Justia Antitrust & Trade Regulation Opinion Summaries

Several plaintiffs, including an individual, an investment fund, and a limited partnership, engaged in trading derivatives tied to the Sterling London Interbank Offered Rate (Sterling LIBOR). They alleged that a group of major banks conspired to manipulate Sterling LIBOR for their own trading advantage. The plaintiffs claimed that the banks coordinated false submissions to the rate-setting process, sometimes inflating and sometimes deflating the benchmark, which in turn affected the value of Sterling LIBOR-based derivatives. The plaintiffs asserted that this manipulation was orchestrated through internal and external communications among banks and with the help of inter-dealer brokers.The United States District Court for the Southern District of New York reviewed the case and dismissed the plaintiffs’ claims under the Sherman Act and the Commodity Exchange Act (CEA). The district court found that two plaintiffs lacked antitrust standing because they were not “efficient enforcers” and had not transacted directly with the defendants, resulting in only indirect and remote damages. The court also determined that the third plaintiff, a limited partnership, lacked the capacity to sue and had not properly assigned its claims to a substitute entity. Additionally, the court found that one plaintiff failed to adequately plead specific intent for the CEA claims.On appeal, the United States Court of Appeals for the Second Circuit affirmed the district court’s dismissal, but on a narrower ground. The Second Circuit held that none of the plaintiffs plausibly alleged actual injury under either the Sherman Act or the CEA. The court explained that because the alleged manipulation was multidirectional—sometimes raising and sometimes lowering Sterling LIBOR—the plaintiffs did not show that they suffered net harm as a result of the defendants’ conduct. Without specific allegations of transactions where they were harmed by the manipulation, the plaintiffs’ claims could not proceed. The judgment of dismissal was affirmed, and the cross-appeal was dismissed as moot. View "Sonterra Cap. Master Fund, Ltd. v. UBS AG" on Justia Law

A group of plaintiffs, including an individual, a retirement fund, and several investment funds, traded derivatives based on the Euro Interbank Offered Rate (Euribor). They alleged that a group of banks and brokers conspired to manipulate Euribor, which affected the pricing of various over-the-counter (OTC) derivatives, such as FX forwards, interest-rate swaps, and forward rate agreements. The alleged conduct included coordinated false submissions to set Euribor at artificial levels, collusion among banks and brokers, and structural changes within banks to facilitate manipulation. Plaintiffs claimed this manipulation harmed them by distorting the prices of their Euribor-based derivative transactions.The United States District Court for the Southern District of New York dismissed the plaintiffs’ claims under the Sherman Act, the Commodity Exchange Act (CEA), the Racketeer Influenced and Corrupt Organizations Act (RICO), and state common law, finding it lacked personal jurisdiction over all defendants. The district court also found that the RICO claims were based on extraterritorial conduct and did not meet the particularity requirements of Federal Rule of Civil Procedure 9(b). It declined to exercise pendent personal jurisdiction over state-law claims.The United States Court of Appeals for the Second Circuit reviewed the case. It agreed that conspiracy-based personal jurisdiction was not established but held that two plaintiffs—Frontpoint Australian Opportunities Trust and the California State Teachers’ Retirement System—had established specific personal jurisdiction over UBS AG and The Royal Bank of Scotland PLC for Sherman Act and RICO claims related to OTC Euribor derivative transactions in the United States. The court affirmed dismissal of the RICO claims for lack of particularity, but held that the Sherman Act claims were sufficiently pleaded. It vacated the district court’s refusal to exercise pendent personal jurisdiction over state-law claims and remanded for further proceedings. The judgment was affirmed in part, reversed in part, and vacated in part. View "Sullivan v. UBS AG" on Justia Law

A group of federally funded health centers and clinics serving low-income populations alleged that several major drug manufacturers conspired to restrict drug discounts offered through the federal Section 340B Drug Discount Program. The plaintiffs claimed that, beginning in 2020, the manufacturers coordinated efforts to limit the availability of discounted diabetes medications at contract pharmacies, resulting in significant financial losses for safety-net providers. The manufacturers, who are direct competitors in the diabetes drug market, allegedly implemented similar policies within a short timeframe, each restricting or eliminating the discounts in ways that had a comparable anticompetitive effect.After the plaintiffs filed a class action complaint, the United States District Court for the Western District of New York dismissed their first amended complaint and denied leave to file a second amended complaint. The district court concluded that the plaintiffs failed to allege sufficient parallel conduct or factual circumstances suggesting a conspiracy, and thus found the proposed amendments futile.The United States Court of Appeals for the Second Circuit reviewed the case and applied a de novo standard to both the dismissal and the denial of leave to amend. The Second Circuit held that the plaintiffs’ proposed second amended complaint alleged enough facts to plausibly infer a horizontal price-fixing conspiracy under Section 1 of the Sherman Act. The court found that the complaint sufficiently pled both parallel conduct and “plus factors” such as a common motive to conspire, actions against individual economic self-interest, and a high level of interfirm communications. The court also determined that Supreme Court precedents cited by the defendants did not bar the plaintiffs’ claims. Accordingly, the Second Circuit vacated the district court’s judgment and remanded the case with instructions to allow the plaintiffs to file their second amended complaint. View "Mosaic Health, Inc. v. Sanofi-Aventis U.S., LLC" on Justia Law

Plaintiffs, representing a putative class, filed an antitrust lawsuit against Grubhub Inc., Postmates Inc., and Uber Technologies, Inc. (collectively, "Defendants"). The plaintiffs alleged that the defendants violated Section 1 of the Sherman Antitrust Act and its state analogues by entering into no-price competition clauses (NPCCs) with restaurants, which prevented the restaurants from offering lower prices through other channels. The plaintiffs claimed that these NPCCs led to artificially high prices for restaurant meals. The class included customers who purchased takeout or delivery directly from restaurants subject to NPCCs, customers who dined in at such restaurants, and customers who used non-defendant platforms to purchase from these restaurants.The United States District Court for the Southern District of New York denied the defendants' motion to compel arbitration. The court held that the scope of the arbitration clauses was an issue for the court to decide and that the clauses did not apply to the plaintiffs' claims as they lacked a nexus to the defendants' Terms of Use. The court also found that the plaintiffs had not agreed to Grubhub's Terms of Use.The United States Court of Appeals for the Second Circuit reviewed the case. The court affirmed the district court's decision in part, ruling that the question of arbitrability for the plaintiffs' claims against Grubhub is for the court to decide and that Grubhub's arbitration clause does not apply to the plaintiffs' antitrust claims. However, the court reversed the district court's decision in part, finding that Grubhub had established an agreement to arbitrate with the plaintiffs and that the threshold question for the plaintiffs' claims against Uber and Postmates is for the arbitrator to decide. The case was remanded for further proceedings consistent with this opinion. View "Davitashvili v. Grubhub" on Justia Law

Plaintiffs filed a class action alleging that Takeda prevented competitors from timely marketing a generic version of Takeda’s diabetes drug ACTOS by falsely describing two patents to the FDA. Plaintiffs claimed that these false patent descriptions channeled Takeda’s competitors into a generic drug approval process that granted the first-filing applicants a 180-day exclusivity period, which in turn acted as a 180-day "bottleneck" to all later-filing applicants. 9 out of 10 generic applicants took that route. Teva was prevented from seeking approval via another regulatory mechanism when the FDA announced that all generic manufacturers would be required to take the bottlenecked route. Plaintiffs alleged that they were wrongfully obligated to pay monopoly prices for ACTOS when Takeda's patent on the active ingredient in ACTOS expired when the mass of generic market entry occurred. The district court dismissed plaintiffs' antitrust claims. The court affirmed to the extent that plaintiffs' theory posits a delay in the marketing of generic alternatives to ACTOS by all the generic applicants other than Teva, because plaintiffs' theory presupposes that these applicants were aware of Takeda’s allegedly false patent descriptions when they filed their applications, which is not supported by well-pleaded allegations. However, the court concluded that plaintiffs' theory as to Teva does not require any knowledge of the false patent descriptions. Therefore, the court reached other issues as to Teva and found plaintiffs plausibly alleged that Takeda delayed Teva's market entry. Accordingly, the court affirmed in part, vacated in part, and remanded for further proceedings. View "In re ACTOS End-Payor Antitrust Litigation" on Justia Law

Amex appealed from the district court's decision finding that it unreasonably restrained trade in violation of section 1 of the Sherman Act, 15 U.S.C. 1, by entering into agreements containing nondiscriminatory provisions (NDPs). The district court held that Amex was liable for violating section 1 and enjoined Amex from enforcing its NDPs. The court concluded that the district court erred here in focusing entirely on the interests of merchants while discounting the interests of cardholders. Plaintiffs bore the burden in this case to prove net harm to Amex consumers as a whole - that is, both cardholders and merchants - by showing that Amex’s nondiscriminatory provisions have reduced the quality or quantity of credit‐card purchases. The court concluded that, given the district court’s explicit finding that neither party provided reliable evidence of Amex’s costs or profit margins accounting for consumers on both sides of the platform, and given evidence showing that the quality and output of credit cards across the entire industry continues to increase, plaintiffs failed to carry their burden to prove a section 1 violation. Accordingly, the court reversed and remanded. View "United States v. American Express Co." on Justia Law

The FTC and the State filed suit seeking to hold LeadClick liable for its role in the use of deceptive websites to market weight loss products in violation of Section 5 of the Federal Trade Commission Act (FTC Act), 15 U.S.C. 45(a)(1), and the Connecticut Unfair Trade Practices Act (CUTPA), C.G.S.A. 42‐110b(a). The FTC also filed a claim against CoreLogic, LeadClick's parent company, as a relief defendant. The district court granted summary judgment in favor of the FTC and the State. The court affirmed the district courtʹs grant of summary judgment for the FTC and the State with respect to the claims against LeadClick where LeadClick is an information content provider with respect to the content at issue and where LeadClick is liable for its own content and not merely because it was the ʺpublisher or speakerʺ of deceptive content provided by its affiliates; reversed as to the claim against CoreLogic where CoreLogic's advances to LeadClick constituted "valuable consideration" entitling it to repayment from LeadClick; and remanded with instructions to the district court to enter judgment in favor of CoreLogic. View "FTC v. LeadClick Media, LLC" on Justia Law

A multi-district antitrust class action was brought by plaintiffs against defendants, entities incorporated under the laws of China, alleging that defendants conspired to fix the price and supply of vitamin C sold to U.S. companies on the international market in violation of Section 1 of the Sherman Act, 15 U.S.C. 1, and Sections 4 and 16 of the Clayton Act, 15 U.S.C. 4, 16. Defendants challenge the district court's denial of their initial motion to dismiss, denial of a subsequent motion for summary judgment, and, after a jury trial, an entry of judgment awarding plaintiffs $147 million in damages and enjoining defendants from engaging in future anti-competitive behavior. The court held that the district court erred in denying defendants' motion to dismiss. In this case, because the Chinese Government filed a formal statement in the district court asserting that Chinese law required defendants to set prices and reduce quantities of vitamin C sold abroad, and because defendants could not simultaneously comply with Chinese law and U.S. antitrust laws, the principles of international comity required the district court to abstain from exercising jurisdiction in this case. Accordingly, the court vacated the judgment, reversed the district court's order denying defendants' motion to dismiss, and remanded for further proceedings. View "In Re: Vitamin C Antitrust Litig." on Justia Law

Time Warner filed suit alleging a violation of the Sherman Act, 15 U.S.C. 1 et seq., in the tying of certain premium cable television services to the leasing of ʺinteractiveʺ set‐top cable boxes. The district court dismissed two iterations of the complaint, including the Third Amended Complaint, the operative complaint for the purposes of this opinion. The court held that the Third Amended Complaint fails to adequately plead facts that, if proven, would establish that:  (i) the set‐top cable boxes and the premium programming they transmit are separate products for the purposes of antitrust law; and (ii) Time Warner possesses sufficient market power in the relevant markets to establish an illegal tie‐in. Accordingly, the court affirmed the judgment. View "In re Set-Top Cable Television Box Antitrust Litig." on Justia Law

Cortron appealed the district court's award of damages pursuant to a jury verdict of MacDermid on its claims for violations of federal and Connecticut antitrust laws, breach of contract, misappropriation of trade secrets, spoliation, and violations of Connecticut statutes prohibiting computer crimes and unfair trade practices. At issue are the requirements for proving an adverse effect on competition for purposes of section 1 of the Sherman Act, 15 U.S.C. 1, in cases where the plaintiff has not proved that the allegedly anticompetitive behavior led to higher prices, reduced output, or lower quality in the market. The court held that a plaintiff may not prevail under the “rule of reason” merely by proving that (1) the defendant exercised “market power,” and (2) the challenged behavior may have misled consumers to believe that certain products were no longer available, without showing that consumers actually experienced reduced access to those products. In this case, the court agreed with Cortron that the district court erred in denying Cortron judgment as a matter of law with respect to MacDermid’s antitrust claims because MacDermid failed to present evidence that Cortron’s conduct harmed competition. Accordingly, the court reversed as to this claim. The court otherwise affirmed the judgment and remanded for recalculation of damages. View "MacDermid Printing Sols. LLC v. Cortron Corp." on Justia Law