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No Antitrust Violations on the Route to Machu Picchu

With Carter Ledyard’s assistance, Peruvian railway operators Ferrocarril Transandino S.A. and Perurail S.A. (affiliates of firm client Orient-Express Hotels Ltd.) were recently cleared of antitrust violations in the operation of the railroad to Machu Picchu, Peru’s foremost tourist attraction. Last year, the Technical Secretariat of INDECOPI (the Peruvian Competition Commission), citing U.S. antitrust precedents, found that Ferrocarril and Perurail had illegally suppressed competition by filing a series of complaints against competing railway operators. Working with Peruvian counsel in an appeal, litigation partner Gary D. Sesser prepared an expert report on the interpretation and application of the "sham litigation" exception to the Noerr-Pennington doctrine under U.S. antitrust law (which immunizes private parties from antitrust liability for attempting to influence governmental action). Our report concluded that the Technical Secretariat’s report incorrectly interpreted U.S. law, noting that it is necessary to demonstrate that the challenged legal proceedings are objectively baseless in order to fall within the sham litigation exception to the Noerr-Pennington doctrine. Our report also explained that successful litigation, by definition, cannot be sham litigation. On August 22, 2011, INDECOPI decided in favor of Ferrocarril and Perurail, holding that the legal and administrative actions they had filed did not constitute a sham litigation but were a legitimate exercise of their rights. In its 102 page decision, the INDECOPI explained that successful litigation cannot be baseless, specifically referencing our analysis.
 
Litigation partner Gary D. Sesser, litigation counsel Jeffrey L. Loop, and litigation associates Judith Wallace and Chlo├ę D. Coravos worked on this matter.

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