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Natural Gas Companies Settle Antitrust Suit Stemming from Joint Bidding

by Jon B. Dubrow and Cerissa Cafasso On Monday, April 22, 2013, after rejecting the initial settlement agreement, Judge Richard Matsch (D. Colo.) approved a revised settlement of a suit brought by the U.S. Department of Justice (DOJ) against two energy companies for conspiring not to compete for mineral rights leases.  Gunnison Energy Corp. (GEC) and SG Interests I Ltd. and SG Interests VII Ltd. (collectively "SGI”) will each pay a fine of $275,000 to the DOJ to settle allegations of agreeing not to bid against each other in violation of antitrust law for natural gas leases on government land in western Colorado.  These fines are in addition to those related to alleged False Claims Act violations, for which SGI and GEC paid government fines of $206,250 and $245,000 respectively.  The new settlement is twice the amount of the fines in the original settlement. McDermott Will & Emery wrote an article in February 2012 analyzing the...

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Release of Confidential Cartel Information by European Commission to English High Court Suspended

by Philip Bentley and Philipp Werner On 29 November 2012, the EU General Court (GC) issued a provisional order suspending the European Commission’s decision to communicate to the High Court of England and Wales a copy of Alstom’s reply to the statement of objections in the gas insulated switchgear cartel.  The statement of objections, which contained confidential business secrets, had been requested by the High Court in the context of a follow-on damages claim brought by National Grid, one of Alstom’s former customers. For defendants, it will be reassuring to know that the GC will not allow the Commission to disclose contentious documents until the matter has been debated fully in court.  Plaintiffs will be relieved that they are not completely shut out of court on the issue of access to Commission documents that might support their claim for damages.  The matter does have to be debated at length, however, and the result is...

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Alleged Agreement Between Chesapeake Energy and EnCana Corporation to Suppress Prices for Mineral Rights Highlights the Antitrust Risks Facing Energy Companies

by Jon B. Dubrow and Shauna A. Barnes Recently published reports of land acquisition activities between Chesapeake Energy and EnCana senior executives will likely expose those companies to a Department of Justice (DOJ) antitrust investigation and challenge, as well as, if accurate, civil antitrust claims.  This matter highlights the risks that energy companies face when discussing lease arrangements with their competitors.  Joint Bidding or Bid Rigging for Property Rights Can Violate the Antitrust Laws In February 2012, DOJ settled its first challenge to a bidding agreement for mineral rights, alleging that agreements between Gunneson Energy Corporation and SGI Interests to bid jointly for government mineral leases were anticompetitive.  In a previous post, we explained the potential issues and pitfalls related to joint bidding for oil and gas properties.  We suggested various factors that companies can use to assess, or manage, their...

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6th Circuit Limits Applicability of the Filed-Rate Doctrine and Holds that Electricity is a “Commodity” under Robinson-Patman

by Nick Grimmer, Gregory E. Heltzer and Shauna A. Barnes On June 6, 2012, in Williams v. Duke Energy Int’l, Inc., the U.S. Court of Appeals for the 6th Circuit reversed a dismissal of Robinson-Patman Act (price discrimination) claims, amongst others.  In the district court, a class of electricity purchaser plaintiffs alleged that defendant electricity providers gave an unfair competitive advantage to several of the defendants’ largest customers by paying them undisclosed rebates in side agreements, such that the favored customers paid effective rates below those approved by the governing agency, while the plaintiffs still had to pay higher agency-approved rates.  The plaintiffs alleged that while the favored customers initially objected to the defendants’ proposed rate plan, they withdrew their objections in exchange for the undisclosed rebates.  The district court dismissed the plaintiffs’ claims under the...

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FERC Reaffirms Merger Policy; Does Not Adopt DOJ/FTC 2010 Horizontal Merger Guidelines

by Jon Dubrow and Cerissa Cafasso Public utilities could face different levels of scrutiny in merger reviews before the U.S. Federal Energy Regulatory Commission, and the Department of Justice and the Federal Trade Commission (the Antitrust Agencies). To view the full article, please click here. 

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DOJ Finds Antitrust Violation in Joint Bid for Oil & Gas Leases

by Jon B. Dubrow and Shauna A. Barnes The U.S. Department of Justice’s recent action challenging a joint bidding arrangement for natural gas leases highlights the antitrust risks of joint bids.  This newsletter describes considerations parties considering joint bids can take to evaluate and potentially manage their antitrust risks. To read the full article, click here.

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Antitrust Inspections in The Energy Exchange Market

by David Henry and Philipp Werner On February 7, the European Commission (EC) and the European Free Trade Association (EFTA) Surveillance Authority conducted unannounced inspections in the energy exchange market.  Representatives of Nord Pool Spot (Lysaker, Norway) and EPEX Spot (Paris, France and Leipzig, Germany) announced that the companies were subject to inspections.  It is not known whether other companies were also raided.  The inspections show that the EC’s enforcement policy extends beyond the retail level of the energy sector. To read the full article, click here.

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