937 F. Supp. 2d 119
D. Mass.2013Background
- Plaintiffs are former shareholders challenging 27 private equity–led LBOs from 2003–2007 who sue under Sherman Act §1.
- Defendants are ten private equity firms plus JP Morgan Chase, alleged to have conspired to fix or allocate prices in club LBOs.
- Count One alleges a single overarching conspiracy to restrain trade across multiple Target Companies and deals.
- Count Two (HCA claim) alleges a separate conspiracy to rig bids and refrain from competing in the HCA LBO.
- Transactions typically involved auctions or proprietary deals; defendants formed bidding clubs/consortiums and used go-shop periods.
- Court analyzes whether evidence shows a larger conspiracy, ultimately allowing Count One to proceed only on a narrowed theory not to ‘jump’ others’ announced deals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of an overarching conspiracy (Count I). | Plaintiffs contend a larger, common goal existed across many deals. | Defendants argue parallel conduct arises from independent business practices, not a single conspiracy. | Count I survives on narrowed theory: refrain from 'jumping' announced proprietary deals. |
| Sufficiency of evidence for stand-down/in exchange in HCA (Count II). | Evidence shows coordinated stand-downs for HCA in July and September 2006 in exchange for not competing on Freescale. | Arguments inconsistent or insufficient to prove an exchange; independent motives possible. | Evidence supports inference of stand-downs; Count II denied only as to Mere independent action challenges. |
| Effect of joint bidding/club deals on antitrust inference. | Joint bidding and consulting among Defendants indicate a coordinated market allocation. | Club deals are standard industry practice with pro-competitive justifications. | Not per se evidence of a market-wide conspiracy; must show larger picture beyond routine collaborations. |
| Impact of ‘go-shop’ periods on inference of conspiracy. | Lack of topping bids and go-shop dynamics imply coordinated restraint. | Go-shop protections and break-up/matching rights are standard and do not prove conspiracy. | Go-shop context considered; no independent action inference negated; May support narrower Count I. |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (antitrust conspiracy requires plausible evidence, not just parallel conduct)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (U.S. 1986) (inference of conspiracy must be reasonable against competing inferences of independent action)
- White v. R.M. Packer Co., Inc., 635 F.3d 571 (1st Cir. 2011) (tacit agreement may be found from uniform behavior preceded by discussions)
- U.S. v. Portela, 167 F.3d 687 (1st Cir. 1999) (overarching conspiracy analysis includes common goal, interdependence, and overlap)
- Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752 (U.S. 1984) (evidence must tend to exclude independent action to support conspiracy)
- U.S. v. Richerson, 833 F.2d 1147 (5th Cir. 1987) (single conspiracy requires a 'larger picture' and interdependence among participants)