July 13, 2024

DealBook: Cravath to Hire Antitrust Chief

Christine Varney, the Justice Department's outgoing head of antitrust enforcement.Brendan Hoffman/Bloomberg NewsChristine Varney, the Justice Department’s outgoing head of antitrust enforcement.

Christine A. Varney, the government’s top antitrust lawyer, is leaving the Justice Department to join Cravath, Swaine Moore as a partner, representatives of the law firm confirmed on Wednesday.

Ms. Varney, 55, who was appointed by President Obama in January 2009, was expected to bring a more aggressive antitrust approach to Washington after what many legal experts saw as a period of lax enforcement during the Bush administration.

“She was faced with an agency that had been decimated and had to turn that ship around, which takes time,” said Bert Foer, the president of the American Antitrust Institute, a nonprofit agency that generally argues for more competition. “She got it moving in the right direction.”

In a statement, Ms. Varney said, “I am grateful for my two and a half years of service as assistant attorney general of the antitrust division.”

Her decision to return to private practice came as a surprise to many. Under Ms. Varney, the antitrust division had just begun to bring big cases.

Last October, the Justice Department brought a case against the major credit card companies, accusing them of anticompetitive behavior in prohibiting merchants from steering customers toward certain payments to avoid transaction fees. Visa and MasterCard settled the civil allegations; American Express is fighting the claim.

That same month, the department sued Blue Cross and Blue Shield of Michigan, contending that the health insurer forced hospitals to charge higher prices to Blue Cross’s rivals.

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On the merger front, the Nasdaq OMX Group and IntercontinentalExchange abandoned a joint bid to acquire NYSE Euronext after the antitrust division informed the companies that it would file a lawsuit to block the deal. It also forced VeriFone Systems to drop its takeover of Hypercom, a deal that the agency said would have lessened competition in the electronic payments business.

Yet a number of controversial mergers won approval under Ms. Varney, including the merger of Live Nation and Ticketmaster; Google’s purchase of ITA, the airline search software company; and Comcast’s acquisition of NBC Universal. Each of these deals was subject to various concessions by the companies. The agency is now examining one of the biggest acquisitions in recent years: ATT’s proposed $39 billion purchase of T-Mobile USA.

Ms. Varney bumped up against Cravath several times at the Justice Department. The antitrust division cleared a number of deals on which Cravath worked, including the airline merger between United and Continental.

And defending American Express in the government’s antitrust action is Evan R. Chesler, the presiding partner at Cravath who helped recruit Ms. Varney.

There is another Cravath connection: Late last year, Ms. Varney hired Katherine B. Forrest, a Cravath partner who led the review of the Continental-United combination, to serve as one of her top deputies. Ms. Forrest was recently nominated for a federal judgeship in Manhattan.

Under government ethics rules, Ms. Varney is banned for two years from appearing in any matter before the Justice Department. And she cannot work on any case or matter that was initiated by her division during her tenure.

The hiring of Ms. Varney is a coup for Cravath, which is renowned for its antitrust work. It is also unusual in that Cravath rarely hires partners from outside the firm. She will work in New York, where nearly all the firm’s lawyers are based. (It also has a small office in London.)

She plans to leave the Justice Department early next month and start at Cravath on Sept. 6.

She will advise the law firm’s clients on antitrust issues related to mergers. The firm is currently advising the Williams Companies in a bid to acquire the pipeline company Southern Union. Recent assignments include advising Johnson Johnson in its $21.3 billion acquisition of Synthes and representing a special committee of J. Crew’s board in the $3 billion buyout by two private equity firms.

A graduate of the Georgetown University Law Center, Ms. Varney has jumped between government service and private practice throughout her career. Before joining the Obama administration, Ms. Varney was a partner at Hogan Hartson, where she focused on antitrust work and Internet policy.

In the 1990s she served as a commissioner at the Federal Trade Commission after working in the White House during the early years of the Clinton administration.

Among the oldest firms in the United States, Cravath has had a number of its lawyers serve in prominent government posts. John W. White, a longtime partner, served during the George W. Bush administration as the head of corporate finance at the Securities and Exchange Commission and then rejoined the firm in 2009. William H. Seward, who served as President Lincoln’s secretary of state and governor of New York, was a founding partner of the firm.

Cravath’s hiring of Ms. Varney comes at a time when large corporate law firms are aggressively hiring away top lawyers from other firms and offering record pay packages.

Ms. Varney is not receiving such largess: Cravath hews to a lockstep compensation model in which partners are paid according to seniority. Still, she will get a significant raise from her government salary: the average Cravath partner earned $3.2 million last year, according to American Lawyer magazine.

Article source: http://feeds.nytimes.com/click.phdo?i=f82e6369f15e4a3e20c11fa4cb5e2cdf

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