Justia Antitrust & Trade Regulation Opinion Summaries

A large communications equipment manufacturer, Avaya, and its dealer and service provider, TLI had a falling out. Avaya subsequently aggressively acted to block TLI from providing independent maintenance services for Avaya equipment. Meanwhile, the newly-independent TLI took various “legally dubious actions” to gain access to Avaya communications systems used by clients the parties once shared. Avaya filed suit, alleging several business torts and breach of contract; TLI counter-sued for antitrust violations. After years of pre-trial litigation, and in the midst of a months-long trial, the district court granted TLI’s motion for judgment as a matter of law on all of Avaya’s affirmative claims. The court later instructed the jury that none of TLI’s actions could be considered unlawful. The jury found Avaya liable for two antitrust violations and awarded substantial damages. The Third Circuit vacated. Given how intertwined the two sides’ claims are, and given that Avaya’s antitrust defense relied in large part on justifying Avaya’s conduct as a response to TLI’s conduct, the erroneous Rule 50 judgment infected the jury’s verdict. View "Avaya Inc v. Telecom Labs Inc" on Justia Law

Generic drug manufacturers (plaintiffs) originally sued name-brand drug companies (defendants) that manufacture and sell “Doryx,” the delayed-release doxycycline hyclate, an oral antibiotic of the tetracycline class used to treat severe acne. Tetracyclines are a broad category of antibiotics, the most common being doxycycline monohydrate and minocycline, which vary in their use and efficacy. Plaintiffs claimed that defendants conspired to protect their position in the market through “product hopping,” by making four critical changes to Doryx, all of which required generics to go through a cumbersome regulatory approval process if they wanted to continue to benefit from state substitution laws. Several plaintiffs settled their cases and the district court rejected, on summary judgment, remaining claims of unlawful monopoly and attempted monopolization under section 2 of the Sherman Act; agreement in restraint of trade under section 1 of the Sherman Act; and tortious interference with prospective contractual relationships under Pennsylvania law. The Third Circuit affirmed, finding that defendants’ conduct was not anticompetitive, and that, even if it was, it was not established that defendants had the requisite market power in the relevant product market. Adoption of plaintiffs’ theory of “anticompetitive product redesign” could have adverse, unintended consequences, including slowing innovation. View "Mylan Pharma. Inc v. Warner Chilcott Pub. Ltd. Co." on Justia Law

Penn State Hershey Medical Center is a leading academic medical center, with 551 beds and more than 800 physicians. Hershey offers all levels of care, but specializes in more complex, specialized services, unavailable at most other hospitals. Hershey draws patients from a broad area. PinnacleHealth System has three hospital campuses, two in Harrisburg, and another in Mechanicsburg, focusing on cost-effective primary and secondary services, with only a limited range of more complex services. It employs fewer than 300 physicians and provides 646 beds. In 2014, Hershey and Pinnacle signed a letter of intent for a proposed merger. Their respective boards subsequently approved the merger; the Hospitals notified the Federal Trade Commission (FTC), and, in 2015, executed a “Strategic Affiliation Agreement.” The FTC opposed the merger and filed suit under the Clayton Act and the FTC Act. The district court denied a preliminary injunction pending the FTC’s adjudication on the merits, finding that the opponents of the merger did not properly define the relevant geographic market, a necessary prerequisite to determining whether a proposed combination is sufficiently likely to be anticompetitive as to warrant injunctive relief. The Third Circuit reversed after determining the government’s likelihood of success and weighing the equities, finding that a preliminary injunction would be in the public interest. The Hospitals did not rebut the government’s prima facie case that the merger is likely to be anticompetitive. View "Fed. Trade Comm'n v. Penn State Hershey Med. Ctr." on Justia Law

Amex appealed from the district court's decision finding that it unreasonably restrained trade in violation of section 1 of the Sherman Act, 15 U.S.C. 1, by entering into agreements containing nondiscriminatory provisions (NDPs). The district court held that Amex was liable for violating section 1 and enjoined Amex from enforcing its NDPs. The court concluded that the district court erred here in focusing entirely on the interests of merchants while discounting the interests of cardholders. Plaintiffs bore the burden in this case to prove net harm to Amex consumers as a whole - that is, both cardholders and merchants - by showing that Amex’s nondiscriminatory provisions have reduced the quality or quantity of credit‐card purchases. The court concluded that, given the district court’s explicit finding that neither party provided reliable evidence of Amex’s costs or profit margins accounting for consumers on both sides of the platform, and given evidence showing that the quality and output of credit cards across the entire industry continues to increase, plaintiffs failed to carry their burden to prove a section 1 violation. Accordingly, the court reversed and remanded. View "United States v. American Express Co." on Justia Law

The FTC and the State filed suit seeking to hold LeadClick liable for its role in the use of deceptive websites to market weight loss products in violation of Section 5 of the Federal Trade Commission Act (FTC Act), 15 U.S.C. 45(a)(1), and the Connecticut Unfair Trade Practices Act (CUTPA), C.G.S.A. 42‐110b(a). The FTC also filed a claim against CoreLogic, LeadClick's parent company, as a relief defendant. The district court granted summary judgment in favor of the FTC and the State. The court affirmed the district courtʹs grant of summary judgment for the FTC and the State with respect to the claims against LeadClick where LeadClick is an information content provider with respect to the content at issue and where LeadClick is liable for its own content and not merely because it was the ʺpublisher or speakerʺ of deceptive content provided by its affiliates; reversed as to the claim against CoreLogic where CoreLogic's advances to LeadClick constituted "valuable consideration" entitling it to repayment from LeadClick; and remanded with instructions to the district court to enter judgment in favor of CoreLogic. View "FTC v. LeadClick Media, LLC" on Justia Law

A multi-district antitrust class action was brought by plaintiffs against defendants, entities incorporated under the laws of China, alleging that defendants conspired to fix the price and supply of vitamin C sold to U.S. companies on the international market in violation of Section 1 of the Sherman Act, 15 U.S.C. 1, and Sections 4 and 16 of the Clayton Act, 15 U.S.C. 4, 16. Defendants challenge the district court's denial of their initial motion to dismiss, denial of a subsequent motion for summary judgment, and, after a jury trial, an entry of judgment awarding plaintiffs $147 million in damages and enjoining defendants from engaging in future anti-competitive behavior. The court held that the district court erred in denying defendants' motion to dismiss. In this case, because the Chinese Government filed a formal statement in the district court asserting that Chinese law required defendants to set prices and reduce quantities of vitamin C sold abroad, and because defendants could not simultaneously comply with Chinese law and U.S. antitrust laws, the principles of international comity required the district court to abstain from exercising jurisdiction in this case. Accordingly, the court vacated the judgment, reversed the district court's order denying defendants' motion to dismiss, and remanded for further proceedings. View "In Re: Vitamin C Antitrust Litig." on Justia Law

Eaton manufactures truck transmissions for sale to Original Equipment Manufacturers (OEMs), which offer “data books,” listing the options for truck parts. Customer choose among the options; the OEM sources the parts from the manufacturers and uses them to build custom trucks then sold to that customer. Eaton was a near-monopolist in supplying Class 8 truck transmissions. In 1989, ZF emerged as a competitor. Eaton allegedly sought to retain its market share by entering agreements with the OEMs, with increasingly large rebates on Eaton transmissions based on the percentage of transmissions a given OEM purchased from Eaton as opposed to ZF. ZF closed in 2003. In 2006, ZF successfully sued Eaton for antitrust violations. Separately, indirect purchasers who bought trucks from OEMs’ immediate customers brought a class action; that case was dismissed. In this case, Tauro attempt to represent direct purchasers in an antitrust suit was rejected because Tauro never directly purchased a Class 8 truck from the OEMs, but rather purchased trucks from R&R, a direct customer that expressly assigned Tauro its direct purchaser antitrust claims. The Third Circuit reversed. An antitrust claim assignment need not be supported by bargained-for consideration in order to confer direct purchaser standing on an indirect purchaser; it need only be express. That requirement was met. The presumption that a motion to intervene by a proposed class representative is timely if filed before the class opt-out date applies in this pre-certification context. View "Wallach v. Eaton Corp" on Justia Law

Aerotec is a small, independent company that provides maintenance, repair and overhaul (MRO) services for Honeywell's auxiliary power units (APUs). Aerotec filed suit alleging causes of action under sections 1 and 2 of the Sherman Antitrust Act, 15 U.S.C. 1, 2, the Robinson-Patman Act, 15 U.S.C. 13(a), and Arizona state law. Aerotec alleges that Honeywell leverages its monopoly power over the APU parts market to unfairly smother competition in the repair services market. The court concluded that Aerotec’s chain of logic and evidence is too attenuated to support liability for tying under section 1, and none of the indicia that the court would ordinarily review in an exclusive dealing claim are present in the record. The court rejected Aerotec's monopolization claims under section 2, concluding that Aerotec's refusal to deal claim fails based on its vague requested remedy that the court order Honeywell to provide parts, data, and prices like it did before 2007. Furthermore, reasonable access to the essential facility exists and Aerotec cannot establish an essential facilities claim. The court rejected Aerotec's claim that Honeywell engages in unlawful conduct by simultaneously charging a low (but above-cost) price for its repair bundles and raising the wholesale price of replacement parts. Finally, the court rejected Aerotec's claim that Honeywell engages in secondary-line price discrimination under the Robinson-Patman Act. Accordingly, the court affirmed the judgment. View "Aerotec Int'l v. Honeywell Int'l" on Justia Law

Limoliner Inc., which owned and operated a fleet of luxury motor coaches, hired Dattco, Inc. to perform repair work on one of those vehicles. While Dattco recorded most of those requests in writing, Dattco neglected to write down Limoliner’s verbal request to repair one of the vehicle’s important electrical components. When Dattco failed to make any repairs to that component, Limoliner commenced this action, alleging, inter alia, that Dattco violated Mass. Gen. Laws ch. 93A, 2(a), as interpreted by 940 Code Mass. Regs. 5.05(2), by failing to record Limoliner’s request in writing. Dattco removed the case to federal court on the basis of diversity jurisdiction. Following a jury-waived trial, a magistrate judge found for Dattco on Limoliner’s regulatory claim under 940 Code Mass. Regs. 5.05, concluding that the provision at issue applies only to consumer transactions and not to transactions where the customer is another business. Limoliner appealed, and the United States Court of Appeals for the First Circuit certified a question regarding the issue to the Supreme Court. The Supreme Court answered that 940 Code Mass. Regs. 5.05 does apply to transactions in which the customer is a business entity. View "Limoliner, Inc. v. Dattco, Inc." on Justia Law

Hartig filed a putative class action, alleging antitrust violations involving medicated eyedrops manufactured by the Defendants. Hartig claimed that the Defendants’ wrongful suppression of generic competition resulted in supracompetitive pricing of those eyedrops. Although not a direct purchaser of the medications, Hartig claimed it had standing to sue because of an assignment of rights from Amerisource, a direct purchaser. The district court dismissed for lack of subject matter jurisdiction, finding that an anti-assignment clause in a distribution agreement between Allergan (the assignee of the named inventors) and Amerisource barred any assignment of antitrust claims from Amerisource to Hartig. The Third Circuit vacated; the district court erred in treating antitrust standing as an issue of subject-matter jurisdiction. The court distinguished between Article III standing and antitrust standing and stated that, when the correct procedures are followed, the court may consider the impact of the anti-assignment clause. View "Hartig Drug Co., Inc v. Senju Pharma. Co., Ltd" on Justia Law