Justia Antitrust & Trade Regulation Opinion Summaries

Articles Posted in Constitutional Law
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For nearly 30 years, Chicago Studio operated the only film studio in Chicago. In 2010, Cinespace opened a new studio. Cinespace rapidly expanded its studio to include 26 more stages and 24 times more floor space than Chicago Studio’s facility. Chicago Studio subsequently failed to attract business and stopped making a profit. Chicago Studio sued the Illinois Department of Commerce and Economic Opportunity, Illinois Film Office, and Steinberg (state actors responsible for promoting the Illinois film industry), alleging that the Defendants unlawfully steered state incentives and business to Cinespace in violation of the Sherman Act and equal protection and due process protections. The Seventh Circuit affirmed the rejection of those claims. The Sherman Act claim was properly dismissed because Chicago Studio failed to adequately plead an antitrust injury but merely alleged injuries to Chicago Studio, not to competition. The complaint does not plausibly allege that Defendants conspired to monopolize or attempted to monopolize the Chicago market for operating film studios. The district court properly granted summary judgment on the equal protection claim. Chicago Studio and Cinespace are not similarly situated, and there was a rational basis for Steinberg’s conduct. Cinespace consistently reached out to Steinberg for marketing support; Chicago Studio rarely did and it was rational for Steinberg to promote the studios based on production needs. View "Chicago Studio Rental, Inc. v. Illinois Department of Commerce & Economic Opportunity" on Justia Law

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In 2005 Paramount leased a parcel of highway-adjacent property in Bellwood, Illinois, planning to erect a billboard. Paramount never applied for a local permit. When Bellwood enacted a ban on new billboard permits in 2009, Paramount lost the opportunity to build its sign. Paramount later sought to take advantage of an exception to the ban for village-owned property, offering to lease a different parcel of highway-adjacent property directly from Bellwood. Bellwood accepted an offer from Image, one of Paramount’s competitors. Paramount sued Bellwood and Image, alleging First Amendment, equal-protection, due-process, Sherman Act, and state-law violations. The Seventh Circuit affirmed summary judgment in favor of the defendants. Paramount lost its lease while the suit was pending, which mooted its claim for injunctive relief from the sign ban. The claim for damages was time-barred, except for an alleged equal-protection violation. That claim failed because Paramount was not similarly situated to Image; Paramount offered Bellwood $1,140,000 in increasing installments over 40 years while Image offered a lump sum of $800,000. Bellwood and Image are immune from Paramount’s antitrust claims. The court did not consider whether a market-participant exception to that immunity exists because Paramount failed to support its antitrust claims. View "Paramount Media Group, Inc. v. Village of Bellwood" on Justia Law

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Schaumburg’s 2016 ordinance requires commercial buildings to send fire‐alarm signals directly to the local 911 dispatch center, NWCDS, which has an exclusive arrangement with Tyco. To send signals to NWCDS, local buildings must use Tyco equipment. Schaumburg’s notice of the ordinance referred to connection through Tyco and stated that accounts would be charged $81 per month to rent Tyco’s radio transmitters and for the monitoring service. Tyco pays NWCDS an administrative fee of $23 per month for each account it connects to the NWCDS equipment. Tyco’s competitors filed suit charging violations of constitutional, antitrust, and state tort law. The district court dismissed the case. The Seventh Circuit reversed the dismissal of the Contracts Clause claim against Schaumburg. The complaint alleges a potentially significant impairment, the early cancellation of the competitors’ contracts, and Schaumburg’s self‐interest, $300,000 it stands to gain. The court otherwise affirmed, noting that entities not alleged to have taken legislative action cannot be liable under the Contracts Clause. WIth respect to constitutional claims, the court noted the government’s important interest in fire safety. Rejecting antitrust claims, the court stated that the complaint did not allege a prohibited agreement, as opposed to an independent, legislative decision. View "Alarm Detection Systems, Inc. v. Village of Schaumburg" on Justia Law

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Four Illinois Villages passed ordinances that require commercial buildings to send fire-alarm signals directly to the local 911 dispatch center through one alarm-system provider, Tyco, which services the area pursuant to an exclusive agreement with the dispatch center. An alarm-system competitor, ADS, sued, citing the Illinois Fire Protection District Act, the Sherman Act, and the Fourteenth Amendment. The district court granted the defendants summary judgment. The Seventh Circuit affirmed. The Sherman Act claims fail because they are premised on the unilateral actions of the Villages, which ADS did not sue. The court noted that ADS can compete for the contract now held by Tyco. ADS’s substantive due process claim asserted that the district acted arbitrarily and irrationally by going with an exclusive provider rather than entertaining ADS’s efforts at alternative, methods. The ordinances effectively require the district to work with an exclusive provider and there was thus a rational basis to choose an exclusive provider. View "Alarm Detection Systems, Inc. v. Orland Fire Protection District" on Justia Law

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Veritext filed suit challenging the Board's enforcement of La. Code Civ. Proc. Ann. art. 1434(A)(1), which provides that depositions shall be taken before an officer authorized to administer oaths, who is not an employee or attorney of any of the parties or otherwise interested in the outcome of the case. In 2012, the Board began enforcing Article 1434 more aggressively, declaring that the law prohibits all contracts between court reporters and party litigants, including volume-based discounts and concessions to frequent customers.The Fifth Circuit held that the district court was correct to dismiss all of the constitutional claims brought by Veritext as a matter of Supreme Court precedent. The court explained that Louisiana's interest in the integrity of its court reporting system was legally sufficient, and Veritext failed to clearly identify a burden on interstate commerce imposed by the Board's enforcement of Article 1434 that exceeds its local benefits. However, the court held that Veritext pled facts sufficient to support a finding that the Board's conduct did restrain trade and remanded so that Veritext could proceed on its Sherman Act claim. View "Veritext Corp. v. Bonin" on Justia Law

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Defendant Samer Shami was charged with violating the Tobacco Products Tax Act (TPTA) for possessing, acquiring, transporting, or offering for sale tobacco products with an aggregate wholesale price of $250 or more as a manufacturer without a license in violation of MCL 205.423(1) and MCL 205.428(3). Defendant was the manager of Sam Molasses, a retail tobacco store owned by Sam Molasses, LLC. Investigation revealed that the labels on several plastics tubs of tobacco in the store’s inventory did not match those listed on the invoices from tobacco distributors. Defendant explained that he had mixed two or more flavors of tobacco to create a new “special blend,” which was then placed in the plastic tubs and relabeled. Defendant also explained that he repackaged bulk tobacco from a particular distributor by taking the packets of tobacco out of the boxes, inserting them into metal tins, and placing his own label on the tins, which were then sold at the store. The issue presented in this case for the Michigan Supreme Court's review was whether an individual who combined two different tobacco products to create a new blended product or repackages bulk tobacco into smaller containers with a new label was considered to be a manufacturer of a tobacco product and must have the requisite license. The Court of Appeals held that, in either instance, such a person was a manufacturer. According to that Court, manufacturing simply requires a change from the original state of an object or material into a state that makes it more suitable for its intended use, and a person who changes either the form or delivery method of tobacco constitutes a manufacturer for purposes of the TPTA. Although the Supreme Court agreed with the Court of Appeals’ conclusion that an individual combining two different tobacco products to create a blended product, relabeling that new mixture, and making it available for sale to the public is a manufacturer of a tobacco product, the Court disagreed with the Court of Appeals that merely repackaging bulk tobacco into smaller containers renders an individual a manufacturer under the TPTA. Therefore, the Court affirmed in part and reversed in part the judgment of the Court of Appeals. This case was remanded to the Circuit Court for further proceedings. View "Michigan v. Shami" on Justia Law

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Defendant Samer Shami was charged with violating the Tobacco Products Tax Act (TPTA) for possessing, acquiring, transporting, or offering for sale tobacco products with an aggregate wholesale price of $250 or more as a manufacturer without a license in violation of MCL 205.423(1) and MCL 205.428(3). Defendant was the manager of Sam Molasses, a retail tobacco store owned by Sam Molasses, LLC. Investigation revealed that the labels on several plastics tubs of tobacco in the store’s inventory did not match those listed on the invoices from tobacco distributors. Defendant explained that he had mixed two or more flavors of tobacco to create a new “special blend,” which was then placed in the plastic tubs and relabeled. Defendant also explained that he repackaged bulk tobacco from a particular distributor by taking the packets of tobacco out of the boxes, inserting them into metal tins, and placing his own label on the tins, which were then sold at the store. The issue presented in this case for the Michigan Supreme Court's review was whether an individual who combined two different tobacco products to create a new blended product or repackages bulk tobacco into smaller containers with a new label was considered to be a manufacturer of a tobacco product and must have the requisite license. The Court of Appeals held that, in either instance, such a person was a manufacturer. According to that Court, manufacturing simply requires a change from the original state of an object or material into a state that makes it more suitable for its intended use, and a person who changes either the form or delivery method of tobacco constitutes a manufacturer for purposes of the TPTA. Although the Supreme Court agreed with the Court of Appeals’ conclusion that an individual combining two different tobacco products to create a blended product, relabeling that new mixture, and making it available for sale to the public is a manufacturer of a tobacco product, the Court disagreed with the Court of Appeals that merely repackaging bulk tobacco into smaller containers renders an individual a manufacturer under the TPTA. Therefore, the Court affirmed in part and reversed in part the judgment of the Court of Appeals. This case was remanded to the Circuit Court for further proceedings. View "Michigan v. Shami" on Justia Law

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In 2017, Maryland enacted “An Act concerning Public Health – Essential Off-Patent or Generic Drugs – Price Gouging – Prohibition.” The Act, Md. Code, Health–General 2-802(a), prohibits manufacturers or wholesale distributors from “engag[ing] in price gouging in the sale of an essential off-patent or generic drug,” defines “price gouging” as “an unconscionable increase in the price of a prescription drug,” and “unconscionable increase” as “excessive and not justified by the cost of producing the drug or the cost of appropriate expansion of access to the drug to promote public health” that results in consumers having no meaningful choice about whether to purchase the drug at an excessive price due to the drug’s importance to their health and insufficient competition. The “essential” medications are “made available for sale in [Maryland]” and either appear on the Model List of Essential Medicines most recently adopted by the World Health Organization or are “designated . . . as an essential medicine due to [their] efficacy in treating a life-threatening health condition or a chronic health condition that substantially impairs an individual’s ability to engage in activities of daily living.” The Fourth Circuit reversed the dismissal of a “dormant commerce clause” challenge to the Act, finding that it directly regulates the price of transactions that occur outside Maryland. View "Association for Accessible Medicine v. Frosh" on Justia Law

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This case arose from an allegedly forged home-equity loan. Plaintiff sued the lenders, bringing several claims, including statutory fraud and violations of the Texas Finance Code and Texas Deceptive Trade Practices Act. The trial court granted summary judgment for the lenders without stating its reasons. The court of appeals affirmed. The Supreme Court affirmed in part and reversed and remanded in part, holding that the court of appeals (1) properly affirmed summary judgment on Plaintiff’s constitutional forfeiture claim; and (2) erred in holding that Plaintiff’s remaining claims were barred on statute of limitations and waiver grounds. View "Kyle v. Strasburger" on Justia Law

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From 1992-2013, a Milwaukee ordinance limited taxicab permits to those in existence on January 1, 1992 that were renewed. The ordinance lowered the ceiling over time by virtue of the nonrenewals. By 2013 the number of permits had diminished from 370 to 320. The price of permits on the open market soared as high as $150,000. In 2013, after a successful equal protection and substantive due process challenge, the city conducted a lottery, which attracted 1700 permit seekers. Milwaukee had only one taxicab per 1850 city residents, a much lower ratio than comparable cities. The city eliminated the cap in 2014. In the meantime, “ridesharing” companies such as Uber, had diminished the profitability of the existing taxi companies. Plaintiffs, cab companies, alleged that the increased number of permits has taken property without compensation. The Seventh Circuit affirmed dismissal. The taxi companies were aware that there was no guarantee that the ordinance would remain in force indefinitely, and that, were it repealed, they would be faced with new competition that would threaten their profits. The ordinance gave them no property right; its repeal invaded no right conferred by the Constitution. The court similarly rejected state-law claims of breach of contract, promissory estoppel, and equitable estoppel. View "Joe Sanfelippo Cabs, Inc. v. City of Milwaukee" on Justia Law