Justia Antitrust & Trade Regulation Opinion Summaries

Purchasers of egg products accused suppliers of conspiring to reduce the supply of eggs and increase the price for egg products in violation of the Sherman Act, 15 U.S.C. 1. Plaintiffs alleged that the producers conspired to reduce the population of egg-laying hens, resulting in a reduced supply of eggs and, given the inelasticity of demand, supra-competitive prices. A trade association coordinated a certification program under which participants had to increase their cage sizes and not replace hens that died. Plaintiffs alleged that the proffered animal welfare rationale was a pretext to reduce supply. The district court, citing a bar on indirect purchaser actions, concluded that the purchaser-plaintiffs lacked standing. The Third Circuit reversed. As a matter of first impression, a direct purchaser of a product that includes a price-fixed input has antitrust standing to pursue a claim against the party that sold the product to the purchaser, where the seller is a participant in the price-fixing conspiracy, but the product also includes some price-fixed input supplied by a third-party non-conspirator. The direct relationship between the purchasers and their suppliers and the fact that the suppliers are alleged price-fixing conspirators, not merely competitors of those conspirators, are key factors. Regardless of who collected the overcharge, the purchasers’ econometric analysis purports to show the “difference between the actual [supracompetitive] price and the presumed competitive price” of the egg products they purchased. This purported difference, and the purchasers’ resulting injury, was allegedly a direct and intended result of the suppliers’ conspiracy. View "In Re: Processed Egg Products Antitrust Litigation" on Justia Law

At issue in these certified questions was the proper interpretation of the safe-harbor provision of the Arkansas Deceptive Trade Practices Act (ADTPA), Ark. Code Ann. 4-88-101(3). The Supreme Court exercised its discretion to reformulate the questions and answered that the ADTPA’s safe-harbor provision should be applied according to the specific-conduct rule, rather than the general-activity rule.Here, Petitioner filed suit against Respondent in federal district court, alleging, inter alia, violations of the ADTPA. Petitioner filed a motion to dismiss, alleging that it should receive the benefit of the safe-harbor provision of the ADTPA. Because the Supreme Court never expressly interpreted the safe-harbor provision of the ADPTA, the federal district court presented the Supreme Court with questions regarding the proper interpretation of the safe-harbor provision. The Supreme Court answered as set forth above, which meant that the provision precludes claims only when the actions or transactions at issue have been specifically permitted or authorized under laws administered by a state or federal regulatory body or officer. View "Air Evac EMS, Inc. v. Usable Mutual Insurance Co." on Justia Law

The Supreme Court reversed two orders of the circuit court unsealing an index of 349 documents and directing the Attorney General to produce eighty-nine of those documents.Steel of West Virginia, Inc. (Steel) brought this action to enforce its request for production of material under West Virginia’s Freedom of Information Act (FOIA). The Attorney General received the 349 documents at issue in connection with his investigative powers under the West Virginia Antitrust Act regarding the proposed merger of St. Mary’s Medical Center, Inc. and Cabell Huntington Hospital, Inc. The Attorney General and St. Mary’s contended that the index of the 349 documents and the eighty-nine documents to be produced were exempt from disclosure. The circuit court awarded the production of the index as a sanction against the Attorney General for sharing part of the index with the Federal Trade Commission. The Supreme Court held (1) the sanction was inappropriate; and (2) the eighty-nine documents were not subject to rpdocution because the statutory exemption set forth in W.Va. Code 29B-1-4, which incorporates the confidentiality provisions of the Antitrust Act. View "St. Mary's Medical Center, Inc. v. Steel of West Virginia" on Justia Law

The Supreme Court affirmed as modified the district court’s order dismissing with prejudice Plaintiff’s complaint for lack of personal jurisdiction. Plaintiff, an attorney, filed a complaint for breach of contract against Defendant. The trial court dismissed the complaint with leave to amend. Plaintiff then filed an amended complaint including claims for tortious conversion and a violation of Nebraska’s Uniform Deceptive Trade Practices Act. The Supreme Court affirmed the dismissal of the complaint, holding (1) neither general nor specific personal jurisdiction over Defendant existed; but (2) the district court erred in dismissing the complaint with prejudice. The court modified the district court’s order to a dismissal without prejudice. View "Nimmer v. Giga Entertainment Media, Inc." on Justia Law

To track accounting, payroll, inventory, sales, parts, service, finance, and insurance, auto dealerships use computerized dealer‐management systems. Some systems use open architecture, under which third parties have some access to dealer‐originated data in the system. Others use closed architecture, under which that type of data scraping is forbidden under the license. One provider, CDK, decided to change from an open system to a closed system. CDK and another provider, Reynolds, entered into agreements to ease the transition, which allowed their subsidiaries (Authenticom’s competitors) continued access to the data. Authenticom, in the business of collecting data from dealer‐management systems and selling or using it for applications, sued under the Sherman Act, 15 U.S.C. 1. Because Authenticom’s loss of access to the data was imperiling its survival, it obtained preliminary injunctions. CDK and Reynolds took an interlocutory appeal. The Seventh Circuit vacated the injunctions, which did not focus on the agreements that are the focus of Authenticom’s lawsuit. Instead, they address the measures that the court believed necessary to “extend a lifeline to Authenticom, to maintain its viability until this case is finally decided on the merits.” The court ordered the defendants to enter into a new arrangement with Authenticom, rather than simply barring implementations of the challenged agreement. View "Authenticom, Inc. v. Reynolds and Reynolds Co." on Justia Law

The First Circuit agreed with the judgment of the district court that the facts in this case alleging unlawful monopolization could not subject San Juan Cable LLC, doing business as “OneLink,” to liability under the so-called “sham” exception to the Noerr-Pennington immunity.Puerto Rico Telephone Company (PRTC) sought permission from the Puerto Rico Telecommunications Regulatory Board (TRB) to offer internet protocol television services to Puerto Rico residents. OneLink, which provided cable television service to residents of several municipalities in Puerto Rico, petitioned the TRB and other governmental tribunals and officials, to impede PRTC’s efforts. PRTC eventually obtained the requested permission from the TRB. Thereafter, PRTC filed this antitrust action claiming that OneLink’s interference with its permitting efforts constituted unlawful monopolization and attempted monopolization. The district court granted summary judgment to OneLink, concluding that OneLink’s actions were immune from suit under the Noerr-Pennington doctrine, which conditionally protects the right to petition the government. On appeal, PRTC argued that the facts could support a finding that OneLink abused its right to petition and could be found liable under the sham exception to Noerr-Pennington immunity. The First Circuit affirmed, holding that the facts in this case could not subject OneLink to liability under the sham exception. View "Puerto Rico Telephone Co. v. San Juan Cable LLC" on Justia Law

Plaintiffs are homeowners in centrally-planned neighborhoods in Thompson’s Station, Tennessee. The developers established and controlled owners’ associations for the neighborhoods but have transferred that control to third-party entities not controlled by either the developers or homeowners. While under the developers’ control, the associations each entered into agreements granting Crystal the right to provide telecommunications services to the neighborhoods for 25 years, with an option for Crystal to unilaterally renew for an additional 25 years. The Agreements make Crystal the exclusive agent for homeowners in procuring services from outside providers. Homeowners must pay the associations a monthly assessment fee, which the associations use to pay Crystal, regardless of whether the homeowner uses Crystal's service, and must pay Crystal $1,500 for the cost of constructing telecommunications infrastructure. Crystal uses service easements within the neighborhoods. Crystal had no prior experience in telecommunications-services and contracts with another provider, DirecTV, and charges homeowners a premium above the rate negotiated with DirecTV. Crystal does not provide services outside of the neighborhoods. The plaintiffs claimed that the Agreements constituted self-dealing, unjust enrichment, unconscionability, unlawful tying, and unlawful exclusivity. The Sixth Circuit reversed dismissal, in part, finding plaintiffs’ allegations plausible on their face with respect to the tying claim, but affirmed dismissal of the exclusivity claim. View "Cates v. Crystal Clear Technologies, LLC" on Justia Law

First Western Capital Management (“FWCM”), and its parent company First Western Financial, Inc. (collectively, “First Western”), sought a preliminary injunction against former employee Kenneth Malamed for misappropriating trade secrets. In 2008, FWCM acquired Financial Management Advisors, LLC (“FMA”), an investment firm Malamed founded in 1985 primarily to serve high net worth individuals and entities such as trusts and foundations. After selling FMA, Malamed worked for FWCM from 2008 until FWCM terminated him on September 1, 2016. In early 2016, a committee of FWCM directors began discussing the possibility of selling FWCM to another company. Although Malamed was not involved in these discussions, he learned about the potential sale and, in a meeting with other FWCM officers, expressed his displeasure with the buyer under consideration. Following the meeting, Malamed emailed his assistant asking her to print three copies of his client book, which contained the names and contact information for approximately 5,000 FWCM contacts. Of these contacts, 331 were current FWCM clients and roughly half of those had been clients of FMA before First Western acquired it. The printout also contained spreadsheets that included, among other information, client names, the total market value of their holdings under management, and the fees being charged by FWCM. On September 1, 2016, shortly after Malamed’s employment contract expired, First Western fired him. That same day, First Western served him with a complaint it had filed in federal court a month earlier, alleging misappropriation of trade secrets under the federal Defend Trade Secrets Act of 2016 (“DTSA”), and the Colorado Uniform Trade Secrets Act (“CUTSA”), breach of employment contract, and breach of fiduciary duty. First Western moved for a temporary restraining order and a preliminary injunction to prevent Malamed from soliciting FWCM’s clients. The district court excused First Western from demonstrating irreparable harm (one of the four elements a party seeking injunctive relief is typically required to prove) and granted the injunction. As applied here, the Tenth Circuit determined that if First Western could not show irreparable harm, it cannot obtain injunctive relief. The district court should not have entered the preliminary injunction here. View "First Western Capital v. Malamed" on Justia Law

The FDA approved Depakote for treating seizures, migraine headaches, and conditions associated with bipolar disorder. Physicians may prescribe it for other "off-label" uses, but a drug’s manufacturer can promote it only as suitable for uses the FDA has found safe and effective. Abbott, which makes Depakote, encouraged intermediaries to promote Depakote’s off-label uses for ADHD, schizophrenia, and dementia, hiding its own involvement. Abbott pleaded guilty to unlawful promotion and paid $1.6 billion to resolve the criminal case and False Claims Act suits, 31 U.S.C. 3729–33. Welfare-benefit plans that paid for Depakote’s off-label uses sought treble damages under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1964, for a class comprising all third-party payors. Following a remand, the court dismissed the suit on the ground that the plaintiffs could not show proximate causation, a RICO requirement. The Seventh Circuit affirmed, reasoning that the Payors are not the most directly, injured parties. Patients suffer if they take Depakote when it is useless and may be harmful and costly. Physicians also may lose, though less directly. Because some off-label uses of Depakote may be beneficial to patients, it is hard to treat all off-label prescriptions as injurious to the Payors; if they did not pay for Depakote they would have paid for some other drug. In addition, some physicians were apt to write off-label prescriptions whether or not Abbott promoted such uses. Calculation of damages would require determining the volume of off-label prescriptions that would have occurred absent Abbott’s unlawful activity. View "Sidney Hillman Health Center of Rochester v. Abbott Laboratories, Inc." on Justia Law

Titanium dioxide is a commodity-like product with no substitutes, the market is dominated by a few firms, and there are substantial barriers to entry. Valspar, a large-scale titanium dioxide purchaser, alleges that suppliers conspired to increase prices, beginning when DuPont—the largest American supplier—joined the Titanium Dioxide Manufacturers Association (TDMA) in 2002. DuPont then announced a price increase. Within two weeks, DuPont’s price increase was matched by other suppliers. During the next 12 years, the alleged conspirators announced price increases 31 times. Because Valspar claims it was overcharged by $176 million. In 2010, a class of titanium dioxide purchasers filed a price-fixing action. Valspar opted out of that class action, which settled. Valspar then filed its own claim and settled except against DuPont. The Third Circuit affirmed the summary judgment in favor of DuPont. Valspar’s characterization of the suppliers’ price announcements “neglects the theory of conscious parallelism” and is contrary to the doctrine that in an oligopoly “any rational decision must take into account the anticipated reaction of the other . . . firms.” Price movement in an oligopoly is interdependent and frequently will lead to successive price increases, because oligopolists may “conclude that the industry as a whole would be better off by raising prices.” Valspar did not show that the suppliers’ parallel pricing went “beyond mere interdependence [and was] so unusual that in the absence of advance agreement, no reasonable firm would have engaged in it.” View "Valspar Corp v. E I Du Pont De Nemours & Co" on Justia Law