October 16, 2012 – 3:05 pm
In Nexstar Broadcasting Inc. v. Granite Broadcasting Corp. et al., Northern District of Indiana Judge Robert L. Miller Jr. denied Granite Broadcasting Corp.’s motion to reconsider a denial of its motion to dismiss and a request to certify an interlocutory appeal. In its suit, Nexstar accused Granite of restricting competition for local spot advertising in the Fort Wayne designated market area. According to the complaint, after becoming an exclusive Fox affiliate and acquiring dominance in the Fort Wayne local spot advertising market, Granite was able to charge much higher prices for local advertising and restrain competition.
Granite moved to dismiss the suit, arguing that the suit failed to state a claim and that it focused on Nexstar’s loss of the Fox affiliate contract, not on any illegal actions taken by Granite. Judge Miller denied Granite’s motion to dismiss, holding that Nexstar had plausibly alleged a theory of antitrust injury related not just to Granite’s takeover of the Fox affiliation, but also to a broader range of older anti-competitive conduct. Granite filed a motion for reconsideration and requested that the court certify an interlocutory appeal. The court denied Granite’s motion and request, holding that Granite’s understanding of the ruling as being based solely on Nexstar’s loss of the Fox affiliate contract is incorrect, the case is more complex. Furthermore, an interlocutory appeal of those issues would simply delay the course of litigation.
October 16, 2012 – 1:46 pm
In In re: TFT-LCD (Flat Panel) Antitrust Litigation, Northern District of California Judge Susan Illston denied a motion to dismiss price-fixing claims related to the sale of cellphones and digital cameras brought by several retailers against liquid crystal display manufacturers. This case is part of a consolidated multidistrict class action suit, where direct purchasers of LCD panels and retailers accused LG Display Co. Ltd and other LCD manufacturers of illegally fixing prices in the TFT-LCD market during a series of meetings.
Defendants moved to dismiss the price-fixing claims, arguing that the retailers, such as Best Buy Co. Inc., Target Corp., Kmart Corp., and Sears Roebuck & Co., lacked standing to bring antitrust claims over the sale of the electronics. Defendants argued that the market for LCD components is distinct from the market for cellphones and digital cameras, and the LCD components make up only a fraction of the finished electronic devices. Any potential damages would thus be speculative. The court denied defendants’ motion, holding that the market for LCD components and electronics that use them are “inextricably linked” because the LCD components have no independent utility. The retailers’ alleged damages therefore flowed directly from the fixed price on the LCD displays that are incorporated into cellphones and digital cameras.
October 16, 2012 – 1:19 pm
In Basic Your Best Buy Inc. v. DirecTV Inc., a California Court of Appeal refused to dismiss a $83.7 million lawsuit against DirecTV Inc. The plaintiff, a marketer of DirecTV products, accused DirecTV of conspiring to restrain trade by suddenly ending its contract, threatening litigation, warning other DirecTV dealers not to buy the company’s assets, and then forcing the plaintiff to turn its assets over to DirecTV in a fire sale.
DirecTV moved to dismiss the suit underCalifornia’s anti-Strategic Litigation Against Public Participation (anti-SLAPP) law, which is designed to prevent lawsuits that target free speech. DirecTV argued that Basic’s complaint was based on protected pre-litigation conduct — its letter to Basic to cease-and-desist its attempts to offer its customers a choice to sign up with DirecTV’s competitors, and DirecTV’s statements to third parties in connection with its anticipated trademark litigation against Best.
After a California Superior Court Judge denied DirecTV’s motion, DirecTV appealed. The Appellate Court affirmed the lower court’s decision, holding that a contemplated or even pending lawsuit does not transform every subsequent written communication into a product of the litigation. Here, there was no evidence that DirecTV’s communications directing other dealers not to bid for Basic’s assets related to the substantive issues of DirecTV’s threatened trademark infringement litigation.
October 12, 2012 – 4:38 pm
In Behrend et al. v. Comcast Corp. et al., Eastern District of Pennsylvania Judge John R. Padova refused to compel Comcast to follow through on a settlement to which the parties had tentatively agreement before the U.S. Supreme Court granted certiorari to review a class certification issue in Comcast Corp. et al. v. Caroline Behrend et al.
A divided panel of the Third Circuit certified the class in this monopolization case in which the plaintiffs argue that Comcast anticompetitively increased cable rates. The controversial issue is whether a class may be certified even if the plaintiffs have not provided admissible evidence, including expert testimony, to demonstrate that damages could be awarded on a class-wide basis. The U.S. Supreme Court agreed to review the certification issue. But the plaintiffs argued that it should dismiss the writ as improvidently granted because the parties had reached a settlement that should be enforced against Comcast.
Judge Padova disagreed. According to the court, the parties had not entered an enforceable settlement contract. The term sheet to which they agreed explicitly recognized that additional negotiations would be required on multiple terms. “[T]he words of the term sheet, the manner in which even class counsel referred to it, and . . . the many nonfinalized terms included therein,” Judge Padova explained, all show “that the parties intended to execute a more formal contract in the future.” In addition, later drafts that the plaintiffs sent to Comcast included differences confirming that the term sheet was “merely an ‘agreement to agree’ that is not capable of being enforced.”
The plaintiffs have also argued for dismissal on the ground that Comcast now advances an argument for the inadmissibility of the plaintiffs’ export report that it did not raise in the lower courts.
On the merits, the plaintiffs contend that district courts should have broad discretion in class certification proceedings and that its evidence would meet any plausible standard of admissibility on the issue of class-wide damages.
October 11, 2012 – 9:09 am
In Simon v. KeySpan Corp., the United States Court of Appeals for the Second Circuit upheld the dismissal of the plaintiffs claims on the ground that the filed rate doctrine blocked a consumer class action alleging that KeySpan used a complex financial transaction to overcharge New York City electricity buyers.
The filed rate doctrine holds that a rate filed with a regulatory agency may not serve as the basis for an antitrust action. The New York electricity market is concentrated and KeySpan and financial partner Morgan Stanley had previously settled with the Department of Justice on antitrust claims based on the same conduct. Moreover, the rate in question was set through an auction. Nevertheless, the Second Circuit held, regulators ultimately approved it and that was enough. “The auction process,” the court explained, “was circumscribed, and the process was reviewed by the regulatory body which determined the resulting rate to be reasonable. In these circumstances, the filed rate doctrine” applies.
The court also held that the name plaintiff lacked standing as an indirect electricity purchaser. Only the utilities may sue suppliers who anticompetitively drive up prices.
October 8, 2012 – 2:19 pm
In In re: TFT-LCD (Flat Panel) Antitrust Litigation, Northern District of California Judge Susan Illston rejected the defendants’ argument that the Foreign Trade Antitrust Improvements Act barred some claims. The defendants contended that the bulk of one plaintiff’s damages were based on LCD products that had been shipped to a Mexican arm of the plaintiff. But that plaintiff responded that those shipments satisfied the statute’s “import trade or commerce” exception because they were intended to be imported into the U.S. Judge Illston held that a reasonable jury could find for the plaintiff because the shipments were plausibly “directed at an import market.” The panels in question had been shipped to the US; sent to Mexico for processing, and then sent back to the U.S. for sale.
The FTAIA exempts from the Sherman Act trade or commerce with foreign nations, but import trade and import commerce are exceptions. Although the FTAIA does not explicitly definte “import,” the court held that it covered activity directed at an import market. That US customs law may define goods en route to another country as outside the scope of U.S. imports, Judge Illston held that other statutes are irrelevant to whether a good is an import within the meaning of the FTAIA.
September 21, 2012 – 1:35 pm
In PharmaRx Pharmaceutical Inc v. GE Healthcare Inc et al., Central District of California Judge Mariana R. Pfaelzer dismissed a radiopharmacy owner’s putative antitrust class action against Cardinal Health Inc. and GE Healthcare Inc., ruling the plaintiff had failed to plead its antitrust and conspiracy claims with enough specificity. In its complaint, plaintiff alleged that defendants denied competitors effective market access when they struck a deal under which they refused to sell GE’s Myoview imaging agent and other products to class members in areas where the defendants had their own radiopharmacies, ensuring a “virtual monopoly” on Myoview sales in Southern California. Defendants filed a motion to dismiss, arguing that plaintiff was attempting to create a conspiracy out of a plain agreement; and that plaintiff did not allege a proper, relevant market, or that defendants had market power within the relevant market. The court agreed with defendants and dismissed the complaint, holding that the complaint was mostly filled with legal conclusions based on assumptions, and failed to cite case law stating that specific intent could be inferred from the defendants’ anti-competitive practices. The court also dismissed the complaint on the ground that it used the agreement as an example of predatory or anti-competitive conduct, without properly pleading that the agreement existed.
September 20, 2012 – 3:35 pm
In Gonzalez-Maldonado et al v. MMM Health Care Inc. et al., the First Circuit Court of Appeals rejected antitrust claims filed by two Puerto Rico doctors against three HMOs, which cut ties with the doctors over disputed payments. In dismissing the antitrust claims, the court held that the three HMOs are incapable of collusion because they all share the same corporate parent — MMM Holdings Inc. — making them “a single economic unit” that has a “complete unity of interest” and cannot violate the Sherman Act’s conspiracy prohibition.
September 20, 2012 – 3:15 pm
In In re: WellPoint Inc. Out-of-Network “UCR” Rates Litigation, Central District of California Judge Philip S. Gutierrez dismissed Sherman Act claims in a long-running multidistrict litigation for lack of standing. In their suit, plaintiffs accuse WellPoint and other insurers of conspiring to underpay health care providers by knowingly creating and using flawed data – contained in the Ingenix database – to record “usual, customary, and reasonable” (UCR) reimbursement rates for out-of-network health services. Although the court dismissed many of the allegations in the case, it gave plaintiffs until November 1 to amend their claim.
September 20, 2012 – 2:16 pm
In United National Maintenance Inc. v. San Diego Convention Center Corp. Inc., Southern District of California Judge dismissed a suit accusing San Diego Convention Center (SDC) of monopolizing cleaning services during trade shows and interfering with a janitorial vendor’s contract. The dispute began after the SDC enacted a policy requiring all cleaning services at trade shows to be performed only by the center’s in-house janitorial staff. In granting SDC’s motion for judgment as a matter of law, the court held that SDC is a state actor with a “broad grant of authority” from the legislature to supervise and manage the convention center; therefore it’s immune from the plaintiff’s antitrust claims. The court also held that the antitrust claims must be dismissed because SDC did not control a dominant share of the trade show cleaning services market in San Diego, and the SDC’s policy to use in-house staff did not have any obvious negative effect on consumers, prices or quality of services.