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

Articles Posted in Antitrust & Trade Regulation

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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. View "name.space, Inc. V. ICANN" on Justia Law

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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. View "Ward v. Apple, Inc." on Justia Law

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In this putative nationwide class action Plaintiffs claimed that they were deceived into purchasing Defendants’ “natural” cosmetics, which contained allegedly synthetic and artificial ingredients. Plaintiffs sought injunctive relief and damages under the federal Magnuson-Moss Warranty Act, California’s unfair competition and false advertising laws, and common law theories of fraud and quasi-contract. The district court dismissed the quasi-contract cause of action for failure to state a claim and dismissed the state law claims under the primary jurisdiction doctrine so that the parties could seek expert guidance from the Food and Drug Administration (FDA). A panel of the Ninth Circuit reversed, holding (1) the Food, Drug, and Cosmetic Act does not expressly preempt California’s state law causes of action that create consumer remedies for false or misleading cosmetics labels; (2) although the district court properly invoked the primary jurisdiction doctrine, it erred by dismissing the case rather than staying proceedings while the parties sought guidance from the FDA; and (3) the district court erred in dismissing the quasi-contract cause of action as duplicative of or superfluous to Plaintiffs’ other claims. View "Astiana v. Hain Celestial Group, Inc." on Justia Law

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Plaintiff filed a false advertising lawsuit against Johnson & Johnson and McNeil Nutritionals, LLC (collectively, McNeil) challenging several of McNeil’s assertions about its product, Benecol, a vegetable oil-based spread. Specifically, Plaintiff alleged that McNeil’s claims about its product were not authorized under the FDA’s regulations and were false. Plaintiff asserted claims for relief on behalf of a putative class of Benecol purchasers under California’s Unfair Competition Law, False Advertising Law, and Consumer Legal Remedies Act. The district court granted McNeil’s motion to dismiss, concluding that Plaintiff lacked standing because he failed to plead reasonable reliance on any misrepresentations and that Plaintiff’s claims for relief were preempted under federal law. The Ninth Circuit reversed, holding (1) Plaintiff had standing to challenge McNeil’s statements; (2) Plaintiff’s claims for relief were not preempted to the extent they were predicated on McNeil’s statements about trans fat, and a certain FDA letter was not entitled to preemptive effect; and (3) Plaintiff’s action was not barred by the primary jurisdiction doctrine. Remanded. View "Reid v. Johnson & Johnson" on Justia Law

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A class of Netflix DVD subscribers filed a consolidated amended class action against Netflix and Walmart, claiming that a promotion agreement whereby Walmart transferred its online DVD-rental subscribers to Netflix and Netflix agreed to promote Walmart’s DVD sales business was anti-competitive. The district court approved of a settlement between Walmart and the class of Netflix subscribers whereby Walmart agreed to pay a total amount of $27,250,000. The Ninth Circuit affirmed, holding that the district court did not err in (1) approving the settlement as fair, reasonable, and adequate; (2) certifying the settlement class; and (3) awarding attorneys’ fees of twenty-five percent of the overall settlement fund. View "Frank v. Netflix, Inc." on Justia Law

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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

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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

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This case arose when the Oakland Athletics wanted to move to the City of San Jose, but the City falls within the exclusive operating territory of the San Francisco Giants. The City, seeking approval of the move, filed suit against MLB, alleging violations of state and federal antitrust laws, of California's consumer protection statute, and of California tort law. The district court granted MLB's motion to dismiss on all but the tort claims and the City appealed. The City argues that the baseball industry's historic exemption from the antitrust laws does not apply to antitrust claims relating to franchise relocation. The court held, however, that antitrust claims against MLB's franchise relocation policies are precluded by Flood v. Kuhn, and, under Portland Baseball Club, Inc. v Kuhn, the court rejected any antitrust claim that was wholly unrelated to the reserve clause. Therefore, the City's claims under the Sherman Act and Clayton Act, 15 U.S.C. 1-7 and 15 U.S.C. 12-27, must be dismissed. Further, the City's antitrust claims necessarily fall with its federal claims where the City can point to no case that has ever held that state antitrust claims continue to be viable after federal antitrust claims have been dismissed under the baseball exemption. An independent claim under California's unfair competition law is also barred so long as MLB's activities are lawful under the antitrust laws. Accordingly, the court affirmed the judgment of the district court. View "City of San Jose v. Comm'r of Baseball" on Justia Law

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Defendant appealed from the district court's grant of summary judgment to the FTC and its order permanently enjoining defendant from engaging in a variety of marketing tactics, and ordering him to pay restitution. The court concluded that the district court properly held defendant personally liable for both injunctive relief and the requirement to pay restitution with respect to all of the marketing schemes at issue, with the exception of the Acai Total Burn scheme; individual liability for corporate malfeasance is available for violations of the Electronic Funds Transfer Act (EFTA), 15 U.S.C. 1693, because such violations are also deemed to be violations of the Federal Trade Commission Act (FTC Act), 15 U.S.C. 41-58, and that defendant is liable for Vertek's, defendant's wholly controlled company, violations of the EFTA because of his personal involvement in concocting and carrying out the several schemes that violated the EFTA; and defendant's challenges to the scope of the district court's injunction are unavailing. Accordingly, the court affirmed the district court's grant of summary judgment to the FTC in part, and vacated the district court's grant of summary judgment to the FTC with respect to the Acai Total Burn scheme. The court remanded so that the district court could modify its permanent injunction and the amount of restitution.View "FTC v. Kimoto" on Justia Law

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This criminal antitrust case stems from an international conspiracy between Taiwanese and Korean electronics manufacturers to fix prices for TFT-LCDs. Defendants, AUO, a Taiwanese company, and AUOA, AUO's retailer and wholly owned subsidiary (collectively, "the corporate defendants"), and two executives were convicted of conspiracy to fix prices in violation of the Sherman Act, 15 U.S.C. 1 et seq. The court concluded that venue in the Northern District of California was proper; defendants waived their jury instruction challenge regarding the extraterritoriality of the Sherman Act; the price-fixing scheme as alleged and proved is subject to per se analysis under the Sherman Act; the Foreign Trade Antitrust Improvements Act (FTAIA), 15 U.S.C. 6a, does not limit the power of the federal courts, but rather, it provides substantive elements under the Sherman Act in cases involving nonimport trade with foreign nations; the FTAIA does not apply to defendants' import trade conduct because the government sufficiently pleaded and proved that the conspirators engaged in import commerce with the United States and that the price-fixing conspiracy violated section 1 of the Sherman Act; there was no constructive amendment because the facts in the indictment necessarily supported the domestic effects claim; the evidence offered in support of the import trade theory alone was sufficient to convict defendants of price-fixing in violation of the Sherman Act; the unambiguous language of the Alternative Fine Statute, 18 U.S.C. 3571(d), permitted the district court to impose the $500 million fine based on the gross gains to all the coconspirators; and no statutory authority or precedent supports AUO's interpretation of the Alternative Fine Statute as requiring joint and several liability and imposing a "one recovery" rule. Accordingly, the court affirmed the judgment of the district court. View "United States v. Hsiung" on Justia Law