Category: Class Actions

In a recently unsealed opinion, a court in the District of New Jersey has declined to certify a direct-purchaser class in In re Lamictal on numerosity grounds.  It joins the growing number of courts in recent years to have held that a putative class included too few members to warrant certification.  (We discussed those prior decisions in an article published in the Global Competition Review’s 2022 Annual Review, available here).

Under the Biden Administration, the FTC and DOJ have voiced a commitment to an expansive enforcement of antitrust law.  The recent confirmation of Judge Ketanji Brown Jackson to assume Justice Breyer’s position on the Supreme Court raises the question of how antitrust jurisprudence might develop against that backdrop.  Those questions loom particularly large given that Justice Breyer’s antitrust opinions have not reflected a predictable theoretical approach to antitrust issues facing the Court; instead, they have tended to manifest the pragmatism that guides his judicial philosophy.

The Fourth Circuit ruled last month that the Charlotte-Mecklenburg Hospital Authority, which does business as Atrium Health, is immune from antitrust damages as a “special function governmental unit” under the Local Government Antitrust Act of 1984 (the “Act”).  The decision in Benitez v. Charlotte-Mecklenburg Hospital Authority clarifies the scope of local government antitrust immunity and confirms that mere growth of an organization beyond local borders does not prevent it from continuing to enjoy antitrust immunity as a “local government.”

Yesterday we discussed 2019’s most significant developments in challenges to reverse-payment settlements.  Today we continue our analysis of recent trends in pharmaceutical antitrust actions with a discussion of cases addressing class certification requirements in the reverse-payment context.

Recently, Judge Goldberg in the Eastern District of Pennsylvania certified two classes of plaintiffs asserting antitrust claims based on alleged “product hopping” by the manufacturer of branded tablets treating opioid addiction.  In re: Suboxone (Buprenorphine Hydrochloride and Nalaxone) Antitrust Litig., 13-md-2445, 2019 U.S. Dist. LEXIS 166524 (E.D. Pa. Sept. 26, 2019).  While declining to certify a class of end payors seeking injunctive relief, the court nevertheless certified  (1)  a damages class of direct purchasers of Suboxone tablets under Rule 23(b)(3) and (2) an issues class of end payors certified under Rule 23(c)(4).  The court held that certification of the latter class would materially advance the litigation because the issue of alleged anticompetitive conduct—which focuses only on the conduct of defendants—is “wholly severable” from the issues of antitrust impact and damages, which could raise individualized issues. 

As the Supreme Court prepares to hear Apple Inc. v. Pepper, a major case involving antitrust standing, interested parties across the political spectrum are weighing in with their ideas of how the case should be resolved.  As we previously reported, the Supreme Court decided to review the Ninth Circuit’s decision that because Apple sold iPhone apps directly to consumers, consumers are direct purchasers that have standing to sue Apple for alleged monopolization of the market for iPhone apps.  Apple contends that the app developers – not Apple – are the sellers of apps to consumers because the app developers set prices; Apple contends that it sells only distribution services, and sells those services to the app developers, not to consumers.

The Third Circuit recently denied a petition for rehearing en banc a panel’s earlier decision in the In re Flonase Antitrust Litigation. In that case, the panel decision addressed the degree to which class settlements can bind non-participating U.S. state class members.  After vigorous briefing on the issue, the panel found that the state of Louisiana had not waived its sovereign immunity, and therefore could not be bound by a class settlement that enjoined class members from subsequently bringing separate suits. This is a case with potentially wide reaching implications, as it could impact the negotiation of settlements in class actions that include states as class members.

A federal judge in California has refused to allow indirect purchasers of semiconductor chips—i.e., cell phone consumers—to bring claims against Qualcomm under federal antitrust law.

The Third Circuit recently affirmed the grant of summary judgment to GlaxoSmithKline (“GSK”) in the nearly 10-year-old Wellbutrin XL Antitrust Litigation, which challenged the lawfulness of settlement agreements resolving patent disputes over Wellbutrin XL.  In determining that GSK had not violated the Sherman Act, the court determined that GSK’s settlement of patent infringement lawsuits did not reflect that GSK had engaged in sham litigation, or that GSK made unlawful “reverse payments” to settle that litigation.  To reach these conclusions, the court carefully picked apart years of evidence

Recently in In re Pre-Filled Propane Tank Antitrust Litigation, an en banc panel of the Eighth Circuit clarified the application of the continuing violation exception to the statute of limitations for claims under the Sherman Act.  The Court was closely divided, with a 5-to-4 split between the majority opinion and a sharply worded dissent.  The majority held that, in an antitrust conspiracy suit, a continuing violation tolls the statute of limitations as long as there were unlawful acts (e.g., sales to the plaintiff) within the limitations period, even if the alleged conspiracy was hatched outside the four-year statute of limitations period.  The dissent, however, argued that to avoid dismissal plaintiffs are required to show a live, ongoing conspiracy within the limitations period.

We have not previously reported on an antitrust litigation that is enveloping the mixed martial arts (“MMA”) world.  Six current and former MMA fighters have filed a class action lawsuit against the company that owns the UFC, Zuffa, LLC, for violations of the Sherman Act.  A review of the docket indicates that the UFC will have to go a few more rounds before it has another opportunity for a knockout.

In a significant Illinois Brick decision, the Ninth Circuit recently issued an opinion concluding that consumers who purchase apps from Apple’s “app store” directly purchase those apps from Apple, which acts as a distributor.  The purchasers therefore have antitrust standing to sue Apple for alleged monopolization of the iPhone app market.  The decision could make it easier for consumers to bring antitrust claims against sellers in e-commerce.

It has been over three years since the Supreme Court’s Actavis decision.  Since then, numerous putative class actions alleging harm to competition as a result of “reverse-payment” settlements have flooded the courts.  The complexity of these cases, along with the vague guidance provided by the Supreme Court, has given rise to intricate questions about how courts should apply Actavis and scrutinize settlements of Hatch-Waxman litigation.

It is not every day that antitrust plaintiff classes fail to win certification due to lack of numerosity under Federal Rule of Civil Procedure 23(a)(1).  Yet this week, absence of numerosity was the reason a Third Circuit panel reversed an order from the Eastern District of Pennsylvania certifying a class of 22 plaintiffs.  The putative class included direct purchasers allegedly injured by reverse-payment agreements between Cephalon and four generic manufacturers of Cephalon’s narcolepsy drug Provigil.

On July 5, 2016, investors filed a federal class action [add link to pdf] in the Southern District of New York alleging defendant banks had manipulated the Singapore Interbank Offered Rate (SIBOR) “and/or” Singapore Swap Offer Rate (SOR) market, forcing investors to pay artificial prices for financial derivative transactions based on these benchmarks. This lawsuit follows on the heels of the Second Circuit’s decision in In re: LIBOR-Based Financial Instruments Antitrust Litigation, which allowed the case to proceed.  

On June 21, 2016, the United Kingdom Competition Appeal Tribunal (the “Tribunal”) published notice of an application to commence collective proceedings under Section 47B of the UK’s competition act.  If this action continues, it will be the first opt-out collective (class action) competition claims to be heard by the Competition Appeal Tribunal.

Certifying a class of direct purchasers of sheet metal parts alleging claims under section 1 of the Sherman Act, Judge Lynn Adelman of the United States District Court for the Eastern District of Wisconsin focused on what it means for common questions to predominate in an antitrust class action.  

It is plausible that Uber’s CEO, Travis Kalanick, may have violated antitrust law by fixing prices charged to Uber passengers, a judge in the United States District Court for the Southern District of New York concluded last week in denying Kalanick’s motion to dismiss.  The lawsuit, Meyer v. Kalanick, is a putative class action initiated by Spencer Meyer, a resident of Connecticut, on behalf of people who, like him, have used Uber car services.  The complaint also names a subclass of people who have been charged according to Uber’s “surge pricing” model.

We’ve previously written about litigation involving the scope of Major League Baseball’s long-standing antitrust exemption.  Earlier this week, on the eve of trial, MLB settled Garber v. Office of the Commissioner of Baseball, a class action lawsuit challenging its territorial broadcasting policy.  The lead plaintiff Marc Lerner is a Mississippi resident and New York Yankee fan who was allegedly charged supracompetitive prices to watch the Yankees due to MLB’s territorial broadcast policies.  Under MLB’s policy of territorially restricting television broadcasts, consumers could only watch “out-of-market” games subject to certain limitations, including a requirement to purchase every out-of-market game, even if the consumer was only interested in following a single team.  By avoiding the bench trial, MLB avoided having to further litigate the scope of its unique “antitrust exemption” in front of Judge Scheindlin of the U.S. District Court for the Southern District of New York, who had previously expressed skepticism about the continuing viability of the exemption.

When we last wrote in June 2015 about In re Capacitors Antitrust Litig., No. 14-03264-JD, consolidated putative class actions pending before Judge James Donato in the Northern District of California, the plaintiffs had just largely survived a motion to dismiss.  That blog post, which describes the background of the case and the first round of motions to dismiss, is available here.  Recently, on December 30, 2015, the court ruled on several additional motions to dismiss based on plaintiffs’ amended complaints.

On December 14, 2015 Judge Yvonne Gonzalez Rogers heard oral argument on a motion to dismiss filed by Apple in an antitrust action brought against the company in connection with its 2007 deal to sell iPhones exclusively to AT&T Mobility.  The next day, Judge Rogers denied Apple’s motion.  The lawsuit, one of several arising from the Apple-AT&T agreement, raises interesting questions about how to define a relevant product market using an “aftermarket” theory. 

We reported earlier today that the jury began deliberations this past Monday in the antitrust class action lawsuit against Cox Communications brought by its premium services subscribers.  The jury returned its verdict today in favor of the plaintiffs and found that Cox had violated the Sherman Act by illegally tying its premium cable services to rentals of its set-top boxes.  The jury awarded the plaintiffs $6.31 million in damages, which will be trebled to $19 million.  The jury awarded damages based on one aspect of the plaintiffs’ claims for fees from set-top box rentals but declined to award damages based on the plaintiffs’ DVR fees.  Thus, the damages award came back much lower than the $49 million figure the plaintiffs were seeking.

Yesterday, the Ninth Circuit ruled in the long awaited O’Bannon v. NCAA case, which challenged NCAA rules that bar student-athletes from “being paid for the use of their names, images, and likenesses” (NILs) – part of the so-called “amateurism rules.”  The Court upheld the district court’s decision finding the NCAA amateurism rules to be an unlawful restraint of trade in violation of the Sherman Act and upheld part of the district court’s remedy which permanently enjoined the NCAA from prohibiting its member schools from giving student-athletes scholarships up to the full cost of attendance at their respective schools.  The Ninth Circuit struck down, however, the district court’s second remedy which would have permanently enjoined the NCAA from prohibiting its member schools from giving student-athletes up to $5,000 per year in deferred compensation. 

Last week, we discussed public reports of an investigation by the DOJ of four major airlines (American, Delta, Southwest, and United) regarding possible collusion. Over the past two months, a number of consumers have filed class action complaints against the airlines, putting forward their own theories regarding collusion.

The Ninth Circuit issued an order last Friday staying an injunction from U.S. District Judge Claudia Wilken of the Northern District of California in O’Bannon v. NCAA until it reaches a decision on the merits of the appeal.