United States v. Ab Electrolux , 139 F. Supp. 3d 390 ( 2015 )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA,
Plaintiff,
Case No. 1:15-cv-01039-EGS
v.
AB ELECTROLUX,
ELECTROLUX NORTH AMERICA, INC.,
and
GENERAL ELECTRIC COMPANY,
Defendants.
MEMORANDUM OPINION
Non-party Intervenors (“Intervenors”) object to the four
in-house counsel designated by Defendant General Electric (“GE”)
to access Confidential Information pursuant to the Protective
Order. Intervenors argue the in-house counsels’ declarations do
not sufficiently demonstrate their lack of involvement with GE’s
“competitive decision making.” GE now moves the Court to
overrule the Intervenors’ objections. Docket No. 142. Upon
consideration of the motion, the response and reply thereto,
GE’s motion is GRANTED.
I. BACKGROUND
In July 2015, GE identified Sharis A. Pozen, Aimee Imundo,
Bradford A. Berenson and Ronald G. Schroeder as the in-house
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counsel designated to review Intervenors’ Confidential
Information pursuant to the terms set forth in the Protective
Order. Between July and the present date, Intervenors sought
varied modifications to the Protective Order. See e.g. Docket
Nos. 57 and 80. The Court directed GE to file amended
declarations in support of Mses. Pozen and Imundo and issued two
Amended Protective Orders. See Minute Order, September 7, 2015;
Docket Nos. 110 and 140. The modifications made to the
Protective Order were designed to ensure that sufficient
safeguards were in place to deter the misuse of Intervenors’
Confidential Information. Still, Intervenors object to the in-
house counsel designated by GE.
II. ANALYSIS
In merger cases, Courts may prohibit access to confidential
information from those who can be described as “competitive
decision makers.” Intervet, Inc. v. Merial Ltd., 241 F.R.D. 55,
57 (D.D.C. 2007). Competitive decision making includes counsel’s
“activities, associations, and relationship with a client that
are such as to involve counsel’s advice and participation in any
or all of the client’s decisions (pricing, product design, etc.)
made in light of similar or corresponding information about a
competitor.” U.S. Steel Corp. v. United States, 730 F.2d 1465,
1468 n.3 (Fed. Cir. 1984). The primary concern underlying the
“competitive decision making test” is that confidential
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information will be used or disclosed inadvertently because of
the lawyer’s role in the client’s business decisions. See Brown
Bag Software v. Symantec Corp., 960 F.2d 1465, 1470 (9th Cir.
1992).
Intervenors’ objections to each of the four counsel
identified by GE will be discussed in turn.
A. Sharis A. Pozen and Aimee Imundo
Ms. Pozen serves as Vice President of Global Competition
and Antitrust at GE. Pozen Decl., Docket No. 108, Ex. A. Ms.
Imundo serves as Executive Counsel, Competition Law and
Compliance at GE. Imundo Decl., Docket No. 108, Ex. C. Mses.
Pozen and Imundo explain that they are part of GE’s legal team
that “functions independently” from GE’s appliance team, which
has its own legal counsel. Mses. Pozen and Imundo affirmatively
declare that, in their current roles, they are “not involved in
any competitive decision making that relates to the GE Appliance
division or its business.” Each further declares:
I do not participate in any decisions or advise the GE
Appliance division regarding formulating or implementing
strategies to compete with GE Appliances’ competitors or
any decision about formulating or implementing pricing
strategies, much less “day-to-day pricing.” I am not
involved in any competitive decisions regarding pricing,
marketing, distribution, product design, or other
competitively sensitive issues concerning the GE
Appliance business that are the subjects of Confidential
Information in this case.
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Nevertheless, Intervenors argue that “because antitrust is,
by its nature about competition, there is a particularly high risk
that antitrust counsel will be involved in competitive decision-
making.” Inter. Response, Docket No. 144 at 4. Intervenors further
argue that because Mses. Pozen and Imundo are high ranking, they
should be forced to “make a real showing that, contrary to
reasonable expectations, they were not in fact involved in
[competitive decision-making] discussions.” Id. Finally,
Intervenors argue that because Defendants are reportedly
considering divestitures in order to save the proposed merger,
access to competitor information by Mses. Pozen and Imundo will
“give GE an advantage over all other companies.” Id. at 5.
Intervenors’ arguments fail. First, Intervenors seek more
detailed declarations from Mses. Pozen and Imundo to ensure they
are not involved in competitive decision making. This is
unnecessary. Ms. Pozen and Ms. Imundo have made their
declarations under oath. Each have explicitly declared that they
are not, and will not for the next two years, be involved in the
type of competitive decision making prohibited by case law and
the Second Amended Protective Order. Pozen Decl.; Imundo Decl.
Absent evidence contradicting the sworn declarations made by
Mses. Pozen and Imundo, there is no basis to conclude that they
are involved in competitive decision making. F.T.C. v. Whole
Foods Market, Inc., et al., Case No. 07-1021, 2009 WL 2059741,
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*3 (D.D.C. July 6, 2007) (holding that based on the in-house
counsel’s declaration, the Court was unable to conclude that the
counsel was involved in competitive decision making, despite
intervenors’ arguments to the contrary); compare with F.T.C. v.
Sysco Corporation, Case No. 15-256, 2015 WL 1120013, *2 (D.D.C.
March 12, 2015) (holding that in-house counsel was “too close”
to Defendant’s competitive decision making where the in-house
counsel “candidly acknowledged that issues such as pricing,
purchasing, and marketing may be discussed at the Executive
Team’s weekly meetings.”).
Moreover, the First Amended Protective Order sought to
further protect the Intervenors’ Confidential Information by
including the following penalty provision:
Any violation of this order may be deemed contempt and
punished by a fine of up to $250,000. Any imposed fine
will be paid individually by the person who violates
this Order. A violator may not seek to be reimbursed or
indemnified for the payment the violator has made. If
the violator is an attorney, the court may recommend to
the appropriate professional disciplinary authority that
the attorney be sanctioned, suspended or disbarred.
Docket No. 110 ¶ 18. Similarly, the Second Amended
Protective Order addressed the Intervenors’ concern about
potential misuse of information by in-house counsel as it
pertains to Defendants’ divestiture negotiations by
explicitly stating “[i]n-house counsel shall have access to
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such Confidential Information for the purpose of defending
this litigation only.” Docket No. 140 at ¶ 10(g).
In light of Mses. Pozen and Imundo’s affirmative
declarations, the lack of contradictory evidence presented
by Intervenors, and additional protections built into the
Second Amended Protective Order, Intervenors’ objections to
Mses. Pozen and Imundo are overruled.
B. Bradford A. Berenson and Ronald G. Schroeder
Mr. Berenson serves as Vice President and Senior Counsel,
Litigation and Legal Policy at GE. Berenson Decl., Docket No.
108, Ex. B. Mr. Schroeder serves as Global Executive Litigation
Counsel-Corporate at GE. Schroeder Decl., Docket No. 108, Ex. D.
Both declare that they are responsible for management and
oversight of this litigation and that they are granted access to
confidential information in “virtually all litigation and
investigation matters” they handle for GE. Berenson Decl. at ¶¶
7-8; Schroeder Decl. at ¶¶ 6-7.
Intervenors argue that Mr. Berenson should explain in more
detail what his responsibilities are pertaining to “compliance”
and “legal policy for GE worldwide.” Inter. Response at 9.
Similarly, Intervenors argue Mr. Schroeder should explain the
meaning of “management of compliance risk” and “implementation
of company-wide legal policy.” The concerns raised by
Intervenors about Messrs. Berenson and Schroeder deserve even
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less discussion than those raised about Mses. Pozen and Imundo.
When considered in their entirety, Messrs. Berenson and
Schroeder’s declarations leave no doubt that their duties are
far from the competitive decision making prohibited by the
Second Amended Protective Order and controlling case law. Mr.
Berenson is responsible for litigation, government and internal
investigations, compliance and legal policy for GE Worldwide.
Berenson Decl. ¶ 5. Mr. Schroeder manages U.S. and international
litigation, internal investigations and compliance risk.
Schroeder Decl. ¶ 4. Nothing in Messrs. Berenson and Schroeder’s
declarations indicates they are involved with GE’s competitive
decision making and Intervenors have offered no evidence to the
contrary.
III. CONCLUSION
For the reasons discussed above, GE’s motion is GRANTED. An
appropriate order accompanies this Memorandum Opinion.
SO ORDERED.
Signed: Emmet G. Sullivan
United State District Judge
October 9, 2015
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