Justia Antitrust & Trade Regulation Opinion Summaries

In 2023, James Broad and Rebecca McCrensky began operating a car-rental agency, Becky's Broncos, LLC, on Nantucket Island without the necessary local approvals. The Town of Nantucket and the Nantucket Town Select Board ordered Becky's to cease operations. Becky's sought preliminary injunctive relief in the District of Massachusetts to continue their business.The District Court for the District of Massachusetts denied Becky's request for a preliminary injunction. The court found insufficient evidence of discriminatory effect under the dormant Commerce Clause and concluded that Becky's had not demonstrated a likelihood of success on the merits of its claims. Becky's appealed the decision.The United States Court of Appeals for the First Circuit reviewed the case. The court affirmed the district court's denial of the preliminary injunction. The appellate court held that Becky's did not show a likelihood of success on the merits of its dormant Commerce Clause claim, as the ordinance did not discriminate against out-of-state businesses. The court also found that Becky's failed to establish a likelihood of success on its antitrust claims due to a lack of a concrete theory of liability. Additionally, Becky's procedural due process argument was rejected because it did not establish a property interest in the required medallions. Lastly, the court held that the ordinance survived rational basis review under substantive due process, as it was rationally related to legitimate government interests in managing traffic and congestion on the island. View "Becky's Broncos, LLC v. Town of Nantucket" on Justia Law

PharmacyChecker.com LLC, an online pharmacy accreditation and price comparison service, sued its competitor LegitScript LLC for allegedly engaging in a group boycott in violation of antitrust laws. LegitScript moved for summary judgment, arguing that PharmacyChecker lacked antitrust standing because its business facilitated the illegal importation of foreign drugs, thus precluding any legally cognizable injury under Section 4 of the Clayton Act.The U.S. District Court for the District of Oregon denied LegitScript's motion for summary judgment. The court found that PharmacyChecker's business was legal and that LegitScript had not shown that PharmacyChecker itself engaged in illegal activity. The court also noted that the facilitation of potentially illegal activities by some of PharmacyChecker's users did not bar its antitrust standing. LegitScript's motion to certify the order for interlocutory appeal was granted, and the case was brought before the United States Court of Appeals for the Ninth Circuit.The Ninth Circuit affirmed the district court's decision, holding that PharmacyChecker had antitrust standing under Section 4 of the Clayton Act. The court relied on Supreme Court and Ninth Circuit precedents, including Kiefer-Stewart Co. v. Joseph E. Seagram & Sons, Inc., Perma Life Mufflers, Inc. v. International Parts Corp., Calnetics Corp. v. Volkswagen of America, Inc., and Memorex Corp. v. IBM. These cases established that neither the equitable defense of in pari delicto nor unclean hands could bar a plaintiff from bringing an antitrust suit, even if the plaintiff's business involved some illegal conduct. The court concluded that PharmacyChecker's facilitation of potentially illegal drug importation by some users did not negate its standing to sue for antitrust violations. View "PHARMACYCHECKER.COM LLC V. LEGITSCRIPT LLC" on Justia Law

Plaintiffs Anthony D’Armiento and Susan Scharpf filed a class action lawsuit against several major shipbuilders and naval-engineering consultancies, alleging a "no-poach" conspiracy to suppress wages by agreeing not to recruit each other’s employees. The plaintiffs, who had not worked for any defendant since 2013, claimed that this conspiracy was concealed through a "non-ink-to-paper" agreement, which they only discovered in April 2023 through an investigation.The United States District Court for the Eastern District of Virginia dismissed the case, ruling that it was barred by the Sherman Act’s four-year statute of limitations. The court found that the alleged "non-ink-to-paper" agreement did not constitute an affirmative act of fraudulent concealment that would toll the limitations period.The United States Court of Appeals for the Fourth Circuit reviewed the case and reversed the district court’s decision. The appellate court held that an agreement deliberately kept unwritten to avoid detection could qualify as an affirmative act of concealment. The court emphasized that fraudulent concealment can include acts of omission, such as avoiding the creation of written evidence. The court found that the plaintiffs had adequately alleged that the defendants engaged in affirmative acts of concealment by maintaining a secret, unwritten no-poach agreement.The Fourth Circuit concluded that the plaintiffs’ allegations met the relaxed Rule 9(b) standard for pleading fraudulent concealment with particularity. The court also determined that the plaintiffs had sufficiently alleged due diligence, as they were not on inquiry notice of the conspiracy until the investigation in 2023. The case was reversed and remanded for further proceedings. View "Scharpf v. General Dynamics Corporation" on Justia Law

Mesabi Metallics Company LLC (Mesabi) filed for Chapter 11 bankruptcy in 2016 and emerged successfully in 2017. During the bankruptcy proceedings, Mesabi initiated an adversary proceeding against Cleveland-Cliffs, Inc. (Cliffs), alleging tortious interference, antitrust violations, and other claims. Mesabi sought to unseal certain documents obtained from Cliffs during discovery, which had been filed under seal pursuant to a protective order. Cliffs opposed the motion, arguing that the documents should remain sealed under Bankruptcy Code § 107, not the common law right of access.The United States Bankruptcy Court for the District of Delaware applied the common law standard from In re Avandia Marketing, Sales Practices & Products Liability Litigation, concluding that Cliffs had not met the burden to keep the documents sealed. The court recognized the potential for a different interpretation and certified the question for direct appeal to the United States Court of Appeals for the Third Circuit.The Third Circuit held that the sealing of documents in bankruptcy cases is governed by § 107 of the Bankruptcy Code, not the common law right of access. The court clarified that § 107 imposes a distinct burden for sealing documents, requiring protection of trade secrets or confidential commercial information if disclosure would cause competitive harm. The court vacated the Bankruptcy Court's order and remanded for application of the correct standard.Additionally, the Third Circuit addressed a separate motion by Greg Heyblom to intervene and unseal the documents. The court concluded that the Bankruptcy Court lacked jurisdiction to grant Heyblom's motions while the appeal was pending, as it would interfere with the appellate court's jurisdiction. The orders granting Heyblom's motions were vacated. View "In re: ESML Holdings Inc v. Mesabi Metallics Company LLC" on Justia Law

The case involves the Federal Trade Commission (FTC) seeking a preliminary injunction to block Microsoft's acquisition of Activision Blizzard, Inc., a major video game developer. The FTC argued that the merger would likely violate Section 7 of the Clayton Act by substantially lessening competition in the U.S. markets for gaming console devices, gaming subscription services, and gaming cloud-streaming services. The FTC's primary concern was that Microsoft would make Activision's popular game, Call of Duty, exclusive to its Xbox console, thereby harming competition.The United States District Court for the Northern District of California denied the FTC's motion for a preliminary injunction. The court held a five-day evidentiary hearing and concluded that the FTC had not raised serious questions regarding whether the proposed merger would likely substantially lessen competition. The court found that Microsoft lacked the incentive to make Call of Duty exclusive to Xbox, as doing so would harm its financial interests and reputation. The court also noted that Activision Blizzard had historically resisted putting its content on subscription services, and there was insufficient evidence to show that this would change absent the merger.The United States Court of Appeals for the Ninth Circuit reviewed the district court's decision and affirmed the denial of the preliminary injunction. The appellate court agreed that the district court applied the correct legal standards and did not abuse its discretion or rely on clearly erroneous findings. The Ninth Circuit held that the FTC failed to make a sufficient evidentiary showing to establish a likelihood of success on the merits of its Section 7 claim. The court concluded that the FTC had not demonstrated that the merger would likely substantially lessen competition in the relevant markets. View "FTC V. MICROSOFT CORPORATION," on Justia Law

Mesabi Metallics Company LLC (Mesabi) filed for Chapter 11 bankruptcy in 2016 and emerged successfully in 2017. During the bankruptcy proceedings, Mesabi initiated an adversary proceeding against Cleveland-Cliffs, Inc. (Cliffs), alleging tortious interference, antitrust violations, and civil conspiracy. Mesabi claimed Cliffs engaged in anti-competitive conduct to impede Mesabi's business operations. To facilitate discovery, the parties entered a stipulated protective order allowing documents to be designated as confidential. Mesabi later moved to unseal certain documents filed under seal to support a petition in the Minnesota Court of Appeals.The United States Bankruptcy Court for the District of Delaware, applying the common law right of access, held that Cliffs had not met the burden to keep the documents sealed. The court relied on the Third Circuit's precedent in In re Avandia, which requires a showing that disclosure would cause a clearly defined and serious injury. Recognizing potential ambiguity in the law, the Bankruptcy Court certified the question for direct appeal to the United States Court of Appeals for the Third Circuit.The Third Circuit clarified that the sealing of documents in bankruptcy cases is governed by 11 U.S.C. § 107, not the common law right of access. Section 107 imposes a distinct burden, requiring protection of trade secrets or confidential commercial information without the need for balancing public and private interests. The court vacated the Bankruptcy Court's decision and remanded for application of the correct standard under § 107. Additionally, the Third Circuit held that the Bankruptcy Court lacked jurisdiction to grant a third party's motion to intervene and unseal documents while the appeal was pending, vacating those orders as well. View "ESML Holdings Inc v. Mesabi Metallics Compay LLC," on Justia Law

In this case, plaintiffs in a class action alleged that several corporations in the broiler chicken market violated antitrust laws by engaging in bid rigging and reducing the supply of broiler chickens. The plaintiffs claimed that these actions led to anomalous dips in sales, which they attributed to collusion on price and output. The class action was divided into two tracks: Track 1, which omitted bid-rigging allegations for faster discovery and trial, and Track 2, which included bid-rigging theories and state law claims by indirect purchasers.The United States District Court for the Northern District of Illinois allowed the class to place claims against Simmons Foods, Inc. and Simmons Prepared Foods, Inc. on Track 1. Simmons settled for $8 million, but several class members, including the Boston Market group, objected to the settlement. They argued that the settlement was inadequate and that they should not be included in the class because they had filed their own antitrust suits. However, they missed the deadline to opt out of the class, and the district court approved the settlement.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court held that the settlement's release language was broad enough to cover bid-rigging claims and that the $8 million settlement was reasonable. The court noted that the Boston Market group did not provide evidence that the settlement amount was unreasonably low. Additionally, the court observed that the class had lost a related trial and that criminal antitrust prosecutions against some firms had ended in mistrials or acquittals, indicating uncertainty about the plaintiffs' prospects. The court affirmed the district court's approval of the settlement. View "Boston Market Corporation v Mountainaire Farms, Inc." on Justia Law

Plaintiffs, representing a putative class, filed an antitrust lawsuit against Grubhub Inc., Postmates Inc., and Uber Technologies, Inc. (collectively, "Defendants"). The plaintiffs alleged that the defendants violated Section 1 of the Sherman Antitrust Act and its state analogues by entering into no-price competition clauses (NPCCs) with restaurants, which prevented the restaurants from offering lower prices through other channels. The plaintiffs claimed that these NPCCs led to artificially high prices for restaurant meals. The class included customers who purchased takeout or delivery directly from restaurants subject to NPCCs, customers who dined in at such restaurants, and customers who used non-defendant platforms to purchase from these restaurants.The United States District Court for the Southern District of New York denied the defendants' motion to compel arbitration. The court held that the scope of the arbitration clauses was an issue for the court to decide and that the clauses did not apply to the plaintiffs' claims as they lacked a nexus to the defendants' Terms of Use. The court also found that the plaintiffs had not agreed to Grubhub's Terms of Use.The United States Court of Appeals for the Second Circuit reviewed the case. The court affirmed the district court's decision in part, ruling that the question of arbitrability for the plaintiffs' claims against Grubhub is for the court to decide and that Grubhub's arbitration clause does not apply to the plaintiffs' antitrust claims. However, the court reversed the district court's decision in part, finding that Grubhub had established an agreement to arbitrate with the plaintiffs and that the threshold question for the plaintiffs' claims against Uber and Postmates is for the arbitrator to decide. The case was remanded for further proceedings consistent with this opinion. View "Davitashvili v. Grubhub" on Justia Law

Plaintiffs sued Qualcomm Inc., alleging that its business practices violated state and federal antitrust laws. These practices included Qualcomm’s “no license, no chips” policy, which required cellular manufacturers to license Qualcomm’s patents to purchase its modem chips, and alleged exclusive dealing agreements with Apple and Samsung. The Federal Trade Commission (FTC) had previously challenged these practices, but the Ninth Circuit reversed the district court’s ruling in favor of the FTC, holding that Qualcomm did not violate the Sherman Act.The district court in the current case certified a nationwide class, but the Ninth Circuit vacated the class certification order and remanded to consider the viability of plaintiffs’ claims post-FTC v. Qualcomm. On remand, plaintiffs proceeded with state-law claims under California’s Cartwright Act and Unfair Competition Law (UCL). The district court dismissed the tying claims and granted summary judgment on the exclusive dealing claims. The court found that the Cartwright Act did not depart from the Sherman Act and that plaintiffs failed to show market foreclosure or anticompetitive impact in the tied product market. The court also rejected the UCL claims, finding no fraudulent practices and determining that plaintiffs could not seek equitable relief.The United States Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal of the tying claims and the summary judgment on the exclusive dealing claims under the Cartwright Act. The court held that Qualcomm’s “no license, no chips” policy was not anticompetitive and that plaintiffs failed to show substantial market foreclosure or antitrust injury. The court also affirmed the rejection of the UCL claims but vacated the summary judgment on the UCL unfairness claim related to exclusive dealing, remanding with instructions to dismiss that claim without prejudice for refiling in state court. View "KEY V. QUALCOMM INCORPORATED" on Justia Law

Plaintiffs, purchasers of coupon processing services, alleged that Inmar, Inc. and its subsidiaries engaged in an anticompetitive conspiracy to raise coupon processing fees. They sought class certification for a manufacturer purchaser class. The district court rejected their attempts to certify the class, leading to this appeal.The United States District Court for the Middle District of North Carolina denied plaintiffs' first two motions for class certification. The first was denied due to discovery issues, and the second was rejected as an impermissible fail-safe class. Plaintiffs' third motion proposed three different class definitions: the Fixed List Class, the Limited Payer Class, and the All Payer Class. The district court rejected all three, finding the Fixed List Class to be a fail-safe class, the Limited Payer Class to be unascertainable and excluding too many injured manufacturers, and the All Payer Class to fail the predominance requirement of Rule 23(b)(3) due to a high percentage of uninjured members.The United States Court of Appeals for the Fourth Circuit reviewed the district court's decision and affirmed the denial of class certification. The court found that the Fixed List Class failed to define a class and improperly shifted the burden to the district court. The Limited Payer Class was deemed unascertainable and not superior due to its exclusion of many injured manufacturers. The All Payer Class failed the predominance requirement as the plaintiffs' expert did not show injury for 32% of the class members, raising both predominance and standing issues. The Fourth Circuit concluded that the district court did not abuse its discretion in denying class certification. View "Mr. Dee's Inc. v. Inmar, Inc." on Justia Law