Justia Antitrust & Trade Regulation Opinion Summaries
Articles Posted in California Courts of Appeal
Symons Emergency Specialties v. City of Riverside
The case involves Symons Emergency Specialties (Symons), a provider of ambulance services, and the City of Riverside. The City regulates ambulance services within its limits under the Riverside Municipal Code (RMC), which requires operators to obtain a valid franchise or permit. Symons filed a civil complaint seeking declaratory and injunctive relief against the City, arguing that the RMC section requiring a permit is invalid under the Emergency Medical Services System and Prehospital Emergency Medical Care Act (EMS Act). The dispute centered on whether the City had regulated nonemergency ambulance services as of June 1, 1980, which would allow it to continue doing so under the EMS Act's grandfathering provisions.The trial court found in favor of the City, concluding that Symons had failed to meet its burden of proof. Symons appealed, arguing that the trial court erred in admitting certain testimonies, that the court's factual finding was not supported by substantial evidence, and that the RMC section violated federal anti-trust law.The Court of Appeal of the State of California Fourth Appellate District Division Two affirmed the trial court's decision. The appellate court found no error in the admission of testimonies, concluded that substantial evidence supported the trial court's findings, and rejected Symons's anti-trust argument. The court held that the City's regulation of ambulance services did not violate the EMS Act or federal anti-trust law. View "Symons Emergency Specialties v. City of Riverside" on Justia Law
Beverage v. Apple, Inc.
This case involves a dispute between plaintiffs Michelle Beverage and Joseph Mejia, and defendant Apple, Inc. The plaintiffs filed a class action complaint alleging that Apple's restrictive contractual terms and coercive conduct towards software developers on its App Store constituted unlawful and unfair practices that violated the Cartwright Act and the Unfair Competition Law (UCL). The plaintiffs specifically focused on Apple's treatment of one developer, Epic Games, Inc., and its gaming application, Fortnite. The trial court sustained a demurrer brought by Apple without leave to amend, applying the Colgate doctrine and the holding of Chavez v. Whirlpool Corporation. The court determined that the plaintiffs did not and could not state causes of action under either legal regime as a matter of law.The trial court's decision was based on the application of the Colgate doctrine and the holding of Chavez v. Whirlpool Corporation. The court found that the plaintiffs did not and could not state causes of action under either the Cartwright Act or the UCL as a matter of law. The plaintiffs appealed only one aspect of the trial court's ruling, arguing that the court erred by relying on Chavez to sustain the demurrer to their UCL cause of action alleging unfair practices by Apple towards Epic Games.The Court of Appeal of the State of California Sixth Appellate District affirmed the trial court's judgment. The appellate court disagreed with the plaintiffs' argument that Chavez was inconsistent with the California Supreme Court’s decision in Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Company. The court found that the trial court correctly relied on Chavez to sustain the demurrer without leave to amend. The court held that the plaintiffs did not state a claim as a matter of law under the "unfair" prong of the UCL, considering the trial court's ruling that Apple's practices constituted permissible unilateral conduct. View "Beverage v. Apple, Inc." on Justia Law
BioCorRx, Inc. v. VDM Biochemicals, Inc.
BioCorRx, Inc. (BioCorRx) was a publicly traded company primarily engaged in the business of providing addiction treatment services and related medication. It issued several press releases that allegedly made misrepresentations and improperly disclosed confidential information about a treatment it was developing for opioid overdose. VDM Biochemicals, Inc. (VDM) specializes in the synthesis and
distribution of chemicals, reagents, and other specialty products for life science research. It owned a patent (the patent) for VDM-001, a compound with potential use as a treatment for opioid overdose. In September 2018, VDM and BioCorRx entered into a Mutual
Nondisclosure & Confidentiality Agreement (the NDA), which restricted each party’s disclosure of confidential information as they discussed forming a business relationship. A month later, VDM and BioCorRx signed a Letter of Intent to Enter Definitive Agreement to Acquire Stake in Intellectual Property (the letter of intent). The letter of intent memorialized the parties’ shared desire whereby BioCorRx would partner with VDM to develop and commercialize VDM-001. BioCorRx and VDM never signed a formal contract concerning VDM-001. Their relationship eventually soured. BioCorRx filed a complaint (the complaint) against VDM; VDM cross-complained. In response, BioCorRx filed the anti-SLAPP motion at issue here, seeking to strike all the allegations from the cross-complaint concerning the press releases. The Court of Appeal found these statements fell within the commercial speech exemption of California's Code of Civil Procedure section 425.16 (the anti-SLAPP statute) because they were representations about BioCorRx’s business operations that were made to investors to promote its goods and services through the sale of its securities. Since these statements were not protected by the anti-SLAPP statute, the Court reversed the part of the trial court’s order granting the anti-SLAPP motion as to the press releases. The Court affirmed the unchallenged portion of the order striking unrelated allegations. View "BioCorRx, Inc. v. VDM Biochemicals, Inc." on Justia Law
Barber Group, Inc. v. New Motor Vehicle Bd.
Barber Group, Inc., doing business as Barber Honda (Barber)—a car dealer in Bakersfield, California—brought an establishment protest to the California New Motor Vehicle Board (Board), challenging a decision by American Honda Motor Co., Inc. (Honda) to open a new dealership about nine miles away. The Board overruled Barber’s protest, and the trial court denied Barber’s petition for administrative mandate challenging the Board’s decision. On appeal, Barber argued the Board prejudicially erred when it: (1) relied on Honda’s dealer performance standards at the protest hearing without first deciding whether those standards were reasonable; (2) permitted the proposed new dealership to exercise a peremptory challenge to an administrative law judge initially assigned to the protest hearing, contrary to notions of fairness and the Board’s own order in the matter; and (3) denied Barber’s request that it take official notice of the effects of the COVID-19 pandemic. Finding no reversible error, the Court of Appeal affirmed. View "Barber Group, Inc. v. New Motor Vehicle Bd." on Justia Law
Ahn v. Stewart Title Guaranty Co.
Plaintiff-appellant Steve Ahn was a sales executive for a title insurer who claimed his sales figures were adversely affected when his employer barred him from using a particular sales pitch to solicit customers from a competitor who was also a proposed corporate merger partner. Ahn’s pitch told prospective clients that after the proposed merger was finalized, they would have no choice but to comply with his company’s higher-cost, less flexible underwriting standards. He attempted to use this pitch to convince these clients to abandon the competitor before the merger. The issue this case presented for the Court of Appeals' consideration was whether Ahn had standing under the California antitrust statute, known as the Cartwright Act, to assert a cause of action. To this, the Court found that Ahn did not claim injury from the alleged anticompetitive aspects of the proposed merging entities' agreement, but rather from conduct that emphasized their competitive differences. "A complaint that he could not lure customers with a pitch about their restricted postmerger options does not constitute an antitrust injury, meaning Ahn lacks standing to sue under the Cartwright Act." The Court's conclusion that Ahn could not demonstrate an antitrust violation affected his derivative economic relations tort claims, both of which required independently wrongful conduct. Concluding the trial court did not err in granting summary judgment, the appellate court therefore affirmed the judgment. View "Ahn v. Stewart Title Guaranty Co." on Justia Law
California v. Maplebear Inc.
The San Diego City Attorney brought an enforcement action under the California Unfair Competition Law, Business and Professions Code sections 17200, et seq. (UCL), on behalf of the People of California against Maplebear Inc. DBA Instacart (Instacart). In their complaint, the State alleged Instacart unlawfully misclassified its employees as independent contractors in order to deny workers employee protections, harming its alleged employees and the public at large through a loss of significant payroll tax revenue, and giving Instacart an unfair advantage against its competitors. In response to the complaint, Instacart brought a motion to compel arbitration of a portion of the City’s action based on its agreements with the individuals it hired (called "Shoppers"). The trial court denied the motion, concluding Instacart failed to meet its burden to show a valid agreement to arbitrate between it and the State. Instacart appealed, arguing that even though the State was not a party to its Shopper agreements, it was bound by its arbitration provision to the extent the State sought injunctive relief and restitution because these remedies were “primarily for the benefit of” the Shoppers. The Court of Appeal rejected this argument and affirmed the trial court’s order. View "California v. Maplebear Inc." on Justia Law
SK Trading International Co. Ltd. v. Superior Court
The state sued several oil and gas firms alleging their participation in a multiyear conspiracy to manipulate the California gasoline market to the detriment of California consumers. The complaint alleged violations of the Cartwright Act, Business and Professions Code section 16720, and the Unfair Competition Law, section 17200.Defendant SK Trading, a South Korean corporation, sought a writ of mandate to compel the trial court to reverse its order denying its motion to quash service of the summons for lack of personal jurisdiction. SK argued that its limited contacts with California were insufficient to support the court’s exercise of specific personal jurisdiction. The court of appeal denied the petition. SK Trading’s contacts with California supported the court’s exercise of specific personal jurisdiction; it purposefully engaged in activities that should have led it to reasonably anticipate being required to defend those activities in California legal proceedings. SK Trading has not established that the assumption of jurisdiction over it is unfair or unreasonable. There was evidence that SK Trading controlled and facilitated key aspects of the alleged conspiracy. The operative facts of the controversy are related to that contact with this state. View "SK Trading International Co. Ltd. v. Superior Court" on Justia Law
California v. Johnson & Johnson
Johnson & Johnson, Ethicon, Inc., and Ethicon US, LLC (collectively, Ethicon) appealed after a trial court levied nearly $344 million in civil penalties against Ethicon for willfully circulating misleading medical device instructions and marketing communications that misstated, minimized, and/or omitted the health risks of Ethicon’s surgically-implantable transvaginal pelvic mesh products. The court found Ethicon committed 153,351 violations of the Unfair Competition Law (UCL), and 121,844 violations of the False Advertising Law (FAL). The court imposed a $1,250 civil penalty for each violation. The Court of Appeal concluded the trial court erred in just one respect: in addition to penalizing Ethicon for its medical device instructions and printed marketing communications, the court penalized Ethicon for its oral marketing communications, specifically, for deceptive statements Ethicon purportedly made during one-on-one conversations with doctors, at Ethicon-sponsored lunch events, and at health fair events. However, there was no evidence of what Ethicon’s employees and agents actually said in any of these oral marketing communications. Therefore, the Court of Appeal concluded substantial evidence did not support the trial court’s factual finding that Ethicon’s oral marketing communications were likely to deceive doctors. Judgment was amended to strike the nearly $42 million in civil penalties that were imposed for these communications. View "California v. Johnson & Johnson" on Justia Law
Curtin Maritime Corp. v. Pacific Dredge etc.
Curtin Maritime Corp. (Curtin) filed suit against its competitor, Pacific Dredge and Construction, LLC (Pacific), asserting one cause of action for violation of the Unfair Competition Law. The parties operated dredging vessels, and competed for contracts awarded by the U.S. Army Corps of Engineers (USACE). In its complaint, Curtin alleged Pacific was ineligible for two contracts it was awarded over Curtin because
its vessel was not “entirely” built in the United States, a violation of the federal Merchant Marine Act of 1920 (commonly referred to as the Jones Act), and Pacific defrauded the Coast Guard in its successful application for certification that the vessel was U.S.-built. These allegations served as the sole basis for Curtin’s UCL claim. In response to the complaint, Pacific brought a motion under Code of Civil Procedure section 425.16 to strike Curtin’s claim, asserting it arose from protected speech and that Curtin could not show a probability of prevailing on the merits of its claim. The trial court agreed with Pacific that the claim arose from protected activity, but concluded Curtin had met its burden at this early stage of litigation to show the claim had minimal merit and denied the motion. Pacific appealed the ruling, contending the trial court erred because the claim was preempted by the Jones Act. After Pacific filed its notice of appeal, Curtin dismissed the underlying lawsuit and moved to dismiss the appeal as moot. Pacific opposed the motion, asserting the appeal was viable since reversal of the trial court’s order would provide Pacific the opportunity to seek attorney fees under the anti-SLAPP statute. The Court of Appeal agreed with Pacific that the appeal was not moot, and dismissal of the appeal was not appropriate. Further, the Court concluded Curtin did not show a probability of prevailing on the merits of its claim. Accordingly, the Court reversed the trial court’s order denying Pacific’s motion to strike, and directed the trial court to reinstate the case and issue an order granting the anti-SLAPP motion and striking Curtin’s claim. View "Curtin Maritime Corp. v. Pacific Dredge etc." on Justia Law
Neurelis, Inc. v. Aquestive Therapeutics, Inc.
Neurelis, Inc. (Neurelis) and Aquestive Therapeutics, Inc. (Aquestive) were pharmaceutical companies developing their own respective means to administer diazepam, a drug used to treat acute repetitive seizures (ARS). Neurelis was further along in the development process than Aquestive. According to Neurelis, Aquestive engaged in a “multi-year, anticompetitive campaign to derail the Food and Drug Administration” (FDA) from approving Neurelis’s new drug. Based on Aquestive’s alleged conduct, Neurelis sued Aquestive for defamation, malicious prosecution, and violation of the unfair competition law. In response, Aquestive brought a special motion to strike the complaint under the anti-SLAPP (Strategic Lawsuit Against Public Participation) statute. The superior court granted in part and denied in part Aquestive’s motion, finding that the defamation cause of action could not withstand the anti-SLAPP challenge. However, the court denied the motion as to Neurelis’s other two causes of action. Aquestive appealed, contending the court erred by failing to strike the malicious prosecution action as well as the claim for a violation of the UCL. Neurelis, in turn, cross-appealed, maintaining that the conduct giving rise to its defamation cause of action was not protected under the anti- SLAPP statute. The Court of Appeal agreed that at least some of the conduct giving rise to the defamation action was covered by the commercial speech exception and not subject to the anti-SLAPP statute. Accordingly, the Court held the superior court erred in granting the anti-SLAPP motion as to the defamation action. Some of this same conduct also gave rise to the UCL claim and was not subject to the anti-SLAPP statute too. However, the Court noted that Neurelis based part of two of its causes of action on Aquestive’s petitioning activity. That activity was protected conduct under the anti-SLAPP statute, and Neurelis did not show a likelihood to prevail on the merits. Thus, allegations relating to this petitioning conduct had to be struck. Finally, the Court found Neurelis did not show a probability of success on the merits regarding its malicious prosecution claim. As such, the Court held that claim should have been struck under the anti-SLAPP statute. View "Neurelis, Inc. v. Aquestive Therapeutics, Inc." on Justia Law