Category: Class Actions
This week, the Second Circuit affirmed the approval of a $50 million agreement settling price-fixing claims brought by a class of farmers against a dairy cooperative and a dairy marketing company. The settlement in Allen et al. v. Dairy Farmers of America et al. was notable for at least two reasons that were seemingly at odds: First, the unusually high number of claims filed; and second, the vociferous advocacy of two named plaintiffs who objected to the settlement. The objectors argued that class counsel colluded with defendants’ to reach a settlement agreement, and coerced class members to support the settlement.
We have not previously reported on an antitrust litigation that is enveloping the mixed martial arts (“MMA”) world. Six current and former MMA fighters have filed a class action lawsuit against the company that owns the UFC, Zuffa, LLC, for violations of the Sherman Act. A review of the docket indicates that the UFC will have to go a few more rounds before it has another opportunity for a knockout.
Second Circuit Declares That, to Survive Motions to Dismiss, Antitrust Allegations Require Factual Support for All “Necessary Premises”
Last Wednesday, the Second Circuit Court of Appeals partially vacated the judgment of the district court in In re Actos End-Payor Antitrust Litigation.
In a significant Illinois Brick decision, the Ninth Circuit recently issued an opinion concluding that consumers who purchase apps from Apple’s “app store” directly purchase those apps from Apple, which acts as a distributor. The purchasers therefore have antitrust standing to sue Apple for alleged monopolization of the iPhone app market. The decision could make it easier for consumers to bring antitrust claims against sellers in e-commerce.
Manufacturers of containerboard and corrugated products have asked the Supreme Court to weigh in on a Circuit split concerning the impact of negotiated prices on class certification in antitrust cases brought under Section 1 of the Sherman Act. Petitioners filed for a writ of certiorari on December 30, 2016, arguing that the Seventh Circuit in Kleen Products LLC, et al. v. International Paper Company, et al., Nos. 15-2385, 15-2386 (7th Cir. Aug. 4 2016), erred in two related ways, both of which flow from the fact that prices of the containerboard products at issue in the case tend to be individually negotiated.
It has been over three years since the Supreme Court’s Actavis decision. Since then, numerous putative class actions alleging harm to competition as a result of “reverse-payment” settlements have flooded the courts. The complexity of these cases, along with the vague guidance provided by the Supreme Court, has given rise to intricate questions about how courts should apply Actavis and scrutinize settlements of Hatch-Waxman litigation.
How explicitly must a complaint sounding in antitrust allege causation? At oral argument last week, the Court of Appeals for the Second Circuit evaluated the sufficiency of the plaintiffs’ allegations that certain Takeda entities, in their representations to the FDA, falsely described patents for the antidiabetic drug ACTOS in order to delay the entry of generic competitors into the market—specifically, whether the plaintiffs had pleaded enough facts to show that these representations plausibly caused the delay.
It is not every day that antitrust plaintiff classes fail to win certification due to lack of numerosity under Federal Rule of Civil Procedure 23(a)(1). Yet this week, absence of numerosity was the reason a Third Circuit panel reversed an order from the Eastern District of Pennsylvania certifying a class of 22 plaintiffs. The putative class included direct purchasers allegedly injured by reverse-payment agreements between Cephalon and four generic manufacturers of Cephalon’s narcolepsy drug Provigil.
The European Commission on Tuesday announced its decision finding truck makers MAN, Volvo/Renault, Daimler, Iveco, and DAF liable for violating EU antitrust rules. The companies acknowledged that for 14 years they colluded in setting truck prices, settling the case for a record total of €2.93 billion. Competition commissioner Margrethe Vestager reported that the five-company cartel “account[s] for around 9 out of every 10 medium and heavy trucks produced in Europe.” Vestager also said that the unprecedented fines send a “clear message to companies that cartels are not accepted.”
After Favorable LIBOR Ruling from the Second Circuit, Investors Now Allege Anticompetitive SIBOR Manipulation
On July 5, 2016, investors filed a federal class action [add link to pdf] in the Southern District of New York alleging defendant banks had manipulated the Singapore Interbank Offered Rate (SIBOR) “and/or” Singapore Swap Offer Rate (SOR) market, forcing investors to pay artificial prices for financial derivative transactions based on these benchmarks. This lawsuit follows on the heels of the Second Circuit’s decision in In re: LIBOR-Based Financial Instruments Antitrust Litigation, which allowed the case to proceed.
As our loyal readers know, on May 23, 2016, the Second Circuit issued a decision in the In re: LIBOR-Based Financial Instruments Antitrust Litigation vacating the District Court’s prior decision dismissing one case in this consolidated action. Our analysis of that decision is available here. Notably, however, the Second Circuit declined to rule on whether the plaintiffs (the “Plaintiffs”) are “efficient enforcers” of the antitrust laws and remanded that question for the District Court’s consideration.
On June 21, 2016, the United Kingdom Competition Appeal Tribunal (the “Tribunal”) published notice of an application to commence collective proceedings under Section 47B of the UK’s competition act. If this action continues, it will be the first opt-out collective (class action) competition claims to be heard by the Competition Appeal Tribunal.
Procompetitive Effects of Business Associations in the Balance?: Business Association Membership and the Sufficiency of Sherman Act Allegations
What facts beyond mere membership in a trade association trigger Sherman Act liability? Next term, the Supreme Court will hear an antitrust case testing the requirements for pleading the conspiracy element of a claim brought under the Sherman Act—namely, whether the allegation that defendants belong to an association is sufficient for a Section 1 claim.
Certifying a class of direct purchasers of sheet metal parts alleging claims under section 1 of the Sherman Act, Judge Lynn Adelman of the United States District Court for the Eastern District of Wisconsin focused on what it means for common questions to predominate in an antitrust class action.
On May 23, 2016, the Second Circuit issued a long-awaited decision in the In re: LIBOR‐Based Financial Instruments Antitrust Litigation, vacating the District Court’s (Buchwald, J.) prior decision dismissing one case in this consolidated action.
It is plausible that Uber’s CEO, Travis Kalanick, may have violated antitrust law by fixing prices charged to Uber passengers, a judge in the United States District Court for the Southern District of New York concluded last week in denying Kalanick’s motion to dismiss. The lawsuit, Meyer v. Kalanick, is a putative class action initiated by Spencer Meyer, a resident of Connecticut, on behalf of people who, like him, have used Uber car services. The complaint also names a subclass of people who have been charged according to Uber’s “surge pricing” model.
MLB Settles, Leaving Unanswered Questions: Do Sports Leagues’ Regional Blackout Agreements Violate Antitrust Laws?
In the wake of Major League Baseball’s settlement of antitrust claims on the eve of trial, the central question from the lawsuit remains: are sports leagues’ exclusive broadcasting territories for live games an antitrust violation? Although suits against the MLB and National Hockey League have both settled, analogous antitrust claims are pending against the National Football League, leaving open the possibility that these issues may be finally resolved in the court room.
MLB Pitches Around Consumers by Settling Suit, Avoiding Further Litigation on the Scope of Its Longstanding Antitrust Exemption
We’ve previously written about litigation involving the scope of Major League Baseball’s long-standing antitrust exemption. Earlier this week, on the eve of trial, MLB settled Garber v. Office of the Commissioner of Baseball, a class action lawsuit challenging its territorial broadcasting policy. The lead plaintiff Marc Lerner is a Mississippi resident and New York Yankee fan who was allegedly charged supracompetitive prices to watch the Yankees due to MLB’s territorial broadcast policies. Under MLB’s policy of territorially restricting television broadcasts, consumers could only watch “out-of-market” games subject to certain limitations, including a requirement to purchase every out-of-market game, even if the consumer was only interested in following a single team. By avoiding the bench trial, MLB avoided having to further litigate the scope of its unique “antitrust exemption” in front of Judge Scheindlin of the U.S. District Court for the Southern District of New York, who had previously expressed skepticism about the continuing viability of the exemption.
Defendants Summary Judgment Motion in In re Cathode Ray Tube Antitrust Litigation May Illuminate Policy Justifications Behind Ownership or Control Exception
Earlier this month, defendants in the In re Cathode Ray Tube Antitrust Litigation moved to challenge the standing of major retailers to pursue damages claims under the Supreme Court’s 1977 Illinois Brick decision.
In re Capacitors Antitrust Class Action Update: Claims Slightly Narrowed, Parties Continue Discovery
When we last wrote in June 2015 about In re Capacitors Antitrust Litig., No. 14-03264-JD, consolidated putative class actions pending before Judge James Donato in the Northern District of California, the plaintiffs had just largely survived a motion to dismiss. That blog post, which describes the background of the case and the first round of motions to dismiss, is available here. Recently, on December 30, 2015, the court ruled on several additional motions to dismiss based on plaintiffs’ amended complaints.
A settlement agreement last week in the long-running U.S. Cargo Antitrust Class Action brought the settlement fund in that case to over $1.1. billion. Polar Air Cargo, Polar Air Cargo Worldwide, and Atlas Air Worldwide Holdings agreed to pay $100 million in three installments. The settlement is the second-largest so far in this case, after Korean Air Lines's agreement in December 2013 to pay $115 million. It is subject to approval by the U.S. District Court for the Eastern District of New York, where the case is pending.
On December 14, 2015 Judge Yvonne Gonzalez Rogers heard oral argument on a motion to dismiss filed by Apple in an antitrust action brought against the company in connection with its 2007 deal to sell iPhones exclusively to AT&T Mobility. The next day, Judge Rogers denied Apple’s motion. The lawsuit, one of several arising from the Apple-AT&T agreement, raises interesting questions about how to define a relevant product market using an “aftermarket” theory.
As we previously reported (click here, to read more), last month, a jury returned a $6 million verdict for a class plaintiff in a suit alleging that Cox Communications had illegally tied its premium cable services to rentals of its set-top boxes. Yesterday, the court granted Cox’s renewed motion for judgment as a matter of law, overturned the jury’s verdict, and entered judgment for Cox.
We reported earlier today that the jury began deliberations this past Monday in the antitrust class action lawsuit against Cox Communications brought by its premium services subscribers. The jury returned its verdict today in favor of the plaintiffs and found that Cox had violated the Sherman Act by illegally tying its premium cable services to rentals of its set-top boxes. The jury awarded the plaintiffs $6.31 million in damages, which will be trebled to $19 million. The jury awarded damages based on one aspect of the plaintiffs’ claims for fees from set-top box rentals but declined to award damages based on the plaintiffs’ DVR fees. Thus, the damages award came back much lower than the $49 million figure the plaintiffs were seeking.
After a near two-week trial in the consumer class action lawsuit against Cox Communications, the jury began deliberations this past Monday to decide whether Cox’s alleged practice of tying premium cable services to rentals of its cable boxes violated the Sherman Act by harming competition in the set-top box market.
Yesterday, the Ninth Circuit ruled in the long awaited O’Bannon v. NCAA case, which challenged NCAA rules that bar student-athletes from “being paid for the use of their names, images, and likenesses” (NILs) – part of the so-called “amateurism rules.” The Court upheld the district court’s decision finding the NCAA amateurism rules to be an unlawful restraint of trade in violation of the Sherman Act and upheld part of the district court’s remedy which permanently enjoined the NCAA from prohibiting its member schools from giving student-athletes scholarships up to the full cost of attendance at their respective schools. The Ninth Circuit struck down, however, the district court’s second remedy which would have permanently enjoined the NCAA from prohibiting its member schools from giving student-athletes up to $5,000 per year in deferred compensation.
This past Tuesday, the Seventh Circuit upheld the decision of Judge Robert M. Dow Jr. of the U.S. District Court for the Northern District of Illinois granting cheese manufacturer Schreiber Foods Inc.’s motion for summary judgment in an antitrust class action. The Seventh Circuit agreed with the District Court that the plaintiffs, led by a cheese distributor and a dairy farmer and milk futures trader, lacked evidence to support their claims that Schreiber conspired with Dairy Farmers of America, a dairy marketing cooperative, to increase the price of raw milk.
Last week, we discussed public reports of an investigation by the DOJ of four major airlines (American, Delta, Southwest, and United) regarding possible collusion. Over the past two months, a number of consumers have filed class action complaints against the airlines, putting forward their own theories regarding collusion.
Yesterday, the Ninth Circuit issued an opinion affirming the dismissal of plaintiffs’ consolidated complaint in In re Musical Instruments and Equipment Antitrust Litigation. In addressing plaintiffs’ allegations of a hub-and-spoke conspiracy, the Ninth Circuit reiterated that each component of such a conspiracy (both vertical and horizontal) must be evaluated separately.
The Ninth Circuit issued an order last Friday staying an injunction from U.S. District Judge Claudia Wilken of the Northern District of California in O’Bannon v. NCAA until it reaches a decision on the merits of the appeal.
We have previously posted about United States v. Apple, Inc., a blockbuster trial that ended with Judge Denise Cote of the Southern District of New York concluding that Apple had conspired with five publishing companies to raise the price of e-books. At oral argument before the Second Circuit, the panel hearing Apple’s appeal seemed particularly interested in whether the district court had erred in applying the relatively lenient per se standard rather than the rule of reason, under which the plaintiffs would have had to prove that the anti-competitive injury caused by Apple outweighed any pro-competitive benefits of its conduct.
On March 17, 2015, a Ninth Circuit panel consisting of Chief Judge Sidley R. Thomas, Circuit Judge Jay S. Bybee and Senior U.S. District Judge Gordon J. Quist, of the Western District of Michigan heard oral argument in O’Bannon v. NCAA.
Last Friday, the Ninth Circuit affirmed the dismissal of a multidistrict class action brought by Netflix subscribers who claimed the company conspired with Walmart to dominate the online DVD sales and rental markets. In 2005, Netflix and Walmart entered into a promotion arrangement whereby Walmart agreed to transfer its DVD-rental subscribers to Netflix in exchange for 10% of the revenue and a $36 payment for each subscriber Netflix gained through referral. Netflix also agreed to promote Walmart’s DVD sales in exchange for the referrals.
A federal judge in New York on Wednesday allowed a consolidated class action by U.S.-based investors concerning the rigging of the foreign exchange (FX) market to move forward. In denying a motion to dismiss, U.S. District Judge Lorna G. Schofield ruled that the allegations in the complaint were sufficient to warrant discovery and, possibly, trial.
On January 21, 2015, the Supreme Court of the United States issued a highly anticipated decision in a LIBOR-based antitrust class action suit allowing a plaintiff to immediately take a direct appeal from an order dismissing that plaintiff’s complaint in its entirety even when that case has been consolidated by the Judicial Panel on Multidistrict Litigation and other cases remain pending in the consolidated action.
Nippon Cargo Airlines Co. Ltd last week agreed to pay $36.55 million to settle claims that it conspired with other airlines to fix rates for air cargo services in the early 2000s. Two dozen airlines have settled in the long-running multi-district litigation (MDL), bringing the settlement fund to more than $900 million.
On Monday, the United States Court of Appeals for the Second Circuit heard oral argument in Apple’s appeal in the e-book price-fixing lawsuit brought by the Department of Justice. This appeal follows an adverse decision from June 2013, in which the district court determined that Apple had conspired with five book publishers to raise prices on e-books in violation of the antitrust laws.
Several minor league baseball players have filed an antitrust class action against Major League Baseball, alleging that MLB and its teams operate as a cartel to impose restrictive contracts on minor league players. The suit, Miranda v. Selig, alleges that the league’s anticompetitive conduct has artificially lowered wages for the approximately 6,000 minor league baseball players employed by the league, resulting in some minor leaguers earning as little as $3,000 per year.
District Court Allows Monopolization Claims to Move Forward on Allegations of Direct Evidence of Monopoly Power
Traditionally, plaintiffs asserting claims under Sections 1 and 2 of the Sherman Act allege the existence of one or more product markets relevant to the defendants’ anticompetitive conduct and the defendants’ shares of those markets in order to state a plausible claim of defendants’ market power and/or monopoly power in a product market. But plaintiffs can also convince courts they can proceed to trial by alleging “direct evidence” of defendants’ market power.
Court Allows “Product Hopping” Claims to Proceed in Suboxone Litigation Based on Allegations of Removal of Prior Formulation and Disparagement of Generic Competition
We’ve previously discussed antitrust claims related to “product hopping”—allegations that pharmaceutical manufacturers have reformulated or otherwise altered their products to prevent automatic generic substitution. Earlier this week, the district court for the Eastern District of Pennsylvania in In re Suboxone Antitrust Litigation denied a motion to dismiss similar allegations regarding the drug Suboxone, which is used to treat opioid dependence.
On November 21, 2014, professors of antitrust law from 15 universities filed an amicus brief in support of the NCAA’s appeal in O’Bannon v. NCAA. Citing their interest in the “proper development of antitrust jurisprudence,” the professors argue that the district court misapplied the rule of reason analysis under the Sherman Act, and that allowing the trial court’s decision to stand could undermine amateurism in college sports and have a broader impact on antitrust law in general.
On November 14, 2014, the National Collegiate Athletic Association (“NCAA”) filed a brief in the Ninth Circuit challenging a district court’s injunction on the enforcement of NCAA rules barring college athlete compensation as violating the federal antitrust laws. This blog previously covered O’Bannon v. NCAA.
The plaintiffs’ antitrust claims in the New Jersey municipal tax lien auction bid-rigging class action may proceed, the federal judge presiding over the litigation has ruled.
Developments in the Capacitor Cartel Litigation: Class Counsel Appointed and the Antitrust Division Intervenes
In July, we wrote about two putative class action lawsuits alleging that Panasonic, Samsung, and other electronics manufacturers had formed a cartel to boost prices of certain electronic capacitors. Since then, the cases have been consolidated, interim lead co-counsel have been appointed, the Antitrust Division has confirmed its own investigation, and the court has set a preliminary case schedule.
The Canada Supreme Court ruled earlier this month that civil antitrust plaintiffs may receive wire-tap evidence obtained in the criminal investigation into an alleged price-fixing scheme by several large gas companies. During the criminal investigation, the Competition Bureau of Canada intercepted and recorded more than 220,000 private communications which it used to bring antitrust proceedings against 54 persons.
Much has happened since our last post on the Nexium “pay for delay” class action lawsuit. Jury selection began in the District of Massachusetts on Monday, October 20, 2014. The day prior, one of the generic drug makers, Dr. Reddy’s Laboratories (“DRL”), settled with the plaintiffs and agreed to cooperate in plaintiffs’ case against AstraZeneca, Teva Pharmaceutical Industries, and Ranbaxy Inc.
In re Credit Default Swaps Antitrust Litigation: Big Banks Still Must Face Section 1 Sherman Act Claim
In a decision upholding most of the class action antitrust claims against 12 of the world’s largest financial institutions, Judge Cote of the Southern District of New York held that the plaintiffs had standing and alleged sufficient facts to satisfy their Section 1 claim under the Sherman Act. While Judge Cote denied plaintiffs’ conspiracy to monopolize claim under Section 2 of the Sherman Act, she did suggest two ways antitrust plaintiffs could bring a conspiracy to monopolize claim even where an oligopoly, not a monopoly, is present.
On Friday, August 8, Judge Claudia Wilken of the Northern District of California issued her much-anticipated findings of fact and conclusions of law in O’Bannon v. NCAA.
On August 1, 2014, Judge Cote preliminarily approved a $450 million settlement in the Apple e-books litigation. As many of you will recall, a June 2013 trial resulted in a finding that the various plaintiffs (including numerous states, the United States, and a class action) succeeded in proving that Apple had conspired with five book publishers to raise e-book prices.
A panel of the U.S. Court of Appeals for the First Circuit heard oral argument this week in In Re: Nexium (Esomeprazole) Antitrust Litigation in an appeal of a lower court’s decision certifying a class of drug consumers and third-party payors challenging AstraZeneca’s “pay-for-delay” patent suit settlements, as reported by the National Law Journal.
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