Justia Antitrust & Trade Regulation Opinion Summaries

When Sears, Roebuck & Co. merged with Kmart in 2005, the company formed as the parent (Sears) inherited directors from both. Crowley also serves on the boards of AutoNation and AutoZone; Reese is also on the board of Jones Apparel. In a derivative action, Sears shareholders claimed that the consolidated business competes with those other firms and that the Clayton Act, 15 U.S.C. 19 (section 8), forbids the interlocking directorships. Delaware usually allows investors to sue derivatively only if, after a demand for action, the board cannot make a disinterested decision. The investors filed suit without first making a demand. The district court refused to dismiss, accepting an assertion that a demand would have been futile and agreeing that section 8 can be enforced through derivative litigation, even though cooperation with a competitor should benefit the investors. The Seventh Circuit reversed, stating that the suit "serves no goal other than to move money from the corporate treasury to the attorneys' coffers," while depriving Sears of directors, freely elected and of benefit to the company. Usually serving on multiple boards demonstrates breadth of experience, which promotes competent and profitable management. The Antitrust Division and the FTC do not see a problem. View "Frank v. Robert F. Booth Trust" on Justia Law

In these parallel cases, separate petitions were filed requesting the district court to set a "reasonable" rate after ASCAP and BMI were unable to agree on licensing fees with DMX, a provider of background/foreground music. In both cases, the district court adopted DMX's proposals. The court held the Second Amended Final Judgment (AFJ2) permitted blanket licenses subject to carve-outs to account for direct licensing and the court rejected ASCAP's claim that a blanket license with an adjustable carve-out conflicted with the AJF2. The court concluded that the district court in both cases found that ASCAP and BMI did not sustain their burdens of proving that their proposals were reasonable; no legal error contributed to these findings and the findings supported by the record were not clearly erroneous; and in both instances, the district court had the authority to set a reasonable rate for DMX's licenses. Accordingly, the court held that the district court did not err in setting DMX's licensing rates with ASCAP and BMI and that the rates set by the district court were reasonable. View "Broadcast Music, Inc. v. DMX Inc.; American Society of Computers, Authors and Publishers v. THP Capstar Acquisition Corp." on Justia Law

Hexcel sued BP Amoco on November 26, 2008 for antitrust injuries it allegedly suffered as a result of a carbon fiber price-fixing scheme, beginning in 1992. To avoid the effect of the applicable four-year statute of limitations, 15 U.S.C. 15b, Hexcel contended that the statute of limitations was tolled due to fraudulent concealment by BP Amoco. The court held, however, that based upon the overwhelming evidence of Hexcel's knowledge in the record, the court held that Hexcel's claims were time-barred and affirmed the judgment. View "Hexcel Corp. v. Ineos Polymers, Inc." on Justia Law

This case involved two putative class actions, consolidated on interlocutory appeal, brought by purchasers of real estate brokerage services in South Carolina. Each complaint alleged that the real estate brokerages serving as board members of the local multiple listing service (MLS) conspired to unfairly restrain market competition in violation of section 1 of the Sherman Antitrust Act, 15 U.S.C. 1. The court held that plaintiffs sufficiently pled the plurality of actors necessary for section 1 to apply. At this early stage of the litigation, the court was not in a position to weigh the alleged anticompetitve risks of the MLS rules against their procompetitive justifications. This rule of reason inquiry was best conducted with the benefit of discovery and the court expressed no view on the merits of the litigation beyond recognizing the sufficiency of the complaints. Therefore, the court affirmed the judgment of the district court and remanded for further proceedings. View "Robertson v. Sea Pines Real Estate Co." on Justia Law

A proposed consent order from an FTC investigation indicated that U-Haul attempted to implement a scheme to collude with competitors, Budget and Penske, to raise prices for truck rentals. The FTC concluded that U-Haul's conduct violated the Federal Trade Commission Act, 15 U.S.C. 45(a)(1). The proposed consent order was designed to prevent collusion. U-Haul consented to the relief, but did not admit the conduct or violation. A consumer filed a complaint charging U-Haul with violating Mass. Gen. Laws ch. 93A by engaging in an attempted price-fixing scheme and seeking damages on behalf of a large class. The suit, a follow-on action after a proposed government consent decree, is common in antitrust cases. Because the FTC Act contains no private right of action and the Sherman Act is of doubtful application to price-fixing, the suit rested chapter 93A, which prohibits "[u]nfair methods of competition and unfair or deceptive acts or practices," and permits consumer class actions. The complaint alleged that U-Haul's actions caused plaintiff to pay at least 10 percent more for truck rentals than she would have absent the unlawful action. The district court dismissed, stating that the complaint failed plausibly to allege injury. The First Circuit vacated, finding the claim plausible. View "Liu v. Amerco" on Justia Law

This case involved a type of patent litigation settlement known as a "pay for delay" or "reverse payment" agreement. In this type of settlement, a patent holder paid the allegedly infringing generic drug company to delay entering the market until a specified date, thereby protecting the patent monopoly against a judgment that the patent was invalid or would not be infringed by the generic competitor. This case began when the FTC filed a complaint in district court alleging that the reverse payment settlements between the holder of a drug patent and two generic manufacturers of the drug were unfair restraints on trade that violated federal antitrust laws. The court's precedent established the rule that, absent sham litigation or fraud in obtaining the patent, a reverse payment settlement was immune from antitrust attack so long as its anticompetitive effects fell within the scope of the exclusionary potential of the patent. The court rejected the FTC's claims to the contrary and affirmed the judgment. View "FTC v. Watson Pharmaceuticals, Inc., et al." on Justia Law

This action involved the single-copy magazine industry, i.e., the business of selling magazines for purchase by consumers at retail outlets. Anderson appealed (1) from a judgment of the district court dismissing their complaint alleging that defendants, who were suppliers and business competitors, conspired to drive Anderson out of business in violation of section 1 of the Sherman Antitrust Act, 15 U.S.C. 1, and New York law, and (2) from an order denying Anderson's motion for reconsideration and for leave to file a proposed amended complaint. The court concluded that even if the original complaint did not meet the Twombly/Igbal standard, Anderson's proposed amended complaint, which contained additional factual allegations, met that standard and should have been allowed. Accordingly, the court vacated the judgment of dismissal and remanded for further proceedings. View "Anderson News, L.L.C. v. American Media, Inc." on Justia Law

In a Sherman Act case, the district court held that more than $365,000 in charges imposed by the electronic discovery vendors, covering hard drive imaging, data processing, keyword searching, and file format conversion, were taxable under FRCP 54(d), without differentiating between those charges that constitute "fees for exemplification," and charges that constitute "costs of making copies," 28 U.S.C. 1920(4). The Third Circuit affirmed in part and vacated in part, noting conflicting decisions by other courts. None of activities at issue can be regarded as exemplification of materials; only scanning and file format conversion can be considered to be making copies, an activity that amounts to approximately $30,000 of electronic discovery charges taxed in the case.View "Race Tires Am., Inc.l v. Hoosier Racing Tire Corp." on Justia Law

Plaintiffs are among the world’s largest purchasers of air conditioning and refrigeration copper tubing. Defendants imported ACR copper into the U.S. In 2003 the Commission of the European Communities found that defendants and other conspired on prices targets and other terms for industrial tubes and allocated customers and market shares in violation of European law. The findings did not identify any conspiratorial agreements with respect to U.S. markets. In 2004, another EC decision found violation in the market for plumbing tubes. Plaintiff claimed that the European conspiracy was also directed at the U.S. market for ACR industrial tubes, violating the Sherman Act and the Tennessee Trade Practices Act. Two similar cases, involving different plaintiffs, had been dismissed. The district court dismissed for lack of subject matter jurisdiction and failure to state a claim. The Sixth Circuit reversed, finding that the complaint adequately stated a claim under the Sherman Act and was not barred by the Act's limitations period, 15 U.S.C. 15b and that the court had personal jurisdiction. The fact that the complaint borrows its substance from the EC decision and then builds on the EC’s findings does not render its allegations any less valid.View "Carrier Corp. v. Outokumpu Oyj" on Justia Law

In 2009 the fire protection district adopted an ordinance requiring commercial buildings and multi-family residences to have fire alarms equipped with wireless radio technology to send alarm signals directly to the district's central monitoring board. The ordinance provided that the district would contract with one private alarm company to provide and service signaling equipment, displacing several private fire alarm companies that have competed for these customers. The alarm companies sued on claims under the U.S. Constitution, federal antitrust law, and state law. The district court granted summary judgment for the alarm companies on the basis of state law and enjoined the district from implementing the ordinance. The Seventh Circuit affirmed in part, holding that the district has statutory authority to require that commercial and multi-family buildings connect directly to its monitoring board through wireless radio technology. The district does not, however, have authority to displace the entire private market by requiring all customers to buy services and equipment from itself or just one private company. View "ADT Sec. Servs., Inc. v. Lisle-Woodridge Fire Prot. Dist." on Justia Law