Justia Antitrust & Trade Regulation Opinion Summaries

Following published stories about an investigation of their business practices, principals of a waste-management company improved their chances of winning a bid for a contract to refurbish garbage carts for the City of Chicago by slashing their bid. They encouraged other companies to bid in hopes of being hired as a subcontractor if another company won the bid. Each bidder had to certify that it had not entered into any agreement with any other bidder or prospective bidder relating to the price, nor any agreement restraining free competition among bidders. The company won the bid, and after a Justice Department investigation for antitrust violations, the principals were convicted of mail and wire fraud. The Seventh Circuit reversed, reasoning that the purpose of "colluding" with other potential bidders had not been to prevent them from underbidding but to provide insurance against the bid being rejected based on the earlier investigation. There was no harm as a result of the company encouraging additional bidders. View "United States v. Fenzl" on Justia Law

A 1998 settlement (MSA), between states and large tobacco companies (OPMs) included incentives for non-parties to join, but OPMs retained the most favorable payment terms. The MSA permitted states to enact statutes requiring nonparticipants to make deposits into escrows to be held for 25 years, in case a state obtained a future judgment against that nonparticipant. The MSA ensured that OPMs retained favored treatment over other participants. Plaintiff entered the market in 2000, as a nonparticipant, paying into state escrow accounts. As escrow payments became more burdensome, Plaintiff joined the MSA after negotiating a back-payment and future payments. During negotiations, defendants denied Plaintiff information about payment reductions granted to grandfathered companies. Plaintiff, unhappy with the disparate treatment and unable to meet its obligations, was unable to negotiate better terms because of an MSA provision that would entitle other participants to more favorable terms if such terms were granted to a late-joiner. Plaintiff sued tobacco manufacturers and attorneys general, alleging antitrust (15 U.S.C. 1, 3 (a)) and constitutional violations. The district court dismissed. The Sixth Circuit affirmed. Manufacturer defendants were immunized under the Noerr-Pennington and state-action doctrines. Plaintiff's waivers were knowing, intelligent, and voluntary, regardless of representations made during negotiations. View "VIBO Corp., Inc. v. Conway" on Justia Law

In 2006, BP began converting company-operated gas and convenience stores into franchisee-operated stores. From 2006 to 2008, plaintiffs purchased gas station sites and entered into long-term contracts with BP for fuel and use of BP's brand name and marks. In 2009 plaintiffs sued under the Illinois Franchise Disclosure Act. Consolidated cases were removed to federal court when plaintiffs added claims under the federal Petroleum Marketing Practices Act. They later added price discrimination claims under the Robinson-Patman Act. Before trial, all federal claims were withdrawn. The district judge relinquished supplemental jurisdiction and remanded to Illinois state court. The Seventh Circuit affirmed. A district court has broad discretion and the general presumption in favor of relinquishment was particularly strong because the state-law claims are complex and raise unsettled legal issues. View "RWJ Mgmt. Co., Inc. v. BP Prod. N. Am., Inc." on Justia Law

The Telecommunications Act of 1996 requires incumbent local exchange carriers to lease to new competitive LECs, unbundled, at cost, facilities and services (elements) that the FCC deems necessary to provide local telephone service, 47 U.S.C. 251(c)(3), (d)(2). Section 271 requires "Bell operating" companies that seek to provide long-distance service, such as AT&T, to make available a competitive checklist of services to facilitate competition in the local phone service market. In response to regulatory developments, Kentucky competitive LECs asked the state commission to require AT&T to continue de-listed elements. The commission agreed. A district court enjoined enforcement and ordered the commission to calculate the amount a competitive LEC owed AT&T for services obtained at the unlawfully imposed rate. The commission issued another order requiring AT&T to provide de-listed elements at a regulated rate. The court entered another injunction. The Sixth Circuit affirmed, upholding conclusions that the commission may not require continued unbundling of de-listed elements; that FCC regulations do not require AT&T to provide to competitive LECs equipment known as a line splitter; and that FCC regulations do not require AT&T to provide unbundled access to high-speed fiber-optic loops in new service areas. LECs, upon request, must package unbundled network elements provided under section 251 with elements mandated only by section 271View "Bellsouth Telecomm., Inc. v. KY Pub. Serv. Comm'n" on Justia Law

The Federal Trade Commission found that a merger between a health system and a hospital violated the Clayton Act, 15 U.S.C. 18. Plaintiffs sought treble damages and certification of a class of patients and third-party payors who allegedly paid higher prices for care. Under FRCP 23(b)(3), a class may be certified only if questions of law and fact common to members predominate over questions affecting only individuals in the class. Plaintiffs proposed to rely on economic and statistical methods used by the FTC and defendant's economic experts to analyze antitrust impact. The "difference-in-differences" method estimates price increases resulting from exercise of market power rather than from other factors. The district court denied certification, concluding that the expert had not shown that his methodology could address impact on a class-wide basis. The Seventh Circuit granted interlocutory appeal, vacated, and remanded. Although plaintiffs' expert initially believed that the health system did increase prices uniformly across all services, he acknowledged that it might not have done so, and explained how his methodology could show impact to the class despite such complications. The degree of uniformity the court demanded is not required; "it is important not to let a quest for perfect evidence become the enemy of good evidence." View "Messner v. Northshore Univ. Healthsystem" on Justia Law

Plaintiffs alleged that De Beers coordinated worldwide sales of diamonds by executing agreements with competitors, setting production limits, restricting resale within regions, and directing marketing, and was able to control quantity and prices by regimenting sales to preferred wholesalers. Plaintiffs claimed violations of antitrust, consumer protection, and unjust enrichment laws, and unfair business practices and false advertising. De Beers initially refused to appear, asserting lack of personal jurisdiction, but entered into a settlement with indirect purchasers that included a stipulated injunction. De Beers agreed to jurisdiction for the purpose of fulfilling terms of the settlement and enforcement of the injunction. The district court entered an order, approving the settlement and certifying a class of Indirect Purchasers in order to distribute the settlement fund and enforce the injunction. De Beers then entered into an agreement with direct purchasers that paralleled the Indirect Purchaser Settlement. The Third Circuit remanded the certification of two nationwide settlement classes as inconsistent with the predominance inquiry mandated by FRCP 23(b)(3), but, on rehearing, vacated its order. The court then affirmed the class certifications, rejecting a claim that the court was required to ensure that each class member possesses a colorable legal claim. The settlement was fair, reasonable, and adequate. View "Sullivan v. DB Inv., Inc." on Justia Law

This was an appeal of two consolidated suits brought under Indiana's and Missouri's trade secret statutes, involving information about the repair and overhaul of helicopter engines published by Rolls-Royce. The court held that the district court did not err in granting Rolls-Royce summary judgment on its trade secret claims where AvidAir was not entitled to the value of the proprietary revised documents, even if the new technical specifications were relatively minor in the context of the overhaul process as whole. Having concluded that the documents in question were protected trade secrets, the district court did not err in granting an injunction in favor of Rolls-Royce. Consequently, the court also affirmed the district court's grant of summary judgment for Rolls-Royce on AvidAir's antitrust and tortious interference claims. Accordingly, the judgment was affirmed. View "AvidAir Helicopter Supply v. Rolls-Royce Corp." on Justia Law

Church & Dwight, the leading manufacturer of condoms in the United States, appealed an order of the district court enforcing a subpoena and an accompanying civil investigation demand (CID), issued by the FTC insofar as the FTC would require it to produce information related to its sales of products other than condoms. Church & Dwight contended that such information was not reasonably relevant to the FTC's investigation into its potentially monopolistic practices in the market for condoms. Because the FTC's inquiry lawfully extended to the possibility that Church & Dwight engaged in the exclusionary bundling of rebates to retailers that sold condoms and other Church & Dwight products, the court held that the district court did not err in finding that the information on products other than condoms was reasonably relevant to the FTC's investigation. Accordingly, the court affirmed the order enforcing the subpoena and the CID against Church & Dwight. View "Federal Trade Comm'n v. Church & Dwight Co., Inc." on Justia Law

The Commission brought this action to obtain a preliminary injunction against appellees, alleging that the Authority's purchase of Palmyra would create a monopoly in the relevant market. The district court dismissed the complaint under Rule 12(b)(6), holding that appellees were entitled to the state-action immunity. The Commission appealed. The court agreed with the Commission that, on the facts alleged, the joint operation of Memorial and Palmyra would substantially lessen competition or tend to create, if not create, a monopoly. The court held, however, that the acquisition of Palmyra and its subsequent operation at the Authority's behest by PPHS were authorized pursuant to a clearly articulated state policy to displace competition. Consequently, the execution of the plan was protected by state-action immunity. Accordingly, the judgment of the district court was affirmed. View "Federal Trade Comm'n v. Phoebe Putney Health Sys., et al." on Justia Law

The Illinois Attorney General filed suit against eight manufacturers of LCD panels for violations of the Illinois Antitrust Act, claiming that the defendants unlawfully inflated prices on LCD products sold to the state, its agencies, and residents. The complaint sought injunctive relief, civil penalties, and treble statutory damages for the state as a purchaser and, as parens patriae, for harmed residents. Defendants removed the case to federal court under the Class Action Fairness Act of 2005, 28 U.S.C. 1332(d), 1453. The district court granted a motion to remand. The Seventh Circuit denied appeal, rejecting defendants' characterization of the parens patriae case as a disguised class action or mass action. View "LG Display Co., Ltd. v. Madigan" on Justia Law