Case Citation
Legal Case Name

CHICAGO BRIDGE & IRON CO. N.V. v. F.T.C. Case Brief

United States Court of Appeals, Fifth Circuit2008
534 F.3d 410 Antitrust Law Administrative Law

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Case Brief Summary & Legal Analysis

General Brief
4 min read

tl;dr: A court upheld an FTC order blocking a merger between the two dominant U.S. builders of specialized industrial tanks. The acquisition created a near-monopoly, and the court found that high entry barriers prevented new competitors from counteracting the substantial lessening of competition.

Legal Significance: Affirms the flexible application of the Baker Hughes burden-shifting framework in merger challenges and demonstrates that significant entry barriers, such as reputation and regulatory expertise, can defeat a rebuttal defense based on potential competition, even in markets with sophisticated customers.

CHICAGO BRIDGE & IRON CO. N.V. v. F.T.C. Law School Study Guide

Use this case brief structure for your own legal analysis. Focus on the IRAC methodology to excel in law school exams and cold calls.

Case Facts & Court Holding

Key Facts & Case Background

Chicago Bridge & Iron (CB&I) acquired the assets of its primary competitor, Pitt-Des Moines (PDM), in four specialized U.S. markets for industrial storage tanks (LNG, LPG, LIN/LOX) and thermal vacuum chambers (TVCs). Prior to the acquisition, CB&I and PDM operated as a virtual duopoly, constituting the only significant competitors in these markets. For example, between 1975 and the acquisition, they were the only builders of LNG tanks for U.S. import terminals. The Federal Trade Commission (FTC) challenged the merger under Section 7 of the Clayton Act, arguing it would substantially lessen competition. The FTC established a prima facie case based on extremely high post-merger market concentration, as measured by the Herfindahl-Hirschman Index (HHI), and qualitative evidence from customers and internal documents. CB&I attempted to rebut this case by arguing that the threat of entry by new, primarily foreign, competitors would be sufficient to constrain any potential anticompetitive behavior. The FTC rejected this defense, finding that significant barriers to entry—including reputation for U.S.-specific projects, regulatory expertise with FERC, and access to specialized labor—would prevent new entry from being timely, likely, and sufficient to replace the competition lost from PDM’s exit.

Court Holding & Legal Precedent

Issue: Did the acquisition of a primary competitor in highly concentrated markets violate Section 7 of the Clayton Act where the acquiring firm argued that potential entry by new competitors would be sufficient to prevent anticompetitive effects?

Yes. The court denied the petition for review and affirmed the FTC’s Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut l

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IRAC Legal Analysis

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Legal Issue

Did the acquisition of a primary competitor in highly concentrated markets violate Section 7 of the Clayton Act where the acquiring firm argued that potential entry by new competitors would be sufficient to prevent anticompetitive effects?

Conclusion

This case provides a strong precedent for challenging mergers in highly concentrated Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco l

Legal Rule

Under Section 7 of the Clayton Act, the government first establishes a Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit,

Legal Analysis

The court affirmed the FTC's application of the *Baker Hughes* burden-shifting framework, Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute

Flash-to-Full Case Opinions

Flash Summary

  • The Fifth Circuit upheld an FTC divestiture order after finding CB&I’s
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id es

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