Higher Filing Thresholds for HSR Act Premerger Notifications and Interlocking Directorates Announced

1. Higher Thresholds For HSR Filings

On January 15, 2015, the Federal Trade Commission announced revised, higher thresholds for premerger filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The filing thresholds are revised annually, based on the change in gross national product and will be effective thirty days after publication in the Federal Register. Publication is expected within a week, so the new thresholds will most likely become effective in late February 2015. Acquisitions that have not closed by the effective date will be subject to the new thresholds.

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CMS’ Proposed Regulations Include Significant Antitrust Implications For Entities Interested In Forming ACOs

The Centers for Medicare & Medicaid Services (CMS) released proposed regulations to clarify and build on current regulatory requirements for Accountable Care Organizations (ACOs) that participate in the Medicare Shared Savings Program (MSSP).  Among the changes is one addressing when an ACO must be formed as an independent legal entity, separate from any of its multiple participants.  According to CMS, this proposed change is designed to clarify existing regulations and to ensure that ACO decision-making is governed by individuals with fiduciary duties to the ACO alone.

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Allegations That Designer Wedding Dress Line Constitutes A Relevant Product Market Found Implausible

Allegations that a highly specialized designer line of wedding dresses lacks reasonable substitutes fail to support allegations of Sherman Act violations for price fixing and group boycott claims.  House of Brides etc., v. Alfred Angelo, Inc., Case No. 1:11-cv-07834 (N.D. Ill., December 4, 2014).

Alfred Angelo, Inc. (“Angelo”) is a designer, manufacturer and retailer of wedding products.  House of Brides was an authorized Angelo retail dealer for over 40 years.  While strictly a designer and manufacturer for many years, Angelo eventually entered into the operation of its own retail stores. Thus, it was engaged in “dual distribution,” in competition with its dealers such as House of Brides.

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The Ninth Circuit Holds That Res Judicata Bars State Recovery of Restitution for Members of a CAFA-Compliant Class Action

In California v. Intelligender, LLC[1], the Ninth Circuit ruled that final judgment in a CAFA-compliant class settlement barred the State of California from seeking restitution on behalf of members of the settlement class for losses caused by Intelligender’s allegedly false advertising of its gender predictive test.  The Ninth Circuit rejected Intelligender’s efforts to block other remedies sought by the State.

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Supplier Beware Before Terminating Dealers: California’s Equipment Dealers Act

Developments in modern antitrust law have made it increasingly difficult for termination of vertical relationships between a supplier and a dealer to be actionable under the antitrust laws, particularly under a per se theory of liability.  Suppliers contemplating termination of dealer agreements, however, may need to carefully consider laws beyond contracts and antitrust.  That is, many states including California have statutes intended to afford greater substantive and procedural protections to dealers than may be found within the four corners of the dealer agreement.  What’s more, California’s statute – the Fair Practices of Equipment Manufacturers, Distributors, Wholesalers and Dealers Act (commonly known as California’s Equipment Dealers Act or CEDA), Cal. Bus. & Prof. Code § 22900 et seq. – is relatively arcane, has broad applicability to all kinds of “equipment” dealers, may apply to dealers solely doing business outside of California, and has a dearth of case law.

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District Court Weighs in on Level of Integration Required to Shield Health Care Collaborations from Section 1 Scrutiny

In Medical Center at Elizabeth Place v. Premier Health Partners et. al, Case No. 12-cv-26 (S.D. Oh. Oct. 20, 2014), the Southern District of Ohio held that previously-competing health care systems who join together in a revenue-sharing arrangement are incapable of conspiring with each other under Section 1 of the Sherman Act.  This is the latest decision to weigh in on the level of integration required among legally separate entities to be deemed a single economic actor for antitrust purposes, and particularly significant given the rapidly increasing number of collaborations within the health care industry following passage of the Affordable Care Act.

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Agricultural Cooperative Antitrust Litigation Continues to Mushroom

Pennsylvania District Court certifies five year ruling for interlocutory appeal, that mushroom cooperative is not immune from antitrust claims based upon “advice of counsel” argument.  In Re Mushroom Direct Purchaser Antitrust Litigation, Case No. 2:06-cv-00620, (E.D. Pa. October 17, 2014.)

The multidistrict litigation over alleged price fixing in the mushroom market is one of many antitrust class actions pending against cooperatives in various agricultural industries throughout the United States.  These include In Re Fresh & Processed Potatoes Antitrust Litigation, (MDL No. 2186 D. Idaho) and In Re Processed Egg Products Antitrust Litigation, MDL No. 2002 (E.D. Pa.)  These cases involve the scope of immunity for agricultural cooperatives pursuant to the Capper-Volstead Act of 1922, 7 U.S.C. §291-292.  The Capper-Volstead Act provides agricultural coops with a limited scope of immunity to agree to fix sales prices through “collectively processing, preparing for market, handling, and marketing.”

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Beginning to Close the POM Circle? – POM Wonderful and Drug Advertising: JHP Pharmaceuticals

Earlier this year, in POM Wonderful LLC v. Coca-Cola Co.,[1] the Supreme Court examined the interaction between the Lanham Act’s prohibition against false advertising and the FDCA’s prohibition against food, drug and cosmetics labeling that is “false or misleading.”  In POM Wonderful, POM alleged that Coca-Cola’s labeling and marketing of its “Pomegranate Blueberry” juice was false and misleading.  Coca-Cola sought dismissal of POM’s Lanhan Act and state law claims on the grounds that because its labeling complied with the requirement of the Food, Drug and Cosmetics Act (FDCA), POM’s claims were precluded.  The Supreme Court disagreed, holding that the FDCA and Lanham Act were complementary statutory schemes and allowed competitor advertising claims under the Lanham Act that challenge food and beverage labeling regulated under the FDCA.

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DOJ Will Not Challenge Cyber Security Data Sharing Platform

On October 2, 2014, the U.S. Department of Justice announced that a cyber intelligence data-sharing platform known as TruSTAR, developed by CyberPoint International, LLC, passed antitrust muster.  The TruSTAR platform allows members to share threat and incident data along with cyber-attack information, and to develop remediation solutions to facilitate more effective cyber-attack prevention strategies.  The DOJ’s business review letter also reiterated antitrust guidelines applicable to information exchanges by business organizations such as industry trade associations.

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ABA Antitrust Section, Consumer Protection Subcommittee September 2014 Monthly Consumer Protection Update

On October 14, 2014, Bruce Colbath  and Sheppard Mullin presented the ABA Antitrust Section, Consumer  Protection SubCommittee September 2014 Monthly Consumer Protection Update.  Bruce is the Vice-Chair of the ABA Antitrust Section’s Consumer Protection Committee, which focuses on issues that arise in commercial advertising, including administrative and private advertising litigation and related proceedings.  The Consumer Protection Updates are presented each month and summarize developments at the Federal Trade Commission, Consumer Finance Protection Bureau, NAD and in private advertising litigation.

Click here to view the presentation.