The California Supreme Court refused to grant review, upholding a $21 million verdict against SF Weekly as a result of predatory pricing. Bay Guardian Co. Inc. had alleged that SF Weekly used profits from out-of-region papers to sell ad space below cost. The Defendants had appealed to the 1st Appellate District arguing that recoupment of losses was an essential element of a predatory pricing case under Section 17043 of California’s Unfair Practices Act. The appellate court held California law is distinct from its Federal counterparts because California requires intent, looking to the purpose of the scheme rather than the resulting harm.
California Supreme Court refuses to grant review in predatory pricing Suit
January 17, 2011 – 12:12 am
State Law Damages Claims Preempted in RR Fee Fixing Class Action
January 7, 2011 – 2:18 pm
Update December 2010: The U.S. Supreme Court denied certiorari on the preemption issue.
Update January 2009: The court dismissed the indirect purchasers’ state law claims, holding that they were preempted by the Staggers Rail Act. Under Federal antitrust law, indirect purchasers may seek injunctive relief but not damages. Many state antitrust laws, by contrast, permit indirect purchasers to recover damages. The court held that state law damages claims against railroads were preempted by the Staggers Act.
In In re: Rail Freight Fuel Surcharge Antitrust Litigation, District of Columbia Federal Disctrict Court Judge Paul Friedman denied defendant railroad’s motion to dismiss a class action alleging that the defendants agreed to fix fuel surcharges. Relying on Twombley, the railroads argued that the class had failed to sufficiently allege a conspiracy. The court found that detailed allegations of price uniformity following meetings at which other agreements were reached was sufficient to survive a motion to dismiss.
Programmable Controller Monopolization Case to Move Toward Discovery
December 18, 2010 – 10:26 am
District of Massachusetts Senior Judge Edward F. Harrington rejected a motion to dismiss Savant’s monopolization allegations against Crestron and pledging to reconsider the arguments after discovery in a motion for summary judgment. According to the plaintiff Savant, Crestron, the largest supplier of programmable controllers for residential and commercial automation in the U.S., supplies about 2,500 of the 3,000 U.S. automation system dealers . Plaintiff alleges that access to dealers, who provide information to customers and arrange for technicians to install the systems, is critical, especially for smaller companies that cannot afford to maintain their own nationwide fleet of installers.
Savant alleges that Crestron has “unlawfully required dealers, as a condition of maintaining their relationship with Crestron and their access to Crestron’s products for resale, to agree not to offer, resell, install or distribute Savant products.” In addition, it has offered discounts to dealers who refuse to carry Savant products and penalized those who offer Savant systems. Crestron’s conduct, the complaint alleges, reduces innovation and competition. In addition to its conduct with respect to dealers, Savant also argues that Crestron has made false and misleading statements disparaging Savant personnel and products and falsely asserting that only Crestron has an exclusive relationship with Apple Inc., when Savant is also an authorized reseller of Apple products.
Attack on MPEG Patent Pool Dismissed
December 14, 2010 – 1:39 pm
Update December 2010: The court again dismissed the complaint, holding that Nero’s amended complaint still failed to allege sufficient facts to back up its allegations. Nero asserted that it would appeal the decision.
Central District of CA Judge Mariana Pfaelzer dismissed Nero AG’s monopolization case against the MPEG video compression technology patent for failing to state a claim. The complaint alleged that the patent pool members improperly extended the life of their patented technologies in part by including non-essential patents in the pool. The court based on the dismissal and Nero’s failure to allege facts to support the allegations, which the court found to be overly speculative.
Robinson-Patman Act Case Based on Discriminatory Shipping Policies to Move Forward
November 11, 2010 – 5:43 pm
Western District of Washing Judge Richard Jones dismissed the Sherman Act claims, but permitted a Robinson-Patman Act claim to go forward. The plaintiff, Gorlick Distribution Centers alleged that defendant Allied Exhaust Systems agreed with supplier Car Sound Exhaust Systems to refuse to ship to Gorlick in the Pacific Northwest because of its price cutting activities. The court found insufficient allegations of agreement to support a Sherman Act claim. The court did, however, permit a claim that the discriminatory shipment policy constituted price discrimination under the Robinsons-Patman Act, because Allied’s complicity in Car Sound’s refusal to ship to Gorlick in the Pacific Northwest was not required to support that claim.
No Competition Found in the Food Services Giant’s Antitrust Suit
November 11, 2010 – 2:18 pm
Update October 2010: The Supreme Court has denied certiorari, allowing the 3rd Circuit’s decision to stand.
In Feesers Inc. v. Michael Foods Inc. et al., Third Circuit ruled that Feesers Inc. and Sodexo Inc. were not competing purchasers under the federal law and therefore Feesers could not show that it suffered competitive injury under the Robinson-Patman Act. This ruling reversed an earlier win for Feesers in an antitrust case targeting Sodexo and egg and potato wholesaler Michael Foods Inc. According to the Third Circuit, Feesers sells food to self-operating institutions and food service management companies, whereas Sodexo sells food in conjunction with its food service management services, therefore, the two companies compete when a customer considers switching from self-op to food service management or vise versa, which occurs prior to Michael Foods’ sales of food products to the two companies. Thus, according to the Third Circuit, Feesers and Sodexo’s competition is irrelevant to the sales by Michael after that competition was complete.
Standard Setting Abuse Case to Move Forward
November 11, 2010 – 12:50 pm
Eastern District of Texas Judge Leonard Davis refused to dismiss Encore Wire Corp’s claim that competitor Southwire Inc. violated California state antitrust laws by lobbying for an industry standard without disclosing that it owned a patent that would be infringed by wire conforming to the standard. Southwire sought dismissal on the ground that the statute of limitations had run since it the standard had been adopted. The court declined to dismiss the antitrust claim on the ground that Southwire’s filing of a patent infringement action against Encore was an overt act in furtherance of the anticompetitive scheme.
Exclusive of Generic Drugs Monopolization Case Goes Forward
October 30, 2010 – 2:37 pm
Update October 2010:The court denied GSK’s request that it reconsider its decision to allow indirect purchaser claims to move forward.
Update September 2010: Tracking his decisions in the direct purchaser case, Judge Stengel dismissed claims relating to one of GSK’s patents, but otherwise permit at least one state law claim to proceed for each of the in-direct purchaser plaintiff. The court invited the indirect purchases to seek class certification. The direct purchase plaintiffs were certified as a class in 2008.
Update September 2010: Eastern District of PA Judge Lawrence Stengel affirmed his denial of GSK’s summary judgment motions in In re: Wellbutrin Antitrust Litigation. As did the opinion described below, the court held that disputes of fact existed as to whether GSK has probable cause for patent infringement actions that delayed the entry of generic version of Wellbutrin. The court also rejected GSK’s argument that because the court had held that one of its patents was valid, that its case which included the valid patent could not constitute sham litigation. Judge Stengel explained that he had ruled separated on each patent. The reasonableness of basing the suit on one patent could not justify summary judgment for GSK if it had not ground for including the second patent.
In Meijer Inc. et al. v. Biovail Corpet al., Eastern District of PA Judge MaryA. McLaughlin, allowed an antitrust lawsuit filed by a group of direct purchasers of Wellbutrin XL against Biovail Corp. and GlaxoSmithKline PLCto proceed, despite dismissing one claim of substantive monopolization against Biovail. In their suit the plaintiffs allege that GSK and Biovail delayed the entry of generic competitors for Wellbutrin XL into the American market, by filing “meritless litigation” and a “baseless” citizen petition with the FDA. Plaintiffs claim that Biolvail’s settlement of patent infringement suitsit filed in 2004 and 2005, against four generic manufacturers of Wellbutrin who sought to market generic Wellbutrin alternatives, “highlights the sham nature of the suits”. Plaintiffsfurther allege that defendants’ anticompetitive conduct forced consumers to pay supracomeptitive prices for their products, which cost consumers $37 billion per month for four months. As part of its holding, the court upheld the claim of conspiracy to monopolize against both companies, finding that plaintiffs sufficiently pled the element of “agreement and concerted action in restraint of trade” by sufficiently alleging a product mark and geographic market and that GSK and Biovail possessed power over both markets and acted together in filing the “allegedly baseless infringement suits”. The court dismissed the substantive monopolization claim against Biovail due to Biovail’s lack of direct participation in the U.S. market for Wellbutrin, despite receiving drug sale royalties from GSK. However, the court upheld an identical claim against GSK stating that its licensing of Wellbutrin from Biovail “ensured [GSK] a monopoly on sales of Wellbutrin XL in the United States.”
Several Antitrust Claims Dismissed In An Antitrust Multi-District Suit Against Plush Web Toy Supplier
October 25, 2010 – 2:21 pm
Update October 2010: Judge Richard Seeborg has taken over the case and rejected Ganz’s motion to dismiss the plaintiff’s amended complaint. The court held that the amended complaint includes specific allegations of anticompetitive effects, such as the alternate suppliers who the plaintiffs had stopped buying from as a result of the defendant’s tying practices, which the initial complaint had omitted.
In In re: Webkinz Antitrust Litigation, Northern District of California Judge Jeffrey S. White dismissed four claims in antitrust multidistrict litigation alleging that Ganz Inc., the supplier of the popular Webkinz toys, required retailers to buy unrelated gift items in order to obtain the plush animals. While leaving the claims under Connecticut Unfair Trade Practices Act and Florida’s Deceptive and Unfair Trade Practices Act in tact, the court dismissed allegations that that Ganzi violated antitrust law and California Unfair Competition Law, among other claims, holding plaintiffs failed to state a claim, but gave plaintiffs a chance to amend their complaint. In dismissing the claims, the court held that “[p]laintiffs summarily assert that consumers have been harmed, but do not allege facts demonstrating that consumers have suffered any injury as a result of limited choices of the tied products in plaintiffs’ stores, … [and c]onclusory allegations of anti-competitive effect are insufficient without supporting facts as to how competition in the tied markets has actually been reduced or harmed.”
Monopolization Case Against United Airlines Dismissed
October 19, 2010 – 4:12 pm
DC FDC Judge Richard Leon has granted summary judgment in favor of United Airlines in a case alleging that the airline monopolized the market in non-stop flights from San Francisco to the Washington Dulles area. In a putative class action, the plaintiff alleged that United’s rules prohibiting resale of tickets restrained competition from the secondary market. The court held that without evidence that additional capacity was excluded from the market as a result of United’s conduct, the case could not go forward.