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

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

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

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

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

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

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

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

Plaintiffs filed suit against defendants, alleging that defendants violated federal and state antitrust laws by conspiring to fix the price for SD cards and engaging in improper practices with respect to the licensing of defendants' patents to other manufacturers of SD cards. Plaintiffs sought injunctive relief under section 16 of the Clayton Act, 15 U.S.C. 26. The court distinguished this case from a recent decision in Samsung Electronics Co., Ltd v. Panasonic Corp. The court concluded that, because plaintiffs sought only injunctive relief under federal law, their federal antitrust claim was subject to the equitable doctrine of laches and not the four-year statute of limitations in section 4B of the Clayton Act. The court concluded that there was sufficient evidence to establish that laches was not a bar to plaintiffs' federal antitrust claim. The court also concluded that the district court erred in dismissing plaintiffs' state law claims. On remand, the district court should apply the California Supreme Court's recent decision in Aryeh v. Canon Business Solutions, Inc. in determining whether plaintiffs' Cartwright Act, Cal. Bus. & Prof. Code 16720, claim was timely filed. Accordingly, the court reversed the judgment of the district court and remanded for further proceedings. View "Oliver v. SD-3C" on Justia Law

UNM, a trade show cleaning company, filed suit against SDC, alleging claims for interference with contract, interference with prospective economic advantage, and antitrust violations. The court reversed the district court's holding that under California law, SDC could not be held liable for the tort of intentional interference with contractual relationship; reversed the grant of judgment as a matter of law on that ground; affirmed the district court's holding that it committed instructional error by not interpreting the terms of the contract and that this error constituted prejudicial error that warranted a new trial; affirmed the district court's holding that SDC possessed state action immunity from UNM's antitrust claim; held that the a new trial is warranted on UNM's claim for intentional interference with contractual relationship; and concluded that, under California law, SDC could not be liable for punitive damages because it is a public entity. View "United Nat'l Maint. v. San Diego Convention Ctr." on Justia Law

Samsung filed suit alleging that defendant's SD card licenses were an anti-competitive agreement in restraint of trade in violation of the Sherman Act, 15 U.S.C. 1-7. At issue was the scope of the continuing violation exception to the four-year statute of limitations on private actions to enforce the antitrust laws. The court agreed with Samsung that defendants' committed two overt acts within the limitations period: the adoption of the 2006 license, which extended the license to cover the second-generation SD cards, and the attempt to enforce either license by collecting royalty payments from Samsung. The court held that, even if the 2006 license was merely a restatement of the 2003 license, the application of the licenses to Samsung when it began to make SD cards in the fall of 2006 was also an overt act that restarted the limitations period. Because the harm Samsung challenged in this suit was speculative at the time of the initial wrong, the law of limitations in federal antitrust actions allowed Samsung to file suit once the harm crystallized in 2006. Because the court concluded that the federal antitrust claims were timely, the court vacated the district court's dismissal of the state law claims and remanded. Construing the district court's order as an implicit dismissal of the equitable claim, the court vacated that dismissal and remanded for a determination of whether the equitable claim was timely. Accordingly, the court reversed and remanded for further proceedings on the federal antitrust claims and on the supplemental state law claims. View "Samsung Electronics v. Panasonic Corp." on Justia Law