Justia U.S. 6th Circuit Court of Appeals Opinion Summaries

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

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

Until 2001 Dean and Suiza competed to process and sell bottled milk to retailers. Suiza was the largest U.S. processor of milk and Dean was the second largest. Both purchased raw milk from other entities. DFA, a dairy farmer cooperative, was Suiza’s primary supplier and business partner. Dean obtained its raw milk predominantly from independent farmers. Dean and Suiza merged in 2001, becoming Dean Foods, hoping to obtain “distribution efficiencies and economies of scale,” for millions of dollars in cost savings. Certain agreements were negotiated, with input from the Department of Justice, which approved the proposed merger, subject to divestment of particular milk processing plants. Retailers of processed milk sued, charging violation of 15 U.S.C. 1, the Sherman Antitrust Act, by conspiring with a raw milk supplier-milk processor and the purchaser of the divested processing facilities to divide markets and restrict output. The district court granted summary judgment in favor of Dean Foods, finding insufficient proof of injury and failure to establish the relevant antitrust geographic market, primarily because plaintiff’s expert’s testimony was excluded. The Sixth Circuit reversed and remanded, holding that the expert should not have been excluded and that the conclusions regarding injury were based on flawed propositions. View "Food Lion, LLC v. Dean Foods Co." on Justia Law

Suits consolidated under 28 U.S.C. 1407 alleged antitrust violations of price fixing and dividing markets by the manufactures of cooling compressors. The district court dismissed the claims of some of the indirect-buyer plaintiffs and declined to enter a final judgment under Civil Rule 54(b) or to certify an interlocutory appeal under 28 U.S.C. 1292. The Sixth Circuit dismissed an appeal for lack of jurisdiction, concluding that the order did not amount to a “final” decision from which the dismissed plaintiffs may appeal. When a single action involves multiple claims or multiple parties, a ruling that disposes of only some claims or only some parties is ordinarily not “final;” the rule is not different for consolidated multi-district cases. View "In re: Refrigerant Compressors Antitrust Litigation" on Justia Law

Groeneveld sued Lubecore, claiming that Lubecore’s automotive grease pump is a “virtually identical” copy of Groeneveld’s automotive grease pump. The complaint asserted tradedress infringement in violation of section 43(a) of the Lanham Act, 15 U.S.C. 1125(a), and violation of related federal and Ohio laws. The trade-dress claim went to the jury, which found for Groeneveld and awarded it $1,225,000 in damages. The Sixth Circuit reversed, holding that a company cannot use trade-dress law to protect its functional product design from competition with a “copycat” design made by another company where there is no reasonable likelihood that consumers would confuse the two companies’ products as emanating from a single source. Trademark law is designed to promote brand recognition, not to insulate product manufacturers from lawful competition. View "Groeneveld Transp. Efficiency, Inc. v. Lubecore Int'l, Inc." on Justia Law

Erie County filed a purported class action on behalf of itself and other counties in northern Ohio, claiming that Morton and Cargill conspired to fix the price of rock salt in northern Ohio by geographically dividing the market and excluding competition, in violation of Ohio’s Valentine Act (Ohio Rev. Code 1331.01-1331.15), analogous to federal antitrust statutes, including the Sherman Act (15 U.S.C. 1-7). The district court dismissed, finding that the alleged facts were just as consistent with lawful parallel conduct as with a conspiracy. The Sixth Circuit affirmed. The alleged “failure to compete” indicates no more than a natural and independent desire to avoid a turf war and preserve profits guaranteed by regional dominance. Erie County’s concession that it was not bound by the “Buy Ohio” law defeated its claim of conspiracy evidenced by submission of sham bids. View "Erie Cnty. v. Morton Salt Co." on Justia Law

Georgia-Pacific sued Four-U-Packaging, alleging that Four-U’s supply of off-brand paper towels for use in Georgia-Pacific paper-towel dispensers infringed on its trademarks. Four-U distributes paper and janitorial supplies; it does not manufacturer commercial paper systems. Four-U argued that the claims were barred by the ruling in a similar case brought by Georgia-Pacific in Arkansas against a different distributor of generic paper towels. The district court granted summary judgment to Four-U. The Sixth Circuit affirmed. All of the elements of issue preclusion are met and applying the doctrine poses no risk of creating inconsistent rulings. View "Georgia-Pacific Consumer Prods., LP v. Four-U-Packaging, Inc." on Justia Law

LE, creator of the “5-hour ENERGY” energy shot, asserted that N.V.E., creator of the “6 Hour POWER” energy shot, infringed its trademark, under the Lanham Act. 15 U.S.C. 125(a). LE distributed a “recall notice” stating that NVE’s “‘6 Hour’ energy shot” had been recalled. NVE claims that the notice constituted false advertising in violation of the Lanham Act and anti-competitive conduct in violation of the Sherman Act, 15 U.S.C. 2. The district court first found that a likelihood of confusion did not exist between “6 Hour POWER” and “5-hour ENERGY” and held that the recall notice did not constitute false advertising or a violation of the Sherman Act. The Sixth Circuit reversed with respect to trademark infringement and false advertising claims, but affirmed with respect to Sherman Act claims. The “5-hour ENERGY” mark is suggestive and protectable, but the factors concerning likelihood of confusion were closely balanced, making summary judgment in appropriate. There were also unresolved questions of fact as to whether the “recall notice” was misleading, but there was no Sherman Act violation because it was relatively simple for NVE to counter it by sending notices that “6 Hour POWER” had not been recalled. View "N.V.E., Inc. v. Innovation Ventures, LLC" on Justia Law

Lexmark manufactures printers and toner cartridges. Remanufacturers acquire used Lexmark cartridges, refill them, and sell them at a lower cost. Lexmark developed microchips for the cartridges and the printers so that Lexmark printers will reject cartridges not containing a matching microchip and patented certain aspects of the cartridges. SC began replicating the microchips and selling them to remanufacturers along with other parts for repair and resale of Lexmark toner cartridges. Lexmark sued SC for copyright violations related to its source code in making the duplicate microchips and obtained a preliminary injunction. SC counterclaimed under federal and state antitrust and false-advertising laws. While that suit was pending, SC redesigned its microchips and sued Lexmark for declaratory judgment to establish that the redesigned microchips did not infringe any copyright. Lexmark counterclaimed again for copyright violations and added patent counterclaims. The suits were consolidated. The Sixth Circuit vacated the injunction and rejected Lexmark’s copyright theories. On remand, the court dismissed all SC counterclaims. A jury held that SC did not induce patent infringement and advised that Lexmark misused its patents. The Sixth Circuit affirmed dismissal of federal antitrust claims, but reversed dismissal of SC’s claims under the Lanham Act and certain state law claims. View "Static Control Components, Inc v. Lexmark Int'l, Inc." on Justia Law

Plaintiffs sued behalf of themselves and all other purchasers of title insurance in Ohio from March 2004 through the present. They alleged that 22 title-insurance companies and the Ohio Title Insurance Rating Bureau violated antitrust laws (Sherman Act, 15 U.S.C. 1; Ohio Rev. Code 1331.01) by conspiring to set unreasonably high title-insurance rates. The title-insurance companies filed rates with the Ohio Department of Insurance through OTIRB, a properly licensed rating bureau. Plaintiffs claimed that it was impossible for the Department to review the reasonableness of the rates collectively set by defendants because those rates are based principally on undisclosed costs, which allegedly included “kickbacks, referral fees and other expenses designed to solicit business referrals.” The district court dismissed, holding that the filed-rate doctrine applied to title insurance, and foreclosed claims for monetary damages and that Ohio statutes (Title XXXIX) completely foreclosed federal and state antitrust claims. The Sixth Circuit affirmed, noting that there are at least 45 similar cases, nationwide. The filed-rate doctrine, which limits antitrust remedies available to private parties, is irrelevant because the actions are barred by state law. View "Katz v. Fidelity Nat'l Title Ins." on Justia Law