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Baker Botts Win for Client McWane, Inc. Breaks FTC's 20-Year Streak

First Time a Commission Ruling Favors a Defendant in Nearly Two Decades

WASHINGTON, Feb. 6, 2014 /PRNewswire/ -- The Federal Trade Commission today publicly dismissed six of seven conspiracy and monopolization charges against Baker Botts client McWane, Inc.; the lone remaining count was a split decision that drew a lengthy and sharp dissent from Commissioner Joshua D. Wright. The dissent is available here

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The dismissals marked the first time in nearly two decades that the Commission has ruled against itself following an administrative trial in its in-house court.

The dismissals are the culmination of a multi-year odyssey for McWane that resulted in a two-month trial before Administrative Law Judge D. Michael Chappell in 2012. Judge Chappell subsequently wrote an opinion rejecting the Commission's allegations that McWane colluded with its primary competitors to fix prices. Instead, he found that McWane priced independently at all times and routinely priced below rival suppliers "in order to beat prices being offered by its competitors, which is a pro-competitive purpose." 

Judge Chappell rejected the government's case as a "daisy chain of assumptions" that were weak, unsupported, strained and pure speculation. His complete opinion is available here.

Baker Botts Partner Joseph Ostoyich, who tried the case for McWane and argued the appeal before the Commission, said: "We knew we were fighting an uphill battle, given their long track record in consistently ruling in their own favor, but we decided that an aggressive defense was the way to go and we took the fight to them at trial."

"Our trial team from Baker Botts -- including Partner Erik Koons -- and our co-counsel at Maynard, Cooper, & Gale, P.C. did an outstanding job crossing the government's witnesses and putting on our case," Ostoyich said.  "Our strong attack at trial dismantled their 'evidence' and forced several of the Commissioners, to their credit, to reassess six of the seven counts in the complaint they issued. The dismissals of those counts demonstrate that the facts and the law were on McWane's side and proved to be the determining factor in the ruling made public today. We expect to knock the remaining flawed count out on appeal for the reasons Commissioner Wright has made clear."

McWane General Counsel James M. Proctor, II, said: "Knowing the FTC's track record for home cooking we knew this would be a difficult fight. However, we decided to stand on principle, and had the highest confidence that Joe Ostoyich and his team would demonstrate the injustice of this persecution. They did an excellent job, and the result is a testament to their skill and professionalism." 

A copy of McWane's news release concerning today's FTC ruling is available here.

The Commission has recently come under fire on Capitol Hill and in the press for a self-proclaimed 20-year winning streak that has led lawmakers to criticize it for "an unbeaten streak that Perry Mason would envy" and others to complain that it operates under "house rules" like a Las Vegas casino. 

Commissioner Wright's lengthy dissent on the lone remaining count criticized the Commission's decision for a "dearth of record evidence" that "failed to establish . . . that McWane's conduct was exclusionary" and "fails totally to establish, as it must under the antitrust laws, that McWane's conduct harmed competition."

The Baker Botts Antitrust and Competition practice is one of the most renowned in the world. This highly-ranked group of lawyers regularly handles high profile, "bet the company" matters. A complete background on the practice is available here.

About Baker Botts L.L.P.
Baker Botts is an international law firm of approximately 700 lawyers practicing throughout a network of 15 offices around the globe. Based on our experience and knowledge of our clients' industries, we are recognized as a leading firm in the energy, technology and life sciences sectors. Throughout our 174-year history, we have provided creative and effective legal solutions for our clients while demonstrating an unrelenting commitment to excellence. For more information, please visit BakerBotts.com.

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