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Nelson Mullins Riley & Scarborough LLP

Aileen Nagy Joins Nelson Mullins in Atlanta
Aileen L. Nagy has joined Nelson Mullins Riley & Scarborough LLP as an associate in the Firm's Atlanta office. Ms. Nagy's practice will focus on corporate, financial services, and securities law.

Ms. Nagy is a member of the State Bar of Georgia and the Atlanta Bar Association.

In 2005, Ms. Nagy earned a Juris Doctor from Vanderbilt University Law School, where she was named to the Order of the Coif and received the Carl J. Ruskowski Clinical Legal Education Award. While attending law school, she served as a managing editor of the Vanderbilt Law Review and published a note entitled, "Certifying Mandatory Punitive Damages Classes in a Post-Ortiz and State Farm World," 58 Vand. L. Rev. 559 (2005). Ms. Nagy also competed in the Moot Court Competition and was elected to Moot Court Board. In 2001, Ms. Nagy earned a Bachelor of Arts degree in Political Science, summa cum laude, from the State University of New York at Buffalo.

07-10-2007

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Kennedy Covington Lobdell & Hickman, L.L.P.

Kennedy Covington Partner Nationally Recognized as Health Law Leader
Kennedy Covington, one of the largest law firms in the Carolinas, is pleased to announce Patricia T. Meador is among the American Health Lawyers Association (AHLA) 2007-2008 Fellows.

Meador is one of only ten leaders to be named this year as an AHLA Fellow, an honor which recognizes individual achievements, contributions, tenure with the AHLA and continuing service to the legal profession.

"We congratulate Patricia on this prestigious honor and are proud to have her leadership on the Kennedy Covington team," says Kent Christison, partner-in-charge, RTP and Raleigh offices. "Patricia sets the bar for attorneys in her field and she is most deserving of recognition."

To date, only 61 of more than 10,000 members of the AHLA have been chosen as Fellows. The Fellows themselves act as ambassadors for the AHLA and serve as role models and mentors to current members.

07-10-2007

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Jackson Walker L.L.P.

Alan Greenspan wins summary judgment appeal for 'The Herald Democrat'
Media and intellectual property attorney Alan Greenspan prevailed in an appeal of a libel suit against his client, The Herald Democrat. An earlier motion for summary judgment in the case had been denied, but the Court of Appeals, Sixth Appellate District of Texas, reversed the lower court's decision and rendered a take-nothing judgment in favor of The Herald Democrat.

The case centered on an accusation of libel against the newspaper, which serves Sherman, Denison, Bonham, and the Red River Valley of North Texas and Southeastern Oklahoma. Roy Floyd of Bonham had made the libel charge as a result of the paper's coverage of his political rivals' accusation that he removed campaign signs during an election.

In an article about the decision in The Herald Democrat, Mr. Greenspan was quoted as saying, "I'm very pleased that the Texarkana Court of Appeals recognized that this newspaper's article on a matter of great public concern and significance was protected by the First Amendment."

Mr. Greenspan specializes in business litigation and intellectual property law. He helps his clients define and achieve success in the resolution of business disputes, whether that is through trial or through a favorable settlement.

07-10-2007

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Ellis & Winters

After Weyerhaeuser: Predatory-bidding plaintiffs face the same scrutiny as predatory-pricing plaintiffs
In February, the Supreme Court of the United States held that the framework for analyzing a predatory-pricing claim also governs a Predatorybuying claim in Weyerhaeuser Co. v. Ross- Simmons Hardwood Lumber Co., 127 S. Ct. 1069 (2007). This article examines the Weyerhaeuser decision.

Weyerhaeuser and Ross-Simmons operated competing hardwood-lumber sawmills in the Pacific Northwest. These mills processed red alder sawlogs. The mills purchased many of the sawlogs on the open bidding market.

After it closed its mill in 2001, Ross-Simmons filed suit against Weyerhaeuser claiming that Weyerhaeuser's bidding practices violated Section 2 of the Sherman Act, 15 U.S.C. Section 2. Ross- Simmons alleged that Weyerhaeuser intentionally drove it out of business by bidding up the cost of red alder sawlogs. Ross-Simmons argued that because Weyerhaeuser had overpaid for sawlogs, sawlog prices rose to artificially high levels. As evidence of Weyerhaeuser's predatory conduct, Ross-Simmons pointed to Weyerhaeuser's large share of the alder sawlogs purchasing market, an increase in the price of alder sawlogs, and Weyerhaeuser's decreased profits.

At trial, Weyerhaeuser argued that the jury instructions should incorporate the predatory pricing test set forth in Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209 (1993). In a predatory-pricing scheme, the seller drops the retail price of its product below cost to force its competition out of the market. Once successful, the seller raises retail prices to a supracompetitive level. The Brooke Group test requires that a plaintiff raising a predatory-pricing claim must first prove that "the prices complained of are below an appropriate measure of its rivals' costs." Id. at 222. Second, the plaintiff must show that its competitor had "a dangerous probabilit[y] of recouping its investment in below-cost prices." Id. at 224.

Weyerhaeuser argued that a predatory bidding scheme shares the same fundamental traits as a predatory pricing scheme. In each scheme, a firm: (1) invokes a unilateral pricing measure to ward off competition; and (2) suffers short-term losses for the chance of gaining supracompetitive long-term profits.

The District Court, however, rejected the Brooke Group framework and crafted its own standard. The court instructed the jury to consider whether or not Weyerhaeuser "purchased more logs than it needed, or paid a higher price for logs than necessary, in order to prevent [Ross-Simmons] from obtaining the logs they needed at a fair price." Weyerhaeuser, 127 S. Ct. at 1073.

The jury returned a $26 million verdict-subsequently trebled to $78 million-in Ross-Simmons's favor. The Ninth Circuit affirmed. Confederated Tribes of Siletz Indians of Ore. v. Weyerhaeuser Co., 411 F.3d 1030, 1038 (9th Cir. 2005). The Supreme Court granted certiorari to determine whether the Brooke Group elements should have governed the predatory-bidding claim.
Brooke Group

In Brooke Group, the Supreme Court emphasized that a failed predatory-pricing scheme-like legitimate price-cutting-benefits consumers. Both result in lower retail prices. Loathe to chill legitimate price-cutting, Brooke Group established the high threshold of proof, as stated above, for a plaintiff who brings a predatory- pricing claim.

The Supreme Court deemed the Brooke Group test to be appropriate because "predatory pricing schemes are rarely tried, and even more rarely successful." Brooke Group, 509 U.S. at 226 (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 589 (1986)). The court formulated the "dangerous probability" requirement in particular because, "without a dangerous probability of recoupment, it is highly unlikely that a firm would engage in predatory pricing." Weyerhaeuser, 127 S. Ct. at 1075.
The Ninth Circuit Rejects Brooke Group

The Ninth Circuit refused to apply Brooke Group's high threshold for predatory-pricing claims to the predatory-bidding claim against Weyerhaeuser. The Ninth Circuit reasoned that a predatory-bidding scheme did not provide the same potential for consumer benefit as did a predatory-pricing scheme-particularly because predatory bidding does not require a firm to lower retail prices.

Even if a predatory-bidding firm did lower retail prices during the predation period, the Ninth Circuit reasoned that those lower prices would generate further pressure on competitors already strained by higher input prices. In the Ninth Circuit's view, the increased threat from that pressure outweighed any benefit to consumers from the lowered prices.

The Ninth Circuit acknowledged some potential benefit from predatory bidding. In certain situations, "rising input prices might encourage new companies to enter the supply side of the market." Confederated Tribes of Siletz Indians, 411 F.3d at 1038. The new supply side entrants, in turn, would expand output, increase innovation, and increase efficiency. The red alder sawlog market however, because it is relatively inelastic, did not lend itself to these benefits. Consequently, the Ninth Circuit determined that "the high standard of liability in Brooke Group does not apply here." Id.
The Supreme Court's Decision

In reversing the Ninth Circuit, the Supreme Court did not consider whether the Brooke Group framework should apply to a predatory bidding claim specifically concerning a "relatively inelastic market." (Indeed, the Supreme Court did not even refer to the market for red alder sawlogs as inelastic.) Instead, the Weyerhaeuser opinion focused on the many parallels between a predatory-bidding claim and a predatory-pricing claim.

First, the court noted that both schemes are rarely successful. In both the predatory-pricing and predatory-bidding contexts, few rational businesses will agree to suffer short-term losses on the chance of gaining long-term supracompetitive profits. As Weyerhaeuser's counsel said at oral argument, "predatory conduct is self-deterring."

Second, the court found that the actions taken in both predatory-pricing and predatory-bidding schemes are "the very essence of competition." Weyerhaeuser, 127 S. Ct. at 1077 (quoting Brooke Group, 509 U.S. at 226). A firm that engages in predatory pricing lowers prices to compete for consumer sales. A firm that engages in predatory bidding pays high prices "to compete for scarce inputs." Id. There are many lawful reasons, said the Supreme Court, why a firm might bid up input prices. For example, a firm might be:

* Miscalculating its input needs;
* Responding to increased consumer demand for its outputs;
* Trying to gain market share in the output market;
* Using a new production process that requires more inputs; or
* Acquiring excess inputs to protect against future input shortages.

As Chief Justice Roberts explained at oral argument, regardless of which of these motives is at work, the high prices will benefit suppliers in the short-term.

Third, like a failed predatory-pricing scheme, a failed predatory-bidding scheme may benefit consumers. The Court explained that when a predator acquires more inputs, it will "usually" lead to the manufacture of more outputs. At oral argument, Justice Scalia raised the point that increases in output "will benefit consumers who want those goods."

This result, however, is not a guaranteed byproduct of predatory bidding. In a footnote, the Court conceded that "if the same firms compete in the input and output markets, any increase in outputs by the predator could be offset by decreases in outputs from the predator's struggling competitors." Id. at 1077 n.5.

While the Ninth Circuit relied on this potential outcome to conclude that Brooke Group should not control predatory-bidding claims, the Supreme Court concluded that predatory bidding ultimately presents less of a direct threat of consumer harm than predatory pricing. This is because "a predatory bidder does not necessarily rely on raising prices in the output market to recoup its costs." Id. at 1078. Rather, a predatory bidder captures monopsony profits by forcing down input prices, not by raising output prices.
A Unanimous Decision

The Supreme Court decided Weyerhaeuser unanimously. This result may be linked to Ross-Simmons's failure to offer a feasible alternative framework. The District Court's jury instructions required the jury to determine the "fair price" for red alder sawlogs. At oral argument, Justices Souter and Alito asked Ross-Simmons's counsel how a jury could ascertain a "fair price." Justice Breyer bluntly remarked, "You see, the reason they're coming up with this [Brooke Group] test is that they don't think . . . that you can produce a better one." Presumably, the Court was not convinced that a jury could determine a "fair price" or that a test better than Brooke Group's was apparent.
The Future of Predatory Buy-Side Claims

The long-term effects of the Weyerhaeuser decision are difficult to forecast. Predatory-bidding claims are raised less frequently than are predatory-pricing claims. Now that prospective plaintiffs definitively know that they have to satisfy the Brooke Group test, predatory-bidding claims might become even more scarce. The same may be true for predatory-overbuying claims. In a footnote, the Supreme Court explained that predatory-bidding and predatory overbuying claims are analytically identical and that the Brooke Group test applies to both claims.
A Consumer Protection Perspective

The Solicitor General submitted an amicus curiae brief in support of Weyerhaeuser. Although the Federal Trade Commission joined this brief, one commissioner, J. Thomas Rosch, spoke out against that decision in a speech entitled "Monopsony and the Meaning of 'Consumer Welfare': A Closer Look at Weyerhaeuser." Commissioner Rosch gave the speech on December 7, 2006, at the Milton Handler Annual Antitrust Review in New York City.

In his speech, Commissioner Rosch argued that applying the Brooke Group test to predatory- bidding cases wrongly assumes that the antitrust laws protect buyers and sellers equally. In his view, the antitrust laws protect consumers who purchase outputs. Brooke Group, he said, expressed concern for the welfare of these consumers.

By adopting the Brooke Group test for predatory-bidding claims that do not necessarily affect consumer welfare, the Supreme Court (according to Commissioner Rosch) endorsed the position that the antitrust laws protect total societal welfare.

07-10-2007

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Chamberlain, Hrdlicka, White, Williams & Martin, P.C.

Four Chamberlain Hrdlicka Lawyers named "Super Lawyers"
George Hrdlicka, Larry Campagna, Richard Cruse and Jack Eckels were recently named "Super Lawyers" by Texas Monthly Magazine’s "Super Lawyers 2007.”

07-10-2007

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Chamberlain, Hrdlicka, White, Williams & Martin, P.C.

Chamberlain Hrdlicka Named in Top Ten for Fastest Growth
Chamberlain Hdlicka's Atlanta office was recently named in the Atlanta Business Chronicle as number six in Atlanta for growth by number of attorneys, placing it in the top ten for fastest growth in firm size.

Review the rankings from the June 15-21 issue of the Atlanta Business Chronicle.

07-10-2007

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Bradley Arant Boult Cummings LLP

Frank Caprio Elected Chairman of the Huntsville Hospital Foundation Board of Trustees
Frank Caprio has been elected Chairman of the Huntsville Hospital Foundation Board of Trustees and began his term on July 1. He previously served as vice chairman, and has been a member of the Board since July 2004. Frank serves in several additional Board leadership positions: chairman of the 2008 Huntsville Classic Golf Tournament, which will be the 25th anniversary of the Foundation's signature event; and chairman of "Operation Excellence," a $1.65 million capital campaign which will provide five pieces of cutting-edge diagnostic and patient tracking equipment for Huntsville Hospital.

Frank has supported the Foundation for many years as a civic-minded volunteer, and for the last six years as also a very grateful parent. In 2001, his son Mark was critically injured in an automobile accident, suffering severe and extensive brain trauma. Thanks in large part to the timely and expert care he received from the physicians and staff at Huntsville Hospital, Mark is now a healthy young man who will celebrate his own 25th birthday during the Huntsville Classic weekend in May 2008.

Huntsville Hospital Foundation is the non-profit fundraising arm of Huntsville Hospital, an 881-bed regional tertiary care hospital that serves 11 counties in north Alabama and south central Tennessee. The Foundation has raised over $5.1 million in the past two years, and transferred $3.7 million to Huntsville Hospital for the purchase of lifesaving equipment and program support. More than $900,000 has been invested in the Foundation's endowment which now exceeds $19 million in funds that will support Huntsville Hospital in perpetuity.

07-10-2007

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