domingo, 15 de junio de 2014


Caso en el que el Paso Gas Corporation dominante de un mercado compra la compañía Northwest que se iniciaba en el mismo rubro, es decir que El PGC al ver amenazado su mercado decidió comprar a la empresa que recién se iniciaba, para proteger y mantener su mercado, esta conducta fue considerada por la Corte Americana como Ilegal porque buscaba evitar la competencia en potencia.
Una fusión también puede generar este efecto y realmente se considera ilegal porque lo que busca es :
1) Concentrar el poder en el adquiriente o comprador.
2) Generar efectos monopolicos en base a su posición dominante del mercado haciendo que el competidor comercial acepte el trato.
3) Buscar confundir su patrimonio con ele incorporado, haciendo desaparecer su nacimiento.

UNITED STATES of America, Plaintiff,
EL PASO NATURAL GAS COMPANY and Pacific Northwest Pipeline Corporation, Defendants.
Civ. A. No. 143-57.

United States District Court D. Utah, C. D.
June 21, 1968.
As Amended August 29, 1968.

*4 *5 Joseph J. Saunders, John H. Dougherty, Milton J. Grossman, Robert D. Paul, Attys., Department of Justice, Washington, D. C., for plaintiff.

Leon M. Payne, A. H. Ebert, Jr., P. Dexter Peacock, Andrews, Kurth, Campbell & Jones, Houston, Tex., Gregory A. Harrison, David F. Mackie, Brobeck, Phleger & Harrison, San Francisco, Cal., G. Scott Cuming, General Counsel, E. G. Najaiko, Asst. General Counsel El Paso Natural Gas Co., El Paso, Tex., Dennis McCarthy, Van Cott, Bagley, Cornwall & McCarthy, Salt Lake City, Utah, for defendant.

Darrell F. Smith, Atty. Gen., H. J. Lewkowitz, Asst. Atty. Gen. State of Arizona, Phoenix, Ariz., for intervenors State of Arizona ex rel. The Arizona Corporation Commission, Arizona Public Service Co., Tucson Gas & Electric Co.

Nicholas H. Powell, Snell & Wilmer, Phoenix, Ariz., for Arizona Public Service Co.

A. Y. Holesapple, Holesapple, Conner, Jones, McFall & Johnson, Tucson, Ariz., for Tucson Gas & Electric Co.

Louis H. Callister, Callister, Kesler & Callister, Salt Lake City, Utah, for Arizona Public Service Co. and Tucson Gas & Electric Co.

John T. Miller, Jr., Washington, D. C., for State of Arizona ex rel. Arizona Corporation Commission, Arizona Public Service Co., Tucson Gas & Electric Co.

Thomas C. Lynch, Atty.Gen. of State of California, William M. Bennett, Sp. *6 Counsel to Atty. Gen., Iver E. Skjeie, Deputy Atty. Gen., Sacramento, Cal., for the People of State of California.

James E. Faust, Salt Lake City, Utah, for California-Pacific Utilities Co.

Mary Moran Pajalich, J. Calvin Simpson, Sheldon Rosenthal, San Francisco, Cal., for Public Utilities Commission of State of California.

Richard B. Hooper, Wilbert C. Anderson, Jones, Grey, Kehoe, Bayley, Hooper & Olsen, Seattle, Wash., for Cascade Natural Gas Corporation.

Duke W. Dunbar, Atty. Gen., State of Colorado, Robert Lee Kessler, Asst. Atty. Gen., State of Colorado, Denver, Colo., for State of Colorado ex rel. Colorado Public Utilities Commission.

Allan G. Shepard, Atty. Gen., State of Idaho, Larry D. Ripley, Asst. Atty. Gen., assigned to Idaho Public Utilities Commission, c/o Idaho Public Utilities Commission, Boise, Idaho, for State of Idaho ex rel. Idaho Public Utilities Commission.

Claude Marcus, Marcus, Leggat & Marcus, Boise, Idaho, for Intermountain Gas Co.

Joseph S. Jones, Salt Lake City, Utah, for Mountain Fuel Supply Co.

Harvey Dickerson, Atty. Gen. of Nevada, John Sheehan, Deputy Atty. Gen., Carson City, Nev., for Public Service Commission of Nevada.

Boston E. Witt, Atty. Gen. of New Mexico, Dennis R. Francish, Special Asst. Atty. Gen., Santa Fe, N. M., for New Mexico Public Service Commission.

Harold W. Pierce, Portland, Ore., for Northwest Natural Gas Co.

Robert Y. Thornton, Atty. Gen. of Oregon, Richard W. Sabin, Asst. Atty. Gen., Salem, Ore., for State of Oregon ex rel. The Public Utility Commissioner of Oregon.

Richard H. Peterson, Frederick T. Searls, Malcolm H. Furbush, Stanley T. Skinner, San Francisco, Cal., for Pacific Gas and Electric Co.

Sherman Chickering, C. Hayden Ames, Donald J. Richardson, Jr., Chickering & Gregory, San Francisco, Cal., for San Diego Gas & Electric Co.

Rollin E. Woodbury, William E. Marx, Los Angeles, Cal., R. Clyde Hargrove, Shreveport, La., for Southern California Edison Co.

John Ormasa, Harvey L. Goth, Los Angeles, Cal., Neil R. Olmstead, Olmstead, Stine & Campbell, Ogden, Utah, of counsel, for Southern California Gas Co. and Southern Counties Gas Company of California.

Charles H. McCrea, Vice-President and General Counsel, Las Vegas, Nev., for Southwest Gas Corporation.

Edward F. Richards, Gustin & Richards, Salt Lake City, Utah, for Utah Gas Service Co.

Phil L. Hansen, Atty. Gen., State of Utah, H. Wright Volker, Asst. Atty. Gen., Salt Lake City, Utah, for Utah Public Service Commission.

Cartano, Botzer & Chapman, John W. Chapman, Seattle, Wash., Draper, Sandack & Saperstein, A. Wally Sandack, Salt Lake City, Utah, for Washington Natural Gas Co.

John J. O'Connell, Atty. Gen., Frank P. Hayes, Robert E. Simpson, Asst. Attys. Gen., Olympia, Wash., for Washington Utilities and Transportation Commission.

Robert L. Simpson, Paine, Lowe, Coffin, Herman & O'Kelly, Spokane, Wash., A. Wally Sandack, Salt Lake City, Utah, for Washington Water Power Co.

Don M. Empfield, Sp. Asst. Atty. Gen. State of Wyoming, Cheyenne, Wyo., for Public Service Commission of Wyoming.

Richard A. Solomon, General Counsel, Washington, D. C., for Federal Power Commission, amicus curiae.

Henry S. Nygaard, Salt Lake City, Utah, Frank Shafroth, Grant, Shafroth, Toll & McHendrie, Denver, Colo., David T. Searls, Vinson, Elkins, Weems & Searls, Houston, Tex., for Aspen Pipeline Co.

David K. Watkiss, Salt Lake City, Utah, Risher M. Thornton, III, Midland, Tex., James D. McKinney, Washington, D. C., for Colonial Group.

*7 Walter W. Sapp, General Counsel, Colorado Springs, Colo., James L. White, William J. Carney, Jr., Holland & Hart, Denver, Colo., Macoy A. McMurray, McKay & Burton, Salt Lake City, Utah, for Colorado Interstate Gas Co.

B. J. Bradshaw, William Howard Wolf, Fulbright, Crooker, Freeman, Bates & Jaworski, Houston, Tex., Calvin A. Behle, Parsons, Behle, Evans & Latimer, Salt Lake City, Utah, for Continental Pacific Corporation.

Oscar W. Moyle, Jr., Hardin A. Whitney, Jr., O. Wood Moyle, III, Salt Lake City, Utah, for Great Lakes Carbon Corporation.

Wm. H. Ferguson, Thomas J. Greenan, Ferguson & Burdell, Seattle, Wash., Ted Stockmar, Holme, Roberts & Owen, Denver, Colo., for Pacific Western Pipeline Corporation.

C. Keefe Hurley, Earle C. Cooley, Hale & Dorr, Boston, Mass., Brigham E. Roberts, Rawlings, Roberts & Black, Salt Lake City, Utah, for Paradox Production Corporation.

C. Preston Allen, S. J. Quinney, Ray, Quinney & Nebeker, Salt Lake City, Utah, Thompson, Knight, Simmons & Bullion, Dallas, Tex., George S. Dibble, Jr., Cody, Wyo., for Joseph Rosenblatt et. al., Husky Oil Co. Group.

Alfred H. Stoloff, Phillips, Coughlin, Buell & Phillips, Portland, Ore., Fred D. Turnage, Cleary, Gottlieb, Steen & Hamilton, Washington, D. C., for Western States Pipeline Corporation.

CHILSON, District Judge.


The following is a brief summary of the facts and background which lead to the present phase of this litigation. A more detailed account is found in three decisions of the Supreme Court:

California v. Federal Power Commission, 369 U.S. 482, 82 S.Ct. 901, 8 L.Ed.2d 54; United States v. El Paso Natural Gas Co. et al., 376 U.S. 651, 84 S.Ct. 1044, 12 L.Ed.2d 12; Cascade Natural Gas Corp. v. El Paso Natural Gas Co. et al., 386 U.S. 129, 87 S.Ct. 932, 17 L.Ed.2d 814. (Referred to as Cascade)

Prior to the year 1954, El Paso Natural Gas Company (El Paso) was engaged in the business of transporting natural gas interstate to the California border for sale to distributors who distributed the gas to users in southern California. At that time, El Paso was the sole out-of-state supplier to the California market.

In 1954, Pacific Northwest (PNW) received the approval of the Federal Power Commission to construct and operate a pipeline from the San Juan Basin in New Mexico to the State of Washington to supply gas to the then unserved Pacific Northwest area. The pipeline was completed and service was begun in 1956.

PNW had obtained authorization to receive large quantities of Canadian gas and, in addition, had acquired Rocky Mountain gas reservoirs along its route and gas reserves in the San Juan Basin. In 1954, PNW tried to enter the rapidly expanding California market by transportation of Canadian gas to Pacific Gas & Electric Co. (PG & E) in northern California, and the effort was renewed in 1955. In 1956, PNW negotiated with Southern California Edison Co. (Edison) to supply it with natural gas.

Although PNW had no pipeline into California and its efforts to enter the California market were unsuccessful, these efforts were a substantial competitive factor in the California market and led to a price reduction and other concessions to the ultimate benefit of Edison.

El Paso had been interested in acquiring PNW since 1954. The first offer from El Paso was in December 1955, an offer PNW rejected. Negotiations were resumed by El Paso in the summer of 1956, while PNW was still trying to obtain entry to the California market.

In November of 1956, El Paso offered to exchange El Paso shares for PNW shares. This offer was accepted by *8 PNW directors and by May 1957, El Paso had acquired 99.8 percent of PNW's outstanding stock.

In July 1957, the Department of Justice filed suit against El Paso in the U. S. District Court for the District of Utah charging that the stock acquisition violated Section 7 of the Clayton Act.

In August 1957, El Paso applied to the Federal Power Commission for permission to acquire the assets of PNW, and on December 23, 1959, the Commission approved and the merger of PNW with El Paso was effected on December 31, 1959. California, an intervenor in the proceedings, obtained a review by the Court of Appeals, which affirmed the Commission (111 U.S.App.D.C. 226, 296 F.2d 348). The Supreme Court granted certiorari and set aside the Commission's approval, holding that it should not have acted until the District Court had passed on the Clayton Act issues. California v. Federal Power Commission, 369 U.S. 482, 82 S.Ct. 901 (supra).

Meanwhile, (in October 1960) the United States amended its Complaint in the District Court so as to include the asset acquisition by merger in the charge of violation of the Clayton Act. Upon trial of this action, the District Court found for El Paso; the U. S. appealed; the Supreme Court, on review of the record which was composed largely of undisputed evidence, concluded that the effect of the acquisition "may be substantially to lessen competition" within the meaning of Section 7 of the Clayton Act, reversed the judgment and remanded with directions to the District Court "to order divestiture without delay." United States v. El Paso Natural Gas Company et al., 376 U.S., p. 651, 84 S.Ct. 1044 (supra).

Upon remand to the District Court, motions to intervene by the State of California, Southern California Edison Company, (Edison) and Cascade Natural Gas Company (Cascade Company) were denied, and the District Court entered a decree of divestiture which had been agreed upon by the Department of Justice and El Paso.

California, Edison, and Cascade Company appealed from the denial of their motions to intervene. The Supreme Court in Cascade Natural Gas Corporation v. El Paso Natural Gas Company et al., 386 U.S. 129, 87 S.Ct. 932 (supra) reversed the District Court and remanded with directions to allow each appellant to intervene as a matter of right and that the proceedings be reopened to give California, Edison, and Cascade Company an opportunity to be heard as intervenors.

The Court also held that the agreed decree, entered by the District Court, was not in accord with the Supreme Court's mandate in 376 U.S. 651, 84 S. Ct. 1044 (supra) which required that PNW, or a new company, be at once restored to a position where it could compete with El Paso in the California market; ordered the District Court to vacate the orders of divestiture previously entered; "have de novo hearings on the type of divestiture" the Court envisioned and made plain in its opinion in 376 U.S. 651, 84 S.Ct. 1044; directed "* * * there be a divestiture without delay * * *"; suggested guidelines that should be followed in ordering the divestiture and ordered that a different District Judge be assigned to hear the case.


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