Justia Antitrust & Trade Regulation Opinion Summaries

Until recently, under every McDonald’s franchise agreement, the franchise operator promised not to hire any person employed by a different franchise, or by McDonald’s itself, until six months after the last date that person had worked for McDonald’s or another franchise. A related clause barred one franchisee from soliciting another’s employee (anti-poach clauses). In a suit under the Sherman Act, 15 U.S.C. 1, the plaintiffs worked for McDonald’s franchises while these clauses were in force and were unable to take higher-paying offers at other franchises. They contend that the anti-poach clause violated the antitrust laws.The district court dismissed, rejecting plaintiffs’ “per se” theory, stating that the anti-poach clause is not a “naked” restraint on trade but is ancillary to each franchise agreement—and, as every new restaurant expands output, the restraint was justified. The court deemed the complaint deficient under the Rule of Reason because it does not allege that McDonald’s and its franchises collectively have power in the market for restaurant workers’ labor.The Seventh Circuit. The complaint alleges a horizontal restraint; market power is not essential to antitrust claims involving naked agreements among competitors. The court noted that there are many potentially complex questions, which cannot be answered by looking at the language of the complaint but require careful economic analysis. View "Turner v. McDonald's USA LLC" on Justia Law

In this case, the Federal Trade Commission appeals the district court’s dismissal of claims against pharmaceutical manufacturers for violations of Sections 1 and 2 of the Sherman Act. The district court dismissed the action against Appellees Endo Pharmaceuticals Inc. (Endo), its parent, Endo International plc (Endo International), Impax Laboratories, LLC (Impax), and its parent, Amneal Pharmaceuticals, Inc. (Amneal) (collectively Appellees) for failure to state a claim because a single patentee granting an exclusive license is conduct protected and allowed under the Patent Act. 35 U.S.C. 261;The D.C. Circuit affirmed the district court’s dismissal of the Commission’s claims. The court concluded that the resolution of the case came down to the following question: Does a valid patent holder’s grant of a nearly exclusive license to a single potential competitor in exchange for royalty payments violate antitrust law when that nearly exclusive license restrains trade only to an extent traditionally recognized by patent law as reasonable? The court answered the question in the negative, holding that under FTC v. Actavis, Inc., when a complaint alleges that a patent holder has violated the antitrust laws, courts must strike a balance “between the lawful restraint on trade of the patent monopoly and the illegal restraint prohibited broadly by the Sherman Act.” The Court must defer to Congress’ judgment, as outlined in the Patent Act. View "FTC v. Endo Pharmaceuticals Inc." on Justia Law

For decades, Johns Manville Corp. ("JM") was the sole domestic manufacturer and supplier of calcium silicate (or “calsil”), a substance used to make thermal pipe insulation. In March 2018, Chase Manufacturing, Inc. (doing business as Thermal Pipe Shields, Inc., or "TPS") challenged JM’s monopoly status by entering the calsil market with a superior and less expensive product. JM responded by threatening distributors that it would not sell to them if they bought TPS’s competing calsil. By August 2021, more than three years after TPS’s market entry, JM retained over 97% of the domestic calsil market. TPS sued under the Sherman Act, alleging that JM had unlawfully: (1) maintained its monopoly; and (2) tied the availability of its insulation products to distributors’ not buying TPS’s calsil. The district court granted summary judgment for JM. Though the Tenth Circuit affirmed some of the district court’s rulings, it held that the district court erred in finding no genuine issues of material fact on whether JM unlawfully maintained its monopoly after TPS’s market entry. The case was remanded for further proceedings. View "Chase Manufacturing v. Johns Manville Corporation" on Justia Law

Plaintiff’s dog, Clinton, suffered from health problems. The solution, at least according to a veterinarian, was to feed him specialized dog food available only by prescription. It has different ingredients than regular dog food but includes no special medication. Prescription dog food is expensive. The crux of Plaintiff’s complaint is that the “prescription” requirement is misleading because the Food and Drug Administration never actually evaluates the product. And the damages came from its higher sales price. The original complaint, which included only state-law claims, reflected these theories. Brought on behalf of all similarly situated Missouri consumers, it alleged a violation of Missouri’s antitrust laws, claims under Missouri’s Merchandising Practices Act, and unjust enrichment. Plaintiff initially filed her complaint in state court, but Royal Canin and Nestle Purina quickly removed it to federal court. The district court then remanded it.   The Eighth Circuit vacated the district court’s judgment and send this case back to the district court with directions to remanded it to Missouri state court. The court explained that just on the face of the amended complaint, the answer is clear. Only the carryover claims and their civil-conspiracy counterpart remain, and neither one presents a federal question. It is no longer possible to say that “dependence on federal law permeates the allegations” of Plaintiff’s complaint. Further, the court wrote that the manufacturers hope to keep the case in federal court through supplemental jurisdiction. It is too late, however, to turn back the clock. View "Anastasia Wullschleger v. Royal Canin U.S.A., Inc." on Justia Law

Plaintiff The Highland Consulting Group, Inc. (“Highland”), a consulting firm, sued Defendant for misappropriating its trade secrets under the Defend Trade Secrets Act (“DTSA”). At trial, the jury returned a verdict of $1.2 million in favor of plaintiff Highland. The district court carefully used a special verdict form on which the jury answered questions and made specific findings on each element of plaintiff Highland’s claims. On appeal, Defendant does not challenge the jury’s findings that the documents he took contained trade secrets and that he misappropriated those trade secrets. Instead, Defendant contends that (1) Plaintiff failed to prove it was an “owner” of those trade secrets, as required by the DTSA, and (2) the district court erred in denying his motions for judgment as a matter of law, or alternatively for a new trial on this ground.   The Eleventh Circuit affirmed. The court explained that drawing all reasonable inferences in favor of plaintiff Highland, the court concluded that the record contains sufficient evidence to support the jury’s finding that Plaintiff owned “any”—in other words, at least one—of the trade secrets involved here. The court wrote that the evidence, in the light most favorable to Plaintiff Highland, demonstrated the plaintiff owned multiple trade secrets misappropriated by Defendant. View "The Highland Consulting Group, Inc. v. Jesus Felix Minjares Soule" on Justia Law

Barber Group, Inc., doing business as Barber Honda (Barber)—a car dealer in Bakersfield, California—brought an establishment protest to the California New Motor Vehicle Board (Board), challenging a decision by American Honda Motor Co., Inc. (Honda) to open a new dealership about nine miles away. The Board overruled Barber’s protest, and the trial court denied Barber’s petition for administrative mandate challenging the Board’s decision. On appeal, Barber argued the Board prejudicially erred when it: (1) relied on Honda’s dealer performance standards at the protest hearing without first deciding whether those standards were reasonable; (2) permitted the proposed new dealership to exercise a peremptory challenge to an administrative law judge initially assigned to the protest hearing, contrary to notions of fairness and the Board’s own order in the matter; and (3) denied Barber’s request that it take official notice of the effects of the COVID-19 pandemic. Finding no reversible error, the Court of Appeal affirmed. View "Barber Group, Inc. v. New Motor Vehicle Bd." on Justia Law

Consolidated suits claimed that many firms in the broiler-chicken business formed a cartel. Third-party discovery in that ongoing suit turned up evidence that Rabobank, a lender to several broiler-chicken producers, urged at least two of them to cut production. Some plaintiffs added Rabobank as an additional defendant.The Seventh Circuit affirmed the dismissal of those claims. The Sherman Act, 15 U.S.C. 1, bans combinations and conspiracies in restraint of trade and does not reach unilateral action. Here, all the plaintiffs allege is that Rabobank tried to protect its interests through unilateral action. The complaint does not allege that Rabobank served as a conduit for the producers’ agreement, helped them coordinate their production and catch cheaters, or even knew that the producers were coordinating among themselves. A flurry of emails among managers and other employees at Rabobank observing that lower output and higher prices in the broiler-chicken market would improve the bank’s chance of collecting its loans and a pair of emails from the head of Rabobank’s poultry-lending section, to executives at two producers indicated nothing but unilateral action. The intra-Rabobank emails could not have promoted or facilitated cooperation among producers and the two messages only reminded the producers that as long as demand curves slope downward, lower output implies higher prices. Advice differs from agreement. View "Amory Investments LLC v. Utrecht-America Holdings, Inc." on Justia Law

Imperial Sugar went bankrupt in 2001 and suffered a costly accident in 2008, prompting its sale to Louis Dreyfus. Imperial receives from Louis Dreyfus only minimal investment and is an “import-based, price-uncompetitive sugar refinery” that is “structurally uncompetitive” and lost roughly 10 percent of its customers from 2021-2022. Florida-based refiner U.S. Sugar agreed to purchase Imperial. The government sought an injunction (Clayton Act. 15 U.S.C. 18), arguing that the acquisition would have anticompetitive effects, leaving only two entities in control of 75% of refined sugar sales in the southeastern United States. The government applied the hypothetical monopolist test to demonstrate the validity of its proposed product and geographic markets. U.S. Sugar responded that it does not sell its own sugar but participates with other producers in a Capper-Volstead agricultural cooperative that markets and sells the firms’ output collectively but exercises no control over the quantities produced. At capacity, Imperial’s facility could produce only about seven percent of national output. U.S. Sugar argued that distributors constitute a crucial competitive check on producer-refiners that would undermine any attempt to increase prices and noted evidence of the high mobility of refined sugar throughout the country.The Third Circuit affirmed the denial of an injunction, upholding a finding that the government overlooked the pro-competitive effects of distributors in the market, erroneously lumped together heterogeneous wholesale customers, and defined the relevant geographic market without regard for the high mobility of sugar throughout the country. View "United States v. United States Sugar Corp." on Justia Law

Plaintiff-appellant Steve Ahn was a sales executive for a title insurer who claimed his sales figures were adversely affected when his employer barred him from using a particular sales pitch to solicit customers from a competitor who was also a proposed corporate merger partner. Ahn’s pitch told prospective clients that after the proposed merger was finalized, they would have no choice but to comply with his company’s higher-cost, less flexible underwriting standards. He attempted to use this pitch to convince these clients to abandon the competitor before the merger. The issue this case presented for the Court of Appeals' consideration was whether Ahn had standing under the California antitrust statute, known as the Cartwright Act, to assert a cause of action. To this, the Court found that Ahn did not claim injury from the alleged anticompetitive aspects of the proposed merging entities' agreement, but rather from conduct that emphasized their competitive differences. "A complaint that he could not lure customers with a pitch about their restricted postmerger options does not constitute an antitrust injury, meaning Ahn lacks standing to sue under the Cartwright Act." The Court's conclusion that Ahn could not demonstrate an antitrust violation affected his derivative economic relations tort claims, both of which required independently wrongful conduct. Concluding the trial court did not err in granting summary judgment, the appellate court therefore affirmed the judgment. View "Ahn v. Stewart Title Guaranty Co." on Justia Law

Plaintiff Vitamins Online, Inc. believed that its competitor, Defendant Heartwise, Inc. (d/b/a NatureWise), was misrepresenting the ingredients of its competitive nutritional supplements and manipulating those products’ Amazon reviews. Vitamins Online sued for violations of the Lanham Act and Utah’s common law Unfair Competition Law. The case proceeded to a bench trial, at the conclusion of which the district court ruled for Vitamins Online and ordered disgorgement of NatureWise’s profits for 2012 and 2013. The court also awarded Vitamins Online attorney fees and costs for NatureWise’s willful misrepresentation and for various discovery abuses. Both parties appealed. NatureWise contended the district court erred in finding that it made false or misleading representations about its own nutritional supplements’ ingredients and its Amazon reviews. NatureWise further asserted the district court erred in concluding that Vitamins Online was entitled to a presumption of injury for these misrepresentations. Vitamins Online contended the district court erred in bifurcating Vitamins Online’s injury into two separate time periods and requiring Vitamins Online to prove that a presumption of injury was applicable separately for each period. Vitamins Online also argued the district court erred in denying disgorgement for the second time period, and for failing to consider an award of punitive damages and an injunction as to NatureWise’s further manipulation of reviews. The Tenth Circuit concluded the district court did not clearly err in applying a presumption of injury, and affirmed the award of profits, attorney fees, and costs, and found no reversable error in the amount awarded. The Court also held the district court failed to consider properly Vitamins Online’s request for punitive damages and an injunction; the Court remanded for the district court to reconsider. View "Vitamins Online, Inc. v. HeartWise, Inc." on Justia Law