Of Characterization and Common Sense: Court Holds That Erroneous Interpretation of Allegations of Complaint Doom Counterclaim to Bottom of Chicken Coop

In In Re Processed Egg Products Antitrust Litigation, No. 2:08-Md.-02002-GP (E.D. Pa., June 10, 2014), the plaintiffs alleged that they purchased eggs from the defendant egg producing cooperatives, and that the plaintiffs had required that defendants provide only eggs that complied with a “certification program.”  The defendants were required by the program to certify, for “animal welfare purposes,” that they had expanded the size of the cages for chickens, which was accomplished  by reducing the number of chickens in each cage.  The complaint alleged that defendant egg producers had conspired to utilize the program as a pretext to reduce the output of eggs by reducing the number of chickens overall.  Defendants counterclaimed that the certification program itself was an agreement to restrict output in violation of the antitrust laws.

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Supreme Court Rules Compliance with FDA Labeling Guidelines Does Not Bar Lanham Act False Advertising Suits – POM Wonderful v. Coca-Cola Co.

In a highly anticipated decision, the Supreme Court on June 12 announced that compliance with food labeling guidelines promulgated by the Food and Drug Administration will not operate as a bar against false advertising claims brought under the Lanham Act.  In its decision, the Court made clear that food and beverage labeling may mislead consumers even though the labeling complies with the Federal Food, Drug and Cosmetics Act (“FDCA”), and may be actionable under the Lanham Act.  The decision will have significant ramifications for all advertisers operating in regulated industries because compliance with particular labeling or disclosure requirements does not constitute a “free pass” against the Lanham Act’s prohibition against false advertising.

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Beyond Truth, and Toward Repose: Price Increases Following “Merger to Monopoly” Do Not Rekindle Statute of Limitations

Z Technologies Corp. v. Lubrizol Corp., No. 2:12-cv-12206 (6th Cir., May 23, 2014).

In February, 2007, Lubrizol Corporation made a “merger to monopoly” acquisition of the assets of a competitor.  The acquisition established a monopoly in the market for petroleum wax-based oxidates.  After the acquisition, Lubrizol increased prices for oxidates in March, July and November, 2007, and again in May, July and September of 2008.  In the aggregate, Lubrizol increased its oxidate prices approximately 70% following the acquisition.

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Department of Justice Opens Review of ASCAP and BMI Consent Decrees

The Antitrust Division of the Department of Justice this month announced that it has opened a review of the 73-year-old ASCAP and BMI Consent Decrees. In its press release, the DOJ noted that it is most interested in comments “on competitive concerns that arise from the joint licensing of music by performance rights organizations and the remediation of those concerns.”

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Some Interesting Numbers Regarding Merger Review: The Hart-Scott-Rodino Annual Report for Fiscal Year 2013

The Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”) requires that proposed acquisitions of voting securities, assets or non-corporate interests meeting certain criteria be reported to the Federal Trade Commission (the “FTC”) and the Antitrust Division of the Department of Justice (the “DOJ,” and together with the FTC, the “Agencies”).  Whether a particular acquisition must be reported depends upon the value of the acquisition and the size of the persons involved, as measured by their sales or assets.

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FTC Targeting Trade Associations?

On May 1, the Federal Trade Commission issued a press release concerning the antitrust risks involved in trade association activity and cautioned such groups that the Commission continues to maintain an active antitrust enforcement focus on trade association activity.  Interestingly, the release does not appear to have been the result of any specific enforcement action, but, instead appears designed to communicate the FTC’s continued interest, and perhaps a particular focus, on trade association activity.

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FTC Offers Guidance on Social Media Contests

In a recent (March 20, 2014) letter, the Federal Trade Commission (FTC) offered guidance as to the factors to consider in evaluating whether entry into a contest on a social media site is a form of material connection requiring disclosure under the FTC Endorsement Guidelines.  At issue before the FTC was a promotional contest held by Cole Haan on Pinterest.  The letter is one of the first instances in which the FTC has offered guidance as to the applicability of the Endorsement Guidelines to contests conducted on social media sites.

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Microsoft-Nokia: China’s MOFCOM Quietly Slips Into the Debate about Injunctive Relief for FRAND-encumbered SEPs

This past November and December, the US Department of Justice (“DOJ”) and European Commission (“EC”) cleared Microsoft Corporation’s (“Microsoft”) acquisition of the bulk of the devices and services business of Nokia Corporation of Finland (“Nokia”) without any conditions. In contrast, on April 8, 2014, the Chinese Ministry of Commerce (“MOFCOM”) approved the acquisition subject to conditions that include an intellectual property issue that is still to be resolved in the US, EU and other countries: whether holders of standard essential patents (“SEPs”) who make licensing commitments under fair, reasonable and nondiscriminatory (“FRAND”) terms should be barred from seeking injunctive relief against alleged infringers of their patents.  MOFCOM’s conditional approval is not controversial for this specific transaction, but raises the question of how MOFCOM’s treatment of this issue will be interpreted in future merger reviews and whether this will affect investigations related to anticompetitive conduct.

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Seventh Circuit Affirms Dismissal of Motorola’s LCD Antitrust Claims Based on Foreign Purchases

On March 27, in the latest major development in Motorola Mobility’s lawsuit alleging price-fixing of liquid crystal display modules (LCDs), a three-judge panel of the Seventh Circuit, including renowned antitrust jurist Judge Richard Posner, simultaneously granted Motorola’s petition for interlocutory appeal and affirmed a ruling by U.S. District Judge Joan B. Gottschall that more than 99% of Motorola’s $5.4 billion in claimed damages are beyond U.S. antitrust jurisdiction under the Foreign Trade Antitrust Improvements Act, 15 U.S.C. 6a.  The Court decided the substantive issue on the basis of the district court record and the parties’ interlocutory appeal papers, dispensing with further appellate briefing and oral argument.  We previously reported on Judge Gottschall’s decision in the trial court here.

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