Justia Antitrust & Trade Regulation Opinion Summaries

Plaintiffs, individuals representing a class of Netflix subscribers, contended that a promotion agreement whereby Walmart transferred its online DVD-rental subscribers to Netflix and Netflix agreed to promote Walmart’s DVD sales business violated the Sherman Act by illegally allocating and monopolizing the online DVD rental market. The district court granted summary judgment for Netflix and awarded Netflix $710,194 in costs. The Ninth Circuit (1) affirmed the district court’s summary judgment, holding that Plaintiffs did not raise a triable issue of fact as to whether they suffered antitrust in-jury-in-fact on a theory that they paid supracompetitive prices for their DVD-rental subscriptions because Netflix would have reduced its subscription price but for its allegedly anticompetitive product; and (2) affirmed in part and reversed in part the award of costs, holding that certain charges for “data upload” and “keywording” were not recoverable as costs for making copies under 28 U.S.C. 1920(4). Remanded for consideration of whether costs were properly awarded for “professional services.” View "Resnick v. Netflix, Inc." on Justia Law

Plaintiffs filed a class action complaint against Philip Morris Companies Inc. and Philip Morris Inc., alleging that Philip Morris violated the Arkansas Deceptive Trade Practices Act (ADTPA) by falsely advertising that its Marlboro Lights cigarettes were safer and contained less tar and nicotine than other cigarettes. The circuit court certified Plaintiffs’ class action, concluding that common issues among all class members predominated over any individual issues and that a class action was a superior method of resolving the claim. The Supreme Court affirmed the circuit court’s order certifying the class, holding that the circuit court did not abuse its discretion in certifying the class, as common issues predominated, a class action was a superior method of adjudication, and the class was ascertainable. View "Philip Morris Cos., Inc. v. Miner" on Justia Law

Appellant Ortho-McNeil-Janssen Pharmaceuticals (Janssen) manufactured the antipsychotic drug Risperdal. The Attorney General of South Carolina believed that Janssen had violated the South Carolina Unfair Trade Practices Act (SCUTPA) by engaging in unfair methods of competition by willfully failing to disclose known risks and side effects associated with Risperdal. In 2007, the State and Janssen entered into a tolling agreement concerning the statute of limitations. The State filed its Complaint on April 23, 2007: the first claim arose from the content of the written material furnished by Janssen since 1994 with each Risperdal prescription (the "labeling claim"); the second claim centered on alleged false information contained in a November 2003 Janssen-generated letter sent to the South Carolina community of prescribing physicians (the "Dear Doctor Letter"). Because both claims arose more than three years prior to January 24, 2007, Janssen pled the statute of limitations as a bar to the Complaint. The matter proceeded to trial. A jury rendered a liability verdict against Janssen on both claims. The trial court rejected Janssen's defenses, including the statute of limitations, finding that both claims were timely. Janssen appealed. After review, the Supreme Court affirmed the liability judgment on the labeling claim but modify the judgment to limit the imposition of civil penalties to a period of three years from the date of the tolling agreement, which was coextensive with the three-year statute of limitations, subject to an additional three months by virtue of the time period between the January 24, 2007, tolling agreement and the filing of the Complaint on April 23, 2007. The Court affirmed the liability judgment on the doctor letter claim, but remitted the amount of penalties associated with that claim. View "South Carolina v. Ortho-McNeil-Janssen Pharmaceuticals" on Justia Law

North Carolina’s Dental Practice Act does not specify that teeth whitening is “the practice of dentistry.” After dentists complained, the Board of Dental Examiners issued cease-and-desist letters to nondentist teeth whitening service providers and product manufacturers, warning that the unlicensed practice of dentistry is a crime. The FTC filed an administrative complaint, alleging that the Board’s concerted action to exclude nondentists from the market for teeth whitening services constituted an anticompetitive and unfair method of competition under the Federal Trade Commission Act. An ALJ rejected a claim of state-action immunity and ruled against the Board. The FTC, the Fourth Circuit, and the Supreme Court affirmed. Because a controlling number of the Board’s decision-makers are active market participants in the occupation being regulated, the Board could invoke immunity only if the challenged restraint was clearly articulated and affirmatively expressed as state policy, actively supervised by the state. That requirement was not met. The need for supervision turns not on the formal designation given by states to regulators but on the risk that active market participants will pursue private interests in restraining trade. States may provide for the defense and indemnification of agency members in the event of litigation, and can ensure immunity by adopting clear policies to displace competition and providing active supervision. Regardless of whether the Board exceeded its powers under North Carolina law, there is no evidence of any decision by the state to initiate or concur with the Board’s actions against the nondentists. View "North Carolina State Bd. of Dental Examiners v. FTC" on Justia Law

The FTC initiated an enforcement proceeding against Boehringer after the pharmaceutical company failed to comply with an administrative subpoena seeking various documents related to a settlement agreement between the company and Barr, a generic drug manufacturer. Boeringer subsequently certified compliance with the subpoena but withheld hundreds of responsive documents under the work product doctrine and the attorney-client privilege. Te court rejected the FTC's assertion that the district court erred as a matter of law when it concluded that settlement documents pertaining to a co-promotion agreement between Boehringer and Barr were prepared in anticipation of litigation. The court held that a settlement term may have independent economic value and still be considered part of a settlement for purposes of work product protection. The court also found that the district court reasonably concluded that the bulk of the contested co-promotion materials were prepared in anticipation of the Boehringer-Barr litigation, with a single exception pertaining to post-settlement documents. Therefore, the court generally affirmed the district court's finding on this issue but remanded for further consideration with respect to post-settlement documents. The court agreed with the FTC that the district court misapprehended the proper distinction between fact and opinion work product and reversed and remanded on this issue. View "FTC v. Boehringer Ingelheim Pharm." on Justia Law

The FTC and the State filed suit alleging that the 2012 merger of two health care providers in Nampa, Idaho violated section 7 of the Clayton Act, 15 U.S.C. 18, and state law. The district court found that the merger violated section 7 and ordered divestiture. The court affirmed the judgment, concluding that the district court's determination that Nampa was the relevant geographic market was supported by the record; the district court did not clearly err in holding that plaintiffs established a prima facie case that the merger will probably lead to anticompetitive effects in the market; and defendant failed to rebut the prima facie case by demonstrating that efficiencies resulting from the merger would have a positive effect on competition. Therefore, in this case, the district court did not abuse its discretion in choosing divestiture. View "St. Alphonsus Med. Ctr. v. St. Luke's Health Sys." on Justia Law

After the FTC voted to hold POM and the associated parties liable for violating the Federal Trade Commission Act (FTC Act), 15 U.S.C. 45(a)(1) and 52(a), and ordered them to cease and desist from making misleading and inadequately supported claims about the health benefits of POM products, POM petitioned for review. The court denied most of petitioners' challenges; the court saw no basis to set aside the Commission's conclusion that many of POM's ads made misleading or false claims about POM products; and the Commission had no obligation to adhere to notice-and-comment rulemaking procedures. Further, the court held that the Commission's order is valid to the extent it requires disease claims to be substantiated by at least one randomized and controlled human clinical trial (RCT); the order fails Central Hudson scrutiny because it categorically requires two RCTs for all disease-related claims; the Commission has failed to adequately justify an across-the-board two-RCT requirement for all disease claims by petitioners; and, therefore, Part I of the Commission's order will be modified to require petitioners to possess at least one RCT. The court denied the petition for review in all other respects. View "POM Wonderful LLC v. FTC" on Justia Law

Felder's filed an antitrust suit against All Star and GM, alleging that GM's "Bump the Competition" program, which lowers the consumer price for GM-manufactured parts below the prices of equivalent "generic" auto parts manufactured by others, is an unlawful predatory pricing scheme. GM lowers the price by providing rebates to dealers like All Star that sell GM-manufactured parts for the reduced prices. The court concluded that the effect of this rebate in deciding whether Felder's can meet one of the essential elements of a predatory pricing claim - that defendant is selling its products at a price below average variable cost - should be considered. Accordingly, the court affirmed the district court's dismissal of the antitrust claims based on Felder's failure to adequately define the relevant geographic market and its earlier finding that Felder's did not allege below-cost pricing. View "Felder's Collision Parts v. All Star Advertising" on Justia Law

AstraZeneca, which sells a heartburn drug called Nexium, and three generic drug companies (“generic defendants”) that sought to market generic forms of Nexium, entered into settlement agreements in which the generic defendants agreed not to challenge the validity of the Nexium patents and to delay the launch of their generic products. Certain union health and welfare funds that reimburse plan members for prescription drugs (the named plaintiffs) alleged that the settlement agreements constituted unlawful agreements between Nexium and the generic defendants not to compete. Plaintiffs sought class certification for a class of third-party payors, such as the named plaintiffs, and individual consumers. The district court certified a class. Relevant to this appeal, the class included individual consumers who would have continued to purchase branded Nexium for the same price after generic entry. The First Circuit affirmed the class certification, holding (1) class certification is permissible even if the class includes a de minimis number of uninjured parties; (2) the number of uninjured class members in this case was not significant enough to justify denial of certification; and (3) only injured class members will recover. View "In re Nexium Antitrust Litig." on Justia Law

Plaintiffs filed suit against AQHA, alleging violations of the Sherman Act, 15 U.S.C. 1, 2, and Texas antitrust law. Plaintiffs' allegations stemmed from votes by the Stud Book and Registration Committee of the AQHA, which had blocked AQHA registration of horses created through somatic cell nuclear transfer (SCNT or cloning). On appeal, AQHA challenged the district court's denial of its motion for judgment as a matter of law (JMOL). The court concluded that reasonable jurors could not draw any inference of conspiracy from the evidence presented, because it neither tends to exclude the possibility of independent action nor does it suggest the existence of any conspiracy at all. Therefore, the court concluded that the JMOL motion should have been granted in the absence of substantial evidence on the issue of an illegal conspiracy to restrain trade under Section 1 of the Act. Further, the Section 2 claim failed as a matter of law because AQHA is not a competitor in the allegedly relevant market for elite Quarter Horses. Accordingly, the court reversed and rendered judgment for AQHA. View "Abraham & Veneklasen Joint Venture v. American Quarter Horse Assoc." on Justia Law