Finnegan v. Campeau Corp.

During March 1988, R.H. Macy & Co., Inc. (Macy’s) (defendant) and Campeau Corp. (Campeau) (defendant) were in a public bidding war for control of Federated Department Stores, Inc. (Federated). While bidding against each other, Macy’s and Campeau each continued to outbid the other. In April 1988, Macy’s and Campeau decided it was jointly advantageous to cease bidding against each other and reach an agreement. Thus, Macy’s and Campeau decided that Macy’s would withdraw its bid of $75.51 per share for Federated stock, which permitted Campeau to win the bidding at $73.50 per share. The difference in purchase price represented approximately $172 million in value. In exchange for Macy’s withdrawal, Campeau agreed to reimburse Macy’s for $60 million of expenses Macy’s had incurred during the bidding war and allowed Macy’s to buy two business divisions of Federated. Michael Finnegan (plaintiff) was a shareholder of Federated and brought a lawsuit alleging that Macy’s and Campeau had engaged in a conspiracy to suppress the bidding and competition for Federated, in violation of § 1 of the Sherman Antitrust Act. Finnegan effectively alleged that the rival bidders had engaged in price fixing. Macy’s and Campeau argued that antitrust laws were inapplicable to this case because the Williams Act permitted joint bids and the Securities and Exchange Commission (SEC) required joint bidders to disclose their agreement via Schedule 14D filing. Macy’s and Campeau argued that such conflict between antitrust laws and securities laws relegates the antitrust laws as inapplicable to the case. The district court granted Macy’s motion to dismiss the case, ruling that antitrust laws were not applicable to securities regulation. Finnegan appealed the ruling.