Spotlight on Litigation

Division Update Spring 2017

The Division Wins Major Victories in Civil and Criminal Trials

The Antitrust Division has been as busy as ever, securing several important victories for American consumers in both civil and criminal cases since the last Spring Update, and getting ready for even more trials later this year. This winter alone, Division attorneys were hard at work, simultaneously preparing seven civil cases and four criminal cases for trial in Federal district courts across the country. Six of those trials have already taken place, all in the span of a few short months. Forty-one attorneys stood up to represent the United States in court, and dozens more worked tirelessly behind the scenes. Attorneys on those cases examined 94 witnesses over the course of 54 trial days and prepared more than 4,000 pages of briefing.

The first two civil cases to reach trial challenged proposed mergers that would have reduced the number of large health insurance companies in the United States from five to three. Judge John D. Bates of the U.S. District Court for the District of Columbia enjoined Aetna Inc.’s proposed $37 billion merger with Humana Inc. after concluding that it would likely substantially lessen competition in the market for individual Medicare Advantage in more than 350 counties and on public exchanges in three Florida counties. And Judge Amy Berman Jackson of the same court blocked Anthem, Inc.’s proposed $54 billion acquisition of Cigna Corp., holding that it would likely substantially lessen competition in the markets for the sale of commercial health insurance to national accounts customers in 14 states and to large group customers in Richmond, Virginia. An appeal by Anthem, Inc. and Cigna Corp. is currently pending in the U.S. Court of Appeals for the District of Columbia Circuit.

The Division’s next merger trial is scheduled to begin in the U.S. District Court for the District of Delaware on April 24, 2017. That case challenges EnergySolutions, Inc.’s proposed $367 million acquisition of Waste Control Specialists LLC. The Division is also challenging Deere & Company’s proposed $190 million acquisition of Precision Planting, LLC; trial in the U.S. District Court for the Northern District of Illinois is scheduled to begin on June 5, 2017. In addition to merger cases, the Division has brought several civil actions to enjoin anticompetitive conduct.

In its criminal prosecutions, the Division has demonstrated its continued commitment to individual accountability with a series of trial victories. Since the last Spring Update, the Division tried four criminal cases to verdict in Federal district courts across the country, resulting in the convictions of nine individuals. In the U.S. District Court for the District of Puerto Rico, a jury convicted four school transportation providers—Gavino Rivera Herrera, Luciano Vega Martínez, Alfonso Gonzalez Nevarez, and René Garay Rodríguez—of conspiring to rig bids and allocate the market for millions of dollars of public school bus transportation contracts in the Municipality of Caguas. Each individual was also found guilty of conspiracy to commit mail fraud and four counts of mail fraud relating to their fraudulent bid submissions. The evidence at trial established that the defendants agreed on bid prices, allocated contracts, and manipulated the bidding process to enrich themselves at the expense of the school district.

The Division has also continued to prosecute individuals who rigged bids at residential real estate foreclosure auctions in California. A jury in the U.S. District Court for the Northern District of California convicted Alvin Florida, Jr., Robert Rasheed, Refugio Diaz, and John Berry of participating in a conspiracy to rig bids at foreclosure auctions in Alameda County, California. And another jury in the same district convicted Thomas Joyce of conspiring to rig bids in connection with real estate foreclosure auctions in Contra Costa County, California. The bid-rigging conspiracies proved in both trials operated in a similar fashion: the conspirators would reach an agreement to stop or refrain from bidding during a public auction so that one member of the conspiracy could obtain a property at an artificially low price. The conspirators would then hold a second, private auction in which the property was awarded to one member of the conspiracy, who would then make payoffs to the others. These schemes allowed the conspirators to corrupt hundreds of foreclosure auctions in Northern California, resulting in millions of dollars of financial losses to mortgage holders and homeowners during the subprime mortgage crisis.

There are currently six criminal trials scheduled for 2017, including additional prosecutions of individuals involved in rigging bids at real estate foreclosure auctions and collusion in the heir location services and water chemicals industries.

Updated March 28, 2017