Justia Antitrust & Trade Regulation Opinion SummariesArticles Posted in U.S. 3rd Circuit Court of Appeals
In Re: Mushroom Direct Purchaser Antitrust Litigation
In 2000, mushroom farmers and related entities formed a cooperative (EMMC) and established minimum pricing policies and programs to improve their market position. EMMC purchased properties and resold them with deed restrictions that prohibited mushroom farming. The Department of Justice invesigated and concluded that EMMC was an agricultural cooperative organized pursuant to the Capper- Volstead Act, 7 U.S.C. 291-92. In 2005, EMMC and DOJ entered into a consent judgment that required EMMC to nullify deed restrictions and prohibited it from imposing restrictions for 10 years. Soon after the consent judgment, private parties brought suits, alleging conspiracy in violation of the Sherman Act and Clayton Act. (15 U.S.C. 1, 2, 18). Unlike the DOJ action, the consolidated class action involved both the property purchase program and minimum pricing policies. The district court held that EMMC was not a proper agricultural cooperative under the Act because one member was not technically a grower of agricultural produce and that the uncontested facts revealed an impermissible price-fixing conspiracy with a non-member mushroom distribution company. The Third Circuit dismissed an appeal, holding that it lacked jurisdiction to hear the question on interlocutory appeal. View "In Re: Mushroom Direct Purchaser Antitrust Litigation" on Justia Law
Animal Science Prods. Inc. v. China Minmetals Corp.
Plaintiffs, domestic purchasers of magnesite, alleged that defendants, Chinese exporters, engaged in a conspiracy to fix the price of magnesite in violation of the Clayton Act, 15 U.S.C. 4, 16, predicated on alleged violation of the Sherman Act, 15 U.S.C. 1. The district court dismissed, holding that it lacked subject matter jurisdiction under the Foreign Trade Antitrust Improvements Act, 15 U.S.C. 6a. The Third Circuit vacated. FTAIA states that the Sherman Act "shall not apply to conduct involving trade or commerce . . . with foreign nations" with two exceptions. The Sherman Act does apply if defendants were involved in "import trade or import commerce" or if defendants' "conduct has a direct, substantial, and reasonably foreseeable effect" on domestic commerce, import commerce, or certain export commerce and that conduct "gives rise" to a Sherman Act claim. FTAIA imposes a substantive merits limitation, not a jurisdictional bar. On remand, if the court addresses the "import trade" exception, it must assess whether plaintiffs adequately allege that defendants' conduct is directed at a U.S. import market and not solely whether defendants physically imported goods. If the court assesses the "effects exception" it must determine whether the alleged domestic effect would have been evident to a reasonable person making practical business judgments. View "Animal Science Prods. Inc. v. China Minmetals Corp." on Justia Law
Pernod Ricard USA LLC v. Bacardi U.S.A. Inc.
Two multi-national distilleries have engaged in a lengthy dispute over the use of the words "Havana Club" to sell rum in the United States. Most recently the district held that defendant's use of the words on its label is not a false advertisement of the rum’s geographic origin under Section 43(a)(1)(B) of the Lanham Act, 15 U.S.C. 1125(a)(1)(B). The Third Circuit affirmed, holding that no reasonable interpretation of the label as a whole, which includes a statement that it is "distilled and crafted in Puerto Rico," could lead a reasonable consumer to a false or misleading conclusion. The court declined to address whether the term is subject to trademark protection. View "Pernod Ricard USA LLC v. Bacardi U.S.A. Inc." on Justia Law
Warren Gen. Hosp. v. Amgen, Inc.
The hospital filed the proposed class action, alleging that the pharmaceutical company violate antitrust "tying" prohibitions by using its knowledge of insurance reimbursement rates to leverage its market power in one market—White Blood Cell Growth Factor drugs—to impair competition in the market for Red Blood Cell Growth Factor drugs (Sherman Act, 15 U.S.C. 1 and Clayton Act, 15 U.S.C. 14, 15). The district court dismissed on the ground that the hospital was not a "direct purchaser." The Sixth Circuit affirmed. The mechanics of the hospital's contracts for acquiring the drugs show it to be an indirect purchaser that placed orders and received the drugs through a middleman, despite some direct communications between the manufacturer and the hospital and a rebate program between the two. The court rejected the hospital's claim that it should be granted standing as the first party in the distribution chain to suffer injury from the anti-competitive conduct. View "Warren Gen. Hosp. v. Amgen, Inc." on Justia Law