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FTC Case Study

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The call came late on a Friday afternoon: the Federal Trade Commission wanted to block the proposed merger of Whole Foods and Wild Oats, and the parties were to square off in court in less than two weeks. What could FTI do to help? And how fast could FTI do it? The following Monday morning at 8:30 A.M., FTI communications and technology consultants were sitting across the desk from lead counsel Paul Denis of Dechert LLP, reviewing preliminary graphic concepts and proposed courtroom technology requirements. By lunchtime, FTI consultants had already been in court with defendants’ counsel and participated in an all-counsel strategy session. By the end of the day, FTI’s Trial Services professionals were fully engaged and firmly embedded in the trial team. Over the next seven days, FTI provided continuous communications consulting, graphic design and production, and technology consulting to prepare for what was in every sense of the term a “bet the company case.” And in this case, the defendant companies and defense counsel placed their bet on FTI. FTI Trial Services was retained by defendants to provide support for a two-day expedited hearing before Judge Paul Friedman in United States District Court in Washington, DC. The FTC was seeking to block the merger of Whole Foods and Wild Oats claiming the merger would eliminate competition by allowing Whole Foods to acquire, and then close, existing Wild Oats stores thereby allowing Whole Foods to raise prices and harm consumers in the “premium and natural organic supermarket” (PNOS) market. A key aspect to the defense was demonstrating that vigorous competition for PNOS shoppers exists in a market much larger than Whole Foods and Wild Oats—indeed, a market that today includes virtually every supermarket available to shoppers interested in purchasing natural and organic products. Another key defense theme was rebutting the FTC’s allegation that these PNOS shoppers constituted an enormous percentage of Whole Foods and Wild Oats core customers, an allegation belied by market data and effectively emphasized with supporting conceptual graphics. FTI Trial Services professionals worked continually with trial team members over a nine-day period to refine these themes through effective and persuasive use of graphics and trial technology. From early in the morning until late at night—sometimes through the night - FTI worked side-by-side with the trial team to ensure that the day trial began, Whole Foods and Wild Oats would have a compelling presentation to rebut the FTC’s allegations. But FTI’s support didn’t end when trial began. As lines formed outside the courtroom for this high profile case watched keenly by the business and investment communities, FTI was in the courtroom providing graphics and real-time technology support to Mr. Denis and the defense team. Two senior FTI professionals were present for the entire two days of trial, developing instant graphic treatments and revisions, presenting documents and videotape on a large projection screen viewed by the judge, counsel and packed gallery, and ensuring that in the end defendants’ presentation of the case was seamless, persuasive, and powerful. A few days later, Judge Friedman rendered his verdict: the FTC claim was denied, and Whole Foods and Wild Oats were cleared to proceed with the merger. A subsequent appeal by the FTC was also denied by the appeals court, sealing the victory for Whole Foods and Wild Oats, the trial team, and FTI Consulting Trial Services. THE CASES BEHIND THE HEADLINES FTC VERSUS WHOLE FOODS AND WILD OATS DECHERT LLP, SKADDEN ARPS, VINSON & ELKINS FTI graphics experts can create a wide range of visual communications devices to support the litigation team, including: Exhibit plans and outlines Opening statement presentations Witness presentations Research presentations Hardboards 2D and 3D animation Interactive multimedia Timelines Technical and medical illustrations Tutorials FTI Trial Technology professionals lend expertise in the courtroom and war room with: Best-of-breed courtroom presentation solutions Deepest bench of experienced trial technology consultants in the industry TrialMax trial presentation software FTI Jury consultants offer deep experience designing research to investigate juror perceptions by application of: Community attitude surveys Focus groups Mock trial research Witness preparation Jury selection Post-trial interviews
Transcript

The call came late on a Friday afternoon: the Federal Trade Commission wanted to block the proposed merger of Whole Foods and Wild Oats, and the parties were to square off in court in less than two weeks. What could FTI do to help? And how fast could FTI do it?

The following Monday morning at 8:30 A.M., FTI communications and technology consultants were sitting across the desk from lead counsel Paul Denis of Dechert LLP, reviewing preliminary graphic concepts and proposed courtroom technology requirements. By lunchtime, FTI consultants had already been in court with defendants’ counsel and participated in an all-counsel strategy session. By the end of the day, FTI’s Trial Services professionals were fully engaged and firmly embedded in the trial team.

Over the next seven days, FTI provided continuous communications consulting, graphic design and production, and technology consulting to prepare for what was in every sense of the term a “bet the company case.” And in this case, the defendant companies and defense counsel placed their bet on FTI.

FTI Trial Services was retained by defendants to provide support for a two-day expedited hearing before Judge Paul Friedman in United States District Court in Washington, DC. The FTC was seeking to block the merger of Whole Foods and Wild Oats claiming the merger would eliminate competition by allowing Whole Foods to acquire, and then close, existing Wild Oats stores thereby allowing Whole Foods to raise prices and harm consumers in the “premium and natural organic supermarket” (PNOS) market.

A key aspect to the defense was demonstrating that vigorous competition for PNOS shoppers exists in a market much larger than Whole Foods and Wild Oats—indeed, a market that today includes virtually every supermarket available to shoppers interested in purchasing natural and organic products. Another key defense theme was rebutting the FTC’s allegation that these PNOS shoppers constituted an enormous percentage of Whole Foods and Wild Oats core customers, an allegation belied by market data and effectively emphasized with supporting conceptual graphics.

FTI Trial Services professionals worked continually with trial team members over a nine-day period to refine these themes through effective and persuasive use of graphics and trial technology. From early in the morning until late at night—sometimes through the night - FTI worked side-by-side with the trial team to ensure that the day trial began, Whole Foods and Wild Oats would have a compelling presentation to rebut the FTC’s allegations.

But FTI’s support didn’t end when trial began. As lines formed outside the courtroom for this high profile case watched keenly by the business and investment communities, FTI was in the courtroom providing graphics and real-time technology support to Mr. Denis and the defense team. Two senior FTI professionals were present for the entire two days of trial, developing instant graphic treatments and revisions, presenting documents and videotape on a large projection screen viewed by the judge, counsel and packed gallery, and ensuring that in the end defendants’ presentation of the case was seamless, persuasive, and powerful.

A few days later, Judge Friedman rendered his verdict: the FTC claim was denied, and Whole Foods and Wild Oats were cleared to proceed with the merger. A subsequent appeal by the FTC was also denied by the appeals court, sealing the victory for Whole Foods and Wild Oats, the trial team, and FTI Consulting Trial Services.

the cases behind the headlines

FTC versus Whole Foods and Wild oaTsdeCherT llP, skadden arPs, vinson & elkins

FTI graphics experts can create a wide range of visual communications devices to support the litigation team, including:

— Exhibit plans and outlines

— Opening statement presentations

— Witness presentations

— Research presentations

— Hardboards

— 2D and 3D animation

— Interactive multimedia

— Timelines

— Technical and medical illustrations

— Tutorials

FTI Trial Technology professionals lend expertise in the courtroom and war room with:

— Best-of-breed courtroom presentation solutions

— Deepest bench of experienced trial technology consultants in the industry

— TrialMax trial presentation software

FTI Jury consultants offer deep experience designing research to investigate juror perceptions by application of:

— Community attitude surveys

— Focus groups

— Mock trial research

— Witness preparation

— Jury selection

— Post-trial interviews

About FtI ConsultIngFTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations protect and enhance enterprise value in an increasingly complex legal, regulatory and economic environment. With more than 2,400 professionals located in most major business centers in the world, we work closely with clients every day to anticipate, illuminate, and overcome complex business challenges in areas such as investigations, litigation, mergers and acquisitions, regulatory issues, reputation management and restructuring. More information can be found at www.fticonsulting.com.

fticonsulting.com © FTI Consulting, Inc., 2008. All rights reserved.

1. the mArket ACCordIng to the FtC

3. Whole Foods vs. FtC vIeWs on Core Customers

5. entry oF WIld oAts In A hypothetICAl mArket 6. subsequent entry oF Whole Foods In A hypothetICAl mArket

4. stAples/oFFICe depot merger vs. Whole Foods/WIld oAts merger

2. the reAl mArket


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