From the Editors
Mike McNeely and Don Resnikoff
With this edition of the newsletter, we are adding a new feature—the
Conversation Starter—that we hope will stimulate discussion of current
antitrust and consumer law topics. This edition’s Conversation Starter
describes the debate over the advisability of judicial versus non-judicial
real estate foreclosure processes. It is a summary, written as objectively
as we can manage, of a topic that we hope will generate discussion—maybe
even disputation—together with an invitation to comment. The editors
will select comments to publish in future editions of the newsletter.
If you have a comment about the topic of this Conversation Starter, please
share it with us. If not, please feel free to email
us with comments, critiques, or suggestions concerning this feature.
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Upcoming Section Event
May 5—Brown Bag: Alleged Anticompetitive Wholesale and Retail Pricing After linkLine
In Pacific Bell Telephone v. linkLine Communications No. 07-512, (Feb. 25, 2009), the Supreme Court joined a number of lower courts in severely limiting the price squeeze doctrine. The Court did not explicitly overrule the holding of United States v. Aluminum Co. of America, 148 F.2d 416 (2d Cir. 1945), which established the basis for price squeeze claims, but it decisively rejected the price squeeze claims before it. The linkLine plaintiffs were Internet Service Providers (ISPs). They alleged that the vertically integrated defendant, AT&T, set such a high a price for wholesale digital subscriber line service (DSL) facilities, coupled with such a low price for its own retail DSL offering, that the ISP’s margins were squeezed to the point that it could not profitably compete with AT&T in the retail market. The Court declined to recognize such a price-squeeze claim in the absence of an antitrust duty to deal at the wholesale level or a predatory pricing claim at the retail level.
The panel will discuss linkLine’s implications for monopolization claims involving alleged anticompetitive pricing, with an emphasis on conduct by vertically integrated firms in unregulated markets. It will explore questions such as: Has linkLine closed the door on all “price squeeze” claims? What facts could create the requisite antitrust duty to deal? Could a plaintiff challenge a high wholesale price as a “constructive” refusal to deal? Will a defendant’s wholesale price be relevant to the determination of cost under Brooke Group? What are the implications of the majority and concurring opinions for price-squeeze claims in unregulated industries? Are there ways to characterize the conduct in linkLine or Abbott so that a plaintiff could succeed? The panel also will discuss evidentiary issues and the question of remedies, which has strongly influenced the direction of the law in this area.
Panelists: Richard Brunell, American Antitrust Institute, J. Gregory Sidak,
Criterion Economics.
Moderator: Susan DeSanti, Sonnenschein Nath & Rosenthal. Program Coordinators:
Don Resnikoff, Finkelstein Thompson LLP, Joyce Choi, Freshfields Bruckhaus
Deringer.
12:00 PM–2:00 PM
FinkelsteinThompson LLP
1050 30th Street NW, Washington, DC 20007 (Foggy Bottom Metro Station)
Circulator Bus to Georgetown (exit at 30th Street)
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Recap of Recent Section Events
February 9—Pro Bono Training Program: The section cosponsored this event offered by the D.C. Bar. The program covered advocacy strategies for consumers who have no health insurance, public health benefits or private insurance but have medical debt or are being denied insurance coverage for treatment; enforcing consumer protections under the Fair Debt Collections Practices Act; and determining when bankruptcy may be a consumer's best option. This training program helped to prepare attorneys to handle cases through the D.C. Bar Pro Bono Program's Health Care Access Project.
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February 23—Counseling Executives Regarding HSR Reporting Obligations: Common Pitfalls and Recent Changes: Often executives think of the pre-merger filing requirements of the Hart-Scott-Rodino Act (HSR) as applying only to the companies that merge. In reality, as discussed in this brownbag program sponsored by the section, it is not uncommon for executives to be subject to those requirements. Marian Bruno, Deputy Director of the FTC’s Bureau of Competition, was moderator for this well-attended event. Michelle Harrington of Hogan & Hartson kicked off the session with a discussion of basic HSR requirements, and then focused on how those requirements may affect individual executives who purchase shares of their company’s stock. John Sipple of Weil Gotshal followed with an overview of the steps to be taken when executives fail to observe the HSR filing requirements. He also gave a short summary of an executive’s typical role in preparing HSR filings on behalf of a company.
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Saturday, March 7—Youth Law Fair: The section hosted an exhibit table on consumer law topics at the 2009 Youth Law Fair at the District of Columbia Courthouse. The Fair is an annual community outreach educational event arranged by the D.C. Courts and the D.C. Bar for senior high and middle school students in the Washington metropolitan area. The exhibit hall supplements courthouse tours and a mock court proceeding in which students participate. Don Resnikoff, Sondra Mills, and Ron Isaacs staffed the exhibit table, providing students with educational materials relating to consumer law, including a video concerning the LawHelp Internet resource for consumers.
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Nominating Committee
The section's nominating committee (Sondra Mills, Don Resnikoff, Leonor Velazquez) has forwarded to the Bar a slate of six candidates for the three vacancies on the steering committee for 2009-2010. We are delighted that these exceptional candidates have agreed to be our nominees this year. The Bar will mail ballots in by May 1. They must be returned by June 1. Please take a moment to consider these candidates and vote in this election.
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Conversation Starter:
Judicial v. non-judicial foreclosure
submitted by Don Resnikoff
The District of Columbia’s real estate foreclosure process, like that of nearly 30 states, is referred to as “non-judicial foreclosure,” because litigation processes and judicial confirmation are not required. The remainder of the states feature “judicial foreclosure,” which involves court supervision of foreclosures. We invite your comment on the pros and cons of these two approaches.
A recent article describes the District’s approach: “The basic foreclosure process involves notice to the property owner/borrower, advertisement of the foreclosure sale, and public sale of the property, usually at an auction house or at the courthouse. Often there is a right of redemption prior to the sale, but once the gavel falls on the auction, there usually are no rights of redemption.” Paul Pearlstein, Surviving the Foreclosure Crisis, Washington Lawyer (January 2009).
Proponents of non-judicial foreclosure argue that it is quick and efficient, while judicial foreclosure creates unacceptable burden and delay. A recent report, for example, suggests that recovery from the current housing crisis is stalled in states with judicial foreclosure, as property is stuck in legal limbo, while states with the non-judicial approach are seeing signs of stability in their housing markets. “A Florida Court's 'Rocket Docket' Blasts Through Foreclosure Case.” Wall Street Journal (February 18, 2009).
Consumer advocates, on the other hand, associate non-judicial foreclosure with a loss of procedural rights for homeowners. They argue that non-judicial foreclosure as it exists today lacks meaningful due process rights for debtors, including an opportunity to challenge the finding of default or the underlying contract, minimum standards for the appraisal process, and other protections.
D.C. has a tangled history of legislation concerning mortgage foreclosure. The Protections From Predatory Lending Protections and Mortgage Foreclosure Improvements Act of 2000 added protections for homeowners, but was soon repealed after industry complaints. A milder Home Loan Protection Act of 2002 was passed later, and the Mortgage Disclosure Amendment Act of 2007 added more protections for homeowners.
What are your views? Do you agree with consumer advocates who believe judicial foreclosure protects homeowner rights, or with those who prefer non-judicial foreclosure as more efficient? How do you think the District’s laws measure up? Should those laws be reformed to include a judicial foreclosure process? We’d like to hear your opinions, pro and con. Please submit your comments to the editors by email. We will select comments for publication in the upcoming edition of this newsletter.
Steering Committee
The steering committee members and their responsibilities are as follows:
Ron Isaac—Cochair
Maribeth Petrizzi—Cochair
Robert Bloch—CLE Coordinator
Don Resnikoff—Newsletter Co-editor, Community Outreach Coordinator, Internet Coordinator
Marian Bruno—Antitrust Law Committee Cochair
Sondra Mills—Consumer Law Committee Chair
Mike McNeely—D.C. Practice Manual Coordinator, Newsletter Co-editor
Karin Moore—Financial Officer
Laura Wilkinson—Antitrust Law Committee Cochair
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