Justia Antitrust & Trade Regulation Opinion Summaries

Articles Posted in Constitutional Law
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Appellants (the “Bullion Traders”) are a collection of in-state and out-of-state precious metal traders or representatives thereof challenging the constitutionality of Minnesota Statutes Chapter 80G, which regulates bullion transactions. The Bullion Traders argue the statute violates the dormant Commerce Clause.   The Eighth Circuit reversed the district court’s partial grant of the Commissioner’s motion to dismiss and the district court’s partial denial of the Bullion Traders’ motion for summary judgment. On remand, the court left to the district court to decide in the first instance whether the extraterritorial provisions of Chapter 80G, as amended, are severable from the remainder of the statute.   The court explained that certain in-state obligations, such as a registration fee for traders doing business in Minnesota, even when calculated considering out-of-state transactions, do not control out-of-state commerce. However, Chapter 80G does not merely burden in-state dealers with a monetary obligation that considers both in-state and out-of-state transactions. Rather, it prohibits an in-state dealer who meets the $25,000 threshold from conducting any bullion transaction, including out-of-state transactions, without first registering with the Commissioner. View "Thomas Styczinski v. Grace Arnold" on Justia Law

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Acting under the Export Control Reform Act of 2018 (ECRA) the Department of Commerce has maintained a so-called Entity List to restrict designated foreign parties from receiving United States exports.   Plaintiff, Changji Esquel Textile Co, operates a spinning mill in Xinjiang. The United States has determined that China abuses the human rights of Uyghurs and other religious or ethnic minorities in Xinjiang, including imprisonment and forced labor. Changji and its parent company filed a lawsuit alleging that the Department, in adding Changji to the Entity List, violated ECRA and its implementing regulations, the APA, and the Due Process Clause. They moved for a preliminary injunction on the theory that the alleged ECRA and regulatory violations were ultra vires. The district court denied the motion on the ground that Plaintiffs are not likely to succeed on this claim.   The DC Circuit affirmed. The court explained that to prevail on an ultra vires claim, Plaintiff must establish three things: “(i) the statutory preclusion of review is implied rather than express; (ii) there is no alternative procedure for review of the statutory claim; and (iii) the agency plainly acts in excess of its delegated powers and contrary to a specific prohibition in the statute that is clear and mandatory.   The court explained that the canons invoked by Plaintiffs can resolve statutory ambiguity in close cases, but they do not allow the court to discern any clear and mandatory prohibition on adding entities to the List for human-rights abuses, particularly given the breadth of section 4813(a)(16) and the deference owed to the Executive Branch in matters of foreign affairs. View "Changji Esquel Textile Co. Ltd. v. Gina Raimondo" on Justia Law

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Federal Express Corporation—commonly known as FedEx—challenged the Department of Commerce’s authority to hold it strictly liable for aiding and abetting violations of the 2018 Export Controls Act.   The DC Circuit affirmed the district court’s dismissal of FedEx’s complaint, holding that Commerce’s regulation, 15 C.F.R. Section 764.2(b), and its strict-liability interpretation of it are not ultra vires. The court concluded that the statutory text, circuit precedent, and deference to the Executive Branch in matters of national security and foreign affairs all support Commerce’s interpretation.   The court explained that the first barrier to FedEx’s ultra vires challenge is that Commerce’s interpretation of its regulation to allow for strict liability in civil enforcement actions does not contravene any clear statutory command. Next, FedEx’s ultra vires argument runs into a second headwind—relevant circuit precedent. The court wrote that given that the DC circuit has already specifically held that Commerce can attach strict liability to the first term in the string of verbs “cause or aid, abet, counsel, command, induce, procure, permit, or approve[,]” 15 C.F.R. Section 764.2(b), there is no basis for the court to hold that Commerce acted ultra vires in attaching that same strict-liability reach to the next two verbs. Further, since FedEx has not shown that its asserted mens rea requirement for aiding and abetting liability was truly settled in the common law at the time the statute was promulgated, or that its common-law meaning fits within this specialized national-security scheme, FedEx’s argument does not come close to satisfying the strict standard for an ultra vires claim. View "Federal Express Corporation v. U.S. Department of Commerce" on Justia Law

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The SEC brought an enforcement action within the agency against Petitioners for securities fraud. An SEC administrative law judge adjudged Petitioners liable and ordered various remedies, and the SEC affirmed on appeal over several constitutional arguments that Petitioners raised.   The Fifth Circuit held that (1) the SEC’s in-house adjudication of Petitioners’ case violated their Seventh Amendment right to a jury trial; (2) Congress unconstitutionally delegated legislative power to the SEC by failing to provide an intelligible principle by which the SEC would exercise the delegated power, in violation of Article I’s vesting of “all” legislative power in Congress; and (3) statutory removal restrictions on SEC ALJs violate the Take Care Clause of Article II.   The court reasoned that the Seventh Amendment guarantees Petitioners a jury trial because the SEC’s enforcement action is akin to traditional actions at law to which the jury-trial right attaches. Further, the SEC proceedings at issue suffered from another constitutional infirmity: the statutory removal restrictions for SEC ALJs are unconstitutional. View "Jarkesy v. SEC" on Justia Law

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A dentist, his professional corporation, and a teledentistry company (collectively "Plaintiffs") alleged that the Dental Board of California conspired to harass them with unfounded investigations. Plaintiffs alleged that the harassment arose after they developed an online service model for patients.   The Ninth Circuit affirmed the district court’s dismissal of the Plaintiffs’ claims under the Dormant Commerce Clause. The court reasoned that Plaintiffs sufficiently alleged Article III standing because they alleged an injury that was traceable to Defendants’ challenged conduct. Further, the court found that Plaintiffs sufficiently alleged anticompetitive concerted action. The court rejected the proposition that regulatory board members and employees cannot form an anticompetitive conspiracy.   Further, the court affirmed the district court’s dismissal of the Plaintiffs’ claim that Defendants subjected them to disparate treatment in violation of the Equal Protection Clause. The court explained that a class-of-one plaintiff must be similarly situated to the proposed comparator. Here, Plaintiffs did not meet this standard because instead of claiming they stood the same as others, they touted their differences.   The court did not review the lower court’s denial of state-action immunity. View "JEFFREY SULITZER V. JOSEPH TIPPINS" on Justia Law

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The SmileDirect parties developed an online service model for patients to access certain orthodontic services; they allege the defendants (members and employees of the California Dental Board) conspired to harass them with unfounded investigations and an intimidation campaign, to drive them out of the market. The district court dismissed the suit. The Ninth Circuit reversed with respect to certain Sherman Act antitrust claims. The SmileDirect parties sufficiently pled Article III standing; they alleged an injury in fact that was fairly traceable to defendants’ challenged conduct and was judicially redressable. They sufficiently alleged anticompetitive concerted action, or an agreement to restrain trade. The court rejected an argument that regulatory board members and employees cannot form an anticompetitive conspiracy when acting within their regulatory authority.The court affirmed the dismissal of a claim under the Dormant Commerce Clause, which prohibits states from discriminating against interstate commerce, and of a "disparate treatment" Equal Protection Clause claim. To plead a class-of-one equal protection claim, plaintiffs must allege that they have been intentionally treated differently from others similarly situated and that there is no rational basis for the difference in treatment. A class-of-one plaintiff must be similarly situated to the proposed comparator in all material respects. Rather than claiming that they stood on the same footing as others, the SmileDirect parties argued their uniqueness. View "Sulitzer v. Tippins" on Justia Law

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The district court dismissed a suit alleging that a price plan adopted by Salt River Project Agricultural Improvement and Power District (SRP) unlawfully discriminated against customers with solar-energy systems and was designed to stifle competition in the electricity market.The Ninth Circuit affirmed in part, applying Arizona’s notice-of-claim statute, which provides that persons who have claims against a public entity, such as SRP, must file with the entity a claim containing a specific amount for which the claim can be settled.The district court erred in dismissing plaintiffs’ equal protection claim as barred by Arizona’s two-year statute of limitations. The claim did not accrue when SRP approved the price plan, but rather when plaintiffs received a bill under the new rate structure. The plaintiffs alleged a series of violations, each of which gave rise to a new claim and began a new limitations period.Monopolization and attempted monopolization claims under the Sherman Act were not barred by the filed-rate doctrine, which bars individuals from asserting civil antitrust challenges to an entity’s agency-approved rates. SRP was not entitled to state-action immunity because Arizona had not articulated a policy to displace competition.The Local Government Antitrust Act shielded SRP from federal antitrust damages because SRP is a special functioning governmental unit but the Act does not bar declaratory or injunctive relief. The district court erred in concluding that plaintiffs failed to adequately allege antitrust injury based on the court’s finding that the price plan actually encouraged competition in alternative energy investment. View "Ellis v. Salt River Project Agricultural Improvement and Power District" on Justia Law

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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

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After VA Medical Center selected Metro Health's bid on the condition that Metro Health could obtain a permit from the City to operate emergency medical services (EMS) vehicles, the City refused to grant Metro Health a permit. Metro Health then filed suit against the City and RAA, alleging violations of the Sherman Antitrust Act and the Supremacy Clause of the United States Constitution.The Fourth Circuit affirmed the district court's dismissal of the case with prejudice, agreeing with the district court that defendants were entitled to immunity from federal antitrust liability where they acted pursuant to a clearly articulated state policy. Furthermore, federal law does not preempt their actions. The court rejected Metro Health's contention that by thwarting the VA Medical Center's competitive bidding process, the City and RAA have violated the Supremacy Clause. The court explained that, where, as here, a federal agency, of its own volition, imposes a contract condition consistent with federal law, the Supremacy Clause is not implicated. View "Western Star Hospital Authority, Inc. v. City of Richmond" on Justia Law

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In this dispute in which Plaintiffs sought reimbursement for healthcare costs based upon claims for restraint of trade and monopolization pursuant to N.C. Gen. Stat. Chapter 75 and N.C. Const. art. I, 34, the Supreme Court affirmed in part and reversed in part the order of the trial court deciding issues arising from the Charlotte-Mecklenburg Hospital Authority's motion for judgment on the pleadings, holding that the trial court erred in part.Plaintiffs were a group of current and former North Carolina residents who were covered under the commercial health insurance obtained through the Hospital Authority, a non-profit corporation providing healthcare services with a principal place of business in Charlotte. The trial court granted the Hospital Authority's motion for judgment on the pleadings with respect to Plaintiffs' restraint of trade and monopolization claims but denied the motion with respect to Plaintiffs' monopolization claim. The Supreme Court affirmed in part and reversed in part, holding that the trial court (1) did not err in granting judgment on the pleadings with respect to Plaintiffs' Chapter 75 restraint of trade and monopolization claims; but (2) erred by denying the motion for judgment on the pleadings with respect to Plaintiffs' claim pursuant to article I, section 34. View "DiCesare v. Charlotte-Mecklenburg Hosp. Auth" on Justia Law