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

Delving into "one of the darkest corners of antitrust law," the federal District Court for the Northern District of California recently determined what standard – the per se rule or the rule of reason – should apply to judge the setting of prices by members of a joint venture.  In re ATM Fee Antitrust Litigation, N.D. Cal., No. 04-02676 CRB, 3/24/08.  The court concluded that in this instance, the rule of reason was the appropriate standard for two reasons: (1) the price setting was a "core activity" of the joint venture; and (2) the price setting was "reasonably ancillary to the legitimate cooperative aspects of a joint venture that requires competitor restraints if the venture's product is to be available at all."

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On April 30, 2008, the Ninth Circuit Court of Appeals ruled that Bamberg County Memorial Hospital and Nursing Center ("Bamberg") lacked standing to pursue its antitrust claims against Johnson & Johnson, Inc. ("J & J").  See Delaware Valley Surgical Supply, Inc. v. Johnson & Johnson, 2008 U.S. App. LEXIS 9308 (9th Cir. Apr. 8, 2-008).  Specifically, because Bamberg purchased products through a J&J approved distributor, Bamberg was not a “direct purchaser” with standing to bring an antitrust claim against J&J, even though a contract existed between Bamberg and J&J setting the product prices.

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On April 25, 2008, the Tenth Circuit of the United States Court of Appeals reversed a jury's judgment in favor of competitors who challenged a grocery store's practice of offering below-cost discounts on gasoline conditioned on the purchase of a qualifying amount of groceries sold in the store.  Parish Oil Co. v. Dillon Companies, No. 07-1032 (10th Cir. 3-31-2008).

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The willingness of federal enforcement agencies to lift resale price maintenance ("RPM") prohibitions in light of the Supreme Court's decision holding RPM was no longer per se illegal was demonstrated recently by the FTC.  In re Nine West Group, Inc., FTC Dkt. No. C-3937 (May 6, 2008).  Nine West is a shoe manufacturer.  In 2000, it entered into a Consent Order with the FTC which prohibited it from entering into agreements to fix, control, or maintain resale prices.  After the Supreme Court decision in Leegin Creative Products, Inc. v. PSKS, Inc., 127 S. Ct. 2705 (2007), Nine West petitioned the FTC to modify the order to set aside the portion of the Order containing the RPM prohibition.  In a 4-0 decision issued May 6, the Commission granted the petition in substantial part but required Nine West to provide periodic reports on its use of RPM agreements so that the FTC can analyze the effect of such agreements on competition.

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