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

On June 28, 2007, in Leegin Creative Leather Products, Inc. v. PSKS, Inc.,[1] the United States Supreme Court decided in a 5-4 vote to overrule the long-lived rule in Dr. Miles Medical Co. v. John D. Park & Sons Co.[2]The decision in Dr. Miles, issued in 1911, had a long but checkered life. In Dr. Miles, the Court affirmed the sustaining of a demurrer to a bill in equity, and held that it was illegal under Section 1 of the Sherman Act for a manufacturer and its distributors to agree on a minimum price that the distributor must charge for the manufacturer's goods, upon resale.
 

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The Tenth Circuit's recent dismissal of Section 2 monopolization and attempted monopolization claims in Four Corners Nephrology Associates, P.C. v. Mercy Medical Center of Durango, -- F.3d ---, 2009 WL 3085882 (10th Cir. Sep. 29, 2009), relied extensively on the Supreme Court's Linkline and Trinko decisions to hold that: (1) a hospital's refusal to allow a physician access to its nephrology facilities does not constitute anticompetitive conduct under Section 2 of the Sherman Act; and (2) the refusal does not constitute an injury of the type the antitrust laws were intended to prevent.
 

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Earlier this year, in her first speech as Assistant Attorney General in charge of the Department of Justice's (DOJ) Antitrust Division, Christine Varney referred to Americans' growing reliance on high-tech solutions in the home and workplace, and stated that her Department “planned to devote attention to understanding the unique competition-related issues posed by these markets”. See Christine Varney, Vigorous Antitrust Enforcement in This Challenging Era, Speech Before the Center for American Progress (May 11, 2009), available here. Less than six months later, DOJ has reportedly initiated an antitrust investigation into one of the nation's largest technology companies, IBM, and filed a brief detailing its concerns at a proposed book settlement that would allow the creation of a vast digital library by Google. During the same time period, the Federal Trade Commission (FTC) has been investigating the boardroom overlap between Google and Apple with respect to a breach of the prohibition on “interlocking directorates" and the Federal Communication Commission ( FCC) has been investigating the state of competition in the wireless market. Together, these actions may evidence the beginning of a wider trend of antitrust scrutiny of the technology sector.
 

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On October 2, 2009, the United States Court of Appeals for the Sixth Circuit ruled in favor of defendant airline carriers[1] accused of conspiring to reduce, cap and ultimately eliminate the base commissions paid to travel agents selling defendants’ airline services in In re Travel Agent Commission Antitrust Litigation. The Sixth Circuit’s decision is the latest to embrace the pleading standards of Bell Atlantic Corporation v. Twombly, 550 U.S. 544 (2007) by requiring plaintiffs to plead non-conclusory factual allegations that raise a “plausible suggestion of conspiracy.”
 

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1. DOJ Antitrust Division Head Christine Varney Offers Guidance on Leegin and Proposes "Structured Rule of Reason Test" For Evaluating RPM Under State Laws

When the Supreme Court modified the prohibition against resale price maintenance agreements ("RPM") more than two years ago in Leegin Creative Leather Products v. PSKS, Inc., it was not immediately clear how state enforcers and state courts would apply state laws to RPM. 127 S. Ct. 2705 (2007). Thirty-seven State Attorneys General (AGs) had asked the Court in a joint amicus brief to uphold the per se rule which makes all RPM illegal. Since Leegin, some AGs have taken the position that RPM remains per se illegal under some state laws and other states have passed or may pass "Leegin repealer" bills.
 

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