Justia Antitrust & Trade Regulation Opinion Summaries

A group of wholesale businesses that purchased Clear Eyes Redness Relief eye drops from a manufacturer alleged that the manufacturer sold the product at unlawfully lower prices to their larger competitors, specifically Costco and Sam’s Club. The manufacturer provided these large buyers with discounts and customer rebates not offered to the wholesalers, resulting in a significant price advantage for Costco and Sam’s Club. The wholesalers claimed that this conduct made it impossible for them to compete effectively and sought relief under the Robinson-Patman Act, as well as California’s Unfair Practices Act and Unfair Competition Law.The case was tried in the United States District Court for the Central District of California. The jury found in favor of the wholesalers on their federal claims and awarded damages, except for one wholesaler that was not found to be in direct competition with Costco. The district court also found in favor of the California-based wholesalers on the state claims, entered judgment for the wholesalers, awarded damages, and issued a permanent injunction against the manufacturer. The court also awarded attorney’s fees but reduced the requested amount based on the size of the plaintiffs’ law firm rather than prevailing market rates.On appeal, the United States Court of Appeals for the Ninth Circuit affirmed the district court’s judgment in favor of the wholesalers on all substantive issues. The appellate court held that the district court properly instructed the jury, correctly included customer rebates in the price discrimination calculation, and appropriately issued a permanent injunction. However, the Ninth Circuit vacated the district court’s award of attorney’s fees, holding that a law firm's size alone cannot determine the market rate for a lodestar calculation. The case was remanded for recalculation of attorney’s fees consistent with prevailing market rates. View "LA International Corp. v. Prestige Brands Holdings, Inc." on Justia Law

A major music performing rights organization, which licenses the public performance of musical works to concert promoters, was unable to reach agreement with a national association of concert promoters on the rates and revenue base for blanket licenses covering live performances. For the first time in their relationship, the rights organization petitioned the United States District Court for the Southern District of New York to set the licensing terms, as permitted under an antitrust consent decree applicable to the organization due to its significant market share. The promoters’ association, whose members include the two largest concert promoters in the United States, has historically secured blanket licenses from multiple performing rights organizations to avoid copyright infringement.The district court accepted the organization’s proposed rates for a retroactive period and set a new, higher rate for a more recent period. It also broadened the definition of “gross revenues” for calculating royalties, including new categories such as revenues from ticket service fees, VIP packages, and box suites, which had not traditionally been included. The promoters’ association appealed these decisions, arguing that both the rates and the expanded revenue base were unreasonable. The rights organization cross-appealed the denial of prejudgment interest on retroactive payments.The United States Court of Appeals for the Second Circuit reviewed the district court’s decisions. It held that the district court imposed unreasonable rates, in part because it adopted an unprecedented and administratively burdensome revenue base without justification and relied too heavily on benchmark agreements that were not sufficiently comparable to prior agreements with the association. The court also found no economic changes justifying a significant rate increase. While it found no abuse of discretion in denying prejudgment interest, it vacated the district court’s judgment and remanded for further proceedings consistent with its opinion. View "Broadcast Music, Inc. v. North American Concert Promoters Association" on Justia Law

Four pathologists left their employment at a Des Moines laboratory, operated by Iowa Pathology Associates, P.C., and Regional Laboratory Consultants, P.C., to form a new competing laboratory called Goldfinch Laboratory, P.C. Goldfinch alleged that the existing laboratories had previously enjoyed monopoly power over pathology services in Central Iowa and had pressured pathologists to sign noncompetition agreements to maintain that monopoly. After Goldfinch was established, it claimed that the defendants made false statements about it to physician referrers and undertook other actions designed to eliminate Goldfinch from the market, resulting in significant financial losses.The United States District Court for the Southern District of Iowa dismissed Goldfinch’s complaint. The district court concluded that Goldfinch had not suffered an antitrust injury, was not a proper plaintiff, and, in any event, failed to state a claim under the relevant antitrust statutes. Goldfinch appealed this dismissal.The United States Court of Appeals for the Eighth Circuit reviewed the district court’s decision de novo. The appellate court held that Goldfinch’s claim under Section 1 of the Sherman Act failed because the complaint itself established that the two defendant laboratories were not independent economic actors but operated as a single economic unit, incapable of conspiring with each other under antitrust law. Regarding the Section 2 claim for attempted monopolization, the court found that Goldfinch had not adequately alleged a relevant geographic market, as it did not explain why pathology services outside Central Iowa were not practical alternatives for referring physicians. The court also found no abuse of discretion in the district court’s denial of leave to amend the complaint, as Goldfinch did not explain how an amendment could cure these deficiencies. The Eighth Circuit affirmed the district court’s dismissal. View "Goldfinch Laboratory, P.C. v. Iowa Pathology Associates, P.C." on Justia Law

Two companies that manufacture activated carbon honeycombs, used in automotive emission control systems, became embroiled in a legal dispute. One company holds a patent covering certain dual-stage fuel vapor canister systems, but not honeycombs used in air-intake systems. The other company began marketing a competing honeycomb product, prompting a patent infringement lawsuit. In response, the defendant challenged the validity of the patent, argued non-infringement, and asserted counterclaims alleging antitrust violations—specifically, that the patent holder unlawfully tied licenses for the patent to the purchase of its unpatented honeycomb products.The United States District Court for the District of Delaware first granted summary judgment that the patent was invalid due to prior invention. It then denied both parties’ motions for summary judgment on the antitrust and tortious interference counterclaims, finding a factual dispute about whether the honeycomb products had substantial non-infringing uses. At trial, the jury found the patent holder liable for unlawful tying under federal antitrust law, concluding that it had conditioned patent licenses on customers buying its honeycombs, and awarded significant damages. The district court denied the patent holder’s motions for judgment as a matter of law and for a new trial, confirming the jury’s findings that the honeycombs were staple goods with substantial non-infringing uses and that the conduct was not protected by immunity doctrines.On appeal, the United States Court of Appeals for the Federal Circuit affirmed the district court’s judgment. The Federal Circuit held that substantial evidence supported the jury’s findings that the honeycomb products had actual and substantial non-infringing uses, making them staple goods and removing the patent holder’s statutory defense against antitrust liability. The court also rejected the argument that the patent holder’s conduct was immunized from antitrust scrutiny, and upheld the damages award, finding no error in the district court’s rulings or the jury’s determinations. View "INGEVITY CORPORATION v. BASF CORPORATION " on Justia Law

This case arises from a contract dispute related to a broader multidistrict antitrust litigation involving alleged price-fixing in the sale of broiler chickens. The parties, a meat producer and a commercial purchaser, engaged in settlement negotiations to resolve the purchaser’s antitrust claims across three cases (Broilers, Beef, and Pork) for a total of $50 million. The negotiations included email exchanges where the purchaser appeared to accept a settlement offer, but several terms—including compliance with a judgment sharing agreement, assignment data, a “most favored nation” clause, and allocation among cases—remained unresolved. The purchaser had obtained litigation funding, which required consent from the funder for any settlement.The United States District Court for the Northern District of Illinois initially denied the producer’s motion for summary judgment in 2023 but later granted the producer’s motion to enforce the settlement agreement. The court found that the parties had agreed to the essential material terms: the $50 million payment and release of claims. It relied on draft settlement agreements, despite their lack of signatures, to memorialize agreement on additional terms. The court rejected arguments regarding laches and jurisdiction and subsequently granted summary judgment to the producer, concluding its obligations had been fulfilled by payment.The United States Court of Appeals for the Seventh Circuit reviewed the district court’s summary judgment de novo. It held that no binding settlement agreement existed as of the purchaser’s “We accept” email because several material terms remained open and unresolved at that time. The court found that, under Illinois law, mutual assent to all material terms is required for a binding contract, and the parties had continued to negotiate those material terms for months after the email exchange. The Seventh Circuit reversed the district court’s judgment and remanded the case for further proceedings. View "Carina Ventures LLC v. Pilgrim's Pride Corporation" on Justia Law

The State of Ohio brought a lawsuit in state court against several pharmacy benefit managers (PBMs) and related entities, alleging they conspired to artificially inflate prescription drug prices in violation of Ohio law. Ohio claimed that the PBMs, acting as intermediaries between drug manufacturers and health plans, negotiated rebates and fees in a manner that increased drug list prices and extracted payments from pharmacies, harming consumers and violating state antitrust and consumer protection statutes. The PBMs provided services to both private clients and federal health plans, including those for federal employees and military personnel.The defendants, Express Scripts and Prime Therapeutics, removed the case to the United States District Court for the Southern District of Ohio under the federal officer removal statute, arguing that their negotiations on drug prices were conducted on behalf of both federal and non-federal clients in a unified process subject to federal oversight. Ohio moved to remand the case to state court, asserting that its claims did not target conduct directed by federal officers and disclaimed any challenge to the administration of federal health programs like FEHBA or TRICARE. The district court accepted Ohio’s disclaimer and determined that the complaint did not impose liability for acts under federal direction, granting Ohio’s motion to remand.On appeal, the United States Court of Appeals for the Sixth Circuit reviewed the matter de novo. The court held that the PBMs were “persons acting under” federal officers because their negotiations were performed under detailed federal supervision and regulation for federal health plans. The court further found that the complaint related to acts under color of federal office, as the alleged wrongful conduct was inseparable from federally directed negotiations. The court also determined that the PBMs raised colorable federal defenses based on federal preemption. Consequently, the Sixth Circuit reversed the district court’s remand order and remanded the case for further proceedings in federal court. View "Ohio ex rel. Yost v. Ascent Health Services, LLC" on Justia Law

A Mississippi retail pharmacy, Rx Solutions, Inc., sought to join the pharmacy benefit management (PBM) network operated by Caremark, LLC, which is associated with CVS Pharmacy, Inc. Caremark denied Rx Solutions’ application, citing inconsistencies in ownership information and affiliations with Quest Pharmacy, owned by Harold Ted Cain, who Caremark claimed was previously found guilty of violating the False Claims Act. Rx Solutions disputed these reasons, noting acceptance by other PBM networks and asserting that Harold Ted Cain lacked operational control over Rx Solutions and had not been convicted of any relevant criminal offense.Rx Solutions filed suit in the United States District Court for the Southern District of Mississippi, alleging two federal antitrust violations under the Sherman Act and three state law claims: violation of Mississippi’s “any willing provider” statute, violation of the state antitrust statute, and tortious interference with business relations. The district court dismissed the federal antitrust and state statutory claims, concluding that Rx Solutions failed to adequately define relevant product and geographic markets and did not allege antitrust injury. The court also determined there was no diversity jurisdiction to support the remaining state law claims and declined to exercise supplemental jurisdiction.The United States Court of Appeals for the Fifth Circuit affirmed the district court’s dismissal of the federal antitrust and Mississippi state antitrust claims, holding that Rx Solutions did not sufficiently plead a relevant market or antitrust injury. However, the Fifth Circuit reversed the district court’s finding regarding diversity jurisdiction, based on admissions by Caremark and CVS establishing complete diversity between the parties. The appellate court affirmed the dismissal of the state antitrust claim and remanded the claims under Mississippi’s “any willing provider” statute and for tortious interference with business relations for further proceedings. View "Rx Solutions v. Caremark" on Justia Law

Endure Industries, Inc., a seller of disposable medical supplies, sought to participate as a supplier in Vizient’s group purchasing organization (GPO), which negotiates bulk purchasing contracts for healthcare providers. Vizient is the largest GPO in the United States, serving a majority of general acute care centers and academic medical centers. After Vizient rejected Endure’s bid to supply medical tape in favor of another supplier, Endure filed an antitrust suit against Vizient and related entities, alleging monopolization and anticompetitive conduct in two proposed markets for disposable medical supplies.The United States District Court for the Northern District of Texas granted summary judgment to Vizient, finding that Endure failed to define a legally sufficient relevant market under antitrust law. The district court reasoned that Endure’s expert’s market definitions—(1) the sale of disposable medical supplies through GPOs to acute care centers, and (2) sales to Vizient member hospitals—excluded significant alternative sources of supply. Specifically, evidence showed that many hospitals purchase substantial amounts of supplies outside GPO contracts, demonstrating that reasonable substitutes exist and undermining Endure’s theory of market foreclosure.On appeal, the United States Court of Appeals for the Fifth Circuit reviewed only the issue of market definition. The Fifth Circuit held that Endure did not raise a genuine dispute of material fact regarding its proposed markets, as its definitions failed to account for all commodities reasonably interchangeable by consumers. The court found that significant hospital purchasing occurs outside GPOs and that Vizient members are not “locked in” to buying exclusively through Vizient. The Fifth Circuit affirmed the district court’s summary judgment in favor of Vizient, concluding that neither of Endure’s proposed antitrust markets was legally sufficient. View "Endure Industries v. Vizient" on Justia Law

Iron Triangle, LLC significantly increased its presence in the Malheur National Forest after winning a 2013 competitive bidding process by the U.S. Forest Service, securing an exclusive ten-year stewardship contract and right of first refusal on 70% of federal timberland. Iron Triangle also regularly won bids for the remaining 30% of timber sales. In 2020, it entered a contract with Malheur Lumber Company to supply pine sawlogs and provide logging services. Plaintiffs—loggers, landowners, and a competing sawmill—claimed that Iron Triangle and other defendants used anticompetitive tactics to monopolize and restrain trade across four related product markets in the region.The United States District Court for the District of Oregon dismissed the antitrust claims with prejudice, finding that plaintiffs failed to allege monopoly power, anticompetitive conduct, or antitrust injury in any of the identified markets. The court also held that federal regulations governing government contracting and timber sales precluded findings of monopoly power. Plaintiffs amended their complaint twice, but each time, the district court found the allegations insufficient and eventually denied further leave to amend.The United States Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal. While disagreeing that federal regulations categorically preclude monopoly power, the appellate court held that plaintiffs failed to plausibly plead monopoly or monopsony power, anticompetitive conduct, or antitrust injury in any market. The court also found plaintiffs did not sufficiently allege an illegal tying arrangement under Section 1 of the Sherman Act, as logging services and sawlogs were not distinct products and there was no coercion. The Ninth Circuit further affirmed denial of leave to amend, concluding additional amendments would be futile. View "MALHEUR FOREST FAIRNESS COALITION V. IRON TRIANGLE, LLC" on Justia Law

Seagate Technology LLC, a California-based manufacturer of hard disk drives, and two of its foreign subsidiaries (in Thailand and Singapore) brought antitrust claims against NHK Spring Co., Ltd., a Japanese supplier of suspension assemblies—critical hard drive components. NHK pleaded guilty in a separate federal criminal proceeding to conspiring with competitors to fix the prices of these suspension assemblies, which were sold both in the United States and abroad. The majority of the price-fixed assemblies purchased by Seagate’s foreign entities occurred outside the United States, with only finished hard drives being imported into the country.The United States District Court for the Northern District of California initially found that the Sherman Act did not apply to Seagate’s claims related to suspension assemblies purchased abroad, ruling that these were “wholly foreign transactions” outside the reach of U.S. antitrust law. The court also determined that the Foreign Trade Antitrust Improvements Act (FTAIA) import commerce exclusion did not apply since the assemblies themselves were not directly imported into the United States, and that Seagate could not show the necessary domestic effect giving rise to its foreign injury. The district court granted NHK’s motion for partial summary judgment in full and denied Seagate leave to amend its complaint for indirect purchaser claims.The United States Court of Appeals for the Ninth Circuit vacated the district court’s summary judgment order. The appellate court held that while the import commerce exclusion did not apply, Seagate alleged a viable theory under the FTAIA’s domestic effects exception: NHK’s price-fixing in the United States led to higher prices domestically, which then directly caused Seagate’s foreign entities to pay inflated prices abroad. The Ninth Circuit remanded the case for the district court to determine whether Seagate had presented sufficient evidence of proximate cause to survive summary judgment. View "SEAGATE TECHNOLOGY LLC V. NHK SPRING CO., LTD." on Justia Law