Articles Posted in Antitrust & Trade Regulation

by
The defendant companies, based in China, produce conventional solar energy panels. Energy Conversion and other American manufacturers produce the newer thin-film panels. The Chinese producers sought greater market shares. They agreed to export more products to the U.S. and to sell them below cost. Several entities supported their endeavor. Suppliers provided discounts, a trade association facilitated cooperation, and the Chinese government provided below-cost financing. From 2008-2011, the average selling prices of their panels fell over 60%. American manufacturers consulted the Department of Commerce, which found that the Chinese firms had harmed American industry through illegal dumping and assessed substantial tariffs. The American manufacturers continued to suffer; more than 20 , including Energy Conversion, filed for bankruptcy or closed. Energy Conversion sued under the Sherman Act, 15 U.S.C. 1, and Michigan law, seeking $3 billion in treble damages, claiming that the Chinese companies had unlawfully conspired “to sell Chinese manufactured solar panels at unreasonably low or below cost prices . . . to destroy an American industry.” Because this allegation did not state that the Chinese companies could or would recoup their losses by charging monopoly prices after driving competitors from the field, the court dismissed the claim. The Sixth Circuit affirmed. Without such an allegation or any willingness to prove a reasonable prospect of recoupment, the court correctly rejected the claim. View "Energy Conversion Devices Liquidation Trust v. Trina Solar Ltd." on Justia Law

by
Blue Cross controls more than 60% of the Michigan commercial health insurance market; its patients are more profitable for hospitals than are patients insured by Medicare or Medicaid. BC enjoys “extraordinary market power.” The Justice Department (DOJ) claimed that BC used that power to require MFN agreements: BC would raise its reimbursement rates for services, if a hospital agreed to charge other commercial insurers rates at least as high as charged to BC. BC obtained MFN agreements with 40 hospitals and MFN-plus agreements with 22 hospital systems. Under MFN-plus, the greater the spread between BC's rates and the minimum rates for other insurers, the higher the rates that BC would pay. Class actions, (consolidated) followed the government’s complaint, alleging damages of more than $13.7 billion, and seeking treble damages under the Sherman Act, 15 U.S.C 15. In 2013, Michigan banned MFN clauses; DOJ dismissed its suit. During discovery in the private actions, plaintiffs hired an antitrust expert, Leitzinger. BC moved to exclude Leitzinger’s report and testimony. Materials relating to that motion and to class certification were filed under seal, although the report does not discuss patient information. BC agreed to pay $30 million, about one-quarter of Leitzinger's estimate, into a settlement fund and not to oppose requests for fees, costs, and named-plaintiff “incentive awards,” within specified limits. After these deductions, $14,661,560 would be allocated among three-to-seven-million class members. Class members who sought to examine the court record or the bases for the settlement found that most key documents were heavily redacted or sealed. The court approved the settlement and denied the objecting class members’ motion to intervene. The Seventh Circuit vacated, stating that the court compounded its error in sealing the documents when it approved the settlement without meaningful scrutiny of its fairness to unnamed class members . View "Shane Group, Inc. v. Blue Cross Blue Shield of Mich." on Justia Law

by
Plaintiff is a 26-bed, for-profit, physician-owned hospital that specializes in acute-care surgical services. Its Dayton-area competitors include the defendant hospitals (Premier Group), which have joint operating agreement for negotiating managed care insurance contracts and sharing revenues and losses through an agreed-upon formula, while maintaining separate asset ownership and filing separate tax returns and other corporate forms. Plaintiff sued, alleging violation of the Sherman Act, claiming that Premier was not a single entity, but a group of hospitals capable of concerted action to keep plaintiff from competing in the market. The court dismissed, concluding that Premier was a single entity. The Sixth Circuit reversed, citing the Supreme Court’s multi-factored test for determining whether a joint venture constitutes a “combination” under 15 U.S.C. 1: the condition of the business before and after the restraint is imposed; the nature of the restraint and its effect, actual or probable; the reason for adopting the particular remedy, and the purpose or end sought to be attained. The summary judgment record indicated that the purpose of Premier was to prevent plaintiff from entering the Dayton market; there was evidence of coercive conduct, threatening physicians and insurance companies with financial loss if they did business with plaintiff. There was also evidence of continued competition among the defendants, creating a genuine issue of material fact. View "Med. Ctr. at Elizabeth Place, LLC v. Atrium Health Sys." on Justia Law

by
Allied, founded in 1973 by Ramun, competes with Genesis in the field of industrial dismantling and scrap processing, including the design, development, and manufacture of related specialized equipment. From 1992-2001, Ramun’s son Mark worked at Allied. By 1999, Allied developed innovative multi-use demolition machine attachments, called MT. Various sizes and types of jawsets, including a steel beam cutter and a concrete crusher, were available, allowing the MT operator to perform different tasks with just one tool. The jawset could be changed without removing the main pin, saving time and enhancing productivity. Mark had detailed information regarding the design and function of the attachment, which was highly confidential. In 2001 Mark left Allied, taking a laptop containing 15,000 pages of Allied documents, including detailed technical information about the MT. Mark joined Genesis in 2003. Genesis later released its own multiuse tool. Genesis brought trade secret claims, based on similarity to the MT. A jury rendered a verdict in favor of Allied. The court awarded damages but refused to enter an injunction. The Sixth Circuit affirmed dismissal of a subsequent suit under the Ohio Uniform Trade Secrets Act, alleging misappropriation after that verdict, citing issue preclusion. View "Allied Erecting & Dismantling Co. Inc. v. Genesis Equip. & Mfg., Inc." on Justia Law

by
Best designs and markets exit signs and emergency lighting. Pace manufactured products to Best’s specifications. Best’s founder taught Pace how to manufacture the necessary tooling. There was no contract prohibiting Pace from competing with Best. By 2004, Best was aware that Pace was selling products identical to those it made for Best to Best’s established customers. Several other problems arose between the companies. When they ended the relationship, Pace was in possession of all of the tooling used to manufacture Best’s products and the cloned products, and Best owed Pace almost $900,000 for products delivered. Pace filed a breach of contract suit. Best requested a setoff of damages for breach of warranty and counterclaimed for breach of contract, tortious interference, misappropriation of trade secrets, conversion, and fraud. Pace claimed that Best had misappropriated Pace’s trade secrets and had tortiously interfered with Pace’s contracts. The district court found that Best had breached its contractual obligations by failing to pay, but that Pace was liable for breach of warranties, breach of contract, tortious interference, misappropriation of trade secrets, conversion, and false designation of origin and false advertising under the Lanham Act. The Sixth Circuit affirmed that Pace is liable for breach of contract and tortious interference, but reversed or vacated as to the trade secrets, Lanham Act, conversion, and warranties claims. View "Kehoe Component Sales Inc. v. Best Lighting Prods., Inc." on Justia Law

by
Gordon Auto Body Parts, a Taiwanese company, was one of several early entrants into the U.S. market for replacement truck hoods. PBSI eventually entered the market for certain replacement hoods but found that it could not match the prices of Gordon and other Taiwanese firms, with which Gordon had participated in joint ventures. Believing that Gordon and the other firms were conspiring to drive it out of business with predatory prices, PBSI brought antitrust claims against Gordon. The district court granted Gordon summary judgment. The Sixth Circuit affirmed, finding that PBSI failed to make any showing that Gordon’s prices were below an appropriate measure of cost. View "Superior Prod. P'shp v. Gordon Auto Body Parts Co." on Justia Law

by
Class representatives sued Kentucky real estate firms, alleging violation of Section 1 of the Sherman Antitrust Act, 15 U.S.C. 1, by participating in a horizontal conspiracy to fix commissions charged in Kentucky real estate transactions at an anti-competitive rate. The certified class consists of people who sold residential real estate in Kentucky from 2001 to 2005, and used the services of defendants. Several defendants settled. The district court entered summary judgment for remaining defendants, excluding the opinions of plaintiffs’ experts with respect to whether collusion among the defendants was the likely economic explanation of the pricing of commissions. The Sixth Circuit affirmed, stating that although the plaintiffs produced a good deal of circumstantial evidence that would support a theory of collusion, the conduct at issue was also consistent with permissible competition. View "Hyland v. HomeServices of America, Inc." on Justia Law

by
The Federal Trade Commission (FTC) filed a complaint alleging that Defendants fraudulently marketed and sold debt-related services, failed to provide those services, and retained money as upfront fees in violation of the FTC Act, 15 U.S.C. 45(a); the Telemarketing Sales Rule, 16 C.F.R. 310; and the Mortgage Assistance Relief Services Rule, 12 C.F.R. 1015. The FTC also sought a temporary restraining order and a preliminary injunction, and provided more than 1,000 pages of exhibits. Defendants sought to stay proceedings, asserting that a criminal investigation had been launched into their business activities, as evidenced by a raid conducted by the Royal Canadian Mounted Police that resulted in seizure of records they claim were necessary to defend against the FTC’s allegations. The district court denied the motion; the FTC and Defendants entered into a stipulated preliminary injunction. Defendants later renewed the motion for a stay, claiming that they were unable to access critical records. Without explanation, the district court denied the motion and later granted the FTC’s motion for summary judgment, ordering Defendants to jointly pay restitution in the amount of $5,706,135.48 to injured consumers. The Sixth circuit affirmed, finding clear evidence of the violations. View "Fed. Trade Comm'n v. E.M.A. Nationwide, Inc." on Justia Law

by
Lubrizol, a chemical manufacturer, produces petroleum wax-based oxidates, used in anti-corrosion products. In 2007, Lubrizol acquired Lockhart’s oxidate business and assets, leaving Lockhart’s Flint, Michigan oxidate production facility partially unused. The purchase agreement “prohibited Lockhart, for a period of five years from the date of the purchase agreement, from directly or indirectly engaging in any business competitive with the assets it sold to Lubrizol.” Lubrizol allegedly later employed the clause to prevent the use or re-lease of the plant to another oxidates manufacturer.” The purchase gave Lubrizol a 98% market share monopoly in the oxidate market. Lubrizol subsequently increased prices by 70%. In 2009, the FTC alleged violations of Section 5 of the FTC Act and Section 7 of the Clayton Act. In a consent agreement, Lubrizol promised: to divest the Lockhart oxidates assets to Additives Int'l; to rescind any prohibition or restraint including noncompete agreements, on the sale or use of the Flint plant for the manufacture and sale of products by Additives or others; and to lease the Flint plant to Additives. Z Technologies, a purchaser of oxidates that makes anti-corrosion products for cars, filed suit in 2012, alleging violations of the Sherman and Clayton Acts and Michigan antitrust laws. The district court dismissed, determining that the claims were time-barred. The Sixth Circuit affirmed, rejecting a continuing-violations argument. Lubrizol’s price increases and alleged implementation of the non-compete clause did not constitute a “new and independent” injury. The court also found a hold-and-use argument inapplicable because the alleged implementation of a non-compete clause was not a “new use” of an “asset.” View "Z Techs. Corp. v. Lubrizol Corp." on Justia Law

by
Lucas County has about 440,000 residents and includes Toledo. Two-thirds of the county’s patients have government-provided health insurance, such as Medicare or Medicaid; 29 percent have private insurance, which pays significantly higher rates to hospitals than government-provided insurance. General acute-care (GAC) inpatient services include “primary services,” such as hernia surgeries, radiology services, and most inpatient obstetrical (OB) services. “Secondary services,” such as hip replacements and bariatric surgery, require more specialized resources. “Tertiary services,” such as brain surgery and treatments for severe burns, require even more specialized resources. “Quaternary services,” such as major organ transplants, require the most specialized resources. Different hospitals offer different levels of service. In Lucas County ProMedica has 46.8% of the GAC market and operates three hospitals, which together provide primary (including OB), secondary, and tertiary services. Mercy Health Partners has 28.7% of the GAC market and operates three hospitals in the county, which provide primary (including OB), secondary, and tertiary services. University of Toledo Medical Center (UTMC) has 13% of the GAC market with a single teaching and research hospital, focused on tertiary and quaternary services. It does not offer OB services. St. Luke’s Hospital had 11.5% of the GAC market and offered primary (including OB) and secondary services. In 2010 ProMedica merged with St. Luke’s, creating an entity with 50% of the market in primary and secondary services and 80% of the market for obstetrical services. The FTC challenged the merger under the Clayton Act, 15 U.S.C. 18. The Commission found that the merger would adversely affect competition and ordered ProMedica to divest St. Luke’s. The Sixth Circuit upheld the order. View "ProMedica Health Sys., Inc. v. Fed. Trade Comm'n" on Justia Law