Posted by : Matthew Wild | On : October 12, 2017

In Right Field Rooftops, LLC v. Chicago Cubs Baseball Club, LLC,  No. 16-3582, 2017 U.S. App. LEXIS 16847 (7th Cir. Sept. 1, 2017), the Seventh Circuit affirmed dismissal of monopolization (and attempted monopolization) claims against the Chicago Cubs based on professional baseball’s antitrust exemption.  Plaintiffs-appellants were owners of two buildings that sold tickets to view Cubs’ games from their roofs.  In support of their monopolization claim, the rooftop owners alleged, among other things, that the Cubs “attempt[ed] to set a minimum ticket price, purchas[ed] rooftops, threaten[ed] to block rooftops with signage that did not sell to the Cubs and beg[an] construction at Wrigley Field” that would obstruct views from rooftops.  Id. at *13-14.  The Seventh Circuit found that these allegations fell within baseball’s antitrust exemption because they part of the “business of baseball.”.   In doing so, the Seventh Circuit followed the U.S. Supreme Court precedent in which the Supreme Court long ago held “that the Sherman Act had no application to the ‘business of giving exhibitions [of] business of base ball’ . . .”  (Id. at *12, quoting Toolson v. New York Yankees, Inc., 346 U.S. 356, 357 (1953), followed by Flood v. Kuhn, 407 U.S. 258 (1972)).

As discussed in the previous post, it remains curious that baseball is the only sport that has an antitrust exemption.



Posted by : Matthew Wild | On : October 2, 2017

In Wyckoff v. Officer of the Commissioner of Baseball, No. 16-3795-cv, 2017 U.S App. LEXIS 16728 (Aug. 31, 2017), the Second Circuit affirmed dismissal of a putative antitrust class action brought by professional baseball scouts against Major League Baseball.  The scouts alleged that the Major League Baseballs teams conspired to depress competition in their labor market in violation of § 1 of the Sherman Act.  However, in 1922, the Supreme Court created antitrust immunity for the “business of baseball,” and “repeatedly reaffirmed baseball’s antitrust exemption.”  Id. at *3 (citations omitted).  Because the scouts’ claim fell squarely within baseball’s antitrust exemption, their antitrust claim failed.

This case illustrates the vitality of baseball’s antitrust exemption.  It is curious that no other sport has such an exemption.



Posted by : Matthew Wild | On : September 14, 2017

In Quality Auto Painting Ctr. of Roselle, Inc. v. State Farm Indem. Co., No. 15-14160, 2017 U.S. App. LEXIS 17138 (11 Cir. Sept. 7, 2017), the Eleventh Circuit recently reversed the dismissal of the actions brought by auto body shops against auto insurers.  The actions were brought for violations § 1 of the Sherman Act and for state claims of unjust enrichment, quantum meruit and tortious interference.  The Court summarized the auto body shops’ allegations as follows:

The body shops argue that the insurance companies engaged in two lines of tactics in pursuit of a single goal: to depress the shops’ rates for automobile repairs.  The first line of tactics was designed to set a “market rate,” which reflected no forces of the market but an artificial rate that would benefit only insurance companies.  The second line of tactics was designed to pressure the body shops in accepting the market rate by steering insureds away from non-compliant shops that charged more than the rate.

2017 U.S App. LEXIS 17138, at *25.  Based on these allegations (which are set out in more detail in the complaints), the body shops argued that the insurance companies engaged in horizontal price fixing and boycotting.  Horizontal price fixing and boycotting are per se violations of § 1 of the Sherman Act.

The Court held that despite direct allegations of an agreement, the allegations were sufficient to infer the existence of an agreement.  Thus, the complaints were sufficient to satisfy the pleading standard established by Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007).

To satisfy Twombly, the Court explained:

in the absence of direct evidence of an agreement, an antitrust claimant must show not only “parallel conduct” but also “further factual enhancement.”  Often labeled as “parallel plus” or “plus factors,” these factual enhancements “serve as proxies for direct evidence of an agreement.”  This [C]ircuit has never prescribed factors or a combination of factors that may be sufficient to tip the parallel conduct into the domain of per se violation.

2017 U.S. App. LEXIS 17138, at *35-36 (citations omitted).

The Court held that the body shops established “parallel conduct [because] they allege that the insurance companies adopted the same labor rate and materials costs and employed the same line of tactics to depress the rate and costs.”  Id., at *37.  The Court held that the body shops established further factual enhancements because of the “adoption of a uniform price despite variables that would ordinarily result in divergent prices [] and uniform practices”.  Id., at *41.  The Court thus held that it could “infer the existence of an agreement.”  Id.

The Court also reversed dismissal of the unjust enrichment, quantum meruit and tortious interference claims.  The Court held that “unjust enrichment requires a showing that a plaintiff conferred a benefit on a defendant that the defendant knew about and that allowing defendant to retain the benefit without the payment would be unjust.”  Id., at *49-50.  The Court then held:

The allegations readily and plausibly establish the claims of unjust enrichment [because] [t]he body shops allege that the shops conferred benefits by providing repair services at the low price that the insurance companies collectively selected[, and] the body shops allege that the insurance companies not only knew about the benefits but also forced the shops to confer the benefits. . . .

Id., at *50.

The Court held that the body shop’s “readily and plausibly establish claims for quantum meruit because the body shop’s allege that they rendered repair services, expecting compensation; that the services were in fact for the insurance companies . . . and that the companies paid an artificially low price, below the reasonable value for the services.”  Id., at *53.

The Court held that the tortious interference claims were “readily and plausibly establish[ed]” because of the insurance companies’ “false and misleading statements about the shops’ business integrity and quality and that this . . . resulted in a loss of business.”  Id., at *54



Posted by : Matthew Wild | On : June 20, 2014

A recent speech by Deputy Assistant Attorney General Leslie Overton emphasized the risk in consummating mergers that do not have to be reported under the HSR Act, but have (or may have) adverse effects on competition.  Ms. Overton emphasized that the Antitrust Division devotes substantial resources to, and challenges, non-reportable mergers.  The Antitrust Division learns about non-reportable mergers from a number of sources, including customers, industry contacts and trade publications.  A successful government challenge to a merger can have drastic consequences for the buyer.  The remedy is generally divestiture of key assets and not rescission.  The buyer may have paid substantial money for these assets, but will lose them without receiving much value.  In addition, any profits earned because of adverse effects of competition are subject to disgorgement.  And perhaps most significantly, the buyer and the seller can be sued for treble damages in class actions brought by injured customers.  In an article entitled Buyer Beware: Consummating Non-HSR Reportable Mergers May Prove Costly In The End, published by the ABA Antitrust Litigator, the author herein discusses these risks.  In sum, parties to non-reportable transactions face significant risks if they consummate an anti-competitive merger.

Author: Matthew S. Wild (Wild Law Group PLLC)



Posted by : Matthew Wild | On : August 29, 2013


“WASHINGTON, D.C. – The District of Columbia filed a lawsuit against ExxonMobil Oil Corporation and its gasoline distributors for Washington, D.C., to stop enforcement of exclusive-supply agreements that make one group of affiliated distributors the only suppliers of Exxon-branded gasoline in D.C., Attorney General Irvin B. Nathan announced today. The complaint, filed in D.C. Superior Court, alleges that the exclusive-supply agreements violate the District’s Retail Service Station Act.

The affiliated distributors – Capitol Petroleum Group, LLC, Anacostia Realty, LLC, and Springfield Petroleum Realty, LLC – are the exclusive gasoline suppliers for about 60% of the 107 gasoline stations in D.C., including all 31 Exxon stations, 19 of 20 Shell stations, all 12 Valero stations, and 3 unbranded stations.  The District’s lawsuit challenges agreements that make these affiliated distributors the exclusive suppliers of Exxon-branded gasoline for the 27 independently-operated Exxon stations in D.C., or about 25% of the gasoline stations in the city.

The exclusive-supply agreements, or earlier versions of them, were established by ExxonMobil and were transferred in 2009 to the affiliated distributors, along with ExxonMobil’s ownership of the 30 D.C. Exxon stations to which the agreements then pertained.  According to the District’s complaint, these supply agreements can now be enforced either by the affiliated distributors or by ExxonMobil through its separate agreements with other area distributors.

The District alleges that the exclusive-supply agreements allow the affiliated distributors to “set the wholesale prices paid for Exxon-branded gasoline in D.C., depriving D.C. residents . . . of the benefits of competition in the wholesale supply of Exxon-branded gasoline.”

“Under the District’s gasoline marketing law, a retail gasoline dealer is free to purchase a brand of gasoline from any supplier of the brand,” Attorney General Nathan said.  “Our suit seeks to end these unlawful supply restrictions, increase wholesale competition, and bring down retail prices at the pump.”



Posted by : Matthew Wild | On : July 11, 2013

On June 17, 2013, in FTC v. Actavis, Inc., the Supreme Court reversed a ruling, which held that settlements that have the patentee paying the patent infringer to withdraw its patent challenge and not to infringe (i.e., reverse payments) are immune from the antitrust laws as long as the agreement not to infringe is within the scope of the patent.  The Supreme Court held that these agreements are subject to the rule of reason under § 1 of the Sherman Act and an inquiry into the patent’s validity is unnecessary to the analysis.  Rather, the size of the reverse payment alone can be used as a proxy for the strength or weakness of the patent.  A large reverse payment can be sufficient for the agreement to violate the rule of reason.  The Supreme Court noted that other ways to settle patent litigation, such as allowing the alleged infringer to market the infringing product after a delay but before the patent’s expiration, would pass muster under the rule of reason.  This decision is going to change the way brand name pharmaceutical companies settle patent disputes with generic drug manufacturers as those settlements frequently involve large reverse payments in exchange for the generic drug manufacturer staying out of the market.  The decision is linked here: FTC v. Actavis.

Author: Matthew S. Wild, Wild Law Group PLLC



Posted by : Matthew Wild | On : July 10, 2013

Today, the United States District Court for the Southern District of New York held, “Plaintiffs have shown that Apple conspired to raise the retail price of e-books and that they are entitled to injunctive relief. A trial on damages will follow.”  The opinion appears here: Apple decision.

Author: Matthew S. Wild, Wild Law Group PLLC



Posted by : Matthew Wild | On : June 20, 2013

In American Express v. Italian Colors (Amex), the Supreme Court held today that “a contractual waiver of class arbitration is enforceable under the Federal Arbitration Act when the plaintiff ’s cost of individually arbitrating a federal statutory claim exceeds the potential recovery.”  The problem is that the decision leaves the plaintiff with no way to vindicates its rights.  The plaintiff’s maximum recovery would have been $38,000, but to proceed on its own would require an expert report from an economist that would cost between $100,000 and $1,000,000.  The contract’s confidentiality provisions prevent the plaintiff from sharing this expense with other victims.  Thus, the clause effectively precludes any method to vindicate the Sherman Act (not just class actions).  The dissent summed the import of the decision as “[t]oo darn bad.”  It really is.

Author: Matthew S. Wild, Wild Law Group PLLC



Posted by : Matthew Wild | On : April 22, 2013

Overruling the recent Kansas Supreme Court decision in  O’Brien v. Leegin Creative Leather Products, Inc.  discussed in the May 8, 2012 Post, the Kansas legislature has mandated that resale price maintenance is subject to the rule of reason.  This legislation is remarkable in light of all the uproar over the United States Supreme Court’s decision in Leegin Creative Leather Products v. PSKS, 127 S.Ct. 2705 (2007), that made resale price maintenance subject to the rule of reason.  For example, as discussed in previous posts of May 4, 2009 and October 29, 2009, the Maryland legislature enacted the first Leegin repealer statute making resale price maintenance per se unlawful and 41 state attorneys general have urged Congress to repeal Leegin.

Author: Matthew S. Wild, Wild Law Group PLLC




Posted by : Matthew Wild | On : March 18, 2013

On March 14, 2013, a jury in the United States District Court for the Eastern District of New York awarded $54,100,000 to an antitrust plaintiff class.  The jury found that the Chinese Vitamin C manufacturers engaged in price-fixing.  This verdict demonstrates that there is no need for a criminal prosecution for a successful civil suit.  This was the first case in which Chinese companies have been held liable for violating the United States antitrust laws.

Author: Matthew S. Wild, Wild Law Group PLLC