Practitioners and clients have long bemoaned the fact that a merger challenge by the Federal Trade Commission (FTC) is procedurally different than one by the Antitrust Division of the Department of Justice (DOJ) because the differences can have a substantive effect on the outcome of the merger challenge. Ironically, a recent loss by the FTC in a transfer motion regarding its challenge of Graco Inc.'s proposed acquisition of Illinois Tool Works Finishing LLC (ITW) might have further widened that procedural gap. F.T.C. v. Graco Inc., Civ. Action No. 11-cv-02239 (RLW), Memo. Op. (D.D.C. Jan. 26, 2012) [hereinafter “Graco”]

The primary procedural difference between the agencies' merger challenges is that a challenge by the DOJ involves a single federal lawsuit where all issues, including question of injunctive relief and the merits, are decided by a single judge in a single court. A merger challenge by the FTC, however, involves both an injunctive relief action in federal court seeking to block the proposed transaction and an administrative complaint wherein a different judge (an administrative law judge specializing in antitrust) will render a decision on the merits. Therefore, battling an FTC merger challenge means fighting on two fronts (unless the parties elect to consent to a PI). The FTC has argued—with varying levels of success—that this procedural difference, and the fact that the injunctive proceeding is not decided by the administrative law judge (ALJ) who will decide the merits, means that the FTC has a lower standard in obtaining injunctive relief than the DOJ.

In addition to the arguably different legal standard, the FTC now may be able to argue that it also has broader jurisdictional powers than the DOJ, based on a recent ruling by Judge Robert Wilkins regarding Graco's proposed acquisition of ITW. Id. In Graco, the FTC sued in administrative court to block the proposed acquisition based on the Clayton Act and the FTC Act. At the same time, the FTC brought suit in the U.S. District Court for the District of Columbia to enjoin the merger during the pendency of the administrative action. The parties immediately moved to dismiss or transfer the case, arguing, among other things, that Washington, D.C.,did not have jurisdiction over Graco and that, in any event, the District of Minnesota was a more appropriate forum.