McDermott Wins Unanimous Affirmance from Ninth Circuit in Dismissal of Antitrust Case on Behalf of Constellation Brands - McDermott Will & Emery

McDermott Wins Unanimous Affirmance from Ninth Circuit in Dismissal of Antitrust Case on Behalf of Constellation Brands


Washington, DC (April 5, 2016) – A McDermott appellate team led by global Antitrust & Competition practice head Raymond Jacobsen has prevailed at the Ninth Circuit Court of Appeals, which unanimously affirmed the dismissal of an antitrust lawsuit linked to the merger of global beer-makers Anheuser-Busch InBev and Grupo Modelo.

McDermott represented New York-based beverage-producer Constellation Brands at both the district and appeals court levels. A group of consumers filed suit in 2013 alleging that Constellation, which acquired Modelo’s U.S. beer business to satisfy U.S. Justice Dept. concerns about the merger, would be dominated as a “puppet” by Anheuser-Busch as part of the latter’s bid to expand its market share.

In their ruling handed down April 4, the three appeals judges were unequivocal in their support of Constellation’s arguments rejecting the suit: “Plaintiffs failed to state a claim that the acquisition of Modelo violates Section 7 of the Clayton Antitrust Act… [n]or have Plaintiffs plausibly alleged that the challenged transaction permits ABI to control Constellation and thereby increase its market power,” they wrote.

The appellate panel strongly supported the district court’s dismissal of the lawsuit and denial of plaintiffs’ bid to make a second round of amendments to their complaint: “After two opportunities to amend their complaint,” the judges stated, “plaintiffs failed to identify any additional factual allegations that could save their complaint from dismissal.”

The appeals court also sustained the lower court’s denial of the plaintiffs’ motion for relief from judgment.

“This is the best possible outcome for our client,” said Mr. Jacobsen. “The appeals court’s ruling is unambiguous in its rejection of the plaintiffs’ contention that Constellation is somehow operating in a manner dictated by Anheuser-Busch. The judges took a close look at the district court’s ruling and the cases presented by the two sides and did what we believed they would, which is completely knock out the plaintiffs’ argument that Constellation was acting in an uncompetitive manner. Our client is very pleased that this legal interruption has been put to rest.”

The McDermott team led by Mr. Jacobsen advised Constellation throughout the merger negotiations with Group Modelo as well as the litigation, including helping Constellation secure perpetual rights to Modelo brands in the U.S. and defeat a temporary restraining order that would have blocked the transaction.

Assisting Mr. Jacobsen at the appellate stage of the case were Antitrust & Competition partner Jon Dubrow and associate Ryan Leske, Appellate partners Miller Baker and Margaret Warner, and Trial practice partner Daniel Alberti.

The case caption is Steven Estrom et. Al. v. Anheuser-Busch INBEV SA/NV; No. 14-15336; DC No: 3:13-ev-01309-MMC; U.S. Court of Appeals for the Ninth Circuit.

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