Justia Antitrust & Trade Regulation Opinion Summaries

Bloomington, Indiana (population 90,000) is in a metropolitan statistical area with a population near 200,000. From Bloomington, one can drive an hour and ten minutes to Indianapolis (population 865,000); two hours to Evansville (population 120,000); two hours to Louisville (population 620,000); or two and a half hours to Cincinnati, (population 300,000). Dr. Vasquez arrived in Bloomington in 2006, opened an independent vascular‐surgery practice, and obtained admitting privileges at Bloomington Hospital, Monroe Hospital, and the Indiana Specialty Surgery Center. He performed more than 95% of his inpatient procedures at Bloomington Hospital. In 2010, IU Health acquired Bloomington Hospital. In 2017, IU Health acquired Premier Healthcare, an independent physician group based in Bloomington. Vasquez alleges that, because of the acquisition, IU Health employs 97% of primary care providers (PCPs) in Bloomington and over 80% of PCPs in the region. Vasquez’s alleged that IU Health launched “a systematic and targeted scheme” to ruin his reputation and practice because of Vasquez’s commitment to independent practice. IU Health's employees cast aspersions on his reputation. IU Health revoked Vasquez’s Bloomington admitting privileges.Vasquez brought claims under Sherman Act, 15 U.S.C. 2, and Clayton Act, section 18. The Seventh Circuit reversed the dismissal of his suit. Vasquez’s accounts of how a hypothetical monopolist could dominate Bloomington’s vascular‐ surgery market suffice for the pleading stage; the complaint presents a plausible account under which his suit is timely. View "Vasquez v. Indiana University Health, Inc" on Justia Law

Federal Express Corporation—commonly known as FedEx—challenged the Department of Commerce’s authority to hold it strictly liable for aiding and abetting violations of the 2018 Export Controls Act.   The DC Circuit affirmed the district court’s dismissal of FedEx’s complaint, holding that Commerce’s regulation, 15 C.F.R. Section 764.2(b), and its strict-liability interpretation of it are not ultra vires. The court concluded that the statutory text, circuit precedent, and deference to the Executive Branch in matters of national security and foreign affairs all support Commerce’s interpretation.   The court explained that the first barrier to FedEx’s ultra vires challenge is that Commerce’s interpretation of its regulation to allow for strict liability in civil enforcement actions does not contravene any clear statutory command. Next, FedEx’s ultra vires argument runs into a second headwind—relevant circuit precedent. The court wrote that given that the DC circuit has already specifically held that Commerce can attach strict liability to the first term in the string of verbs “cause or aid, abet, counsel, command, induce, procure, permit, or approve[,]” 15 C.F.R. Section 764.2(b), there is no basis for the court to hold that Commerce acted ultra vires in attaching that same strict-liability reach to the next two verbs. Further, since FedEx has not shown that its asserted mens rea requirement for aiding and abetting liability was truly settled in the common law at the time the statute was promulgated, or that its common-law meaning fits within this specialized national-security scheme, FedEx’s argument does not come close to satisfying the strict standard for an ultra vires claim. View "Federal Express Corporation v. U.S. Department of Commerce" on Justia Law

The Board, a private, nonprofit provider of medical certifications to radiologists, is dominant in the market for radiology certifications. All states permit physicians who are not Board-certified to practice medicine, provided they possess a valid state medical license. Siva, a Board-certified radiologist, says that most insurers will not grant in-network status to physicians who are not Board-certified; uncertified physicians are often shut out from meaningful employment opportunities. When the Board began selling certifications in 1934, radiologists who passed the examination would remain certified for life. The Board later shifted to “initial certification” and “maintenance of certification” (MOC). Radiologists who wish to remain Board-certified must participate in and pay for the MOC program annually, which requires continuing education credits from third parties, completing “practice improvement” activities, and passing Board-administered examinations.The Seventh Circuit affirmed the dismissal of Siva’s antitrust suit. Siva argued that MOC should be thought of not as part of the Board’s certification product but as a unique product in its own right and that the Board’s decision to revoke the certification of radiologists who refuse to participate in the MOC program reflects not a benign product redesign but rather an illegal tying arrangement that violates the Sherman Act, 15 U.S.C. 1. Siva cannot identify a distinct product market in which it is efficient to offer MOC separately from certification. View "Siva v. American Board of Radiology" on Justia Law

The Supreme Court affirmed the judgment of the appellate court concluding that the Home Improvement Act (Act), Conn. Gen. Stat. 20-418 et seq., did not apply to work performed by Defendant on Plaintiff's property, holding that Plaintiff's claim under the Act was unavailing.The trial court found in favor of Plaintiff on his claims alleging breach of contract, violations of the Act, and violations of the Connecticut Unfair Trade Practices Act (CUTPA), Conn. Gen. Stat. 42-110a et seq. The trial court ruled in favor of Plaintiff. The appellate court affirmed with respect to the breach of contract count but reversed with respect to the remaining claims, ruling that the work performed by Defendant fell within the new home exception of the Act, and therefore, Plaintiff failed to state a claim under both the Act and CUTPA. The Supreme Court affirmed, holding that the work performed by Defendant fell within the new home exception. View "Winakor v. Savalle" on Justia Law

Competing trade associations offered memberships to home inspectors, who typically inspect homes prior to home sales. Benefits of membership in the International Association of Certified Home Inspectors (InterNACHI) and the American Society of Home Inspectors (ASHI) included online advertising to home buyers, educational resources, online training, and free services such as logo design. From 2015 to 2020, ASHI featured the slogan “American Society of Home Inspectors. Educated. Tested. Verified. Certified” on its website. Contending that tagline mislead consumers, InterNACHI sued ASHI under the federal Lanham Act, claiming the line constituted false advertising because it inaccurately portrayed ASHI’s entire membership as being educated, tested, verified, and certified, even though its membership includes so-called “novice” inspectors who had yet to complete training or become certified. InterNACHI argued this misleading advertising and ASHI’s willingness to promote novice inspectors to the public caused InterNACHI to lose potential members and dues revenues. The district court granted summary judgment in favor of ASHI, concluding no reasonable jury could find that InterNACHI was injured by ASHI’s allegedly false commercial advertising. To this, the Tenth Circuit Court of Appeals concurred: because InterNACHI did not present any evidence from which a reasonable jury could find that InterNACHI was injured by ASHI’s slogan, the district court did not err in granting summary judgment for ASHI. View "Examination Board, et al. v. International Association, et al." on Justia Law

OJ Commerce and Naomi Home sued KidKraft and MidOcean. OJ Commerce and Naomi Home alleged that “KidKraft control[led] over 70% of the wooden play kitchen market in the continental United States.” They asserted that “KidKraft’s termination of its relationship with OJ[] [Commerce] had no legitimate business justification or procompetitive benefit” and violated section two of the Sherman Act. They asserted that, alternatively, the termination was a form of attempted monopolization, a separate violation of section two.  The district court entered summary judgment in favor of KidKraft and MidOcean.   The Eleventh Circuit affirmed the summary judgment order. The court held that the district court correctly entered a summary judgment in favor of MidOcean and KidKraft on the section-one claim. The court reasoned that a company ordinarily cannot conspire with an entity it owns and controls and with which it does not compete. Here, MidOcean owns nothing other than its interest in KidKraft that sells toys of any type. And as noncompetitors, MidOcean and KidKraft are incapable of conspiring for purposes of section one because the evidence establishes that MidOcean has majority ownership of and controls KidKraft. It is undisputed that, during the relevant period, MidOcean owned approximately 57 percent of the membership interests in the company that wholly owns KidKraft.Further, the court held that the district court correctly entered a summary judgment against the section-two claim because OJ Commerce and Naomi Home failed to present substantial evidence to support a viable theory of monopolization. View "OJ Commerce, LLC, et al. v. KidKraft, Inc., et al." on Justia Law

Plaintiffs, investors in 22nd Century Group, alleged on behalf of an investor class that (1) Defendants engaged in an illegal stock promotion scheme in which they paid authors to write promotional articles about the company while concealing the fact that they paid the authors for the articles; and (2) Defendants failed to disclose an investigation by the Securities and Exchange Commission (“SEC”) into the company’s financial control weaknesses. Plaintiffs alleged they were harmed after public articles revealed the promotion scheme and stock prices fell. The district court dismissed the complaint for failing to state a claim.   On appeal, Plaintiffs argued (1) they adequately alleged material misrepresentations sufficient to sustain claims under SEC Rule 10b-5; (2) their claim under Section 20(a) of the Securities Exchange Act was premised on a valid predicate violation of Section 10(b); and (3) the district court erred in dismissing the complaint with prejudice.   The Second Circuit affirmed in part and vacated in part. On the first and second points, the court agreed that the allegation that Defendants failed to disclose the SEC investigation states a material misrepresentation and could also support Section 20(a) liability. However, the court found no merit in the remaining challenges. The court reasoned that because the complaint does not adequately allege that Defendants had a duty to disclose that they paid for the articles’ publication, Plaintiffs fail to state a claim that the existence of the stock promotion scheme constituted a materially misleading omission. View "Noto v. 22nd Century Grp." on Justia Law

The San Diego City Attorney brought an enforcement action under the California Unfair Competition Law, Business and Professions Code sections 17200, et seq. (UCL), on behalf of the People of California against Maplebear Inc. DBA Instacart (Instacart). In their complaint, the State alleged Instacart unlawfully misclassified its employees as independent contractors in order to deny workers employee protections, harming its alleged employees and the public at large through a loss of significant payroll tax revenue, and giving Instacart an unfair advantage against its competitors. In response to the complaint, Instacart brought a motion to compel arbitration of a portion of the City’s action based on its agreements with the individuals it hired (called "Shoppers"). The trial court denied the motion, concluding Instacart failed to meet its burden to show a valid agreement to arbitrate between it and the State. Instacart appealed, arguing that even though the State was not a party to its Shopper agreements, it was bound by its arbitration provision to the extent the State sought injunctive relief and restitution because these remedies were “primarily for the benefit of” the Shoppers. The Court of Appeal rejected this argument and affirmed the trial court’s order. View "California v. Maplebear Inc." on Justia Law

The SEC brought an enforcement action within the agency against Petitioners for securities fraud. An SEC administrative law judge adjudged Petitioners liable and ordered various remedies, and the SEC affirmed on appeal over several constitutional arguments that Petitioners raised.   The Fifth Circuit held that (1) the SEC’s in-house adjudication of Petitioners’ case violated their Seventh Amendment right to a jury trial; (2) Congress unconstitutionally delegated legislative power to the SEC by failing to provide an intelligible principle by which the SEC would exercise the delegated power, in violation of Article I’s vesting of “all” legislative power in Congress; and (3) statutory removal restrictions on SEC ALJs violate the Take Care Clause of Article II.   The court reasoned that the Seventh Amendment guarantees Petitioners a jury trial because the SEC’s enforcement action is akin to traditional actions at law to which the jury-trial right attaches. Further, the SEC proceedings at issue suffered from another constitutional infirmity: the statutory removal restrictions for SEC ALJs are unconstitutional. View "Jarkesy v. SEC" on Justia Law

Freight shippers (“Plaintiffs”) alleged that the nation’s four largest freight railroads (“Defendants” or “Railroads”) have violated the Sherman Act, 15 U.S.C. Section 1, by engaging in a price-fixing conspiracy to coordinate their fuel surcharge programs as a means to impose supra-competitive total price increases on their shipping customers. Before hearing summary judgment motions, the District Court considered Defendants’ motions to exclude certain evidence on which Plaintiffs rely. Defendants argued the challenged documents were inadmissible under 49 U.S.C. Section 10706(a)(3)(B)(ii)(II) (“Section 10706”) as evidence of the Railroads’ discussions or agreements concerning “interline” traffic.   The D.C. Circuit affirmed in part and reversed in part the District Court’s interpretation of Section 10706, vacated the District Court’s order and remanded for the court to reconsider the evidence at issue. The court held that the District Court’s interpretation of Section 10706 sometimes strays from the literal terms of the statute.  The court reasoned that a discussion or agreement “concern[s] an interline movement” only if Defendants meet their burden of showing that the movements at issue are the participating rail carriers’ shared interline traffic. A discussion or agreement need not identify a specific shipper, shipments, or destinations to qualify for exclusion; more general discussions or agreements may suffice. Further, the court held that a carrier’s internal documents need not convey the substance of a discussion or agreement concerning interline movements to qualify for exclusion under the statute. View "In re: Rail Freight Fuel Surcharge Antitrust Litigation" on Justia Law