Plaintiffs and appellants, the disfavored purchasers in a Robinson-Patman Act case, were twenty-eight retail pharmacies who alleged that the pharmaceutical manufacturer defendants had charged them higher prices than those charged since the early 1990s to the favored purchasers, who typically received discounts and rebates. The favored purchasers included HMOs and pharmacy benefit managers, who manage benefits for insurers and HMOs.  Plaintiffs claimed that the price differentials harmed their ability to compete, causing them to lose customers to the favored purchasers.  After years of discovery, the district court granted summary judgment and dismissed plaintiffs’ Robinson-Patman Act claims (15 U.S.C. sections 13(a), (d), and (f), 15 and 26) for failure to prove competitive or antitrust injury.  The court of appeals affirmed. Cash & Henderson Drugs, Inc. v. Johnson & Johnson, 799 F.3d 202 (2d Cir. 2015).[1]
Continue Reading Morton Salt Presumption Of Injury Under Robinson-Patman Act

In what has been described as the latest opinion on the use of hub and spoke theories to allege conspiracies in violation of Section 1 of the Sherman Act, the plaintiffs took the position that the viability of their claims depended exclusively on whether they had adequately alleged a horizontal conspiracy. In re: Musical Instruments and Equipment Antitrust Litigation, No. 12-56674, 2015 U.S. App. Lexis 14960, slip op. at 13-14 (9th Cir. August 25, 2015) (“Plaintiffs made it clear both before the district court and on appeal that their theory of the case depends on establishing . . . horizontal agreements”). Plaintiffs did not claim that the “hub’s” conduct constituted part of the alleged antitrust violations. Id. at 22 n.9 (“nor do plaintiffs allege that the MAP policies themselves are illegal vertical agreements”); id. at 14 n.4. Plaintiffs pleaded a number of asserted “plus factors” to support their horizontal theories, all of which were rejected by the district court and the Ninth Circuit majority, which relied extensively on Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007).
Continue Reading Ninth Circuit Affirms Dismissal of Challenge to Alleged Horizontal Adoption of Minimum Advertised Prices

The Second Circuit affirmed the district court and held, 2 to 1, that defendant Apple Inc. had violated Section 1 by masterminding the creation, organization and implementation of a conspiracy by five publishers of ebooks that benefited Apple, as Apple intended, by eliminating retail price competition from Apple’s rival, Amazon, in the sale of ebooks.  United States v. Apple Inc., No.13-3741 (2d Cir. June 30, 2015).[1]
Continue Reading The Second Circuit’s Apple Ebooks Opinion

The Supreme Court has ruled that when an oversight mechanism created by a State—here a State Board—is under the control of those it was supposed to be regulating (sometimes referred to by economists as “regulatory capture”)[1], anticompetitive actions taken by the State Board on its own without further official government review or approval enjoy no immunity under the state action doctrine.  North Carolina State Board of Dental Examiners v. Federal Trade Commission, 574 U.S.___, 135 S.Ct. 1101 (Feb. 25, 2015) (“N.C. State Board“).
Continue Reading Regulatory Capture Vitiates State Action Immunity

So far in China there have not been any published decisions regarding price-fixing or other anti-competitive agreements based on concerted action by competitors.  There is also no Chinese legal precedent for including potential competitors in the analysis of antitrust law compliance.  But China’s antitrust enforcers are very much aware of how the U.S. and EC enforce antitrust laws.  We may thus begin to see more cases where the Chinese enforcers enforce the Anti-Monopoly Law’s (“AML”) prohibition of anti-competitive agreements among competitors based on concerted action using the same approach as the EC, whose decision to fine banana suppliers for fixing the price of green and ripe bananas was recently upheld by the European Court of Justice (“Court”) in Dole Food and Dole Germany v. Commission, case number C‑286/13 P.  While this is not the first time the EC has fined companies based on concerted action, it reinforces some of the broad sweeping concepts that make it easy to punish a company in an administrative process, such as in China, where the enforcer, investigator and judge are essentially the same body. This is particularly of concern in China given the discretionary power of the Chinese enforcement authorities.
Continue Reading China Ripe For Enforcing AML Based On Concerted Action

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.
Continue Reading Antitrust Enforcement in China: Understanding the Framework of the Anti-Monopoly Law

In California v. Intelligender, LLC[1], 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.
Continue Reading The Ninth Circuit Holds That Res Judicata Bars State Recovery of Restitution for Members of a CAFA-Compliant Class Action

Earlier this year, in POM Wonderful LLC v. Coca-Cola Co.,[1] the Supreme Court examined the interaction between the Lanham Act’s prohibition against false advertising and the FDCA’s prohibition against food, drug and cosmetics labeling that is “false or misleading.”  In POM Wonderful, POM alleged that Coca-Cola’s labeling and marketing of its “Pomegranate Blueberry” juice was false and misleading.  Coca-Cola sought dismissal of POM’s Lanhan Act and state law claims on the grounds that because its labeling complied with the requirement of the Food, Drug and Cosmetics Act (FDCA), POM’s claims were precluded.  The Supreme Court disagreed, holding that the FDCA and Lanham Act were complementary statutory schemes and allowed competitor advertising claims under the Lanham Act that challenge food and beverage labeling regulated under the FDCA.
Continue Reading Beginning to Close the POM Circle? – POM Wonderful and Drug Advertising: JHP Pharmaceuticals

Earlier this year, in POM Wonderful LLC v. Coca-Cola Co.,[1] the Supreme Court examined the interaction between the Lanham Act’s prohibition against false advertising and the FDCA’s prohibition against food, drug and cosmetics labeling that is “false or misleading.”  In POM Wonderful, POM alleged that Coca-Cola’s labeling and marketing of its “Pomegranate Blueberry” juice was false and misleading.  Coca-Cola sought dismissal of POM’s Lanhan Act and state law claims on the grounds that because its labeling complied with the requirement of the Food, Drug and Cosmetics Act (FDCA), POM’s claims were precluded.  The Supreme Court disagreed, holding that the FDCA and Lanham Act were complementary statutory schemes and allowed competitor advertising claims under the Lanham Act that challenge food and beverage labeling regulated under the FDCA.
Continue Reading Beginning to Close the POM Circle? – POM Wonderful and Drug Advertising: JHP Pharmaceuticals