California Supreme Court Judge Stephen A. Brick dismissed a complaint filed by a group of pharmacies alleging that several drug manufacturers had conspired to increase drug prices. The case was initially dismissed on the ground that the pharmacies would have passed on any overcharge to their customers, but the California Supreme Court reversed that holding. On remand, the court held that the plaintiffs failed to allege that the defendants conspired. All of the allegations were consistent with the defendants’ individual business interests.
Drug Pricing Class Action Certified
May 11, 2011 – 5:01 pm
A District of Massachusetts court certified a class of state and city plaintiffs bringing a class complaint alleging that McKesson Corp., a large drug distributer, organized a scheme to increase the posted average wholesale prices for drugs, which is used to calculate payments to pharmacies. The 2008 complaint alleges that the scheme affected prices from August 2001 to June 2005. In 2008, McKesson settled for $350 million a class action raising similar claims that was filed by consumers and health insurers.
LBO Price Fixing Case Narrowed
May 11, 2011 – 4:18 pm
District of Massachusetts Judge Edward F. Harrington dismissed the allegations of former Kinder Morgan shareholders in a broad class action alleging price fixing among Goldman Sachs, the Carlyle Group, Blackstone, and other Wall Street defendants with respect to leveraged buyouts. The court dismissed the Kinder Morgan allegations on the ground that they were covered by a prior settlement dismissing the claims.
First Circuit Rejects Martha’s Vineyard Gas Price Fixing Case
May 11, 2011 – 3:48 pm
The First Circuit has upheld summary judgment in favor of four gas stations on Martha’s Vineyard that were accused of fixing prices. The complaint alleged that the prices on the island were substantially higher than those in near by Cape Cod. The court found that transportation costs could explain the price difference, and the gas retail market on Martha’s Vineyard was susceptible to consciously parallel behavior leading to higher prices despite the lack of a price fixing agreement. Where the evidence fails to exclude the possibility of individual decision making, the antitrust laws are not violated.
EC Prestressed Steal Cartel Fines Issued
May 11, 2011 – 2:48 pm
The European Commission has fined 17 prestressed steel producers for operating a multi-national cartel from the 1980s through 2002. The fines totaled € 269 870 750.
SanDisk’s Walker Process Claim Moves Forward
May 9, 2011 – 4:06 pm
Northern District of California Judge Jeremy Fogel denied SanDisk Corp.’s motion to dismiss an antitrust class action involving Ritz Camera & Image LLC’s Walker Process claim. Ritz, who allegedly paid monopoly prices for SanDisk flash memory since 2006, alleged SanDisk enforced fraudulently procured patents. SanDisk contended that only direct competitors, not customers, could bring such claims. Judge Fogel held that Ritz’s claim is viable based because the relevant patents had already been tarnished by a finding of inequitable conduct.
Florida Concrete Companies Denied Motion to Dismiss
May 9, 2011 – 4:03 pm
Southern District of Florida Judge Cecilia M. Altonaga denied a motion to dismiss indirect purchasers from a class action price-fixing suit against several Florida cement companies. The complaint alleged that cement companies conspired as early as February 2008 to keep prices high in Florida. The indirect purchasers survived the motion to dismiss because at least one plaintiff had standing, and therefore the court held it has subject matter jurisdiction. The court remarked that if it turns out the indirect purchasers have not been injured by the alleged conspiracy then their claims will fail on the merits.
DOJ and Texas Hospital Propose Antitrust Settlement
May 9, 2011 – 4:00 pm
A Northern District of Texas court received a proposed settlement between the Department of Justice and a Texas hospital that was accused of monopolizing the hospital services market by preventing insurers from working with competitors. United Regional Health Care System of Wichita Falls, Texas, controlled hospital services in the area and was allegedly able to charge insurance companies about 70% more than its nearest competitor for the same services. The proposed settlement prohibits the hospital from retaliating against or imposing anti-competitive agreements on health insurers for seven years.
Court Allows Plaintiffs To Amend Complaint in On-Line DVD Rental Antitrust Suit
May 8, 2011 – 6:23 pm
Update May 2011: The court dismissed claims filed by Blockbuster customers, alleging that the Walmart/Netflix deal led directly to Blockbuster raising its prices. The court held that there was insufficient evidence of a direct link between
Update July 2010: The court has denied Walmart’s and Netflix’s motion to dismiss. Although retaining doubt about the plaintiffs’ ultimate ability to prove that their injuries were caused by any agreement between Walmart and Netflix, it felt compelled to allow discover to proceed given that no case law addressed the specific claim and that it was plausible that the plaintiffs could build an evidentiary record showing causation.
In Pierson v. Walmart.com USA et al.; and Levy et al. v. Walmart.com USA LLC et al., Northern District of California Judge Phyllis J. Hamilton has agreed to allow Blockbuster Inc. customers who accused Wal-Mart Stores Inc. and Netflix Inc. of colluding in the market for online DVD rentals to amend their complaint based on facts obtained through discovery after oral argument on the defendants’ motion to dismiss. The plaintiffs said that they could allege new facts that would provide the missing causal link between an alleged agreement between Wal-Mart and Netflix not to compete in the market for on-line DVD rentals and Blockbuster’s decision to raise its prices. Judge Hamilton said in her order that while she was not convinced the plaintiffs’ additional allegations would withstand scrutiny, there was “at minimum a possibility” that the plaintiffs could amend the complaint in a way that would overcome its previous deficiencies.
Activision Antitrust Fine Upheld by European Court of Justice
April 15, 2011 – 1:35 pm
The European Court of Justice, the European Union’s highest court, upheld a €500,000 ($680,000) fine against Activision Blizzard Germany GmbH for its antitrust violation regarding parallel exports of Nintendo products. Activision was found to have participated in a scheme, along with several other distributors including Nintendo Co. Ltd., to restrict the sale of Nintendo products in other countries between 1991 and 1998.