Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS—D.D.C.: GE in-house lawyers allowed access to confidential information, (Oct 13, 2015)

By Jeffrey May, J.D.

Top in-house lawyers at General Electric Company will not be denied access to confidential information in Department of Justice litigation challenging the acquisition of the company's appliance business by rival AB Electrolux, the federal district court in Washington, D.C. has decided. Appliance makers Samsung Electronics America, LG Electronics USA, Inc., and Haier America Trading, LLC unsuccessfully argued that four GE attorneys should be barred from access to rivals' competitively sensitive information because they did not sufficiently demonstrate that they were not involved in “competitive decision making” as required by the protective order (U.S. v. AB Electrolux, October 9, 2015, Sullivan, E.).

The Department of Justice Antitrust Division filed its complaint to block the proposed $3.3 billion acquisition of GE’s appliance business by AB Electrolux and its North America subsidiary Electrolux North America Inc. on July 1. The acquisition threatened to raise the prices of major cooking appliances, the government alleged.

As the case moves towards a November trial date, the parties and non-parties, including competing appliance makers, have squabbled over discovery of, and access to, confidential documents. An amended protective order was issued by the court that provided safeguards against the misuse of confidential information. The order limits access to confidential documents to four in-house attorneys for GE and four in-house attorneys for Electrolux.

Under the order, the designated in-house counsel could not provide advice on “business decisions that the client would make regarding, for example, pricing, marketing, distribution or product design issues.” According to the objecting appliance makers—Samsung, LG, and Haier—the four attorneys designated by GE fail this requirement.

GE designated the following four attorneys to receive access to material confidential information: Sharis A. Pozen, Vice President of Global Competition and Antitrust; Aimee Imundo, Executive Counsel, Competition Law and Compliance; Bradford A. Berenson, Vice President and Senior Counsel, Litigation and Legal Policy; and Ronald G. Schroeder, Global Executive Litigation Counsel-Corporate. GE contended that these four attorneys were not directly involved with the day-to-day competitive decisions of GE’s Appliance division and the four attorneys declared under oath that they were not involved in such matters.

The court was satisfied that Pozen, a former head of the Department of Justice Antitrust Division, and Imundo had not and would not over the next two years be involved in the type of competitive decision making prohibited by the protective order and relevant case law. Their sworn declarations were sufficient. Moreover, there were protections built into the protective order to overcome the objectors' concerns. For instance, there were fines available for violations of the order.

With respect to the senior litigators on GE's corporate legal team, Berenson and Schroeder, the court concluded that their duties were far from competitive decision making. They were not involved in the “pricing, marketing, distribution or product design issues” of GE’s Appliance division, and the objectors had no evidence to the contrary. The declarations of GE's senior litigators satisfied the court’s protective order.

The case is No. 1:15-cv-01039-EGS.

Attorneys: Ethan Glass, U.S Department of Justice, for the United States of America. Carly J. Rothenberg (Jones Day) for AB Electrolux and Electrolux North America, Inc. Paul T. Denis (Dechert, LLP) for General Electric Co. Courtney B. Dyer (O'Melveny & Myers LLP) for Samsung Electronics America, Inc. Meytal McCoy (Mayer Brown LLP) for LG Electronics USA, Inc. D. Bruce Hoffman (Hunton & Williams LLP) for Haier America Trading, LLC.

Companies: AB Electrolux; Electrolux North America, Inc.; General Electric Co.; Samsung Electronics America, Inc.; LG Electronics USA, Inc.; Haier America Trading, LLC

Cases: AcquisitionsMergers Antitrust AntitrustDivisionNews