Justia Antitrust & Trade Regulation Opinion Summaries

Fred Duran filed a putative class action complaint against Obesity Research Institute, LLC (ORI) and Wal-Mart Stores, Inc. (Wal-Mart) (collectively, defendants). Duran alleged defendants falsely claimed that ORI's products, Lipozene and MetaboUp, had weight loss benefits. The court approved a claims-made settlement providing that class members submitting a claim without proof of purchase would receive $15, and those submitting receipt(s) would receive one refund of double the unit price paid. The settlement also provided that ORI would cease making certain assertions in product advertising. Defendants also agreed to not oppose a motion seeking $100,000 in attorney fees to class counsel. Objectors, class members DeMarie Fernandez, Alfonso Mendoza, and Brian Horowitz appealed, contending the settlement was the product of collusion. Objectors claimed the class did not receive sufficient notice of settlement, and the settlement was unreasonable and inadequate. They also contended the attorney fee award was excessive. The Court of Appeal reviewed the case and concluded that the trial court's judgment had to be reversed because the class notice failed in its fundamental purpose, to apprise class members of the terms of the proposed settlement. "The erroneous notice injected a fatal flaw into the entire settlement process and undermines the court's analysis of the settlement's fairness." View "Duran v. Obesity Research Institute" on Justia Law

In 2003, several class action lawsuits were filed against automobile manufacturers and trade associations, alleging antitrust conspiracy, Bus. & Prof. Code, 167201, and unfair business practices, Bus. & Prof. Code, 17200, on behalf of individuals who purchased or leased new vehicles in California within a certain time period. The lawsuits, which were eventually coordinated, alleged conspiracy to restrict the movement of lower-priced Canadian vehicles into the U.S. market, to avoid downward pressure on U.S. new vehicle prices. After years of litigation, the court granted summary judgment in favor of the two remaining defendants, Ford U.S. and Ford Canada, concluding that there was not sufficient evidence of an actual agreement among Ford and the other manufacturers to restrict the export of new vehicles from Canada to the U.S. The court of appeal affirmed with respect to Ford U.S., but concluded that the admissible evidence was sufficient to demonstrate a material factual issue as to whether Ford Canada participated in an illegal agreement to restrict the export of automobiles. The court noted an expert economic analysis indicating that the manufacturers would not have continued to restrict exports during the alleged conspiracy period absent an agreement that none of them would break ranks and reap the profits available in the export market; parallel conduct by the manufactures during the same period; and deposition testimony. View "In re: Auto. Antitrust Cases I and II" on Justia Law

In an antitrust class action brought on behalf of approximately 12 million merchants against Visa and Mastercard, as well as other various banks, plaintiffs alleged conspiracy in violation of Section 1 of the Sherman Act, 15 U.S.C. 1. After the parties agreed to a settlement releasing all claims, the district court certified two settlement-only classes and approved the settlement. Numerous objectors and opt‐out plaintiffs appealed and argued that the class action was improperly certified and that the settlement was unreasonable and inadequate. The court concluded that class members of the (b)(2) class were inadequately represented in violation of both FRCP 23(a)(4) and the Due Process Clause. The court also concluded that procedural deficiencies produced substantive shortcomings in this class action and the settlement. Consequently, the court concluded that the class action was improperly certified and the settlement was unreasonable and inadequate. The court vacated the district court's certification of the class action and reversed the approval of the settlement. The court remanded for further proceedings. View "In re Payment Card Interchange Fee and Merchant Discount Antitrust" on Justia Law

This case involved a royalty dispute over the use of nuclear technology. Areva NP, Inc. filed a complaint against Babcock & Wilcox Company (B&W) and affiliated companies (collectively, the B&W defendants), alleging breach of contract and violation of the Virginia Uniform Trade Secrets Act. The jury rendered a verdict in favor of Areva on both claims. The Supreme Court reversed, holding that the trial court erred by failing to set aside the verdict and by entering judgment for the B&W defendants on Areva’s royalty and trade secrets claims. Final judgment entered dismissing Areva’s claims. View "Babcock & Wilcox Co. v. Areva NP, Inc." on Justia Law

Cook Timber Company sued Georgia Pacific Corporation, claiming breach of contract and antitrust violations, both unilaterally and through a conspiracy with other market participants. In 1983, Cook Timber entered into a contract with Georgia Pacific, and from then until 2000, Cook Timber worked exclusively with Georgia Pacific. Eighty to ninety percent of Cook Timber’s wood was hauled to the Taylorsville Plywood Plant and Bay Springs Sawmill. The remainder was hauled to the Leaf River Pulp Mill. In March 2000, Georgia Pacific notified Cook Timber by letter that its Leaf River Pulp Mill no longer would receive any pine pulpwood deliveries from Cook Timber. Cook Timber then filed this suit. The circuit judge granted Georgia Pacific a directed verdict on Cook Timber’s conspiracy and breach-of-contract claim, but the jury returned a verdict for Cook Timber on its unilateral antitrust claim. Because Cook Timber failed to present sufficient evidence to support its unilateral antitrust claims, the Mississippi Supreme Court reversed the jury’s verdict on that claim. The Court also affirmed the circuit judge’s decision to grant Georgia Pacific a directed verdict on the conspiracy claim. But the Court reversed the directed verdict on Cook Timber’s breach-of-contract claim, and remanded for a new trial on that claim. View "Georgia Pacific Corporation v. Cook Timber Company, Inc." on Justia Law

Blue Cross controls more than 60% of the Michigan commercial health insurance market; its patients are more profitable for hospitals than are patients insured by Medicare or Medicaid. BC enjoys “extraordinary market power.” The Justice Department (DOJ) claimed that BC used that power to require MFN agreements: BC would raise its reimbursement rates for services, if a hospital agreed to charge other commercial insurers rates at least as high as charged to BC. BC obtained MFN agreements with 40 hospitals and MFN-plus agreements with 22 hospital systems. Under MFN-plus, the greater the spread between BC's rates and the minimum rates for other insurers, the higher the rates that BC would pay. Class actions, (consolidated) followed the government’s complaint, alleging damages of more than $13.7 billion, and seeking treble damages under the Sherman Act, 15 U.S.C 15. In 2013, Michigan banned MFN clauses; DOJ dismissed its suit. During discovery in the private actions, plaintiffs hired an antitrust expert, Leitzinger. BC moved to exclude Leitzinger’s report and testimony. Materials relating to that motion and to class certification were filed under seal, although the report does not discuss patient information. BC agreed to pay $30 million, about one-quarter of Leitzinger's estimate, into a settlement fund and not to oppose requests for fees, costs, and named-plaintiff “incentive awards,” within specified limits. After these deductions, $14,661,560 would be allocated among three-to-seven-million class members. Class members who sought to examine the court record or the bases for the settlement found that most key documents were heavily redacted or sealed. The court approved the settlement and denied the objecting class members’ motion to intervene. The Seventh Circuit vacated, stating that the court compounded its error in sealing the documents when it approved the settlement without meaningful scrutiny of its fairness to unnamed class members . View "Shane Group, Inc. v. Blue Cross Blue Shield of Mich." on Justia Law

Plaintiffs filed numerous antitrust suits alleging that the Banks colluded to depress LIBOR by violating the rate‐setting rules, and that the payout associated with the various financial instruments was thus below what it would have been if the rate had been unmolested. After consolidation into a multi-district litigation (MDL), the district court dismissed the litigation in its entirety based on failure to plead antitrust injury. The court vacated the judgment on the ground that: (1) horizontal price‐fixing constitutes a per se antitrust violation; (2) a plaintiff alleging a per se antitrust violation need not separately plead harm to competition; and (3) a consumer who pays a higher price on account of horizontal price‐fixing suffers antitrust injury. The court remanded for further proceedings on the question of antitrust standing. Finally, the court rejected the Bank's alternative argument that no conspiracy has been adequately alleged. View "In re: LIBOR-Based Financial Instruments Antitrust Litig." on Justia Law

USA Power, LLC developed a power plant project in Mona, Utah called the “Spring Canyon vision.” Meanwhile, PacifiCorp entered into negotiations to purchase USA Power’s Spring Canyon assets, and USA Power provided PacifiCorp with details on the entire project. PacifiCorp terminated the negotiations, however, and began construction on a power plant project in Mona that was very similar to the Spring Canyon project. PacifiCorp also retained Jody Williams, USA Power’s former attorney, to help it obtain water rights for its project, called the Currant Creek project. USA Power brought suit against Williams, asserting malpractice claims for Williams’s alleged breach of her fiduciary duties of confidentiality and loyalty, and against PacifiCorp, alleging misappropriation of USA Power’s trade secrets. The trial court granted summary judgment for Defendants. The Supreme Court reversed. On remand, the jury returned a special verdict against PacifiCorp and Williams. The trial court reduced the unjust enrichment award against PacifiCorp, granted Williams’s judgment notwithstanding the verdict motion for lack of evidence related to causation, and determined that USA was entitled to attorney fees. Both parties appealed. The Supreme Court affirmed the trial court’s rulings as to each issue presented on appeal, holding that the court did not err in its judgment. View "USA Power, LLC v. PacifiCorp" on Justia Law

Apotex filed suit alleging that Acorda filed a sham citizen petition with the FDA to hinder approval of Apotex's competing formulation of a drug for treating spasticity, in violation of Section 2 of the Sherman Act, 15 U.S.C. 2, and that Acorda violated the Lanham Act's, 15 U.S.C. 1125(a)(1), proscription on false advertising. The district court ruled that the simultaneous approval by the FDA of Apotex’s drug application and its denial of Acorda’s citizen petition was by itself insufficient to support a Sherman Act claim. The district court then granted summary judgment and dismissed all of Apotex’s false advertising claims on the grounds that (with the exception of one graph) no representation was literally false or likely to mislead consumers. In regard to the graph, Apotex failed to show that the false depiction would meaningfully impact consumers’ purchasing decisions. The court concluded that, although precedent supports an inference that a citizen petition is an anticompetitive weapon if it attacks a rival drug application and is denied the same day that the application is approved, that inference has been undercut by recent FDA guidance.  As to false advertising, the court agreed with the district court that no reasonable jury could have found that Acorda made literally false or misleading representations in its advertisements, with the exception of a single representation that Apotex has failed to show affected decisions to purchase. Accordingly, the court affirmed the judgment. View "Apotex Inc. v. Acorda Therapeutics, Inc." on Justia Law

Mark Ibsen, Inc., the owner and operator of the Urgent Care Plus medical clinic in Helena, purchased health insurance coverage for its employees from Blue Cross and Blue Shield of Montana (BCBSMT) through a Chamber of Commerce program. Health Care Corporation (Health Care) subsequently acquired BCBSMT’s health insurance business and changed its name to Caring for Montanans, Inc. (Caring). Less than one year later, Ibsen filed a complaint and class action against Caring and Health Care claiming that they had violated the Unfair Trade Practices Act (UTPA). Health Care filed a motion to dismiss and Caring filed a motion for summary judgment. The district court granted the motions, concluding that the legislature did not provide private citizens with the right to bring a cause of action to enforce the UTPA. The Supreme Court affirmed, holding (1) Ibsen may not maintain a private right of action for violation of Mont. Code Ann. 33-18-208 and -212 of the UTPA; and (2) in the alternative, Ibsen’s claims cannot be sustained as common law claims. View "Mark Ibsen, Inc. v. Caring for Montanans, Inc." on Justia Law