Articles Posted in Antitrust & Trade Regulation

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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

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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