Justia Antitrust & Trade Regulation Opinion Summaries

Ben-E-Lect, a third-party insurance claim administrator, developed a medical expense reimbursement plan; employers could buy a group policy of medical insurance with a high deductible and self-fund to pay for the healthcare expenses employees incurred within the annual deductible or any copay requirement. The practice of employers’ using such plans in conjunction with a high-deductible health plan is called “wrapping.” Ben-E-Lect was the state’s largest third-party administrator for small group employers who wrapped their employee medical policies. Anthem provides fully insured health plans to the California small group employer market. Beginning in 2006, Anthem announced a series of policies that limited wrapping. In 2014, Anthem prohibited wrapping all Anthem plans. Employer groups who used Anthem plans certified they would not wrap Anthem policies, and agents certified they would not advise employers to enter into any employer-sponsored wrapping plan. Ben-E-Lect sued Anthem.The court of appeal affirmed that Anthem’s policy to prohibit wrapping its health insurance products violated the Cartwright Act (Bus. & Prof. Code, 16700); interfered with Ben-E-Lect’s prospective business relationships; and was an illegal, coercive, vertical group boycott under the antitrust rule of reason (Bus. & Prof. Code, 17200), because Anthem told its insurance agents that if they wrapped any Anthem policies they would be subject to termination loss of sales commissions. The court affirmed an award of $7.38 million and an injunction. The trial court considered sufficient evidence of market power and market injury. View "Ben-E-Lect v. Anthem Blue Cross Life and Health Insurance Co." on Justia Law

This case case arising out of the breakup of a limited partnership created to produce and market a new cement product the Supreme Court reversed in part the judgment of the court of appeals largely affirming the judgment of the trial court in favor of the limited partnership and a technology-supplying partner, holding that Plaintiffs failed to present legally sufficient evidence of damages and that the technology-supplying partner was not entitled to a permanent injunction for misappropriation of trade secrets.The partnership, its general partner, and the limited partner that supplied the cement-making technology sued the limited partners responsible for funding, the general manager of the partnership, and the companies that foreclosed on and purchased the partnership's assets. Defendants asserted counterclaims. The court of appeals largely affirmed. The Supreme Court reversed in part and affirmed in part, holding (1) the damage awards were not supported by legally sufficient evidence; (2) the technology-supplying partner was not entitled to a permanent injunction for misappropriation of trade secrets; and (3) the company that purchased the partnership's assets and promissory note did not prove it was entitled to judgment as a matter of law on its counterclaim for the partnership's failure to pay a deficiency balance on the note. View "Pike v. Texas EMC Management, LLC" on Justia Law

Inline filed suit against its competitor, Graphic, alleging antitrust and tortious interference claims related to the susceptor-packaging market. The Eighth Circuit affirmed the district court's grant of summary judgment in favor of Graphic, holding that the district court did not err concluding that there was no genuine dispute of material fact regarding whether Graphic fraudulently procured patents on packaging concepts and designs through false claims of inventorship of the asserted patents and fraudulently concealed prior sales of drawing sample sleeves. In this case, Inline cannot establish that Graphic committed knowing and willful fraud and thus his monopolization claim under 15 U.S.C. 2 failed. Because Inline did not evidence fraud related to Graphic's procurement of the asserted patents and its prior sales of drawing sample sleeves 50019D/F, it has not established why the same set of facts and evidence would render Graphic's patent-infringement litigation objectively baseless. Therefore, the court affirmed the district court's dismissal of the sham-litigation claim.The court affirmed the district court's dismissal of the discount-bundling claim because Inline failed to show that Graphic held sufficient monopoly or market power, and the district court adequately assessed the record and did not abuse its discretion in dismissing Inline's economic expert's untimely market opinion. Finally, the court held that the district court did not abuse its discretion in rejecting Inline's exclusive dealing claim and tortious interference claim. View "Inline Packaging, LLC v. Graphic Packaging International, LLC" on Justia Law

The South Carolina Supreme Court granted a writ of certiorari to review the court of appeals' decision in Wilson v. Gandis, Op. No. 2018-UP-078 (S.C. Ct. App. filed Feb. 7, 2018). David Wilson, John Gandis, and Andrea Comeau-Shirley (Shirley) are members of Carolina Custom Converting, LLC (CCC). Wilson filed suit against Gandis, Shirley and CCC, alleging they engaged in oppressive conduct against him. Wilson also brought a derivative action against CCC. Wilson sought a forced buyout of his membership interest by Gandis, Shirley, and CCC. CCC counterclaimed against Wilson, alleging Wilson misappropriated its trade secrets and communicated these secrets to Neologic Distribution, Inc. and to Fresh Water Systems, Inc. During a five-day bench trial, the trial court received over three hundred exhibits and heard testimony from ten witnesses. The trial court found Gandis and Shirley engaged in oppressive conduct and ordered them to individually purchase Wilson's distributional interest in CCC for $347,863.23. The trial court found in favor of Wilson on CCC's, Gandis', and Shirley's counterclaim for breach of fiduciary duty. The trial court also found in favor of Wilson, Neologic, and Fresh Water on CCC's trade secrets claim. CCC, Gandis, and Shirley appealed. In an unpublished opinion, the court of appeals affirmed the trial court and adopted the trial court's order in its entirety. After review, the Supreme Court affirmed as modified the court of appeals' decision as to Wilson's claim for oppression, affirmed the court of appeals' decision as to Gandis' and Shirley's claim for breach of fiduciary duty, and affirmed the court of appeals' decision as CCC's claim for misappropriation of trade secrets. View "Wilson v. Gandis" on Justia Law

The Second Circuit reversed the district court's dismissal of plaintiffs' Sherman Act, RICO Act, and common-law claims against defendants for lack of Article III standing. Plaintiffs are a group of investment funds and defendants are a collection of financial institutions. Plaintiffs' claims stemmed from a scheme to fix the benchmark interest rates used to price financial derivatives in the Yen currency market.The court held that plaintiffs alleged an injury in fact sufficient for Article III standing, because plaintiffs plausibly alleged that defendants' conduct caused them to suffer economic injury. In this case, plaintiffs alleged that they entered into financial agreements on unfavorable terms because defendants manipulated benchmark rates in their own favor. Accordingly, the court remanded for further proceedings. View "Sonterra Capital Master Fund Ltd. v. UBS AG" on Justia Law

Employers Resource Management Company (“Employers”) returned to the Idaho Supreme Court in a second appeal against the Idaho Department of Commerce. In 2014, the Idaho Legislature passed the Idaho Reimbursement Incentive Act (“IRIA”). The Economic Advisory Council (“EAC”), a body created under IRIA to approve or deny tax credit applications, granted a $6.5 million tax credit to the web-based Illinois corporation Paylocity, a competitor to Employers Resource Management Company. Employers claimed Paylocity’s tax credit created an unfair economic advantage. Paylocity, however, had yet to receive the tax credit because it did not satisfy the conditions in the Tax Reimbursement Incentive agreement. Having established competitor standing in Employers Res. Mgmt. Co. v. Ronk, 405 P.3d 33 (2017), Employers argued the Idaho Reimbursement Incentive Act was unconstitutional under the separation of powers doctrine. The district court dismissed Employers’s case upon finding the Act constitutional. Finding no reversible error in that judgment, the Idaho Supreme Court affirmed. View "Employers Resource Mgmt Co v. Kealy" on Justia Law

Plaintiff, Steve Strauss, brought claims against Defendant, Angie’s List, Inc., alleging violations of the Lanham Act. Strauss owned a tree trimming/removal business called Classic Tree Care (“Classic”). Defendant Angie’s List was an internet-based consumer ratings forum on which fee-paying members could view and share reviews of local businesses. According to Strauss, the membership agreement between Angie’s List and its members lead members to believe that businesses were ranked by Angie’s List according to unedited consumer commentaries and endorsements when, in reality, the order in which businesses were ranked was actually based on the amount of advertising the business bought from Angie’s List. He alleged businesses were told they will be ranked more favorably on the website if they paid advertising and referral fees to Angie’s List. According to Strauss, from 2005 to 2016 he paid $200,000 in advertising services fees and coupon retention percentages to Angie’s List “in an effort to appear higher” in search results. The business relationship between Strauss and Angie’s List, however, began to sour in 2013. Strauss alleged he failed to appear in search results for a three-month period and then was “buried” in search-result listings even though he had numerous favorable reviews and a high rating from consumers. In September 2017, Strauss filed a putative class action lawsuit against Angie’s List, raising allegations that Angie’s List engaged in false advertising in violation of section 45(a) of the Lanham Act, as well as the Kansas Consumer Protection Act (KCPA). Strauss appealed when the district court dismissed his complaint on the basis that it failed to identify any statements made by Angie’s List that qualified as commercial advertising or promotion within the meaning of the Lanham Act’s false advertising provision. Strauss contended the district court erred by analyzing his claims under the test adopted by the Tenth Circuit in Proctor & Gamble Co. v. Haugen, 222 F.3d 1262 (10th Cir. 2000) (adopting a four-part test for determining what constitutes commercial advertising or promotion). Finding no reversible error, however, the Tenth Circuit affirmed dismissal of Strauss’ case. View "Strauss v. Angie's List" on Justia Law

Healthcare providers often do not purchase medical devices directly from the manufacturer; they join group purchasing organizations (GPOs), which negotiate prices with manufacturers. The provider chooses a distributor to deliver the product. The distributor enters into contracts with the provider and the manufacturer, incorporating the price and other terms that the GPO negotiated, plus a markup for the distributor. A GPO negotiated with Becton (a manufacturer) on the plaintiff-providers’ behalf; a distributor delivered the devices.Had Becton acted alone, selling its products to an independent distributor, which then sold them to a provider, the Supreme Court’s 1977 “Illinois Brick” rule would bar the provider from suing Becton for any alleged monopoly overcharges. Only buyers who purchased products directly from the antitrust violator have a claim for treble damages. The plaintiffs alleged that Becton, the GPOs, and the distributors were in a conspiracy and engaged in various anti-competitive measures, including exclusive-dealing and penalty provisions. Under Brick's conspiracy exception, when a monopolist enters into a conspiracy with its distributors “the first buyer from a conspirator is the right party to sue.”The district court found the conspiracy rule inapplicable because this case did not involve vertical price-fixing. The Seventh Circuit vacated. The relationship between the buyer and the seller, not the nature of the alleged anticompetitive conduct, governs whether the buyer may sue under the antitrust laws. Remand was required because the Providers have failed adequately to allege the necessary conspiracy. View "Marion HealthCare, LLC. v. Becton Dickinson & Co." on Justia Law

The plaintiffs (Sharif Pharmacy, J&S) were members of the Prime pharmacy network, which is owned, in part, by Blue Cross Blue Shield. Under Medicare, Medicaid, and private health insurance plans, many patients had significant financial incentives to buy their prescription drugs from pharmacies within the network. Prime terminated both plaintiffs from the network after audits uncovered invoicing irregularities. The plaintiffs claimed that their terminations from the Prime network violated the Sherman Act, 15 U.S.C. 1 and 2. Three customers joined the suit, having had to switch to different, less convenient pharmacies. The plaintiffs alleged that the audits were pretextual and that Prime really terminated their participation in its network to get rid of competition with Walgreens, with whom it had entered a joint venture. Prime sent letters to both pharmacies’ customers saying that Sharif and J&S would no longer accept their insurance and recommending that customers have their prescriptions filled at a nearby Walgreens. Prime also retained funds from both pharmacies as a result of the audits. The Seventh Circuit affirmed the dismissals of the cases by two district courts. The individual plaintiffs lacked standing. The pharmacy could not identify an appropriate geographic market where a defendant had or threatened to have monopoly power. View "Sharif Pharmacy Inc. v. Prime Therapeutics LLC" on Justia Law

Viamedia sued Comcast under the Sherman Act, 15 U.S.C. 2, for using its monopoly power in one service market (Interconnect) to exclude competition and gain monopoly power in another service market (advertising representation) in the Chicago, Detroit, and Hartford geographic markets. Interconnect services are cooperative selling arrangements for advertising through an “Interconnect” that enables retail cable television service providers to sell advertising targeted efficiently at regional audiences. Advertising representation services assist those providers with the sale and delivery of national, regional, and local advertising slots. Viamedia’s evidence indicated Comcast used its monopoly power over the Interconnect to force its smaller retail cable television competitors to stop doing business with Viamedia; Viamedia’s customers for advertising representation (Comcast’s retail cable competitors) switched to Comcast because Comcast presented a choice: either start buying advertising representation services from us and regain access to the Interconnect or keep buying services from Viamedia and stay cut off from the Interconnect they needed to compete effectively. The strategy cost Comcast millions of dollars in the short run but eventually gave it monopoly power in these local markets for advertising representation services.The Seventh Circuit reversed the dismissal of Viamedia’s case. Giving Viamedia the benefit of its allegations and evidence, this is not a case in which Section 2 is being misused to protect weaker competitors rather than competition more generally. Viamedia has also adequately stated a claim that Comcast has unlawfully refused to deal with Viamedia and any cable competitor that bought advertising representation from Viamedia. View "Viamedia, Inc. v. Comcast Corp." on Justia Law