Justia U.S. 9th Circuit Court of Appeals Opinion Summaries

Articles Posted in Antitrust & Trade Regulation

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Plaintiffs, purchasers of iPhones and iPhone apps, filed suit against Apple, alleging that Apple has monopolized and attempted to monopolize the market for iPhone apps. The court held that plaintiffs lacked antitrust standing pursuant to Illinois Brick Co. v. Illinois. The court agreed with the Third and Tenth Circuits and read Rule 12(g)(2) in light of the general policy of the Federal Rules of Civil Procedure, expressed in Rule 1. The court concluded that any error committed by the district court in ruling on Apple’s motion to dismiss under Rule 12(b)(6) for lack of statutory standing under Illinois Brick, was harmless. The court explained that Apple is a distributor of the iPhone apps, selling them directly to purchasers through its App Store. Because Apple is a distributor, plaintiffs have standing under Illinois Brick to sue Apple for allegedly monopolizing and attempting to monopolize the sale of iPhone apps. Accordingly, the court reversed and remanded for further proceedings. View "Pepper v. Apple Inc." on Justia Law

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Aerotec is a small, independent company that provides maintenance, repair and overhaul (MRO) services for Honeywell's auxiliary power units (APUs). Aerotec filed suit alleging causes of action under sections 1 and 2 of the Sherman Antitrust Act, 15 U.S.C. 1, 2, the Robinson-Patman Act, 15 U.S.C. 13(a), and Arizona state law. Aerotec alleges that Honeywell leverages its monopoly power over the APU parts market to unfairly smother competition in the repair services market. The court concluded that Aerotec’s chain of logic and evidence is too attenuated to support liability for tying under section 1, and none of the indicia that the court would ordinarily review in an exclusive dealing claim are present in the record. The court rejected Aerotec's monopolization claims under section 2, concluding that Aerotec's refusal to deal claim fails based on its vague requested remedy that the court order Honeywell to provide parts, data, and prices like it did before 2007. Furthermore, reasonable access to the essential facility exists and Aerotec cannot establish an essential facilities claim. The court rejected Aerotec's claim that Honeywell engages in unlawful conduct by simultaneously charging a low (but above-cost) price for its repair bundles and raising the wholesale price of replacement parts. Finally, the court rejected Aerotec's claim that Honeywell engages in secondary-line price discrimination under the Robinson-Patman Act. Accordingly, the court affirmed the judgment. View "Aerotec Int'l v. Honeywell Int'l" on Justia Law

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After Sony and HannStar engaged a mediator to resolve a price-fixing dispute, the mediator proposed settlement in an email exchange. Both parties accepted by email, but when HannStar refused to comply, Sony filed suit to enforce the agreement. The district court denied Sony’s motion for summary judgment, holding that the California Evidence Code’s mediation privilege bars introduction of the settlement emails. The parties stipulated to a final judgment. The court held that, because at the time the parties engaged in mediation, their negotiations concerned (and the mediated settlement settled) both federal and state law claims, the federal law of privilege applies. Accordingly, the court concluded that the district court erred in applying California privilege law to resolve this dispute. The court reversed and remanded. View "Sony Electronics v. HannStar Display Corp." on Justia Law

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The FTC filed suit against AT&T under section 5 of the Federal Trade Commission Act (FTA), 15 U.S.C. 45(a), taking issue with the adequacy of AT&T’s disclosures regarding its data throttling program. The district court denied AT&T's motion to dismiss and rejected it's view of the common carrier exemption. The court concluded, however, that the common carrier exemption in section 5 of the FTC Act carves out a group of entities based on their status as common carriers. Those entities are not covered by section 5 even as to non-common carrier activities. Because AT&T was a common carrier, it cannot be liable for the violations alleged by the FTC. Accordingly, the court reversed and remanded. View "FTC v. AT&T Mobility" on Justia Law

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Plaintiffs, a group of West Coast fishermen, filed suit againt Frank Dulcich, Pacific Seafood, and an Ocean Gold entity, alleging antitrust claims under the Sherman Act, 15 U.S.C. 1-7, and the Clayton Act, 15 U.S.C. 18. Defendants appealed the district court's decision granting a preliminary injunction to enjoin the acquisition and denying the motion to compel arbitration. The court affirmed the district court's order denying the motion to compel arbitration because plaintiffs' claims are not within the scope of the purported arbitration provision in the Resolution Agreement. The court also affirmed the district court's grant of a preliminary injunction where plaintiffs have shown a sufficient likelihood of success on the merits because plaintiffs did not release their claims in a prior settlement, plaintiffs have adequately demonstrated that the proposed transaction could substantially lessen competition, plaintiffs are likely to suffer irreparable harm in the absence of preliminary relief, the balance of the equities tips in plaintiffs' favor, a preliminary injunction is in the public interest, and the preliminary injunction is not overbroad. View "Boardman v. Pacific Seafood Grp." on Justia Law

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The FTC filed suit against Commerce Planet in order to enjoin it's deceptive marketing of a product called “OnlineSupplier.” The FTC alleged that Commerce Planet violated section 5(a) of the Federal Trade Commission Act, 15 U.S.C. 45(a). Commerce Planet and two individual defendants settled. The remaining defendant, Charles Gugliuzza, was enjoined from engaging in similar misconduct and ordered to pay $18.2 million in restitution. In this opinion, the court addressed Gugliuzza's arguments contesting the validity of the restitution award. The court concluded that the district court had the authority to award restitution under section 13(b) of the FTC Act; the court saw no basis for holding that courts are categorically precluded from imposing joint and several liability in actions brought under section 13(b); because joint and several liability is permissible, restitution awards need not be limited to the funds each defendant personally received from the wrongful conduct; and, in this case, the judgment entered against Gugliuzza does not actually hold him jointly and severally liable for Commerce Planet’s restitution obligations. Therefore, the court vacated the judgment. If on remand the district court decides, in the exercise of its discretion, to hold Gugliuzza jointly and severally liable with Commerce Planet, it may reinstate the $18.2 million restitution award. Otherwise, the award must be limited to the unjust gains Gugliuzza himself received. Finally, the court concluded that the district court properly followed the two-step burden-shifting framework for calculating restitution awards under section 13(b) and the district court did not abuse its discretion in calculating the amount of the award in this case. Accordingly, the court affirmed in part, reversed in part, and remanded. View "FTC V. Commerce Planet, Inc." on Justia Law

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Plaintiff, a tomato cannery, filed suit under Section 1 of the Sherman Antitrust Act, 15 U.S.C. 1, alleging claims that it pays artificially high prices as the result of an illegal market allocation agreement among the nation’s leading tin manufacturers who agreed to cede the tin mill products market in the western United States to UPI. The court concluded that U.S. Steel’s participation in the alleged conspiracy is economically implausible. Further, the court concluded that the evidence does not tend to exclude the possibility that the alleged conspirators were acting independently and therefore, plaintiff has failed to establish specific facts supporting a market allocation conspiracy. Accordingly, the court affirmed the district court's grant of summary judgment to defendants. View "Stanislaus Food Products v. USS-POSCO Indus." on Justia Law

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Plaintiff O'Bannon filed suit against the NCAA and CLC, alleging that the NCAA’s amateurism rules, insofar as they prevented student-athletes from being compensated for the use of their names, images, and likenesses (NILs), were an illegal restraint of trade under Section 1 of the Sherman Act, 15 U.S.C. 1. Plaintiff Keller filed suit against the NCAA, CLC, and EA, alleging that EA had impermissibly used student-athletes’ NILs in its video games and that the NCAA and CLC had wrongfully turned a blind eye to EA’s misappropriation of these NILs. Both cases were consolidated. The district court entered judgment for plaintiffs, concluding that the NCAA’s rules prohibiting student-athletes from receiving compensation for their NILs violate Section 1 of the Sherman Act. The court concluded that it was not precluded from reaching the merits of the appeal and found none of plaintiffs' claims persuasive. The court reaffirmed that NCAA regulations are subject to antitrust scrutiny and must be analyzed under the Rule of Reason; when those regulations truly serve procompetitive purposes, courts should not hesitate to uphold them; but the NCAA is not above the antitrust laws, and courts cannot and must not shy away from requiring the NCAA to play by the Sherman Act’s rules. In this case, the NCAA’s rules have been more restrictive than necessary to maintain its tradition of amateurism in support of the college sports market. The court concluded that the Rule of Reason requires that the NCAA permit its schools to provide up to the cost of attendance to their student athletes. The court concluded that it does not require more. Accordingly, the court vacated the district court’s judgment and permanent injunction insofar as they require the NCAA to allow its member schools to pay student-athletes up to $5,000 per year in deferred compensation. The court affirmed otherwise. View "O'Bannon v. NCAA" on Justia Law

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Magnetar filed suit alleging that Intamin maliciously prosecuted a patent infringement action against it and claiming that Intamin prosecuted the action even though the ‘350 Patent was invalid pursuant to the on-sale bar of 35 U.S.C. 102 (on-sale bar). The district court granted summary judgment to Intamin. The court concluded that a reasonable attorney could have determined that the on-sale bar did not apply due to the genuine dispute concerning whether the magnetic braking system had been (1) offered for sale before the critical date; and (2) was ready for patenting before the critical date. Therefore, the court affirmed as to this issue. The court also affirmed the district court's conclusion that Magnetar has not alleged sufficient facts to show a causal antitrust injury stemming from Intamin’s actions. Finally, the court concluded that the district court properly refused to sanction Magnetar for filing a frivolous action where Magnetar proceeded in good faith in not admitting facts related to the antitrust injury. Accordingly, the court affirmed the district court's judgment in its entirety. View "Magnetar Techs. v. Intamin, Ltd." on Justia Law

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Plaintiffs, a putative class, filed suit alleging that Guitar Center and the manufacturer defendants, as well as NAMM, conspired to implement and enforce minimum-advertised-price policies (MAP policies) that fixed the minimum price at which any retailer could advertise the manufacturers’ guitars and guitar amplifiers. Plaintiffs claimed that these MAP policies tended to raise retail prices and restrain competition in violation of section 1 of the Sherman Act, 15 U.S.C. 1. Plaintiffs allege that each manufacturer agreed with Guitar Center to adopt MAP policies and that the manufacturers agreed among themselves to adopt the MAP policies proposed by Guitar Center. The district court granted defendants' motion to dismiss for failure to state a claim and dismissed with prejudice. At issue was whether plaintiffs have pleaded sufficient facts to provide a plausible basis from which the court can infer the alleged agreements’ existence. Because plaintiffs lack direct evidence of horizontal agreements among the manufacturers, they plead that defendant manufacturers’ parallel conduct in adopting MAP policies, in conjunction with several “plus factors,” plausibly suggests the existence of horizontal agreements. The court concluded that plaintiffs have indeed provided a context for the manufacturers’ adoption of MAP policies, but not one that plausibly suggests they entered into illegal horizontal agreements. Accordingly, plaintiffs failed to state a claim under section 1 and the court affirmed the judgment of the district court. View "Ramsey v. NAMM" on Justia Law