]. A disclaimer on an unnumbered page toward the front of the Guidance reads, in relevant part, as follows:

[The Guidance] is non-binding, informal, and summary in nature, and the information contained herein does not constitute rules or regulations. As such, it is not intended to, does not, and may not be relied upon to create any rights, substantive or procedural, that are enforceable at law by any party, in any criminal, civil, or administrative matter. It is not intended to substitute for the advice of legal counsel on specific issues related to the FCPA. It does not in any way limit the enforcement intentions or litigating positions of the U.S. Department of Justice, the U.S. Securities and Exchange Commission, or any other U.S. government agency.

[4]. FCPA Guidance, supra note 1, at 20.

[5]. Id.

[6]. Id.

[7]. Id. at 15.

[8]. Id.

[9]. Id.

[10]. Id. at 16.

[11]. Id. at 18, 19.

[12]. Id. at 19.

[13]. Id.

[14]. Id. at 24.

[15]. Id. at 14.

[16]. Id. at 27.

[17]. Id. at 28.

[18]. See id. at 28, 62.

[19]. Id. at 22.

[20]. Id. at 60.

[21]. Id. at 57.

[22]. Kara Brockmeyer, Chief, Foreign Corrupt Practices Unit, U.S. Sec. & Exch. Comm’n. & Charles Duross, Deputy Chief, Foreign Corrupt Practices Unit, U.S. Dep’t of Justice, Panel Discussion at the American Conference Institute’s 28th National Conference on the FCPA: The U.S. DOJ and SEC Speak on the Key FCPA Cases of 2012 and Current Enforcement Priorities (Nov. 15, 2012).

[23]. FCPA Guidance, supra note 1, at 57.

[24]. Id. at 58.

[25]. Id.

[26]. Id. at 59.

[27]. Id.

[28]. Id. at 59–60.

[29]. Id. at 60.

[30]. Id. at 61.

[31]. Id. at 62.

[32]. Id. at 63.

[33]. Id. at 77–79.

Copyright © 2012 by Morgan, Lewis & Bockius LLP

Supreme Court to Hear Arguments on Contours of “State Action” Exemption to Antitrust Laws

The National Law Review recently published an article by Steven J. Cernak of Schiff Hardin LLP regarding an upcoming Supreme Court Hearing:

 

On November 26, 2012, the U.S. Supreme Court will hear arguments in the only case this term to squarely raise antitrust issues. The case, FTC v. Phoebe Putney Health System, Inc., raises several issues related to the “state action” exemption to the federal antitrust laws. This case, along with another Federal Trade Commission (“FTC”) matter involving a North Carolina dental board on appeal in the 4th Circuit, should provide clearer antitrust guidance to doctors, dentists, lawyers, accountants and others arguably acting under the authority of a state, such as through licensure boards.

Since 1941, Georgia law has allowed counties to create hospital authorities to acquire and run hospitals. The Hospital Authority of Albany-Dougherty County was established immediately after the law’s passage and shortly thereafter acquired Phoebe Putney Memorial Hospital. The Authority has run the hospital ever since, the last several years through two wholly-owned subsidiaries. In 2010, the Authority gave permission for one of the subsidiaries to negotiate the purchase of the other hospital in the county, Palmyra Medical Center, from a private entity. The negotiations were successful and the Authority approved the transaction late in 2010.

In April 2011, the FTC initiated an administrative challenge to the acquisition as an anti-competitive merger and sought a preliminary injunction in district court. Both the district court and 11th Circuit denied the injunction request under the “state action” exemption to the antitrust laws. In particular, both courts found that the Georgia law’s delegation of powers to hospital authorities, including the power to acquire other hospitals, was a “clear articulation” of a policy to displace competition because such mergers were a “foreseeable result” of the legislation. Neither court thought that having the acquisition made through the Authority’s private subsidiaries precluded application of the exemption.

The Supreme Court has held that actions by a state as a sovereign trump the federal antitrust laws. Subdivisions of a state such as the Authority, however, are not sovereign and their actions are immune from prosecution under the antitrust laws only if the state legislature “clearly articulated” a policy to displace competition. If private parties are implementing that policy, they must be “actively supervised” by the state itself.

In this case, the FTC objects to a finding of a “clear articulation” where the action being challenged is just a “foreseeable result” of the state action. Instead, the FTC urges the Court to require that the clear articulation be made explicitly and clearly by the legislature or that the anti-competitive effect be a “necessary” or “inherent” effect of the state action. The FTC also believes that these private hospital parties were not “actively supervised”. The Authority and Phoebe parties respond that the lower courts’ “foreseeable results” standard was correct and correctly applied. In addition, the Authority and Phoebe parties argue that the “active supervision” prong is not necessary here because either 1) the Authority, not the hospitals, was taking the action; or, if rejected, 2) the hospitals were agents of the state-created Authority.

The case has attracted several amicus briefs. Perhaps the most important comes from the American Medical Association urging the Court not to rule in this case in such a way that the state action doctrine would not be available to state or local medical licensure boards that contained competitors. Here, the AMA is referring to another current FTC challenge to allegedly anti-competitive actions by a state-sponsored health care agency, this one involving a North Carolina dental licensure board with private dentist members. That case has been fully briefed for the 4th Circuit but oral argument has not yet been scheduled. These two cases are the latest examples of a decade-long effort by the FTC to obtain clear guidance from the courts on the limits of the state action exemption.

Clients acting at the behest of a governmental entity — such as serving on the local licensure board for insurance, real estate or other professionals — need to be aware of the current limits to the state action doctrine and the possibility that those limits might be further explained by the Court in this case.

© 2012 Schiff Hardin LLP

‘Get-Rich-Quick’ Systems Penalized by FTC to Tune of $478 Million

As part of the Federal Trade Commission’s ongoing efforts to shut down scams that target financially vulnerable consumers, a U.S. district judge has issued a $478 million judgment at the request of the FTC against the marketers of three get-rich-quick systems that the agency says are used for deceiving consumers. The order is the largest litigated judgment ever obtained by the FTC.

The judgment was awarded against companies and individuals who marketed the schemes, titled “John Beck’s Free & Clear Real Estate System,” “John Alexander’s Real Estate Riches in 14 Days,” and “Jeff Paul’s Shortcuts to Internet Millions.”

Nearly a million consumers paid $39.95 for one of these “get-rich-quick” systems, and some consumers purchased personal coaching services, which cost up to $14,995. According to the FTC complaint filed in June 2009, one system was marketed to consumers with the promise that consumers could “quickly and easily earn substantial amounts of money by purchasing homes at tax sales in their area ‘free and clear’ for just ‘pennies on the dollar’ and then turning around and selling these homes for full market value or renting them out for profit.”

The FTC said that nearly all the consumers that bought the systems lost money.

The FTC’s suit alleged violations of the Federal Trade Commission Act, based on the defendants’ representations in connection with the advertising, marketing, promoting and sale of the systems. The FTC also alleged that the defendants’ violated the Telemarketing Sales Rule through their marketing to consumers.

Two of the individual defendants, Douglas Gravnik and Gary Hewitt, were held jointly and severally liable for the monetary part of the judgment. The judge also imposed a lifetime ban from infomercial products and telemarketing against Gravnik and Hewitt. Gravnik and Hewitt indicated that they are likely to appeal the order to the extent it imposes a lifetime ban. A third individual, John Beck, is responsible for $113.5 million of the judgment.

In its case, the FTC filed 30 consumer declarations detailing consumers’ experiences with the defendants’ products. The defendants objected to many of these declarations on various grounds, including hearsay, relevance, and the best evidence rule among other objections, but these objections were all overruled.

The defendants also objected to the use of a survey by the FTC that showed that less than 0.2 percent of consumers who purchased the defendants’ system made any profits and only 1.9 percent of consumers who purchased coaching material made any revenue. The defendants moved to exclude all evidence relating to the survey on the ground that the pre-notification letter “poisoned the well in such a way as to invalidate whatever survey finding the FTC obtained” and argued that the manner in which the survey was conducted rendered the results unreliable. The court found that the survey was performed under accepted principles used by experts in the field and was admissible.

The court granted summary judgment for the FTC , finding that the defendants made material misrepresentations that were either false or unsubstantiated. The court pointed out that the materials provided by the defendants to consumers taught consumers how to purchase tax liens and certificates, but these purchasers do not obtain title to the property and thus were not “purchasing” the homes as the advertising materials stated.

The court also granted summary judgment on the Telemarketing Sales Rule allegations. The basis of the defendants’ argument was that the violations were isolated and should not be the basis for liability. The court found that there was no dispute that the defendants’ telemarketers repeatedly initiated calls to consumers who asked the defendants not to contact them. The FTC also produced “overwhelming” evidence that the defendants lacked a meaningful compliance program or any written procedures in place to comply with the regulations.

Jeffrey Klurfeld, director of the FTC’s Western Region, stated in a press release that “This huge judgment serves notice to anyone thinking of using phony get-rich-quick schemes to defraud consumers. The FTC will come after you if you violate the law.”

In this case, the FTC had already completed its surveys when it went to court. Trial judges will often be very impressed with FTC surveys and will grant judgment to the agency in nearly every case. Therefore, it is critical that a company that is being targeted by the FTC obtain counsel at the earliest possible stage, before the agency files anything in court. Counsel should be ready to vigorously defend the client’s marketing practices with techniques such as the use of countersurveys and customer testimonials and expert testimony, before the FTC files in court.

© 2012 Ifrah PLLC

Another Loss for the Robinson-Patman Act

The National Law Review recently published an article by Harvey Saferstein, Bruce D. Sokler, Nada I. Shamonki, and Robert G. Kidwell of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., regarding the Robinson-Patman Act:

In Drug Mart Pharmacy Corp. v. American Home Products Corp., 2012 U.S. Dist. LEXIS 11582 (E.D.N.Y. Aug. 16, 2012), Magistrate Judge Steven M. Gold gave the Robinson-Patman Act another drubbing. He granted summary judgment for the defendants in this complex, long pending antitrust litigation between retail pharmacies and various pharmaceutical companies.

Numerous independently owned retail pharmacies claimed that five manufacturers of brand name prescription drugs offered discounts and rebates to their competitors in violation of the Robinson-Patman Act prohibition on price discrimination. In order to establish their losses, the pharmacies set out to compare their customers with the customers of favored pharmacies for the brand name prescription drugs in question. The “matching” process showed a very low number of lost customers. On average, each plaintiff pharmacy lost less than 200 customers and 537 transactions over the entire period examined—a 12-year time frame from 1998 to 2010.

Magistrate Judge Gold characterized these results as “de minimis.” “Many pharmacies lost no more than ten customers per defendant over the relevant twelve-year time period, or less than one customer per year.”

Accordingly, Judge Gold held summary judgment was appropriate—especially in light of the Supreme Court’s admonition in Volvo Trucks N. Am, Inc. v. Reeder-Simco GMC, Inc., to construct the Robinson-Patman Act narrowly. With that view in mind, the court concluded that plaintiffs could not show competitive injury required by Section 2(a) of the Robinson-Patman Act. Moreover, the same de minimis impact made it impossible for plaintiffs to demonstrate antitrust injury.

Despite the existence of a price disparity in drug prices, the plaintiffs were not able to show any real consequences in their business or as a matter of antitrust competitive injury. This doomed their Robinson-Patman claims.

©1994-2012 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

Second Circuit Finds Anderson News Pleading Is Plausible . . . Enough

The National Law Review recently featured an article, Second Circuit Finds Anderson News Pleading Is Plausible . . . Enough, written by Scott Martin, Simon Harms, Mary K. Marks, Scott Martin, Irving Scher, and Stephen C. Tupper of Greenberg Traurig, LLP:

GT Law

Admonishing that motions to dismiss for failure to state a claim must be decided based on whethera plaintiff’s complaint is plausible rather than how plausible it is, which was the district’s view in granting a dismissal motion, the Second Circuit, in Anderson News, L.L.C. v. American Media, Inc.,[1] declared improper the district court’s denial of leave to file a proposed amended complaint and vacated the dismissal.

Prior to its bankruptcy, Anderson News was the second largest wholesaler of magazines to newsstands and bookstores in the United States. Anderson alleged in a lawsuit against its major publisher suppliers that in response to a magazine distribution surcharge that Anderson another wholesaler (Source) had announced, the publishers conspired with Anderson’s competitors and distribution service companies to refuse to deal with the two wholesalers in order to drive them out of business Anderson claimed that the group boycott resulted in its loss of access to 80 percent of the magazines it distributed.

The District Court Decision

Judge Paul A. Crotty of the Southern District of New York dismissed Anderson’s original complaint under Fed. R. Civ. P. 12(b)(6), denied reconsideration, and refused leave to file a proposed amended complaint, finding the alleged conspiracy to be facially implausible under the Twombly-Iqbalstandard,[2] and the original pleading’s defects incurable.[3] Among other things, Judge Crotty commented that eliminating Anderson and Source would have left 90 percent of the wholesale market share in the hands of two competitors. Because publishers and distributors have an economic self-interest in having more, not fewer, wholesalers (since that yields greater competition, which is good for suppliers), Judge Crotty concluded that the conspiracy’s alleged goal was implausible. By contrast, he believed that parallel, but unilateral, conduct was “completely plausible” under the circumstances. Specifically, the defendants initially had different reactions to the surcharge; there was no direct evidence of conspiracy alleged in the original complaint; and the defendants’ decisions to not pay the surcharge and instead stop shipping to Anderson were “in line with a wide swath of rational and competitive business strategy unilaterally prompted by common perceptions of the market.”[4]

The district court concluded that Anderson’s allegations presented only “an economically implausible antitrust conspiracy” that was “based on sparse parallel conduct allegations” and lacked “a context suggesting a preceding agreement.”[5]The district court further stated that while it was compelled to take “all factual allegations as true on a motion to dismiss, . . . factual inferences are not entitled to the same benefit.”[6]

The Court of Appeals Decision

The Second Circuit reversed. While acknowledging that Twombly required “some factual context suggesting [that the parties] reached an agreement, not facts that would be merely consistent with an agreement,”[7] the appellate court declared that it was not necessary for the plaintiff to show “that its allegations suggesting an agreement are more likely than not true or that they rule out the possibility of independent action, as would be required at later litigation stages such as a defense motion for summary judgment or a trial.”[8] The Second Circuit emphasized that “a given set of actions may well be subject to diverging interpretations, each of which is plausible,” but the choice between such interpretations was for the fact-finder, not for the court to make on a Rule 12(b)(6) motion, “even if it strikes a savvy judge that actual proof of the facts alleged is improbable, and that a recovery is very remote and unlikely.”[9] Unlike the Twombly complaint, however, Anderson’s proposed amended complaint did not rely solely on allegations of parallel conduct that was explicable as natural, unilateral reactions, but did, in fact, allege actual agreement — identifying dates, executives, and statements that could plausibly be interpreted as such. Ruling that these amendments would have stated a claim, the Second Circuit stressed that “[t]he plausibility standard is lower than a probability standard, and there may therefore be more than one plausible interpretation of a defendant’s words, gestures, or conduct.”[10] In such circumstances, taking all facts as true and making all reasonable inferences, “on a Rule 12(b)(6) motion it is not the province of the court to dismiss the complaint on the basis of the court’s choice among plausible alternatives.”[11]

Should We Discern A Trend?

In another recent Twombly-Iqbal decision, Liu v. AMERCO,[12] the First Circuit was similarly permissive in applying the plausibility test, this time with respect to the required element of damages in a claim under the Massachusetts unfair trade practices statute (“Chapter 93A”). The plaintiff in Liu had brought a class action against the U-Haul truck rental companies premised upon a recent Federal Trade Commission investigation and consent order concerning an alleged invitation to collude by U-Haul to its major competitors (which as an attempt to conspire would not be actionable under Section 1 of the Sherman Act, but could be challenged under Section 5 of the FTC Act and,could potentially provide a basis for a claim, under Massachusetts’ Chapter 93A).

Although the plaintiff claimed to have undertaken two U-Haul rentals in or to Massachusetts, she did not plead specific facts concerning those transactions, such as what she paid or what competitors’ rates were at the time. The district court dismissed her complaint, explaining that basic facts about her individual transactions where necessary to judge whether she had overpaid, and whether such overpayment was caused by U-Haul’s unconsummated conspiracy attempt. The First Circuit, in an opinion by Judge Michael Boudin, disagreed, finding sufficient the plaintiff’s reliance, inter alia, upon the FTC complaint’s allegations (including references to specific documents) that U-Haul had raisedits own prices as an essential element of its effort to collude. Although the appellate court noted that “U-Haul’s brief raises fair questions about the power of the analysis,”[13] it held, not unlike the Second Circuit in Anderson News, that “[t]he place to test factual assertions for deficiencies and against conflicting evidence is at summary judgment or trial.”[14] Again, although the First Circuit appeared skeptical of the claim, it required that the complaint set forth “only enough facts to make the claim plausible, and at this stage reasonable inferences are taken in favor of the pleader.”[15]

Author’s note: Several years ago, while participating on a panel not long after the Supreme Court decided Twombly, I was greeted with skepticism (to put it politely) when arguing that it would not be an extraordinary extension of the then-new pleading standard to require that a complaint alleging an agreement in restraint of trade set forth facts that, if true and allowing for all reasonable inferences in the plaintiff’s favor, stated a claim that was more plausibly consistent with conspiracy than with competition. After all, that would be a logical application of the summary judgment standard of Matsushita[16] — a decision that likewise is framed around notions of plausibility and economically rational behavior — in the pleading context: i.e., if the record were to develop consistent with plaintiff’s pleading, would it “tend to exclude the possibility” of independent, non-collusive action?[17] It would also respond to concerns expressed by the Supreme Court that even under the old Conley v. Gibson[18] “plaintiff can prove no set of facts” pleading standard in itsAssociated General Contractors[19] decision, a district court served an important gatekeeping role at the pleading stage in antitrust cases due to the significant expense of discovery.[20] From the perspective of this (principally defense) antitrust litigator, Judge Crotty’s approach in Anderson Newswas not unwelcome. For the time being, though, at least in the Second Circuit, it is not the law.

[1] ___ F.3d ___ (2d Cir. April 3, 2012). The decision is available on Westlaw at 2012 WL 1085948.

[2] See Ashcroft v. Iqbal, ___ U.S. ___, 129 S. Ct. 1937 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007).

[3] Anderson News, L.L.C. v. Am. Media, Inc., 732 F. Supp. 2d 389 (S.D.N.Y. 2010).

[4] Id. at 397-99.

[5] Id. at 402.

[6] Id. (emphasis added).

[7] Anderson, 2012 WL 1085948, at *18 (internal quotations omitted).

[8] Id.

[9] Id. at *18-19 (internal quotation marks and citations omitted).

[10] Id. at *24.

[11] Id.

[12] F.3d ___ (1st Cir. May 4, 2012) (Boudin, J.). The decision is available on Westlaw at 2012 WL 1560170.

[13] Id. at *6.

[14] Id.

[15] Id. (citing SEC v. Tambone, 597 F.3d 436, 441 (1st Cir. 2010)).

[16] Matsushita Elec .Indus. Co. v. Zenith Radio, 475 U.S. 574 (1986).

[17] See id. at 588 (internal quotations omitted).

[18] 355 U.S. 41 (1957).

[19] Assoc. Gen. Contractors of Cal., Inc. v. Carpenters, 459 U.S. 519 (1983).

[20] See id. at 528 n.17 (“a district court must retain the power to insist upon some specificity in pleading before allowing a potentially massive factual controversy to proceed”).

©2012 Greenberg Traurig, LLP

8th Annual FCPA & Anti-Corruption Compliance Conference

The National Law Review is pleased to bring you information about the upcoming 8th FCPA & Anti-Corruption Compliance Conference:

8th FCPA and Anti-Corruption Compliance Conference
Identifying Changes to the Global Anti-Corruption Compliance Landscape to Maintain and Upgrade Your Existing Compliance Program

Event Date: 12-14 Jun 2012
Location: Washington, DC, USA

Beyond dealing with the FCPA and UK Bribery Act, there are upcoming changes to global Anti-Compliance initiatives being enacted by other major countries. It is imperative that organizations are made aware of these new rules and regulations to be able to meld them all into their organization’s anti-corruption compliance program. Maintaining a robust global compliance program along with performing proper and detailed 3rd party due diligence is of the upmost importance.

Marcus Evans invites you to attend our 8th Annual Anti-Corruption & FCPA Conference. Hear from leading executives within various industries on how to identify new areas of concern when dealing with bribery or working within a company to update an anti-corruption compliance program.

Attending this event will allow you to learn how to mitigate the effects of any possible instances of corruption and bribery both at home and abroad. Discuss solutions and best practices that companies have found when dealing with their anti-corruption compliance programs. This conference will not only review the newest enforcement cases, but also highlight practical solutions to problems dealing with FCPA and global anti-corruption measures.

Attending this conference will allow you to:

-Overcome the issues in dealing and conducting an internal investigation with Dell
-Identify anti-corruption liability concerns for US companies when engaging in Joint Ventures and Mergers and Acquisitions with Crane Co.
-Perform anti-corruption audits to better identify gaps in the compliance program with SojitzCorporation of America
-Promote a culture of ethics within an organization to combat non-compliance with Morgan Stanley
-Assess the continued challenges in conducting a 3rd party due diligence program with Parker Drilling

The marcus evans 8th Annual Anti-Corruption & FCPA Conference is a highly intensive, content-driven event that includes, workshops, presentations and panel discussions, over three days. This conference aims to bring together heads, VP’s, directors, chief compliance officers, and in-house counsel in order to provide an intimate atmosphere for both delegates and speakers.

This is not a trade show; our 8th Annual Anti-Corruption & FCPA Conference is targeted at a focused group of senior level executives to maintain an intimate atmosphere for the delegates and speakers. Since we are not a vendor driven conference, the higher level focus allows delegates to network with their industry peers.

8th Annual FCPA & Anti-Corruption Compliance Conference

The National Law Review is pleased to bring you information about the upcoming 8th FCPA & Anti-Corruption Compliance Conference:

8th FCPA and Anti-Corruption Compliance Conference
Identifying Changes to the Global Anti-Corruption Compliance Landscape to Maintain and Upgrade Your Existing Compliance Program

Event Date: 12-14 Jun 2012
Location: Washington, DC, USA

Beyond dealing with the FCPA and UK Bribery Act, there are upcoming changes to global Anti-Compliance initiatives being enacted by other major countries. It is imperative that organizations are made aware of these new rules and regulations to be able to meld them all into their organization’s anti-corruption compliance program. Maintaining a robust global compliance program along with performing proper and detailed 3rd party due diligence is of the upmost importance.

Marcus Evans invites you to attend our 8th Annual Anti-Corruption & FCPA Conference. Hear from leading executives within various industries on how to identify new areas of concern when dealing with bribery or working within a company to update an anti-corruption compliance program.

Attending this event will allow you to learn how to mitigate the effects of any possible instances of corruption and bribery both at home and abroad. Discuss solutions and best practices that companies have found when dealing with their anti-corruption compliance programs. This conference will not only review the newest enforcement cases, but also highlight practical solutions to problems dealing with FCPA and global anti-corruption measures.

Attending this conference will allow you to:

-Overcome the issues in dealing and conducting an internal investigation with Dell
-Identify anti-corruption liability concerns for US companies when engaging in Joint Ventures and Mergers and Acquisitions with Crane Co.
-Perform anti-corruption audits to better identify gaps in the compliance program with SojitzCorporation of America
-Promote a culture of ethics within an organization to combat non-compliance with Morgan Stanley
-Assess the continued challenges in conducting a 3rd party due diligence program with Parker Drilling

The marcus evans 8th Annual Anti-Corruption & FCPA Conference is a highly intensive, content-driven event that includes, workshops, presentations and panel discussions, over three days. This conference aims to bring together heads, VP’s, directors, chief compliance officers, and in-house counsel in order to provide an intimate atmosphere for both delegates and speakers.

This is not a trade show; our 8th Annual Anti-Corruption & FCPA Conference is targeted at a focused group of senior level executives to maintain an intimate atmosphere for the delegates and speakers. Since we are not a vendor driven conference, the higher level focus allows delegates to network with their industry peers.

8th Annual FCPA & Anti-Corruption Compliance Conference

The National Law Review is pleased to bring you information about the upcoming 8th FCPA & Anti-Corruption Compliance Conference:

8th FCPA and Anti-Corruption Compliance Conference
Identifying Changes to the Global Anti-Corruption Compliance Landscape to Maintain and Upgrade Your Existing Compliance Program

Event Date: 12-14 Jun 2012
Location: Washington, DC, USA

Beyond dealing with the FCPA and UK Bribery Act, there are upcoming changes to global Anti-Compliance initiatives being enacted by other major countries. It is imperative that organizations are made aware of these new rules and regulations to be able to meld them all into their organization’s anti-corruption compliance program. Maintaining a robust global compliance program along with performing proper and detailed 3rd party due diligence is of the upmost importance.

Marcus Evans invites you to attend our 8th Annual Anti-Corruption & FCPA Conference. Hear from leading executives within various industries on how to identify new areas of concern when dealing with bribery or working within a company to update an anti-corruption compliance program.

Attending this event will allow you to learn how to mitigate the effects of any possible instances of corruption and bribery both at home and abroad. Discuss solutions and best practices that companies have found when dealing with their anti-corruption compliance programs. This conference will not only review the newest enforcement cases, but also highlight practical solutions to problems dealing with FCPA and global anti-corruption measures.

Attending this conference will allow you to:

-Overcome the issues in dealing and conducting an internal investigation with Dell
-Identify anti-corruption liability concerns for US companies when engaging in Joint Ventures and Mergers and Acquisitions with Crane Co.
-Perform anti-corruption audits to better identify gaps in the compliance program with SojitzCorporation of America
-Promote a culture of ethics within an organization to combat non-compliance with Morgan Stanley
-Assess the continued challenges in conducting a 3rd party due diligence program with Parker Drilling

The marcus evans 8th Annual Anti-Corruption & FCPA Conference is a highly intensive, content-driven event that includes, workshops, presentations and panel discussions, over three days. This conference aims to bring together heads, VP’s, directors, chief compliance officers, and in-house counsel in order to provide an intimate atmosphere for both delegates and speakers.

This is not a trade show; our 8th Annual Anti-Corruption & FCPA Conference is targeted at a focused group of senior level executives to maintain an intimate atmosphere for the delegates and speakers. Since we are not a vendor driven conference, the higher level focus allows delegates to network with their industry peers.

8th Annual FCPA & Anti-Corruption Compliance Conference

The National Law Review is pleased to bring you information about the upcoming 8th FCPA & Anti-Corruption Compliance Conference:

8th FCPA and Anti-Corruption Compliance Conference
Identifying Changes to the Global Anti-Corruption Compliance Landscape to Maintain and Upgrade Your Existing Compliance Program

Event Date: 12-14 Jun 2012
Location: Washington, DC, USA

Beyond dealing with the FCPA and UK Bribery Act, there are upcoming changes to global Anti-Compliance initiatives being enacted by other major countries. It is imperative that organizations are made aware of these new rules and regulations to be able to meld them all into their organization’s anti-corruption compliance program. Maintaining a robust global compliance program along with performing proper and detailed 3rd party due diligence is of the upmost importance.

Marcus Evans invites you to attend our 8th Annual Anti-Corruption & FCPA Conference. Hear from leading executives within various industries on how to identify new areas of concern when dealing with bribery or working within a company to update an anti-corruption compliance program.

Attending this event will allow you to learn how to mitigate the effects of any possible instances of corruption and bribery both at home and abroad. Discuss solutions and best practices that companies have found when dealing with their anti-corruption compliance programs. This conference will not only review the newest enforcement cases, but also highlight practical solutions to problems dealing with FCPA and global anti-corruption measures.

Attending this conference will allow you to:

-Overcome the issues in dealing and conducting an internal investigation with Dell
-Identify anti-corruption liability concerns for US companies when engaging in Joint Ventures and Mergers and Acquisitions with Crane Co.
-Perform anti-corruption audits to better identify gaps in the compliance program with SojitzCorporation of America
-Promote a culture of ethics within an organization to combat non-compliance with Morgan Stanley
-Assess the continued challenges in conducting a 3rd party due diligence program with Parker Drilling

The marcus evans 8th Annual Anti-Corruption & FCPA Conference is a highly intensive, content-driven event that includes, workshops, presentations and panel discussions, over three days. This conference aims to bring together heads, VP’s, directors, chief compliance officers, and in-house counsel in order to provide an intimate atmosphere for both delegates and speakers.

This is not a trade show; our 8th Annual Anti-Corruption & FCPA Conference is targeted at a focused group of senior level executives to maintain an intimate atmosphere for the delegates and speakers. Since we are not a vendor driven conference, the higher level focus allows delegates to network with their industry peers.

8th Annual FCPA & Anti-Corruption Compliance Conference

The National Law Review is pleased to bring you information about the upcoming 8th FCPA & Anti-Corruption Compliance Conference:

8th FCPA and Anti-Corruption Compliance Conference
Identifying Changes to the Global Anti-Corruption Compliance Landscape to Maintain and Upgrade Your Existing Compliance Program

Event Date: 12-14 Jun 2012
Location: Washington, DC, USA

Beyond dealing with the FCPA and UK Bribery Act, there are upcoming changes to global Anti-Compliance initiatives being enacted by other major countries. It is imperative that organizations are made aware of these new rules and regulations to be able to meld them all into their organization’s anti-corruption compliance program. Maintaining a robust global compliance program along with performing proper and detailed 3rd party due diligence is of the upmost importance.

Marcus Evans invites you to attend our 8th Annual Anti-Corruption & FCPA Conference. Hear from leading executives within various industries on how to identify new areas of concern when dealing with bribery or working within a company to update an anti-corruption compliance program.

Attending this event will allow you to learn how to mitigate the effects of any possible instances of corruption and bribery both at home and abroad. Discuss solutions and best practices that companies have found when dealing with their anti-corruption compliance programs. This conference will not only review the newest enforcement cases, but also highlight practical solutions to problems dealing with FCPA and global anti-corruption measures.

Attending this conference will allow you to:

-Overcome the issues in dealing and conducting an internal investigation with Dell
-Identify anti-corruption liability concerns for US companies when engaging in Joint Ventures and Mergers and Acquisitions with Crane Co.
-Perform anti-corruption audits to better identify gaps in the compliance program with SojitzCorporation of America
-Promote a culture of ethics within an organization to combat non-compliance with Morgan Stanley
-Assess the continued challenges in conducting a 3rd party due diligence program with Parker Drilling

The marcus evans 8th Annual Anti-Corruption & FCPA Conference is a highly intensive, content-driven event that includes, workshops, presentations and panel discussions, over three days. This conference aims to bring together heads, VP’s, directors, chief compliance officers, and in-house counsel in order to provide an intimate atmosphere for both delegates and speakers.

This is not a trade show; our 8th Annual Anti-Corruption & FCPA Conference is targeted at a focused group of senior level executives to maintain an intimate atmosphere for the delegates and speakers. Since we are not a vendor driven conference, the higher level focus allows delegates to network with their industry peers.