Antitrust Commentary

Kansas Enacts Legislation Making Resale Price Maintenance Subject To The Rule Of Reason

Matthew Wild — Mon, 22 Apr 2013 22:05:52 +0000

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

$162.3 Million Jury Verdict (After Trebling) Against Chinese Vitamin C Manufacturers

Matthew Wild — Mon, 18 Mar 2013 20:43:28 +0000

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

Ninth Circuit Holds That Cartwright Act Has Extra-Territorial Reach

Matthew Wild — Thu, 14 Feb 2013 21:39:51 +0000

The Ninth Circuit, in AT&T Mobility LLC v. AU Optronics Corp., No. 11-16188 (9th Cir. Feb. 14, 2013), held that the Cartwright Act (the California antitrust law) applies, consistent with due process, to conspiratorial conduct that took place in California even though plaintiffs (indirectly) purchased the price-fixed goods outside of California. This decision demonstrates the breadth of the Cartwright Act to reach purchases outside of California as long as “defendant’s conspiratorial conduct was sufficiently connected to California.”

Author: Matthew S. Wild, Wild Law Group PLLC

Second Circuit Reverses Summary Judgement For Defendant In Published Paper MDL

Matthew Wild — Thu, 09 Aug 2012 22:15:39 +0000

On August 6, 2012, the Second Circuit brought reality back to standards governing summary judgment in antitrust cases. See In re Publication Paper Antitrust Litig., 11-101-cv (2d Cir. Aug. 6, 2012). Stora Enso North America (“SENA”) was acquitted of price fixing with UPM-Kymmene even though UPM’s CEO testified that he agreed with SENA’s CEO to fix prices. A price fixing class action was later brought against SENA, its foreign parent and UPM (which settled). Notwithstanding UPM’s CEO”s sworn testimony admitting the conspiracy, the district court granted summary judgment in favor of the defendants. The Second Circuit reversed against SENA holding that a jury should decide the credibility of UPM’s CEO’s testimony. The Second Circuit also held that there was sufficient proof of impact: “the demonstrable existence of an agreement between [the CEOs] to follow price increases announced by competitors, if proven, constitutes strong evidence that the alleged agreement caused at least some element of the subsequent price increases (e.g., amount or effective date), or, at a minimum, the inability of plaintiffs to negotiate below the list price. Furthermore, the causal link is presumed to be particularly strong when, as alleged here, the agreement is between executives at rival companies, each of whom has final pricing authority.”

There was no evidence of SENA’s parent’s involvement and therefore summary judgment in its favor was affirmed.

In any other type of case, I doubt that a court would grant summary judgment in face of a CEO’s admission or obvious evidence of causation and damages. But with so many cases warning against finding the existence of a conspiracy (or causation from price increases) when it is plausible that the defendants acted independently, district courts lean to granting summary judgment even in face of direct evidence. Such decisions would never fly in any other type of case. Fortunately, the Second Circuit made clear that the plausibility of independent action as opposed to a conspiracy is not an appropriate consideration in the face of direct evidence of the agreement (and the subsequent price increase), and applied the standard governed by Rule 56.

Author: Matthew Wild, Wild Law Group PLLC

Packaged Ice Indirect Purchasers Settled Claims Against One Defendant For More Than 90% of the Direct Purchasers’ Cash Settlement

Matthew Wild — Thu, 31 May 2012 20:17:49 +0000

The Indirect Purchaser in the Packaged Ice MDL settled their claims against Reddy Ice. Reddy Ice recently filed for bankruptcy protection in the United States Bankruptcy Court for the Northern District of Texas. The Indirect Purchaser class settled its claims against Reddy Ice for $700,000. By comparison, the Direct Purchaser class settled for $750,000 in cash (and another $250,000 if Reddy Ice and Arctic Glacier merge). The Bankruptcy Court certified a settlement class of all indirect purchasers of packaged ice in the continental United States from Reddy Ice, Arctic Glacier and Home City; and found the settlement to be fair, adequate and reasonable. Matthew Wild and Max Wild of the Wild Law Group PLLC were appointed class counsel. Class members were not permitted to opt-out because Reddy Ice’s insolvency created a limited fund from which all claimants should be permitted to recover on an equal basis. For more information (including pleadings), visit www.icesettlements.com.

Author: Matthew Wild, Wild Law Group PLLC

Resale Price Maintenance Is Per Se Unlawful In Kansas

Matthew Wild — Tue, 08 May 2012 18:24:19 +0000

On May 4, 2012, the Kansas Supreme Court held in O’Brien v. Leegin Creative Leather Products, Inc. that resale price maintenance is a per se offense of the Kansas antitrust law. The Kansas statute differs meaningfully (with express prohibitions on agreements involving the pricing of goods) from the general language of § 1 of the Sherman Act (prohibiting only agreements in “restraint of trade”). As noted in earlier Posts, the U.S. Supreme Court’s decision in, Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877 (2007), which held that resale price maintenance is subject to the rule of reason under §1 of the Sherman Act, has not been favorably received. Congress has proposed legislative repeal; several state attorneys’ general have obtained consent decrees prohibiting such practices as per se offenses of their state antitrust laws; and Maryland repealed Leegin. It remains to be seen how long Leegin survives. Companies should remain cautious in imposing RPM programs because they may still face substantial liability under state law.

Author: Matthew S. Wild, Wild Law Group PLLC

Department of Justice Sues Apple and Publishers for Price-Fixing E-Books and Settles with Three Other Publishers

Matthew Wild — Wed, 11 Apr 2012 17:56:50 +0000

Today, the Antitrust Division sued Apple and a number of publishers for price fixing e-books. The government alleges that Apple and the publishers agreed to use Apple as their agent – paying Apple a commission and allowing Apple to set the prices. Apple set the prices at $9.99 with the support of the publishers. The government alleges that this conduct constitutes price-fixing and is a per se violation of § 1 of the Sherman Act. The action was brought in the United States District Court for the Southern District of New York where a related multi-district litigation class action is pending, brought by direct purchasers. Today, the government also filed a motion for approval of a settlement with three other publishers. In addition to important reporting requirements, the proposed final judgment provides that “[f]or two years, Settling Defendants shall not restrict, limit, or impede an E-book Retailer’s ability to set, alter, or reduce the Retail Price of any E-book or to offer price discounts or any other form of promotions to encourage consumers to Purchase one or more E-books.”

The E-Books Complaint and E-Books Settlement are available here.

Indirect Purchaser Plaintiffs In Packaged Ice MDL File For Preliminary Approval of Their Settlement With One Defendant

Matthew Wild — Tue, 10 Apr 2012 21:43:37 +0000

Today, the Indirect Purchaser Plaintiffs filed their motion for preliminary approval and authorization to disseminate notice of their settlement with Defendant The Home City Ice Company. The terms of the settlement are set forth in the previous post. The motion demonstrates that the Court should certify a settlement class for injunctive relief under Rule 23(b)(2) and damages under Rule 23(b)(3). The motion further demonstrates that the settlement is fair, reasonable and adequate and the notice contemplated is the best notice practicable under the circumstances. Motion for Preliminary Approval

Matthew S. Wild, Max Wild and John M. Perrin of the Wild Law Group PLLC are interim lead and liaison counsel for the class.

Indirect Purchaser Plaintiffs Settle With One Defendant In In re Packaged Ice Antitrust Litig., MDL

Matthew Wild — Fri, 09 Mar 2012 20:53:06 +0000

Yesterday, the Indirect Purchaser class settled their claims with Defendant The Home City Ice Company in In re Packaged Ice Antitrust Litig., MDL No. 1952 for $2,700,000. That settlement amount represents more than 2% of Home City’s sales during the class period (January 1, 2001 to March 6, 2008) to consumers who purchased packaged ice in the 27 states covered by the agreement and who will be compensated. Consumers in other states do not have a judicially recognized claim for relief.

The Direct Purchaser class had previously settled with Home City (on a national basis) for 2.5% of sales or $13,500,000. Thus, the Indirect Purchaser class has obtained 80% on the basis of Home City’s sales as the Direct Purchaser class.

In addition, the Indirect Purchaser class’ settlement agreement provides for an injunction and cooperation by Home City in the prosecution of the class’ claims against Home City’s co-conspirators.

The settlement agreement contains two classes. The first class consists of all indirect purchasers (e.g., retail consumers) of Home City, Arctic Glacier and Reddy Ice packaged ice throughout the nation during the class period. All of these class members benefit from the injunction and cooperation. But because they do not receive any monetary compensation, the agreement expressly provides that they do not release their monetary claims. The second class consists of indirect purchasers in Arizona, Arkansas, California, District of Columbia, Florida, Illinois, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, North Dakota, South Dakota, Tennessee, Utah, Vermont, West Virginia, Wisconsin and Wyoming of Home City, Arctic Glacier or Reddy Ice packaged ice during the class period. These consumers have a claim for relief under a state antitrust or consumer protection statute or for unjust enrichment. They share in the settlement proceeds and release all of their claims.

The settlement agreement requires court approval. A motion for preliminary approval and to disseminate class notice will be filed in the near future.

Matthew S. Wild, Max Wild and John Perrin of the Wild Law Group PLLC serve as interim lead and liaison counsel for the Indirect Purchaser Class in In re Packaged Ice Antitrust Litig., MDL No. 1952. Messrs. Wild, Wild, Perrin and Adrian Render (an associate with the Wild Law Group PLLC) negotiated the agreement on the class’ behalf.

Ninth Circuit Joins the Fourth Circuit in Holding that Parens Patriae Actions Are Not Subject to Removal under CAFA

Matthew Wild — Thu, 06 Oct 2011 16:48:35 +0000

On October 3, 2011, the Ninth Circuit held that parens patriae actions commenced by state attorneys general are not “class actions” under the Class Action Fairness Act (“CAFA”) and, therefore, could not be removed from federal to state court under the CAFA removal provisions. Washington v. Chimei Innolux Corp., No. 11–16862, 2011 WL 4543086 (9th Cir. Oct. 3, 2011). The California and Washington attorneys general commenced actions under state law in their respective state courts to recover damages for their citizens as a result of price fixing among LCD manufacturers. These actions are based on the same allegations in MDL No. 1827. Defendants removed them asserting jurisdiction under CAFA. CAFA creates subject matter jurisdiction and authorizes removal in a class action where there is minimal diversity of citizenship between a defendant and one named or unnamed putative class member and the amount sought by the class exceeds $5,000,000. Defendants argued that a parens patriae action is just like a class action and the CAFA removal provision should thus apply. Joining the Fourth Circuit, West Virginia ex rel. McGraw v. CVS Pharm., Inc., 646 F.3d 169 (4th Cir.2011), the Ninth Circuit held that the language of CAFA does not permit treating parens patriae actions as class actions. It then affirmed the district court’s remand orders.