In Darba Enterprises Inc. v. Amica Mutual Insurance Co. et al., District of Nevada Judge Hicks dismissed the plaintiffs’ antitrust claim arguing that the defendant’s trademark enforcement suit against the plaintiff constituted anticompetitive activity. Amica had sued alleging that Darba violated its trademark by using it in websites that inaccurately suggested that Darba could provide Amica policy quotes. The court held that Amica’s trademark suit was protected from antitrust attack by the Noerr-Pennington Doctrine because the plaintiff failed to present any evidence to suggest that the suit was a sham.
Payment Card Re-load Fee Fixing Not Per Se Illegal
August 16, 2012 – 1:01 pm
In nFinanSe Inc. v. Interactive Communications International Inc., Northern District of Georgia Judge Amy Totenberg dismissed the plaintiff’s claim that the defendant violated the antitrust laws by requiring a set fee to reload payment cards used in the defendant’s network. The plaintiff, a seller of prepaid credit cards, claimed that the defendant, a distributor of the cards, violated the Sherman Act by requiring card sellers to charge a set reload fee of $3.95, a dollar more than the plaintiff had charged.
The court held that the fee restriction was not a naked restraint of trade with no purpose other than restricting competition. On the contrary, the defendant’s “reload network,” according to Judge Totenberg, “creates a more centralized and efficient reload process for consumers and retailers and in which upstream card providers participate.”
Claims Dismissed in Refrigerant Compressor Price Fixing Case
August 16, 2012 – 12:58 pm
In Refrigerant Compressors Antitrust Litigation, Eastern District of Michigan Judge Sean F. Cox dismissed several state antitrust indirect purchaser claims in multidistrict litigation alleging a price-fixing conspiracy in the refrigerant compressor market. The court found that indirect purchase plaintiffs must have lived in or suffered an injury in a state to bring indirect purchaser claims under that state’s antitrust law. Federal law prohibits indirect purchasers from recovering damages.
In 2009, the plaintiffs sued alleging that the defendants charged them supra-competitive prices for compressors used in refrigerators and air conditioners and that the plaintiffs thus paid more for the finished products that they would have in a competitive market. Although courts have gone both ways, Judge Cox held that the Due Process Clause requires at least one class member to have been injured in a state in order to invoke that state’s antitrust laws.
USFE’s Antitrust Suit Against CME and CBOT Will Move Forward
August 8, 2012 – 2:45 pm
In U.S. Futures Exchange LLC et al. v. Board of Trade of the City of Chicago et al., Northern District of Illinois Judge James B. Zagel denied, in part, a motion for summary judgment, filed by Chicago Board of Trade and Chicago Mercantile Exchange, Inc., thereby allowing part of the antitrust suit against them to proceed. In this suit, plaintiff U.S. Futures Exchange LLC, accuses CBOT and CME of conspiring to prevent it from creating a competing exchange. In its motion for summary judgment defendants argued that USFE cannot show injury from the alleged anti-competitive conduct when trading is up and fees are down in the commodities market. The court rejected this argument and held that the relevant consideration in determining whether plaintiff has antitrust standing is the comparison between the U.S. Treasury futures market as it exists today and the market that would have existed had defendants’ alleged anti-competitive conduct never taken place.
However, the court dismissed USFE’s claim that CBOT and CME conducted a misinformation campaign to prevent USFE from obtaining the U.S. Commodity Futures Trading Commission’s approval to launch its exchange. The court held that the defendants’ statements to Congress do not necessarily play a role in this situation because Congress was not involved in approving USFE’s designated contract market application. The CFTC’s decision on approving the application involved its own discretionary authority and there are too many considerations in evaluating such applications.
Microsoft’s Decision to Withdraw Windows Support for WordPerfect Not Antitrust Conduct
August 7, 2012 – 4:23 pm
In Novell Inc. v. Microsoft Corp, District of Utah Judge J. Frederick Motz granted Microsoft’s motion for judgment on Novell’s eight-year-old claim that the software giant violated the antitrust laws by eliminating certain APIs from Windows that Novell used to run applications such as WordPerfect. The claim had gone to a jury, which was unable to return a verdict.
Judge Motz relied on the general rule that even a monopolist has no duty to cooperate with competitors. Although exceptions to that rule exist, the court held that they did not apply here because the plaintiff failed to provide evidence to show that Microsoft eliminated the API’s knowing that doing so would delay Novell’s development efforts. The court also concluded that Novell’s claim that its programs would have been significantly more successful had Microsoft not fostered incompatibility was “entirely speculative.”
A Novell spokesman said that the company planned to appeal.
Third Circuit and EU: Pay-for-Delay Generic Drug Settlement Can Violate Antitrust Law
August 7, 2012 – 4:20 pm
Update: The Third Circuit has refused to stay its ruling pending Supreme Court review. The defendant sought the stay in hopes of restraining the FTC and private plaintiffs from using the ruling to justify attacks on other drug patent settlements.
In In re: K-Dur Antitrust Litigation, the U.S. Court of Appeals for the Third Circuit has split with the Second, Eleventh, and Federal Circuits to hold that a payment by a patent-holding drug company to a generic competitor conditioned on the competitors holding a drug off the market is prima facie evidence of an anticompetitive agreement. Patent holders may rebut by demonstrating either that the payment (1) benefits competition or (2) constitutes compensation for something other than delayed market entry.
Prior decisions had emphasized the presumed validity of patents and the desire to settle disputes as justifying so-called pay-for-delay settlements. But the Third Circuit held that these considerations were outweighed by Congress’s intent in the Hatch-Waxman Act to employ “litigated patent challenges . . . to protect consumers from unjustified monopolies by name-brand drug manufacturers.” Judge Sloviter, writing for the panel, stressed that the “almost unrebuttable presumption of patent validity” created by the prior courts was insufficiently deferential to antitrust concerns. That presumption, she explained is merely a procedural device governing patent litigation “not a substantive right of the patent holder.”
“Many patents issued by the PTO,” she continued, “are later found to be invalid or not infringed, and a 2002 study conducted by the FTC concluded that, in Hatch-Waxman challenges made under Paragraph IV, the generic challenger prevailed 73% of the time. . . . [R]everse payments permit the sharing of monopoly rents between would-be competitors without any assurance that the underlying patent is valid.”
It is widely believed the Supreme Court will hear either this case or a recent Eleventh Circuit case involving the drug Androgel that was resolved in favor of the defendant, because of the clear split across circuits.
Like the Third Circuit, the European Commission has evinced its concern about pay-for-delay settlements by issuing two statements of objections. The first was issued to Lundbeck A/S, Merck, Ranbaxy Labs, and Xellia Pharmaceuticals. The EC is concerned that Lundbeck has entered anticompetitive agreements to forestall generic competition with its drug citalopram, which it markets under the brand names Celexa and Cipramil.
Shortly thereafter, the EC issued a statement of objections to Servier SAS and several generic drug manufacturers, accusing the French drug-maker of limiting generic competition with perindopril, a cardiovascular treatment marketed as Aceon.
Court Refuses to Dismiss Accreditation Antitrust Suit
August 6, 2012 – 10:03 pm
In K&S Associates Inc. v. American Association of Physicists in Medicine, Middle District of Tennessee Judge Kevin H. Sharp refused to dismiss radiation therapy calibration laboratory’s suit accusing the American Association of Physicists in Medicine of conspiring to reduce competition in the calibration industry and drive the lab out of business. K&S sued AAPM, alleging that AAPM refused to re-accredit K&S in order to drive it out of business, thereby helping its competitors stay in business. AAPM filed a motion for summary judgment. The court denied AAPM’s motion, holding that although K&S hadn’t proved that use of the Sherman Act’s “per se” or “quick look” standards were appropriate for its direct claims against AAPM, AAPM’s decision not to re-accredit K&S could still be subject to a “rule-of-reason” test under the act. The court further held that K&S had offered sufficient evidence that the AAPM’s effective monopoly over legally-required accreditation in a “highly concentrated” market of only three dosimetry calibration labs meant that a decision to deny K&S accreditation could potentially affect the market.
Court Denies Class Certification in Car Parts Antitrust Suit
August 6, 2012 – 9:09 pm
In Perez et al. v. State Farm Mutual Automobile Insurance Company et al., Northern District of California Judge James Ware dismissed a putative class action against State Farm Mutual Insurance Company and four other insurers. In their suit, plaintiffs alleged that the insurers colluded to exclusively offer “junk” policies that shut competitors out of the market and set up a sham organization, the Certified Automotive Parts Association, to prevent competition over auto repair parts. Defendants challenged plaintiffs’ class certification and sought to strike the testimony of plaintiffs’ expert, Allen Wood, who testified on the issue of evaluation of car parts. Defendants argued that while Wood attempted to perform a “systematic review” of the relevant material at issue, he didn’t meet generally accepted, basic statistical requirements for a valid analysis of that kind. The court agreed with the defendants and struck Wood’s testimony, holding that Wood didn’t establish any workable system for picking which surveys and reports to include in his analysis and his process did not rise to the level of methodology, and was not admissible into evidence. The court further held that because Wood’s testimony was excluded, plaintiffs failed to provide an admissible methodology for categorizing car parts. Therefore, their move for class certification was denied with prejudice.
DOJ Seeks to Block No Contest Plea in Airline Price-Fixing Case
August 6, 2012 – 8:17 pm
In U.S. v. Florida West International Airways Inc. et al., The U.S. Department of Justice urged the judge weighing a no-contest plea by Florida West International Airways Inc., in a criminal price-fixing case, to explain his decision. In this case, the DOJ has accused Florida West and its former vice president of conspiring to rig shipment prices on northbound cargo shipments from Colombia to Miami. Florida West, however, claims that its former vice president was secretly employed by and acted at the behest of another carrier and that the company should not be held responsible for his actions.
In its motion challenging Florida West’s nolo contendere plea, the DOJ asked Southern District of Florida Judge Robert N. Scola Jr. to “ensure the completeness” of the record if he agrees to let the airline enter such an unusual plea by outlining which factors he used to decide the plea was appropriate and explaining how each factor applied to the specifics of the case. The DOJ claims that a nolo contendere plea, which can’t be used to establish civil liability, would allow Florida West to accept a penalty without actually admitting to any antitrust violations. Florida West has argued that the plea is appropriate given the unusual circumstances of the case. In early June, the judge indicated that he was inclined to accept the plea and set the case for a July 23 hearing to take it.
Sixth Circuit Affirms Dismissal of Title Insurance Price Fixing Suit
August 6, 2012 – 7:40 pm
In Jordan Katz et al. v. Fidelity National Title Insurance et al., the Sixth Circuit affirmed the dismissal of a consolidated class action accusing 22 title insurers of conspiring with an Ohio rating bureau to fix prices. In their suit, plaintiffs claimed that the title insurers violated the Sherman Act and Ohio’s Valentine Act when they conspired with the Ohio Title Insurance Rating Bureau to fix prices for title insurance. Plaintiffs further claimed that the inflated rates the insurers set hid unlawful kickbacks and other charges unrelated to title insurance. In April 2010, Ohio District Judge dismissed plaintiffs’ claims, finding that the McCarran-Ferguson Act and Ohio state law barred the claims completely and that the filed-rated doctrine foreclosed damages and injunctive relief. The Sixth Circuit affirmed the dismissal, holding that the plaintiffs’ federal claims were barred, since the McCarran-Ferguson Act bars federal antitrust actions related to an insurance business where a state regulates the business, and Ohio regulates title insurance. The court declined to address the filed-rate doctrine issue because the McCarran-Ferguson Act and Title XXXIX of the Ohio Revised Code are complete bars to plaintiffs’ federal and state antitrust claims, so there was no need to consider the filed-rate doctrine issue.