Northern District Of California Shuts Down App Developers’ Antitrust Suit
On April 26, 2021, Judge Beth Labson Freeman of the United States District Court for the Northern District of California dismissed a complaint alleging that Facebook violated Section 2 of the Sherman Act by removing certain application interfaces that plaintiffs relied on for their mobile applications. Reveal Chat Holdco LLC, et al. v. Facebook, 5:20-cv-00363 (N.D. Cal. Apr. 26, 2021). Plaintiffs alleged that the application programming interfaces (“APIs”) were central to their ability to function and that the removal of these APIs by Facebook in 2015 was part of a scheme to harm applications that were competitive or potentially competitive with Facebook. In dismissing the complaint for a second time and with prejudice, the Court concluded that plaintiffs’ “entire theory of liability is based on completed acts by Facebook beyond the limitations period” and that their claims were therefore time-barred.
U.S. Supreme Court Unanimously Narrows The FTC’s Enforcement Powers
On April 22, 2021, the U.S. Supreme Court abated the Federal Trade Commission’s (“FTC”) restitution power in a unanimous opinion delivered by Justice Stephen Breyer. AMG Cap. Mgmt., LLC v. Fed. Trade Comm’n, 141 S. Ct. 1341 (2021). Notably, the Court declared that the language of Section 13(b) of the FTC Act does not empower the FTC to obtain court-ordered equitable monetary relief such as restitution or disgorgement. In so doing, the Court resolved a circuit split on the issue and reversed the Ninth Circuit’s decision.
FTC’s Cancer Detection Antitrust Suit Transferred To California Southern District
On April 20, 2021, the United States District Court for the District of Columbia granted defendants’ motion to transfer a motion for preliminary injunction brought by the Federal Trade Commission (“FTC”) alleging that defendants’ plans to enter into a merger agreement violated Section 5 of the FTC Act and Section 7 of the Clayton Act. Federal Trade Commission v. Illumina, et al., No. 21-873 (D.D.C. 2021). The Court found that the U.S. District Court for the Southern District of California was a more appropriate venue for litigation of the case on the basis that it would be easier for most of the witnesses to get to that district, among other factors. Preliminary injunction hearings are currently set for August 24, 2021.
California District Court Rules Antitrust Claims Against Hollywood Foreign Press Don’t Make Final Cut
On March 23, 2021, Judge Stanley Blumenfeld, Jr. of the United States District Court for the Central District of California dismissed amended antitrust claims brought by two entertainment journalists against the Hollywood Foreign Press Association (“HFPA”). Flaa v. Hollywood Foreign Press Ass’n, No. 2:20-cv-06974-SB (C.D. Cal. Mar. 23, 2021).
Ninth Circuit Reverses Class Certification Based On District Court’s Failure To Resolve Factual Issues Relating To Uninjured Class Members
On April 6, 2021, the United States Court of Appeals for the Ninth Circuit vacated a district court order certifying three classes in a multi-district antitrust case alleging a price-fixing conspiracy by producers of packaged tuna, finding that the district court erred in determining that plaintiffs had satisfied to the predominance requirement of Federal Rule of Civil Procedure 23(b)(3). Olean Wholesale Grocery Coop v. Bumble Bee Foods, No. 19-56514 (9th Cir. Apr. 6, 2021). Specifically, the Court concluded that the district court abused its discretion in declining to resolve whether plaintiffs’ proposed use of statistical evidence to establish classwide impact swept a substantial number of uninjured purchasers into the putative class. A class cannot be certified, the Court held, when it contains more than a “de minimis” number of uninjured purchasers.
Southern District Of New York Dismisses Antitrust Claims In U.S. Treasury Securities Action
On March 31, 2021, Judge Paul Gardephe of the United States District Court for the Southern District of New York granted defendants’ motions to dismiss antitrust claims alleging separate purported conspiracies to suppress competition in the trading of U.S. Treasury securities and to boycott competitive platforms for the trading of such securities. In re Treasury Sec. Auction Antitrust Litig., No. 1:15-md-02673-PGG (S.D.N.Y. Mar. 31, 2021). In so doing, the Court found that neither “statistical analyses” based on averages of all market participants’ conduct nor reports of government investigations was sufficient to plead the involvement in a conspiracy by an individual defendant that is required to overcome a motion to dismiss.
NCAA Athletes’ Case Goes To Highest Court In The Land: The Supreme Court Hears Argument On Sherman Act Challenge To NCAA Eligibility Rules On Compensation For Student-Athletes
On March 31, 2021, the United States Supreme Court heard oral argument in the consolidated cases National Collegiate Athletic Associate v. Alston
(No. 20-520) and American Athletic Conference v. Alston
(No. 20-512). These cases were previously covered as part of our preview of the current Supreme Court term
. Plaintiffs below – NCAA student-athletes – challenged the NCAA’s limits on education-related benefits to student athletes as unreasonable restraints on competition for the student-athletes’ services that violated Section One of the Sherman Act. After a lengthy trial, the district court agreed and entered an injunction in favor of plaintiffs. The Ninth Circuit affirmed, finding that the district court had properly applied the rule of reason to the challenged rules, that the rules had significant anticompetitive effects, and that plaintiffs had established that less restrictive alternatives to the existing rules were viable in that they were “virtually as effective” in achieving the procompetitive purposes of the joint venture. The case-specific issue presented to the Supreme Court is whether the Ninth Circuit erred in affirming the district court’s judgment that the NCAA eligibility rules regarding compensation of student-athletes violated the Sherman Act. But the case may have broader implications in how courts analyze a joint venture’s restraints on competition under the rule of reason, including how courts should evaluate claims that a defendant joint venture could have or should have used less restrictive means to accomplish its procompetitive goal.
Southern District Of New York Dismisses Competitor’s Sherman Act Claims Against Fintech Company For Lack Of Antitrust Standing
On March 31, 2021, Judge Mary Kay Vyskocil of the United States District Court for the Southern District of New York dismissed a ten-count complaint alleging that defendant financial technology companies, Advent Software Inc. and its parent company, SS&C Technologies Holdings Inc. (collectively “defendant”), violated, inter alia, Sections 1 and 2 of the Sherman Act by refusing to renew a software license with one of its competitors and engaging in so-called “exclusive dealing arrangements” that allegedly foreclosed the competitor from the marketplace. Arcesium, LLC v. Advent Software, Inc., 1:20-cv-04389 (MKV) (S.D.N.Y. Mar. 31, 2021). The Court found that plaintiff Arcesium LLC (“plaintiff”), a technology company that licensed defendant’s portfolio accounting software, but competed with them in providing related “post-trade solutions” (technology and services used to provide middle- and back-office support for investment funds and fund administrators), failed to adequately plead antitrust standing.
New Legislation In New York Addresses Expected Discontinuance Of LIBOR
On March 25, 2021, the New York State Legislature addressed the expected discontinuance of LIBOR by establishing that New York law-governed contracts without LIBOR fallback provisions will be deemed to use the replacement rate recommended by the Alternative Reference Rates Committee (ARRC). The legislation will take effect immediately once signed into law by Governor Cuomo, which is expected to take place in the coming days.
Second Circuit Rejects The “Nullity Doctrine” In Benchmarking Antitrust Case
On March 17, 2021, the Second Circuit vacated a district court’s dismissal of a putative class antitrust action, holding that the pre-lawsuit dissolution of the named plaintiffs does not render the action a legal nullity and deprive the court of subject matter jurisdiction, provided the assignee of their claims had standing to prosecute the claims as the real party in interest when the suit was filed and joins or substitutes into the action within a reasonable time. Fund Liquidation Holdings LLC v. Bank of Am. Corp., 2021 WL 1010596 (2d Cir. Mar. 17, 2021).
Maryland District Court Refuses To Send Poultry Workers’ Claims To Chopping Block In Wage Fixing Class Action
On March 10, 2021, Judge Stephanie Gallagher of the United States District Court for the District of Maryland denied defendants’ motions to dismiss antitrust claims brought by a putative class of poultry workers asserting that poultry processing companies unlawfully exchanged compensation data and conspired to fix and depress employee wages. Jien v. Perdue Farms, Inc., No. 1:19-CV-2521-SAG (D. Md. March 10, 2021).
Third Circuit Dismisses Sherman Act And RICO Claims Against Certification Board
On February 25, 2021, the United States Court of Appeals for the Third Circuit affirmed a district court’s ruling that the American Board of Internal Medicine (“defendant”) did not violate Sections 1 and 2 of the Sherman Act or the Racketeer Influenced and Corrupt Organizations Act (“RICO”). Kenney v. Am. Bd. of Internal Med., No. 20-1007, 2021 WL 732715 (3d Cir. Feb. 25, 2021). Among other things, the Third Circuit found that a group of physicians (“plaintiffs”) did not plausibly allege that defendant impermissibly tied together initial physician certifications with the regular renewals of the same certifications. These regular renewals are known as maintenance of certification (“MOC”). The Third Circuit also found that plaintiffs did not plausibly allege that defendant utilized monopoly power to require plaintiffs to purchase MOCs.
Fourth Circuit Affirms Lower Court’s First Of Its Kind Divesture Order In Private Challenge To Merger
On February 18, 2021, the Fourth Circuit affirmed in relevant part a district court’s divestiture order in a Clayton Act challenge to a consummated merger by a private party. Steves & Sons, Inc. v. JELD-WEN, Inc., No. 19-1397, 2021 WL 630521 (4th Cir. Feb. 18, 2021). The divestiture order appears to be the first time that an appellate court has affirmed a post-consummation divestiture order of an acquired company in response to a Clayton Act challenge to a merger or acquisition by a private party.
District Court Grants Summary Judgment Against Indirect Purchasers In Aluminum Price-Fixing Case
On February 17, 2021, Judge Paul A. Engelmayer of the United States District Court for the Southern District of New York granted summary judgment to defendants that traded commodities and derivatives, and defendants that owned and operated warehouses, in a consolidated action, dismissing claims by aluminum purchasers. In Re Aluminum Warehousing Antitrust Litigation, 13 MD 2481 (PAE) (S.D.N.Y. Feb. 17, 2021). Plaintiffs alleged defendants had conspired to fix the price of aluminum in a distribution channel in which plaintiffs (with one exception) did not participate, but that the conspiracy had the incidental effect of inflating the cost of plaintiffs’ contracts with third parties, most notably aluminum producers. Plaintiffs asserted that even though they did not participate directly in the allegedly restrained distribution channel, they could pursue a claim that defendants violated Section 1 of the Sherman Act. The Court held that plaintiffs were not efficient enforcers, and therefore lacked “antitrust standing” to bring the claims, because they did not contract directly with defendants, their claimed harms were speculative, and their claims risked exposing defendants to duplicative liability.
Central District Of California Forecloses Realtors’ Antitrust Suit
On February 3, 2021, Judge John W. Holcomb of the United States District Court for the Central District of California dismissed a complaint alleging that real estate listing services conspired with a national realtors association to exclude a competitor from the market. The PLS.com, LLC v. The National Association of Realtors, et al., 2:20-cv-04790 (C.D. Ca. Feb. 3, 2021). Plaintiff, a listing service for off-market properties, alleged that three real estate listing services—Bright MLS, Inc. (“BrightMLS”), Midwest Real Estate Data, LLC (“Midwest RED”), and California Regional Multiple Listing Service, Inc. (“Cal Regional MLS”)—conspired with The National Association of Realtors (“NAR”) to eliminate them from the market in violation of Section 1 of the Sherman Act and California’s Cartwright Act.
Courts Finds It Lacks Jurisdiction To Entertain Challenge To FTC Civil Investigative Demand
On February 3, 2021, Judge R. David Proctor of the United States District Court for the Northern District of Alabama granted the Federal Trade Commission’s motion to dismiss a complaint filed by the Board of Dental Examiners of Alabama (“Board”) seeking to enjoin a Civil Investigative Demand (“CID”) that the FTC had issued to the Board. Bd. of Dental Exam’rs of Ala. v. Fed. Trade Comm’n, Case No. 2:20-cv-1310-RDP (N.D. Ala. 2021). The court held that it lacked subject-matter jurisdiction to entertain the complaint because the Board failed to meet the final agency action and exhaustion requirements.
Fourth Circuit Panel Reaffirms State Immunity From Sherman Antitrust Liability
On January 19, 2021, the United States Court of Appeals for the Fourth Circuit affirmed the dismissal of claims brought by Western Star Hospital Authority, Inc. (“Metro Heath”), an ambulance company, against the City of Richmond, Virginia and the Richmond Ambulance Authority (“RAA”), a public monopoly, under Section 2 of the Sherman Act.
Third Circuit Requires Patent Validity Analysis In Adjudicating Antitrust Causation
On January 11, 2021, the United States Court of Appeals for the Third Circuit vacated a district court order granting defendants’ summary judgment motion, finding that the court erred in concluding that defendants’ patent position barred plaintiff’s antitrust damages claims without evaluating plaintiff’s challenges to the patent’s validity and infringement as to plaintiff’s product. Fresenius Kabi USA, LLC v. Par Sterile Prods., LLC, No. 20-1618, 2021 WL 80616 (3d Cir. Jan. 11, 2021). Where the defendant has raised its patent rights as a defense to the assertion of antitrust damages, the Third Circuit held, a court must analyze the plaintiff’s challenges to validity and infringement of the patent regardless of whether patent litigation or a Food and Drug Administration (“FDA”) application relating to the product has been filed.
Revised Market Definition For Patents Still Fails To State Plausible Claims Against Investment Manager
On January 6, 2020, Judge Edward M. Chen of the United States District Court for the Northern District of California granted defendants’ motion to dismiss. Intel Corp., et al. v. Fortress Investment Group LLC, et al., No. 19-cv-07651-EMC (N. D. Ca. 2021). Plaintiffs alleged that defendants conspired to aggregate and assert essential patents against plaintiffs, which harmed competition in 13 alleged markets for patented technologies. Plaintiffs asserted this conduct violated Sherman Act § 1, Clayton Act § 7, as well as unfair competition law under state and FTC statutes. The Court dismissed plaintiffs’ complaint with prejudice as to the FTC Act claim as well as the other claims as they related to several product markets. It dismissed without prejudice claims as to the other markets to the extent plaintiffs could further amend their claims.
Eastern District Of Pennsylvania Allows Hospital Merger To Proceed
On December 14, 2020, Judge Gerald Pappert of the United States District Court for the Eastern District of Pennsylvania denied the Federal Trade Commission’s (“FTC”) emergency motion for an injunction pending appeal. Federal Trade Commission, et al. v. Thomas Jefferson University, et al., 2:20-cv-01113 (E.D. Pa. Dec. 14, 2020). The decision comes after the district court, on December 8, denied the FTC’s request to enjoin Jefferson Health from acquiring Albert Einstein Healthcare Network. The FTC has appealed the December 8 decision and sought an injunction pending that appeal to prevent the acquisition from going forward on December 15 in accordance with the stipulated terms of a prior temporary restraining order entered in the case. The Court denied the FTC’s motion, explaining that the emergency motion—rather than maintaining the status quo—would alter the parties’ circumstances by imposing an injunction where there was none.
Defendants Cannot Crack Peanut Farmers’ Class Certification Motion
On December 1, 2020, Judge Raymond A. Jackson of the United States District Court for the Eastern District of Virginia granted plaintiff peanut farmers’ motion for class certification against defendant peanut shelling companies. D&M Farms, et al. v. Birdsong Corp., et al., No. 2:19-cv-463 (E. D. Va. 2020). Plaintiffs alleged that defendants conspired to lower the price of peanuts since as early as January 2014 in violation of Sherman Act § 1. The court certified plaintiffs’ proposed class after finding the facts submitted by plaintiffs and plaintiffs’ expert analysis satisfied the class certification requirements.
California District Court Cuts Cord On Subcontractor’s Antitrust Claims Against Cable Provider
On November 17, 2020, Judge Troy Nunley of the United States District Court for the Eastern District of California granted summary judgment for Comcast, dismissing claims brought by a cable installation subcontractor alleging that Comcast engaged in unlawful anticompetitive activity in violation of state antitrust laws. Clear Connection Corp. v. Comcast Cable Commc’ns. Mgmt., LLC, No. 2:12-cv-02910-TLN-DB (E.D. Cal. Nov. 17, 2020).
Central District Of California Dismisses Sherman Act Claims Involving Alleged Los Angeles Outdoor Advertising Market
On November 9, 2020, the United States District Court for the Central District of California granted defendant Outfront Media Inc.’s (“Outfront”) motion to dismiss claims that Outfront engaged in an illegal conspiracy to stifle competition and maintain “monopolistic control” over the alleged market for outdoor advertising (billboards) in Los Angeles. Karraa v. City of Los Angeles, No. 2:20-cv-07036-SVW-AGR (C.D. Cal. Nov. 9, 2020). The Court found that plaintiffs, including rival outdoor advertising company Virtual Media Group, Inc. (“VMG”) and the ground lessors of billboard sites, did not plead facts to establish a violation of either Section 1 or Section 2 of the Sherman Act.
Anti-Competitive Effects Suit Against Tyson Chicken To Proceed To Trial
On October 27, 2020, Judge Joseph McKinley Jr. of the United States District Court for the Western District of Kentucky granted in part and denied in part Tyson’s motion for summary judgment. Charles Morris, et al v. Tyson Chicken Inc., et al., 4:15-cv-00077 (W.D. Ky. Oct. 27, 2020). Plaintiffs, growers of chicken broilers who contract with Tyson for the supply of chicken, sued alleging a number of violations under the Packers and Stockyards Act (“PSA”), as well as numerous contract claims.
Third Time’s Not A Charm: California District Court Dismisses Consolidated Class Action Against German Automakers
On October 23, 2020, District Judge Charles Breyer of the United States District Court for the Northern District of California dismissed with prejudice Sherman Act claims in two consolidated complaints brought by consumers (indirect purchasers or IPPs) and auto-dealers (direct purchasers or DPPs) (together Plaintiffs). The complaints alleged anticompetitive standardization of diesel emissions control systems and price-fixing by the five leading German car manufacturers in the United States—Audi AG, BMW AG, Daimler AG, Porsche AG, and Volkswagen AG (Defendants) for models made between 2006 through 2016. In re: German Automotive Manufacturers Antitrust Litigation, MDL No. 2796 CRB (JSC) (N.D.Cal. Oct. 23, 2020). Ultimately, the Court found that Plaintiffs failed to allege a "relevant market" and that Defendants had power within that market. The Court had granted Defendants’ motions against the same Plaintiffs on two prior occasions and thus granted the present motion with prejudice so that Plaintiffs would not get a fourth bite at the apple.
Northern District Of California Engages In Tech Companies’ Fortnite Battle
On October 9, 2020, Judge Yvonne Gonzalez Rogers of the United States District Court for the Northern District of California granted in part and denied in part Epic Games’ motion for preliminary injunction against Apple, Inc. Epic Games, Inc. v. Apple Inc. , No. 4:20-cv-05640-YGR (N. D. Cal. 2020). Plaintiff Epic Games (“Epic”) sought to reinstate its popular video game, Fortnite, to the Apple App Store and to regain its access to Apple’s developer tools. The Court declined to reinstate Fortnite to Apple’s App Store, but ordered Apple to allow Epic’s corporate affiliates access to its developer tools.
Fifth Circuit Reverses Decision Of Immediate Appealability Of State Action Immunity Defense
On October 2, 2020, the United States Court of Appeals for the Fifth Circuit reversed a district court’s ruling staying an administrative proceeding brought by the Federal Trade Commission (the “FTC”) against the Louisiana Real Estate Appraisers Board (the “Board”). Louisiana Real Estate Appraisers Bd. v. United States Fed. Trade Comm’n, No. 19-30796, 2020 WL 5869072 (5th Cir. Oct. 2, 2020). The Fifth Circuit found that the district court lacked jurisdiction to stay the FTC proceeding because the Commission’s order denying the Board immunity under the state action doctrine did not constitute final agency action under the Administrative Procedure Act, nor did the collateral order doctrine apply. The practical effect of the ruling is the Board will be forced to defend its challenged regulation in the FTC proceeding before taking an appeal.
Northern District Of Illinois Allows Price-Fixing Claim Against National Association Of Realtors To Proceed
On October 2, 2020, Judge Andrea R. Wood of the Northern District of Illinois denied related motions to dismiss filed by the National Association of Realtors (“NAR”) and certain corporate defendants who are among the largest real estate brokers in the United States (the “Corporate Defendants” and, collectively with NAR, “Defendants”), which sought to avoid a price-fixing suit brought by a putative class of home sellers under Section 1 of the Sherman Act. Moehrl v. The National Association of Realtors, No. 19-cv-01610 (N.D. Ill. Oct. 2, 2020). In denying Defendants’ motions, the Court noted (among other things) allegations that the Corporate Defendants required its franchisees, affiliates, and realtors to join the NAR and follow the NAR’s rules, including rules for broker commissions. The Court found that this conduct plausibly demonstrated the existence of a conspiracy among the Corporate Defendants, NAR, and other non-parties to impose sales commission rules that could result in unfair charges to home sellers.
Third Circuit Reverses $448 Million FTC Penalty Imposed Against Generic Pharmaceutical Manufacturers
On September 30, 2020, a panel of the United States Court of Appeals for the Third Circuit made up of Judges Thomas M. Hardiman, David J. Porter, and Peter J. Phipps reversed a court-ordered disgorgement penalty of $448 million, holding that disgorgement is not an available remedy under Section 13(b) of the Federal Trade Commission (“FTC”) Act. Fed. Trade Comm’n v. AbbVie Inc., No. 18-2621, 2020 WL 5807873 (3d Cir. Sept. 30, 2020). Respondents AbbVie, Inc., Abbott Laboratories, Unimed Pharmaceuticals LLC, and Besins Healthcare, Inc. (collectively “Respondents”) are patent owners of a testosterone replacement therapy drug called AndroGel. Appellant FTC sued Respondents in the United States District Court for the Eastern District of Pennsylvania under Section 13(b) of the FTC Act (15 U.S.C. Sec. 53(b)), which provides a mechanism for the FTC to seek injunctive relief in connection with Respondents’ lucrative sale of AndroGel.
Tech Startup’s Antitrust Claims Against Professional Networking Site Don’t Get The Job Done
On September 9, 2020, Judge Edward Chen of the United States District Court for the Northern District of California dismissed antitrust claims brought against LinkedIn by a tech startup that alleged LinkedIn exploited its monopoly power to deny the startup access to essential information it uses in providing analytics services. hiQ Labs, Inc. v. LinkedIn Corp., No. 17-cv-03301-EMC (N.D. Cal. Sept. 9, 2020).
U.S. District Court Dismisses Auto Parts Maker’s Antitrust Claims Against Wireless Patent Pool
On September 10, 2020, Chief Judge Barbara M. G. Lynn of the U.S. District Court for the Northern District of Texas dismissed a major automotive components manufacturer’s antitrust lawsuit against a group of holders of standard-essential patents (“SEPs”) used in wireless telecommunications and their joint licensing agent Avanci LLC, rejecting claims that defendants’ patent licensing platform and practices violated, inter alia, Sections One and Two of the Sherman Act. Continental Automotive Systems, Inc. v. Avanci, LLC, No. 3:19-cv-02933-M (N.D. Tx. Sept. 10, 2020). In dismissing the case, the Court found that plaintiff had failed to adequately plead (1) antitrust standing, (2) an unlawful agreement to restrain trade under Section One, and (3) the anticompetitive conduct necessary to establish a violation of Section Two. On the monopolization claim, this decision is consistent with the Ninth Circuit’s decision last month in FTC v. Qualcomm Inc., in which the Ninth Circuit reversed the district court and rejected similar Section Two challenges to Qualcomm’s licensing practices for its SEPs. It is also consistent with the U.S. Department of Justice Antitrust Division’s July 28, 2020 favorable business review letter addressing Avanci’s 5G patent licensing platform.
California State Court of Appeals Reverses Award For Antitrust “Circuit Dealing” Allegations
On September 2, 2020, a three-judge panel on the California State Court of Appeals Second Appellate District reversed a jury’s award in favor of Flagship Theatres of Palm Desert, LLC (“Plaintiff”) under California’s Cartwright Act. Flagship Theatres of Palm Desert, LLC v. Century Theatres, Inc., No. B292609, 2020 WL 5229369, at *1 (Cal. Ct. App. Sept. 2, 2020). Plaintiff sued rival theaters Century Theatres, Inc. and Cinemark USA, Inc. (“Defendants”) in Coachella Valley, California in connection with their “circuit dealing” agreements with movie distributors. The court found that the elimination of a single competitor is not sufficient evidence of harm to competition to sustain a verdict under the Cartwright Act.
Northern District Of California Rejects Plaintiffs’ Request To Challenge Approval Of Class Settlement That Excluded Them
On August 27, 2020, Judge Jon S. Tigar of the United States District Court for the Northern District of California denied a motion to intervene filed by two subclasses of indirect cathode ray tube purchasers (“Non-Settling Plaintiffs”) that would have allowed them to derail a $500 million settlement between 22 state classes of indirect purchasers (“Settling Plaintiffs”) and seven cathode ray tube manufacturers (“Settling Defendants”). The Non-Settling Plaintiffs sought intervention in order to appeal the District Court’s final approval of the settlement. The decision is In re Cathode Ray Tube (CRT) Antitrust Litig., No. 07-cv-05944-JST (N.D. Cal. Aug. 27, 2020).
Eastern District Of Virginia Wades Into “Grey Area”; Certifies Class Of Thirty-Five Direct Purchaser Plaintiffs
On August 21, 2020, Judge Rebecca Beach Smith of the United States District Court for the Eastern District of Virginia certified a class of thirty-five direct purchasers. In Re Zetia (Ezetimibe) Antitrust Litigation, 19-cv-00014 (E.D. Va. Aug. 21, 2020). Plaintiffs, direct purchasers of the branded drug Zetia, alleged that defendant pharmaceutical manufacturers engaged in an unlawful reverse-payment settlement whereby the manufacturer of the branded drug Zetia agreed to pay a generic manufacturer approximately $800 million to delay its launch of a generic for Zetia for nearly five years. Zetia is a drug that prevents cholesterol by inhibiting the buildup of plaque in arteries. The issue before the district court was whether Rule 23 class certification was proper of a direct-purchaser class of only thirty-five members. In finding it was, the court found it credible that many class members would not find it financially worthwhile to pursue the case on their own and that judicial economy would be best served by certification.
Ninth Circuit Delivers A Defeat To The FTC And Holds That Technology Company’s Licensing Practices Are Not Illegal
On August 11, 2020, the United States Court of Appeals for the Ninth Circuit overturned a decision by the United States District Court for the Northern District of California finding that the Federal Trade Commission had proven that the technology company’s (the “Company”) patent licensing practices violated the antitrust laws. FTC v. Qualcomm Corp., __ F.3d __, Case No. 19-16122, 2020 WL 4591476 (9th Cir. Aug. 11, 2020). The panel included Judges Rawlinson and Callahan of the Ninth Circuit, and Judge Murphy of the Eastern District of Michigan, sitting by designation. While the Ninth Circuit’s opinion involves some complex issues involving technology markets and patent law, at a higher level, this opinion’s critical antitrust findings reaffirm that businesses are free to independently choose with whom to deal, the terms upon which they will do so and that mere profit-seeking conduct is not illegal. The opinion further makes plain that to establish the element of harm to competition, plaintiff’s theory of harm, its market definition, and its proof of alleged anticompetitive effects must be consistent. Where the alleged anticompetitive effects are not established to have occurred within the properly defined, relevant market, a plaintiff’s claim should be rejected.
Sports Promoter Misses Goal In SDNY Antitrust Case Against US Soccer
On July 20, 2020, United States District Judge Valerie Caproni of the United States District Court for the Southern District of New York dismissed antitrust claims brought by a soccer promoter against the United States Soccer Federation (“USSF”), which alleged that USSF entered into anticompetitive agreements to block plaintiff from hosting international soccer matches in the United States. Relevent Sports, LLC v. United States Soccer Federation, Inc., No. 19-CV-8359 (S.D.N.Y. July 20, 2020).
The Supreme Court Of California Clarifies The Legal Standards For Economic Torts And For California Business & Professions Code Section 16600 Claims
On August 3, 2020, a unanimous California Supreme Court clarified the legal standards for claims alleging tortious interference with contracts that are terminable at will and the substantive standard for review of alleged violations of California Business and Professions Code section 16600’s prohibition against restraints on the freedom to engage in a business. Ixchel Pharma, LLC v. Biogen, Inc., No. S256927, 2020 WL 4432623 (Cal. Aug. 3, 2020). On appeal from the Eastern District of California, the Ninth Circuit (Ixchel Pharma, LLC v. Biogen, Inc., 930 F.3d 1031 (9th Cir. 2019)) asked the California Supreme Court to answer two certified questions on unresolved issues of California law: (1) whether a plaintiff must plead an independently wrongful act to state a claim for tortious interference with a contract that is terminable at will; and (2) whether a contract is void under section 16600 where it restrains one entity from engaging in lawful business or trade with another entity.
SDNY Denies Class Certification On Aluminum Price-Fixing Claims
On July 23, 2020, U.S. District Judge Paul A. Engelmayer of the United States District Court for the Southern District of New York denied a motion for class certification in the Aluminum Warehousing Antitrust Litigation based on plaintiffs’ failure to show that they could establish class-wide impact through common proof. The case is significant, among other things, in its close examination and rejection of plaintiffs’ statistical models based on average impact that mask the existence of putative class members who did not suffer any injury.
When “Killing Competition” Isn’t Anticompetitive: Federal Circuit Affirms Dismissal Of Power Grid Tech Company’s Antitrust Claims Against Rival Firms
On July 13, 2020, the United States Court of Appeals for the Federal Circuit affirmed the Central District of California’s dismissal of a suit brought by a power systems software company against three competitor corporations on grounds that plaintiff’s claims failed to adequately allege anticompetitive conduct under the Sherman Act and related state law claims. Power Analytics Corp. v. Operation Tech., Inc. et al., No. 19-1805 (Fed. Cir. July 13, 2020).
Texas District Court Finds Foreign Patent Holder Properly Served Through U.S. Subsidiary in Antitrust Dispute Over Standards Essential Patents
On July 5, 2020, Chief Judge Barbara M.G. Lynn of the United States District Court for the Northern District of Texas, Dallas Division denied Sharp Corporation’s (“Sharp Japan”) motion to dismiss claims that Sharp Japan colluded with other technology companies in refusing to license their standard essential patents (“SEPs”) on fair, reasonable, and non-discriminatory (“FRAND”) terms. Continental Auto. Sys., Inc. v. Avanci, LLC, No. 3:19-cv-02933-M (N.D. Ill. July 5, 2020).
Northern District Of Illinois Dismisses Antitrust Claims Relating To World’s Most Profitable Drug—Humira (Adalimumab)
On June 8, 2020, Judge Manish Shah of the United States District Court for the Northern District of Illinois (Eastern Division) granted AbbVie’s motion to dismiss plaintiff’s Sherman Act claims because the allegations fell “short of alleging the kind of competitive harm remedied by antitrust law.” In re Humira (Adalimumab) Antitrust Litigation, No. 1:19-cv-01873 (N.D. Il. 2020). Plaintiffs are two separate classes of indirect purchasers in a consolidated class action alleging that pharmaceutical manufacturer AbbVie, in concert with competing biosimilar manufacturers (Amgen, Samsung Bioepis, and Sandoz), violated §§ 1 and 2 of the Sherman Act by improperly exercising monopoly power over the market for the drug Adalimumab.
California Appeals Court Reverses Denial Of Class Certification In Anheuser-Busch Pricing Suit
On May 29, 2020, the Court of Appeal for the Fifth Appellate District of California (Judge Brad Hill) reversed the lower court’s denial of certification for a class of convenience store owners pursuing a price discrimination claim under California law. Dhillon, et al. v. Anheuser-Busch, LLC, et al., No. F074952, 2020 WL 2786837 (Cal. Ct. App. May 29, 2020). Plaintiffs alleged that defendants, a major brewer and its distributor, violated California law requiring wholesalers to sell to retailers on a nondiscriminatory basis and charge only the prices filed with the Department of Alcoholic Beverage Control. Specifically, plaintiffs alleged that defendants engaged in a systematic scheme to favor certain retailers over others in the pricing of beer by issuing a disproportionately large number of consumer coupons to favored retailers. Those retailers, in turn, allegedly redeemed the coupons themselves rather than issuing them to customers to use in connection with a particular beer sale. Based on this scheme, plaintiffs alleged, the favored retailers effectively received wholesale prices, below the prices paid by “disfavored” retailers.
United States District Court For The Eastern District Of Pennsylvania Denies End-Payor Plaintiffs’ Motion For Class Certification In Pay-For-Delay MDL
On June 3, 2020, Judge Jan E. DuBois of the United States District Court for the Eastern District of Pennsylvania denied the End-Payor Plaintiffs’ (“EPPs”) motion for class certification in a multidistrict litigation (“MDL”) challenging the settlement practice of pay-for-delay. In re Niaspan Antitrust Litig., No. 13-MD-2460, 2020 WL 2933824 (E.D. Pa. June 3, 2020). The district court denied the EPPs’ motion for class certification because the EPPs failed to demonstrate, by a preponderance of the evidence, the requirements of ascertainability, predominance, and superiority.
Reno, Nevada Escapes Shearman Section 1 Antitrust Suit
On May 14, 2020, the United States Court of Appeals for the Ninth Circuit affirmed the summary judgement against a private recycling company, which had alleged the city of Reno, Nevada had violated Section 1 of the Sherman Act by granting a competing recycling firm, Reno Disposal, an exclusive franchise over certain recycling services in the city. Green Solutions Recycling, LLC v. Reno Disposal Company Inc., 3:16-cv-00334-MMD-CBC (9th Cir. May 14, 2020).
Important Procedural Developments In Litigation Over Two-Sided Markets
There were two developments in litigation involving the treatment of two-sided markets that, while not groundbreaking themselves, could portend significant implications for future litigation involving two-sided markets.
SDNY Judge Grants 3M Preliminary Injunction Against N95 Mask Price Gouger
On May 4, 2020, U.S. District Judge Loretta A. Preska of the U.S. District Court for the Southern District of New York issued an order granting plaintiff 3M’s application for a preliminary injunction against defendant Performance Supply, LLC under Federal Rule of Civil Procedure 65(a).
U.S. Attorney’s Office Charges New York Resident With COVID-19-Related Price Gouging
On April 24, 2020, the U.S. Attorney’s Office for the Eastern District of New York charged Long Island resident Amardeep Singh with hoarding and price gouging of medical supplies in violation of the Defense Production Act of 1950 (“DPA”). The complaint alleges that Mr. Singh and his business entities acquired excessive amounts of personal protective equipment (“PPE”) and other medical supplies designated as “scarce” under an executive order issued by the President. Mr. Singh then allegedly sold these products at prices well in excess of the prevailing market price, including a 1,328% markup on disposable face masks. Complaint, United States v. Singh, No. 20-MJ-236 (SIL) (E.D.N.Y. Apr. 24, 2020). According to the U.S. Attorney’s Office, the charges are the first criminal charges filed under the DPA during the present crisis. The case is currently before Magistrate Judge Steven I. Locke.
Northern District Of Georgia Allows Sherman Act Tying Scheme Claims To Proceed
On April 14, 2020, Judge Timothy C. Batten Sr. of the United States District Court for the Northern District of Georgia denied a motion to dismiss Shearman Act claims against defendant CargoSprint, LLC and its founder. PayCargo, LLC v. CargoSprint, LLC, No. 3:19-CV-85-TCB, 2020 WL 1861928 (N.D. Ga. Apr. 14, 2020). Plaintiff, a competing provider of electronic payment management services to freight and cargo carriers and shippers, alleged that defendants violated antitrust laws by tying the use of one of their products to the purchase of another. Judge Batten denied defendants’ motion to dismiss, rejecting defendants’ argument that plaintiff’s amended complaint contained only conclusory allegations regarding the tying arrangement.
Northern District Of Texas Rejects Walker Process And Sham Patent Litigation Antitrust Claims For Lack Of Standing Based On Failure To Show Causation
On April 13, 2020, Judge Reed O’Connor of the United States District Court for the Northern District of Texas granted defendants’ motion for summary judgment on plaintiffs’ monopolization claim based on plaintiffs’ failure to present substantial evidence that fraud on the Patent Office and subsequent sham litigation were a material cause of plaintiffs’ alleged lost profits. Chandler et al v. Phoenix Services LLC, 19-cv-00014 (N.D. Tex. April 13, 2020). With regard to plaintiffs’ claims for fees and costs expended in defending the sham litigation, the Court found that these claims were barred by the statute of limitations.
Southern District Of New York Dismisses Putative Class Action Against Banks For Alleged Price Manipulation
On March 29, 2020, Judge Gregory H. Woods of the United States District Court for the Southern District of New York dismissed for lack of standing a putative class action against defendant banks accused of a conspiracy to manipulate the global benchmark price of palladium and platinum. The Court also dismissed plaintiffs’ Commodity Exchange Act (“CEA”) claims for lack of personal jurisdiction, finding that the CEA allegations concerned primarily foreign conduct. In re Platinum and Palladium Antitrust Litig., No. 1:14-CV-9391-GHW, 2020 WL 1503538 (S.D.N.Y. Mar. 29, 2020).