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DOJ Requires Divestitures of Amsted Industries Inc
Lawyer Blog News | 2007/04/19 06:15

The Department of Justice today announced that it has reached a settlement that will require Chicago-based Amsted Industries Incorporated to divest certain assets in order to remedy harm to competition arising from its December 2005 acquisition of FM Industries (FMI). FMI formerly was a wholly owned subsidiary of Progress Rail Services Holding Corporation. The Department said the acquisition removed Amsted's only competitor in new end-of-car cushioning units (EOCCs) used in the railroad industry, resulted in higher prices, and substantially lessened competition in the market for used EOCCs.

EOCCs are hydraulic devices that protect sensitive cargos by mitigating the forces experienced by railcars during transit and coupling. The Department's Antitrust Division filed a civil lawsuit today in U.S. District Court in Washington, D.C., alleging that the transaction harmed competition. At the same time, the Department filed a proposed consent decree that, if approved by the court, would resolve the Department's competitive concerns.

Amsted's acquisition of FMI was not subject to the reporting and waiting period requirements of the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976 since the value of the transaction did not meet HSR reporting requirements. However, the Department opened an investigation after customers complained that the consummated transaction removed a significant constraint on pricing, resulting in an immediate price increase for EOCCs. According to the Department, the merging companies were the only two manufacturers of new EOCC units and two of only three suppliers of reconditioned EOCC units used in the railway industry. The acquisition left Amsted as the sole competitor in the market for new EOCCs and the dominant supplier in the reconditioned EOCC market.

"Amsted's acquisition of FMI substantially reduced competition resulting in higher prices," said Gerald F. Masoudi, Deputy Assistant Attorney General in the Department's Antitrust Division. "This divestiture will create an opportunity for a new entrant to enter the markets for EOCCs and restore competition to these markets."

The Department said that the proposed consent decree requires Amsted to divest all of the intangible and other manufacturing assets needed to produce new and reconditioned EOCCs that it acquired from FMI. Because the FMI business was discontinued as a result of the transaction and Amsted has only one facility that manufactures EOCCs, the decree requires Amsted to grant a perpetual license to its own intellectual property to account for gaps in the FMI assets. The divestiture and license grant will be conveyed to an approved buyer, to facilitate that company's entry into the markets for new and reconditioned EOCCs. The Department said that the divestitures will enable that company to become a viable EOCC supplier and compete with Amsted.

In addition, under the proposed consent decree Amsted will be prohibited from acquiring any assets of or any interest in the development, production, or sale of EOCCs in the U.S. if the value of such acquisition exceeds $1 million without first notifying the U.S. through procedures set out in the decree, unless the transaction is otherwise subject to the reporting and waiting period requirements of the Hart-Scott-Rodino Antitrust Improvements Act. This notification requirement runs for a period of 10 years.

Amsted is a diversified manufacturer of industrial components serving primarily the railroad, vehicular, and construction markets. Its products include a range of railroad car parts, including couplers, side frames, bolsters, draft gears and hydraulic cushioning devices. In 2005, Amsted reported sales of $2.5 billion. Amsted's EOCC sales in the U.S. are made through ASF-Keystone Inc., a subsidiary of Amsted Industries, headquartered in Granite City, Ill.

As required by the Tunney Act, the proposed consent decree, along with the Department's competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed decree during a 60-day comment period to Maribeth Petrizzi, Chief, Litigation II Section, Antitrust Division, U.S. Department of Justice, 1401 H Street, N.W., Suite 3000, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the Court may enter the final judgment upon a finding that it serves the public interest.



Woman sues town after falling in to friend's grave
Lawyer Blog News | 2007/04/18 18:17

A Georgia woman is suing the town of Highlands and a Macon County funeral home after she fell into the open grave of her friend in a town-owned cemetery.

Marian May, of Marietta, Ga., fell into the grave of Jean Murphy Henderson in June 2004 while trying to place flowers on her casket.

She remembers the ground giving way as she stepped toward the casket and then hitting the concrete vault 6-feet below. The fall broke her hip, which she eventually had to have replaced.

"It is not much fun being down there, where it's nice and black and you are looking up and I am saying 'Jean, I don't want to go with you,'" May said.

The rescue squad removed her from the grave on a backboard.

A federal judge recently cleared the case to proceed. It could go to trial next year.

In the court papers, May claims the open grave was dangerous because green carpeting, which she says appeared to be a good place to step, was the only material covering its opening. She also says the side of the grave might have been crumbling beneath the carpeting.

She said the town and the funeral home are responsible because they didn't make the grave safe for the service, didn't dig it to the proper size, didn't cover the opening with plywood and failed to warn people about the danger.

She and her husband William May, 92, who claims the accident has cost him the affection of his wife, are suing for more than $75,000.

The town denied the claims in court papers filed in response to the lawsuit.

A lawyer for Highlands said the town didn't know about dangerous conditions at the graveside and that it is not responsible for making the area near a grave safe. The town's lawyer also said May didn't heed warnings from funeral home officials to stay away from the graveside.

Bryant Funeral Home also denied it was responsible for the accident in court papers and said funeral home workers warned May to stay away from the graveside.



Supreme Court upholds 'partial-birth' abortion ban
Lawyer Blog News | 2007/04/18 16:00

The US Supreme Court on Wednesday upheld the federal Partial Birth Abortion Ban Act of 2003. In Gonzales v. Carhart, the Court held that groups challenging the ban on "partial-birth" abortions "have not demonstrated that the Act, as a facial matter, is void for vagueness, or that it imposes an undue burden on a woman's right to abortion based on its overbreadth or lack of a health exception." Carhart was consolidated with Gonzales v. Planned Parenthood, and the Supreme Court reversed the federal appeals court decisions in both cases. Wednesday's 5-4 decision marks the first time the Court has upheld a complete ban on an abortion procedure. Read the Court's opinion per Justice Kennedy, along with a concurrence  from Justice Thomas, and a dissent from Justice Ginsburg. SCOTUSblog has more. AP has additional coverage.

In a second 5-4 decision handed down Wednesday, the Court held in James v. United States that attempted burglary, as defined by Florida law, qualifies as a "violent felony" under the Armed Career Criminal Act (ACCA). Under the ACCA, defendants may subjected to longer sentences if the defendant has three prior convictions for violent felonies or serious drug offenses. James unsuccessfully argued that his Florida conviction for attempted burglary did not qualify as a violent felony under the ACCA. The Supreme Court affirmed the Eleventh Circuit's decision in the case. Read the Court's opinion per Justice Alito, along with a dissent from Justice Scalia and a second dissent from Justice Thomas.



Court upholds right to sue under communications law
Lawyer Blog News | 2007/04/17 16:46

The US Supreme Court handed down decisions in three cases Tuesday, including Watters v. Wachovia Bank, where the Court held that the National Bank Act and regulations promulgated by the Office of the Comptroller of the Currency preempt state laws regulating mortgage lending by national banks and their operating subsidiaries, affirming the Sixth Circuit's decision in the case. Read the Court's opinion per Justice Ginsburg, along with a dissent from Justice Stevens. Justice Thomas did not participate in this case.

In Global Crossing v. Metrophones, the Court held that Sections 201(b) and 207 of the Communications Act create a private right of action allowing a provider of payphone services to sue a long distance carrier for allegedly violating regulations governing compensation for coinless payphone calls. Metrophones sued Global Crossing, a long distance carrier, arguing that Global Crossing violated Federal Communications Commission (FCC) regulations by failing to compensate Metrophones for coinless payphone calls, a practice determined by the FCC to be "unjust and unreasonable." The Court upheld the Ninth Circuit's decision in the case, which also held that that Metrophones could pursue the lawsuit. The Supreme Court determined that the FCC's "unreasonable practice" determination was lawful, and that the language of relevant Communications Act provisions allow a party injured by violations of Section 201(b) to bring a federal action for damages. Read the Court's opinion per Justice Breyer, along with a dissent from Justice Scalia and a second dissent from Justice Thomas.

Finally, in Zuni Public School District No. 89 v. Dept. of Education, the Court held that the US Department of Education properly applied an equalization public school funding formula in determining that New Mexico "equalized expenditures" for public school districts and could therefore offset federal Impact Aid funding by reducing state aid to individual school districts. The Court determined that the Department of Education is permitted by statute to refer to the the number of students in a school district as well as the amount of per-student expenditure in a school district when determining whether a state "equalizes expenditures" among public school districts. Read the Court's opinion per Justice Breyer, along with a concurrence from Justice Stevens, a second concurrence from Justice Kennedy, a dissent from Justice Scalia, and a second dissent from Justice Souter.



Charter Communications Sues Law Firm in 2000 Deal
Lawyer Blog News | 2007/04/16 15:41

Charter Communications is suing a Los Angeles-based law firm, claiming its malpractice cost the cable operator and its holding companies more than $150 million in a cable acquisition.

The suit, filed April 6 in U.S. District Court for the Central District of California in Santa Ana, claims St. Louis-based Charter's legal counsel in the deal ' Irell & Manella LLP ' erred in legal preparations for a transaction in which Charter holding companies acquired Bresnan Communications systems from the Bresnan family and investors that included AT&T.

Bresnan owners were to get units in a Charter holding company, which could later be converted to Charter Communications stock or cash.



Lawyer leaps to his death from Empire State Building
Lawyer Blog News | 2007/04/15 00:53

A lawyer leaped to his death from a 69th-floor office at the Empire State Building Friday, causing temporary road closures in midtown Manhattan, local media reported. The incident became known when a passerby discovered a human leg on 33rd Street at about 3 p.m. local time. Police were called to the spot and discovered that the body had landed on a setback on the 30th floor of the building. Investigators questioned employees at Levine & Blit, a personal injury practice, and at Ashok Karmaker. Both law firms share a suite on the 69th floor where Kanovsky "did odds-and-ends work" for Karmaker.

It wasn't immediately clear what prompted Kanovsky's suicide.

"He was interviewing a client," said a man who works in the suite. "He just got up, opened the window and jumped."

According to news reports, more than 30 people have committed suicide by jumping from the 103-story building since the skyscraper opened in 1931.



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