2018 saw a significant upswing in antitrust litigation against health care providers; 27 cases were filed in 2018 versus 17 in 2017. In the latest Antitrust Update for Health Care Providers, we discuss what caused the notable rise, what kinds of cases were brought over the past two years and how they were decided,

Standard-essential patent holders and implementers may face uncertainty regarding licensing practices following a May 23 Texas court ruling. In the ruling, a Texas federal judge reached a conclusion different from a recent California court decision—FTC v. Qualcomm—on the question of whether an SEP holder must base its royalty rates on the “smallest salable

WHAT HAPPENED:

  • The Department of Justice filed a Statement of Interest in three related cases in the Eastern District of Washington yesterday dealing with alleged “no-poach” (or non-solicitation) agreements between franchisors like Carl’s Jr, Auntie Anne’s and Arby’s and their franchisees.
  • In the statement, the DOJ distinguished between “naked” no-poach agreements between competitors and the

Last week, in Connecticut Fine Wine and Spirits LLC v. Seagull, the US Court of Appeals for the Second Circuit affirmed a lower court’s motion to dismiss a lawsuit from Total Wine & More challenging parts of Connecticut’s Liquor Control Act and related regulations. Though the decision represents a victory for state alcohol regulatory regimes, the Second Circuit’s ruling was decided on the basis of established antitrust law and did not raise or rely on state regulatory authority under the 21st Amendment. Nonetheless, state alcoholic beverages regulators will embrace the court’s ruling.

In Connecticut Fine Wine, Total Wine challenged three sets of provisions in Connecticut’s alcohol laws. First, Total Wine challenged “post-and-hold” provisions. Under the post-and-hold provisions, state-licensed wholesalers are required to post a “bottle price” and “case price” each month with the Connecticut Department of Consumer Protection. Those prices are then made available to industry participants. During the four days after prices are posted, wholesalers may “amend” their posted prices to match—but not drop below—lower prices offered by competitors. Wholesalers are then obligated to “hold” their prices for a month.

Second, Total Wine challenged the state’s minimum-retail-price provisions. The minimum-retail-price provisions require retailers to sell alcohol beverages to customers at or above a statutorily defined “cost,” which is determined by adding the posted bottle price and a markup for shipping and delivery. Combined with the post-and-hold provisions, the minimum-retail-price provisions bind retailer prices to wholesaler prices.

Third, Total Wine challenged the state’s price discrimination and volume discount provisions. The price discrimination/volume discount provisions preclude wholesalers from offering a given product to different retailers at different prices and from offering discounts to retailers who are high-volume purchasers.
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As highlighted in a recent lawsuit, aerospace and defense contractors can face various antitrust risks when using certain tactics to prevent other companies from hiring their employees. See Hunter v. Booz Allen Hamilton Holding Corp., No. 2:19-CV-411 (S.D. Ohio). The plaintiff, a former intelligence professional who worked at the US government’s Joint Intelligence Operations Center Europe Analytic Center in Molesworth, England (JAC Molesworth), filed an antitrust suit on behalf of herself and a class of JAC Molesworth employees. She alleges that three military intelligence contractors—Booz Allen, CACI and Mission Essential—entered into illegal agreements not to hire one another’s employees. The complaint alleges that the three contractors each had Indefinite Delivery / Indefinite Quantity (IDIQ) contracts and, prior to the alleged “no-poach” agreement, competed aggressively to hire employees with experience at JAC Molesworth to provide services under contract task orders. According to the complaint, these alleged no-poach agreements had the effect of suppressing the wages and benefits for skilled workers at JAC Molesworth because they stopped a bidding war for talent.

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In this Special Report, we highlight notable trends in antitrust litigation involving health care providers over the past two and a half years. Our complimentary update identifies the types of cases filed against providers, who is filing them, case results and currently pending cases to watch.

Access the full report.

Alert: The Supreme Court clarified the principles of international comity this week in a ruling pertaining to the long-running vitamin C antitrust class action litigation. International comity is the recognition a nation shows to the legislative, executive or judicial acts of another nation. Principles of comity state that US courts should defer to the laws of other nations when actions are taken pursuant to those laws. In this week’s ruling, Justice Ginsberg wrote that federal courts should accord respectful consideration to foreign government submissions when analyzing comity issues, but are not bound by them. This ruling vacates the Second Circuit’s decision in the case overturning the jury verdict for the class, and is a win for the class of US purchasers of vitamin C.
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The US International Trade Commission (ITC) issued an opinion dismissing United States Steel Corporation’s antitrust claim made under Section 337 of the Tariff Act of 1930 against several Chinese steel manufacturers or distributors, ruling that a complainant must show an antitrust injury even in a trade case.

WHAT HAPPENED

  • On Monday, March 19, three of the ITC’s four sitting commissioners upheld an administrative law judge’s (ALJ) decision to eliminate the antitrust claim from US Steel’s trade case against Chinese steel manufacturers.
  • US Steel’s claims were made pursuant to Section 337 of the Tariff Act of 1930. Section 337 has primarily been used by US companies to bar the import of items that infringe upon intellectual property rights. A violation of Section 337 requires a showing of “[u]nfair methods of competition [or] unfair acts in the importation of articles.”
  • US Steel took a rather novel approach and based one of its Section 337 claims on Section 1 of the Sherman Act. Specifically, US Steel alleged a conspiracy between the Chinese manufacturers to fix prices at below-market prices and control output and export volumes. Though US Steel based its claim on the Sherman Act, it argued before the ALJ and the ITC that it did not need to show antitrust injury to sustain its antitrust claim. US Steel reasoned that because Section 337 is designed to protect American companies and workers, it needed only show harm to those groups.
  • In November 2016, an ALJ granted the Chinese manufacturers’ motion to dismiss the antitrust claims, confirming that US Steel is required to show antitrust injury to state an antitrust claim under Section 337.
  • The ITC affirmed the ALJ’s dismissal of US Steel’s antitrust claim because it did not meet the pleading requirements of the Sherman Act under substantive federal antitrust law; such an antitrust claim requires antitrust injury to be alleged. The ITC explained that it relies on existing bodies of substantive federal law to avoid conflicts with federal precedent.
  • Under US antitrust law, for US Steel to properly allege antitrust injury on the allegation that its competitors fixed prices at below-market prices, the below-market pricing must be predatory. That is, US Steel would be required to prove (a) below-cost pricing and (b) that the Chinese steel manufacturers had a dangerous chance of recouping their losses. US Steel did not—and conceded it could not—satisfy the pleading standard for predatory pricing.


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Dealmakers know that a critical part of the merger process is obtaining antitrust clearance from government enforcers. But, even if the antitrust enforcers review and clear a transaction, a third-party can file a private suit alleging the transaction violated the antitrust laws. Recently, an aggrieved customer did just that—it won a substantial jury verdict and

Indirect purchaser plaintiffs’ motion for class certification in a lithium ion battery suit was denied for failing to show concrete evidence linking increased input costs to increased end-product prices; theoretical inference is not enough.

WHAT HAPPENED:

  • The US District Court for the Northern District of California denied a motion for class certification for a proposed