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Slower Crony Capitalism: The Immediate Aftermath of NC Board

When the FTC prevailed in narrowing the state action exemption in North Carolina Board of Dental Examiners in February 2015, the hope of many commentators was that the result might be a reduction in excessive or unnecessary local regulation. While that still might be the ultimate result, the immediate reaction of some state legislatures has been to add a layer of bureaucratic oversight to ensure “active supervision.” So the case, so far, has expanded application of the federal antitrust laws, triggered more lawsuits and resulted in more, not less, state oversight of economic activity.

The state action exemption is easy to summarize but difficult to apply: bona fide state regulation of th [...]

Reverse Payment Claims Authorized Under State Law: Five Lessons from California’s In re Cipro Decision

Opening a new front in litigation over so-called reverse payment pharmaceutical patent infringement settlements, the California Supreme Court recently held that private parties can challenge these settlements under its state antitrust law, the Cartwright Act.[1] The court relied heavily on the U.S. Supreme Court’s decision interpreting federal antitrust law in F.T.C. v. Actavis, Inc.,[2] importing many of the same federal standards into California law. In so doing, the Cipro court elaborated on these standards beyond the relatively narrow holding of Actavis and rejected the contention that state law claims were preempted by federal patent law. The decision has important lessons for pharmaceu [...]

Judgment for Drug Companies Unlikely the End of the Road in Nexium Case

The federal district court in Boston has rejected a request from purchasers of AstraZeneca LP’s heartburn medication Nexium for a new trial to challenge a “reverse payment” or “pay-for-delay” agreement between AstraZeneca and Ranbaxy Pharmaceuticals to block the entry of a generic version of the drug. Judge Young’s lengthy opinion provides an interesting look at the trial and the proceedings that led up to it. In addition, the decision offers a glimpse of the issues that might be raised in a likely appeal.

In December 2014, the jury had found that a patent settlement agreement between AstraZeneca and Ranbaxy was unreasonably anticompetitive under a rule of reason standard. Howe [...]

Antitrust Whistleblowers Get Another Shot at Federal Protection from Retaliation by Employers

UPDATE: The bi-partisan “Criminal Antitrust Anti-Retaliation Act of 2015” passed the Senate by unanimous consent on July 22.

A bill is advancing through the U.S. Senate that would protect employees who report suspected criminal antitrust activity to their employer or the federal government from workplace retaliation. The proposed “Criminal Antitrust Anti-Retaliation Act of 2015” (S. 1599) was reported out of the Senate Judiciary Committee on June 16.

A similar bill was passed unanimously by the Senate in the last Congress; however, the measure was not taken up by the House at that time. With the current bill moving through the Senate, it’s up to House lawmakers to act on the bill [...]

Dawn Raids – EU’s Highest Court Prevents Circumvention of the Ban on Using Dawn Raids for Fishing Expeditions

The Court of Justice of the European Union has now delivered its judgment in the Deutsche Bahn1 case. This case concerns important practical principles which govern the conduct of European Commission dawn raids (on-the-spot surprise inspections used to investigate possible infringements of the EU competition rules). In particular, the case focusses on what inspectors can do with documents that that they have found during an inspection which do not relate to the subject matter of their inspection, but indicate separate unrelated anti-competitive behaviour.

Business should review their dawn raid procedures to ensure that they reflect the best practice established by this judgment, in particula [...]

The Roberts Court, Enforcement Agencies and “The Limits of Antitrust”

Finding a unifying theory to explain (almost) all the decisions of the Supreme Court in a substantive area can be a difficult task. Alden Abbott and Thom Lambert’s new article accomplishes it for the antitrust decisions of the Roberts Court.[1] They contend that these opinions can be seen as the Court implementing Professor (now Judge) Easterbrook’s seminal 1984 article The Limits of Antitrust.[2] By comparison, the authors believe that the enforcement agencies in the same time period have shown less deference to any such limits. While that conflict might portend future difficulties for the agencies in front of the Court, the one acknowledged exception to the theory was a big win for the [...]

High Court Considering Fate of Three Antitrust Petitions

UPDATE: On June 15, the Court denied review in Hsiung v. U.S., Dkt. 14-1121,  and Motorola Mobility LLC v. AU Optronics Corp., Dkt. 14-1122. Apparently, Dow Chemical Co. v. Industrial Polymers, Inc., Dkt. 14-1091, remains pending. The parties filed a joint motion to hold the petition in abeyance before release of the Supreme Court Order List, and the motion was subsequently withdrawn.

On June 11, the U.S. Supreme Court is scheduled to consider whether to grant review in three antitrust cases. We could know as early as next Monday the fate of the petitions for certiorari.

Two of the petitions question the application of the Foreign Trade Antitrust Improvements Act to an international cart [...]

Divided Supreme Court Allows State Law Antitrust Claims to Proceed Against Pipelines, Rejects Field Preemption Argument

In a decision that’s received relatively little attention, a divided U.S. Supreme Court earlier this week held that the Natural Gas Act (NGA) did not “field” preempt state law antitrust claims raised by large retail buyers of natural gas seeking damages from pipelines for their purported price manipulation. Rejected was the pipelines’ argument that the claims fell within the field preempted by the NGA—“the field of matters relating to wholesale sales and transportation of natural gas in interstate commerce.” The decision could encourage antitrust lawsuits in areas where preemption concerns might have made antitrust plaintiffs otherwise reluctant.

While the Court’s seven-to-two de [...]

Phoebe Putney, NC Board: Winning Legal Battles, Not Hearts and Minds

The FTC has notched two Supreme Court wins in recent years to narrow the state action exemption.  But elements of those two cases might best be seen as evidence that the FTC is losing the broader fight: increasing antitrust compliance by convincing non-experts of the wisdom of antitrust’s principles.

Here’s a quick refresher on the two cases in question:

  • In Phoebe Putney, the FTC challenged a hospital merger in Georgia. It lost that challenge on state action immunity grounds at the district court and 11th Circuit and the merger closed while awaiting Supreme Court action.  In February 2013, the Court agreed with the FTC that the lower courts had misread the “clear articulation” pro [...]
Supreme Court Has Opportunity to Clarify Application of Foreign Trade Antitrust Improvements Act

Last week, the U.S. Supreme Court was asked, in parallel petitions, to resolve a split between the Seventh Circuit and the Ninth Circuit on the application of the federal antitrust laws to a conspiracy to fix prices of thin-film transistor-liquid crystal display (TFT-LCD) panels. The petitions provide an excellent opportunity for the High Court to offer needed guidance on the Foreign Trade Antitrust Improvements Act (FTAIA), which the Court last took up just over a decade ago in F. Hoffmann-LaRoche Ltd. v. Empagran S.A., 542 U.S. 155, 2004-1 Trade Cases ¶74,448.

In a petition for certiorari filed on March 16, Taiwanese electronics manufacturer AU Optronics Corporation, two of its former of [...]

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