MIDCON CORP. V. FREEPORT-McMORAN, INC.
625 F. Supp. 1475 (1986)
NATURE OF THE CASE: Midcon (P) moved for a preliminary injunction to prevent Freeport (D)
from taking over P.
FACTS: D announced a tender offer to acquire all outstanding shares of common stock of P.
P moved for a preliminary injunction. P claimed violation of 1 and 2 of the Sherman Act,
15 U.S.C. 1-2, and 7 of the Clayton Act, 15 U.S.C. 18. P claims that once D gains
control of the pipelines owned by P's subsidiaries, D will force those subsidiaries to
purchase gas from D at inflated prices. This theory is based on P's 'captive market'. P
presented no evidence on building new pipelines, nor did it present significant testimony
concerning the availability of alternative fuels or the price elasticity of demand for
natural gas in the Chicago market. P presented no evidence that D ever sold their gas at
above-market rates. P's witnesses testified that generally, it is important for a pipeline
to be independent from producers. Evidence was presented concerning the policies and
procedures of the FERC, a federal agency with the power to regulate gas prices and that FERC
had never rejected a pipeline's request for a price increase.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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