Justia Antitrust & Trade Regulation Opinion Summaries
State ex rel. Morrisey v. Diocese of Wheeling-Charleston
The Supreme Court considered a question certified by the circuit court and answered that the deceptive trade practices provisions of the West Virginia Consumer Credit and Protection Act (the Act), W. Va. Code 46A-6-101 to -106, do not apply to educational and recreational services offered by a religious institution.The Attorney General sued the Diocese of Wheeling-Charleston and Michael Bransfield, in his capacity as former bishop of the Diocese, alleging (1) the Diocese knowingly employed persons who admitted to sexually abusing others or who were credibly accused of sexual abuse at its camps and schools, and (2) by misrepresenting or hiding that danger, the Diocese violated the deceptive practices provisions of the West Virginia Consumer Credit and Protection Act. The circuit court dismissed the Attorney General's claims but stayed its order and certified a question of law to the Supreme Court. The Supreme Court answered the question in the negative, holding that the deceptive practices provisions of the Act do not apply to educational and recreational services offered by a religious institution. View "State ex rel. Morrisey v. Diocese of Wheeling-Charleston" on Justia Law
Quidel Corporation v. Super. Ct.
Quidel Corporation (Quidel) petitioned for a writ of mandate and/or prohibition to direct the trial court to vacate its order granting summary adjudication. Quidel contended the trial court incorrectly concluded a provision in its contract with Beckman Coulter, Inc. (Beckman) was an invalid restraint on trade in violation of Business and Professions Code, section 16600. Quidel argued the trial court improperly extended the holding from Edwards v. Arthur Andersen LLP, 44 Cal.4th 937 (2008) beyond the employment context to a provision in the parties’ 2003 BNP Assay Agreement (the Agreement). In its original, published opinion, the Court of Appeal concluded it was not, granted the petition and issued a writ instructing the trial court to vacate the December 2018 order granting summary judgment on the first cause of action. The California Supreme Court then granted review of the Court of Appeal's opinion and ordered briefing deferred pending its decision in Ixchel Pharma, LLC v. Biogen, Inc., S256927. On August 3, 2020, the Supreme Court issued Ixchel Pharma, LLC v. Biogen, Inc., 9 Cal.5th 1130 (2020), which held “a rule of reason applies to determine the validity of a contractual provision by which a business is restrained from engaging in a lawful trade or business with another business.” The Quidel matter was transferred back to the Court of Appeals with directions to vacate its previous opinion and reconsider the case in light of Ixchel. The appellate court issued a new opinion in which it concluded the trial court’s decision was incorrect. The trial court was directed to vacate the December 7, 2018 order granting summary adjudication on the first cause of action. View "Quidel Corporation v. Super. Ct." on Justia Law
Louisiana Real Estate Appraisers Board v. Federal Trade Commission
The Fifth Circuit vacated the district court's order staying administrative proceedings that were initiated by the FTC against the Board under the Federal Trade Commission Act. The district court concluded that it lacked jurisdiction over the Board's lawsuit because the Act vests exclusive jurisdiction to review challenges to Commission proceedings in the courts of appeals.The court held that, even if the Act does not preclude the Administrative Procedure Act's default review provision, 5 U.S.C. 704,—an issue the court need not address—the Board fails to meet Section 704's jurisdictional prerequisites. The court explained that case law does not support jurisdiction based on the collateral order doctrine as applied through Section 704. In this case, the issues relevant to immunity pertain to the reach of the Sherman Act and thus a judicial decision at this point would not resolve an issue completely separate from the merits of the action. Therefore, the April 10, 2018 order does not constitute final agency action under Section 704, and the collateral order doctrine does not apply. View "Louisiana Real Estate Appraisers Board v. Federal Trade Commission" on Justia Law
Flagship Theatres of Palm Desert, LLC v. Century Theatres, Inc.
In this antitrust dispute involving licensing of motion pictures to movie theaters for public exhibition, Flagship obtained a jury verdict against Century. Flagship owned the Palme d'Or theater and Century owned The River theater. The jury found true Flagship's allegations that Century had engaged in "circuit dealing" by entering into licensing agreements with film distributors that covered licenses to play films not just at The River, but at multiple other Century-owned theaters as well, and using these agreements to pressure distributors into refusing to license films to Palme d'Or.The Court of Appeal agreed with Century that Flagship did not present substantial evidence of anticompetitive effects in the relevant market. The court also agreed with Century that this failure of proof warrants reversal, as circuit dealing based on multi-theater licensing agreements is not per se illegal under the Cartwright Act. Therefore, the court reversed the judgment and need not reach Century's remaining arguments on appeal. The court also did not need to address Flagship's case from the court's postjudgment order awarding Flagship attorney fees in an amount lower than Flagship had requested. View "Flagship Theatres of Palm Desert, LLC v. Century Theatres, Inc." on Justia Law
In re: Allergan ERISA Litigation
The plaintiffs are participants in the Allergan Savings and Investment Plan, which provides various investment options, including an employee stock ownership feature for buying Allergan stock. According to the plaintiffs, the defendants were Plan fiduciaries and owed them commensurate duties under the Employee Retirement Income Security Act (ERISA). They claim that, although the public was unaware, the defendants knew or should have known that, before the divestiture of its generic-drug business, Allergan had conspired with other generic-drug manufacturers to fix prices, thereby artificially boosting its financial performance and its stock price. The plaintiffs cited inquiries from members of Congress and the Antitrust Division of the Department of Justice, seeking information about large price increases in certain generic drugs. The plaintiffs do not allege that Allergan was ever charged in connection with the investigation but claim that the defendants’ failure to remove Allergan stock as a Plan investment option or otherwise take action to protect Plan participants, violated ERISA.The Third Circuit affirmed the dismissal of the complaint. Even viewed in the light most favorable to the plaintiffs, the well-pled factual allegations fail to support a plausible inference that Allergan conspired with competitors to fix prices. Because all of the plaintiffs’ causes of action ultimately rest on the premise that the defendants knew or should have known about that supposed illegal conduct, the absence of allegations sufficient to support the existence of it is fatal to each of their claims. View "In re: Allergan ERISA Litigation" on Justia Law
Aerotek v. Johnson Group Staffing Co.
Porter Scott, P.C. (hereafter, “Porter Scott”) defended The Johnson Group Staffing Company, Inc. (hereafter, “TJG” or “Johnson Group”) through two rounds of litigation with its chief competitor, Aerotek, Inc. (hereafter, “Aerotek”). Aerotek first sued TJG after TJG’s founder, Chris Johnson, left Aerotek to form TJG. In the lawsuit, Aerotek alleged that TJG and Johnson, among other things, misappropriated trade secrets by soliciting Aerotek’s customers. TJG and Johnson settled with Aerotek a little over a year later. The issue presented for the Court of Appeal's review concerned the ownership of fees awarded under Civil Code 3426.4, and whether the prevailing litigant (here, The Johnson Group Staffing Company, Inc.) or the prevailing litigant’s attorney (here, Porter Scott, P.C.) were entitled to the fees awarded to the “prevailing party.” The Court concluded that, absent an enforceable agreement to the contrary, these fees belonged to the attorney to the extent they exceeded the fees the litigant already paid. Furthermore, the Court concluded that, although the parties here entered into a fee agreement, that agreement did not alter the default disposition of fees in favor of the attorney. Because the trial court reached the same conclusion, the Court of Appeal affirmed its judgment. View "Aerotek v. Johnson Group Staffing Co." on Justia Law
PNE Energy Supply LLC v. Eversource Energy
The First Circuit affirmed the decision of the district court dismissing this lawsuit challenging Defendants' alleged manipulation of natural gas pipeline capacity for failure to state a claim, holding that any differences between two cases filed with regard to this issue did not warrant a different outcome.In 2017, a group of economists published a report alleging that Defendants were able to increase electricity prices in New England by buying up and refusing to release excess transmission capacity in the Algonquin pipeline. In response, a group of electricity end consumers filed suit alleging violations of federal and state antitrust and unfair competition law. Thereafter, PNE Energy Supply LLC, a wholesale energy purchaser, filed this lawsuit also challenging Defendants' conduct in neither using nor releasing reserved pipeline capacity. The district court dismissed the electricity consumers' suit. The First Circuit affirmed, holding that the antitrust claims failed on their merits because Defendants' conduct occurred pursuant to a tariff approved by the Federal Energy Regulatory Commission. At issue was whether the logic from the electricity consumers' suit also applied to this lawsuit brought by PNE. The First Circuit held that the holding in the first lawsuit controlled and affirmed the district court's dismissal of PNE's lawsuit. View "PNE Energy Supply LLC v. Eversource Energy" on Justia Law
Flagship Theatres of Palm Desert, LLC v. Century Theatres, Inc.
In an antitrust dispute involving the licensing of motion pictures to movie theaters for public exhibition, Flagship obtained a jury verdict against Century. The jury found true Flagship's allegations that Century had engaged in a practice known as "circuit dealing" by entering into licensing agreements with film distributors that covered licenses to play films not just at The River, a theater located two miles away from the Palme d'Or, but at multiple other Century-owned theaters as well, and using these agreements to pressure distributors into refusing to license films to the Palme d'Or.The Court of Appeal held that a Cartwright Act plaintiff asserting a non-monopoly circuit-dealing claim must prove not only that a theater-circuit owner entered into film licensing agreements covering more than one of its theaters, but that such agreements caused net harm to competition, as determined by the balancing of anti and procompetitive effects under the rule of reason. In this case, the court held that substantial evidence does not support the jury's finding of anticompetitive effects in the relevant market. Furthermore, this failure of proof warrants reversal, as circuit dealing based on multi-theater licensing agreements is not per se illegal under the Cartwright Act. The court reversed the judgment and concluded that it need not address Century's remaining arguments, as well as Flagship's separate appeal challenging the amount of attorney fees awarded. View "Flagship Theatres of Palm Desert, LLC v. Century Theatres, Inc." on Justia Law
Hanna v. Little League Baseball
Plaintiff Michael Hanna was declared to be a vexatious litigant under several subparts of the California Code of Civil Procedure section 391(b). As a result, and the trial court's determination that Hanna was not reasonably likely to succeed on the merits of this action, Hanna was ordered to furnish a $100,000 security bond. The trial court also imposed a prefiling restriction on Hanna in future litigation, requiring Hanna to seek permission from the presiding justice or presiding judge of the court if he brought a civil action as a pro se litigant. The underlying dispute arose from a 2017 complaint Hanna filed against Little League Baseball, Inc., alleging trade libel and unfair and fraudulent business practices. Hanna alleged he was the president of a youth sports organization known as Team Hemet Baseball and Softball (Team Hemet), and in that capacity, he “executed an agreement” with Little League “for the individual ‘. . . right to conduct a baseball and softball program under the name “Little League”’” for one year. In July 2017, Little League “purportedly” placed Team Hemet on a regional hold, which “prevent[ed] any operations by [Team Hemet] until satisfied.” Hanna alleged that Little League “ha[d] improperly obtained money from [Hanna], and continue[d] to improperly obtain money from the general public.” The trial court dismissed the trade libel claim on demurrer. Little League moved for an order finding Hanna to be a vexatious litigant and requiring him to furnish security, and requested the court judicially notice 14 different civil actions filed from 2009 through 2018 involving Hanna as a pro se plaintiff and a defendant. Hanna challenged the vexatious litigant determination and the determination that he was not likely to succeed on the merits of the action. Hanna further contends that the trial court lacked authority to rule on discovery motions and to impose discovery sanctions after the filing of the motion under section 391.1 to declare Hanna a vexatious litigant and to have him furnish security. The Court of Appeal affirmed the prefiling restriction placed on Hanna’s filing of future actions as a pro se litigant. In the published portion of its opinion, the Court agreed the trial court was without authority to rule on the discovery motions or to impose sanctions. "Under the plain language of section 391.6, all further proceedings in the action should have been stayed once the vexatious litigant motion under section 391.1 was filed." The Court therefore reversed the orders imposing discovery sanctions. Judgment was affirmed in all other respects. View "Hanna v. Little League Baseball" on Justia Law
Federal Trade Commission v. Qualcomm Inc.
The FTC alleged that Qualcomm violated the Sherman Act by unreasonably restraining trade in, and unlawfully monopolizing, the code division multiple access (CDMA) and premium long-term evolution (LTE) cellular modem chip markets.The Ninth Circuit vacated the district court's judgment, and reversed the district court's permanent, worldwide injunction prohibiting several of Qualcomm's core business practices. The panel noted that anticompetitive behavior is illegal under federal antitrust law, but that hypercompetitive behavior is not. The panel explained that its role was to assess whether the FTC has met its burden under the rule of reason to show that Qualcomm's practices have crossed the line to "conduct which unfairly tends to destroy competition itself." The panel concluded that the FTC has not met its burden.The panel held that Qualcomm's practice of licensing its standard essential patents (SEPs) exclusively at the original equipment manufacturers (OEM) level does not amount to anticompetitive conduct in violation of section 2 of the Sherman Act, as Qualcomm is under no antitrust duty to license rival chip suppliers; Qualcomm's patent-licensing royalties and "no license, no chips" policy do not impose an anticompetitive surcharge on rivals' modem chip sales; rather, these aspects of Qualcomm's business model are "chip-supplier neutral" and do not undermine competition in the relevant antitrust markets; Qualcomm's 2011 and 2013 agreements with Apple have not had the actual or practical effect of substantially foreclosing competition in the CDMA modem chip market; and because these agreements were terminated years ago by Apple itself, there is nothing to be enjoined. View "Federal Trade Commission v. Qualcomm Inc." on Justia Law