Justia Antitrust & Trade Regulation Opinion Summaries
CDK Global LLC v. Brnovich
A 2019 Arizona statute prohibits auto dealer management system (DMS) providers from “tak[ing] any action by contract, technical means or otherwise to prohibit or limit a dealer’s ability to protect, store, copy, share or use” data the dealer has stored in its DMS. DMS providers may not impose charges “beyond any direct costs incurred” for database access. DMS providers may not prohibit the third parties contracted by the dealers “from integrating into the dealer’s data system,” nor may they otherwise “plac[e] an unreasonable restriction on integration.” DMS providers must “[a]dopt and make available a standardized framework for the exchange, integration, and sharing of data” with authorized integrators.The Ninth Circuit affirmed the denial of a preliminary injunction against the statute’s enforcement. There is no conflict preemption; the statute and the federal Copyright Act are not irreconcilable. The statute does not conflict with 17 U.S.C. 106(1), which grants the owner of a copyrighted work the exclusive right “to reproduce the copyrighted work in copies.” The plaintiffs forfeited their claim that the statute impaired their contracts with third-party vendors and did not show that the statute impaired their ability to discharge their contractual duty to keep dealer data confidential. The statute was reasonably drawn to serve important public purposes of promoting consumer data privacy and competition and amounted to neither a per se physical taking nor a regulatory taking. View "CDK Global LLC v. Brnovich" on Justia Law
Mallet & Co., Inc. v. Lacayo
In 2019, Mallet learned that Bundy was its newest competitor in the sale of baking release agents, the lubricants that allow baked goods to readily separate from the containers in which they are made. Bundy was well-known for other commercial baking products when it launched a new subsidiary, Synova, to sell baking release agents. Synova hired two Mallet employees, both of whom had substantial access to Mallet’s proprietary information. That information from Mallet helped Synova rapidly develop, market, and sell release agents to Mallet’s customers.Mallet sued, asserting the misappropriation of its trade secrets. The district court issued a preliminary injunction. restraining Bundy, Synova, and those employees from competing with Mallet. The Third Circuit vacated and remanded for further consideration of what, if any, equitable relief is warranted and what sum Mallet should be required to post in a bond as “security … proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained.” A preliminary injunction predicated on trade secret misappropriation must adequately identify the allegedly misappropriated trade secrets. If the district court decides that preliminary injunctive relief is warranted, the injunction must be sufficiently specific in its terms and narrowly tailored in its scope. View "Mallet & Co., Inc. v. Lacayo" on Justia Law
Association of American Physicians & Surgeons, Inc. v. American Board of Medical Specialties
The Association of American Physicians & Surgeons (AAPS), is a nonprofit organization of physicians and surgeons. The American Board of Medical Specialties, a nonprofit provider of medical certification services, is an umbrella organization for 24 member boards, each dedicated to a particular medical practice area. The Board deems physicians who meet its requirements to be “Board-certified.” To remain certified, physicians must comply with the Board’s Maintenance of Certification (MOC) program and continuing education requirements. All states permit physicians who are not Board-certified to practice medicine.According to AAPS, the Board conspired with its member boards, hospitals, and health insurers to condition the granting of staff privileges and in-network status on physicians’ continued participation in the MOC program so that physicians find themselves forced to participate in the program to practice medicine, at least if they wish to do so in hospitals or to accept certain forms of insurance. The Seventh Circuit affirmed the dismissal of its suit under section 1 of the Sherman Act and claiming negligent misrepresentation on the Board’s website to “create the false impression that [the MOC program] is indicative of the medical skills of physicians.” The complaint does not plausibly allege an agreement between the Board, hospitals, and insurers. Mere legal conclusions are “not entitled to be assumed true.” View "Association of American Physicians & Surgeons, Inc. v. American Board of Medical Specialties" on Justia Law
Hyundai Electric & Energy Systems Co., Ltd. v. United States
The Federal Circuit affirmed the U.S. Court of International Trade's decision sustaining the U.S. Department of Commerce's final results in the fifth administrative review of the antidumping duty order on large power transformers from the Republic of Korea. This case involves two categories of information that Commerce requested from Hyundai, namely product-specific cost information and cost-reconciliation information.The court held that Commerce's determinations to rely on facts otherwise available, to cancel verification, and to draw an adverse inference in selecting from among the facts otherwise available are supported by substantial evidence and otherwise not contrary to law. In this case, Hyundai's repeated disclosure of partial, aggregate, or sample information rather than complete and itemized information establishes that Commerce's decision to rely on facts otherwise available was reasonable and supported by substantial evidence. Furthermore, Commerce articulated sound reasons for seeking more detailed information regarding Hyundai's cost-shifting in this administrative review than in prior reviews, including its observation that cost shifting had a larger impact on this administrative review. The court explained that such concerns support the reasonableness of Commerce's requests for a greater amount of detail in this administrative review. Finally, to the extent that the shortcomings of Hyundai's responses are attributable to its record keeping, that alone does not avoid an adverse inference. Here, Commerce clearly and repeatedly requested the information and identified the defects in Hyundai’s responses, and the information that was ultimately missing from the record was foundational to Commerce's ability to perform the antidumping duty calculations in a sound manner. The court considered Hyundai's remaining arguments and found them unpersuasive. View "Hyundai Electric & Energy Systems Co., Ltd. v. United States" on Justia Law
Stromberg v. Qualcomm, Inc.
The district court certified a nationwide indirect purchaser class in antitrust multidistrict litigation seeking injunctive and monetary relief under sections 1 and 2 of the Sherman Act and California law against Qualcomm. The suit alleged that Qualcomm maintained a monopoly in electronic chips by engaging in a “no-license-no-chips” policy and sold chips only at above-FRAND (fair, reasonable, and non-discriminatory) royalty rates; refusing to license its standard-essential patents to rival chip suppliers; and entering into exclusive dealing arrangements with Apple. The plaintiffs, consumers who bought cellphones, alleged that Qualcomm’s monopoly harmed consumers because the amount attributable to an allegedly excessive royalty was passed through the distribution chain to consumers.The Ninth Circuit vacated. The court noted its 2020 holding, FTC v. Qualcomm, that Qualcomm’s modem chip licensing practices did not violate the Sherman Act and that its exclusive dealing agreements with Apple did not substantially foreclose competition. The class was erroneously certified under a faulty choice of law analysis because differences in relevant state laws swamped predominance. California’s choice of law rules precluded the district court’s certification of the nationwide Rule 23(b)(3) class because other states’ laws, beyond California’s Cartwright Act, should apply. As a result, common issues of law did not predominate in the class as certified. View "Stromberg v. Qualcomm, Inc." on Justia Law
Ellison v. American Board of Orthopaedic Surgery
Ellison, an orthopedic surgeon who practices in California, wants to move to New Jersey and practice in the RWJBarnabas Health system. In order to obtain staff privileges, Ellis sought certification by the American Board of Orthopaedic Surgery (ABOS) around 2012. ABOS only certifies surgeons who successfully complete its multistep certification examination. Ellison passed the first step of ABOS’s exam, but ABOS prohibited him from taking the second step until he first obtained medical staff privileges at a hospital. Ellison has yet to apply for staff privileges. He believes the New Jersey hospitals where he desires to practice will reject his application, as their bylaws provide that they generally grant privileges only to physicians who are already board certified. Ellison sued ABOS in 2016. ABOS removed the matter to federal court. Ellison amended his complaint to allege that ABOS violated the Sherman Act, 15 U.S.C. 1. The District Court dismissed Ellison’s complaint for failure to state a claim for relief.The Third Circuit vacated with instructions to dismiss the case for lack of standing. Ellison has not attempted to apply for medical staff privileges or taken any concrete steps to practice in New Jersey. His assertions that ABOS has injured him are speculative. View "Ellison v. American Board of Orthopaedic Surgery" on Justia Law
United Food & Commercial Workers Local 1776 v. Takeda Pharmaceutical Co.
Defendants in these tandem cases (collectively, "Takeda") are a brand pharmaceutical manufacturer and related entities that began producing and marketing the Type-2 diabetes drug ACTOS in 1999. Purchasers of ACTOS filed suit against Takeda for improperly describing its patents to the FDA, in effect extending the duration of its patent protection over ACTOS and delaying generic competition. The district court denied Takeda's motion to dismiss, concluding that the alleged patent descriptions were incorrect under the Hatch–Waxman Act and pertinent regulations.On this interlocutory appeal, the Second Circuit held that under the "Listing Requirement" of 21 U.S.C. 355(b)(1), a combination patent does not "claim" any of its component drug substances past their individual patent expiration dates. The court also held that the purchasers were not required to allege that Takeda's interpretation of the Listing Requirement was unreasonable in order to plead a monopolization claim under the Sherman Act. Accordingly, the court affirmed the district court's denial of Takeda's motion to dismiss and remanded for further proceedings. View "United Food & Commercial Workers Local 1776 v. Takeda Pharmaceutical Co." on Justia Law
Hetronic International v. Hetronic Germany GmbH, et al.
Hetronic International, Inc., a U.S. company, manufactured radio remote controls, the kind used to remotely operate heavy-duty construction equipment. Defendants, none of whom were U.S. citizens, distributed Hetronic’s products, mostly in Europe. After about a ten-year relationship, one of Defendants’ employees stumbled across an old research-and-development agreement between the parties. Embracing a “creative legal interpretation” of the agreement endorsed by Defendants’ lawyers, Defendants concluded that they owned the rights to Hetronic’s trademarks and other intellectual property. Defendants then began manufacturing their own products—identical to Hetronic’s—and selling them under the Hetronic brand, mostly in Europe. Hetronic terminated the parties’ distribution agreements, but that didn’t stop Defendants from making tens of millions of dollars selling their copycat products. Hetronic asserted numerous claims against Defendants, but the issue presented on appeal to the Tenth Circuit centered on its trademark claims under the Lanham Act. A jury awarded Hetronic over $100 million in damages, most of which related to Defendants’ trademark infringement. Then on Hetronic’s motion, the district court entered a worldwide injunction barring Defendants from selling their infringing products. Defendants ignored the injunction. In the district court and before the Tenth Circuit, Defendants focused on one defense in particular: Though they accepted that the Lanham Act could sometimes apply extraterritorially, they insisted the Act’s reach didn’t extend to their conduct, which generally involved foreign defendants making sales to foreign consumers. Reviewing this matter as one of first impression in the Tenth Circuit, and after considering the Supreme Court’s lone decision on the issue and persuasive authority from other circuits, the Tenth Circuit concluded the district court properly applied the Lanham Act to Defendants’ conduct. But the Court narrowed the district court’s expansive injunction. Affirming in part, and reversing in part, the Court remanded the case for further consideration. View "Hetronic International v. Hetronic Germany GmbH, et al." on Justia Law
Aya Healthcare Services, Inc. v. AMN Healthcare, Inc.
In 2010, AMN Healthcare contracted with Aya Healthcare to provide travel nursing services to healthcare facilities. The contract prohibited Aya from soliciting AMN’s employees. In 2015, Aya began actively soliciting AMN’s travel nurse recruiters. AMN temporarily terminated Aya’s access to AMN’s platform. The parties ended their relationship. Aya filed suit under the Sherman Antitrust Act, 15 U.S.C. 1, 2, including a “per se” claim and a quick-look/rule-of-reason claim and claims for attempted monopolization and monopolization, and state law tortious interference and other claims. Aya claimed that it suffered exclusionary damages as a result of AMN’s non-solicitation covenant and retaliatory damages as a result of AMN’s termination of the relationship.The Ninth Circuit affirmed summary judgment in favor of AMN. The non-solicitation agreement is an ancillary, rather than a naked restraint, because it is reasonably necessary to the parties’ procompetitive collaboration; it is not per se unlawful but is subject to the rule-of-reason standard. Aya failed to satisfy its initial burden under that standard because it did not establish a triable issue of fact with respect to whether AMN’s nonsolicitation agreement has a substantial anticompetitive effect that harms consumers in the relevant market. Aya’s claim for retaliatory damages failed because it did not present any evidence of a cartel or a concerted action in the termination of the agreement. View "Aya Healthcare Services, Inc. v. AMN Healthcare, Inc." on Justia Law
Stone v. East Coast Swappers, LLC
The Supreme Court affirmed the judgment of the appellate court affirming the judgment of the trial court finding that Defendant, East Coast Swappers, LLC, had violated the Connecticut Unfair Trade Practices Act (CUTPA), Conn. Gen. Stat. 42-110a et seq., holding that the trial court abused its discretion when it failed to award Plaintiff attorney's fees.The trial court found that Defendant had violated CUTPA and awarded Plaintiff compensatory damages. The court, however, declined to award punitive damages or attorney's fees. On appeal, Plaintiff argued that the Court should adopt a presumption whereby a plaintiff prevailing in a CUTPA action should ordinarily recover attorney's fees under section 42-110g(d) unless the award would be unjust. The Supreme Court declined to adopt Plaintiff's suggested presumption but nevertheless reversed, holding that the trial court abused its discretion by failing to award Plaintiff attorney's fees. View "Stone v. East Coast Swappers, LLC" on Justia Law