Justia Antitrust & Trade Regulation Opinion Summaries

Septic systems comprise a septic tank that isolates and contains the sewage; the remaining wastewater flows through a drain field, where microorganisms treat it. Customers have two options for private septic systems—aerobic treatment units (contained systems), or soil-based/open-bottom treatment systems (T&D systems). Geomatrix markets and sells a T&D system, while many of its competitors sell contained systems.Since 1970, NSF has offered certification for the wastewater treatment industry, A manufacturer needs to obtain certification before marketing products in at least 37 states. This standard is developed through a voluntary consensus process, overseen by a joint committee staffed by NSF employees, state regulatory officers, industry manufacturers, and consumers. Geomatrix obtained certification. Geomatrix alleges that competitors then began conspiring against T&D systems, questioning whether T&D systems should be entitled to certification and disparaging the efficacy of T&D systems. The alleged conspiracy affected Geomatrix’s business by preventing it from obtaining state regulatory approval, although its certification should have made it possible to do so. Ultimately, Geomatrix withdrew its NSF certification. NSF has not adopted a new standard; discussions remain ongoing.Geomatrix filed suit, alleging violations of the Sherman Act and the Lanham Act. The Sixth Circuit affirmed the dismissal of the suit. The defendants’ petitioning activity was immunized under the Noerr-Pennington doctrine. Geomatrix failed to show the proximate cause required for its unfair competition claims, and its promissory estoppel claims were based on statements that did not state a sufficiently definite promise. View "Geomatrix, LLC v. NSF International" on Justia Law

Legacy, a small family-owned business, provides nonemergency ambulance services in several Ohio counties that border Kentucky. After receiving many inquiries from Kentucky hospitals and nursing homes, Legacy sought to expand into the Commonwealth. Kentucky required Legacy to apply for a “certificate of need” with the Kentucky Cabinet for Health and Family Services. Existing ambulance providers objected to Legacy’s request. The Cabinet denied Legacy’s application partly on the ground that these providers offered an adequate supply. Legacy sued, alleging that Kentucky’s certificate-of-need law violated the “dormant” or “negative” part of the Commerce Clause.The district court granted the defendants summary judgment. The Sixth Circuit affirmed with respect to Legacy’s request to offer intrastate ambulance transportation in Kentucky. Under the modern approach to the dormant Commerce Clause, a law’s validity largely depends on whether it discriminates against out-of-state businesses in favor of in-state ones. Legacy’s evidence suggests that the state’s limits will harm Kentucky’s own “consumers.” It has not shown a “substantial harm” to interstate commerce. The court reversed with respect to Legacy’s request to offer interstate ambulance transportation between Kentucky and Ohio. States may not deny a common carrier a license to provide interstate transportation on the ground that the interstate market contains an “adequate” supply. The bright-line rule barring states from obstructing interstate “competition” does require a finding that a state has discriminated against out-of-state entities. View "Truesdell v. Friedlander" on Justia Law

Mayfield manufactures a football helmet accessory that purportedly reduces the severity of football helmet impact when it is installed on an existing football helmet. Mayfield sued the National Operating Committee on Standards for Athletic Equipment (NOCSAE), a nonprofit organization that develops and promotes safety standards for athletic equipment. It has a safety certification that can be applied to football helmets that meet NOCSAE’s standards. NOCSAE does not permit manufacturers of helmet accessories to seek certification separately from the helmet manufacturers.Mayfield alleged that NOCSAE and helmet manufacturers are restraining trade in the football helmet market, engaging in an overarching conspiracy to limit competition, and subjecting Mayfield to tortious interference of business relationships or expectations. The Sixth Circuit affirmed the dismissal of the suit. In its claims under the Sherman Act section 1, Mayfield cited scenarios, theories, and occurrences and asked the court to make "sweeping conclusions" about the motives and actions of the defendants. An “explicit agreement,” as required for Sherman Act liability, "should not demand this kind of intellectual leap." The defendants have shown that their desire to protect their reputations and sell safe products is a legitimate business interest. View "Hobart-Mayfield, Inc. v. National Operating Committee on Standards for Athletic Equipment" on Justia Law

In the Automotive Parts Antitrust multi-district litigation, a subset of consumers and businesses (End-Payor Plaintiffs), alleged that automotive-part manufacturers fixed prices in violation of antitrust laws and that they paid elevated prices for defendants’ parts or purchased or leased vehicles containing those parts. After eight years of motions, negotiations, approval hearings, and objections, the district court granted final approval to settlements between End-Payor Plaintiffs and defendants. The settlement agreements, the class notices, and plans of allocation for each settlement agreement defined the classes of plaintiffs to include consumers and businesses that bought or leased certain qualifying vehicles or paid to replace certain qualifying vehicle parts during designated time periods. The class definitions did not include insurers, assignees, or subrogees.FRS, a third-party company that manages and files claims for clients, later submitted claims on behalf of insurers that purchased or leased eligible vehicles for company use (Fleet Vehicles) and claims that are based on its clients’ claimed “subrogation rights” to class members’ claims. The district court denied FRS’s motion to intervene as untimely. The Sixth Circuit affirmed. FRS offers no legitimate excuse for failing to intervene after End-Payor Plaintiffs repeatedly expressed their adverse position; the district court alerted FRS to a deficient filing. End-Payor Plaintiffs would have suffered delay-related prejudice had the district court allowed intervention. View "Automotive Parts Antitrust Litig." on Justia Law

The Sixth Circuit previously affirmed the Federal Trade Commission’s decision to block a merger of ProMedica and St. Luke’s Hospital in Lucas County, Ohio. As part of the unwinding of the merger, ProMedica and St. Luke’s signed an agreement in which ProMedica’s insurance subsidiary, Paramount, agreed to maintain St. Luke’s as a within-network provider; Paramount could drop St. Luke’s if ownership of the hospital changed. A large healthcare company based in Michigan, McLaren, subsequently merged with St. Luke’s. Paramount ended its relationship with St. Luke’s, removing the hospital from its provider network. St. Luke’s then alleged that ProMedica’s refusal to do business with it violated the antitrust laws. The district court preliminarily enjoined ProMedica from ending the agreement. The Sixth Circuit vacated. Because ProMedica had a legitimate business explanation for ending the relationship, St. Luke’s is unlikely to show that ProMedica unlawfully refused to continue doing business with it. St. Luke’s has little likelihood of establishing an irreparable injury given the option of money damages. View "St. Luke's Hospital v. ProMedica Health System, Inc." on Justia Law

A class of end-payor purchasers sued (Clayton Act, 15 U.S.C. 26; Sherman Act, 15 U.S.C. 1) manufacturers and suppliers, alleging that they conspired to fix prices of automotive anti-vibration rubber parts. The district court certified a nationwide settlement class comprising persons and entities who indirectly purchased anti-vibration rubber parts that were manufactured or sold by the defendants, excluding persons or entities who purchased parts directly or for resale.Before the court entered final judgments approving the "indirect purchaser" settlement, Plaintiffs filed a separate suit against the same defendants, in the same court, seeking damages under the Clayton Act on behalf of a putative class of “direct purchasers” of anti-vibration rubber parts. They alleged that they purchased parts “from an entity (Firestone retail shop) of which one of the Defendants (Bridgestone) is the ultimate parent”; Firestone is not a defendant in either lawsuit. Bridgestone is a defendant in both. The court entered final judgments in the end-payor lawsuit, enjoining all settlement class members from “commencing, prosecuting, or continuing . . . any and all claims” arising out of or relating to the released claims.Defendants moved to enjoin Plaintiffs from litigating their direct-purchaser lawsuit. The district court denied the motion, citing “Illinois Brick.” Under federal antitrust law, a private plaintiff generally must be a “direct purchaser” to have suffered injury and have standing to sue a manufacturer or supplier. In Illinois Brick, the Supreme Court recognized an exception, holding that an “indirect purchaser” might have standing if it purchased from an intermediary that was “owned or controlled” by the ultimate seller.The Sixth Circuit reversed. Regardless of whether Illinois Brick applies to plaintiffs’ underlying claims, plaintiffs fit within the class definition under the plain meaning of the settlement agreements. Their suit is therefore barred. View "In re: Automotive Parts Antitrust Litigation" on Justia Law

The Tennessee Department of Health allowed two healthcare companies to merge into Ballad Health. Some of the board members of the resulting entity also had ties to another area healthcare organization, MEAC. The plaintiffs filed suit, alleging that Ballad, MEAC, and individual defendants had created an interlocking directorate in violation of the Clayton Antitrust Act, 15 U.S.C. 19. The defendants moved to dismiss the case for lack of standing. The plaintiffs sought to amend their complaint. Their proposed 29-page complaint included “allegations” that amounted to “colorful insults,” such as that MEAC “surrendered to [Ballad] much in the manner Marshal Petain surrendered France" to Hitler.The Sixth Circuit affirmed the dismissal of the case. Plaintiffs must allege the elements of standing as they would any other element of their suit. The plaintiffs failed to alleged injury in fact by showing that they suffered “an invasion of a legally protected interest” that is “concrete and particularized” and “actual or imminent, not conjectural or hypothetical.” The plaintiffs alleged legal conclusions, speculative risks, and the interests of the general public, saying nothing about what medical services they have sought in the past, what services they will seek in the future, or how the dissolution of MEAC would affect their access to these services. Nothing in the Clayton Act purports to create a novel injury in fact or an exception to the case-or-controversy requirement. View "Bearden v. Ballad Health" on Justia Law

Saginaw County has nearly 200,000 residents. A single company, Mobile Medical, has provided the county’s ambulance services since 2009. The county guaranteed Mobile the exclusive right to operate within its borders; Mobile pledged to serve all eight of Saginaw County’s cities and incorporated villages and its 27 rural townships. In 2011, STAT, a competing ambulance company, entered the Saginaw market, providing patient-transport services for an insurer as part of a contract that covered six Michigan counties. A municipality, dissatisfied with Mobile’s response times and fees, hired STAT. When Saginaw County proposed to extend Mobilel’s contract in 2013, STAT objected, arguing that the arrangement violated state law, federal antitrust law, and the Fourteenth Amendment. The county approved Mobile's new contract and enacted an ordinance that codified the exclusivity arrangement but never enforced the ordinance. STAT continued to insist that Michigan law permitted it to offer ambulance services. Saginaw County sought a federal declaratory judgment that Michigan law authorizes the exclusive contract and that it does not violate federal antitrust laws or the U.S. Constitution by prohibiting STAT from operating in the county. The Sixth Circuit affirmed the dismissal of the claim for lack of jurisdiction. The county failed to establish an actual or imminent injury. Federal courts have the power to tell parties what the law is, not what it might be in potential enforcement actions. View "Saginaw County. v. STAT Emergency Medical Services, Inc." on Justia Law

MCEP, an acute care, for-profit hospital owned by 60 physicians and one corporate shareholder, opened in 2006. By 2009, MCEP’s existence as a physician-owned enterprise ended when it sold an ownership interest to Kettering Health Network, a competitor in the Dayton healthcare market. MCEP alleges that it failed because of the anticompetitive actions of Premier, a dominant healthcare network in the Dayton area. MCEP alleges that Premier contracted with area physicians and payers (insurers and managed-care plan providers) on the condition that they did not do business with MCEP. MCEP claims that Premier engaged in a conspiracy so devoid of benefit to the market as to be per se illegal under the Sherman Act, 15 U.S.C. 1. The Sixth Circuit affirmed summary judgment in favor of the defendants. To be per se illegal, a defendant’s conduct has to be so obviously anticompetitive that it has no plausibly procompetitive features. Premier’s contracts with payers and physicians had plausibly procompetitive features. It is plausible that panel limitations, which prohibited referrals to MCEP, lower the cost of defendants’ services and improve “cost effectiveness and efficiencies in the delivery of health care services.” View "Medical Center at Elizabeth Place, LLC v. Atrium Health System" on Justia Law

Innovation sold 5-Hour Energy. In 2004, it contracted with CN to manufacture and package 5-Hour. Jones, CN's President and CEO, had previously manufactured an energy shot. When the business relationship ended, CN had extra ingredients and packaging, which Jones used to continue manufacturing 5-Hour, allegedly as mitigation of damages. The companies sued one another, asserting breach of contract, stolen trade secrets or intellectual property, and torts, then entered into the Settlement, which contains an admission that CN and Jones “wrongfully manufactured” 5-Hour products and forbids CN from manufacturing any new “Energy Liquid” that “contain[s] anything in the Choline Family.” CN received $1.85 million. CN was sold to a new corporation, NSL. Under the Purchase Agreement, NSL acquired CN's assets but is not “responsible for any liabilities ... obligations, or encumbrances” of CN except for bank debt. The Agreement includes one reference to the Settlement. NSL, with Jones representing himself as its President, took on CN’s orders and customers, selling energy shots containing substances listed in the Choline Family definition. Innovation sued. Innovation was awarded nominal damages for breach of contract. The Sixth Circuit affirmed the rejection of defendants’ antitrust counterclaim, that NSL is bound by the Settlement, and that reasonable royalty and disgorgement of profits are not appropriate measures of damages. Jones is not personally bound by the Agreement. Upon remand, Innovation may introduce testimony that uses market share to quantify its lost profits. The rule of reason provides the proper standard for evaluating the restrictive covenants; Defendants have the burden of showing an unreasonable restraint on trade. View "Innovation Ventures, LLC v. Nutrition Science Laboratories, LLC" on Justia Law