United States v. Ab Electrolux

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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