Justia Antitrust & Trade Regulation Opinion Summaries

The appeal is another installment in a series of disputes involving an enforcement action by the Federal Trade Commission (FTC) against a group of fraudulent real estate developers (the Sanctuary Belize enforcement action). Appellants, a group of 14 individual investors and a family-owned corporation moved to intervene in an action brought by others and sought relief from the district court’s judgment. Appellants did not do so until after the district court had entered final judgment and that judgment had been appealed to the Fourth Circuit. Because the Sanctuary Belize enforcement action was already on appeal when Appellants filed their motions, the district court concluded that it lacked jurisdiction to entertain those motions. It held alternatively that the motions should be denied as meritless.   The Fourth Circuit affirmed. The court held that a district court lacks jurisdiction over a motion to intervene while an appeal is pending, regardless of who noted the appeal. Further, the court explained that because the district court correctly determined it lacked jurisdiction on a matter that had been appealed to the Fourth Circuit, the court held that it only has jurisdiction to review that decision, not to entertain the underlying merits. View "Federal Trade Commission v. Yu Lin" on Justia Law

The Supreme Court affirmed in part, reversed in part and vacated in part the judgment of the circuit court holding that Bristol-Myers Squibb and Sanofi had violated Hawai'i's Unfair or Deceptive Acts or Practices law (UDAP) by misleading the public about the safety and efficacy of their anitplatelet drug, Plavix, holding that remand was required.The circuit court concluded that Defendants misled Hawai'i consumers by failing to warn them that Plavix was less effective for poor responders, granted the State's motion for partial summary judgment, and imposed an $834 million penalty. The Supreme Court (1) reversed the circuit court's deceptive acts or practices holding, holding that the summary judgment ruling circumscribed Defendants' ability to present a full defense and affected the penalty award, requiring a new trial; (2) affirmed the holding that Defendants committed unfair acts under UDAP; and (3) held that Defendants' procedural arguments failed. View "State v. Bristol-Myers Squibb Co." on Justia Law

A putative class of over 12 million merchants brought this antitrust action under the Sherman Act against Visa U.S.A. Inc., MasterCard International Inc., and numerous banks that serve as payment-card issuers for those networks. Plaintiffs alleged that Visa and MasterCard adopted and enforced rules and practices relating to payment cards that had the combined effect of injuring merchants by allowing Visa and MasterCard to charge supracompetitive fees (known as “interchange fees”) on each payment card transaction. After nearly fifteen years of litigation, the parties agreed to a settlement of roughly $ 5.6 billion, which was approved by the district court over numerous objections. In so doing, $900,000 in service awards was granted to lead plaintiffs, and roughly $523 million was granted in attorneys’ fees. Appellants are various objectors who argue that the district court erred when it certified the class, approved the settlement, granted service awards and computed attorneys’ fees.   The Second Circuit affirmed in all respects the district court’s orders to the extent they constituted a final judgment, with the exception that the court directed the district court to reduce the service award to class representatives to the extent that its size was increased by time spent in lobbying efforts that would not increase the recovery of damages. The court made no ruling as to how damages should be allocated between branded oil companies and their branded service station franchisees, the reasonableness of the special master’s ultimate findings, or the legality of releasing an as-of-yet hypothetical future claim. View "In re Payment Card Interchange Fee and Merchant Discount Antitrust" on Justia Law

The Horseracing Integrity and Safety Act (HISA) is a federal law that nationalizes governance of the thoroughbred horseracing industry. To formulate detailed rules on an array of topics, HISA empowers a private entity called the Horseracing Integrity and Safety Authority (the “Authority”), which operates under Federal Trade Commission oversight. Soon after its passage, HISA was challenged by various horsemen’s associations, which were later joined by Texas and the state’s racing commission. Plaintiffs argued HISA is facially unconstitutional because it delegates government power to a private entity without sufficient agency supervision. The district court acknowledged that the plaintiffs’ “concerns are legitimate,” that HISA has “unique features,” and that its structure “pushes the boundaries of public-private collaboration.” Nonetheless, the court rejected the private non-delegation challenge.   The Fifth Circuit declared that the HISA is unconstitutional because it violates the private non-delegation doctrine. Accordingly, the court reversed the district court’s decision and remanded. The court explained that while acknowledging the Authority’s “sweeping” power, the district court thought it was balanced by the FTC’s “equally” sweeping oversight. Not so. HISA restricts FTC review of the Authority’s proposed rules. If those rules are “consistent” with HISA’s broad principles, the FTC must approve them. And even if it finds an inconsistency, the FTC can only suggest changes. What’s more, the FTC concedes it cannot review the Authority’s policy choices. The Authority’s power outstrips any private delegation the Supreme Court or the Fifth Circuit has allowed. Thus the court declared HISA facially unconstitutional. View "National Horsemen's Benevolent v. Black" on Justia Law

The Supreme Court denied mandamus relief in this challenge to a district court order reinstating a claim against a cigarette manufacturer under the Nevada Deceptive Trade Practices Act (NDTPA), holding that mandamus relief was not warranted.Plaintiffs brought filed suit against Petitioner, a cigarette manufacturer, alleging civil conspiracy and a violation of the Nevada Deceptive Trade Practices Act (NDTPA). The district court granted Petitioner's motion to dismiss, concluding that Plaintiffs were not consumer fraud victims under Nev. Rev. Stat. 41.600(1) because they never used Petitioner's products. The district court granted the motion to dismiss, concluding that Plaintiffs were not consumer fraud victims under the statute. The district court then granted reconsideration, concluding that the earlier dismissal order was erroneous. Petitioner then brought this petition, arguing that Plaintiffs lacked standing to bring the deceptive trade practices claim against Petitioner because they never used Petitioner's products. The Supreme Court denied relief, holding that the allegations in the complaint were sufficient to survive a motion to dismiss. View "R.J. Reynolds Tobacco Co. v. District Court" on Justia Law

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

The Supreme Court affirmed in part and vacated in part the judgment of the intermediate court of appeals (ICA) affirming the district court's order on motion for summary judgment and judgment, holding that the ICA erred when it affirmed the district court regarding Plaintiff-buyers' claims alleging unfair or deceptive acts or practices (UDAP) remaining after summary judgment.Following the execution of two purchase agreements, Buyers took possession of the vehicle in dispute in this case, which, unbeknownst to Buyers at the time, had a defective clutch assembly. Seller refused to repair the vehicle at no cost to Buyers or to return Buyers' deposit. Buyers brought this action alleging that Seller had engaged in UDAP. The district court granted summary judgment for Seller and then entered judgment against Buyers on all remaining claims. The ICA affirmed. The Supreme Court vacated the lower courts' judgments in part, holding that the district court erred in interpreting Haw. Rev. Stat. 481J-2 to conclude that the warranty for used motor vehicles does not cover a clutch assembly. View "Leong v. Honolulu Ford, Inc. " on Justia Law

Lee, a San Francisco independent optometrist, sued corporate affiliates operating optical retail stores in California that offer competing eyeglass products and optometry services, on behalf of a putative class of independent optometrists. He alleged that the chain stores operated in a manner that violated state laws regulating the practice of optometry and the dispensing of optical products, constituting unfair and/or unlawful business practices in violation of California’s Unfair Competition Law (UCL). He claimed that “adults are, on average, willing to drive more than 20 miles for routine medical care” and that “[i]f patients had not been able to visit illegal optometry locations, a statistically significant and statistically ascertainable percentage of such patients would have instead visited at least one member of the Class. The complaint sought a judgment “[o]rdering the restitution/disgorgement of all sums obtained by Defendants through improper taking of market share from Class Members through violations of the UCL.”The court of appeal affirmed the suit's dismissal. Compensation for lost market share is not a remedy authorized by the UCL, because it does not constitute restitution, the only form of nonpunitive monetary recovery authorized under the UCL. Compensation for expected but unearned future income to which the plaintiff has no legal entitlement is not recoverable as restitution under the UCL, regardless of how it is characterized. View "Lee v. Luxottica Retail North America, Inc." on Justia Law

The Supreme Court held that the Federal Trade Commission's "single document rule," promulgated under the Magnuson-Moss Warranty Act, 15 U.S.C. 2301-2312, does not require the disclosure of a binding arbitration agreement.Petitioner bought a truck from Respondent. The parties' retail purchase order included a binding arbitration agreement for any dispute related to the truck's purchase. Petitioner eventually filed suit under the Act, and Respondent successfully moved to compel arbitration. Petitioner appealed, arguing that the arbitration agreement was unenforceable because it was not disclosed in a single document with other warranty terms, in violation of the Federal Trade Commission's (FTC) single document rule. The Fifth District affirmed, holding that a binding arbitration agreement is not an item covered by the single document rule's disclosure requirements. The Supreme Court approved the Fifth District's decision, holding that the existence of a binding arbitration agreement is not among the disclosures required by the FTC's single document rule. View "Krol v. FCA US, LLC" on Justia Law

The Supreme Court considered a question certified by the circuit court and answered that the deceptive trade practices provisions of the West Virginia Consumer Credit and Protection Act (the Act), W. Va. Code 46A-6-101 to -106, do not apply to educational and recreational services offered by a religious institution.The Attorney General sued the Diocese of Wheeling-Charleston and Michael Bransfield, in his capacity as former bishop of the Diocese, alleging (1) the Diocese knowingly employed persons who admitted to sexually abusing others or who were credibly accused of sexual abuse at its camps and schools, and (2) by misrepresenting or hiding that danger, the Diocese violated the deceptive practices provisions of the West Virginia Consumer Credit and Protection Act. The circuit court dismissed the Attorney General's claims but stayed its order and certified a question of law to the Supreme Court. The Supreme Court answered the question in the negative, holding that the deceptive practices provisions of the Act do not apply to educational and recreational services offered by a religious institution. View "State ex rel. Morrisey v. Diocese of Wheeling-Charleston" on Justia Law