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Case: 23-60167
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No. 23-60167
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
–––––––––––––––––––––––––––––––––––––––––––––
ILLUMINA, INCORPORATED; GRAIL,
INCORPORATED, now known as GRAIL, L.L.C.
Petitioners,
v.
FEDERAL TRADE COMMISSION,
Respondent.
–––––––––––––––––––––––––––––––––––––––––––––
On Petition for Review of an Order
of the Federal Trade Commission
Docket No. 9401
–––––––––––––––––––––––––––––––––––––––––––––
BRIEF OF THE FEDERAL TRADE COMMISSION
(PUBLIC VERSION)
–––––––––––––––––––––––––––––––––––––––––––––
Of Counsel:
SUSAN A. MUSSER
STEPHEN MOHR
JORDAN ANDREW
DAVID GONEN
Attorneys
FEDERAL TRADE COMMISSION
Washington, D.C., 20850
ANISHA S. DASGUPTA
General Counsel
MATTHEW M. HOFFMAN
Attorney
FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, N.W.
Washington, D.C. 20580
(202) 326-3097
mhoffman@ftc.gov
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STATEMENT REGARDING ORAL ARGUMENT
Oral argument would aid the Court in resolving the issues raised
in this petition for review.
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TABLE OF CONTENTS
STATEMENT REGARDING ORAL ARGUMENT ................................... i
ADDENDUM OF RELEVANT STATUTES ............................................iii
TABLE OF AUTHORITIES ..................................................................... iv
CITATION ABBREVIATIONS ............................................................... xii
INTRODUCTION ...................................................................................... 1
JURISDICTIONAL STATEMENT ........................................................... 3
QUESTIONS PRESENTED ..................................................................... 3
STATEMENT OF THE CASE .................................................................. 3
A.
The Race To Develop MCED Tests ......................................... 3
B.
Illumina’s NGS Platforms ....................................................... 4
C.
Illumina’s Acquisition of Grail................................................ 5
D.
The FTC and the Clayton Act ................................................. 5
E.
Proceedings in This Case. ....................................................... 8
F.
The Commission Decision ..................................................... 10
G.
Commissioner Wilson’s Concurrence.................................... 13
SUMMARY OF ARGUMENT ................................................................. 14
STANDARD OF REVIEW....................................................................... 18
ARGUMENT ........................................................................................... 19
I.
The Commission Properly Found That Illumina’s
Merger With Grail Violates the Clayton Act. ....................... 19
A.
The Commission Properly Defined the
Relevant Market. ......................................................... 21
ii
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B.
II.
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The Commission Properly Found a Prima
Facie Case of Anticompetitive Effects. ........................ 31
1.
The Commission Properly Found a
Prima Facie Case Under the Abilityand-Incentive Framework. ................................. 31
2.
The Commission Properly Found a
Prima Facie Case Under Brown Shoe. ............... 38
C.
The Commission Properly Held That the
Open Offer Does Not Offset the Merger’s
Anticompetitive Effects. ............................................... 43
D.
The Commission Properly Found That
Illumina’s Claimed Efficiencies Did Not
Rebut the Showing of Anticompetitive
Effects. .......................................................................... 50
Illumina’s Constitutional Challenges Lack Merit. ............... 59
A.
Illumina’s Nondelegation Argument Is
Waived, Not Properly Presented, and
Wrong. .......................................................................... 60
B.
Illumina’s Article II Challenge Is Barred by
Supreme Court Precedent and Provides No
Basis for Invalidating the Commission’s
Order. ........................................................................... 65
C.
The Commission’s Procedures Do Not
Violate Due Process. .................................................... 70
D.
Illumina Was Not Denied Equal Protection. ............... 76
CONCLUSION ........................................................................................ 81
ADDENDUM OF RELEVANT STATUTES
iii
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TABLE OF AUTHORITIES
CASES
AD/SAT v. Assoc. Press,
181 F.3d 216 (2d Cir. 1999) ......................................................... 28, 36
Agostini v. Felton,
521 U.S. 203 (1997) ............................................................................. 67
Avondale Shipyards, Inc. v. Vinson,
623 F.2d 1117 (5th Cir. 1980) ............................................................. 75
Axon Enters., Inc. v. FTC,
143 S. Ct. 890 (2023) ........................................................................... 73
Baum v. Blue Moon Ventures, LLC,
513 F.3d 181 (5th Cir. 2008) .............................................................. 62
Bridas S.A.P.I.C. v. Gov’t of Turkmenistan,
345 F.3d 347 (5th Cir. 2003) .............................................................. 22
Brown Shoe Co. v. United States,
370 U.S. 294 (1962) ............................. 11, 20, 21, 22, 24, 29, 38, 39, 40
C.E. Servs., Inc. v. Control Data Corp.,
759 F.2d 1241 (5th Cir. 1985) ............................................................ 26
Califano v. Yamasaki,
442 U.S. 682 (1979) ............................................................................ 19
Carr v. Saul,
141 S. Ct. 1352 (2021) ........................................................................ 60
Chicago Bridge & Iron Co. N.V. v. FTC,
534 F.3d 410 (5th Cir. 2008) ................................. 10, 18, 19, 40, 45, 46
Cmty. Fin. Servs. Ass’n of Am. v. CFPB,
51 F.4th 616 (5th Cir. 2022) ........................................................ 60, 69
Collins v. Yellin,
141 S. Ct. 1761 (2021) ............................................................. 66, 68, 69
iv
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Cotherman v. FTC,
417 F.2d 587 (5th Cir. 1969) .............................................................. 60
FCC v. Beach Commc’ns,
508 U.S. 307 (1993) ....................................................................... 76, 78
Ford Motor Co. v. United States,
405 U.S. 562 (1972) ................................................................ 39, 41, 42
Fruehauf Corp. v. FTC,
603 F.2d 345 (2d Cir. 1979) ......................................................... 39, 41
FTC v. Am. Nat’l Cellular, Inc.,
810 F.2d 1511 (9th Cir. 1987) ............................................................. 67
FTC v. Arch Coal,
329 F. Supp. 2d 109 (D.D.C. 2004) .................................................... 30
FTC v. Cement Inst.,
333 U.S. 683 (1948) ....................................................................... 71, 77
FTC v. Elders Grain, Inc.,
868 F.2d 901 (7th Cir. 1989) .............................................................. 20
FTC v. Hackensack Meridian Health, Inc.,
30 F.4th 160 (3d Cir. 2022) ................................................................ 51
FTC v. Ind. Fed’n of Dentists,
476 U.S. 447 (1986) ...................................................................... 18, 19
FTC v. Penn State Hershey Med. Ctr.,
838 F.3d 327 (3d Cir. 2016) ............................................................... 51
FTC v. R.F. Keppel & Bro., Inc.,
291 U.S. 304 (1934) ............................................................................ 64
FTC v. Staples, Inc.,
190 F. Supp. 3d 100 (D.D.C. 2016) .................................................... 48
FTC v. Sysco Corp,
113 F. Supp. 3d 1 (D.D.C. 2015) ........................................................ 48
v
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FTC v. Univ. Health, Inc.,
938 F.2d 1206 (11th Cir. 1991) .......................................................... 52
Gibson v. FTC,
682 F.2d 554 (5th Cir. 1982). .............................................................. 71
Golden Gate Pharmacy Servs., Inc. v. Pfizer,
No. C-09-3854, 2010 WL 1541257 (N.D. Cal., April 16, 2010) ......... 30
Gundy v. United States,
139 S. Ct. 2116 (2019) .................................................................. 62, 63
Heatransfer Corp. v. Volkswagenwerk, A.G.,
553 F.2d 964 (5th Cir. 1977) .............................................................. 20
Heller v. Doe,
509 U.S. 312 (1993) ............................................................................. 76
Hosp. Corp. of Am. v. FTC,
807 F.2d 1381 (7th Cir. 1986) ............................................................. 77
Humphrey’s Executor v. United States,
295 U.S. 602 (1935) ........................................................... 17, 64, 66, 68
Impax Labs v. FTC,
994 F.3d 484 (5th Cir. 2021) .................................................. 18, 19, 43
In re IBM Corp.,
618 F.2d 923 (2nd Cir. 1980) .............................................................. 74
Jarkesy v. SEC,
34 F.4th 446 (5th Cir. 2022) ...................................... 16, 19, 60, 61, 62
Ky. Speedway, LLC v. Nat’l Ass’n of Stock Car Auto Racing, Inc.,
588 F.3d 908 (6th Cir. 2009) .............................................................. 26
Lefebure v. D’Aquila,
15 F.4th 650 (5th Cir. 2021) ............................................................... 67
Mercantile Tex. Corp. v. Bd. of Governors of the Fed. Rsrv. Sys.,
638 F.2d 1255 (5th Cir. 1981) ............................................................ 31
vi
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N.Y. Cent. Sec. Corp. v. United States,
287 U.S. 12 (1932) .............................................................................. 63
Nat’l Broad. Co. v. United States,
319 U.S. 190 (1943) ............................................................................ 63
Ohio v. Am. Express Co.,
138 S. Ct. 2274 (2018) ........................................................................ 22
Phillips v. Jt. Legis. Comm. on Performance & Expenditure Rev.,
637 F.2d 1014 (5th Cir. 1981) ............................................................. 73
Rothery Storage & Van Co. v. Atlas Van Lines, Inc.,
792 F.2d 210 (D.C. Cir. 1986) ............................................................ 24
Schweiker v. McClure,
456 U.S. 188 (1982) ............................................................................. 71
SCM Corp. v. Xerox Corp,
645 F.2d 1195 (2d Cir. 1981) ............................................................. 30
Se. Mo. Hosp. v. C.R. Bard, Inc.,
642 F.3d 608 (8th Cir. 2011) .............................................................. 23
Seila Law LLC v. CFPB,
140 S. Ct. 2183 (2020) ......................................................................... 66
Sierra Club v. United States Dep’t of Interior,
990 F.3d 898 (5th Cir. 2021) ............................................................... 72
Smith v. United States,
568 U.S. 106 (2013) ............................................................................ 47
So. Pac. Commc’n Co. v AT&T Co.,
740 F.2d 980 (D.C. Cir. 1994) ............................................................. 73
St. Alphonsus Med. Ctr.-Nampa, Inc. v. St. Luke’s Health Sys.,
778 F.3d 775 (9th Cir. 2015) .................................................. 51, 55, 65
United States v. Aetna Inc.,
240 F. Supp. 3d 1 (D.D.C. 2017) ........................................................ 48
vii
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United States v. Anthem, Inc.,
855 F.3d 345 (D.C. Cir. 2017) ............................................................ 51
United States v. AT&T Inc.,
310 F. Supp. 3d 161 (D.D.C. 2018) .................................................... 11
United States v. AT&T Inc.,
916 F.3d 1029 (D.C. Cir. 2019) .................................................... 11, 49
United States v. Benitez-Villafuerte,
186 F.3d 651 (5th Cir. 1999) ............................................................... 71
United States v. Diggins,
36 F.4th 302 (1st Cir. 2022) ............................................................... 63
United States v. E.I. du Pont de Nemours & Co.,
353 U.S. 586 (1957) ............................................................................ 20
United States v. E.I. du Pont de Nemours & Co.,
366 U.S. 316 (1961) ...................................................................... 47, 48
United States v. Fernandez,
48 F.4th 405 (5th Cir. 2022) .............................................................. 59
United States v. Libbey, Inc.,
211 F. Supp. 2d 34 (D.D.C. 2002) ................................................ 49, 50
United States v. Lopez-Velaquez,
526 F.3d 804 (5th Cir. 2008) ......................................................... 79, 80
United States v. Phila. Nat’l Bank,
374 U.S. 321 (1960) ...................................................................... 20, 59
United States v. UnitedHealth Group, Inc.,
630 F. Supp. 3d 118 (D.D.C. 2022) .................................................... 49
Whitman v. Am. Trucking Ass’ns,
531 U.S. 457 (2001) ............................................................................ 63
Wiener v. United States,
357 U. S. 349 (1958) ............................................................................ 68
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Withrow v. Larkin,
421 U.S. 35 (1975) .................................................................. 17, 70, 71
STATUTES
5 U.S.C. § 554(d)(2) ............................................................................. 7, 72
10 U.S.C. § 942(f)..................................................................................... 68
15 U.S.C § 21 ............................................................................................. 6
15 U.S.C. § 18 .......................................................................... 1, 19, 21, 78
15 U.S.C. § 2053(a) .................................................................................. 68
15 U.S.C. § 21(b) .................................................................... 3, 6, 7, 67, 77
15 U.S.C. § 21(c) ........................................................................ 3, 7, 18, 80
15 U.S.C. § 25 .......................................................................................... 77
15 U.S.C. § 41 ............................................................................................ 6
15 U.S.C. § 45 ............................................................................................ 6
15 U.S.C. § 45(b) .......................................................................... 3, 6, 7, 62
15 U.S.C. § 45(c) .................................................................................... 3, 7
15 U.S.C. § 53(b) ............................................................................ 8, 61, 62
26 U.S.C. § 7443(f) ................................................................................... 68
28 U.S.C. § 176 ........................................................................................ 68
29 U.S.C. § 153(a) .................................................................................... 68
38 U.S.C. § 7253(f) ................................................................................... 68
42 U.S.C. § 7171(b) .................................................................................. 68
Clayton Act, ch. 323, 38 Stat. 730 (1914)............................................ 6, 67
Federal Trade Commission Act, ch. 311, 38 Stat. 717 (1914) .................. 6
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REGULATIONS
16 C.F.R. § 0.8 ........................................................................................... 6
16 C.F.R. § 3.31 ................................................................................... 7, 80
16 C.F.R. § 3.41 ....................................................................................... 80
16 C.F.R. § 3.41(c) ..................................................................................... 7
16 C.F.R. § 3.43 ............................................................................. 7, 75, 80
16 C.F.R. § 3.46 ......................................................................................... 7
16 C.F.R. § 3.51 ......................................................................................... 7
16 C.F.R. § 3.52 ......................................................................................... 7
16 C.F.R. § 3.54 ......................................................................................... 7
16 C.F.R. § 4.7(b) ................................................................................. 7, 72
OTHER AUTHORITIES
Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law
§ 335a (May 2023 update) .................................................................. 42
§ 1008a (Aug. 2022 update) ................................................................ 20
Dep’t of Justice & FTC, Horizontal Merger Guidelines (2010) .............. 30
EC Press Release, Mergers: Commission adopts interim measures
to prevent harm to competition following Illumina’s early
acquisition of GRAIL (Oct. 29, 2021..................................................... 9
EC Press Release, Mergers: Commission fines Illumina and
GRAIL for implementing their acquisition without prior merger
control approval (July 12, 2023) ........................................................... 9
EC Press Release, Mergers: Commission prohibits acquisition of
GRAIL by Illumina (Sept. 6, 2022) ...................................................... 9
GAO, DOJ and FTC Jurisdictions Overlap, but Conflicts are
Infrequent (Jan. 2023) ........................................................................ 78
x
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John Gramlich, Pew Research Center, Only 2% of federal criminal
defendants go to trial, and most who do are found guilty (June
11, 2019) .............................................................................................. 74
Maureen K. Ohlhausen, Administrative Litigation at the FTC:
Effective Tool for Developing the Law or Rubber Stamp, 12 J.
Comp. L. & Econ. 623 (2016) .............................................................. 74
Steven C. Salop, Invigorating Vertical Merger Enforcement, 127
Yale L.J. 1962 (2018) .......................................................................... 55
S. Rep. No. 63-597 (1914) ........................................................................ 64
S. Rep. No. 93-151 (1973) ........................................................................ 64
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CITATION ABBREVIATIONS
This Brief uses the same abbreviations used in Petitioners’ Brief,
including the following:
Conc.
Concurring Opinion of Commissioner Wilson
ID
Initial Decision of Administrative Law Judge
IDF
Initial Decision Findings of Fact
Op.
Opinion of Commission
Oral Arg. Tr.
Transcript of Oral Argument Before Commission
Prehearing Tr. Prehearing Transcript
PX
Exhibit of Complaint Counsel
RX
Exhibit of Respondents (Petitioners here)
RFF
Proposed Findings of Fact of Respondents
(Petitioners here)
Tr.
Trial Transcript
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INTRODUCTION
This case involves a merger that threatens to stifle ongoing
competition in the race to develop and commercialize multi-cancer early
detection (“MCED”) tests, which can identify several kinds of cancer in
asymptomatic people by analyzing blood samples. Petitioner GRAIL,
Inc., sells an MCED test called Galleri on a limited basis, but the test is
not approved by the Food and Drug Administration, not covered by
insurance, and costs nearly $1000. Several other companies are also
developing MCED tests. Grail’s ordinary-course-of-business documents
show that it sees these companies as serious competitive threats, while
other MCED test developers view Grail as their main rival.
All MCED tests rely on next generation sequencing (“NGS”)
technology to analyze DNA, and petitioner Illumina, Inc., is the only
company that makes suitable NGS platforms. In 2021, Illumina
purchased Grail. After thoroughly reviewing the record of a multi-week
trial, the Federal Trade Commission unanimously found that this
acquisition violates Section 7 of the Clayton Act, 15 U.S.C. § 18, because
it may substantially lessen the existing competition among Grail and
other MCED test developers. The Commission found that the merged
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firm will have both the ability and a strongly increased incentive to use
its dominance in NGS platforms to favor Grail and disadvantage rival
test developers—e.g., by raising the prices Illumina charges Grail’s
competitors or degrading their access to service and necessary supplies.
Illumina and Grail (collectively, “Illumina”) petition for review of
the Commission’s order. None of their challenges has merit. The
Commission correctly applied the Clayton Act, its decision is supported
by substantial evidence, and there is no constitutional defect in the
Commission’s structure or its proceedings. At the outset, it is important
to dispel one particular myth that Illumina repeats throughout its brief:
the claim that the merger will save lives by somehow accelerating
Grail’s ability to gain FDA approval and payer acceptance for Galleri.
As the Commission properly found, this claim is based on nothing more
than speculation by a single Illumina executive, who could not identify
a single step Illumina might actually take to expedite Galleri’s
approval.
The fundamental question here is whether the merger will
threaten other companies’ ability to develop rival MCED tests and
deprive Americans of competition in this critical market. Competition
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among MCED test developers will promote innovation, leading to more
and better tests being made available to American consumers at lower
prices. This Court should protect competition, as Congress has directed,
and deny the petition.
JURISDICTIONAL STATEMENT
The Commission entered its order on March 31, 2023, pursuant to
15 U.S.C. §§ 21(b) and 45(b) . Illumina timely filed its petition on April
5, 2023. This Court has jurisdiction under 15 U.S.C. §§ 21(c) and 45(c) .
QUESTIONS PRESENTED
1.
Did the Commission properly determine that the Illumina-
Grail merger violates the Clayton Act?
2.
Were the Commission’s proceedings constitutional?
STATEMENT OF THE CASE
A.
The Race To Develop MCED Tests
MCED tests are a screening tool to detect cancer at an early stage
in patients with no cancer symptoms. They work by analyzing a sample
of a patient’s blood for minute amounts of certain “biomarkers” (such as
proteins, DNA, or RNA) associated with the presence of cancers. Op. 3.
Grail and several other companies are in a race to develop and
commercialize MCED tests. Op. 3. Grail started selling its Galleri test
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in April 2021, but has not yet obtained FDA approval, which means the
test can be sold only on a limited basis. Galleri currently costs $949 and
is not covered by insurance. Op. 12, 14. Another leading competitor,
Exact/Thrive, is developing a test called CancerSEEK, which received a
“breakthrough” device designation from the FDA that could accelerate
its review and regulatory approval. Op. 14-16. Exact/Thrive currently
plans
Op. 15, 56. Other companies, including Guardant,
Singlera, Freenome, Natera, and Helio Health, are at various stages of
the development and commercialization process. Op. 16-19. As the
Commission found (Op. 31), the market is like a racetrack where some
companies are leading the pack and others are nipping at their heels,
but collectively, competition is spurring the field to move faster and
work harder to provide patients with many choices of MCED tests.
B.
Illumina’s NGS Platforms
Illumina sells NGS platforms, including the instruments used to
sequence DNA and consumable supplies such as “flow cells” that hold
samples and chemical reagents used in the sequencing process. Op. 4, 6.
NGS platforms are a critical input for MCED tests, and only Illumina
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offers products with the specific characteristics MCED test developers
need: high throughput, high accuracy, low cost, and the ability to read
short DNA fragments. Op. 5-7, 21, 36-40, 42. MCED test developers
thus have no substitute for Illumina’s NGS platforms, either now or in
the near future. Id.
C.
Illumina’s Acquisition of Grail
Illumina formed Grail in 2016, but later spun it off as a separate
company, retaining a 12% stake and the right to a royalty on net sales
of Grail’s oncology products. Op. 10-11. At the time, Illumina explained
that the spinoff would “level[] the playing field” and “accelerate the
liquid biopsy market for all.” Op. 11, 52; PX2406-005. But in September
2020, Illumina changed its mind and decided to acquire the remainder
of Grail for $8 billion. Op. 11. The Grail acquisition was part of a
strategy to shift Illumina’s focus away from NGS platforms and toward
clinical testing, which Illumina saw as an enormous market opportunity
with much greater profit potential. Op. 45-46; see also PX2151-005;
PX2169-045; PX2488-009; PX2465-006 to -008.
D.
The FTC and the Clayton Act
Congress established the FTC in 1914 and directed it to prevent
“unfair methods of competition” in commerce. FTC Act, ch. 311, § 5, 38
5
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Stat. 717, 719 (1914) (codified as amended at 15 U.S.C. § 45). A few
weeks later, Congress enacted the Clayton Act to further strengthen the
nation’s antitrust regime and directed the FTC to enforce the Act’s antimerger provisions. Clayton Act, ch. 323, § 11, 38 Stat. 730, 734 (1914)
(codified as amended at 15 U.S.C § 21).
The Commission consists of five Commissioners appointed by the
President and confirmed by the Senate, no more than three of whom
may be members of the same political party. 15 U.S.C. § 41. To ensure
that the Commission performs its duties as an independent body,
Congress provided that the President may remove Commissioners only
“for inefficiency, neglect of duty, or malfeasance in office.” Id.
Commissioners also serve staggered terms of seven years, so that the
composition of the Commission regularly changes. Id. The President
selects one Commissioner as the Chair, who is the executive and
administrative head of the agency, and may change that designation at
any time. Id.; 16 C.F.R. § 0.8.
Congress directed the Commission to enforce the FTC and Clayton
Acts through administrative adjudication. 15 U.S.C. §§ 21(b), 45(b). The
Commission may issue an administrative complaint when it has “reason
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to believe” a merger may violate the law. Id. The complaint is not a
finding of a violation, but merely the first step in an adversarial process
of review. The complaint is referred to an administrative law judge for
discovery and a trial. See 16 C.F.R. §§ 3.31-3.46. The Commissioners
are not involved in prosecuting the case; that function is performed by
agency staff known as Complaint Counsel, who are walled off from the
Commissioners and the ALJ and prohibited from having any ex parte
contact with them. See 5 U.S.C. § 554(d)(2); 16 C.F.R. § 4.7(b). At trial,
both Complaint Counsel and the respondents (i.e., the merging parties)
may present testimonial and documentary evidence, cross-examine
witnesses, and object to the other side’s evidence, much as they would
in a district court proceeding. Id. §§ 3.41(c), 3.43. Following trial, the
ALJ issues an initial decision. Id. § 3.51. Either side may then appeal to
the full Commission, which reviews the facts and law de novo. Id.
§§ 3.52, 3.54. If the Commission finds in favor of Complaint Counsel,
the respondent may seek review in an appropriate court of appeals. 15
U.S.C. §§ 21(c), 45(c).
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E.
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Proceedings in This Case.
In March 2021, the Commission voted to issue an administrative
complaint alleging that the Illumina-Grail merger would violate the
Clayton Act and the FTC Act. The vote was unanimous and bipartisan.
1
The Commission also sought a preliminary injunction in district court
to block the merger during the pendency of the administrative case. See
15 U.S.C. § 53(b). Shortly afterwards, the European Commission (“EC”)
opened an antitrust investigation upon request from several European
states. That investigation triggered a standstill obligation that barred
Illumina and Grail from completing the merger. In light of the
standstill, the Commission determined that interim relief was no longer
needed to protect the public interest and voluntarily dismissed the
preliminary injunction action. Illumina did not object, though it argued
unsuccessfully that the dismissal should be with prejudice. See FTC v.
Illumina, Inc., No. 3:21-cv-800 (S.D. Cal), ECF Nos. 120, 124, 126.
Despite the European standstill requirement, Illumina closed its
acquisition of Grail in August 2021. Op. 11. The merger was not
1
The Commissioners at that time were Acting Chairwoman Rebecca Kelly
Slaughter and Commissioners Noah Joshua Phillips, Rohit Chopra, and Christine
S. Wilson, with one vacancy.
8
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operationally implemented, however, because the EC ordered Illumina
2
to hold Grail as a separate entity. The EC later concluded that the
acquisition violated European antitrust law and ordered Illumina to
3
unwind the purchase of Grail. It separately fined Illumina €432 million
for knowingly and intentionally breaching the standstill obligation.
4
Meanwhile, following a multi-week trial, the FTC’s ALJ issued an
initial decision in favor of Illumina. On appeal, the Commission
conducted a de novo review and concluded that the transaction violated
the Clayton Act (and therefore the FTC Act as well). Op 2, 24, 93.
Although the Commission’s lineup had changed, the decision was again
bipartisan and unanimous.
5
2
EC Press Release, Mergers: Commission adopts interim measures to prevent
harm to competition following Illumina’s early acquisition of GRAIL (Oct. 29, 2021),
https://shorturl.at/iGJX4.
3
EC Press Release, Mergers: Commission prohibits acquisition of GRAIL by
Illumina (Sept. 6, 2022), https://shorturl.at/nozQ9.
4
EC Press Release, Mergers: Commission fines Illumina and GRAIL for
implementing their acquisition without prior merger control approval (July 12,
2023), https://shorturl.at/hRV58.
5
The Commissioners at the time of decision were Chair Lina M. Khan and
Commissioners Rebecca Kelly Slaughter, Christine S. Wilson, and Alvaro Bedoya,
with one vacancy.
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The Commission Decision
The Commission agreed with the ALJ that research, development,
and commercialization of MCED tests in the United States is the
relevant market for evaluating the acquisition. Op. 24-34. It also agreed
with the ALJ that Illumina’s NGS platforms are a critical and
irreplaceable input for MCED test developers. Op. 35-39. To analyze the
merger’s effects, the Commission applied the well-established burdenshifting framework (Op. 23-24) which this Court endorsed in Chicago
Bridge & Iron Co. N.V. v. FTC, 534 F.3d 410 (5th Cir. 2008). Under that
framework, Complaint Counsel must first “establish a prima facie case
that an acquisition is unlawful.” Id. at 423. The merging parties may
then rebut that case “by producing evidence to cast doubt on the
accuracy of [Complaint Counsel’s] evidence as predictive of future anticompetitive effects.” Id. Finally, “if the respondent successfully rebuts
the prima facie case, the burden of production shifts back to [Complaint
Counsel] and merges with the ultimate burden of persuasion, which is
incumbent on [Complaint Counsel] at all times.” Id.
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The Commission found that Complaint Counsel established a
prima facie case of anticompetitive effects and that Illumina did not
adequately rebut that case.
1.
Anticompetitive Effects. The Commission analyzed the
anticompetitive effects of the acquisition under two overlapping
standards: one set forth by the Supreme Court in Brown Shoe Co. v.
United States, 370 U.S. 294 (1962), and a test applied in more recent
cases that examines whether a transaction will increase the ability
and/or incentive of the merged firm to foreclose competition. See, e.g.,
United States v. AT&T Inc., 310 F. Supp. 3d 161, 243-45 (D.D.C. 2018),
aff’d, 916 F.3d 1029 (D.C. Cir. 2019). Under both approaches, the
Commission found that Complaint Counsel demonstrated a prima facie
case that the merger may threaten competition.
Central to both analyses was the Commission’s finding that a
merged entity could impede or obstruct in multiple ways the efforts of
Grail’s rivals to develop and commercialize MCED tests—for example,
by raising the prices charged for NGS platforms; withholding or
degrading access to supplies, services, or new technologies; and
withholding or delaying cooperation that MCED test developers need to
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obtain regulatory approval for their product. Op. 43-44, 48-49. The
Commission also found that the merger significantly increased
Illumina’s incentives to employ these foreclosure strategies. Op. 45, 4953. As the owner of Grail, Illumina will earn much bigger profits from
the sale of Grail’s tests than it could by selling NGS platforms to Grail’s
rivals. Op. 49-50. The merged firm thus has “an enormous financial
incentive to place [its] thumb on the scale” by favoring Grail over its
competitors. Op. 45. The Commission found that use of these strategies
would harm competition (and ultimately American consumers) by
making it more difficult for Grail’s rivals to develop their products,
leading to reduced innovation, lower quality, and lower availability of
competing MCED tests. Op. 59-61.
2.
Illumina’s Defenses. The Commission held that Illumina did
6
not adequately rebut the prima facie case. It rejected the claim that an
“Open Offer” Illumina made to U.S. oncology customers, purporting to
provide them with access to the same NGS platforms available to Grail
at the same prices, would negate the merger’s anticompetitive effects.
6
The Commission majority opined that the Open Offer would more properly be
addressed at the remedy stage, after a finding of liability, but because it made no
difference to the outcome it analyzed the Offer on rebuttal. Op. 64-65.
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Op. 65-73. The Commission likewise rejected Illumina’s arguments that
the merger would generate various efficiencies and procompetitive
benefits that would offset the harms to competition. Op. 74-87.
3.
Constitutional Arguments. Having found the merger
unlawful, the Commission considered and rejected several
constitutional challenges to its authority. Op. 87-93.
4.
Remedy. The Commission ordered Illumina to divest Grail,
except for the 12% stake it owned before the acquisition, and also
imposed various interim requirements (which are stayed pending this
Court’s review). Op. 94-98.
G.
Commissioner Wilson’s Concurrence
Commissioner Christine S. Wilson authored a concurring opinion
differing with some aspects of the majority’s legal analysis but agreeing
that the Grail acquisition “is likely to lessen competition substantially
in the market for the research, development, and commercialization of
7
MCED tests” and therefore violates the Clayton Act. Conc. 1.
7
Commissioner Wilson would have addressed anticompetitive effects solely under
the ability-and-incentive test because she considered Brown Shoe’s focus on market
share out-of-step with modern antitrust analysis. Conc. 1-3. She also disagreed with
the Commission’s statement that the Open Offer would more properly be addressed
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Commissioner Wilson noted that “[e]ven with respect to those sections
of the Opinion that I do not join, I do rely on and adopt the factual
analysis contained therein.” Id. She specifically agreed with the
rejection of Illumina’s Open Offer and efficiencies defenses. Id. at 4-5.
SUMMARY OF ARGUMENT
This case presents a textbook example of a vertical merger that
threatens to stifle competition. What makes the Illumina-Grail merger
especially problematic is that rival MCED test developers depend on
access to Illumina’s NGS platforms and have no available substitutes,
now or in the near future. That gives the merged entity the ability to
tilt the playing field in Grail’s favor in multiple ways, and the merged
firm has a strong incentive to do whatever it can to keep other MCED
test developers at least one step behind Grail in the innovation race.
The Commission properly defined the relevant product market as
research, development, and commercialization of MCED tests.
Particularly relevant to this analysis is the overwhelming documentary
evidence showing that Grail views itself as competing with other MCED
at the remedy stage, see supra n.6, and did not join certain statements about
efficiencies defenses. Id. at 3-5.
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test developers in a distinct market. Illumina misses the mark with its
arguments that other MCED tests are not yet being sold and may
ultimately have different features from Galleri. The Commission was
concerned with preserving the existing vigorous competition in
research, development, and commercialization of MCED tests, not with
current sales. And it found that other MCED tests in development were
sufficiently similar to Galleri to give the merged firm a strong incentive
to foreclose competition.
The Commission also properly found a reasonable probability that
the merger will substantially lessen the existing competition among
MCED test developers. Substantial evidence supports the Commission’s
conclusions that Complaint Counsel established a prima facie case of
anticompetitive effects under both the ability-and-incentive test and
under Brown Shoe. Illumina does not challenge the Commission’s
factual findings that the Open Offer would not offset the merger’s
anticompetitive effects. Its argument that the Commission should have
addressed the Open Offer as part of the prima facie case is wrong, but
in any event that does not matter because the Commission fully
considered all the evidence and found the Offer fatally flawed. Further,
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the Commission properly found that Illumina’s claimed efficiencies were
unsubstantiated, not merger-specific, and unlikely to be passed along to
consumers. These findings are also supported by substantial evidence,
and the Court must decline Illumina’s repeated invitations to reweigh
the evidence.
None of Illumina’s constitutional arguments has merit. Illumina’s
nondelegation argument, based on Jarkesy v. SEC, 34 F.4th 446 (5th
Cir. 2022), cert granted, 2023 WL 4278448 (June 30, 2023) is directed to
the constitutionality of Section 13(b) of the FTC Act. That section,
enacted in 1973, gave the Commission authority to sue for a permanent
injunction in district court as an alternative to administrative
adjudication, but the Commission has never sought a permanent
injunction against Illumina under Section 13(b) so the nondelegation
issue is not presented here. In any case, unlike the statute in Jarkesy,
Section 13(b) did not give the Commission authority to determine who
gets a jury trial because it authorizes only the equitable remedy of an
injunction. Furthermore, Congress provided an intelligible principle to
guide the Commission’s choice of forum by directing it to consider the
public interest in deciding whether to proceed under Section 13(b) or
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administratively. The Supreme Court has long held that such directives
are sufficient to avoid any nondelegation problem.
Illumina’s argument that the structure of the Commission is
unconstitutional because Commissioners can be removed only for cause
is squarely barred by Humphrey’s Executor v. United States, 295 U.S.
602 (1935), which is binding on this Court. But even if Humphrey’s
Executor were to be overruled, that would not invalidate the
Commission’s decision, because it is undisputed that the Commissioners
were properly appointed, and Illumina cannot show any harm traceable
to the removal restriction.
Withrow v. Larkin, 421 U.S. 35 (1975), bars Illumina’s argument
that Commission proceedings violate due process because prosecutorial
and adjudicative functions are combined in the same agency. As due
process required, the agency staff responsible for prosecution were
walled off from the Commissioners once the complaint was issued.
Moreover, Illumina has not shown any actual bias by any of the
Commissioners.
Finally, Illumina’s equal protection claim fails because the
allocation of merger cases between the Commission and the
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Department of Justice is rationally related to legitimate government
purposes. Congress gave the Commission and DOJ overlapping
jurisdiction to enforce the Clayton Act, and the agencies’ allocation of
cases conserves resources, avoids duplicative proceedings, and allows
each agency to develop industry-specific expertise. Equal protection
does not give merging parties the right to enforcement in the forum of
their choice.
STANDARD OF REVIEW
This Court reviews the Commission’s ruling, not the ALJ’s. Impax
Labs v. FTC, 994 F.3d 484, 491 (5th Cir. 2021). The Commission’s
findings are “conclusive” if supported by substantial evidence, i.e., “such
relevant evidence as a reasonable mind might accept as adequate to
support a conclusion.” 15 U.S.C. §§ 21(c), 45(c); FTC v. Indiana Fed’n of
Dentists, 476 U.S. 447, 454 (1986). This is a “deferential review” that is
“no more searching than if [the Court] were evaluating a jury’s verdict.”
Impax, 994 F.3d at 492. The Court’s “task is not to reweigh the
evidence.” Chicago Bridge, 534 F.3d at 430. “The statute forbids a court
to make its own appraisal of the testimony, picking and choosing for
itself among uncertain and conflicting inferences.” Indiana Fed’n, 476
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U.S. at 454 (cleaned up). Rather, the Court “must accept findings
supported by [substantial] evidence even if suggested alternative
conclusions may be equally or even more reasonable and persuasive.”
Impax, 994 F.3d at 492 (cleaned up).
The Commission’s legal conclusions are reviewed de novo as to
both antitrust questions and constitutional issues. Chicago Bridge, 534
F.3d at 422; Jarkesy, 34 F.4th at 451.
ARGUMENT
Where a litigant raises both statutory and constitutional
arguments, a court “usually should pass on the statutory claim before
considering the constitutional question.” Califano v. Yamasaki, 442 U.S.
682, 692 (1979). Accordingly, we first show that Illumina’s substantive
antitrust challenges to the Commission’s order lack merit, and then
show that Illumina’s constitutional arguments also fail.
I.
THE COMMISSION PROPERLY FOUND THAT ILLUMINA’S
MERGER WITH GRAIL VIOLATES THE CLAYTON ACT.
The Clayton Act prohibits acquisitions the effect of which “may be
substantially to lessen competition, or to tend to create a monopoly.”
15 U.S.C. § 18. Congress used the words “may be” to “indicate that its
concern was with probabilities, not certainties.” Brown Shoe, 370 U.S.
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at 323. Because the Act was designed to “arrest anticompetitive
tendencies in their incipiency,” it “requires … a prediction of [a
merger’s] impact upon competitive conditions in the future.” United
States v. Phila. Nat’l Bank, 374 U.S. 321, 362 (1960) (cleaned up).
“[D]oubts are to be resolved against the transaction.” FTC v. Elders
Grain, Inc., 868 F.2d 901, 906 (7th Cir. 1989). The ultimate issue is
whether there is “a reasonable probability that the merger will
substantially lessen competition.” Brown Shoe, 370 U.S. at 325.
The Clayton Act applies equally to horizontal and vertical
8
mergers. United States v. E.I. du Pont de Nemours & Co., 353 U.S. 586,
590-92 (1957) (“DuPont I”) (Clayton Act always applied to vertical
mergers, and 1950 amendment made that clear); see also Heatransfer
Corp. v. Volkswagenwerk, A.G., 553 F.2d 964, 981-82 (5th Cir. 1977)
(affirming finding that vertical merger violated Clayton Act). “The
primary vice of a vertical merger … is that, by foreclosing the
competitors of either party from a segment of the market otherwise
8
Illumina argues that “most vertical mergers are procompetitive” (Br. 40, 58), but
it is well-recognized that a vertical merger may be anticompetitive, e.g., if it “so
narrow[s] the market that rivals or new entrants would have inadequate access to
low-cost inputs.” Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law § 1008a
(Aug. 2022 update).
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open to them, the arrangement may act as a clog on competition.”
Brown Shoe, 370 U.S. at 323-24 (cleaned up).
This case involves a textbook example of a vertical merger that
threatens to clog competition in a developing industry. What makes
Illumina and Grail’s merger an especially clear statutory violation is
that Grail’s downstream competitors are completely dependent on
Illumina’s NGS platforms and have no available substitute today or in
the near future. A merged entity will thus have both the ability and a
strong financial incentive to disadvantage other MCED test
developers—Grail’s direct rivals—by raising the cost of this critical
input or denying or degrading access to it. That would reduce
competition among MCED test developers, leading to less innovation,
higher prices, and lower quality and availability of MCED tests.
A.
The Commission Properly Defined the Relevant
Market.
The first step in merger analysis is definition of the relevant
market, i.e., the “line of commerce” and the “section of the country”
where competition occurs. 15 U.S.C. § 18; Brown Shoe, 370 U.S. at 324.
Congress “prescribed a pragmatic, factual approach to the definition of
the relevant market and not a formal, legalistic one,” Brown Shoe,
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370 U.S. at 336; see also Ohio v. Am. Express Co., 138 S. Ct. 2274, 2285
(2018) (“[C]ourts should combine different products or services into a
single market when that combination reflects commercial realities.”)
(cleaned up). The Commission agreed with the ALJ that the relevant
product market here is research, development, and commercialization of
9
MCED tests. Op. 24-25; ID 164-68. The evidence supporting that
finding is overwhelming.
10
The Commission defined the product market using the Brown
Shoe methodology, which Illumina concedes is proper. Br. 34-35. Under
Brown Shoe, the “outer boundaries of a product market are determined
by the reasonable interchangeability of use” between the product and
substitutes for it. 370 U.S. at 325. Within that broad market, courts
examine several “practical indicia” to identify “submarkets” which “in
themselves[] constitute product markets for antitrust purposes.” Id.
“[T]he presence of some [indicia], and absence of others, is not
9
It is undisputed that the relevant geographic market is the United States.
10
Illumina’s argument that the Commission erred in not defining a “related
product market” (Br. 39 n.11) is raised only in a footnote and therefore waived. See,
e.g., Bridas S.A.P.I.C. v. Gov’t of Turkmenistan, 345 F.3d 347, 357 n.7 (5th Cir.
2003).
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dispositive.” Se. Mo. Hosp. v. C.R. Bard, Inc., 642 F.3d 608, 614 (8th
Cir. 2011).
The Commission focused on four of the Brown Shoe indicia.
Op. 26-29. First, the Commission found that MCED tests have peculiar
characteristics and uses that set them apart from other tests. Op. 26.
The defining characteristic of MCED tests, the Commission explained,
is that they can detect multiple forms of cancer at an early stage by
examining DNA fragments in the bloodstream. Id. Illumina effectively
conceded this point below. Op. 25-26; see also Br. 35 (characterizing
whether MCEDs are a distinct product line as a “non-issue”).
Second, the Commission found that MCED tests will have distinct
customers from other types of tests because they are designed for use by
asymptomatic adults, as opposed to patients with symptoms or a
diagnosis of cancer. Op. 26-27. Again, Illumina effectively conceded this
point below. Op. 27.
Third, the Commission found that MCED tests will have distinct
prices from other types of cancer tests because of “the need to attract a
unique population of asymptomatic individuals and to persuade payers
to reimburse the tests at population scale.” Op. 28. Illumina argues that
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the exact prices for other MCED tests are unknown because they are
not yet being sold (Br. 36), but that does not undermine the
Commission’s conclusion that the features and intended use of the tests
will result in distinct prices.
Finally, the Commission focused on “industry … recognition of the
[]market as a separate economic entity.” Op. 28; Brown Shoe, 370 U.S.
at 325. It cited copious evidence from Grail’s documents showing that
Grail views itself as competing with other MCED test developers in a
distinct market. Op. 28, 30-34. This evidence is particularly important
because courts “assume that economic actors usually have accurate
perceptions of economic realities.” Rothery Storage & Van Co. v. Atlas
Van Lines, Inc., 792 F.2d 210, 218 n.4 (D.C. Cir. 1986).
For example, in a 2020 presentation addressing
Op. 33; PX4250-002, -009. In a 2020 SEC filing,
Grail described itself as operating in an “intensely competitive”
environment and identified these same companies as “competitors” that
were “developing tests designed to detect cancer, including some that
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will use [genetic data] analyses like ours.” PX4082-036. In a 2021
presentation for a cancer research conference, Grail stated that MCED
tests were “evolving into a highly competitive landscape” and identified
several “[p]otential MCED direct competitor[s].” PX4616-017. Grail
regularly gathered intelligence on and monitored the activities of
potential competitors in the MCED space. See PX4048; Tr. 510-12.
Additionally, Illumina’s CEO at the time of the merger
acknowledged that the merged firm would be “compet[ing] with … some
of our customers,” including several of Grail’s MCED rivals. Tr. 222223. And executives from other MCED test developers likewise testified
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that they were directly competing with Grail and with each other. See
2504-05 (Guardant);
PX7042 at 98-100 (Singlera);
This evidence
leaves no doubt that Grail is currently engaged in vigorous competition
with other MCED developers to win the innovation race.
Illumina wrongly suggests that the Court should ignore this realworld evidence. Br. 37. But this Court has held that materials such as
“affidavits, documentary evidence, and deposition testimony”—
including “marketing and competitive strategies” showing that a group
of firms viewed themselves as a distinct industry and competed
vigorously with each other—is probative evidence on market definition.
C.E. Servs., Inc. v. Control Data Corp., 759 F.2d 1241, 1246 (5th Cir.
1985). The case Illumina cites merely held that certain lay opinion
testimony and internal marketing documents were not enough to
support the proposed market definition in that case, not that ordinarycourse documents and testimony are categorically irrelevant. Ky.
Speedway, LLC v. Nat’l Ass’n of Stock Car Auto Racing, Inc., 588 F.3d
908, 919 (6th Cir. 2009).
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Illumina’s other attacks on the Commission’s market definition
also lack merit. First, Illumina argues that other MCED tests are not
reasonably interchangeable with Galleri because they are not being sold
and their precise features and performance characteristics are not yet
known.
11
Br. 30-34. As the Commission explained, Illumina’s
arguments “miss the mark” because the issue in this case whether the
research, development, and commercialization of MCED tests
constitutes a distinct market, given all the evidence of existing vigorous
competition among MCED test developers. That turns on “whether
MCED tests will be sufficiently interchangeable in the future such that
the merged firm has an incentive to disadvantage Grail’s rivals as they
pursue research, development, and commercialization.” Op. 30. The
Commission found that the tests would be sufficiently interchangeable
because they all “share core features and functionality with Galleri”—
they are “designed to detect multiple cancers by blood draw in
asymptomatic patients”—and Grail “viewed rival products as
potentially developing into substitutes for Galleri.” Id.
11
Illumina asserts that any market entry by a rival firm is five to seven years
away (Br. 34), but the Commission found
Op. 15.
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The fact that other tests may have some different features or
performance characteristics from Galleri does not undermine the
Commission’s conclusion. “[P]roducts or services need not be identical to
be part of the same market.” AD/SAT v. Assoc. Press, 181 F.3d 216, 227
(2d Cir. 1999). Here, “different companies are taking different
approaches” to MCED tests as one would expect in a “nascent market
engaged in innovation.” Op. 31. The purpose of preserving competition
is to foster that innovation so that consumers have a choice. As Dr.
William Cance of the American Cancer Society testified, “we don’t have
a depth of knowledge yet in the complex area of human cancer to know
which test or tests … will be the most effective.” Tr. 621.
Illumina wrongly accuses the Commission of “denigrating” Galleri.
Br. 33. The portions of the Commission opinion Illumina cites (Op. 5456) discuss anticompetitive effects, not market definition, but in any
case the Commission’s findings are fully supported by the record. It is
undisputed that Galleri does not yet have FDA approval. Illumina’s own
expert acknowledged that Galleri has only been shown to detect seven
types of early-stage cancer in the intended use-population of
asymptomatic adults, not 50 as Illumina repeatedly claims. Op. 54; Tr.
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4000-01.
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And Grail’s own website states that a positive test may
require follow-up imaging for diagnostic confirmation. Op. 55; PX0063002; see also Tr. 1387; PX4207-040; RX3041-003. None of the other
purported facts that Illumina claims the Commission ignored have any
bearing on market definition.
Illumina’s argument that a product market analysis must always
begin by examining the “most narrowly-defined group of products”
(Br. 34-35) is also wrong. Brown Shoe expressly contemplates that the
market analysis may start with a broad group of all reasonably
interchangeable products, which can then be narrowed into distinct
submarkets based upon the practical indicia. See 370 U.S. at 325.
Indeed, the Court there rejected an argument that the market for
“children’s shoes” should be further subdivided based on age and sex
because “[f]urther division does not aid us in analyzing the effects of
this merger.” Id. at 327. The iterative broadening process Illumina
describes comes from a different method for defining markets called the
hypothetical monopolist test (“HMT”), which the Commission did not
12
As the Commission explained, the 50-cancer claim is based on a study that
included patients already diagnosed with cancer. Op. 13.
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apply here and which differs from the Brown Shoe analysis.
13
Notably,
Illumina’s expert agreed that it is not a requirement to begin with the
smallest possible market. PX7132-029.
Illumina’ remaining cases (Br. 37-38) are inapt. Illumina cites
SCM Corp. v. Xerox Corp, 645 F.2d 1195 (2d Cir. 1981), for the
proposition that the Clayton Act requires potential harm to competition
in an existing market, id. at 1211, but here the Commission focused on
the existing market for research, development, and commercialization
of MCED tests. Golden Gate Pharmacy Services, Inc. v. Pfizer, No. C-093854, 2010 WL 1541257 (N.D. Cal., April 16, 2010), rejected a proposed
market defined as the “pharmaceutical industry” because all
pharmaceuticals are not interchangeable, id. at *3, but here the
Commission focused on one category of medical tests sharing core
features and functionality. Mercantile Texas Corp. v. Board of
13
See generally Dep’t of Justice & FTC, Horizontal Merger Guidelines § 4.1.1
(2010) (describing HMT). Although the HMT is often a useful way to define
markets, it is not required. The Commission did not apply the HMT here because it
concluded the necessary cross-elasticity data was not available given the nature of
the market. Op. 29 n.12. FTC v. Arch Coal, 329 F. Supp. 2d 109 (D.D.C. 2004),
discusses the “narrowest market” principle in the context of an HMT analysis. Id. at
120-21.
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Governors of the Federal Reserve System, 638 F.2d 1255 (5th Cir. 1981),
does not involve market definition and has no relevance to this case.
B.
14
The Commission Properly Found a Prima Facie Case
of Anticompetitive Effects.
The Commission majority held that Complaint Counsel
established a prima facie case of anticompetitive effects under both
Brown Shoe and the ability-and-incentive test. The Commission
properly applied both tests and substantial evidence supports its
conclusions. Because all four Commissioners agreed on the ability-andincentive test, and Illumina agrees that test is proper (Br. 46), we begin
there.
1.
The Commission Properly Found a Prima Facie
Case Under the Ability-and-Incentive
Framework.
The Commission properly found that Complaint Counsel
established a prima facie case by showing that Illumina had the ability
to foreclose competition among MCED test developers and that the
merger substantially increases its incentive to do so. Op. 47-61.
14
Contrary to Illumina’s claims, Mercantile Texas did not hold that courts may not
“consider market entry that will not occur within two or three years.” Br. 38. It held
that if a potential competitor’s likely market entry were further away than that, the
antitrust analysis should address whether market concentration might change in
that time period. 638 F.2d at 1272.
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Illumina does not dispute that it has the ability to foreclose competition.
Its arguments focus entirely on the incentive side of the test. Br. 47-55.
But substantial evidence, including Illumina and Grail’s internal
documents and expert economic analysis, supports the Commission’s
finding that the merged firm has an increased incentive to take actions
that would hinder the development and commercialization of MCED
tests that might compete with Galleri.
15
Contrary to Illumina’s claims (Br. 48), the Commission properly
compared Illumina’s incentives in a world without the Grail acquisition
to Illumina’s incentives as 100% owner of Grail. The Commission
explained that before the merger, Illumina stood to derive only a small
share of profits from Grail’s sale of MCED tests, based on its 12%
ownership stake in Grail and the royalty Illumina receives on sales of
Grail products. Op. 49. Under those circumstances, if Illumina sought to
favor Grail over rival MCED test developers, the benefit it would
receive would be significantly offset by the NGS revenue it would lose if
15
The Commission credited the testimony of Complaint Counsel’s economic
expert, Dr. Fiona Scott Morton, finding that she was “highly qualified to offer
economic opinions for this case.” Op. 47 n.31. Dr. Scott Morton is a professor at the
Yale School of Organization and Management who studies and conducts research
regarding competitive strategy and industrial organization. PX6090 ¶¶ 1-6.
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a rival’s MCED business were to shrink. Id.; see PX6090 ¶ 196. Thus
Illumina had at most a small incentive to engage in a foreclosure
strategy. Op. 49.
As the 100% owner of Grail, however, Illumina’s incentives change
dramatically. For tests sold by Grail, Illumina will earn a profit on NGS
sales plus 100% of the profit on Grail’s sales, whereas for tests made by
other companies it will earn a profit only on NGS sales. Op. 49-50. Since
Illumina now will earn substantially more profit on Grail’s tests than it
would on a test sold by another developer, it has a substantially
increased incentive to favor Grail over other test developers. Op. 49-50;
PX7138 at 57.
As the Commission found (Op. 50-51), Illumina’s and Grail’s
internal documents bolster the conclusion that the merger will
substantially increase Illumina’s foreclosure incentive. The Grail
acquisition was a key part of Illumina’s strategy to
PX2465 at 3. Illumina saw Grail’s MCED business as a
, PX2151 at 5, and
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, PX2488 at 8.
.
Post-merger, Illumina thus has “a powerful economic incentive to use
its control over the NGS platform to hamstring GRAIL’s competitors as
they pursue commercialization and eventual FDA approval.” Op. 51.
The Commission found that Illumina’s past conduct bolsters the
conclusion that the Grail acquisition heightened Illumina’s incentive to
foreclose. When Illumina was Grail’s sole owner, it gave Grail deep
discounts on pricing and other benefits that were not available to other
firms. When Illumina reduced its ownership to a minority stake, it
eliminated these benefits to “level[] the playing field” and “accelerate
the liquid biopsy market for all.” Op. 11, 52; PX2406-005. As the
Commission found, these statements acknowledge the existence of
competition and raise concerns that Illumina’s reacquisition of Grail
will “re-tilt” the playing field. Op. 52-53.
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Additionally, when Illumina vertically expanded into therapy
selection tests (used to help clinicians choose the appropriate treatment
for cancer patients), it began to see some NGS customers in that market
as competitive threats, and took that into account in deciding whether
to support their efforts to obtain FDA approval. Op. 53; see PX2095-002
(arguing
); Tr. 2085 (discussing “cannibalization” of Illumina’s
business). The Commission found that this “real-world evidence”
showed that Illumina “rationally acted on its incentives in determining
the amount of cooperation it would provide to downstream competitors,”
and that Illumina “can be expected to similarly limit support for MCED
rivals after the Acquisition.” Op. 53.
Illumina’s arguments (Br. 48-55) essentially ask the Court to
reweigh the evidence, which is improper under the substantial evidence
standard. For example, Illumina argues that other MCED tests are not
reasonable substitutes for Galleri and hence will not divert sales.
Br. 49-50. But the Commission cited extensive evidence that other tests
are sufficiently close substitutes to Galleri that they could divert sales—
making it economically advantageous for Illumina to try to slow or halt
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their development. See Op. 54-57. And as noted above (at 27-28) the fact
that other tests may not be identical to Galleri does not mean they will
not meaningfully compete with it. See AD/SAT, 181 F.3d at 227.
Substantial evidence likewise supports the Commission finding
that concerns about reputational harm will not constrain Illumina from
engaging in foreclosure strategies. The record showed that Illumina has
the ability to target MCED customers specifically. Op. 57-58 (citing IDF
¶¶ 746-759, 766-778). Moreover, Illumina could undercut MCED test
developers’ access to NGS platforms in subtle ways that would not be
apparent to other customers and thus would not cause reputational
harm. Op. 58 (citing PX7105 at 69-71; PX7113 at 277; PX7058 at 17477). And the fact that MCED customers have no alternative to
Illumina’s NGS platforms limits Illumina’s potential losses. Op. 58.
Illumina claims there is evidence of actual and potential competition in
the NGS market (Br. 51-52), but the Commission carefully analyzed the
evidence and concluded (in agreement with the ALJ) that Illumina’s
NGS platforms are the only ones suitable for use in MCED testing now
or in the near future. Op. 7-9, 36-40; see also ID 151-52.
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Illumina is mistaken in asserting (Br. 54-55) that the Commission
“ignored” its 2013 acquisition of Verinata, which makes noninvasive
prenatal tests (“NIPT”). Although Illumina contends that the Verinata
merger had procompetitive effects, that acquisition involved a very
different market situation because—as Illumina acknowledges—there
were already four NIPT providers on the market and Verinata was not
the first to market. See RFF ¶ 953. But the Commission raised concerns
about Illumina’s conduct with respect to Verinata,
Op. 33 (citing
). Other evidence raises
additional concerns about Illumina’s tactics, including a presentation
showing that Illumina wanted to “[c]reate a cost structure for Natera
that they can’t sustain or introduce[] a reasonable price floor” and to
“[l]ock in” another NIPT competitor “in order to ensure … [m]arket
price floor.” PX2076-003.
Finally, Illumina’s assertion that it does not expect to earn a profit
on the purchase of Grail until 2026 or fully recoup the cost of purchase
until 2030 (Br. 52) does not undercut the Commission’s findings.
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Presumably Illumina would not have invested $8 billion to purchase
Grail if it did not think the transaction would be profitable in the long
term.
2.
The Commission Properly Found a Prima Facie
Case Under Brown Shoe.
The Commission majority also properly found a prima facie case of
anticompetitive effects under Brown Shoe and its progeny. That
approach begins by examining the “share of the market foreclosed,”
which is an “important” but not necessarily “determinative”
consideration in determining whether a vertical merger may
substantially lessen competition. Brown Shoe 370 U.S. at 328. “[I]f the
share of the market foreclosed is so large that it approaches monopoly
proportions, the Clayton Act will, of course, have been violated,” but
otherwise courts must examine other “economic and historical factors”
to determine whether the transaction may have an anticompetitive
effect. Id. at 328-29.
In keeping with this approach, the Commission first found that
the share of the market foreclosed was “very substantial” because NGS
platforms are a critical input for MCED test developers and Illumina is
the only viable supplier of that technology. Op. 42-45. Illumina could
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exploit its dominance to gain a competitive advantage over Grail’s
MCED rivals, including by raising prices for NGS platforms,
withholding or degrading access to service or supplies or new products,
and delaying or withholding cooperation necessary to obtain regulatory
approval. Op. 43-45.
The Commission then turned to other factors discussed in Brown
Shoe and its progeny, starting with the “nature and purpose” of the
acquisition. Brown Shoe, 370 U.S. at 329. That factor supported a
finding of likely anticompetitive effects, since Illumina’s stated purpose
for the merger was to shift the balance of its revenues away from NGS
platforms and toward clinical testing, which Illumina saw as an
enormous profit opportunity. Op. 45-46. Another relevant factor is “the
degree of market power … possessed by the merged enterprise.”
Fruehauf Corp. v. FTC, 603 F.2d 345, 353 (2d Cir. 1979). That factor
also supported a prima facie case, since Grail is the only current seller
of MCED tests and will directly benefit from the merged firm’s use of
foreclosure strategies against its competitors. Op. 46. “[B]arriers to
entry” are also a relevant factor. Ford Motor Co. v. United States, 405
U.S. 562, 571 (1972); see also Fruehoff, 603 F.2d at 353 (”capital cost”
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and “market share needed … to achieve a profitable level of production”
are relevant factors). The Commission found that the merger will likely
raise entry barriers, because developing an MCED test is an extremely
costly and time-consuming process, and companies are less likely to
make the necessary investments to enter the market if they are
completely dependent on a sole-source supplier that is also a
competitor. Op. 47-48.
There is no merit to Illumina’s arguments that the Commission
misapplied Brown Shoe. Br. 41-46. Contrary to Illumina’s claim (Br. 4142), the Commission did not rely on mere “possibilities.” The
Commission found a “reasonable likelihood” that the merger will
substantially lessen competition (Op. 41-42), which is the proper
standard. See Brown Shoe, 370 U.S. at 323 n.39, 324; Chicago Bridge,
534 F.3d at 423. The Clayton Act does not require proof of more because
its purpose is to “arrest restraints of trade in their incipiency and before
they develop into full-fledged restraints.” Id.
Nor did the Commission apply a per se rule or rely solely on
market share, as Illumina claims. Br. 42-43. The Commission
considered the share of the market foreclosed, as instructed by Brown
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Shoe, and then proceeded to analyze other factors. Illumina faults the
Commission for not addressing all of the Brown Shoe factors (Br. 43),
but as the Commission noted, the Supreme Court has found mergers
unlawful where only some of the factors were satisfied. Op. 42 n.27
(citing Ford Motor, 405 U.S. at 566-70); see also Fruehoff, 603 F.2d at
353 ("[T]here are no precise formulas for determining whether a vertical
merger may probably lessen competition."). Illumina makes no showing
that the omitted factors were relevant to this case or that consideration
of them might have changed the analysis.
Illumina's argument that "the merger will cause no actual
foreclosure today'' because Galleri is the only MCED currently being
sold (Br. 44) focuses on the wrong market. The Commission properly
found a reasonable likelihood that the merger will foreclose the
competition existing today between Grail and other firms to develop and
commercialize MCED tests.
16
Op. 40-41.
Illumina's challenges to the Brown Shoe-related factual findings
(Br. 43-46) of the Commission likewise fail. Although Illumina argues
16
Illumina's citation to Mercantile Texas a ain misstates that case's holdin
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that the purpose of the merger was simply to “accelerate Galleri and
save lives” (Br. 44), ample evidence showed that the Grail acquisition
was part of a long-term strategy by Illumina to shift its profit center
away from NGS platforms and toward clinical testing. PX2151-005;
PX2169-045; PX2465-006 to -008; PX2488-009. And as discussed below
(at 56), the Commission found that Illumina offered only unsupported
speculation to support its claims of market acceleration and potential
lives saved. Given this record, the Commission was not required to
credit self-serving testimony from Illumina and Grail executives that
they acted out of altruism.
17
Illumina is also off base in arguing that the merger will not
change the merged firm’s market power. Br. 45. As the Commission
explained, Illumina already has the power to foreclose competition
among MCED test developers and the merger will give it an increased
incentive to foreclose because it will be directly competing with Grail’s
rivals. Op. 52-53; cf. Ford Motor Co., 405 U.S. at 571 (vertical
17
Illumina is not aided by its reference to Professors Areeda and Hovenkamp’s
discussion of the “antitrust injury” a private plaintiff must demonstrate to have
standing to sue. Br. 45. That requirement does not apply to the United States
government. See Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law § 335a
(May 2023 update).
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acquisition violated § 7 where the merged firm had “every incentive” to
foreclose rivals).
Finally, although Illumina contends that the merger will not
increase barriers to entry (Br. 45), the Commission cited ample evidence
that the merger will disincentivize firms from undertaking the large
investments necessary to develop an MCED test, including testimony
from several of Grail’s leading competitors, see Op. 47;
. Illumina argues that
the ALJ gave scant weight to this evidence (Br. 45-46), but Congress
gave the ultimate authority to weigh evidence to the Commission, not
the ALJ. See Impax, 994 F.3d at 491.
C.
The Commission Properly Held That the Open Offer
Does Not Offset the Merger’s Anticompetitive Effects.
The Commission carefully analyzed the evidence concerning
Illumina’s “Open Offer” and properly concluded that the Offer does not
“eliminate Illumina’s ability to favor GRAIL and harm GRAIL’s rivals”
or “fundamentally alter its incentive to do so.” Op. 73.
18
18
Illumina does
Commissioner Wilson agreed that “the Open Offer does not prevent Illumina
from advantaging GRAIL relative to GRAIL’s rivals” or “eliminate the predicted
anticompetitive effects of the transaction,” and that “even after considering the
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not contend that any of these findings are unsupported by substantial
evidence and has shown no basis for overturning them.
As the Commission explained, the flaws in the Open Offer are
legion. First, Illumina’s offer to provide price parity to Grail’s rivals is
illusory because after the merger, the “prices” charged to Grail are
internal transfer prices that can be adjusted at will. Op. 67-68.
Illumina’s own expert conceded that “GRAIL doesn’t technically pay a
price” and that any “price” charged by Illumina would be a made-up
scenario. Op. 68; RX6000-36. Second, the offer to provide comparable
service to Grail’s competitors would be easy to evade. Op. 68-69. The
Open Offer allows Illumina to give Grail advance access to information
about new products still in development or to design NGS sequencers
specifically to optimize performance for Grail. Op. 69-70. And the Offer’s
firewall to protect MCED rivals’ competitive information is “unusually
porous and inherently flawed.” Op. 70. Finally, enforcement of the
Offer’s terms would be difficult and of limited effect. Op. 71-72.
effects of the Open Offer, anticompetitive effects are likely and the transaction is
likely to lessen competition substantially.” Conc. 4-5.
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Illumina’s argument that the Commission erred by not addressing
the Open Offer as part of Complaint Counsel’s prima facie case (Br. 5758) is a red herring. As this Court held in Chicago Bridge (which
Illumina does not reference), burden-shifting is “a flexible framework
rather than an air-tight rule,” and “in practice, evidence is often
considered all at once and the burdens are often analyzed together.” 534
F.3d at 424. Here, Complaint Counsel produced evidence in its case-inchief that the Open Offer was ineffective, see, e.g., PX6090 ¶¶ 305-315,
and Illumina attempted to produce contrary evidence in the defense
case. Although the Commission addressed this evidence at the rebuttal
stage of the analysis, the result would have been no different if it had
been considered at the prima facie stage, given the Commission’s
findings that the Offer is full of holes and would not offset the
anticompetitive effects of the merger.
In any case, the Commission did not err by addressing the Open
Offer at the rebuttal stage. Illumina’s argument is a variation on one
this Court rejected in Chicago Bridge, where the merging parties
claimed that the Commission improperly shifted the burden of
persuasion on their market entry defense. 534 F. 3d at 425. The Court
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held that the Commission had properly imposed the burden of
production on the merging parties, i.e., “the obligation to come forward
with evidence” to support their defense. Id. Once such evidence is
introduced, the Court explained, the Commission must “judge whether
the nexus between the rebuttal arguments and the proffered evidence is
plausible so as to satisfy the burden of production as a matter of law.”
Id. While the Commission cannot impose “too exacting a standard,” it
“has some discretion to decide if the [merging parties’] proffered
evidence justifies [their] arguments in rebuttal.” Id. at 425-26. Where
Complaint Counsel has anticipated and addressed the rebuttal evidence
in its prima facie case, as in both Chicago Bridge and this case, the
merging parties’ “burden of production on rebuttal is also heightened.”
Id. at 426. Here, the Commission properly determined that the Illumina
did not meet its burden of production because the evidence did not show
that the Open Offer would significantly counteract the merger’s
anticompetitive effects.
The Commission did not err by placing the burden on Illumina to
produce evidence that the Open Offer would be effective. “Where the
facts with regard to an issue lie peculiarly in the knowledge of a party,
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that party is best situated to bear the burden….” Smith v. United
States, 568 U.S. 106, 112 (2013) (cleaned up). Here, Illumina crafted the
Open Offer and continued to modify it even while trial was proceeding.
Because the facts regarding the Offer were peculiarly within Illumina’s
knowledge and control, Illumina bore the burden to produce evidence
that the Offer would remedy the merger’s anticompetitive effects. As
the Commission explained, placing the burden on Complaint Counsel
would “create a perverse incentive for merging parties to propose socalled fixes that leave some portion of competitive harm unremedied,
requiring the government to keep up with shifting proposals that
change, as this one did, in the midst of litigation, and forcing the public
to live with partial remedies that do not fully restore competition.”
Op. 64; see also Conc. 4 (agreeing that “the burden of showing the
competitive effects of the Open Offer falls on [Illumina]”).
United States v. E.I. du Pont de Nemours & Co., 366 U.S. 316
(1961) (“DuPont II”), supports the Commission’s conclusion that
Illumina bore the burden of production here. In that case the Supreme
Court held that “[t]he burden is not on the Government” to show that a
proposed remedy for a Clayton Act violation would itself violate § 7, and
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that complete divestiture is the appropriate remedy if there is a
“substantial likelihood” that the proposed alternative remedy would not
“satisfactorily eliminate[]” the anticompetitive effects. Id. at 331-32
(cleaned up). Although Du Pont involved a remedy that was proposed
after a finding of liability, as an alternative to complete divestiture, the
Commission majority and Commissioner Wilson, writing separately,
both noted that lower courts have applied the same principles when
considering proposed remedies at the liability stage. See, e.g., United
States v. Aetna Inc., 240 F. Supp. 3d 1, 60 (D.D.C. 2017) (“In rebuttal, a
defendant may introduce evidence that a proposed divestiture would
restore the competition lost by the merger counteracting the
anticompetitive effects of the merger.”) (cleaned up); FTC v. Staples,
Inc., 190 F. Supp. 3d 100, 137 n.15 (D.D.C. 2016) (merging parties “bear
the burden of showing that any proposed remedy would negate any
anticompetitive effects of the merger”); FTC v. Sysco Corp, 113 F. Supp.
3d 1, 72-73 (D.D.C. 2015) (placing burden on merging parties to show
partial divestiture would replace competitive intensity lost by the
merger.)
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As the Commission noted (Op. 63-64), the cases cited by Illumina
(Br. 55) are not to the contrary. In United States v. AT&T, Inc., 916
F.3d 1029 (D.C. Cir. 2019), the district court held that the government
failed to establish a prima facie case under the ability-and-incentive
test, and described evidence of certain arbitration agreement offers as
“extra icing on a cake already frosted.” Id. at 1038. It did not hold that
the government had the burden of producing evidence concerning those
agreements. In United States v. UnitedHealth Group, Inc., 630 F. Supp.
3d 118 (D.D.C. 2022), the court held that even applying the
government’s proposed standard, the defendants’ evidence that a
proposed divestiture would offset a merger’s anticompetitive effects was
sufficient to rebut the government’s prima facie case. Id. at 134-35, 140.
Although the court expressed its view that the government should bear
the initial burden of showing the merger would substantially lessen
competition with the proposed divestiture in place, that discussion is
merely dicta and, as the court acknowledged, contrary to cases such as
Aetna and Sysco. Id. at 132-33. United States v. Libbey, Inc., 211 F.
Supp. 2d 34 (D.D.C. 2002), merely held that where the original merger
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agreement was superseded by an amended agreement, review should
focus on the amended agreement. Id. at 46.
Finally, the Commission properly rejected Illumina’s argument
(renewed here at Br. 57) that the Open Offer should not be treated as a
proposed remedy because it is supposedly a “market reality.” Op. 62-63.
As the Commission noted, the Offer was not “some preexisting market
condition or ‘economic reality’ but a remedial effort crafted in
anticipation of legal concerns about the Acquisition.” Op. 62. The Offer
was conditioned on Illumina’s purchase of Grail; its terms are subject to
ongoing modification; and it only applies to customers who sign the
agreement (which not all MCED test developers have done). Id. The
Commission properly held that the Open Offer should be analyzed the
same way as other proposed remedies.
D.
The Commission Properly Found That Illumina’s
Claimed Efficiencies Did Not Rebut the Showing of
Anticompetitive Effects.
The Commission properly rejected Illumina’s claims that various
purported efficiencies could justify the merger. Op. 74-87. No court has
ever held that efficiencies immunized an otherwise unlawful
transaction, and several courts have expressed skepticism that an
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efficiencies defense is even cognizable. E.g., FTC v. Hackensack
Meridian Health, Inc., 30 F.4th 160, 176 (3d Cir. 2022); United States v.
Anthem, Inc., 855 F.3d 345, 353-54 (D.C. Cir. 2017); FTC v. Penn State
Hershey Med. Ctr., 838 F.3d 327, 347-48 (3d Cir. 2016); St. Alphonsus
Med. Ctr.-Nampa, Inc. v. St. Luke’s Health Sys., 778 F.3d 775, 789-90
(9th Cir. 2015).
At a minimum, though, a party asserting the defense must meet
several strict requirements. First, because “the language of the Clayton
Act must be the linchpin of any efficiencies defense,” the evidence must
be sufficient to show that the merger is not anticompetitive. St.
Alphonsus, 778 F.3d at 790. Second, the efficiencies must be “mergerspecific,” meaning they “cannot be achieved by either company alone” or
by other means “without the concomitant loss of a competitor.” Id. at
790-91; Penn State Hershey, 838 F.3d at 348. Third, the efficiencies
must be “verifiable, not speculative.” and “must be shown in what
economists label ‘real’ terms.” Id. at 348-49 (cleaned up). Fourth, the
efficiencies “must not arise from anticompetitive reductions in output or
service.” Id. at 349. Finally, the benefits from the efficiencies must
actually be passed through to consumers. Anthem, 855 F.3d at 362; FTC
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v. University Health, Inc., 938 F.2d 1206, 1223 (11th Cir. 1991). The
Commission properly considered these requirements and concluded that
Illumina’s claimed efficiencies were “unverified, not merger-specific,
and to the extent they might somehow come to pass, not likely to benefit
the public.” Op. 76.
19
Illumina’s claims of legal error (Br. 60-64) mischaracterize the
Commission’s decision. The Commission did not shift the burden of
persuasion to Illumina. It recognized that the burden of persuasion
“remains with the government at all times” (Op. 24), but found
Illumina’s evidentiary showing insufficient to rebut Complaint
Counsel’s prima facie case. Nor did the Commission conclude that
testimony of Illumina’s business executives was “legally irrelevant,” as
Illumina claims. Br. 61. The Commission found that much of the
specific testimony offered by Illumina consisted of unsupported
speculation and was not independently verifiable. The legal standards
applied by the Commission are correct and consistent with governing
case law discussed above.
19
Commissioner Wilson agreed that Illumina “failed adequately to substantiate
[its] claims.” Conc. 5.
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Illumina’s claims that the Commission’s specific findings are not
supported by substantial evidence also fall flat.
Grail Royalty: The Commission found that Illumina failed to show
that elimination of the royalty paid by Grail to Illumina was mergerspecific, pointing to
. Illumina asserts
(Br. 65) that these scenarios were not viable, but as the Commission
noted, the undisputed evidence is that
, so there is no way to tell whether they might have been
accepted. Op. 84; Tr. 3086-87.
In any event, even if this could be characterized as a mergerspecific benefit, the Commission found no evidence that the royalty
reduction (or any of the other claimed efficiencies) would be passed
through to consumers, given “the current absence of a commercial
alternative to Galleri and the corresponding absence of a competitive
pressure to pass through.” Op. 86. Illumina’s expert merely assumed
100% pass-through and conceded that he could not model the effects of
a reduction in Grail’s royalty. Op. 86-87; RX3864 at 73 n.270; RX6000
at 125-26. Illumina argues that some portion of a reduced cost would be
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passed through to consumers (Br. 67), but it was Illumina’s burden to
demonstrate that through economic analysis of this specific market
(e.g., by showing what portion of the costs will be passed through), and
it failed to do so. Op. 87.
EDM: The Commission concluded that Illumina’s evidence of
efficiencies resulting from the elimination of double marginalization
(“EDM”) were not adequately substantiated and that there was no
evidence any savings would be passed through to consumers. Op. 84,
87.
20
Illumina’s economic expert conceded that he could not reliably
quantify the value of EDM, and that his calculations were “intended
only to be illustrative,” and relied on “assumptions” about cost
passthrough. Op. 84.
Illumina does not dispute these findings but argues that EDM
should have been addressed as part of Complaint Counsel’s prima facie
case. Br. 66. Yet Illumina’s expert agreed that EDM is an efficiency.
RX3864 ¶ 101. As the Commission found, courts have uniformly held
that the merging parties bear the burden of production as to
20
Illumina’s counsel conceded at oral argument before the Commission that EDM
“is not one of the more significant efficiencies.” Oral Arg. Tr. 56.
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efficiencies. See, e.g., St. Alphonsus, 778 F.3d at 791; see also Steven C.
Salop, Invigorating Vertical Merger Enforcement, 127 Yale L.J. 1962,
1981 (2018) (in vertical mergers, “[b]ecause the merging parties have
better access to the relevant information, they also bear the burden of
producing evidence of efficiency benefits, just as they do elsewhere in
antitrust”).
21
Supply Chain/Operational Efficiencies: Illumina is wrong in
claiming that the Commission rejected claimed supply chain and
operational efficiencies “principally because Grail had made some
operational improvements on its own.” Br. 66. The Commission rejected
the claimed efficiencies primarily because they were speculative and
unsupported; they were based on a single spreadsheet with no
explanation of how the numbers were generated or the assumptions
underlying the cost savings. Op. 84. The fact that Grail was improving
operations on its own (which Illumina does not dispute) was an
additional factor that made it “difficult to tell what incremental value, if
any, the Acquisition will provide.” Op. 85.
21
Commissioner Wilson’s 2020 remarks, which Illumina cites, did not argue that
Complaint Counsel should bear the burden of demonstrating efficiencies, and
Commissioner Wilson agreed that Illumina’s efficiencies claims failed here.
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R&D Efficiencies: Contrary to Illumina’s assertion (Br. 67), the
Commission rejected Illumina’s claimed research and development
efficiencies because they were not adequately verified, not because they
were based on testimony by company executives. Illumina “failed to
identify the nature or timing of specific, concrete research advances; to
quantify their value; or to account for the likely costs of or barriers to
achieving them.” Op. 77.
Market Access Acceleration: The Commission had multiple reasons
for rejecting Illumina’s claim that the merger would save lives by
accelerating FDA approval and payer acceptance for Galleri. First, the
claim was based on vague and unsupported speculation. Illumina’s
economic expert assumed that the merger would accelerate Galleri’s
market acceptance by one year, but the only evidence to support that
claim came from Illumina’s chief medical officer (“CMO”), who testified
as to the company’s “feel[ing]” but provided no supporting analysis.
Op. 78-79, Tr. 4360-61. The Commission also noted that Illumina did
not account for any market acceleration in its financial modeling for the
Grail acquisition, which “gives reason to question whether it will
actually occur.” Op. 79. Illumina claims that it was being “conservative”
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(Br. 69), but the Commission credited expert testimony that this
explanation was implausible given the
. Op. 79; PX6092 ¶48,
PX7140 at 25-27. Illumina also failed to quantify the costs it would
incur to achieve the purported market acceleration. Op. 79.
Furthermore, Illumina failed to produce any credible evidence as
to how the claimed acceleration might occur. Illumina’s CMO testified
that “
. Op. 79. Despite Illumina’s claim
of superior FDA experience, it has obtained only one approval in the
relevant area, and that was not for a liquid biopsy test.
.
Op. 80-81; PX2593-001.
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Illumina also failed to show that any regulatory acceleration
would be merger-specific. Op. 80-81. The Commission found that Grail
already had significant FDA experience. Given the enormous profits
Illumina says are anticipated from Galleri, a stand-alone Grail would
have a “massive financial incentive to accelerate market acceptance,”
either by expanding its own capabilities or by partnering with another
firm. Op. 81.
The Commission likewise found that Illumina’s claims that the
merger would accelerate payer acceptance of Galleri amounted to
“vague aspirations” and lacked the “verifiable, analytical plan needed to
support an efficiency claim.” Op. 81-82. These claims were also not
merger-specific because the evidence showed that Illumina’s experience
was limited and not impossible to replicate, and that Grail was capable
of working to obtain market access on its own.
All of these conclusions are supported by substantial evidence, as
shown by the Commission’s extensive citations to the record. Stripped
to its essence, Illumina’s argument (Br. 68-70) is that the Commission
should simply have credited the say-so of its company executives. But
the Commission reasonably and unanimously concluded that this
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evidence was not sufficient to establish a verifiable, merger-specific
efficiency that would benefit consumers.
International Expansion: Illumina also claims that the merger will
accelerate international expansion of Galleri, but as the Commission
found, a merger cannot be justified based on asserted efficiencies
outside the relevant market (here, the United States). Op. 86 (citing
Phila. Nat’l Bank, 374 U.S. at 370). In addition, the Commission found
that any claimed benefits from international expansion were not
verified or merger-specific. Illumina failed to produce concrete,
verifiable evidence that international expansion would produce mergerspecific benefits that would be passed on to American consumers.
ILLUMINA’S CONSTITUTIONAL CHALLENGES LACK MERIT.
II.
Illumina also raises several constitutional challenges. None has
merit.
22
22
Several amici also raise constitutional arguments, but all arguments not made
by Illumina are waived. See, e.g., United States v. Fernandez, 48 F.4th 405, 412 (5th
Cir. 2022).
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Illumina’s Nondelegation Argument Is Waived, Not
Properly Presented, and Wrong.
The Commission correctly found that Illumina waived its
nondelegation argument by failing to raise that argument before trial.
Op. 87.
23
Even if the nondelegation argument is not waived, it is not
properly presented here. Illumina relies on this Court’s decision in
Jarkesy, where the petitioner was subject to an administrative penalty
under a statute that gave the SEC “unfettered discretion” to impose
penalties administratively rather than by suing in court. 34 F.4th at
459-63.
24
Illumina argues that Congress gave the FTC analogous
discretion in 1973 by enacting Section 13(b) of the FTC Act, 15 U.S.C.
23
Carr v. Saul, 141 S. Ct. 1352 (2021), reiterated the general rule that litigants
must raise issues before the agency to preserve their right to judicial review when
the agency proceeding is adversarial. Id. at 1358. Contrary to Illumina’s argument
(Br. 18 n.4), Carr did not categorically exempt structural constitutional issues; it
held that in the “specific context” of Social Security ALJ hearings, which have many
inquisitorial features, the fact that a structural constitutional issue was involved
“tipp[ed] the scales” against treating the matter as adversarial. Id. at 1360. Unlike
Social Security proceedings, FTC adjudications are adversarial, and this Court has
held that failure to properly raise an issue before the Commission generally
precludes judicial review. Cotherman v. FTC, 417 F.2d 587, 591-92 (5th Cir. 1969);
see also Cmty. Fin. Servs. Ass’n of Am. v. CFPB, 51 F.4th 616, 633 n.6 (5th Cir.
2022) (nondelegation argument not raised below was forfeited), cert. granted on
other grounds, 143 S. Ct. 978 (2023).
24
The Supreme Court granted certiorari in Jarkesy on June 30. The FTC
respectfully preserves for future review the issue of whether Congress’s decision to
give an agency discretion to choose between judicial and administrative
enforcement is a delegation of legislative power.
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§ 53(b), which authorizes the Commission to sue in court for a
permanent injunction as an alternative to administrative
adjudication.
25
Br. 16-17. But since the Commission has not sought a
permanent injunction against Illumina under Section 13(b), the Court
has no occasion to address whether Congress violated the nondelegation
doctrine by enacting that section.
If the Court nonetheless reaches this issue, it should hold that
Section 13(b) does not unconstitutionally delegate legislative authority.
The nondelegation issue in Jarkesy turned on Congress’s having given
the SEC “the ability to determine which subjects of its enforcement
actions are entitled to Article III proceedings with a jury trial, and
which are not.” 34 F.4th at 461 (emphasis added). The FTC statutory
scheme, by contrast, does not implicate jury trial rights because the
only relief available under Section 13(b) is an “injunction”—an
equitable remedy that does not trigger Seventh Amendment jury trial
rights. See, e.g., Baum v. Blue Moon Ventures, LLC, 513 F.3d 181, 193
25
Section 13(b) also authorizes the Commission to sue in court for a preliminary
injunction in aid of administrative proceedings, e.g., to block a merger while the
Commission considers its legality. As discussed above (at 8), the Commission filed a
preliminary injunction action in this case but then voluntarily dismissed it after the
EC’s investigation triggered a standstill obligation.
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(5th Cir. 2008). Because there is no right to a jury trial either under
Section 13(b) or in an administrative adjudication, giving the
Commission a choice between those forums is not a delegation of
legislative power under the reasoning of Jarkesy.
Furthermore, the statute in Jarkesy said “nothing at all” about
how the SEC should choose between seeking penalties in court or
administratively. 34 F.4th at 462. Here, Congress provided an
intelligible principle to guide the FTC’s exercise of discretion by
directing the Commission to consider “the interest of the public” in
deciding whether to institute administrative or judicial proceedings. 15
U.S.C. §§ 45(b), 53(b).
26
The “intelligible principle” standard is “not demanding.” Gundy v.
United States, 139 S. Ct. 2116, 2129 (2019). The Supreme Court has
only found delegations excessive in two cases—both instances where
“Congress had failed to articulate any policy or standard to confine
26
Illumina argues (Br. 18 n.3) that the public interest does not provide guidance
for deciding between administrative and judicial proceedings because that language
appears in both Section 5 and Section 13(b), but the most natural reading of the two
provisions is that where the Commission has a choice between judicial and
administrative enforcement, it must determine which forum would better serve the
public interest.
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discretion”—and the Court has “over and over upheld even very broad
delegations.” Id. (cleaned up). Of particular relevance here, the Court
has repeatedly “found an ‘intelligible principle’ in various statutes
authorizing regulation in the ‘public interest.’” Whitman v. Am.
Trucking Ass’ns, 531 U.S. 457, 474 (2001). The public interest is “not a
concept without ascertainable criteria,” N.Y. Cent. Sec. Corp. v. United
States, 287 U.S. 12, 25 (1932), or “so indefinite as to confer an unlimited
power,” Nat’l Broad. Co. v. United States, 319 U.S. 190, 216 (1943); see
also id. at 225-26 (rejecting nondelegation argument). Just last year,
the First Circuit held that a criminal statute authorizing prosecutions
in the “public interest” “indisputably satisfies the lax ‘intelligible
principle’ standard under our precedents and those of the Supreme
Court.” United States v. Diggins, 36 F.4th 302, 319 n. 19 (1st Cir. 2022).
Congress’s directive to act in the “interests of the public” likewise
satisfies the intelligible principle standard here.
In Clayton Act merger cases, the “interests of the public” often
weigh in favor of administrative adjudication. That was the only means
of enforcement available to the Commission from 1914 to 1973, and
there is no indication that Congress intended the enactment of Section
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13(b) to significantly alter that practice in merger cases. The legislative
history of Section 13(b) indicates that Congress wanted to give the
Commission flexibility to bypass the administrative process in
situations where it “does not desire to further expand upon the
provisions of the Federal Trade Commission Act through the issuance of
a cease-and-desist order,” as for example “in the routine fraud case.” S.
Rep. No. 93-151, at 31 (1973). Congress reasoned that giving the
Commission the option of seeking a permanent injunction would enable
“Commission resources [to] be better utilized, and cases [to] be disposed
of more efficiently.” Id.
Clayton Act merger cases, however, are well-suited for
administrative adjudication. Congress created the Commission as an
expert body that would be “specially competent” to deal with complex
antitrust issues “by reason of information, experience and careful study
of the business and economic conditions of the industr[ies] affected.”
FTC v. R.F. Keppel & Bro., Inc., 291 U.S. 304, 314 (1934) (quoting S.
Rep. No. 63-597 at 9, 11 (1914)); see also Humphrey’s Executor, 295 U.S.
at 624 (Commissioners “are called upon to exercise the trained
judgment of a body of experts appointed by law and informed by
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experience.”) (cleaned up). Administrative adjudication in Clayton Act
cases benefits the public because it allows the Commission to apply that
specialized expertise and experience to the novel and complex questions
that frequently arise in these cases. Thus the Commission has most
commonly enforced Section 7 of the Clayton Act through administrative
adjudication using the process that Congress prescribed in 1914.
B.
27
Illumina’s Article II Challenge Is Barred by Supreme
Court Precedent and Provides No Basis for
Invalidating the Commission’s Order.
Humphrey’s Executor squarely bars Illumina’s argument that the
structure of the Commission violates Article II of the Constitution
because the President cannot remove Commissioners at will.
28
In that
case, President Roosevelt sought to remove a Commissioner without
cause. The Supreme Court held that the FTC Act authorized removal of
Commissioners only on the grounds specified in the statute
27
There are exceptions, such as where the Commission seeks to enforce the
Clayton Act jointly with a State See, e.g., St. Alphonsus, 778 F.3d at 782 (joint suit
with Idaho). In such instances, the public interest may favor district court
enforcement because the State cannot participate as a plaintiff in an administrative
proceeding.
28
Arguments concerning the constitutionality of removal restrictions on FTC
Commissioners and the combination of prosecutorial and adjudicative functions
within the same agency were also raised in Traffic Jam Events, LLC v. FTC, No. 2160947, which was argued on May 3, 2023.
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(“inefficiency, neglect of duty, or malfeasance in office”) and that this
limitation on the President’s removal power was constitutional given
the “character of the structure and functions of the Commission.” 295
U.S. at 626-32.
In recent cases addressing the President’s removal power, the
Supreme Court has repeatedly declined to overrule Humphrey’s
Executor. For instance, Seila Law LLC v. CFPB, 140 S. Ct. 2183 (2020),
held that Congress cannot restrict the President’s power to remove a
single head of department, but the Supreme Court expressly stated that
“we need not and do not revisit our prior decisions allowing certain
limitations on the President’s removal power” in other contexts,
including Humphrey’s Executor. Id. at 2192; accord Collins v. Yellin,
141 S. Ct. 1761, 1783 (2021). Because the Supreme Court has not
revisited Humphrey’s Executor, that case is binding here. The Supreme
Court’s instructions on this point are clear: if one of its precedents “has
direct application in a case, yet appears to rest on reasons rejected in
some other line of decisions, the Court of Appeals should follow the case
which directly controls, leaving to this Court the prerogative of
overruling its own decisions.” Agostini v. Felton, 521 U.S. 203, 237
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(1997); accord Lefebure v. D’Aquila, 15 F.4th 650, 660-61 (5th Cir.
2021).
None of Illumina’s arguments for disregarding Humphrey’s
Executor (Br. 20-21) withstands scrutiny. Although Congress has
expanded the Commission’s powers since Humphrey’s Executor was
decided, e.g., by enacting Section 13(b), that does not make the Supreme
Court’s decision any less binding. See FTC v. Am. Nat’l Cellular, Inc.,
810 F.2d 1511, 1513-14 (9th Cir. 1987) (enactment of Section 13(b) did
not render Humphrey’s Executor inapposite). And this case does not
involve any of those additional powers. The Commission is exercising
the very authority that Congress granted in 1914: the power to conduct
administrative adjudications to determine whether a transaction
violates the Clayton Act. Illumina’s assertion that the Commission
lacked authority to order divestiture when Humphrey’s Executor was
decided (Br. 21) is incorrect. The Clayton Act has expressly authorized
divestiture of stock from 1914 on (though it was later amended to
authorize divestiture of assets as well). See ch. 323, § 11, 38 Stat. 730,
734 (1914) (codified as amended at 15 U.S.C. § 21(b)).
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Furthermore, the key policy rationale underlying Humphrey’s
Executor remains valid today. Commissioners act as an adjudicatory
body, and the for-cause removal standard ensures that they are free
from “suspicion of partisan direction” or “political domination or
control.” Humphrey’s Executor, 295 U.S. at 625. Congress has similarly
provided for-cause removal standards for the members of many other
non-Article III tribunals composed of multiple members who perform
adjudicatory functions as an expert body within a specific area of the
law.
29
See Collins, 141 S. Ct. at 1783 n.18; Wiener v. United States, 357
U. S. 349, 353 (1958).
In any event, even if Humphrey’s Executor were overruled, that
would not invalidate the Commission’s decision. In Collins, the Court
held that so long as agency officials were “properly appointed”—i.e.,
there was “no constitutional defect in the statutorily prescribed method
of appointment to [the] office”—then an unconstitutional restriction on
the President’s removal power does not void the agency’s actions unless
See 10 U.S.C. § 942(f) (United States Court of Appeals for the Armed Forces); 15
U.S.C. § 2053(a) (Consumer Product Safety Commission); 26 U.S.C. § 7443(f) (Tax
Court); 28 U.S.C. § 176 (Court of Federal Claims); 29 U.S.C. § 153(a) (National
Labor Relations Board); 38 U.S.C. § 7253(f) (Court of Appeals for Veterans Claims).
42 U.S.C. § 7171(b) (Federal Energy Regulatory Commission).
29
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the restriction actually caused harm. 141 S. Ct. at 1787-88. Harm might
be shown if the President “had attempted to remove [an agency official]
but was prevented from doing so by a lower court decision holding that
he did not have ‘cause’ for removal,” or “had made a public statement
expressing displeasure with actions taken by [an agency official] and
asserted that he would remove [the official] if the statute did not stand
in the way.” Id. at 1789. Based on that analysis, this Court recently
held that “harm” under Collins requires “(1) a substantiated desire by
the President to remove the unconstitutionally insulated actor, (2) a
perceived inability to remove the actor due to the infirm provision, and
(3) a nexus between the desire to remove and the challenged actions
taken by the insulated actor.” Cmty. Fin. Servs. Ass’n of Am. v. CFPB,
51 F.4th 616, 632 (5th Cir. 2022), cert. granted on other grounds, 143 S.
Ct. 978 (2023).
Illumina does not dispute that all of the Commissioners who voted
out the administrative complaint or issued the Commission’s decision
were properly appointed. Illumina therefore cannot obtain relief from
the Commission’s order unless it shows harm traceable to the
President’s inability to remove Commissioners at will. It cannot do so.
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Illumina’s brief does not even reference the Collins and Community
Financial standard for harm, let alone try to satisfy it. Illumina merely
cites two Wall Street Journal editorials and two blog posts criticizing
the Commission’s decision (Br. 22). This does not come close to
demonstrating a “substantiated desire by the President” to remove any
of the Commissioners, let alone the other requisites set forth in
Community Financial.
C.
The Commission’s Procedures Do Not Violate Due
Process.
Binding precedent also squarely bars Illumina’s argument that
the Commission’s procedures violated due process. As Illumina
concedes, the Supreme Court has rejected “[t]he contention that the
combination of investigative and adjudicative functions necessarily
creates an unconstitutional risk of bias in administrative adjudication.”
Withrow, 421 U.S. at 47. It is “very typical for the members of
administrative agencies to receive the results of investigations, to
approve the filing of charges or formal complaints instituting
enforcement proceedings, and then to participate in the ensuing
hearings,” and “[t]his mode of procedure … does not violate due process
of law.” Id. at 56. This Court has previously observed that the FTC Act
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specifically authorizes the Commission “to issue administrative
complaints and subsequently sit as an adjudicative body,” and that
“[t]he combination of investigative and judicial functions within an
agency has been upheld against due process challenges.” Gibson v. FTC,
682 F.2d 554, 560 (5th Cir. 1982).
While due process requires an unbiased decisionmaker, Withrow,
421 F.3d at 46-47, courts cannot “presume bias from the mere
institutional structure” of an agency.” United States v. BenitezVillafuerte, 186 F.3d 651, 660 (5th Cir. 1999). Agency adjudicators are
presumed to be unbiased, absent some showing of “conflict of interest or
some other specific reason for disqualification.” Schweiker v. McClure,
456 U.S. 188, 195 (1982); see also Withrow, 421 U.S. at 55 (adjudicators
are presumed to be people of “conscience and intellectual discipline,
capable of judging a particular controversy fairly on the basis of its own
circumstances”). To establish a due process violation, a party must show
that the decisionmakers’ minds were “irrevocably closed” to its position.
FTC v. Cement Inst., 333 U.S. 683, 701 (1948); Benitez-Villafuerte, 186
F.3d at 660.
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Illumina does not even attempt to make this showing. Instead, it
relies on misrepresentations and outright falsehoods. First, Illumina
asserts that the Commission “directed [the complaint’s] prosecution.”
Br. 24. That is untrue. The Commission complied fully with the
requirements of the APA and its own regulations, both of which require
that the agency staff responsible for prosecuting the complaint be
walled off from the Commission and the ALJ. See 5 U.S.C. § 554(d)(2);
16 C.F.R. § 4.7(b). Next, Illumina falsely asserts that the Commission
“colluded with the European Commission” to “deprive the parties of a
hearing before an Article III judge,” citing a letter from four Senators as
purported support. Br. 24-25. The letter is not part of the
administrative record and therefore is not properly before this Court,
see, e.g., Sierra Club v. United States Dep’t of Interior, 990 F.3d 898, 907
(5th Cir. 2021), but in any event the letter does not show that FTC
“colluded” with European officials. Each agency conducted an
independent assessment of the merger consistent with the facts and its
governing law.
30
30
FTC staff communicated with their EC counterparts as part of their routine
duties, but as both the Commission majority and Commissioner Wilson noted, that
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Illumina’s citation to the individual concurring opinions of Justice
Thomas and Justice Gorsuch in Axon Enterprises, Inc. v. FTC, 143 S.
Ct. 890 (2023) (Br. 24), do not advance its argument. Justice Thomas’s
opinion acknowledges that existing Supreme Court law allows for
administrative adjudication, but calls for a reevaluation of those
precedents. Id. at 906-11 (Thomas, J., concurring). This Court, however,
is bound by existing Supreme Court precedent. Justice Gorsuch
asserted that “some say the FTC has not lost an in-house proceeding in
25 years,” though he acknowledged statistics showing the Complaint
Counsel’s success rate is closer to 90%. Id. at 917-18 (Gorsuch, J.,
concurring). But even a “demonstrated tendency to rule any particular
way” does not prove unconstitutional bias. Phillips v. Jt. Legis. Comm.
on Performance & Expenditure Review, 637 F.2d 1014, 1020 (5th Cir.
1981).
31
The most comprehensive analysis of Commission
kind of coordination is explicitly authorized by Congress and international
agreements. Op. 91-02 n.75; Conc. 5-6. Communications at the staff level also do not
show any bias by the Commissioners. The only Commissioner-level communications
with foreign authorities that Illumina cited below were with officials of the United
Kingdom, which is no longer part of the European Union and never opened an
investigation into the merger.
31
See also So. Pac. Commc’n Co. v AT&T Co., 740 F.2d 980, 995 (D.C. Cir. 1994)
(“Statistical one-sidedness” of rulings “cannot be used to support an inference of
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decisionmaking, conducted by former Commissioner Maureen
Ohlhausen and published in a peer-reviewed economics journal, found
no evidence of systemic bias.
32
As a point of comparison, more than 90%
of federal criminal cases are resolved with guilty pleas, and fewer than
1% of federal criminal defendants go to trial and are acquitted.
33
That is
not because federal judges are biased against criminal defendants, but
because the Government does not bring cases without strong evidence
of illegality.
Illumina’s complaint that the Commission considered some
evidence that might not have been admissible under the Federal Rules
of Evidence (Br. 25-26) likewise does not show bias.
34
The same rules of
judicial bias.”); In re IBM Corp., 618 F.2d 923, 930 (2nd Cir. 1980) (“[S]tatistics
alone, no matter how computed, cannot establish extrajudicial bias.”)
32
Maureen K. Ohlhausen, Administrative Litigation at the FTC: Effective Tool for
Developing the Law or Rubber Stamp, 12 J. Comp. L. & Econ. 623, 634-35, 651
(2016).
33
John Gramlich, Pew Research Center, Only 2% of federal criminal defendants
go to trial, and most who do are found guilty (June 11, 2019), at
https://shorturl.at/AILMT.
34
Illumina’s specific examples are spurious. Illumina complains about the
Commission’s reliance on testimony from investigational hearings (Br. 25), but
Illumina’s proposed findings cited the same hearing transcripts. See, e.g., RFF
¶¶ 296, 627, 629, 631, 785, 792, 948. Illumina did not object to the admission of the
deposition transcripts and exhibits that it now complains about. Br. 25-26.
Illumina’s assertion that the Commission “refused to consider evidence” that
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evidence applied to both sides. And although the Commission’s
evidentiary rules are not identical to the Federal Rules, they are very
similar, see 16 C.F.R. § 3.43, and an agency’s “relaxation of the ordinary
rules of procedure and evidence does not invalidate the proceedings,
provided the substantial rights of the parties are preserved.” Avondale
Shipyards, Inc. v. Vinson, 623 F.2d 1117, 1121 (5th Cir. 1980). In
practice, the ALJ adheres closely to the Federal Rules. See Prehearing
Tr. at 41 (“[I]f you have an objection to that type of testimony, don’t be
afraid to cite to the Rules of Evidence…. [Y]ou’ll find I go by the book.”).
The fact that the Commission ruled in Illumina’s favor on several
important issues further shows that it was not biased. For example, the
Commission rejected Complaint Counsel’s argument that Illumina
waived its challenge to the ALJ’s market determination by failing to file
a cross-appeal. Op. 24 n.12. The Commission also rejected a provision of
Complaint Counsel’s proposed remedy that Illumina characterized as
“disgorgement.” Op. 97. And the Commission ultimately granted
contradicted Complaint Counsel’s theory of the case (Br. 26) is untrue. Illumina is
referring to its request to reopen the record more than a month after oral argument
to admit two new exhibits. The Commission rejected this evidence because it was
untimely and Complaint Counsel would not have an opportunity for crossexamination, but also found that even if considered, “the statements at issue would
not change our analysis.” Op. 56 n.38.
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Illumina’s request for a stay of the final order over Complaint Counsel’s
objection. As these and other rulings illustrate, the Commission decided
this matter based on the relevant facts and law.
D.
Illumina Was Not Denied Equal Protection.
Illumina’s equal protection argument also fails. The allocation of
Clayton Act cases between the Commission and the Department of
Justice neither proceeds along suspect lines nor infringes fundamental
constitutional rights. Thus, as Illumina concedes (Br. 26), that
allocation is subject only to rational basis review. It “must be upheld …
if there is any reasonably conceivable state of facts that could provide a
rational basis for the classification.” FCC v. Beach Commc’ns, 508 U.S.
307, 313 (1993); see also Heller v. Doe, 509 U.S. 312, 320 (1993) (there
need only be “a rational relationship between the disparity of treatment
and some legitimate governmental purpose”). The government has “no
obligation to produce evidence to sustain [its] rationality,” and the
justification for the classification “may be based on rational speculation
unsupported by evidence or empirical data.” Id. at 320 (cleaned up). The
allocation of cases between the FTC and DOJ easily satisfies this
standard.
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When Congress passed the Clayton Act in 1914, it gave the
Commission and the Attorney General overlapping enforcement
authority. Congress directed the Commission to enforce certain sections
of the Act (including the merger provisions) through administrative
adjudication. 15 U.S.C. § 21(b). Congress chose this mode of
enforcement because it “thought the assistance of an administrative
body would be helpful in resolving [antitrust] questions and indeed
expected the FTC to take the leading role in enforcing the Clayton Act.”
Hospital Corp. of Am. v. FTC, 807 F.2d 1381, 1386 (7th Cir. 1986). But
Congress also authorized the Attorney General to sue in equity to
restrain violations of the Act. 15 U.S.C. § 25. As the Supreme Court has
explained, Congress wanted to “provide the Government with
cumulative remedies against activity detrimental to competition,” and
to “permit the simultaneous use of both types of proceedings” rather
than “confin[ing] [them] within narrow, mutually exclusive limits.”
Cement Institute, 383 U.S. at 694-95.
Congress reconfirmed its intention that the FTC and DOJ would
share enforcement authority over mergers when it enacted the 1976
Hart-Scott-Rodino Antitrust Improvements Act, which requires the
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parties to most large mergers to submit detailed filings to both the
Commission and DOJ before the merger can close. 15 U.S.C. § 18a. This
premerger notification gives the agencies an opportunity to investigate
the proposed transaction for antitrust issues and, if necessary, to take
action to block the merger. To conserve resources and avoid duplicative
proceedings, the FTC and DOJ have agreed that any antitrust
investigation will be assigned to one agency or the other, depending on
which has the most experience in the relevant industry and which has
available resources or capacity.
35
This allocation of shared authority does not violate the
Constitution’s equal protection guarantee. Rational basis review “is not
a license for courts to judge the wisdom, fairness, or logic of legislative
choices.” Beach Commc’ns, 508 U.S. at 313. Here, Congress reasonably
determined that in the realm of antitrust, two enforcement agencies
were better than one. And because Congress gave the FTC and DOJ
overlapping authority, the agencies had a rational basis for deciding to
assign responsibility for any given merger to the agency with the most
35
See GAO, DOJ and FTC Jurisdictions Overlap, but Conflicts are Infrequent 912 (Jan. 2023), https://www.gao.gov/assets/820/814486.pdf.
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relevant experience and best current capacity. Allocating cases in this
way conserves government resources, prevents parties from being
subjected to duplicative investigations, and allows each agency to
develop and utilize industry-specific expertise. These are all legitimate
governmental purposes.
Illumina errs in claiming that procedural differences between the
administrative and a judicial forum caused it to be denied equal
protection. Equal protection does not guarantee the subject of
government enforcement action a right to the forum it deems most
advantageous, even when substantive rights are at issue. For example,
in United States v. Lopez-Velaquez, 526 F.3d 804 (5th Cir. 2008), this
Court rejected a criminal defendant’s claim that he was denied equal
protection because he was prosecuted in a judicial district without a
“fast-track” early disposition program, and thus was not eligible for a
sentencing reduction that might have been available if he was
prosecuted in another district. The Court applied rational basis review,
holding that the Attorney General’s decision to implement a fast-track
program in some districts but not others was “a function of
Congressional policy,” and that the structure of the program was
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rationally related to the goals of “promoting judicial efficiency” and
“preserving prosecutorial discretion.” Id. at 808. Similarly, in this case,
the FTC and DOJ’s overlapping authority to enforce the Clayton Act is
a function of longstanding Congressional policy and the decision to
allocate cases between the two agencies is rationally related to
legitimate government purposes.
Illumina also exaggerates the procedural differences between the
Commission’s administrative proceedings and court proceedings. The
two are fundamentally very similar.
36
The same substantive legal
standard—the Clayton Act—applies in both forums. Procedurally, in
both forums the parties have substantially the same rights to take
discovery, present evidence at trial, and cross-examine the other side’s
witnesses. See 16 C.F.R. §§ 3.31-3.38, 3.41, 3.43. In both types of
proceedings, the ultimate decisionmaker—an Article III judge in a trial,
and the Commissioners in an FTC adjudication—are appointed by the
36
In some respects, administrative adjudication affords procedural advantages to
merging parties as compared to federal court. For example, when DOJ brings an
action in district court, it chooses the forum, but in FTC adjudications the merging
parties may seek review in any circuit where they reside or carry on business. 15
U.S.C. §§ 21(c), 45(c). And while DOJ may appeal an adverse district court decision,
Complaint Counsel cannot appeal from a Commission decision.
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President, confirmed by the Senate, and protected from arbitrary
removal to ensure that politics does not influence their decisions.
Decisions in both types of proceedings are subject to review in the
courts of appeals. Illumina has not shown any differences between the
forums materially affected the outcome of this case.
CONCLUSION
The petition should be denied.
Respectfully submitted,
ANISHA S. DASGUPTA
General Counsel
July 26, 2023
/s/ Matthew M. Hoffman
MATTHEW M. HOFFMAN
Attorney
FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue,
N.W.
Washington, D.C. 20580
(202) 326-3097
mhoffman@ftc.gov
Of Counsel:
SUSAN A. MUSSER
STEPHEN MOHR
JORDAN ANDREW
DAVID GONEN
Attorneys
FEDERAL TRADE COMMISSION
Washington, D.C. 20580
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CERTIFICATE OF COMPLIANCE
I certify that the foregoing brief complies with the volume
limitations of Fed. R. App. P. 32(a)(7)(B), as modified by the Court’s
order of June 23, 2023, because it contains 15,901 words, excluding the
parts of the brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii), and that
it complies with the typeface and type style requirements of Fed. R.
App. P. 32(a)(5) and (a)(6) and 5th Cir. R. 32.1 because it was prepared
in a proportionally spaced typeface using Microsoft® Word for Microsoft
365 MSO. The text is in 14 point Century Schoolbook type and the
footnotes are in 12-point Century Schoolbook type.
July 26, 2023
/s/ Matthew M. Hoffman
Matthew M. Hoffman
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ADDENDUM OF RELEVANT STATUTES
Clayton Act
15 U.S.C. § 18 ................................................................................ A1
15 U.S.C. § 21 ................................................................................ A2
Federal Trade Commission Act
15 U.S.C. § 41 ................................................................................ A6
15 U.S.C. § 45 ................................................................................ A7
15 U.S.C. § 53 .............................................................................. A11
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United States Code, 2021 Edition
Title 15 - COMMERCE AND TRADE
CHAPTER 1 - MONOPOLIES AND COMBINATIONS IN RESTRAINT OF TRADE
Sec. 18 - Acquisition by one corporation of stock of another
From the U.S. Government Publishing Office, www.gpo.gov
§ 18: Acquisition by one corporation of stock of another
No person engaged in commerce or in any activity affecting
commerce shall acquire, directly or indirectly, the whole or any part of
the stock or other share capital and no person subject to the jurisdiction
of the Federal Trade Commission shall acquire the whole or any part of
the assets of another person engaged also in commerce or in any
activity affecting commerce, where in any line of commerce or in any
activity affecting commerce in any section of the country, the effect of
such acquisition may be substantially to lessen competition, or to tend
to create a monopoly.
No person shall acquire, directly or indirectly, the whole or any part
of the stock or other share capital and no person subject to the
jurisdiction of the Federal Trade Commission shall acquire the whole or
any part of the assets of one or more persons engaged in commerce or in
any activity affecting commerce, where in any line of commerce or in
any activity affecting commerce in any section of the country, the effect
of such acquisition, of such stocks or assets, or of the use of such stock
by the voting or granting of proxies or otherwise, may be substantially
to lessen competition, or to tend to create a monopoly.
***
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United States Code, 2021 Edition
Title 15 - COMMERCE AND TRADE
CHAPTER 1 - MONOPOLIES AND COMBINATIONS IN RESTRAINT OF TRADE
Sec. 21 - Enforcement provisions
From the U.S. Government Publishing Office, www.gpo.gov
§ 21. Enforcement provisions
(a) Commission, Board, or Secretary authorized to enforce
compliance
Authority to enforce compliance with sections 13, 14, 18, and 19 of
this title by the persons respectively subject thereto is vested in the
Surface Transportation Board where applicable to common carriers
subject to jurisdiction under subtitle IV of title 49; in the Federal
Communications Commission where applicable to common carriers
engaged in wire or radio communication or radio transmission of
energy; in the Secretary of Transportation where applicable to air
carriers and foreign air carriers subject to part A of subtitle VII of title
49; in the Board of Governors of the Federal Reserve System where
applicable to banks, banking associations, and trust companies; and in
the Federal Trade Commission where applicable to all other character
of commerce to be exercised as follows:
(b) Issuance of complaints for violations; hearing; intervention;
filing of testimony; report; cease and desist orders; reopening
and alteration of reports or orders
Whenever the Commission, Board, or Secretary vested with
jurisdiction thereof shall have reason to believe that any person is
violating or has violated any of the provisions of sections 13, 14, 18, and
19 of this title, it shall issue and serve upon such person and the
Attorney General a complaint stating its charges in that respect, and
containing a notice of a hearing upon a day and at a place therein fixed
at least thirty days after the service of said complaint. The person so
complained of shall have the right to appear at the place and time so
fixed and show cause why an order should not be entered by the
Commission, Board, or Secretary requiring such person to cease and
desist from the violation of the law so charged in said complaint. The
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Attorney General shall have the right to intervene and appear in said
proceeding and any person may make application, and upon good cause
shown may be allowed by the Commission, Board, or Secretary, to
intervene and appear in said proceeding by counsel or in person. The
testimony in any such proceeding shall be reduced to writing and filed
in the office of the Commission, Board, or Secretary. If upon such
hearing the Commission, Board, or Secretary, as the case may be, shall
be of the opinion that any of the provisions of said sections have been or
are being violated, it shall make a report in writing, in which it shall
state its findings as to the facts, and shall issue and cause to be served
on such person an order requiring such person to cease and desist from
such violations, and divest itself of the stock, or other share capital, or
assets, held or rid itself of the directors chosen contrary to the
provisions of sections 18 and 19 of this title, if any there be, in the
manner and within the time fixed by said order. Until the expiration of
the time allowed for filing a petition for review, if no such petition has
been duly filed within such time, or, if a petition for review has been
filed within such time then until the record in the proceeding has been
filed in a court of appeals of the United States, as hereinafter provided,
the Commission, Board, or Secretary may at any time, upon such notice
and in such manner as it shall deem proper, modify or set aside, in
whole or in part, any report or any order made or issued by it under this
section. After the expiration of the time allowed for filing a petition for
review, if no such petition has been duly filed within such time, the
Commission, Board, or Secretary may at any time, after notice and
opportunity for hearing, reopen and alter, modify, or set aside, in whole
or in part, any report or order made or issued by it under this section,
whenever in the opinion of the Commission, Board, or Secretary
conditions of fact or of law have so changed as to require such action or
if the public interest shall so require: Provided, however, That the said
person may, within sixty days after service upon him or it of said report
or order entered after such a reopening, obtain a review thereof in the
appropriate court of appeals of the United States, in the manner
provided in subsection (c) of this section.
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(c) Review of orders; jurisdiction; filing of petition and record of
proceeding; conclusiveness of findings; additional evidence;
modification of findings; finality of judgment and decree
Any person required by such order of the commission, board, or
Secretary to cease and desist from any such violation may obtain a
review of such order in the court of appeals of the United States for any
circuit within which such violation occurred or within which such
person resides or carries on business, by filing in the court, within sixty
days after the date of the service of such order, a written petition
praying that the order of the commission, board, or Secretary be set
aside. A copy of such petition shall be forthwith transmitted by the
clerk of the court to the commission, board, or Secretary, and thereupon
the commission, board, or Secretary shall file in the court the record in
the proceeding, as provided in section 2112 of title 28. Upon such filing
of the petition the court shall have jurisdiction of the proceeding and of
the question determined therein concurrently with the commission,
board, or Secretary until the filing of the record, and shall have power
to make and enter a decree affirming, modifying, or setting aside the
order of the commission, board, or Secretary, and enforcing the same to
the extent that such order is affirmed, and to issue such writs as are
ancillary to its jurisdiction or are necessary in its judgment to prevent
injury to the public or to competitors pendente lite. The findings of the
commission, board, or Secretary as to the facts, if supported by
substantial evidence, shall be conclusive. To the extent that the order of
the commission, board, or Secretary is affirmed, the court shall issue its
own order commanding obedience to the terms of such order of the
commission, board, or Secretary. If either party shall apply to the court
for leave to adduce additional evidence, and shall show to the
satisfaction of the court that such additional evidence is material and
that there were reasonable grounds for the failure to adduce such
evidence in the proceeding before the commission, board, or Secretary,
the court may order such additional evidence to be taken before the
commission, board, or Secretary, and to be adduced upon the hearing in
such manner and upon such terms and conditions as to the court may
seem proper. The commission, board, or Secretary may modify its
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findings as to the facts, or make new findings, by reason of the
additional evidence so taken, and shall file such modified or new
findings, which if supported by substantial evidence, shall be
conclusive, and its recommendation, if any, for the modification or
setting aside of its original order, with the return of such additional
evidence. The judgment and decree of the court shall be final, except
that the same shall be subject to review by the Supreme Court upon
certiorari, as provided in section 1254 of title 28.
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United States Code, 2021 Edition
Title 15 - COMMERCE AND TRADE
CHAPTER 2 - FEDERAL TRADE COMMISSION; PROMOTION OF EXPORT TRADE AND
PREVENTION OF UNFAIR METHODS OF COMPETITION
SUBCHAPTER I - FEDERAL TRADE COMMISSION
Sec. 41 - Federal Trade Commission established; membership; vacancies; seal
From the U.S. Government Publishing Office, www.gpo.gov
§ 41. Federal Trade Commission established; membership;
vacancies; seal
A commission is created and established, to be known as the Federal
Trade Commission (hereinafter referred to as the Commission), which
shall be composed of five Commissioners, who shall be appointed by the
President, by and with the advice and consent of the Senate. Not more
than three of the Commissioners shall be members of the same political
party. The first Commissioners appointed shall continue in office for
terms of three, four, five, six, and seven years, respectively, from
September 26, 1914, the term of each to be designated by the President,
but their successors shall be appointed for terms of seven years, except
that any person chosen to fill a vacancy shall be appointed only for the
unexpired term of the Commissioner whom he shall succeed: Provided,
however, That upon the expiration of his term of office a Commissioner
shall continue to serve until his successor shall have been appointed
and shall have qualified. The President shall choose a chairman from
the Commission’s membership. No Commissioner shall engage in any
other business, vocation, or employment. Any Commissioner may be
removed by the President for inefficiency, neglect of duty, or
malfeasance in office. A vacancy in the Commission shall not impair the
right of the remaining Commissioners to exercise all the powers of the
Commission. The Commission shall have an official seal, which shall be
judicially noticed.
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United States Code, 2021 Edition
Title 15 - COMMERCE AND TRADE
CHAPTER 2 - FEDERAL TRADE COMMISSION; PROMOTION OF EXPORT TRADE AND
PREVENTION OF UNFAIR METHODS OF COMPETITION
SUBCHAPTER I - FEDERAL TRADE COMMISSION
Sec. 45 - Unfair methods of competition unlawful; prevention by Commission
From the U.S. Government Publishing Office, www.gpo.gov
§ 45. Unfair methods of competition unlawful; prevention by
Commission
(a) Declaration of unlawfulness; power to prohibit unfair
practices; inapplicability to foreign trade
(1) Unfair methods of competition in or affecting commerce, and
unfair or deceptive acts or practices in or affecting commerce, are
hereby declared unlawful.
(2) The Commission is hereby empowered and directed to prevent
persons, partnerships, or corporations, except banks, savings and loan
institutions described in section 57a(f)(3) of this title, Federal credit
unions described in section 57a(f)(4) of this title, common carriers
subject to the Acts to regulate commerce, air carriers and foreign air
carriers subject to part A of subtitle VII of title 49, and persons,
partnerships, or corporations insofar as they are subject to the Packers
and Stockyards Act, 1921, as amended [7 U.S.C. 181 et seq.], except as
provided in section 406(b) of said Act [7 U.S.C. 227(b)], from using
unfair methods of competition in or affecting commerce and unfair or
deceptive acts or practices in or affecting commerce.
***
(b) Proceeding by Commission; modifying and setting aside
orders
Whenever the Commission shall have reason to believe that any such
person, partnership, or corporation has been or is using any unfair
method of competition or unfair or deceptive act or practice in or
affecting commerce, and if it shall appear to the Commission that a
proceeding by it in respect thereof would be to the interest of the public,
it shall issue and serve upon such person, partnership, or corporation a
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complaint stating its charges in that respect and containing a notice of a
hearing upon a day and at a place therein fixed at least thirty days
after the service of said complaint. The person, partnership, or
corporation so complained of shall have the right to appear at the place
and time so fixed and show cause why an order should not be entered by
the Commission requiring such person, partnership, or corporation to
cease and desist from the violation of the law so charged in said
complaint. Any person, partnership, or corporation may make
application, and upon good cause shown may be allowed by the
Commission to intervene and appear in said proceeding by counsel or in
person. The testimony in any such proceeding shall be reduced to
writing and filed in the office of the Commission. If upon such hearing
the Commission shall be of the opinion that the method of competition
or the act or practice in question is prohibited by this subchapter, it
shall make a report in writing in which it shall state its findings as to
the facts and shall issue and cause to be served on such person,
partnership, or corporation an order requiring such person, partnership,
or corporation to cease and desist from using such method of
competition or such act or practice. Until the expiration of the time
allowed for filing a petition for review, if no such petition has been duly
filed within such time, or, if a petition for review has been filed within
such time then until the record in the proceeding has been filed in a
court of appeals of the United States, as hereinafter provided, the
Commission may at any time, upon such notice and in such manner as
it shall deem proper, modify or set aside, in whole or in part, any report
or any order made or issued by it under this section. After the
expiration of the time allowed for filing a petition for review, if no such
petition has been duly filed within such time, the Commission may at
any time, after notice and opportunity for hearing, reopen and alter,
modify, or set aside, in whole or in part any report or order made or
issued by it under this section, whenever in the opinion of the
Commission conditions of fact or of law have so changed as to require
such action or if the public interest shall so require, except that (1) the
said person, partnership, or corporation may, within sixty days after
service upon him or it of said report or order entered after such a
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reopening, obtain a review thereof in the appropriate court of appeals of
the United States, in the manner provided in subsection (c) of this
section; and (2) in the case of an order, the Commission shall reopen
any such order to consider whether such order (including any
affirmative relief provision contained in such order) should be altered,
modified, or set aside, in whole or in part, if the person, partnership, or
corporation involved files a request with the Commission which makes
a satisfactory showing that changed conditions of law or fact require
such order to be altered, modified, or set aside, in whole or in part. The
Commission shall determine whether to alter, modify, or set aside any
order of the Commission in response to a request made by a person,
partnership, or corporation under paragraph1 (2) not later than 120
days after the date of the filing of such request.
(c) Review of order; rehearing
Any person, partnership, or corporation required by an order of the
Commission to cease and desist from using any method of competition
or act or practice may obtain a review of such order in the court of
appeals of the United States, within any circuit where the method of
competition or the act or practice in question was used or where such
person, partnership, or corporation resides or carries on business, by
filing in the court, within sixty days from the date of the service of such
order, a written petition praying that the order of the Commission be
set aside. A copy of such petition shall be forthwith transmitted by the
clerk of the court to the Commission, and thereupon the Commission
shall file in the court the record in the proceeding, as provided in
section 2112 of title 28. Upon such filing of the petition the court shall
have jurisdiction of the proceeding and of the question determined
therein concurrently with the Commission until the filing of the record
and shall have power to make and enter a decree affirming, modifying,
or setting aside the order of the Commission, and enforcing the same to
the extent that such order is affirmed and to issue such writs as are
ancillary to its jurisdiction or are necessary in its judgement to prevent
injury to the public or to competitors pendente lite. The findings of the
Commission as to the facts, if supported by evidence, shall be
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conclusive. To the extent that the order of the Commission is affirmed,
the court shall thereupon issue its own order commanding obedience to
the terms of such order of the Commission. If either party shall apply to
the court for leave to adduce additional evidence, and shall show to the
satisfaction of the court that such additional evidence is material and
that there were reasonable grounds for the failure to adduce such
evidence in the proceeding before the Commission, the court may order
such additional evidence to be taken before the Commission and to be
adduced upon the hearing in such manner and upon such terms and
conditions as to the court may seem proper. The Commission may
modify its findings as to the facts, or make new findings, by reason of
the additional evidence so taken, and it shall file such modified or new
findings, which, if supported by evidence, shall be conclusive, and its
recommendation, if any, for the modification or setting aside of its
original order, with the return of such additional evidence. The
judgment and decree of the court shall be final, except that the same
shall be subject to review by the Supreme Court upon certiorari, as
provided in section 1254 of title 28.
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United States Code, 2021 Edition
Title 15 - COMMERCE AND TRADE
CHAPTER 2 - FEDERAL TRADE COMMISSION; PROMOTION OF EXPORT TRADE AND
PREVENTION OF UNFAIR METHODS OF COMPETITION
SUBCHAPTER I - FEDERAL TRADE COMMISSION
Sec. 53 - False advertisements; injunctions and restraining orders
From the U.S. Government Publishing Office, www.gpo.gov
§ 53. False advertisements; injunctions and restraining orders
***
(b) Temporary restraining orders; preliminary injunctions
Whenever the Commission has reason to believe—
(1) that any person, partnership, or corporation is violating, or is
about to violate, any provision of law enforced by the Federal Trade
Commission, and
(2) that the enjoining thereof pending the issuance of a complaint
by the Commission and until such complaint is dismissed by the
Commission or set aside by the court on review, or until the order of
the Commission made thereon has become final, would be in the
interest of the public,
the Commission by any of its attorneys designated by it for such
purpose may bring suit in a district court of the United States to enjoin
any such act or practice. Upon a proper showing that, weighing the
equities and considering the Commission’s likelihood of ultimate
success, such action would be in the public interest, and after notice to
the defendant, a temporary restraining order or a preliminary
injunction may be granted without bond: Provided, however, That if a
complaint is not filed within such period (not exceeding 20 days) as may
be specified by the court after issuance of the temporary restraining
order or preliminary injunction, the order or injunction shall be
dissolved by the court and be of no further force and effect: Provided
further, That in proper cases the Commission may seek, and after
proper proof, the court may issue, a permanent injunction. Any suit
may be brought where such person, partnership, or corporation resides
or transacts business, or wherever venue is proper under section 1391 of
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title 28. In addition, the court may, if the court determines that the
interests of justice require that any other person, partnership, or
corporation should be a party in such suit, cause such other person,
partnership, or corporation to be added as a party without regard to
whether venue is otherwise proper in the district in which the suit is
brought. In any suit under this section, process may be served on any
person, partnership, or corporation wherever it may be found.
***
A12
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.