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  • Northern District Of California Holds That Commitments Made In Industry Standard Setting Required Chipmaker To License Standard-Essential Patents To “All Comers,” Including Competitors
     
    11/13/2018

    On November 6, 2018, Judge Lucy H. Koh of the U.S. District Court for the Northern District of California sided with the Federal Trade Commission (“FTC”) and granted a motion for partial summary judgment, holding that contractual commitments it agreed to in the standards-setting process required the defendant chipmaker to license certain essential patents to competing modem chip suppliers.  Federal Trade Comm’n v. Qualcomm Inc., No. 17-CV-00220 (N.D. Cal. Nov. 6, 2018).
  • District Of New Jersey Denies Class Certification Based On Presence Of Uninjured Class Members In Proposed Class
     
    11/06/2018

    On October 30, 2018, Judge Madeline C. Arleo of the United States District Court for the District of New Jersey declined to certify a proposed consumer class in litigation accusing a pharmaceutical manufacturer (the “Company”) of maintaining a monopoly for two of its drugs. Judge Arleo held that, under Federal Rule of Civil Procedure 23, a class cannot be certified when a non-trivial portion of class members were not injured, absent some “reasonable and workable plan” to segregate those members from the rest of the class. In re Thalomid and Revlimid Antitrust Litig., No. 2:14-cv-06997, at *26, *29 (D.N.J. Oct. 30, 2018) (“Opinion”). In so holding, Judge Arleo relied heavily on the First Circuit’s recent decision in In re Asacol Antitrust Litig., which reversed a district court’s approval of a class on similar grounds. No. 18-1065, 2018 WL 4958856, at *11 (1st Cir. Oct. 15, 2018); https://www.lit-antitrust.shearman.com/first-circuit-reverses-class-certification-based.
  • First Circuit Reverses Class Certification Based On Presence Of Uninjured Class Members In Certified Class
     

    10/31/2018

    On October 15, 2018, the United Stated Court of Appeals for the First Circuit, in an opinion by Judge William J. Kayatta, reversed a district court’s certification of a class of indirect purchasers of the drug Asacol, holding that, under Federal Rule of Civil Procedure 23, a class cannot be certified when a non-trivial portion of class members were not injured in fact, absent some “reasonable and workable plan” to segregate those members from the rest of the class.  In re Asacol Antitrust Litig., No. 18-1065, 2018 WL 4958856, at *11 (1st Cir. Oct. 15, 2018). 
  • Eastern District Of Pennsylvania Dismisses Antitrust Suit Against Lab Testing Company Alleging Unfair Competition In Specialized Testing Services
     
    10/23/2018

    On October 9, 2018, Judge Gerald J. Pappert of the U.S. District Court for the Eastern District of Pennsylvania granted defendant Independence Blue Cross’s (“IBC”) and defendant Laboratory Corporation of America Holdings’s (“LabCorp”) motions for summary judgment on an unfair competition claim filed by Medical Diagnostic Laboratories, LLC (“MDL”).  MDL is a lab testing company that provides specialized testing services for sexually transmitted infections.  MDL alleged that defendants violated Sherman Act Section 1 and Pennsylvania state unfair competition law, and tortiously interfered with existing and prospective relationships with healthcare providers, by requiring IBC in-network providers to exclusively refer patients needing lab work to LabCorp.  The Court granted defendants’ motions to dismiss the Section 1 and tortious interference with existing business relationships claims on August 30, 2017, but allowed MDL to take discovery on its claims of tortious interference with prospective contractual relations and unfair competition.  In his summary judgment opinion, Judge Pappert rejected these remaining claims.
  • Southern District Of New York Dismisses Benchmark Manipulation Claims Against Banks Not Involved In Setting Benchmark, But Allows Claims To Proceed Against Panel Banks
     
    10/16/2018
     

    On October 4, 2018, Judge Alvin K. Hellerstein of the United States District Court for the Southern District of New York dismissed, with prejudice, claims that certain banks engaged in an industry-wide conspiracy to manipulate various Singapore financial benchmarks in violation of Section 1 of the Sherman Act, while simultaneously ruling that claims against other defendants that were involved in setting the benchmark could proceed.  The Court also found that it did not have jurisdiction over defendant banks that were not members of the panel that set the financial benchmark at issue, and therefore dismissed plaintiffs’ claims against those defendants.  Frontpoint Asian Event Driven Fund v. Citibank, 16 Civ. 5263 (S.D.N.Y. Oct. 4, 2018).

  • Northern District Of California Applies FTAIA To Price-Fixing Claims Based On Various Extraterritorial Purchasing Scenarios
     
    10/09/2018

    On September 20, 2018, Judge James Donato of the United States District Court for the Northern District of California issued an order granting in part and denying in part defendants’ motion for summary judgment on the issue of the applicability of the Foreign Trade Antitrust Improvements Act, 15 U.S.C. § 6a (“FTAIA”) to specific categories of claims.  Judge Donato also addressed a question left open in a prior order regarding whether a state antitrust or consumer protection law might apply less broadly than the FTAIA.  In re Capacitors Antitrust Litig. (No.III), Case No. 17-md-02801-JD (N.D. Cal. Sept. 20, 2018).  Judge Donato’s decision clarifies the application of the FTAIA to various categories of extraterritorial transactions allegedly affected by a price-fixing conspiracy.
  • United States District Court For The District Of Minnesota Rejects Sherman Act Section 2 Suit Against Food Packaging Company Predicated On Sham Litigation And Discount Bundling Claims
     
    10/02/2018

    On September 5, 2018, Judge Ann D. Montgomery of the U.S. District Court for the District of Minnesota issued a decision ruling rejecting a food packaging company’s allegations that the largest company in the market maintained its dominant position through unlawful discount bundling and sham intellectual property claims.  Inline Packaging, LLC v. Graphic Packaging International, LLC, No. 0:15-cv-03183-ADM-LIB (D. Minn. Sept. 5, 2018).
    CATEGORY: Sherman Act § 2
  • District Of New Jersey Finds State Antitrust And Consumer Protection Claims Based On Allegedly Fraudulent Procurement And Enforcement Of Patents And Related Reverse-Payment Agreement Not Preempted By Federal Patent Law
     
    09/25/2018

    On September 18, 2018, Judge Peter G. Sheridan of the U.S. District Court for the District of New Jersey granted in part and denied in part a defense motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c) seeking dismissal of state antitrust and consumer protection claims based on the allegedly fraudulent procurement and enforcement of certain pharmaceutical patents and a related alleged pay-for-delay scheme.  In re Effexor Antitrust Litig., No. 3:11-cv-05661 (D.N.J. Sept. 18, 2018).
  • District Of Columbia Releases Redacted Opinion Detailing Reasoning Behind Decision To Grant Preliminary Injunction In Tronox-Cristal Acquisition
     
    09/17/2018

    On September 5, 2018, Judge Trevor N. McFadden of the United States District Court for the District of Columbia granted the Federal Trade Commission’s request for a preliminary injunction preventing Tronox Ltd. (“Tronox”) from completing its proposed $2.4 billion acquisition of National Titanium Dioxide Company Ltd. (“Cristal”) until after a final ruling in the FTC’s administrative proceedings challenging the deal.  Federal Trade Commission v. Tronox Ltd., et al., 1:18-cv-01622 (TNM) (D.D.C. Sept. 12, 2018).Tronox intends to appeal and will consider whether to proceed with a divestiture to resolve potential competitive concerns.
  • Illinois District Court Denies Sandwich Franchisor’s Motion To Dismiss Sherman Act Claim Alleging Damages From No-Poach Agreement
     
    08/28/2018

    On July 31, 2018, Judge Michael J. Reagan of the United States District Court for the Southern District of Illinois granted in part and denied in part defendant-franchisor’s motion to dismiss an antitrust claim filed by a purported class of former employees of defendant’s franchisees.  Butler v. Jimmy John’s Franchise, LLC, No. 18-CV-0133-MJR-RJD, 2018 WL 3631577 (S.D. Ill. July 31, 2018).  Plaintiffs alleged that provisions included in defendant’s franchise agreements with its franchisees in which the franchisees agreed not to hire each other’s employees—commonly known as “no-poach” agreements—violated Section 1 of the Sherman Act and various state antitrust laws by suppressing employee wages and mobility in the labor market.  Defendants moved to dismiss all claims, arguing that plaintiffs failed to allege an injury that would confer Article III standing, and that plaintiffs failed to plausibly allege an antitrust conspiracy under Section 1 of the Sherman Act.
  • The Ninth Circuit Affirms Implied Antitrust Immunity For USA Track & Field And The United States Olympic Committee
     
    08/21/2018

    On August 7, 2018, the Ninth Circuit Court of Appeals affirmed a district court holding that USA Track & Field and the United States Olympic Committee were immune to antitrust liability for imposing advertising restrictions during the Olympic Trials for track and field athletes.  Gold Medal LLC v. USA Track & Field, No. 6:16-cv-00092-MC (9th Cir. Aug. 7, 2018).  The Court held that defendants were entitled to implied antitrust immunity because the advertising restriction was integral to performance of their statutory duties under the Ted Stevens Olympic and Amateur Sports Act (“ASA”) to fund the U.S. Olympic Team.  Plaintiff alleged that the defendants’ anticompetitive conspiracy imposing advertising restrictions that excluded certain sponsors from the Olympic Trials for track and field athletes violated Section 1 of the Sherman Act.
  • Ninth Circuit Upholds Dismissal Of Antitrust Suit Against The Anheuser-Busch InBev And SABMiller Merger
     
    08/14/2018

    On August 8, 2018, the United States Court of Appeals for the Ninth Circuit upheld a dismissal of an antitrust class action by beer consumers that challenged the acquisition of SABMiller (“SAB”) by Anheuser-Busch InBev (“ABI”).  In an opinion by Judge Margaret McKeown, the Ninth Circuit held that the beer consumers failed to state a claim under Section 7 of the Clayton Act because: (1) ABI did not actually acquire a competitor in the U.S. beer market; (2) ABI did not acquire a “potential competitor” in the U.S. beer market; and (3) the consumers’ concern that the acquisition would significantly increase the threat of post-merger coordination between the last remaining market players, ABI and Molson Coors Brewing Company (“Molson”), was speculative.
  • Southern District Of New York Dismisses Silver Benchmark Manipulation And Silver Trading Conspiracy Claims
     

    07/31/2018


    On July 25, 2018, Judge Valerie E. Caproni of the United States District Court for the Southern District of New York dismissed with prejudice claims that certain banks participated in a conspiracy to (a) manipulate the London Silver Fixing, and (b) engage in manipulation of silver spot markets and futures markets in violation of Section 1 of the Sherman Act. The Court held that plaintiffs failed to plausibly allege that these banks—which did not participate in the London Silver Fixing—were part of the alleged conspiracy to manipulate that benchmark. The Court also dismissed other conspiracy claims on antitrust standing grounds, based on the remoteness of the injuries allegedly suffered by plaintiffs and the dangers of disproportionate recovery that this remoteness would present. The Court also dismissed claims that the alleged conduct violated the Commodity Exchange Act (“CEA”) and justified recovery under an unjust enrichment theory.
     

  • Georgia District Court Denies Class Certification To Plaintiffs Alleging Conspiracy To Delay Release of Generic Versions Of Testosterone Replacement Drug
     
    07/24/2018

    On July 16, 2018, in the latest development in the litigation over the “reverse payment” settlements relating to the pharmaceutical testosterone replacement AndroGel that the Supreme Court addressed in FTC v. Actavis, Inc., 570 U.S. 136 (2013), Judge Thomas W. Thrash, Jr. of the United States District Court for the Northern District of Georgia denied class certification to a proposed class of direct purchaser plaintiffs. In re AndroGel Antitrust Litigation (No. II), No. 2084, 2018 WL 3424612 (N.D. Ga. July 15, 2018). 
  • Illinois District Court Dismisses Complaint Alleging Conspiracy To Restrict Supply And Increase The Price Of Intravenous Saline Solution
     
    07/17/2018

    On July 5, 2018, Judge John J. Tharp, Jr. of the United States District Court for the Northern District of Illinois granted defendant intravenous saline (“IV saline”) bag manufacturers’ motion to dismiss a complaint filed by a purported class of IV saline purchasers alleging that defendants conspired to restrict the output and raise the price of IV saline solution in violation of Section 1 of the Sherman Act.  Washington County Health Care Auth., Inc., et al. v. Baxter Int’l Inc., et al., No. 16 CV 10324 (N.D. Ill. July 5, 2018).  Plaintiffs alleged that defendants conspired to create an artificial shortage of IV saline solution by initiating a series of bogus voluntary recalls to deplete inventories of health care facilities in an effort to increase prices.  Defendants moved to dismiss the claims, arguing the complaint did not adequately allege the existence of an agreement to restrain the supply and increase the price of IV saline.
  • United States District Court For the Eastern District Of Pennsylvania Finds Violation Of FTC Act Section 5 By Pharmaceutical Companies And Orders $448 Million Disgorgement
    07/10/2018

    On June 29, 2018, Judge Harvey Bartle III of the U.S. District Court for the Eastern District of Pennsylvania issued a decision ruling that AbbVie Inc., Abbott Laboratories, and Unimed Pharmaceuticals LLC (together, “AbbVie”), along with Besins Healthcare, Inc. (“Besins”), violated Section 5(a) of the FTC Act by engaging in sham litigation to delay entry of competition to its testosterone replacement drug, and ordered disgorgement of $448 million. Federal Trade Commission v. AbbVie Inc., No. 2:14-cv-05151-HB (E.D. Pa. June 29, 2018). This represents the largest monetary award that the Federal Trade Commission (“FTC”) has achieved in a litigated antitrust case.
  • Eighth Circuit Dismisses Federal Antitrust Claims In Propane Action, Finding Plaintiffs Failed To Allege Injury Or Ongoing Conspiracy By Defendants
     
    07/10/2018

    On June 22, 2018, a three-judge panel on the Eighth Circuit Court of Appeals affirmed in part a district court decision granting summary judgment for defendants and dismissing antitrust claims under Section 1 of the Sherman Act, as well as the antitrust laws of 23 states and the District of Columbia, against two propane gas companies. Mario Ortiz et al. v. Ferrellgas Partners et al., No. 16-4086 (8th Cir. June 22, 2018).
  • United States Supreme Court Upholds Rejection Of The Government’s Antitrust Challenge To American Express’s Merchant Contracts
     
    07/03/2018

    On June 25, 2018, the U.S. Supreme Court, in a 5-4 decision by Justice Thomas, held that provisions in American Express Company’s (“American Express” or “Amex”) and its operating subsidiary’s contracts with merchants that restricted the ability of these merchants to steer customers to other credit or charge cards did not violate the Sherman Act. Ohio v. Am. Express Co., 585 U.S. __, slip op. at 1 (2018). The Court held that plaintiffs—the United States Department of Justice and the Attorneys General of several states—failed to satisfy their burden of proving anticompetitive effects in the relevant market under the rule of reason. Id. at 10. The ruling has important implications for antitrust analysis, not only for the credit card industry, but for other industries that operate in two-sided markets where firms must compete simultaneously for different groups of customers whose demands are distinct but deeply interrelated.
  • Jury In The Eastern District Of Pennsylvania Finds No Liability For Egg Producers In Alleged Price Fixing Suit
    06/26/2018
    On June 14, 2018, a jury in the Eastern District of Pennsylvania found three egg producers not liable for violating Section 1 of the Sherman Act based on an alleged conspiracy to restrict the supply of egg-laying hens and artificially inflate the price of eggs. In re Processed Eggs Prods. Antitrust Litig., 2:08-md-02002 (E.D. Pa. June 14, 2018).
  • United States District Court For The District Of Columbia Rejects DOJ Challenge To AT&T-Time Warner Merger
    06/19/2018
    On June 12, 2018, following a six-week-long bench trial, Judge Richard J. Leon of the United States District Court for the District of Columbia ruled that AT&T’s proposed acquisition of Time Warner does not violate the antitrust laws, rejecting the United States Department of Justice’s (DOJ) challenge to the merger. United States v. AT&T Inc., Civil Case No. 17-2511 (RJL) (D.D.C. June 12, 2018). This case—the first vertical merger challenge tried by the Justice Department since 1977—demonstrates the difficulty in challenging mergers where a competitor is not eliminated by the transaction.

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  • United States Supreme Court Rules That Foreign Government Submissions As To Disputed Issues Of Foreign Law, While Entitled To Deference, Are Not Binding On U.S. Courts
    06/19/2018
    On June 14, 2018, Justice Ginsburg, writing for a unanimous Supreme Court, revived Sherman Act claims against Chinese vitamin manufacturers, reversing a 2016 opinion by the Second Circuit in In re Vitamin C Antitrust Litigation, 837 F.3d 175 (2d Cir. 2016), and holding that a foreign government’s interpretation of its own law is not binding on U.S. courts. Animal Science Prods., Inc. v. Hebei Welcome Pharm. Co., No. 16-1220 (June 14, 2018).

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  • Utah District Court Denies Defendants’ Motion To Dismiss Complaint Alleging Restraint Of Trade In Online Lens Retail Market
     
    06/05/2018

    On May 17, 2018, Judge Tena Campbell of the United States District Court for the District of Utah denied three leading contact lens retailer defendants’ motion to dismiss a putative class action complaint alleging violations of Section 1 of the Sherman Act.  J. Thompson, et al. v. 1-800 Contacts, et al., Case No. 2:16-CV-1183-TC (D. Utah May 17, 2018).  Plaintiffs, who purchased contact lenses online from defendants, alleged that they paid artificially-inflated prices for those contact lenses due to defendants’ anticompetitive trademark litigation settlement agreements.  Defendants moved to dismiss the claims because the plaintiffs lacked antitrust standing, failed to properly plead a relevant product market, did not allege a single overarching conspiracy, and with respect to damages claims prior to 2012, failed to file a lawsuit within the Clayton Act’s four-year statute of limitations.

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  • United States Federal Trade Commission Administrative Law Judge Dismisses Complaint Challenging Reverse Payment Settlement Between Pharmaceutical Manufacturers
     
    05/30/2018

    On May 11, 2018, U.S. Federal Trade Commission (“FTC”) Administrative Law Judge D. Michael Chappell issued an initial decision ruling that a reverse payment settlement by Endo Pharmaceuticals (“Endo”) with Impax Laboratories (“Impax”) did not violate Section 5 of the FTC Act, and dismissing the FTC’s complaint.  In the Matter of Impax Labs., Inc., Docket No. 9373 (Initial Decision, May 11, 2018).  Judge Chappell concluded that despite the reverse payment Endo made to Impax, the anticompetitive harm arising from the settlement was “largely theoretical,” and that the settlement’s procompetitive benefits outweighed any anticompetitive effect from the agreement.  The initial decision is the first administrative ruling on a reverse payment trial since the U.S. Supreme Court’s 2013 Actavis decision.  The decision has been noticed for appeal to the Commission.

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  • Ninth Circuit Overturns Dismissal Of Antitrust Suit Against City’s Ordinance Allowing App-Based Drivers To Collectively Bargain
     
    05/22/2018

    On May 11, 2018, the United States Court of Appeals for the Ninth Circuit Court partially reversed the district court’s dismissal of claims brought by the U.S. Chamber of Commerce, on behalf of ride-share app companies, that a Seattle ordinance allowing for-hire drivers to bargain collectively violated and was preempted by the antitrust laws.  In an opinion by Circuit Judge Milan D. Smith, the Ninth Circuit held that the state-action defense did not protect the ordinance from preemption by the Sherman Act because:  (1) the State of Washington had not clearly articulated and affirmatively expressed a state policy authorizing for-hire drivers to fix the prices of their service fees when using a ride-share app; and (2) the active-supervision requirement of the state-action defense was not met.

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  • Federal Judge Reverses Course, Will Consider Volume Of Commerce In Sentencing For Criminal Antitrust Convictions
     
    05/15/2018

    On May 7, 2018, Judge Charles Breyer of the United States District Court for the Northern District of California affirmed that volume of commerce (“VOC”) is a necessary factor in determining the appropriate sentence for criminal antitrust convictions.  This represents a reversal from his earlier comments at an April 26, 2018 hearing, where Judge Breyer said he would ignore the VOC in sentencing 23 individuals for their roles in a conspiracy to rig bids at public real estate foreclosure auctions. 

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  • Northern District Of California Rejects Motion To Dismiss Sherman Act Claims Against Parties To A Joint Venture In The Vanity Mobile Dial Code Market
     
    05/01/2018

    On April 19, 2018, Judge Beth L. Freeman of the United States District Court for the Northern District of California denied defendants’ motion to dismiss antitrust claims under Sections 1 and 2 of the Sherman Act, rejecting defense arguments that the complaint alleged no more than permissible unilateral conduct by a legitimate joint venture. 

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  • Eastern District Of New York Holds That Group Boycott Of Online Dental Marketplace Must Go To Trial
     
    04/24/2018

    On April 13, 2018, Judge Brian M. Cogan of the United States District Court for the Eastern District of New York denied defendants’—two leading dental supply distributors—motions for summary judgement.  Plaintiff SourceOne, a nascent competitor in the dental supply distribution market, partnered with the Texas Dental Association (TDA) to launch an online marketplace in competition with the larger distributors, including defendants.  Plaintiff alleged that the two defendants and a third leading dental supply distributor (who settled early in the case), which collectively controlled 80 percent of the dental supply distribution in the United States, conspired to boycott the TDA and Arizona Dental Association trade shows in an effort to harm plaintiff. 

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  • DOJ Enters Into Settlement Ending No-Poach Agreements In The Rail Equipment Supplier Industry
     
    04/17/2018

    ​On April 3, 2018, the U.S. Department of Justice (“DOJ”) filed a simultaneous Complaint and Stipulation in its investigation into no-poach agreements—defined as agreements between competitors not to compete for employees—between Knorr-Bremse AG (“Knorr”) and Westinghouse Air Brake Technologies Corporation (“Wabtec”) in the rail equipment supplier industry.  DOJ took a broad view of the scope of such agreements to include both the solicitation and hiring of employees, and to include both the hiring of employees located domestically and those located internationally and hired to work in the United States.  Prior enforcement actions of no-poach cases had brought only civil charges; however, DOJ has recently announced its intent to seek criminal charges in policy guidance published in October 2016.  In this action, DOJ exercised its prosecutorial discretion in deciding not to bring criminal charges.  Nevertheless, this appears to be the first step in DOJ’s efforts to step-up enforcement consistent with the recent public statements of Makan Delrahim, Assistant Attorney General for the Antitrust Division. 

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    CATEGORY: Sherman Act § 1
  • Third Circuit Upholds Dismissal Of Attempted Monopolization Claims For Failure To Allege An Antitrust Violation Or Antitrust Injury
     

    04/10/2018


    On March 27, 2018, the United States Court of Appeals for the Third Circuit upheld a March 2017 order by Judge Sanchez of the Eastern District of Pennsylvania dismissing an attempted monopolization claim asserted by the Philadelphia Taxi Association (“PTA”) and 80 individual taxicab companies against a leading ride-hailing company.  Phila. Taxi Ass’n v. Uber Tech., Inc., No. 17-1871 (3d Cir. Mar. 27, 2018).  The Court held that plaintiffs had failed to state a claim under Section 2 of the Sherman Act and had failed to allege antitrust injury.
     

  • U.S. District Court For The Northern District Of California Rejects Class Certification Of Indirect Purchasers In Lithium Ion Battery Price-Fixing Litigation Based On Plaintiffs’ Failure To Address Focal Point Pricing 
     
    03/27/2018

    On March 5, 2018, Judge Yvonne Gonzalez Rogers of the U.S. District Court for the Northern District of California denied class certification for a group of indirect purchasers alleging price fixing in the sale of lithium batteries, holding that the plaintiffs failed to demonstrate that they had a reliable method of proving pass-through of the alleged overcharges on a class-wide basis.  In so holding, the Court relied primarily on the plaintiffs’ expert’s failure to account for the effects of “focal point pricing,” the practice of pricing consumer products at certain attractive retail price points, for example, $799 or $1299. 

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  • Southern District Of New York Denies Certification To Two Putative Classes And Grants Partial Certification To A Third In LIBOR Rate Manipulation Litigation
     
    03/13/2018

    On February 28, 2018, Judge Naomi Reice Buchwald of the Southern District of New York denied class certification to two proposed classes in the LIBOR rate manipulation litigation, while granting partial certification to a third class.  In re LIBOR-Based Fin. Instruments Antitrust Litig., No 1:11-cv-02613-NRB (S.D.N.Y. Feb. 28, 2018).  At issue in this thorough 366-page decision were three proposed classes:  (1) the “exchange-based” class, (2) the “lender” class, and (3) the “over-the-counter” or “OTC” class, all seeking to recover damages based on alleged manipulation of the London Inter-bank Offered Rate (“LIBOR”).  

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  • Second Circuit Revives Schwab’s Claims Flowing From Alleged LIBOR Manipulation
     
    02/27/2018

    On February 23, 2018, the United States Court of Appeals for the Second Circuit vacated portions of Judge Buchwald’s 2015 opinion that had dismissed claims brought by Charles Schwab Corp. and affiliates against over a dozen banks alleged to have manipulated U.S. Dollar LIBOR for lack of personal jurisdiction for state-law claims and a failure to link the alleged manipulation to damages for Securities Exchange Act claims.  Charles Schwab Corp., et al. v. Bank of America Corp., et al., 16-1189-cv (2d Cir. Feb. 23, 2018).  Schwab had been among the many plaintiffs to pursue claims against LIBOR panel banks under the antitrust laws, but—while the dismissal of those claims was pending appeal before the Second Circuit—Schwab initiated a parallel action against LIBOR panel banks, alleging California common law fraud and unjust enrichment claims, statutory claims under California’s Business and Professions Code, and claims under the Securities Exchange Act.  The district court dismissed the complaint in its entirety, holding that (i) personal jurisdiction was lacking for the state law claims because the alleged manipulation took place outside of the U.S.; and (ii) the complaint failed to allege facts in support of a Securities Exchange Act claim because it failed to connect the suppression of LIBOR to any damages suffered by Schwab.  In re LIBOR-based Financial Instruments Antitrust Litig., 2015 WL 6243526, *70 (Oct. 20, 2015 S.D.N.Y.).  The Second Circuit vacated these rulings, directing the district court to grant Schwab leave to amend its complaint to address a number of issues identified in the opinion. 

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    CATEGORIES: ConspiracyDamages
  • District Of Delaware Denies Building Supply Company’s Motion To Dismiss Claims That It Monopolized And Unlawfully Restrained Trade In The Ceiling Tile Market Through Exclusive Agreements
     
    02/21/2018

    On February 9, 2018, Judge Mark A. Kearney of the United States District Court for the District of Delaware denied in part Armstrong World Industries Inc.’s (“Armstrong”) motion to dismiss a lawsuit filed by rival ceiling tile manufacturer Roxul USA Inc. (“Roxul”), finding that Roxul alleged facts plausibly demonstrating monopolization and attempted monopolization in violation of Sherman Act Section 2, and concerted action in restraint of trade in violation of Sherman Act Section 1 and Clayton Act Section 3.  However, Judge Kearney granted Armstrong’s motion to dismiss Roxul’s claims relating to the sale of ceiling tiles in Canada because Roxul failed to allege how reduced competition in Canada had a “direct, substantial and reasonably foreseeable effect” on U.S. commerce, as required by the Foreign Trade Antitrust Improvements Act (“FTAIA”). 

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  • Eastern District Of Pennsylvania Court Rules In Favor Of Philadelphia Parking Authority In Taxicabs’ Suit Alleging Failure To Regulate Emerging Competitors 
     
    02/06/2018

    ​On January 29, 2018, Judge Michael M. Baylson of the United States District Court for the Eastern District of Pennsylvania granted summary judgment in favor of the Philadelphia Parking Authority (“PPA”) and turned down the damage claims filed by Checker Cab Philadelphia, Inc. and several other medallion-holding taxicab companies (collectively “Checker”) against PPA for their alleged failure to adequately regulate alternative transportation network companies like Uber and Lyft (collectively, “TNCs”).  Checker Cab Philadelphia Inc. v. Philadelphia Parking Authority, 2:16-cv-04669 (E.D. Pa. 2018).  Judge Baylson held that TNCs and taxicab companies are not similarly situated, and that PPA should not be responsible for the taxicab companies’ alleged losses caused by increased competition in the transportation industry.  The Court summarized its holding as follows:  “A court is not suited to protect market participants from competition, or from changing consumer preferences.  The marketplace still speaks loudly, probably louder than a court can, and the resolution of competitive combatants must take place in the marketplace, rather than in a courtroom.”

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  • U.S. District Court For The District Of New Jersey Dismisses Class Action For Failure To Identify Concerted Action And Relevant Market
    01/23/2018
    On January 9, 2018, Judge William J. Martini of the United States District Court for the District of New Jersey dismissed with prejudice a putative class action brought by a purchaser of Jaguar vehicles against Jaguar Land Rover North America LLC, Jaguar Land Rover Limited (collectively, the “manufacturer defendants”), their dealers, and a third-party consulting company.  Baar v. Jaguar Land Rover North Am., LLC, et al., No. 2:17-04142 (D.N.J. Jan. 9, 2018).  Plaintiff alleged that defendants unreasonably restrained trade by implementing and enforcing a no-export agreement that prohibited purchasers from reselling Jaguar’s vehicles abroad for at least one year.  The Court held that the plaintiff’s complaint failed to state a violation of federal or state antitrust laws because it did not adequately allege (1) concerted action among the defendants, or (2) that Jaguar’s no-export policy produced anticompetitive effects within a cognizable antitrust product and geographic market.

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  • U.S. District Court For The Northern District Of Florida Holds That A Doctor Is Not An Efficient Enforcer Of The Antitrust Laws With Respect To An Alleged Conspiracy To Exclude Her From Practicing 
     
    01/17/2018

    On January 3, 2018, Judge Mark E. Walker granted defendant doctors’ motion to dismiss a lawsuit filed by plaintiff Wendy Garlington, a rival practitioner, on grounds that Garlington was not an “efficient enforcer” of the antitrust laws, as required for antitrust standing under Section 4 of the Clayton Act.  This decision is consistent with a line of precedent from the U.S. Court of Appeals for the Eleventh Circuit that sets a high bar under the efficient enforcer requirement for plaintiffs pursuing antitrust claims against competitive rivals in the medical services arena.  

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  • Northern District Of California Rules International Comity Does Not Require Deference To Korean Supreme Court In In Re Korean Ramen
     
    01/10/2018

    On December 28, 2017, Judge William Orrick of the United States District Court for the Northern District of California denied a motion for summary judgment by defendants facing antitrust claims alleging a conspiracy to fix the prices of Korean ramen.  In re Korean Ramen Antitrust Lit., No. 3:13-cv-4115-WHO (N.D. Cal. Dec. 28, 2017).  In so ruling, Judge Orrick rejected defendants’ argument that principles of international comity required the Court to defer to a Korean Supreme Court decision overturning conspiracy findings and fines levied by the Korean Fair Trade Commission (“KFTC”).  The Court also ruled that there was sufficient evidence that the conspiracy impacted ramen prices in the United States, in particular for ramen manufactured in the United States, and that plaintiffs should therefore be permitted to move forward with their claims.

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  • Northern District Of California Dismisses Monopolization Claims By Hospital Operators For Failure To State A Claim  
     
    12/19/2017

    On December 7, 2017, Magistrate Judge Laurel Beeler of the United States District Court for the Northern District of California dismissed a conspiracy to monopolize claim brought by two local hospital operators against Kaiser Foundation Health Plan, Inc., Kaiser Foundation Hospitals, Inc., and Permanente Medical Group, Inc.  Northbay Healthcare Grp., Inc., et al. v. Kaiser Found. Health Plan, Inc., et al., No. 17-cv-05005-LB, 2017 WL 6059299 (N.D. Cal. Dec. 7, 2017).  The plaintiffs, who operate two hospitals in Solano County, California, alleged that defendants conspired to monopolize the healthcare insurance and services market in Solano County by (1) terminating their rate agreements with plaintiffs, and (2) steering patients to or away from defendants’ hospital emergency rooms based on the defendants’ financial incentives.  The Court dismissed the complaint, holding that plaintiffs did not adequately allege (1) a combination or conspiracy to monopolize, (2) specific intent to monopolize, or (3) a causal antitrust injury.  Finding these elements lacking, the Court did not address whether plaintiffs alleged an overt act in furtherance of the alleged conspiracy, the fourth element of the claim. 

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  • United States District Court For The District Of Maryland Grants Summary Judgment To Non-Practicing Entity Intellectual Ventures Against Monopolization Counterclaims Alleging Sham Patent Litigation 
     
    12/12/2017

    On November 30, 2017, Judge Paul W. Grimm of the United States District Court for the Southern Division of the District of Maryland granted Intellectual Ventures (“IV”) and affiliates’ motion for summary judgment on Capital One’s antitrust counterclaims based on IV’s alleged bad faith assertion of patent claims, concluding that Capital One’s antitrust counterclaims were barred by both Noerr-Pennington immunity and collateral estoppel.   Intellectual Ventures I LLC et al v. Capital One Financial Corp., 8-14-cv-00111 (MDD 2017-12-01, Order).  The Court’s thorough and careful opinion is a good illustration of the challenges of litigation over the conduct of a non-practicing patent-assertion entity, or as some would have it, a patent troll, under the Sherman Act.   

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  • European Union General Court Upholds Cartel Liability Of Facilitators, But Attempts To Rein In Commission’s Approach In Settlements
     
    12/12/2017

    On November 10, 2017, the European Union General Court (GC) handed down its judgment in Icap v Commission.  Judgment of the General Court in Case T-180/15 Icap and others v Commission, 10 November 2017.  This note examine three aspects of the decision: (1) the imposition of liability for cartel infringement on a “facilitator” who was not a primary participant in the cartel; (2) the Commission’s procedural obligations with regard to settlement procedures in hybrid cases; and (3) the standard for a “by object” infringement of Article 101(1) Treaty on the Functioning of the European Union (TFEU).

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  • United States District Court For The Northern District Of Illinois Denies Motion To Dismiss Antitrust Claims Brought Against Nation’s Largest Industrial Poultry Producers
     
    12/05/2017

    On November 20, 2017, Judge Thomas M. Durkin of the United States District Court for the Northern District of Illinois denied a motion to dismiss antitrust claims filed against the nation’s largest industrial poultry producers.  In re Broiler Chicken Antitrust Litig., No. 1:16-cv-08637 (N.D. Ill. Nov. 20, 2017).  In a lengthy opinion, Judge Durkin concluded that the totality of plaintiffs’ allegations of competitor communications, changes from historical practice, and arguably parallel restrictions in output, as well as the nature and operation of the commodity market at issue, were sufficient to raise a plausible inference of a conspiracy to restrict output and artificially inflate raise prices, and therefore to survive a motion to dismiss.

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  • Seventh Circuit Rejects Preliminary Injunction As Overbroad In Auto Dealership Management Software Case Alleging Agreement To Restrain Trade
     
    11/21/2017

    On November 6, 2017, the Seventh Circuit Court of Appeals vacated a preliminary injunction in an action alleging an agreement in restraint of trade under Section 1 of the Sherman Act against defendants CDK Global, LLC and Reynolds & Reynolds Co.  Authenticom, Inc. v. CDK Global LLC, No. 17‐cv‐318‐jdp (7th Cir. Nov. 6, 2017).  In an opinion by Chief Judge Diane Wood, the Court held that the preliminary injunction exceeded the proper scope of a preliminary injunction to preserve the status quo and improperly imposed on the defendants a duty to deal with the plaintiff.

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  • Sixth Circuit Holds That Homeowners Stated A Plausible Tying Claim Against Neighborhood Developers For Tying Purchase Of Telecommunications Services To The Sale Of Homes
     
    11/14/2017

    On October 30, 2017, a divided panel of the United States Court of Appeals for the Sixth Circuit reversed a district court’s denial of plaintiffs’ motion to file an amended complaint alleging that the defendants—a group of affiliated real estate development companies—illegally used their alleged market power in the sale of homes in three centrally planned neighborhoods to force the plaintiffs to purchase telecommunication services from another defendant, Crystal Clear Technologies, LLC, a telecommunications company that the developers owned and controlled.  Cates v. Crystal Clear Technologies, LLC, No. 16-6714 (6th Cir. Oct. 30, 2017).  The majority affirmed, however, the district court’s dismissal of the plaintiffs’ claim that the arrangement between Crystal Clear and the defendant developers violated the Federal Communications Commission’s “Exclusivity Order” (In the Matter of Exclusive Service Contracts For Provision Of Video Services In Multiple Dwelling Units and Other Real Estate Developments, 22 FCC Rcd. 20235, 20251 (2007), 47 C.F.R. § 76.2000(a)), which prohibits cable television distributors from entering into exclusive contracts to provide video programming, on the grounds that the complaint and contracts themselves contradicted the allegation that the contracts were in fact exclusive.

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  • Administrative Law Judge Upholds FTC Complaint Alleging That 1-800 Contacts Violated Section 5 Of The FTC Act By Unlawfully Restricting Online Competitor Advertising Through Anticompetitive Settlement Agreements
     
    11/07/2017

    On October 27, 2017, the Federal Trade Commission announced a ruling by Administrative Law Judge D. Michael Chappell finding that online contact lens retailer 1-800 Contacts unlawfully restrained competition in violation of Section 5 of the FTC Act by restricting its competitors’ online search-based advertising through series of settlement agreements resolving trademark litigation it had filed against those competitors.  In the Matter of 1-800 Contacts, Inc., Docket No. 9372 (U.S. Trade Commission, Oct. 27, 2017).  In upholding the FTC’s complaint, ALJ Chappell found that the FTC had proved that the restrictions on the use of certain keywords in search-based advertising caused actual harm to consumers and competition in the market for the online sale of contact lenses in the United States and that the respondent 1-800 Contacts had failed to prove that the settlement agreements had countervailing procompetitive benefits that outweighed their harm to competition.  As relief, the ALJ issued a broad remedial order prohibiting 1-800 Contacts from, inter alia, entering into any agreement that restricts a competitor’s ability to participate in search advertising auctions.  Just as the Supreme Court’s landmark decision in Federal Trade Commission v. Actavis, Inc., 133 S. Ct. 2223 (2013), raised difficult questions as to how litigants could resolve patent disputes over pharmaceutical products, this decision raises difficult questions over potential settlements of trademark disputes, particularly in the context of internet search advertising.  

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  • Eastern District Of North Carolina Finds Plaintiff Plausibly Pleads Tying Claims In Foam Insulation Antitrust Case
     
    10/31/2017

    On October 24, 2017, Judge Terrence W. Boyle of the Eastern District of North Carolina declined to dismiss monopolization and other antitrust claims based on alleged tying and exclusive dealing of foam insulation products against Armacell, Inc.  K-Flex, Inc. v. Armacell, Inc., No. 5:17-CV-279-BO (E.D.N.C. Oct. 24, 2017).  The Court held that plaintiff K-Flex, Inc.’s complaint plausibly alleged that Armacell violated Sections 1 and 2 of the Sherman Act (15 U.S.C. §§ 1 & 2), Section 3 of the Clayton Act (15 U.S.C. § 14), and North Carolina’s Unfair and Deceptive Trade Practices Act (N.C.G.S.A. §  75-1.1), by conditioning sales of one product – polyethylene or “PE” foam insulation, as to which Armacell had substantial market power – on the distributor’s agreement to purchase a second type of insulation product – elastomeric foam insulation - exclusively from Armacell and coercing a distributor to terminate the plaintiff.  The opinion is notable in sustaining a monopolization claim against a manufacturer based largely on an alleged exclusive dealing/tying arrangement with a single regional distributor.      

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  • United States District Court For The Western District Of Texas Grants Motion To Dismiss Antitrust Claims Brought By Physician Against Texas Medical Board
     
    10/31/2017

    On October 20, 2017, Judge Sam Sparks of the United States District Court for the Western District of Texas granted a motion to dismiss antitrust claims filed against the Texas Medical Board (“TMB”) and certain of its individual members.  Allibone v. Texas Medical Board, et al., No. A-17-CA-00064-SS (W.D. Tex. Oct. 20, 2017).  Judge Sparks’s opinion provides a clear articulation of how the doctrines of sovereign immunity and the state action defense interact in antitrust cases in which state regulatory boards that include the plaintiff’s competitors are involved. 

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  • District Of Massachusetts Certifies Direct And Indirect Purchaser Classes In Alleged Pay-For-Delay Action Relating To Solodyn
     
    10/24/2017

    On October 16, 2017, Judge Denise J. Casper of the United States District Court for the District of Massachusetts granted class certification to two classes of purchasers allegedly injured by a pay-for-delay scheme relating to prescription drug Solodyn:  a Direct Purchaser Plaintiff class (“DPPs”) and an End-Payor Plaintiff class (“EPPs”).  In Re Solodyn (Minocycline Hydrochloride) Antitrust Litig., No. 14-md-02503 (D. Mass. Oct. 16, 2017).  In certifying the DPP class, the Court rejected the argument that affiliated corporate entities should be consolidated in evaluating the numerosity requirement of Federal Rule of Civil Procedure 23(a).  In certifying both classes, the Court accepted the plaintiffs’ experts’ proffered methodologies to establish common or class-wide impact as adequate for Rule 23 purposes over a variety of defense challenges.

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  • Eastern District Of Pennsylvania Holds That Monopoly Power And Anti-Competitive Conduct By One Subsidiary Cannot Be Imputed To Another Subsidiary Of The Same Parent  
     
    10/24/2017

    On October 17, 2017, Judge Mitchell S. Goldberg of the United States District Court for the Eastern District of Pennsylvania dismissed monopolization claims brought by the Attorneys General of several states against Reckitt Benckiser Healthcare (UK) Ltd. (“RBH”) premised on an alleged “product hopping” scheme designed to prevent or delay less expensive generic versions of the drug Suboxone from entering the market.  In re Suboxone (Buphrenorphine and Naloxone) Antitrust Litigation, No. 13-MD-2445, 2017 WL 4642285 (E.D. Pa. Oct. 17, 2017).  In so doing, the Court held that the mere fact that two subsidiaries are owned by a common parent is not sufficient either to consolidate the alleged market power of the two firms for the purpose of assessing monopoly power or to attribute the actions of one subsidiary to the other in evaluating allegations of exclusionary conduct. 

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  • United States Court Of Appeals For The Third Circuit Affirms Summary Judgment For Defendant Based On Plaintiff’s Failure To Show “Plus Factors” That Made Finding Of Conspiracy More Likely Than Not In Oligopolistic Market For The Sale Of Titanium Dioxide
     
    10/10/2017

    On October 2, 2017, a divided panel of the United States Court of Appeals for the Third Circuit released a ruling affirming the decision by U.S. District Judge Richard G. Andrews of the District of Delaware to grant summary judgment to the defendant E. I. Du Pont De Nemours & Co. on a Sherman Act, Section One claim alleging price fixing in the sale of titanium dioxide on the grounds that the plaintiff had not shown sufficient evidence of an “actual agreement to fix prices.” Valspar Corp. v. E. I. Du Pont De Nemours and Co., No. 16-1345 (3d Cir. Sept. 14, 2017).  Writing for the majority, Judge Hardiman rejected much of the plaintiffs’ proffered evidence of conspiracy because it established no more than conscious parallelism and interdependent conduct in an oligopolistic market, and was therefore insufficient to prove the essential element of an agreement as required by Section One.  Also lacking, the Court found, was evidence of a “traditional conspiracy,” i.e., “proof that the defendants got together and exchanged assurances of common action or otherwise adopted a common plan even though no meetings, conversation, or exchanged documents are shown.” Id. at 11-12.  This case illustrates the Third Circuit’s continuing practice of requiring a searching analysis of both the particular evidence and the market context in evaluating ambiguous evidence of conspiracy in Sherman Act cases, and reinforces the importance of carefully examining the relevant Circuit law in making forum choices.   

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  • United States District Court For The Southern District Of Iowa Grants Motion To Dismiss Antitrust Claims Against PepsiCo Based On Alleged “Price Squeeze”
     
    9/26/2017

    On September 15, 2017, Judge James E. Gritzner of the United States District Court for the Southern District of Iowa granted a motion to dismiss antitrust claims filed against PepsiCo Inc. and its bottler-distributor subsidiary by an independent bottling company.  Mahaska Bottling Co. v. PepsiCo Inc., No. 4:16-cv-00114-JEG (S.D. Iowa Sept. 15, 2017).  In so doing, Judge Gritzner rejected the bottler’s proffered “price squeeze” theory and its other allegations of exclusionary conduct under Section 2 of the Sherman Act, as well as its proffered market definition, and found that Mahaska had failed to allege harm to competition or, relatedly, antitrust injury.  The Court also dismissed claims brought under the Robinson-Patman Act and Iowa state antitrust statutes.  While this case does not break new ground, it is useful in demonstrating again the difficulties that a distributor faces in asserting antitrust claims against a supplier that the distributor believes is seeking to end the relationship, even with unusual “in perpetuity” exclusive arrangement at issue here.     

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