Antitrust Law Blog : Antitrust Lawyer & Attorney : Sheppard Mullin Law Firm : Antitrust Law Blog

By Jennifer Driscoll-Chippendale 

On March 27, 2013, the U.S. Supreme Court continued its recent trend of imposing more stringent standards for class certification in Comcast Corporation v. Behrend, 569 U.S. ___ (2013). At issue was whether the proponents of certification satisfied Federal Rule of Civil Procedure 23(b), which requires that “questions of law or fact common to class members predominate over any questions affecting only individual members,” when calculating damages with a regression model that did not isolate the effect of specific misconduct. In a 5-4 decision authored by Justice Scalia, the Court held that the class was improperly certified, reversing the decisions of the lower courts.

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By Becky Koblitz 

Since the Anti-monopoly Law (“AML”) has come into effect in August 2008, MOFCOM has issued 16 conditional approvals requiring certain structural or behavioral remedies in order to prevent the anticompetitive consequences that, from MOFCOM’s perspective, could arise as a result of the transaction. On March 27, 2013, the Ministry of Commerce (“MOFCOM”) requested public comments by April 26, 2013 on draft provisions (for unofficial translation by SMRH, please see here) concerning the evaluation, negotiation, implementation, monitoring, reconsideration of the remedies used in the conditional approvals issued as a result of the pre-merger review process as well as related sanctions. Once the draft provisions are finalized, they will replace the 2010 interim provisions on the acquisition and divesture of assets.

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By Thomas D. Nevins 

The Massachusetts United States District Court granted a Rule 12(b)(6) motion dismissing antitrust claims brought under Section 1 of the Sherman Act by a company that had invented a new technology for testing metallic materials. Plaintiff alleged that defendant horizontal competitors, whose technology allegedly was inferior, had conspired to “stack the vote” and take other steps to prevent plaintiff’s product from gaining approval by a standard setting organization (“SSO”) and an International Standards Organization (“ISO”) of which they were voting members. The Court found that plaintiff had failed to plead a plausible conspiracy because each defendant unilaterally would choose to “decline[] to support a standard that would promote another competitor’s technology.” Advanced Technology Corp. v. Instron, Inc., Civil Action No. 12-10171-JLT, slip op. at 12 (D. Mass. Feb. 26, 2013) (“Instron”). In the Court’s view, there was no reason, therefore, to believe that a conspiracy had taken place.

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By Rena Andoh 

In Mayor and City Council of Baltimore v. Citigroup, Inc., No. 10-0722-cv(L) and 10-0867-cv(CON), 2013 WL 791397 (2d Cir. Mar. 5, 2013), the United States Court of Appeals for the Second Circuit upheld the dismissal of two related class action complaints brought on behalf of purchasers of auction rate securities (“ARS”) and ARS issuers, respectively, against a number of large financial institutions. The complaints alleged that the financial institutions violated Section 1 of the Sherman Act, 15 U.S.C. § 1, by conspiring to stop purchasing ARS, thereby rendering ARS almost valueless and triggering the collapse of the ARS market. The Second Circuit based its holding upon a principle first announced by the United States Supreme Court in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) [see blog article here] — that antitrust complaints must allege sufficient factual matter to allow a fact-finder to plausibly infer that the plaintiffs’ alleged injuries were the result of an unlawful conspiracy, rather than independent parallel business conduct.

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By Bob Magielnicki and Malika Levarlet 

1. Higher Thresholds For HSR Filings

Higher thresholds for premerger filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 became effective on February 11, 2013. The filing thresholds are revised annually, based on the change in gross national product.

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By Tyler M. Cunningham

The California Supreme Court has offered hope to plaintiffs facing statute of limitations problems under California’s Unfair Competition Law, holding that special rules for calculating accrual dates for so-called “continuing wrongs” can, in some cases, apply to UCL claims.

In Aryeh v. Canon Business Solutions, Inc., __ Cal. 4th __ (Jan. 24, 2103), the Supreme Court resolved a split among California’s Courts of Appeal. Some had held that the UCL’s four-year statute of limitations begins to run as soon as the last element giving rise to a claim occurs, and that common-law exceptions to that default rule, such as the continuous accrual doctrine, were categorically inapplicable to UCL claims. Others were contra. In Aryeh, the Supreme Court said that the continuous accrual doctrine might apply to UCL claims, depending on the nature of the claim.

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By Mona Solouki

On January 8, 2013 – less than a week after the Federal Trade Commission ("FTC") entered into a consent order with Google,[1] under which Google is generally banned from seeking injunctions on its F/RAND[2] -encumbered standard essential patents ("SEPs")[3] – the United States Department of Justice ("DOJ") banded together with the United States Patent and Trademark Office ("USPTO") (jointly referred here as "the Agencies") in issuing the Policy Statement on Remedies for Standard Essential Patents Subject to F/RAND Commitment ("Policy Statement on Remedies for SEPs").

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By James L. McGinnis

After a 3-week trial and less than 24 hours of deliberation, a federal jury in San Francisco convicted Mr. Stephen Leung of AUO of one felony count of price-fixing in violation of Section 1 of the Sherman Act. He was charged with participating in a worldwide conspiracy to fix LCD panel prices. This was a retrial following a seven-defendant trial that concluded on March 13, 2012. In that first trial, AUO, AUO America, and two individuals were convicted of conspiring to fix LCD panel prices, but the jury hung with respect to Mr. Leung 8-4 in favor of conviction. Two other individuals were acquitted.

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By David Garcia and Leo Caseria

Have you ever been away from home when your favorite baseball or hockey team is playing an important game? Ever wished you could watch that game, and just that game, live while you are on the road? If plaintiffs in Laumann v. Nat’l Hockey League, Case No. 1:12-cv-01817 (S.D.N.Y.) have their way, you might get your wish. On December 5, 2012, District Judge Shira A. Scheindlin largely denied a motion to dismiss plaintiffs’ Sherman Act Section 1 and 2 claims challenging agreements that allegedly restrain the markets for baseball and hockey programming. Plaintiffs, consumers of television and internet packages that include baseball and hockey programming, allege that competition has been eliminated in the distribution of baseball and hockey games through a web of collusive agreements between and among numerous defendants, including the National Hockey League (“NHL”), Major League Baseball (“MLB”) (collectively, the “Leagues”), the teams within those leagues, regional sports networks that televise the games (“RSNs”) and multichannel video programing distributors (“MVPDs”) Comcast and DirecTV, which sell cable programming packages. Defendants’ agreements purportedly divide the market into exclusive “in-market” territories protected by blackouts, prohibit any option for viewing in-market games on the internet, and provide consumers with only one option for viewing “out-of-market” games, an all-or-nothing package containing all out-of-market games. The result, according to plaintiffs, is a double play—higher prices and reduced output of sports programming.

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By David Garcia and Leo Caseria

On Friday, December 7, 2012, the Supreme Court granted certiorari in Oxford Health Plans LLC v. John Ivan Sutter MD, No. 12-135 to address whether the parties to an arbitration agreement authorize class arbitration when the agreement provides that “any dispute” will be submitted to arbitration. The Third Circuit’s decision in Oxford, which upheld an arbitrator’s decision to proceed with class arbitration based on such an agreement, presents a potential conflict with the Supreme Court’s decision in Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 130 S. Ct. 1758 (2010), which held that class arbitration cannot be imposed on parties that have not agreed to it. The Supreme Court has been extremely interested in the topic of class action waivers and arbitration agreements recently. The Court’s decision to hear Oxford comes less than a month after it also granted certiorari in American Express Company vs. Italian Colors Restaurant, No. 12-133 (“AMEX”) to address the following question: “Whether the Federal Arbitration Act permits courts, invoking the ‘federal substantive law of arbitrability,’ to invalidate arbitration agreements on the ground that they do not permit class arbitration of a federal-law claim.” (Previously blogged at Supreme Court to Address Enforceability of Arbitration Agreements and Class Action Waivers Yet Again).

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By Jennifer Driscoll-Chippendale

On November 28, 2012, the Japan Fair Trade Commission (“JFTC”) published the findings of its 2012 survey of corporate compliance practices based on (i) responses from approximately 879 companies listed on the Tokyo Stock Exchange; (ii) interviews of six attorneys specializing in corporate or antitrust law; and (iii) interviews of 82 companies with informative examples of success or failure. The JFTC’s report, titled “Survey on Corporate Compliance Efforts with the Antimonopoly Act (Summary),” coincides with an unprecedented era of administrative and criminal enforcement against Japanese companies and executives by the JFTC and U.S. Department of Justice, Antitrust Division. Although the results pertained to compliance with Japan’s Antimonopoly Act (“AMA”), the principles can be applied to ensure compliance with virtually any competition law regime.

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By David R. Garcia and Helen C. Eckert 

Just three days after the Federal Trade Commission, jointly with the Pennsylvania Attorney General, issued an administrative complaint challenging Reading Health System’s (RHS) proposed acquisition of Surgical Institute of Reading L.P. (SIR), a 15-bed surgical specialty center, both entities abandoned the proposed acquisition, citing the high costs associated with a protracted court battle with the government. This FTC victory provides more valuable insight into how antitrust enforcement agencies are evaluating the increasing number of consolidations within the healthcare industry, particularly after passage of the Affordable Care Act. Specifically, this case highlights the government’s very granular analysis of effects on competition through highly specialized “service markets,” as well as the risk for entities that ordinary-course-of-business documents surrounding the proposed consolidation can play a significant role in the government’s challenge. It also appears to be another example of an FTC challenge to a transaction below the Hart-Scott-Rodino reporting threshold.

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By David Garcia and Leo Caseria

On Friday, November 9, 2012, the Supreme Court granted certiorari in American Express Company vs. Italian Colors Restaurant, No. 12-133 to address the following question: “Whether the Federal Arbitration Act permits courts, invoking the ‘federal substantive law of arbitrability,’ to invalidate arbitration agreements on the ground that they do not permit class arbitration of a federal-law claim.” As we predicted in February, the Supreme Court was likely to grant certiorari in American Express after the Second Circuit held, for the third time in the same case, that a class action waiver in an arbitration agreement between American Express and plaintiff merchants was unenforceable because it would effectively preclude plaintiffs from vindicating their federal statutory rights under the Sherman and Clayton Acts (plaintiffs are merchants alleging a Sherman Act tying claim against American Express for allegedly forcing merchants to accept American Express credit cards and debit cards as a condition of accepting American Express charge cards, at higher rates than competing credit cards and debit cards). See In re American Express Merchants' Litigation, 667 F.3d 204 (2d Cir. 2012) ("AMEX III") (previously blogged at In re American Express Merchants' Litigation - Plaintiffs Survive Three Rounds In The Second Circuit, But Can They Survive The Supreme Court?). To reach its decision, the Second Circuit had to bob and weave its way around three recent Supreme Court decisions all upholding the express terms of arbitration agreements under the Federal Arbitration Act (“FAA”): CompuCredit Corp. v. Greenwood, 132 S. Ct. 665 (2012) (holding that an arbitration agreement could be enforced in a case involving claims under the federal Credit Repair Organizations Act (CROA), because the CROA is silent on whether arbitration is permissible); AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011) (holding that a class action waiver in an arbitration agreement was enforceable because the FAA preempts state law); Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 130 S. Ct. 1758 (2010) (holding that class arbitration cannot be imposed on parties that have not agreed to it). American Express will now become part of this line of cases.

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By Robert Magielnicki

On October 1, 2012, the Federal Trade Commission issued revised “Guides For The Use Of Environmental Marketing Claims” – the “Green Guides,” 16 CFR Part 260. The Green Guides originally were issued in 1992 and were revised in 1996 and 1998. The review resulting in the latest revisions began in November 2007.

The Green Guides set forth the FTC’s views concerning environmental claims and are intended to help marketers avoid making environmental marketing claims that are unfair or deceptive and thus violative of Section 5 of the FTC Act. The Guides are administrative interpretations of the law and thus do not have the force and effect of law. However, the FTC can take action under the FTC Act if a marketer makes an environmental claim that is inconsistent with the Guides.

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