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).
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.
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).
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.
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).
Southern District Of Florida Dismisses Antitrust Claim Despite Burger Franchise’s Explicit No-Hire Agreements
On March 24, 2020, the United States District Court for the Southern District of Florida granted defendants Burger King Worldwide, Inc., Burger King Corporation, Restaurant Brands International, Inc., and Restaurant Brands International Limited Partnership’s (“Burger King”) motion to dismiss plaintiffs’ claim that Burger King and its franchises colluded to limit employment options and suppress wages for franchise employees. Jarvis Arrington et al. v. Burger King Worldwide, Inc., et al., No. 1:18-cv-24128 (S.D. Fla. 2020). The Court dismissed plaintiffs’ claim because Burger King and its franchises are not independent entities for the purpose of § 1 of the Sherman Act and thus not capable of conspiring.
Seventh Circuit Resuscitates Medical Supply Suit, Ruling Plaintiffs Have Standing Under Illinois Brick
On March 5, 2020, the U.S. Court of Appeals for the Seventh Circuit vacated and remanded the Southern District of Illinois’ dismissal of a suit brought by healthcare providers against entities in the distribution chain for medical devices they purchased. Marion Healthcare, LLC v. Becton Dickinson & Co., 18-3735 (7th Cir. Mar. 5, 2020). Judge Diane P. Wood, writing for a unanimous panel, ruled that the district court erred in deciding that plaintiffs lacked antitrust standing to bring conspiracy claims under Section 1 of the Sherman Act.
Central District Of California Allows Sherman Act Claims Against Performing Rights Organization To Proceed But Strikes Claims For Monetary Relief
On February 13, 2020, Judge Terry Hatter of the United States District Court for the Central District of California issued an order denying Defendant Global Music Rights LLC (GMR)’s motion to dismiss antitrust claims based on its licensing practices, but striking all claims for restitution or disgorgement of profits. Radio Music License Committee Inc. v. Global Music Rights LLC, 19-cv-03957 (C.D. Cal. February 13, 2020).
Southern District Of New York Sinks Sync Licensing Claims
On January 29, 2020, Judge Denise Cote of the United States District Court for the Southern District of New York granted a group of music publishers’ motion to dismiss antitrust and tortious interference claims. Downtown Music Publishing LLC et al. v. Peloton Interactive Inc., No. 1:19-cv-02426 (S.D.N.Y. 2020). Defendant Peloton brought counterclaims alleging that the National Music Publishers’ Association, Inc. (“NMPA”) and its members (collectively, “plaintiffs”) had engaged in anticompetitive behavior including the refusal to deal with Peloton by denying sync licenses for music to be used in its exercise classes. The Court dismissed defendant Peloton’s antitrust counterclaims for failure to state a claim due to lack of proper market definition and declined to allow Peloton an option to amend its relevant market allegations.
Southern District Of California Dismisses Price-Fixing Claims Against Owners Of Major Tuna Purveyor
On January 28, 2020, the United States District Court for the Southern District of California dismissed antitrust claims alleging that a private equity fund holding an ownership interest in Bumble Bee Foods LLC (“Bumble Bee”) participated in a conspiracy with major tuna companies to fix the prices of their packaged seafood products. Judge Janis L. Sammartino granted defendants’ motion to dismiss claims against Lion Capital LLP (“Lion Capital”) and Big Catch Cayman LP (“Big Catch”) under FRCP 12(b)(6) with prejudice, determining that plaintiffs failed to state plausible claims for relief against these defendants under §1 of the Sherman Act. In Re: Packaged Seafood Products Antitrust Litigation, 15-MD-2670 JLS (MDD) (S.D. Cal. Jan. 28, 2019).
United States District Court Judge Denies Writers Guild Motion To Dismiss Antitrust Suit Brought By Hollywood Talent Agencies Alleging The Orchestration Of An Illegal Boycott In The Entertainment Industry
On January 6, 2020, District Judge Andre Birotte Jr. of the United States District Court for the
Central District of California denied defendants, Writers Guild of America West, Inc. and Writers Guild of America East, Inc.’s (“WGA”) motion to dismiss an action brought by three of the largest Hollywood talent agencies alleging that WGA violated Section 1 of the Sherman Act by orchestrating an illegal boycott. William Morris Endeavor Entertainment, LLC., et al. v. Writers Guild of America, West, Inc. et al., No. 2:19-cv-05465-AB-FFMx (Jan. 7, 2020).
Court Orders NCAA To Pay Student Athletes’ $33M Legal Bill After Successful Antitrust Challenge To NCAA Rules But Declines To Apply A Multiplier
On December 23, 2019, Magistrate Judge Nathaniel M. Cousins of the United States District Court for the Northern District of California issued an order directing the National Collegiate Athletic Association (“NCAA”) to pay $31.8 million in attorney fees and $1.3 million in costs incurred by plaintiffs in their antitrust challenge to certain NCAA rules governing compensation for student-athletes. In re National Collegiate Athletic Association Athletic Grant-in-aid Cap Antitrust Litigation, No. 4:14-md-02541 (N.D. Ca. Dec. 23, 2019).
Texas Court Of Appeals Gives Plaintiff Second Take In Conspiracy Suit Against Major Movie Theater Chain
On December 5, 2019, the Court of Appeals for the First District of Texas held that a movie theater chain presented sufficient evidence suggesting two national competitors conspired to prevent the chain’s entry to withstand summary judgment. This ruling reversed the trial court’s decision, which granted summary judgment to the remaining defendant and dismissed antitrust restraint-of-trade claims. iPic-Gold Class Entm’t LLC, et al. v. AMC Entm’t Holdings Inc., et al., No. 01-17-00805-CV (Tex. App. Dec. 5, 2019). Justice Peter Kelly, writing for a unanimous panel, ruled that evidence of parallel actions by the two competitors and communication lines between them raised genuine issues of material fact as to the existence of a conspiracy in violation of The Texas Free Enterprise and Antitrust Act (“TFEAA”).
Eastern District Of Pennsylvania Refuses To Determine Proper Standard Of Review In No-Poach Suit At The Motion To Dismiss Phase; Denies Motion In Part
On November 25, 2019, Judge Anita Brody of the United States District Court for the Eastern District of Pennsylvania issued an order granting in part, and denying in part, defendants’ motion to dismiss claims alleging Jiffy Lube’s (the “Company’s”) franchise agreements included no-poach provisions that violate Section One of the Sherman Act. Fuentes v. Royal Dutch Shell PLC, et al., 18-cv-05174 (E.D. Pa. Nov. 25, 2019). Plaintiffs alleged that requests to be transferred between the Company franchisees in Florida and Pennsylvania were denied because of no-poach clauses that prevented franchisees from hiring other franchisees’ employees while they were working at the Company and for six months following the end of their employment. According to plaintiffs, the no-poach provision in the Company’s franchising agreements suppressed wages, inhibited employment mobility and lessened professional work opportunities.
Ninth Circuit Affirms Dismissal Of ODD Price-Fixing Suit
On November 20, 2019, the United States Court of Appeals for the Ninth Circuit affirmed summary judgment dismissing indirect purchaser plaintiffs’ claims that defendants, electronics manufacturers, conspired to fix the prices of optical disc drives (“ODD”) and computers with ODD. Indirect Purchaser Class v. Samsung Electronics Co. Ltd. et al., No. 1:18-cv-15058 (9th Cir. 2019). The Ninth Circuit rejected plaintiffs’ claims, because their economic expert’s analysis seeking to show that the fixed prices were passed on to consumers was not supported by the record evidence.
Plaintiffs Failed To Sufficiently Allege Airlines’ Parallel Actions To Establish Conspiracy Claim
On November 12, 2019, Judge George J. Hazel of the United States District Court for the District of Maryland dismissed without prejudice plaintiffs’ putative class action against major airlines with routes between the United States and Mexico. Plaintiffs had failed to allege violations of the Racketeering Influenced Corrupt Organizations Act (“RICO”), Section 1 of the Sherman Act, or state law. Rojas v. Delta Airlines, Inc., Case No. GJH-19-665 (D. Md. Nov. 12, 2019). The Court also denied defendants’ motion to change venue.
Western District Of Kentucky Upholds Complaint Challenging Franchise No-Poach Agreements As Horizontal Restraints Of Trade
On October 21, 2019, Judge Joseph H. McKinley Jr. of the United State District Court for the Western District of Kentucky issued a mixed order and opinion that denied Defendants Papa John’s International, Inc. and Papa John’s USA’s (“Papa John’s” or “Defendants”) motion to dismiss Plaintiffs’ class claims, but granted Defendants’ motion to compel one of the named plaintiffs to arbitrate. In Re Papa John’s Employee and Franchisee Employee Antitrust Litigation, NO: 3:18-CV-00825-JHM (W.D. Ky. 2019). The case involves three consolidated putative class actions filed by current and former employees against defendants, alleging no-poach, or no-hire, clauses in the company’s franchise agreements are a horizontal restraint on trade and a per se violation of Section 1 of the Sherman Act. The Court ruled that plaintiffs adequately alleged a per se violation, but that discovery would be necessary to determine what standard of review would apply moving forward.
Southern District Of New York Dismisses “Truly Novel” Restraint Of Trade Theory In Pharmaceutical Antitrust Action
On October 8, 2019, United States District Judge for the Southern District of New York Ronnie Abrams dismissed all but one claim in a putative antitrust class action brought against Takeda Pharmaceutical Company Ltd. and various Takeda entities, as well as generic manufacturers Teva Pharmaceuticals, Ranbaxy Pharmaceutical Industries Ltd., Actavis PLC, and Mylan Inc. In re: Actos Direct Purchaser Antitrust Litigation, No. 1:15-cv-03278 (S.D.N.Y. Oct. 8, 2019). The class complaint alleged that Takeda illegally conspired with the other defendants to delay generic competition for its blockbuster diabetes drug Actos through a series of patent settlement agreements, which granted the other defendants non-exclusive licenses to produce generic Actos at a future date prior to the expiration of Takeda’s patents. The Court dismissed these conspiracy claims, finding that plaintiffs’ “truly novel” theory for why the settlement agreements between Takeda and the other defendants violated the antitrust laws lacked “even a colorable basis” of support. The Court’s decision left in place one remaining claim against Takeda for monopolization.
Southern District of New York Dismisses Putative Antitrust Class Action Finding Plaintiffs Failed To Plead Defendants Transacted Business Of A “Substantial Character” In New York
On October 4, 2019, District Judge Edgardo Ramos of the United States District Court for the Southern District of New York dismissed a putative antitrust class action against certain defendants, foreign banks, and individuals for lack of personal jurisdiction and improper venue. In re SSA Bonds Antitrust Litig., No. 16 CIV. 3711 (ER) 2019 WL 4917608 (S.D.N.Y. Oct. 4, 2019). Plaintiffs alleged that the defendant financial institutions and certain employees operating as dealers in the U.S. dollar SSA bond market conspired to fix the price of SSA bonds in violation of Section 1 of the Sherman Act. Several dealer defendants (the “Foreign Dealer Defendants”) and four of their employees (the “Individual Defendants”) moved to dismiss for lack of personal jurisdiction and venue. The Court granted the motion, finding that plaintiffs had not satisfied the venue provision of the Clayton Act because plaintiffs failed to show that the Foreign Dealer Defendants transacted business of a “substantial character” in New York and failed to establish a nexus for purposes of personal jurisdiction “between the alleged business transactions in New York and the claims of this antitrust case.”
Southern District Of New York Dismisses Claims In Mexican Government Bonds Antitrust Suit
On September 30, 2019, Judge Paul Oetken of the United States District Court for the Southern District of New York dismissed claims that defendants, a group of ten financial institutions and related entities, had conspired to manipulate the market for certain debt securities issued by the Mexican government. In re Mexican Government Bonds Antitrust Litigation, 18-CV-2830 (S.D.N.Y. Sept. 30, 2019). Plaintiffs, a group of pension funds, alleged that defendants rigged the auction process used by the Mexican government to issue bonds and conspired to manipulate the pricing of the bonds on the secondary market, in violation of Section 1 of the Sherman Act. According to plaintiffs, the conspiracy artificially depressed auction prices, artificially inflated secondary market prices, and fixed bid-ask spreads, resulting in harm to the pension funds in the United States.
Second Circuit Finds District Court Failed To Properly Consider Two-Sided Markets In Travel Platform Suit, Voids $15M Antitrust Verdict
On September 11, 2019, the United States Court of Appeals for the Second Circuit, in a panel consisting of Judges Robert D. Sack, Debra Ann Livingston and Denny Chin, affirmed in part, reversed in part and vacated in part a lower court’s decision in an antitrust action related to contracts for a travel technology platform. US Airways, Inc., for American v. Sabre Holdings Corporation, No. 17-960 (2d Cir. Sept. 11, 2019). The Second Circuit held that the district court had erred in failing to find the relevant market to be two-sided as a matter of law. The case was remanded for a new trial on the substantive question of whether certain contractual provisions in the business agreements between the parties were unlawful restraints of trade in violation of Sections 1 and 2 of the Sherman Act.
Seventh Circuit Allows Beer Conspiracy Allegations One More Shot
On September 5, 2019, Judge Kenneth Ripple, writing for a unanimous panel of the U.S. Court of Appeals for the Seventh Circuit, partially reversed a lower court’s dismissal of antitrust claims alleging that two brewers conspired to restrict a competitor’s exports of beer to Ontario, Canada. Mountain Crest SRL, LLC v. Anheuser-Busch InBev SA/NV, No. 18-2327, 2019 WL 4198809 (7th Cir. Sept. 5, 2019). The Seventh Circuit held that agreements with a Canadian government-controlled entity (the Liquor Control Board of Ontario, or “LCBO”) were immune from antitrust scrutiny under the act of state doctrine. However, the Court held that claims of an alleged conspiracy between competitors to strong-arm the LCBO into entering into the agreements did not implicate the act of state doctrine and were improperly dismissed.
Second Circuit Affirms Dismissal Of Price Fixing Claims Against Oil Companies
On August 29, 2019, the United States Court of Appeals for the Second Circuit issued an Opinion and Summary Order affirming the dismissal of plaintiffs-appellant derivatives traders’ Sherman Act and Commodities Exchange Act claims against defendant-appellees oil companies. Prime International Trading, Ltd., et al. v. BP PLC, et al., No. 1:17-cv-2233 (2d Cir. 2019).
Second Circuit Reverses District Court’s Dismissal Of Metal Purchasers’ Antitrust Claims
On August 27, 2019, the Second Circuit Court of Appeals vacated a grant of summary judgment by the United States District Court for the Southern District of New York, which had dismissed the claims of a group of aluminum buyers on grounds they did not have standing in an antitrust suit alleging a conspiracy to artificially inflate aluminum prices. Judge Pierre N. Leval, writing for the panel, disagreed with the District Court’s dismissal, ruled that plaintiffs had adequately pleaded antitrust injury, and remanded the case for further proceedings. Eastman Kodak Co. v. Henry Bath LLC, 16-4230, 2019 WL 4018285 (2d Cir. Aug. 27, 2019).
District of Columbia Circuit Pulls The Brake On Class Certification Bid In Railroad Price-Fixing Suit
On August 16, 2019, the United States Court of Appeals for the District of Columbia Circuit affirmed a lower court’s decision to deny class certification in an antitrust action involving some of the country’s largest freight railroad companies. In Re: Rail Freight Fuel Surcharge Antitrust Litigation, MDL No. 1869, (D.C. Cir. Aug. 16, 2019). Plaintiffs alleged that defendants conspired to fix rate-based fuel surcharges in violation of Section 1 of the Sherman Act, Section 4 of the Clayton Act and various state laws. The panel, which consisted of Chief Judge Merrick Garland and Judges Judith Rogers and Gregory Katsas, held that class certification was inappropriate because plaintiffs’ regression analysis did not establish predominance.
Eastern District Of Michigan Slices No-Poach Antitrust Claims Against Pizza Franchise
On July 29, 2019, Judge David M. Lawson of the U.S. District Court for the Eastern District of Michigan dismissed, with prejudice, antitrust claims stemming from a fast-food pizza franchise’s use of “no-poach” hiring agreements in its standard franchise contracts. Judge Lawson determined that plaintiff, who did not attempt to advance a rule of reason antitrust claim, had not pled a viable per se or quick look antitrust violation. Moreover, plaintiff did not plausibly allege that the no-poach agreements caused him a cognizable antitrust injury. Ogden v. Little Caesar Enterprises, Inc., No. 18-12792, 2019 WL 3425266 (E.D. Mich. July 29, 2019).
Central District Of California Gives Poor Review To Movie Rental Antitrust Claims
On July 17, 2019, Judge Dean D. Pregerson of the U.S. District Court for the Central District of California dismissed antitrust claims alleging that a major media and entertainment conglomerate unlawfully restrained trade in the nationwide market for rentals and sales of movies on DVD, Blu-ray and digital platforms. Judge Pregerson determined that plaintiff had not met its pleading burden; specifically, it did not adequately allege market power or anticompetitive effects in the relevant market. Redbox Automated Retail, LLC v. Buena Vista Home Entertainment, Inc., CV 18-00677-DDP (AGRx), 2019 WL 3237376 (C.D. Cal. July 17, 2019).
Seventh Circuit Extinguishes Antitrust Conspiracy Claims About Local Fire Alarm Laws
On July 15, 2019, the Seventh Circuit Court of Appeals dismissed claims alleging an antitrust conspiracy between a local municipality, an intergovernmental cooperation association and a private provider of commercial fire-alarm services. Alarm Detection Sys., Inc. v. Vill. of Schaumburg, No. 18-3316, 2019 WL 3071744 (7th Cir. July 15, 2019). The Court held that plaintiffs failed to plausibly plead the existence of an underlying agreement between defendants as required to plead an antitrust conspiracy claim.
Eastern District Of Pennsylvania Dismisses Claims Against Generic Drug Distributor In Multi-District Price-Fixing Suit
On June 26, 2019, Judge Cynthia M. Rufe of the Eastern District of Pennsylvania dismissed claims that McKesson Corporation and McKesson Medical Surgical, Inc. (collectively the “Company”) engaged in a conspiracy to fix prices of generic pharmaceuticals. Marion Diagnostic Center, LLC, et al. v. McKesson Corporation, et al., No. 16-MD-2724 (June 26, 2019). The Court held that the plaintiffs had not plausibly alleged that the Company’s conduct as a generic drug distributor was the result of an agreement with co-defendant generic drug manufacturers.
Plaintiffs’ No Poach Class Claims Run Off The Rails
On June 20, 2019, Judge Joy Flowers Conti of the Western District of Pennsylvania dismissed plaintiffs’ class claims that defendant employers colluded to suppress market wages by agreeing not to hire each other’s employees. The Court found that the complaint failed to adequately plead that all or nearly all employees in the proposed class were harmed by the alleged collusion. In re Railway Industry Employee No-Poach Antitrust Litigation, No. 18-798 (W.D. Pa. June 20, 2019). The Court, however, acknowledged plaintiffs had sufficiently pled the existence of an overarching conspiracy among defendants from 2014 to 2016 and individual agreements among each of the three defendants beginning at different times since 2009. Since the class claims were dismissed without prejudice, plaintiffs have the opportunity to remedy their class-related pleading defects.
Northern District Of Georgia Rules On Antitrust State Action Immunity
On May 8, 2019, Judge William M. Ray II of the United States District Court for the Northern District of Georgia issued an order granting in part and denying in part defendants’ motion to dismiss. SmileDirectClub, LLC, v. Georgia Board of Dentistry, et al., No. 1:18-cv-02328-WMR (D.N.G. 2019). Plaintiff alleged that the Georgia Board of Dentistry (the “Board”) and its individual members (collectively, “defendants”) conspired to exclude non-dentists from participating in the market for orthodontic aligner treatment services in Georgia. The Court found that claims against the Board were barred by sovereign immunity, while claims against individual members of the Board were adequately pled and survived dismissal.
Eastern District Of Michigan Allows Sherman Act Suit Based On Employee No-Poach Agreement To Proceed
On May 24, 2019, Judge Victoria A. Roberts of the United States District Court for the Eastern District of Michigan denied defendant Domino’s Pizza Franchising LLC’s and other related Domino’s corporate entities’ motion to dismiss, finding that plaintiff, an employee of one of defendants’ franchisees, had adequately alleged a no-poach agreement in violation of Section 1 of the Sherman Act. Blanton v. Domino’s Pizza Franchising LLC, No. 18-13207 (E.D. Mich. May 24, 2019). The Court also found that plaintiff plausibly pleaded that defendants’ fraudulently concealed their conduct such that the Sherman Act’s four-year statute of limitations was tolled.
Second Circuit Revives Direct Injury Claims In Group Boycott Lawsuit
On May 10, 2019, the Second Circuit Court of Appeals, in a panel consisting of Judges John M. Walker, Jr., Dennis Jacobs, and Rosemary S. Pooler, affirmed in part and vacated in part a decision by Judge Brian M. Cogan of the United States District Court for the Eastern District of New York on antitrust standing. IQ Dental Supply, Inc. v. Henry Schein, Inc., 18-175-cv (2d Cir. May 10, 2019). The court agreed with Judge Cogan that plaintiff, IQ Dental Supply, Inc. (“IQ”), had failed to establish antitrust standing to challenge the alleged boycott of an online distribution portal, SourceOne, Inc. (“SourceOne”), which it used to distribute dental supplies to dental practices nationwide. However, the court found that IQ had pled sufficient facts to establish antitrust standing regarding a boycott of its own business and vacated the district court’s judgment.
Second Circuit Rejects Bid To Revive Libor Antitrust Suit By Plaintiff Whose Bonds Were Not Tied To Libor
On April 30, 2019, the Second Circuit Court of Appeals, in a panel consisting of Judges Rosemary S. Pooler, Denny Chin, and Eric N. Vitaliano, affirmed a decision by Judge Paul G. Gardephe of the United States District Court for the Southern District of New York denying plaintiff’s request for leave to amend its complaint alleging that various banks conspired to manipulate LIBOR. 7 West 57th Street Realty Company, LLC v. Citigroup, Inc., 18-1102-cv (2d Cir. April 30, 2019). The Court agreed with Judge Gardephe that plaintiff, the successor in interest to a real estate developer, lacked antitrust standing to bring suit because it was not an efficient enforcer and that amending the complaint would be futile. The Court also agreed that plaintiff did not allege facts sufficient to state a claim under the Racketeer Influenced and Corrupt Organizations Act (“RICO”).
United States District Court For The Northern District Of California Focuses On Information Sharing To Magnify Anticompetitive Conspiracy In Antitrust Suit Against Telescope Manufacturers
On March 29, 2019, Judge Edward J. Davila of the U.S. District Court for the Northern District of California denied a motion to dismiss, finding that plaintiff Orion Telescopes & Binoculars (“Orion”) had sufficiently pled that defendants Ningbo Sunny Electronic Co., Ltd. (“Ningbo”) and Celestron, LLC (“Celestron”) had conspired to divide the market for low- to medium-end telescopes and block a competing manufacturer’s acquisition that would have enabled expansion and broader supply-side competition. Optronic Technologies, Inc., v. Ningbo Sunny Electronic Co., Ltd., No. 16-CV-6370 (N.D. Cal. Mar. 29, 2019). Judge Davila cited plaintiff’s specific allegations of: (a) a division among competitors of the low-end (to Ningbo) and high-end (to Celestron) telescope markets (facilitated in part by a transfer of intellectual property to Ningbo); and (b) Celestron’s advance knowledge of Ningbo’s interest in the merger. Celestron settled prior to the litigation, but Orion and Ningbo will continue into discovery.
Northern District Of California Grants NCAA Athletes Partial Victory In Antitrust Challenge To NCAA Rules
On March 8, 2019, after a bench trial, Judge Claudia Wilkin of the United States District Court for the Northern District of California found that the NCAA’s restrictions on the amount of grants-in-aid and other benefits that universities can provide to student-athletes constitute anticompetitive restraints of trade. In re: National Collegiate Athletic Association Athletic Grant-in-Aid Cap Antitrust Litigation, No. 4:14-md-02541-CW (N.D. Cal. Mar. 8, 2019). Based on this finding, the Court abrogated the NCAA’s limits on “education-related benefits” that its member colleges may provide the student-athletes. However, the Court did not eliminate all restrictions on the benefits that schools may provide to athletes. Instead, using a “less restrictive alternatives” analysis, the Court permitted the NCAA to continue to limit non-education related benefits and compensation, as well as cash payments, to student-athletes.
Southern District Of New York Dismisses CDOR Benchmark Manipulation Complaint In Its Entirety
On March 14, 2019, Judge Analisa Torres of the United States District Court for the Southern District of New York granted defendants’ motion to dismiss a complaint alleging they improperly manipulated the Canadian Dollar Offered Rate (“CDOR”) benchmark. Fire & Police Pension Association of Colorado v. Bank of Montreal, et al., Case No. 1:18-cv-00342 (S.D.N.Y Mar. 14, 2019).
Reversing Prior Order, Utah District Court Holds Per Se Rule Applies To Customer Allocation Agreement
On February 21, 2019, Judge David Sam of the U.S. District Court for the District of Utah reversed course and found that a per se standard applies to a market allocation agreement among competitors in the heir location services market. Judge Sam initially found that the more lenient rule of reason standard should apply. However, following a recent Tenth Circuit ruling, Judge Sam held it is the form of the agreement—not the type of industry—that compels the appropriate standard of review. United States of America, v. Kemp & Associates, Inc. and Daniel J. Mannix, No. 2:16CR403 DS, 2019 WL 763796 (D. Utah Feb. 21, 2019).
Delaware District Court Dismisses Antitrust Suit Against Lab Testing Company Alleging Conspiracy To Exclude Smaller Lab From Market
On February 14, 2019, Judge Maryellen Noreika of the United States District Court for the District of Delaware dismissed a complaint alleging violations of Sections 1 and 2 of the Sherman Act. Prescient Medicine Holdings, LLC v. Laboratory Corporation of America Holdings et al, No. 1:18-cv-00600 (D. Del. Feb 14. 2019). The complaint was filed by Prescient Medicine Holdings, LLC, a provider of laboratory testing services. Plaintiff alleged that an agreement between a competitor laboratory testing service—Laboratory Corporation of America and Laboratory Corporation of America Holdings (“LabCorp”)—and a managed care organization—AmeriHealth, Inc. and AmeriHealth Caritas Delaware Inc. (“AmeriHealth”) was a collusive scheme to monopolize the in-network Medicaid market and exclude plaintiff from that market. Judge Noreika held that plaintiff failed to adequately plead antitrust standing and failed to define a relevant market.
The Eastern District Of Michigan Holds That An Arbitration Clause Does Not Apply To Direct Purchasers In A Private Suit Alleging Price-Fixing
On January 29, 2019, the Honorable Judge Marianne O. Battani of the United States District Court for the Eastern District of Michigan denied without a hearing Defendant KYB Corporation’s and KYB America’s (collectively, the “Company”) motion to dismiss all federal antitrust claims because those claims were subject to an arbitration clause. In re Shock Absorbers, Master File No. 12-md-02311 (E.D. Mich. Jan. 29, 2019). In so finding, the Court denied the Company’s 30(b)(1) motion and concluded that the Court had subject matter jurisdiction.
Department Of Justice Seeks To Intervene In No-Poach Class Action To Counter Arguments That Such Agreements Are Per Se Illegal
On January 25, 2019, the Justice Department’s Antitrust Division filed a Notice of Intent to File a Statement of Interest in Myrriah Richmond et al. v. Bergey Pullman Inc., et al., No. 2:18-cv-00246, in the United States District Court for the Eastern District of Washington. The Notice follows a barrage of settlements between fast-food chains and state antitrust enforcers involving the chains’ “no-poach” agreements—that is, agreements between a franchisor and franchisees that restrict the hiring of one franchisee’s employees by another franchisee. The Justice Department’s decision to involve itself in Myrriah Richmond is significant. By emphasizing—as its Notice did—that such franchisor-franchisee no-poach agreements are “vertical restraints” subject to the rule-of-reason (rather than illegal per se, or subject to only a “quick look” analysis of legality), the Justice Department provides analytic clarity and useful guidance as courts address the growing number of actions challenging different variations of no-poach agreements in different factual scenarios.
Middle District Of Florida Limits Statute Of Limitations Tolling Arguments For Alleged Output Restrictions In Milk Market
On January 16, 2019, Judge Brian J. Davis of the United States District Court for the Middle District of Florida issued an order granting in part and denying in part defendants’ motion for summary judgment. Winn-Dixie Stores, Inc. v. Southeast Milk, Inc. et al., Case No. 3:15-cv-01143 (M.D. Fla. Jan. 16, 2019). The Court ruled that plaintiffs should not receive equitable tolling of the statute of limitations for fraudulent concealment, that only a limited subset of claims were eligible for class action tolling, and that other theories for the timeliness of plaintiffs’ claims depended on the jury’s determination of the facts.
United States District Court For The Eastern District of New York Rejects One-Sided Market And Single-Brand Market Definitions In Credit Card Antitrust Litigation
On January 14, 2019, Judge Nicholas G. Garaufis of the U.S. District Court for the Eastern District of New York granted defendant American Express’ motion for summary judgment as to three of the four relevant markets proposed by the plaintiffs in their antitrust challenge to the “anti-steering” provisions in American Express’s merchant contracts. In re American Express Anti-Steering Rules Antitrust Litigation, No. 11-MD-2221 (NGG) (RER) (E.D.N.Y. Jan. 15, 2019). Following the U.S. Supreme Court’s 2018 decision in a parallel challenge to the same contractual provisions by the U.S. Department of Justice (“DOJ”) and several states, Ohio v. American Express Company, 138 S. Ct. 2274 (2018), Judge Garaufis rejected the retail merchant plaintiffs’ proposed product market definitions that were limited to the merchant side of card transactions, i.e., the “one-sided” markets, finding that the Supreme Court’s decision required an examination of competition on both sides of the credit card platform – the cardholder side and the merchant side – i.e., the “two-sided” market. The court also rejected the plaintiffs’ attempt to limit the relevant product market to American Express card transactions (the “Amex-only market”) because other general purpose credit and charge cards are reasonably interchangeable with American Express cards and therefore in the same relevant product market. American Express did not move for summary judgment on the plaintiffs’ two-sided, all general purpose credit card market definition, and the case will proceed to trial on that theory.
Northern District Of California Rejects Claim Of Bi-Coastal Conspiracy To Eliminate Restaurant Tipping
On January 7, 2019, Judge Jeffrey S. White of the Northern District of California ruled on a motion to dismiss allegations that certain high-end restaurant groups in New York and California had conspired to terminate the practice of tipping in restaurants, in violation of Section 1 of the Sherman Act and various state laws. Judge White held that plaintiff’s claims were too speculative to sustain an inference that defendants could — or had any reason to — conspire, and dismissed all claims. Brown v. 140 NM LLC et al., No. 4:17-cv-05782 (N.D. Cal. Jan. 7, 2019).
Seventh Circuit Affirms District Court’s Grant Of Summary Judgment Of Class Action Case Alleging Price-Fixing In Containerboard Market
On December 7, 2018, the United Stated Court of Appeals for the Seventh Circuit, in an opinion by Chief Judge Diane P. Wood, affirmed a district court’s decision to grant summary judgment in favor of two defendants remaining in a class action alleging price-fixing by manufacturers of containerboard. Kleen Products LLC, et al. v. Georgia-Pacific LLC, et al., No. 17-2808 (7th Cir. Dec. 7, 2018). The Court rejected plaintiffs’ contention that the existence of an anticompetitive agreement between manufacturers could be inferred based primarily on allegedly correlated price increases and reductions in supply.
Oregon District Court Allows Claim Against Association Of Colleges And Universities To Proceed And Accepts Harm To Defendant’s Members As Evidence Of Antitrust Injury
On November 28, 2018, Judge Marco A. Hernández of the United States District Court for the District of Oregon, on remand from the Ninth Circuit, reversed its prior grant of a motion to dismiss and held that plaintiff — which brought antitrust conspiracy claims against a non-profit corporation made up of 549 member colleges — sufficiently demonstrated antitrust injury by alleging harm to the member colleges. CollegeNET, Inc. v. The Common Application, Inc., No. 3:14-CV-00771-HZ (D. Or. Nov. 28, 2018).
Western District Of Washington Rejects Per Se Rule, But Allows Cinnabon Worker’s No-Poach Class Action To Proceed After “Quick Look” Analysis
On November 13, 2018, Judge Robert J. Bryan of the United States District Court for the Western District of Washington denied a motion to dismiss a class action complaint by a former fast-food worker alleging that the company’s agreement to prohibit the re-hiring of one franchisee’s employees by another franchisee violates the Sherman Antitrust Act. Yi v. SK Bakeries LLC, et al., No. 3:18-cv-05627, Dkt. No. 33 (W.D. Wa. Nov. 13, 2018). Judge Bryan did, however, caution plaintiff against relying solely on a “quick look” theory, and suggested that whether franchisees are, in fact, a “single entity” incapable of conspiring with one another is a fact-specific question that did not merit a pleading-stage dismissal.
Eastern District Of Pennsylvania Dismisses Antitrust Suit Against Lab Testing Company Alleging Unfair Competition In Specialized Testing Services
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
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
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.