Blog

Summarizes the latest Federal Trade Commission's annual adjustments to filing fees for premerger review of sizable transactions and reporting thresholds for review under the Hart-Scott-Rodino Antitrust Improvement Act of 1974.

Discusses the rationale for FTC changes to Safeguards Rule, as well as noting types of business entities affected. Includes brief history of Rules’ origins.

Highlights important proposed changes to antitrust Merger Guidelines. Includes evaluation of essential steps merger and acquisition parties will need to take if changes are approved.

Highlights important proposed changes to the Premerger Notification Form required by the Hart-Scott-Rodino Act. Includes evaluation of essential steps transaction parties will need to take if changes are approved.

Summarizes the need for standards to facilitate best practices for internal investigations and presents an overview of the new ISO TS 37008 standard.

Analyzes recent U.S. Supreme Court ruling on the Polansky, M.D. v. Executive Health Resources Inc. False Claims Act case.

Synopsis of the Department of Justice’s recent updates to its corporate voluntary self-disclosure policies, including a new clawback policy to impose costs of corporate crime on responsible executives.

Describes FTC’s annual changes to premerger filing fees and reporting thresholds

The old maxim that “bad facts make bad law” is only a precursor to the conclusion that “bad facts and bad law make very bad results.” Bronx Honda engaged in almost inexplicably bad behavior by engaging in discriminatory and deceptive practices related to its vehicle financing practices for minority customers. In a case that has broad industry implications, the Federal Trade Commission (FTC) took note and put the pedal to the metal on stopping these practices.

On May 21, 2020, the FTC filed a complaint for injunctive and other relief against Liberty Chevrolet d/b/a Bronx Honda ...

An Unexpected Adversary and Risk in Notice Decisions?

You expect consumer complaints and even class action threats in the wake of a law firm data breach. But does a defense law firm expect to be sued by the carrier for the clients it represents? Whether surprising or not, it is happening and law firms must take note. In today’s world there are sometimes tensions between the interests of insurance companies and the law firms engaged to represent the ultimate client—the insureds. Now, it appears that law firms’ decisions following information security incidents have advanced up ...

For many decades, Delaware has enjoyed a favored position as the first choice for incorporation.   Many U.S. companies incorporate in Delaware to benefit from its favorable tax and legal corporate environment.  And other states look to specialized Delaware courts for guidance, particularly the Delaware Court of Chancery, with its expertise and deep precedent in corporate and shareholder dispute resolution.  Delaware’s developed jurisprudence, with a perceived orientation to corporate interests, is unmatched in any other state and offers more guidance and certainty.

Now, the ...

On January 31, the Federal Trade Commission (FTC) published its annual adjustments to the reporting thresholds under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (HSR Act). The newly-revised thresholds represent modest increases over last year’s thresholds. They are published in the Federal Register and will become effective 30 days after the date of their publication. The revised thresholds will remain in effect until the FTC’s next annual adjustment in the first quarter of 2021.

HSR Act Basics

The HSR Act requires parties to mergers ...

Chances are you first become aware that your company is a target or subject of a criminal antitrust investigation when you receive a grand jury subpoena, or worse, when federal agents show up with a search warrant asking questions. This is serious business, given the consequences. Among the many questions experienced antitrust counsel will ask you early on is whether you have an antitrust compliance program, and if so, how it is set up and operates. In recent years, the Antitrust Division of the United States Department of Justice (“DOJ”) assigned no weight to the existence of a ...

This is not about restrictions on how you cook your eggs or hunt game out of season.

But read on if you are an employer and want to know about a serious and growing antitrust risk, heightened by federal and state antitrust enforcement as well as private litigation. Agreements to refrain from soliciting another company’s employees (“no poaching” agreements) face increased scrutiny — with potential criminal consequences. In close alignment, there is a spate of new “wage-fixing” cases, a variant of price fixing.

It all started with three cases brought by antitrust ...

February 20, 2019 - On February 15, the Federal Trade Commission (FTC) published increased reporting thresholds under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (HSR Act). The new thresholds represent an approximate 6.6 percent increase over last year’s thresholds. They are expected to be published in the Federal Register during the week of February 18, 2019, and they will become effective 30 days after the date of their publication. This year’s revised thresholds were delayed due to the government shutdown in January. The revised thresholds will ...

On January 29, the Federal Trade Commission (FTC) published increased reporting thresholds under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (HSR Act). The new thresholds increase last year’s thresholds by approximately 4%. The revised thresholds are effective for all transactions closing on or after February 28, 2018. The revised thresholds will remain in effect until the FTC’s next annual adjustment, which should be released during the first quarter of 2019.

The HSR Act requires parties to mergers, acquisitions, joint ventures, and certain ...

Every year, as tax season arrives, new and increasingly diabolic scams to pilfer and misuse taxpayer information surface. In prior years, cyber fraudsters targeted unsuspecting individual taxpayers to trick them into revealing their personal information through direct telephone or email scams.  Major data breaches, such as Equifax, which is now known to have included millions of additional victims and more forms of personal identifying and financial data than originally disclosed, only exacerbate the problem. As the public has learned more about identity theft ...

Fast food restaurant chain Arby’s Restaurant Group Inc. is known for its great hot roast beef sandwiches and catchy slogan: “We have the Meats!” Arby’s is now communicating a different message; it may be the latest victim of a significant cyber breach.

How are we to digest this? We have grown somewhat immune to the now frequent website notices or press releases that announce that although no one is known to have been harmed, yet another potential information security incident has taken place at yet another company that may have once again exposed customer information.

So what ...

It appears to be innocent and routine. The CFO of your company forwards to you an urgent-sounding, personally addressed email from the Securities Exchange Commission’s EDGAR public filing system announcing changes to the reporting system. Last week you signed the attestation of the accuracy of your Quarterly Report on SEC Form 10-Q. You hope you have not made a mistake or missed an important change. You look over the email again. At first glance it appears legit:

Or it might be your worst nightmare: an email from the SEC questioning your firm’s disclosures, revenue recognition ...

I remember in drivers’ education class being shown the obligatory scary movie on railroad crossing accidents. After the wreck, one salty old train engineer says to another, looking at the demolished car, “Why don’t they learn, Slim?” “I don’t know, Jim,” the other fellow says, scratching his furrowed brow.

In the information security world, we are past the need for scare tactics. Only an ostrich might be oblivious to the heightened cyber risks these days and their increasing frequency. Nevertheless, periodically you see cautionary reminders of mistakes that are ...

Annually, the Federal Trade Commission (FTC) is required to revise the basic thresholds used to determine reportability of transactions under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (HSR Act), based on the change in our gross national product. Once again the thresholds have increased. The changes were effective February 27, 2017.

Most importantly, the minimum “size of transaction” threshold is increased to $80.8 million from $78.2 million last year. Accordingly, an acquisition, merger, or joint venture where at least $80.8 million of assets ...

A Meaningful Class Action Defense Tool?

On May 16, 2016 the High Court finally spoke on Spokeo, the long anticipated case involving what injury is necessary to sustain Article III standing in federal court.  Some predicted a blow to consumer protection and privacy related class actions in which neither the class representative nor the class as a whole suffered anything but a technical federal statutory violation without real harm.

In the underlying case, Thomas Robins claimed that Spokeo published false information about him on its search engine site, in violation of his rights under ...

Class Certification of TCPA Claims in Sandusky Wellness Center, LLC v. MedTox Scientific, Inc.

Alexander Bain, a Scotsman, worked on an experimental fax machine in the 1840’s, synchronizing the movement of two pendulums through a clock to scan messages on a line by line basis. Bain’s work resulted in a patent issued May 27, 1843 for “improvements in producing and regulating electric currents and improvements in timepieces, and in electric printing, and signal telegraphs.”  The rudimentary fax machine preceded Alexander Graham Bell’s invention of the telephone.  Who ...

Unleashing a Trade Secret Misappropriation Federal Private Right of Action

President Obama is poised to sign a bill passed unanimously by the Senate and House Judiciary Committee.  What issue of the day could possibly secure such bipartisan support in a tumultuous presidential election year?  One that even Donald Trump and Bernie Sanders could agree upon.

The emergence of relatively anonymous cyber threats and persistent state-sponsored economic espionage, together with breaches of confidence and traditional bribery, corrupt employee, and misrepresentation schemes, simply ...

Supreme Court Refuses to Review Consumer Appliance Defect Class Actions

Critics of the Supreme Court as consistently “pro-business” welcomed the Court’s February 24, 2014 order denying certiorari in a series of consumer class action cases alleging defects in millions of front loading washing machines.  A pair of recent Sixth Circuit and Seventh Circuit decisions, and a 2012 Ninth Circuit decision permitted the class actions to proceed, notwithstanding the Supreme Court’s recent Comcast decision, over the objections of Whirlpool Corp., Sears Holdings Corp., and a unit ...

Stratus Building Solutions faced a business challenge on a bet the company scale.  Despite winning many franchise awards, five franchisees charged that its entire system imposed a fraud on franchisees.   The plaintiffs sued 179 defendants, including the system franchisor, master (regional) franchisors, and over 70 individuals associated with the franchise system of violating §§ 1962(c) & (d) of the Racketeer Influenced and Corrupt Organizations Act (“RICO”).  They claim the Defendants collectively operate the Stratus franchise system through a massive, but vaguely ...

Commercial adversaries are often tempted to transform breach of contract or warranty matters into negligence or negligent misrepresentation claims. Or fraud or other intentional tort claims. The lure of a more flexible claim before a jury can be hard to resist. Or the governing contract may have limitation of liability restrictions that make warranty and contractual claims unavailing.  Nevertheless, The Eighth Circuit, interpreting Missouri law, strongly reaffirmed its view that tort claims cannot be substituted for matters of contractual risk allocation unless very narrow ...

In many commercial contexts an agreement includes a provision that selects a forum for future dispute resolution.  Frequently, when conflict arises, a party may try to avoid the selected forum and file the first case on their home turf.  The other party to the contract has to respond, but how?

Atlantic Marine Construction Co., a Virginia corporation, faced this issue in a construction contract dispute on a Texas project.  Despite a standard forum-selection clause requiring litigation of disputes in state or federal court in Norfolk, Virginia, a subcontractor filed a preemptive suit ...

** By HeplerBroom Summer Associate Tiffany B. Wong

A. Direct Participant Liability Negligence Theory in Illinois

In Illinois, it is a bedrock principle of limited liability deeply ingrained in our economic and legal systems that a parent company is not liable for the acts of its subsidiary.  Liability for negligence arises when one person breaches a duty of care owed to another.  To establish a cause of action for negligence under the law, a plaintiff must establish four “elements”: (1) a duty of care, (2) a breach of that duty, (3) an injury caused by the breach, and (4) resulting ...

In Russell v. SNFA, 2013 IL 113909 (Ill. Apr. 18, 2013), the Illinois Supreme Court held that Illinois courts had jurisdiction over a French company despite the fact that the company had no offices, assets, property or employees in Illinois, no license to do business in Illinois, and did not specifically direct product sales in Illinois and was generally unaware its products were being distributed in the state.

On January 28, 2003, the sole occupant and pilot of a helicopter died after his helicopter crashed in Illinois. The decedent was a resident of Georgia who was living in Illinois ...

On March 19, 2013, the U.S. Supreme Court unanimously ruled in Standard Fire Ins. Co. v. Knowles that class-action plaintiffs cannot circumvent the jurisdictional requirements of the Class Action Fairness Act of 2005 (“CAFA”) by stipulating damages under the jurisdictional threshold.

CAFA provides federal courts original jurisdiction over class actions where, among other things, the class has more than 100 members and the matter in controversy exceeds the sum or value of $5 million exclusive of interest and costs. To calculate the amount in controversy, the claims of the ...

On January 17, 2013, the Federal Trade Commission (FTC) issued a report revealing an increase in “pay-for-delay” or “reverse-payment” patent settlements between brand-name pharmaceutical companies and their generic counterparts

These controversial settlements typically involve a brand-name drug manufacturer who is granted a drug patent which gives the company the exclusive right to sell the drug for up to 20 years, depending on the type of drug. The patent is then challenged by a generic rival.  Rather than risk losing their patent monopoly on account of a judgment ...

The attorney-client privilege is one of the oldest recognized privileges protecting confidential communications between two parties.  While the privilege serves as the cornerstone of the attorney-client relationship, the privilege is waived when confidential communications are disclosed to third parties.  In fact, the “subject-matter waiver” doctrine holds that where a privileged communication concerning a particular subject is voluntarily disclosed to a third party, waiver of the attorney-client privilege extends to all other communications pertaining to the ...

Following the lead of multiple Illinois appellate districts, the Illinois Supreme Court recently recognized for the first time an actionable tort for “intrusion upon seclusion.”  Intrusion upon seclusion is one of four torts generally recognized under the umbrella of the "right to privacy" torts along with public disclosure of embarrassing private facts, publicity which places a person in a false light in the public eye, and appropriation of a person's name, likeness or identity for trade or advertising purposes without consent.

In Lawlor v. North American ...

In Burress-Taylor v. American Security Insurance Company, 2012 IL App (1st) 110554 (Cook Co. 5th Div.) (October 26, 2012), an Illinois appellate court recently reversed the dismissal of an insured’s complaint against her insurance company for alleged violations of the Illinois Consumer Fraud and Deceptive Business Practices Act (“Consumer Fraud Act”) (815 ILCS 505/1 et seq.).

The plaintiff alleged that in August of 2006 her home was damaged by a fire.  The plaintiff had two insurance policies, both of which covered fire losses, and submitted claims to both.  The first ...

When does a gift or entertainment risk being treated as a violation of the Foreign Corrupt Practices Act (FCPA)?  When do payments associated with obtaining international business become bribes?  What do you do when facilitation payments are requested? How can you deal with these thorny issues and maintain your competitive edge?  The answers are fact and setting specific but the Feds have provided some important new guidance. And the best part is that it is free!

On November 14, 2012 the Department of Justice and the Securities and Exchange Commission released a 120 page “Resource ...

If you are involved in the auto parts industry there is good reason to be concerned.  Why?  Read on.

On October 31, 2012 The Department of Justice-Antitrust Division announced the ninth guilty plea for price-fixing and bid-rigging in a continuing investigation of industry practices.  The DOJ investigation reveals a long-standing conspiracy from approximately 2003 to 2010, when the first prosecutions were announced.   Thus far, nine companies and eleven executives have pled guilty in prosecutions brought in the U.S. District Court for the Eastern District of Michigan, in Detroit.  A ...

Not so fast.  Rachel is Robocaller associated with unwanted calls to consumers by multiple “Cardholder Services” companies offering credit card interest rate reductions in exchange for an up-front fee.

The Federal Trade Commission is not amused.  On November 1, 2012 the FTC announced successful prosecution of five companies based in Arizona and Florida responsible for millions of illegal pre-recorded calls from Rachel.  Federal courts granted the FTC’s request for temporary restraining orders to halt the operations of the companies.  FTC Chairman Leibowitz commented ...

Two oil and gas companies accused of illegally working together in auctions of four natural gas leases on federal land in Colorado have agreed to pay $275,000 each to settle the claim. The case is the first federal challenge to an anti-competitive bidding agreement for mineral rights, according to the U.S. Department of Justice (DOJ).

The complaint alleged that the two companies -- Gunnison Energy Corporation (GEC), with headquarters in Denver, and Texas-based SG Interests VII Ltd. (SGI) -- were separately developing natural gas resources in Western Colorado. In 2005, the ...