Private Merger Challenges Under § 16 of the Clayton Act: Caution Post-JELD-WEN

Abstract

Private merger enforcement is a minefield: there is considerable potential downside for industry because in many cases, the motives of private plaintiffs in a merger challenge will not align with the purpose of the antitrust laws; and it is risky for plaintiffs because they will rarely win. So rarely that, in a Fourth Circuit case decided in February of 2021, the court stated “private suits seeking divestiture are rare and, to our knowledge, no court had ever ordered divestiture in a private suit before this case.” Section 16 claims have been historically underdiscussed, in large part because plaintiffs are (almost) always unsuccessful. But the Fourth Circuit grant of divestiture to a private plaintiff just this year affords us an opportunity to evaluate this oft overlooked corner of antitrust law. Should private plaintiffs be able to mold the shape of industries to such a degree? This comment explores the concerns unique to private merger enforcement under § 16 of the Clayton Act, and maintains that despite the JELD-WEN ruling, courts should continue to review these suits with a critical eye. I acknowledge that private merger enforcement is part of the overall antitrust enforcement schema designed by Congress, and that the importance of private plaintiffs in the overall system has been echoed by the Supreme Court. I then detail counterbalancing concerns unique to private merger enforcement under section 16 of the Clayton Act. Ultimately, I argue that despite the JELD-WEN ruling, courts should continue to review these suits with a critical eye. When evaluating private merger challenges, courts ought to consistently apply the antitrust injury doctrine, give preference consumer plaintiffs over competitor plaintiffs, and be wary of unrecoverable waste resulting from divestiture in post-merger consummation challenges.