A Matsushita “Quick Look” Analysis Demonstrates that While Plausible, No Evidence Supports An Actionable Conspiracy or Monopoly. Abraham & Veneklasen Joint Venture et al. v. Am. Quarter Horse Ass’n, 776 F.3d 321 (5th Cir. Jan. 14, 2015). Continue Reading
There are few aspects of U.S. antitrust law as seemingly well settled as Illinois Brick’s “indirect purchaser rule.” The rule itself — indirect purchasers may not recover damages under federal antitrust laws — is about as straightforward as they come; there are only a few exceptions, and courts have adhered to the U.S. Supreme Court’s instruction that these exceptions not be freely expanded or multiplied. If antitrust has any load-bearing doctrinal pillars, then Illinois Brick is surely among them.
But here is a not-entirely-settled question about Illinois Brick: To what extent does it apply to claims based on conduct occurring in foreign commerce? Part of the answer is easy: As an interpretation of the Clayton Act, Illinois Brick undisputedly applies to bar federal indirect purchaser claims based on foreign conduct. But does it also bar such claims when brought under state laws?
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While hardly ever enforced in modern times by government enforcement agencies, and rarely the subject of antitrust treble damage actions, Sections 2(d) and (e) of the Robinson Patman Act (15 U.S.C. §§ 13(d) and (e)) have had a colorful heritage. In response to the Supreme Court’s decision in FTC v. Fred Meyer, Inc., 390 U.S. 341 (1968), the Federal Trade Commission issued its Guides for Advertising Allowances and Other Merchandising Payments and Services, codified at 16 CFR, Part 240 (1969). The “Fred Meyer Guides”, as they are generally referred to, were revised in 1990, and most recently in November 2014. In the wake of efforts through the years to better equate the aims and goals of Robinson-Patman enforcement with those of the other antitrust laws, there has been a vigorous debate over modifications. These included proffered amendments suggested by the American Bar Association Section of Antitrust Law, the Antitrust Law Institute, and others.
On February 10, 2015, the Ninth Circuit issued its highly-anticipated decision at the intersection of health care and antitrust, affirming the lower court’s finding that a hospital-physician group merger completed nearly three years ago violated Section 7 of the Clayton Act. St. Alphonsus Med. Ctr. – Nampa Inc. v. St. Luke’s Health Sys., Ltd., No. 14-35173 (9th Cir. Feb. 10, 2015) (“St. Luke’s”). The significance of St. Luke’s cannot be overstated. It is the first challenge of a hospital-physician group merger by the Federal Trade Commission that proceeded to trial. And, the Ninth Circuit’s opinion includes significant judicial guidance for future health care mergers, casting serious doubt on the viability of a “post-merger efficiencies defense” to a prima facie case of a Section 7 violation and declaring that proof of “extraordinary efficiencies” that are “merger-specific” is required to successfully offset anticompetitive concerns in highly concentrated markets.
China’s adoption of the Anti-Monopoly Law (“AML”) is a landmark in the evolution of China’s economic transformation. The AML was a carefully thought-out, negotiated, strategic development dictated by the central government, and the culmination of a process that started almost twenty years ago. China has moved from a centrally planned command economy to one that is largely a free market economy, despite the existence of state-owned enterprises as major players. The AML is the ultimate recognition on the part of the Chinese government that free and fair competition in the market place is in the essential interest of the Chinese people.
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.
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.
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.
In California v. Intelligender, LLC, 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.
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.