Weekly Summaries Distributed November 13, 2015
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Roos v. Honeywell Int'l, Inc.
A class action complaint alleged that Honeywell engaged in uncompetitive and illegal conduct to increase its market share of round thermostats and to use its dominant market position to overcharge customers. In 2013, the parties reached a settlement and asked the trial court to preliminarily approve it. The court initially declined to do so because it had concerns about the notice proposed to be sent to class members. Those concerns were subsequently addressed to the court’s satisfaction, and on February 4, 2014, the court preliminarily approved the settlement. The notice of settlement was subsequently published and distributed to class members. The long version was distributed and posted on a website, and the short version was published in various print publications. The trial court found that four objectors to the settlement failed to establish they had standing, but rejected one objection on timeliness grounds and rejected the other three on their merits. The court of appeal affirmed, except for the ruling on standing, finding that the court properly approved the distribution of residual settlement funds and awarded class counsel attorney fees that amounted to 37.5 percent of the settlement fund.
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Hanover 3201 Realty LLC v. Vill. Supermarkets, Inc.
Hanover Realty contracted with Wegmans to develop a supermarket on its New Jersey property, requiring Hanover to secure necessary permits and approvals before breaking ground. ShopRite and its development subsidiary filed administrative and court challenges to Hanover’s applications. Believing these filings were baseless and intended only to frustrate the entry of a competitor, Hanover sued for antitrust violations. The district court dismissed, holding that Hanover did not have standing because it was not a competitor, consumer, or participant in the restrained markets and did not sustain the type of injury the antitrust laws were intended to prevent. The Third Circuit vacated with respect to the claim for attempted monopolization of the market for full-service supermarkets. Hanover can establish that its injury was “inextricably intertwined” with defendants’ anti-competitive conduct. Hanover sufficiently alleged that the petitioning activity at issue was undertaken without regard to the merits of the claims and for the purpose of using the governmental process to restrain trade, so that defendants are not protected by Noerr-Pennington immunity because their conduct falls within the exception for sham litigation. The court affirmed as to the claim for attempted monopolization of the rental space market; there was no standing because Hanover does not compete with defendants in that market.
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Showing posts with label Antitrust & Trade Regulation. Show all posts
Showing posts with label Antitrust & Trade Regulation. Show all posts
Friday, November 13, 2015
Antitrust & Trade Regulation
Friday, September 25, 2015
Antitrust & Trade Regulation
Weekly Summaries Distributed September 25, 2015
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Landmark Inv. Group, LLC v. CALCO Constr. & Dev. Co.
In 2005, Landmark Investment Group, LLC entered into a contract with Chung Family Realty Partnership, LLC (Chung, LLC) to purchase certain property. Chung, LLC repudiated the contract after receiving a more attractive offer from CALCO Construction & Development Company (Calco) and John Senese, Calco’s president and owner (together, Defendants). Landmark successfully sued for specific performance of the contract but was unable to purchase the property after it was sold at a foreclosure auction where a company controlled by Senese was the highest bidder. Landmark then filed suit against Defendants, alleging tortious interference with its contractual relations and a violation of the Connecticut Unfair Trade Practices Act (CUTPA). The jury returned a verdict in favor of Landmark on both counts. The trial court, however, granted Defendants’ motion for judgment notwithstanding the verdict (JNOV) and rendered judgment for Defendants. The Supreme Court reversed, holding that the trial court (1) improperly granted Defendants’ motion for JNOV because it failed to view the evidence in the light most favorable to sustaining the jury’s verdict; and (2) incorrectly concluded that Landmark presented insufficient evidence to support its claims.
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Sanger Ins. Agency v. HUB Int'l
Sanger filed suit claiming that it was forced to abandon certain prospective business plans after coming up against the anticompetitive practices of HUB, a major player in the nationwide market for veterinary insurance. The district court granted summary judgment for HUB. The court concluded that Sanger has produced sufficient evidence of preparedness to survive the standing inquiry at the summary judgment stage, and the court reversed the district court’s ruling to the contrary. The court also concluded that the alleged conduct does implicate allocation of risk in the insurance market and thus the McCarran-Ferguson Act, 15 U.S.C. 1012(b), exemption. Therefore, the dismissal of the federal antitrust claims is affirmed, but the dismissal of the state antitrust and tortious interference claims is reversed.
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Saturday, August 08, 2015
Antitrust & Trade Regulation
Weekly Summaries Distributed August 7, 2015
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name.space, Inc. V. ICANN
The Internet Corporation for Assigned Names and Numbers (ICANN) creates and assigns top level domains (TLDs), such as “.com” and “.net.” Plaintiff, a registry specializing in “expressive” TLDs, filed suit alleging that the 2012 Application Round for the creation of new TLDs violated federal and California law. The district court dismissed the complaint. The court rejected plaintiff's claims for conspiracy in restraint of trade or commerce under section 1 of the Sherman Act, 15 U.S.C. 1, because plaintiff failed to allege an anticompetitive agreement; the court rejected plaintiff's claim under Section 2 of the Sherman Act, because ICANN’s authority was lawfully obtained through a contract with the DOC and did not unlawfully acquire or maintain its monopoly; the trademark and unfair competition claims were not ripe for adjudication because plaintiff has not alleged that ICANN has delegated or intends to delegate any of the TLDs that plaintiff uses; and the complaint failed to allege a claim for tortious interference or unfair business practice. Accordingly, the court affirmed the judgment.
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Osborn v. Visa Inc.
Plaintiffs, users and operators of independent (non-bank) ATMs, filed related actions against Visa, MasterCard, and certain affiliated banks, alleging anticompetitive schemes for pricing ATM access fees. Plaintiffs alleged anticompetitive harm because Visa and MasterCard prevent an independent operator from charging less, and potentially earning more, when an ATM transaction is processed through a network unaffiliated with Visa and MasterCard. The court held that the district court erred in concluding that plaintiffs had failed to plead adequate facts to establish standing or the existence of a horizontal conspiracy to restrain trade under the Sherman Antitrust Act, 15 U.S.C. 1. Accordingly, the court vacated the district court's denial of plaintiff's motion to amend the judgment and remanded for further proceedings.
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Kehoe Component Sales Inc. v. Best Lighting Prods., Inc.
Best designs and markets exit signs and emergency lighting. Pace manufactured products to Best’s specifications. Best’s founder taught Pace how to manufacture the necessary tooling. There was no contract prohibiting Pace from competing with Best. By 2004, Best was aware that Pace was selling products identical to those it made for Best to Best’s established customers. Several other problems arose between the companies. When they ended the relationship, Pace was in possession of all of the tooling used to manufacture Best’s products and the cloned products, and Best owed Pace almost $900,000 for products delivered. Pace filed a breach of contract suit. Best requested a setoff of damages for breach of warranty and counterclaimed for breach of contract, tortious interference, misappropriation of trade secrets, conversion, and fraud. Pace claimed that Best had misappropriated Pace’s trade secrets and had tortiously interfered with Pace’s contracts. The district court found that Best had breached its contractual obligations by failing to pay, but that Pace was liable for breach of warranties, breach of contract, tortious interference, misappropriation of trade secrets, conversion, and false designation of origin and false advertising under the Lanham Act. The Sixth Circuit affirmed that Pace is liable for breach of contract and tortious interference, but reversed or vacated as to the trade secrets, Lanham Act, conversion, and warranties claims.
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Friday, July 24, 2015
Antitrust & Trade Regulation
Weekly Summaries Distributed July 23, 2015
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King Drug Co of Florence Inc, v. Smithkline Beecham Corp.
In earlier litigation, Teva challenged the validity and enforceability of GSK’s patents on lamotrigine, Lamictal’s active ingredient. Teva was first to file an FDA application, alleging invalidity or nonenforceability, and seeking approval to produce generic lamotrigine tablets and chewable tablets for markets alleged to be annually worth $2 billion and $50 million,. If the patent suit resulted in a determination of invalidity or nonenforceability—or a settlement incorporating such terms—Teva would be statutorily entitled to a 180- day period of market exclusivity, during which time only it and GSK could produce generic lamotrigine tablets. After the judge ruled the patent’s main claim invalid, the companies settled; Teva would end its patent challenge in exchange for early entry into the chewables market and GSK’s commitment not to produce its own, “authorized generic” Lamictal tablets. Plaintiffs, direct purchasers of Lamictal, sued under the Sherman Act, 15 U.S.C. 1 & 2, claiming that the agreement was a “reverse payment” intended to induce Teva to abandon the patent fight and eliminate the risk of competition in the lamotrigine tablet market for longer than the patent would otherwise permit. The district court dismissed. The Third Circuit vacated, citing Supreme Court precedent, holding that unexplained large payments from the holder of a drug patent to an alleged infringer to settle litigation of the patent’s validity or infringement (reverse payment) can violate antitrust laws.
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Sioux Pharm, Inc. v. Eagle Labs., Inc.
In this battle between two domestic producers of chondroitin sulfate, Plaintiffs filed suit claiming trade-secrets violations against Defendants. Before the Supreme Court was an interlocutory appeal on a discovery issue. The district court entered a protective order requiring the redesignation of Plaintiffs’ standard operating procedures from “attorneys’ eyes only” to “confidential,” which would allow these materials to be disclosed to the defendants themselves. The Supreme Court reversed, holding that, while removing the “attorneys’ eyes only” designation may have been appropriate, the district court’s rationale for ordering redesignation was insufficient. Remanded for further consideration.
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Ward v. Apple, Inc.
Plaintiffs filed a putative class action against Apple, alleging that Apple conspired with ATTM to violate federal antitrust laws by entering into an exclusivity agreement in which ATTM would be the exclusive provider of voice and data services for Apple's iPhone. The district court dismissed plaintiffs' claims under F.R.C.P. 19 for failure to join ATTM as a defendant. As a preliminary matter, the court determined that it had jurisdiction over the appeal under 28 U.S.C. 1291 because this is an appeal from a final decision of the district court. On the merits, the court concluded that ATTM's role as an antitrust co-conspirator is not alone dispositive of whether it had interests that warrant protection under Rule 19(a)(1)(B)(i). In this case, the district court erred by failing to specify the interests ATTM claimed or to address how those interests might be impaired if the action were resolved in its absence. The court concluded that Apple has not demonstrated that ATTM has a legally protected interest in this action where Apple has not demonstrated that the risk of regulatory scrutiny gives ATTM a legally protected interest in this action; ATTM’s reputational interests in this action are not legally protected under Rule 19; and Apple has not demonstrated that ATTM currently has any substantial contract rights that may be impaired by resolution of this action. Accordingly, the court reversed and remanded.
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United States v. Apple, Inc.
The Justice Department and 33 states and territories filed suit alleging that Apple, in launching the iBookstore, had conspired with the Publisher Defendants to raise prices across the nascent ebook market, in violation of section 1 of the Sherman Antitrust Act, 15 U.S.C. 1 et seq., and state antitrust laws. All five Publisher Defendants settled and signed consent decrees, which prohibited them, for a period, from restricting ebook retailers’ ability to set prices. The district court found that the agreement constituted a per se violation of the Sherman Act and, in the alternative, unreasonably restrained trade under the rule of reason. The district court issued an injunctive order that, inter alia, prevents Apple from entering into agreements with the Publisher Defendants that restrict its ability to set, alter, or reduce the price of ebooks, and requires Apple to apply the same terms and conditions to ebook applications sold on its devices as it does to other applications. The court concluded that the district court’s decision that Apple orchestrated a horizontal conspiracy among the Publisher Defendants to raise ebook prices is amply supported and well‐reasoned, and that the agreement unreasonably restrained trade in violation of section 1 of the Sherman Act. The court also concluded that the district court’s injunction is lawful and consistent with preventing future anticompetitive harms. The court rejected Macmillan and Simon & Schuster's argument that the portion of the injunction related to Apple’s pricing authority either unlawfully modifies their consent decrees or should be judicially estopped. Accordingly, the court affirmed the judgment.
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Joseph Gen. Contracting, Inc. v. Couto
John and Jane Couto entered into a contract with Joseph General Contracting, Inc. for the purchase and construction of a home and carriage house. The trial court found that the contract existed also between the Coutos and Anthony Silvestri, the owner and president of Joseph General. After disputes arose regarding the construction of the dwellings, Joseph General sued the Coutos for, inter alia, breach of contract. The Coutos counterclaimed against Joseph General, Silvestri and Landel Realty, LLC. The trial court held Joseph General, Landel and Silvestri each jointly and severally liable for breach of contract and implied warranty, trespass and violation of the Connecticut Unfair Trade Practices Act (CUTPA). Silvestri appealed the propriety of these adverse rulings with respect to his personal liability. The Appellate Court affirmed the judgment pertaining to Silvestri in an individual capacity. The Supreme Court reversed the judgment of the Appellate Court as to the claims of breach and contract and implied warranty against Silvestri in his individual capacity and affirmed in all other respects, holding that the Appellate Court (1) erred in determining that Silvestri had incurred contractual obligations to the Coutos in his individual capacity; and (2) properly determined that Silvestri could be held individually liable for alleged violations of CUTPA.
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Artie's Auto Body, Inc. v. Hartford Fire Ins. Co.
Plaintiffs, automobile body shops and an auto body association, brought this class action against Defendant, The Hartford Fire Insurance Company, on behalf of more than 1,000 independent auto body repair shops in Connecticut, claiming that Defendant violated the Connecticut Unfair Trade Practices Act (CUTPA) by requiring its staff motor vehicle physical damage appraisers to use, when appraising auto body damage sustained by Defendant’s insureds, the hourly labor rates agreed on by Defendant and the plaintiff auto body shops instead of rates that more accurately reflect the actual value of those services. The jury returned a verdict in favor of Plaintiffs, concluding that Defendant’s hourly rate practices constituted an unfair trade practice because they offended the public policy found in section 38a-790-8 of the Regulations of Connecticut State Agencies. The Supreme Court reversed, holding that the trial court incorrectly concluded that section 38a-790-8 supports Plaintiffs’ CUTPA claim alleging unfair labor rate practices.
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Friday, May 29, 2015
Antitrust & Trade Regulation
Weekly Summaries Distributed May 29, 2015
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In re Memorial Hermann Hosp. Sys.
Plaintiff was a cardiothoracic surgeon who practiced at Memorial Hermann Memorial City Medical Center until 2012. When Plaintiff agreed to practice at Methodist West, Defendants - Memorial Hermann and certain healthcare practitioners - began conducting a “whisper campaign” against Plaintiff to cast doubt on Plaintiff’s heart surgery procedures. Plaintiff brought suit, asserting claims for business disparagement, defamation, tortious interference with prospective business relationship, and improper restraint of trade. When Plaintiff moved to compel the production of certain documents, Memorial Hermann asserted the documents were protected from discovery under the medical committee privilege and the medical peer review committee privilege. The trial court ordered Defendants to produce the documents. After the court of appeals denied Defendants’ petition for writ of mandamus, Defendants sought mandamus relief in the Supreme Court. The Supreme Court conditionally granted mandamus relief as to some of the documents that the Court determined were protected but denied relief as to the remainder of the documents, holding that they were not confidential under either the medical committee privilege or the medical peer review committee privilege.
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United States v. Apple Inc.
The district court found Apple in violation of Section 1 of the Sherman Antitrust Act, 15 U.S.C. 1, because Apple facilitated and executed a conspiracy where five of the six largest e-book publishers in the country entered into a horizontal conspiracy to eliminate retail price competition in order to raise e-book prices. The district court issued an external compliance monitor through a permanent injunction. At issue on appeal is the district court’s denial of the motion to disqualify the appointed monitor, and modifications of the injunction. The court concluded that the district court did not abuse its discretion in declining to disqualify the monitor based on the record before the district court. The court also concluded that, in light of the court's intervening interpretation of the injunction, the terms of the injunction are not currently affected by modifications (if any) made by the district court. Accordingly, the court affirmed the decisions of the district court without prejudice. The court ordered the letter at issue disclosing the fee schedule unsealed and directed the Clerk of the Court to make that letter publicly available on the docket.
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Friday, May 22, 2015
Antitrust & Trade Regulation
Weekly Summaries Distributed May 22, 2015
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Estate of Gleason v. Cent. United Life Ins. Co.
Central United Life Insurance Co. (CULI) purchased Judith Gleason’s cancer benefit insurance policy prior to Gleason’s death from breast cancer. Gleason’s Estate submitted notice of potential claims under the policy to CULI. CULI paid certain claims but denied payment for claims submitted outside the policy limit. The Estate contested the denial of the untimely-filed claims. The district court granted partial summary judgment for the Estate, ruling that CULI owed payment for the untimely-filed claims, provided it was not prejudiced by the late notice. After a trial, the jury found that CULI had violated the Montana Unfair Trade Practices Act (UTPA) but did not award damages and therefore did not consider whether CULI acted with malice. The Supreme Court affirmed in part, reversed in part, and remanded, holding (1) the district court correctly applied the notice-prejudice rule; and (2) when an insurer is found to have violated the UTPA, a jury is not required to find compensatory damages beyond those for breach of the insurance contract before considering malice and punitive damages under the UTPA, and therefore, a new trial must be held on the issue of malice and punitive damages.
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Friday, May 15, 2015
Antitrust & Trade Regulation
Weekly Summaries Distributed May 15, 2015
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McHugh Fuller Law Group, PLLC v. PruittHealth-Toccoa, LLC
McHugh Fuller Law Group, PLLC, a Mississippi-based law firm, ran a full-page advertisement in a Northeast Georgia local newspaper, noting that Heritage Healthcare of Toccoa, a Stephens County nursing home owned by PruittHealth, had been cited by the government for deficiencies in the care of its residents and inviting those suspecting abuse or neglect of a loved one at the facility to call the law firm. On the following day, PruittHealth filed a verified complaint for temporary and permanent injunctive relief under the Georgia Uniform Deceptive Trade Practices Act (UDTPA), and petitioned ex parte for a temporary restraining order. That same day, the Stephens County Superior Court entered a temporary restraining order enjoining McHugh Fuller from publishing, in any newspaper or other media, advertisements regarding PruittHealth utilizing the language of the ad. At the hearing, PruittHealth presented testimony that the government citation referenced in the ad arose from an old report, that the cited deficiencies had been resolved immediately, and the ad had caused severe damage to the facility's reputation. McHugh Fuller presented testimony to substantiate and justify the specific language used in the ad. The trial court found the ad to be deceptive and thus in violation of the UDTPA. Thereafter, the trial court signed an order enjoining McHugh Fuller “from publishing or causing the offending advertisement to be published in the future” and requiring McHugh Fuller remove postings of the ad. McHugh Fuller filed a verified answer and a motion to amend and/or for reconsideration of the court's order. The Supreme Court consolidated both parties' appeals of the trial court's rulings.. In case S15A0362, the Supreme Court concluded the trial court erred by granting permanent injunctive relief at the conclusion of the interlocutory hearing without giving McHugh Fuller clear notice at the time that it was doing so. In case S15A0641, the Court found the trial court erred in its conclusion that that the appellate record in McHugh Fuller's initial appeal should not have included any filings in the trial court submitted after the entry of the permanent injunction on June 2, 2014.
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Gazelka v. St. Peter’s Hosp.
After receiving treatment from St. Peter’s Hospital, Plaintiff filed suit alleging that the Hospital violated Montana anti-trust laws and the Montana Constitution by discriminating against her based on her lack of health insurance. After concluding that Plaintiff had standing, the district court awarded summary judgment to the Hospital, determining that uninsured persons are not a protected class under the Montana Constitution. The Supreme Court (1) affirmed the district court’s standing determination; but (2) reversed the court’s entry of summary judgment on the merits, holding that the determinations that the district court made in its summary judgment order did not resolve all of Plaintiff’s claims. Remanded.
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Friday, May 08, 2015
Antitrust & Trade Regulation
Weekly Summaries Distributed May 8, 2015
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Sukumar v. Nautilus, Inc.
In 1994, Sukumar began caring for his aging father and noticed that rehabilitation fitness machines used by his father did not adequately suit frail seniors. To learn more about rehabilitation for seniors, he attended trade shows where he met Nautilus representatives. In 1998-1999, Sukumar ordered Nautilus machines and asked for modifications to meet elderly users’ needs. When Nautilus delivered the custom fitness machines, Sukumar was dissatisfied and filed a breach of contract action. In 2004, Sukumar founded Southern California Stroke Rehabilitation Associates (SCSRA) to operate senior rehabilitation facilities in which Sukumar would use modified Nautilus fitness machines. SCSRA has acquired over 100 Nautilus fitness machines and, according to Sukumar, has twice attempted to negotiate a patent license from Nautilus. As of 2010, when Sukumar filed a false marking claim, 35 U.S.C. 292(b), SCSRA had no business plan, no employees, no office space, and no prototype designs. The district court found that many of the patents marked on six Nautilus machines did not cover the machines, but concluded that Sukumar had not suffered “competitive injury” necessary to have standing to assert a claim. The Federal Circuit affirmed. Sukumar had not taken sufficient action to enter the market for fitness machines.
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In re Cipro Cases I & II
Bayer AG and Bayer Corporation (collectively, Bayer) marketed Cipro, an antibiotic. In 1987, Bayer was issued a United States patent on the active ingredient in Cipro. Twelve years before the expiration of the patent, Barr Laboratories, Inc. filed an application to market a generic version of Cipro. Bayer responded with a patent infringement suit, and Barr counterclaimed for a declaratory judgment that the patent was invalid. In 1997, Bayer and Barr entered into a settlement agreement under which Bayer agreed to make a “reverse payment” to Barr in exchange for Barr dropping its patent challenge and consenting to stay out of the market. The settlement produced numerous state and federal antitrust suits. This case arose from nine such coordinated class action suits brought by indirect purchasers of Cipro in California. The complaint alleged that the Bayer-Barr reverse payment settlement violated the Cartwright Act, unfair competition law, an common law prohibition against monopolies. The trial court granted summary judgment for Bayer and Barr. The Court of Appeal affirmed. The Supreme Court reversed, holding that parties illegally restrain trade when they privately agree to substitute consensual monopoly in place of potential competition that would have followed a finding of invalidity or noninfringement.
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