Justia Antitrust & Trade Regulation Opinion Summaries

A Mississippi retail pharmacy, Rx Solutions, Inc., sought to join the pharmacy benefit management (PBM) network operated by Caremark, LLC, which is associated with CVS Pharmacy, Inc. Caremark denied Rx Solutions’ application, citing inconsistencies in ownership information and affiliations with Quest Pharmacy, owned by Harold Ted Cain, who Caremark claimed was previously found guilty of violating the False Claims Act. Rx Solutions disputed these reasons, noting acceptance by other PBM networks and asserting that Harold Ted Cain lacked operational control over Rx Solutions and had not been convicted of any relevant criminal offense.Rx Solutions filed suit in the United States District Court for the Southern District of Mississippi, alleging two federal antitrust violations under the Sherman Act and three state law claims: violation of Mississippi’s “any willing provider” statute, violation of the state antitrust statute, and tortious interference with business relations. The district court dismissed the federal antitrust and state statutory claims, concluding that Rx Solutions failed to adequately define relevant product and geographic markets and did not allege antitrust injury. The court also determined there was no diversity jurisdiction to support the remaining state law claims and declined to exercise supplemental jurisdiction.The United States Court of Appeals for the Fifth Circuit affirmed the district court’s dismissal of the federal antitrust and Mississippi state antitrust claims, holding that Rx Solutions did not sufficiently plead a relevant market or antitrust injury. However, the Fifth Circuit reversed the district court’s finding regarding diversity jurisdiction, based on admissions by Caremark and CVS establishing complete diversity between the parties. The appellate court affirmed the dismissal of the state antitrust claim and remanded the claims under Mississippi’s “any willing provider” statute and for tortious interference with business relations for further proceedings. View "Rx Solutions v. Caremark" on Justia Law

Endure Industries, Inc., a seller of disposable medical supplies, sought to participate as a supplier in Vizient’s group purchasing organization (GPO), which negotiates bulk purchasing contracts for healthcare providers. Vizient is the largest GPO in the United States, serving a majority of general acute care centers and academic medical centers. After Vizient rejected Endure’s bid to supply medical tape in favor of another supplier, Endure filed an antitrust suit against Vizient and related entities, alleging monopolization and anticompetitive conduct in two proposed markets for disposable medical supplies.The United States District Court for the Northern District of Texas granted summary judgment to Vizient, finding that Endure failed to define a legally sufficient relevant market under antitrust law. The district court reasoned that Endure’s expert’s market definitions—(1) the sale of disposable medical supplies through GPOs to acute care centers, and (2) sales to Vizient member hospitals—excluded significant alternative sources of supply. Specifically, evidence showed that many hospitals purchase substantial amounts of supplies outside GPO contracts, demonstrating that reasonable substitutes exist and undermining Endure’s theory of market foreclosure.On appeal, the United States Court of Appeals for the Fifth Circuit reviewed only the issue of market definition. The Fifth Circuit held that Endure did not raise a genuine dispute of material fact regarding its proposed markets, as its definitions failed to account for all commodities reasonably interchangeable by consumers. The court found that significant hospital purchasing occurs outside GPOs and that Vizient members are not “locked in” to buying exclusively through Vizient. The Fifth Circuit affirmed the district court’s summary judgment in favor of Vizient, concluding that neither of Endure’s proposed antitrust markets was legally sufficient. View "Endure Industries v. Vizient" on Justia Law

Iron Triangle, LLC significantly increased its presence in the Malheur National Forest after winning a 2013 competitive bidding process by the U.S. Forest Service, securing an exclusive ten-year stewardship contract and right of first refusal on 70% of federal timberland. Iron Triangle also regularly won bids for the remaining 30% of timber sales. In 2020, it entered a contract with Malheur Lumber Company to supply pine sawlogs and provide logging services. Plaintiffs—loggers, landowners, and a competing sawmill—claimed that Iron Triangle and other defendants used anticompetitive tactics to monopolize and restrain trade across four related product markets in the region.The United States District Court for the District of Oregon dismissed the antitrust claims with prejudice, finding that plaintiffs failed to allege monopoly power, anticompetitive conduct, or antitrust injury in any of the identified markets. The court also held that federal regulations governing government contracting and timber sales precluded findings of monopoly power. Plaintiffs amended their complaint twice, but each time, the district court found the allegations insufficient and eventually denied further leave to amend.The United States Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal. While disagreeing that federal regulations categorically preclude monopoly power, the appellate court held that plaintiffs failed to plausibly plead monopoly or monopsony power, anticompetitive conduct, or antitrust injury in any market. The court also found plaintiffs did not sufficiently allege an illegal tying arrangement under Section 1 of the Sherman Act, as logging services and sawlogs were not distinct products and there was no coercion. The Ninth Circuit further affirmed denial of leave to amend, concluding additional amendments would be futile. View "MALHEUR FOREST FAIRNESS COALITION V. IRON TRIANGLE, LLC" on Justia Law

Seagate Technology LLC, a California-based manufacturer of hard disk drives, and two of its foreign subsidiaries (in Thailand and Singapore) brought antitrust claims against NHK Spring Co., Ltd., a Japanese supplier of suspension assemblies—critical hard drive components. NHK pleaded guilty in a separate federal criminal proceeding to conspiring with competitors to fix the prices of these suspension assemblies, which were sold both in the United States and abroad. The majority of the price-fixed assemblies purchased by Seagate’s foreign entities occurred outside the United States, with only finished hard drives being imported into the country.The United States District Court for the Northern District of California initially found that the Sherman Act did not apply to Seagate’s claims related to suspension assemblies purchased abroad, ruling that these were “wholly foreign transactions” outside the reach of U.S. antitrust law. The court also determined that the Foreign Trade Antitrust Improvements Act (FTAIA) import commerce exclusion did not apply since the assemblies themselves were not directly imported into the United States, and that Seagate could not show the necessary domestic effect giving rise to its foreign injury. The district court granted NHK’s motion for partial summary judgment in full and denied Seagate leave to amend its complaint for indirect purchaser claims.The United States Court of Appeals for the Ninth Circuit vacated the district court’s summary judgment order. The appellate court held that while the import commerce exclusion did not apply, Seagate alleged a viable theory under the FTAIA’s domestic effects exception: NHK’s price-fixing in the United States led to higher prices domestically, which then directly caused Seagate’s foreign entities to pay inflated prices abroad. The Ninth Circuit remanded the case for the district court to determine whether Seagate had presented sufficient evidence of proximate cause to survive summary judgment. View "SEAGATE TECHNOLOGY LLC V. NHK SPRING CO., LTD." on Justia Law

AliveCor, a medical-technology company, developed a software feature called SmartRhythm to detect atrial fibrillation (Afib) using the Apple Watch. SmartRhythm depended on heart rate data generated by Apple’s original Workout Mode algorithm, known as HRPO. In 2018, Apple updated its Watch operating system and replaced HRPO with a new algorithm, HRNN, which improved exercise monitoring. Apple shared HRNN data with third-party developers but stopped sharing HRPO data, making SmartRhythm ineffective and leading AliveCor to discontinue the feature. Around the same time, Apple launched its own heart rhythm analysis feature, Irregular Rhythm Notification (IRN), using a different algorithm and shared that data as well. AliveCor alleged that Apple’s conduct intentionally disabled competing software features, thereby monopolizing the market for heart rhythm analysis apps on the Apple Watch.The United States District Court for the Northern District of California granted summary judgment for Apple, finding that Apple’s changes constituted a lawful product improvement under Allied Orthopedic Appliances, Inc. v. Tyco Health Care Group LP. The court held that the update to the Workout Mode was a genuine product improvement and that the associated incompatibility with SmartRhythm was not separate anticompetitive conduct.On appeal, the United States Court of Appeals for the Ninth Circuit affirmed the judgment, but on different grounds. The Ninth Circuit held that Apple’s refusal to continue sharing HRPO data with third-party developers constituted a “refusal to deal,” which under antitrust law does not impose a duty to share with competitors unless specific exceptions apply. The court found that AliveCor had not shown that an exception, such as the Aspen Skiing exception or the essential-facilities doctrine, applied. Therefore, AliveCor’s Section 2 Sherman Act claims failed as a matter of law, and summary judgment for Apple was affirmed. View "ALIVECOR, INC. V. APPLE INC." on Justia Law

A hospital district alleged that a medical device manufacturer used its dominant market share in tip-location systems (TLS) for catheters to manipulate the market for peripherally inserted central catheters (PICCs). Bard, the manufacturer, sells PICCs with a proprietary stylet that is necessary to integrate with Bard’s TLS. The hospital claimed this arrangement effectively forced hospitals to buy Bard’s PICCs to use the TLS, resulting in higher prices, and brought suit under the Sherman Act and Clayton Act for unlawful tying and monopolization. The hospital sought class certification for clinics and hospitals that had purchased Bard PICCs.Initially, the United States District Court for the District of Utah granted Bard’s motion for judgment on the pleadings regarding the tying claim, holding that the hospital lacked antitrust standing since it purchased only the tied product (PICCs) and not the tying product (TLS). The court concluded the hospital did not show it was compelled to buy Bard’s PICCs as a result of owning Bard’s TLS. The court allowed the monopolization claim to proceed, but later denied class certification, finding the proposed class did not meet certification requirements. After the Tenth Circuit denied interlocutory review of the class certification denial, the hospital voluntarily dismissed its remaining claim to facilitate an appeal from final judgment.On appeal, the United States Court of Appeals for the Tenth Circuit affirmed the dismissal of the tying claim, holding that the hospital was not an efficient enforcer of the antitrust laws and therefore lacked antitrust standing. The court found that purchasers of the tying product or competitors are generally better positioned to challenge tying arrangements. The Tenth Circuit also dismissed the appeal from denial of class certification, ruling it lacked jurisdiction under circuit and Supreme Court precedent when the underlying claim was voluntarily dismissed. View "North Brevard County Hospital District v. C.R. Bard, Inc." on Justia Law

Cherry Grove Beach Gear, LLC, operated by Derek and Jacqueline Calhoun, began providing beach equipment rentals and setup services on public beaches in the City of North Myrtle Beach, South Carolina, starting in 2020. The City informed CGBG that its activities violated local ordinances, but the company continued operating despite repeated warnings and complaints from competitors. In response, the City enacted a new ordinance in June 2022 that explicitly restricted professional setup of beach equipment on City beaches to City officials only. CGBG persisted with its services and received several citations for noncompliance.Following these actions, CGBG filed a lawsuit in the United States District Court for the District of South Carolina, alleging that the City had unlawfully established a monopoly over beach equipment rentals and setup services, violating federal antitrust law. The district court granted summary judgment in favor of the City, determining that the municipal ordinances qualified for state action immunity from federal antitrust liability under the Parker doctrine, based on relevant South Carolina statutes.On appeal, the United States Court of Appeals for the Fourth Circuit reviewed the district court’s decision de novo. The Fourth Circuit held that the South Carolina statutes in question clearly articulated and affirmatively expressed state policy allowing municipalities to create exclusive franchises for beach equipment rentals and setup, and that the anticompetitive effects were a foreseeable result of this legislative authorization. The court also rejected CGBG’s argument for a “market participant exception” to state action immunity, noting that precedent does not recognize such an exception. Consequently, the Fourth Circuit concluded that the City is entitled to state action immunity and affirmed the district court’s judgment. View "Cherry Grove Beach Gear, LLC v. City of North Myrtle Beach" on Justia Law

A distributor of television programming alleged that three groups of broadcasters, including two that were so-called “sidecar” entities of a larger broadcaster, engaged in a horizontal price-fixing conspiracy. The distributor claimed that the broadcasters coordinated through a common negotiator to demand supracompetitive retransmission fees during contract renewal talks. When the distributor declined to pay the demanded rates, it lost access to the broadcasters’ stations in certain markets, resulting in blackouts for subscribers and subsequent lost profits.Prior to this appeal, the United States District Court for the Southern District of New York reviewed the case. The district court granted the broadcasters’ motion to dismiss the federal antitrust claims, concluding that the distributor lacked antitrust standing. Specifically, the district court found that there was no antitrust injury because the distributor did not actually pay the alleged supracompetitive prices, and that the distributor was not an efficient enforcer since its injuries were indirect and speculative. Consequently, the district court declined to exercise supplemental jurisdiction over the distributor’s remaining state law claims.On appeal, the United States Court of Appeals for the Second Circuit reviewed the district court’s judgment. The Second Circuit held that the distributor plausibly alleged an antitrust injury, as lost profits from a reduction in output (subscriber losses caused by blackouts resulting from price fixing) are a cognizable form of antitrust injury. The court further held that the distributor is an efficient enforcer because it was the direct target of the alleged conspiracy and had a preexisting course of dealing with the broadcasters. The Second Circuit reversed the district court’s dismissal of the federal antitrust claims, vacated the decision to decline supplemental jurisdiction over the state law claims, and remanded the case for further proceedings. View "DirecTV, LLC v. Nexstar Media Group, Inc." on Justia Law

Several individuals who were former partners at Cantor Fitzgerald L.P., BGC Holdings L.P., and Newmark Holdings L.P. separated from those partnerships and were entitled to receive certain payments after their departure. These payments included an initial amount plus four annual installment payments, but the partnership agreements allowed the partnerships to withhold the annual payments if the former partners engaged in broadly defined “Competitive Activity.” The partnerships exercised this right and withheld payments from the plaintiffs after determining they had engaged in such activity. The plaintiffs alleged that these provisions constituted unreasonable restraints of trade in violation of Section 1 of the Sherman Act and, for two plaintiffs, a violation of Delaware’s implied covenant of good faith and fair dealing.The United States District Court for the District of Delaware dismissed the plaintiffs’ complaint. The court found that the plaintiffs had failed to plead an “antitrust injury,” which is necessary to assert a claim under the Sherman Act, and further held that the implied covenant claims failed because the partnership agreements gave the partnerships express contractual discretion to withhold the payments when a former partner competed, leaving no contractual gap for the implied covenant to fill. The plaintiffs appealed the dismissal.The United States Court of Appeals for the Third Circuit affirmed the District Court’s judgment. The court held that the plaintiffs’ pecuniary injuries, stemming from the withholding of payments, were not antitrust injuries because they did not result from anticompetitive conduct affecting their status as market participants, nor were their injuries inextricably intertwined with any anticompetitive scheme. Regarding the implied covenant claims, the Third Circuit found that the relevant agreements expressly permitted withholding the payments under the circumstances, and there was no plausible allegation that the partnerships exercised their discretion in bad faith. View "McLoughlin v. Cantor Fitzgerald L.P." on Justia Law

Epic Games, a developer and operator of the Epic Games Store, sued Apple over its App Store practices, alleging violations of federal and California competition law. The dispute centered on Apple’s rules requiring developers to use Apple’s in-app payment system, which imposed a 30% commission, and its prohibition of developers directing users to other purchasing options outside the App Store. After a bench trial, the district court found Apple’s anti-steering provisions violated California’s Unfair Competition Law by preventing informed consumer choice but upheld Apple’s in-app payment system requirement for digital goods. The court issued an injunction barring Apple from restricting developers from including in their apps buttons, links, or other calls to action that direct users to alternative purchasing mechanisms.Following the injunction, Apple implemented a compliance plan involving a 27% commission on linked-out purchases and a series of restrictions on how developers could present external payment options, including limitations on button design, link placement, and user flow. Epic contested Apple’s compliance, arguing these measures still effectively prohibited alternative purchases. After holding multiple evidentiary hearings, the United States District Court for the Northern District of California found Apple in civil contempt for failing to comply with the injunction, citing Apple’s bad faith and pretextual justifications. The district court imposed broad sanctions, including prohibiting any commission on linked-out purchases, restricting Apple’s ability to limit external links, and referring Apple for criminal investigation.On appeal, the United States Court of Appeals for the Ninth Circuit affirmed the district court’s contempt findings and most of the resulting sanctions but found portions of the sanctions—particularly the blanket ban on commissions—overbroad and more punitive than coercive. The Ninth Circuit reversed and remanded those parts for further tailoring, clarified the scope of permissible developer link prominence, and declined to vacate the injunction or reassign the case. The court otherwise affirmed the district court’s orders. View "EPIC GAMES, INC. V. APPLE INC." on Justia Law