Antitrust Law Daily Wrap Up, ANTITRUST—9th Cir.: Dismissal of challenge to Anheuser-Busch’s acquisition of Grupo Modelo affirmed, (Apr 5, 2016)

By Michael Menzhuber, J.D., LL.M.

A district court’s dismissal of an action to enjoin Anheuser-Busch InBev’s (ABI’s) acquisition of Grupo Modelo (Modelo) was affirmed by the U.S Court of Appeals in San Francisco. The appellate court also found that the district court did not abuse its discretion when it denied the plaintiffs leave to amend their complaint and denied their motion for relief from judgment (Edstrom v. Anheuser-Busch InBev SA/NV, April 4, 2016, per curiam).

Steven Edstrom and eight other purchasers of beer appealed a district court’s dismissal of their action, which was brought under Section 7 of the Clayton Antitrust Act to enjoin ABI’s acquisition of Modelo. The appellate court found that the plaintiffs failed to state a claim that ABI’s acquisition of Modelo violated Section 7 because, under the revised terms of the challenged transaction, ABI’s market share or concentration in the U.S. beer market would not increase.

The appellate court also found that: (1) the plaintiffs did not provide any factual support for their allegations that ABI’s involvement with Constellation Brands, Inc. during the transition period would allow ABI to influence Constellation’s prices or engage in any other anticompetitive conduct; and (2) the transaction agreements, which contained several provisions designed to prevent ABI from influencing Constellation’s pricing or other competitive decisions, rendered the plaintiffs’ Section 7 claim implausible.

The appellate court determined that the district court did not err by considering the transaction agreements in ruling on the motion to dismiss. Specifically, the court found that the plaintiffs’ complaint alleged the contents of the transaction agreements and no party questioned their authenticity.

Finally, the appellate court determined that the district court did not abuse its discretion by: (1) denying the plaintiffs leave to amend their complaint because, after two opportunities to do so, they failed to identify any additional factual allegations that could save their complaint from dismissal; and (2) denying the plaintiffs’ motion for relief from judgment because they failed to prove, by clear and convincing evidence, that ABI, Constellation, or Modelo made any misrepresentations to the court.

The case is No: 14-15337.

Attorneys: Joseph M. Alioto (Alioto Law Firm) for Steven Edstrom. James A. Keyte (Skadden, Arps, Slate, Meagher & Flom LLP) for Anheuser-Busch InBev SA/NV.

Companies: Anheuser-Busch InBev SA/NV

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