Justia Antitrust & Trade Regulation Opinion Summaries

David Efron and Efron Dorado SE (collectively, "Efron") appealed a civil contempt order entered by the district court for violating its preliminary injunction. This litigation began when the Federal Trade Commission and the Utah Division of Consumer Protection filed a complaint in the federal district court against Zurixx, LLC and related entities. The complaint alleged Zurixx marketed and sold deceptive real-estate investment products. The district court entered a stipulated preliminary injunction, enjoining Zurixx from continuing its business activities and freezing its assets wherever located. The injunction also directed any person or business with actual knowledge of the injunction to preserve any of Zurixx’s assets in its possession, and it prohibited any such person or business from transferring those assets. A week later, the receiver filed a copy of the complaint and injunction in federal court in Puerto Rico, where Zurixx leased office space from Efron. The office contained Zurixx’s computers, furniture, and other assets. The receiver also notified Efron of the receivership and gave him actual notice of the injunction. Although Efron at first allowed the receiver access to the office to recover computers and files, he later denied access to remove the remaining assets and initiated eviction proceedings against Zurixx in a Puerto Rico court. Given these events, the receiver moved the district court in Utah for an order holding Efron in contempt of court for violating the injunction. In response, Efron claimed the assets belonged to him under his lease agreement with Zurixx. The Tenth Circuit Court of Appeal determined the contempt order was a non-final decision. It therefore dismissed this appeal for lack of jurisdiction. View "Federal Trade Commission, et al. v. Zurixx, et al." on Justia Law

This appeal grew out of a dispute over a program (“The Trial Lawyers College”) to train trial lawyers. The College’s board of directors splintered into two factions, known as the “Spence Group” and the “Sloan Group.” The two groups sued each other: The Spence Group sued in state court for dissolution of the College and a declaratory judgment recognizing the Spence Group’s control of the Board; the Sloan Group then sued in federal court, claiming trademark infringement under the Lanham Act. Both groups sought relief in the federal case. The federal district court decided both requests in favor of the Sloan Group: The court denied the Spence Group’s request for a stay and granted the Sloan Group’s request for a preliminary injunction. The Spence Group appealed both rulings. The Tenth Circuit Court of Appeals determined it lacked jurisdiction to review the district court’s denial of a stay. After the Spence Group appealed the federal district court’s ruling, the state court resolved the dispute over Board control. So this part of the requested stay became moot. The remainder of the federal district court’s ruling on a stay did not constitute a reviewable final order. The Court determined it had jurisdiction to review the grant of a preliminary injunction. In granting the preliminary injunction, the district court found irreparable injury, restricting what the Spence Group could say about its own training program and ordering removal of sculptures bearing the College’s logo. The Spence Group challenged the finding of irreparable harm, the scope of the preliminary injunction, and the consideration of additional evidence after the evidentiary hearing. In the Tenth Circuit's view, the district court had the discretion to consider the new evidence and grant a preliminary injunction. "But the court went too far by requiring the Spence Group to remove the sculptures." View "Trial Lawyers College v. Gerry Spences Trial Lawyers, et al." on Justia Law

A 2019 Arizona statute prohibits auto dealer management system (DMS) providers from “tak[ing] any action by contract, technical means or otherwise to prohibit or limit a dealer’s ability to protect, store, copy, share or use” data the dealer has stored in its DMS. DMS providers may not impose charges “beyond any direct costs incurred” for database access. DMS providers may not prohibit the third parties contracted by the dealers “from integrating into the dealer’s data system,” nor may they otherwise “plac[e] an unreasonable restriction on integration.” DMS providers must “[a]dopt and make available a standardized framework for the exchange, integration, and sharing of data” with authorized integrators.The Ninth Circuit affirmed the denial of a preliminary injunction against the statute’s enforcement. There is no conflict preemption; the statute and the federal Copyright Act are not irreconcilable. The statute does not conflict with 17 U.S.C. 106(1), which grants the owner of a copyrighted work the exclusive right “to reproduce the copyrighted work in copies.” The plaintiffs forfeited their claim that the statute impaired their contracts with third-party vendors and did not show that the statute impaired their ability to discharge their contractual duty to keep dealer data confidential. The statute was reasonably drawn to serve important public purposes of promoting consumer data privacy and competition and amounted to neither a per se physical taking nor a regulatory taking. View "CDK Global LLC v. Brnovich" on Justia Law

In 2019, Mallet learned that Bundy was its newest competitor in the sale of baking release agents, the lubricants that allow baked goods to readily separate from the containers in which they are made. Bundy was well-known for other commercial baking products when it launched a new subsidiary, Synova, to sell baking release agents. Synova hired two Mallet employees, both of whom had substantial access to Mallet’s proprietary information. That information from Mallet helped Synova rapidly develop, market, and sell release agents to Mallet’s customers.Mallet sued, asserting the misappropriation of its trade secrets. The district court issued a preliminary injunction. restraining Bundy, Synova, and those employees from competing with Mallet. The Third Circuit vacated and remanded for further consideration of what, if any, equitable relief is warranted and what sum Mallet should be required to post in a bond as “security … proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained.” A preliminary injunction predicated on trade secret misappropriation must adequately identify the allegedly misappropriated trade secrets. If the district court decides that preliminary injunctive relief is warranted, the injunction must be sufficiently specific in its terms and narrowly tailored in its scope. View "Mallet & Co., Inc. v. Lacayo" on Justia Law

Hetronic International, Inc., a U.S. company, manufactured radio remote controls, the kind used to remotely operate heavy-duty construction equipment. Defendants, none of whom were U.S. citizens, distributed Hetronic’s products, mostly in Europe. After about a ten-year relationship, one of Defendants’ employees stumbled across an old research-and-development agreement between the parties. Embracing a “creative legal interpretation” of the agreement endorsed by Defendants’ lawyers, Defendants concluded that they owned the rights to Hetronic’s trademarks and other intellectual property. Defendants then began manufacturing their own products—identical to Hetronic’s—and selling them under the Hetronic brand, mostly in Europe. Hetronic terminated the parties’ distribution agreements, but that didn’t stop Defendants from making tens of millions of dollars selling their copycat products. Hetronic asserted numerous claims against Defendants, but the issue presented on appeal to the Tenth Circuit centered on its trademark claims under the Lanham Act. A jury awarded Hetronic over $100 million in damages, most of which related to Defendants’ trademark infringement. Then on Hetronic’s motion, the district court entered a worldwide injunction barring Defendants from selling their infringing products. Defendants ignored the injunction. In the district court and before the Tenth Circuit, Defendants focused on one defense in particular: Though they accepted that the Lanham Act could sometimes apply extraterritorially, they insisted the Act’s reach didn’t extend to their conduct, which generally involved foreign defendants making sales to foreign consumers. Reviewing this matter as one of first impression in the Tenth Circuit, and after considering the Supreme Court’s lone decision on the issue and persuasive authority from other circuits, the Tenth Circuit concluded the district court properly applied the Lanham Act to Defendants’ conduct. But the Court narrowed the district court’s expansive injunction. Affirming in part, and reversing in part, the Court remanded the case for further consideration. View "Hetronic International v. Hetronic Germany GmbH, et al." on Justia Law

The Sixth Circuit previously affirmed the Federal Trade Commission’s decision to block a merger of ProMedica and St. Luke’s Hospital in Lucas County, Ohio. As part of the unwinding of the merger, ProMedica and St. Luke’s signed an agreement in which ProMedica’s insurance subsidiary, Paramount, agreed to maintain St. Luke’s as a within-network provider; Paramount could drop St. Luke’s if ownership of the hospital changed. A large healthcare company based in Michigan, McLaren, subsequently merged with St. Luke’s. Paramount ended its relationship with St. Luke’s, removing the hospital from its provider network. St. Luke’s then alleged that ProMedica’s refusal to do business with it violated the antitrust laws. The district court preliminarily enjoined ProMedica from ending the agreement. The Sixth Circuit vacated. Because ProMedica had a legitimate business explanation for ending the relationship, St. Luke’s is unlikely to show that ProMedica unlawfully refused to continue doing business with it. St. Luke’s has little likelihood of establishing an irreparable injury given the option of money damages. View "St. Luke's Hospital v. ProMedica Health System, Inc." on Justia Law

Companies that tow or recycle used cars alleged that Milwaukee and its subcontractor, engaged in anticompetitive behavior to self-allocate towing services and abandoned vehicles, a primary input in the scrap metal recycling business. They alleged that an exclusive contract the city entered into with one of the area’s largest recycling providers, Miller Compressing, violated the Sherman Act, 15 U.S.C. 1, and that the contract provided direct evidence of an agreement to restrain trade. They cited laws that require a city-issued license to tow vehicles from certain areas, that obligate towing companies to provide various notices, and that cap maximum charges imposed on vehicle owners who have illegally parked or abandoned their vehicles, as having been enacted to squeeze them out of the market.The Seventh Circuit affirmed the dismissal of the suit. The arrangement between the city and Miller is not per se unreasonable on the basis of horizontal price-fixing. The court also rejected a claim of “bid-rigging.” View "Always Towing & Recovery Inc. v. City of Milwaukee" on Justia Law

In 2005, Appellee Reorganized FLI, Inc.1 (“Farmland”) brought an action against Appellants alleging violations of the Kansas Restraint of Trade Act (“KRTA”). Farmland sought, amongst other things, full consideration damages pursuant to Kan. Stat. Ann. section 50-115. In 2019, Appellants moved for summary judgment on Farmland’s claims, arguing the repeal of section 50-115 operated retroactively to preclude Farmland from obtaining any relief. The Kansas District Court denied the motion for summary judgment but granted Appellants’ motion for leave to file an interlocutory appeal with the Tenth Circuit Court of Appeals. Appellants sought reversal of the district court’s denial of summary judgment and a ruling ordering the district court to enter judgment in their favor. After review, for reasons different from the district court, the Tenth Circuit concluded 50-115 applied retroactively to foreclose Farmland from recovering full consideration damages, Farmland was entitled to other relief if it prevailed on the merits of its claims. Thus, the repeal of 50-115 did not leave Farmland without a remedy and Appellants were not entitled to summary judgment. View "Reorganized FLI v. Williams Companies" on Justia Law

Beginning in the 1980s and 1990s, two Idaho businesses did roofing work under substantially similar names: one, Gem State Roofing, Inc., performed work primarily in Blaine County (Gem State-Blaine); the other was a corporation operating under the name Gem State Roofing and Asphalt Maintenance, which also did business as Gem State Roofing. The latter was based in Boise, Idaho, and performed work in a significantly larger area. In 2011, Gem State Roofing and Asphalt Maintenance was succeeded in interest by United Components, Inc. (UCI.) Notwithstanding its change of name, it continued to do business as Gem State Roofing. In 2005, prior to UCI’s name change, the two businesses with similar names entered into a Trademark Settlement Agreement (TSA), prohibiting UCI from advertising, soliciting, or performing business in Blaine County, with exceptions for certain services (i.e., warranty, maintenance work, or work performed for previous customers). In addition, UCI agreed that if it received a request for work it was contractually unable to fulfil because of the TSA, it would refer the work to Gem State-Blaine. In 2018, Gem State-Blaine sued UCI, alleging it had breached the TSA when it advertised, solicited, bid on, and performed roofing work in Blaine County, and had failed to refer requests for work as required under the TSA. After a bench trial, the district court concluded that, despite UCI’s breach of the TSA and the implied covenant of good faith and fair dealing, Gem State-Blaine had failed to prove damages or that it was entitled to a permanent injunction. The district court further found that Gem State-Blaine had no protectable common-law trademark. Finally, the district court concluded that there was no prevailing party and declined to award attorney fees and costs. Gem State-Blaine timely appealed. UCI timely cross-appealed the district court’s denial of its request for attorney fees and costs. After review, the Idaho Supreme Court reversed in part, affirmed in part, vacated in part, and remanded for further proceedings. The district court’s refusal to enter a permanent injunction was reversed, and the court directed to enter a permanent injunction to enjoin UCI from any further breach of the TSA. The district court’s refusal to award attorney fees and costs as a sanction for UCI’s discovery violations, and the district court’s conclusion that Gem State-Blaine did not have a protectable common-law trademark against UCI were also reversed. The Supreme Court vacated the district court’s determination that neither party prevailed. The matter was remanded for the district court to determine whether there was a prevailing party, and to determine if attorney fees and costs should be awarded. The district court’s decision denying damages was affirmed. View "Gem State Roofing, Incorp. v. United Components, Inc." on Justia Law

AAAPC and UAS filed suit against Quest for conspiring to force them out of the market of providing allergy and asthma testing. The district court dismissed plaintiffs' claims under Federal Rule of Civil Procedure 12(b)(6).The Fifth Circuit concluded that plaintiffs' claims alleging that Quest violated sections 1 and 2 of the Sherman Act and the Texas antitrust law are not time-barred. The court explained that plaintiffs' allegations about Phadia and Quest's continued meetings with providers and payors do not restart the statute of limitations; plaintiffs' allegations regarding the June 2015 policy change does not suffice to restart the statute of limitations; but plaintiffs have sufficiently alleged that Phadia and Quest were involved in the alleged conspiracy and that the allegation regarding Phadia's May 2014 email reset the statute of limitations. Therefore, the court reversed the district court's dismissal as to the state and federal antitrust claims. The court also reversed the dismissal of plaintiffs' misappropriation of trade secrets claim, concluding that plaintiffs have sufficiently pled they could not have discovered their misappropriation injury using reasonable diligence. Moreover, nothing in the complaint forecloses their potential rejoinder to the statute of limitations defense. The court affirmed the district court's dismissal of the civil conspiracy and tortious interference claims. Finally, the court affirmed the district court's denial of plaintiffs' request for leave to amend their complaint. View "Academy of Allergy & Asthma in Primary Care v. Quest Diagnostics, Inc." on Justia Law