Justia Antitrust & Trade Regulation Opinion Summaries

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

Wanke, Industrial, Commercial, Residential, Inc. (Wanke) was a company that installed waterproofing systems. It sued Scott Keck and another of its former employees in 2008 for trade secret misappropriation after they left Wanke to form a competing business, WP Solutions. The parties entered into a stipulated settlement and later litigated Keck's alleged breach of that settlement agreement. To collect, Wanke filed a creditor's suit against third party AV Builder Corp. (AVB) to recover $109,327 that AVB owed WP Solutions in relation to five construction subcontracts. Following a bench trial, the court entered judgment in Wanke's favor for $83,418.94 after largely rejecting AVB's setoff claims. Invoking assignment principles, AVB contended: (1) Wanke lacked the ability to sue given judgment debtor WP Solutions's corporate suspension; (2) Wanke's suit was untimely under section 708.230 of the Code of Civil Procedure; and (3) the trial court erred in denying its request for warranty setoffs under section 431.70. Rejecting each of these contentions, the Court of Appeal affirmed the judgment View "Wanke, Industrial, Commercial, etc. v. AV Builder Corp." on Justia Law

The San Francisco Examiner sued the San Francisco Chronicle, claiming that the defendant sold a certain type of print advertising in the Chronicle at prices that violated California’s Unfair Practices Act (UPA, Bus. & Prof. Code, 17000) and Unfair Competition Law (UCL, 17200). The trial court granted the defendant summary judgment. The court of appeal affirmed. The trial court properly rejected the claim of below-cost sales under the UPA after excluding the opinion of the plaintiff’s expert on costs. The plaintiff had disclaimed reliance on specific transactions to prove the Chronicle’s alleged underpricing of its print advertising, leaving only the aggregate cost analysis prepared by that expert to establish the occurrence of alleged below-cost sales. The plaintiff’s expert lacked the foundational knowledge to conduct the requisite cost analysis and based his analysis on another individual’s non-UPA-related pricing analysis without understanding its foundations, such as some of the included cost components. Summary judgment was proper as to the claim for unlawful use or sale of loss leaders under the UPA because the plaintiff failed to identify the loss leader sales on which this claim was based. The trial court did not err in granting summary judgment on the causes of action for secret and unearned discounts under the UPA. View "San Francisco Print Media Co. v. The Hearst Corp." on Justia Law

Oklahoma Senate Bill 608 mandated that manufacturers of the top 25 brands of liquor and wine sell their product to all licensed wholesalers. Appellees, a group of liquor and wine wholesalers, manufacturers, retail liquor stores, and consumers, challenged Senate Bill 608 as unconstitutional, contending it was in conflict with Okla. Const. art. 28A, section 2(A)(2)'s discretion given to a liquor or wine manufacturer to determine what wholesaler sells its product. The district court agreed and ruled Senate Bill 608 unconstitutional. The Oklahoma Supreme Court held SB 608 was "clearly, palpably, and plainly inconsistent" with Article 28A, section 2(A)(2)'s discretion given to a liquor or wine manufacturer to determine what wholesaler sells its product. Furthermore, the Court ruled that SB 608 was not a proper use of legislative authority as Article 28A, section 2(A)(2) was not in conflict with the Oklahoma Constitution's anticompetitive provisions. The district court, therefore, did not err by granting Distributors' Motion for Summary Judgment and ruling SB 608 unconstitutional. View "Institute For Responsible Alcohol Policy v. Oklahoma ex rel. Alcohol Beverage Laws Enforcement Comm." on Justia Law

GandyDancer, LLC, and Rock House CGM, LLC, were business competitors, and both provided railway construction and repair services to BNSF Railway Company. BNSF awarded contracts to Rock House to provide goods and services in New Mexico. GandyDancer filed a complaint with the New Mexico Construction Industries Division (CID) in 2015 that alleged Rock House violated the Construction Industries Licensing Act (CILA), by performing unlicensed construction work in New Mexico. GandyDancer thereafter filed a complaint in district court against Rock House, alleging theories of competitive injury, and including a claim that Rock House engaged in unfair methods of competition to obtain contracts with BNSF contrary to the UPA. GandyDancer alleged Rock House’s acts amounted to an “unfair or deceptive trade practice” under Section 57-12-2(D) of the New Mexico Unfair Practices Act (UPA). The district court certified for interlocutory review whether the UPA supported supports a cause of action for competitive injury. The Court of Appeals accepted interlocutory review and held that a business may sue for competitive injury based on a plain reading of the UPA. The New Mexico Supreme Court reversed, because the Legislature excluded competitive injury from the causes of action permitted under that statute. Furthermore, the Court observed that Gandydancer relied upon dicta in Page & Wirtz Construction Co. v. Soloman, 794 P.2d 349. Therefore, the Court formally disavowed reliance on Page & Wirtz or prior New Mexico case law that conflicted with its opinion here. View "GandyDancer, LLC v. Rock House CGM, LLC" on Justia Law