Antitrust Law Daily Wrap Up, STRATEGIC PERSPECTIVES—Top 10 antitrust law developments for August 2016, (Sep 7, 2016)

Organizations Mentioned:Bristow Group, Inc. | Clorox | Costco | Deborah Heart and Lung Center

By Jeffrey May, J.D.

As you were enjoying the last few weeks of summer, you might have missed some important antitrust developments from last month. From significant federal appellate court decisions to noteworthy agency activity, below is a recap of 10 particularly nota ...

By Jeffrey May, J.D.

Boycotts. August started with a bang, as the First Circuit shot down a long-running boycott action against the five largest converters of polystyrene products and their trade association for allegedly conspiring to block a recycling business model. The appellate court held that the complaining recycler failed to provide evidence that sufficed to raise a reasonable inference of unlawful action. Although the First Circuit had revived the antitrust claims of Evergreen Partnering Group, Inc., when it first addressed the case in 2013, the court affirmed summary judgment in favor of the defendants (Evergreen Partnering Group, Inc. v. Pactiv Corp., August 2, 2016, Torruella, J.).
ASCAP, BMI consent decrees. Because modifications to the antitrust consent decrees proposed by performing rights organizations American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music, Inc. (BMI) "would disrupt the status quo, would not be consistent with the purposes of the consent decrees, and would not be in the interest of consumers," the Department of Justice Antitrust Division announced on August 4 that it would not join the groups in recommending modifications to the settlements (U.S. v. American Society of Composers, Authors and Publishers, Case No. 41-1395; U.S. v. Broadcast Music, Inc., Case No. 64 Civ. 3787).
Class certification. In an important class action law development, the U.S. Court of Appeals in Chicago affirmed certification of a nationwide class of containerboard purchasers in a suit against producers and sellers of containerboard for conspiring to restrict output and raise prices. The court was satisfied that common methods of proof could be used to demonstrate the existence of the alleged collusion and its effect on prices in the containerboard market and that the existence and impact of any such collusion predominate over other factors that might affect an individual plaintiff’s damages (Kleen Products, LLC v. International Paper Co., August 4, 2016, Wood, D.).
Premerger notification rule violations. Caledonia Investments plc agreed to settle government allegations that it violated the premerger notification and waiting period requirements of the Hart-Scott-Rodino (HSR) Act when it acquired voting securities of helicopter services company Bristow Group, Inc. in February 2014, the Justice Department and FTC jointly announced on August 10. At the same time, the Justice Department filed a proposed settlement, subject to approval by the court, under which Caledonia Investments has agreed to pay a $480,000 civil penalty to resolve the lawsuit (U.S. v. Caledonia Investments, plc, Civil Action No. 1:16-cv-01620, FTC File No. 152 0123).
Price discrimination. Consumer products manufacturer Clorox did not engage in price discrimination in violation of Sec. 13(e) of the Robinson-Patman Act by selling the largest-sized containers of its products only to discount warehouses, such as Costco and Sam’s Club, rather than to what it deemed ordinary retailers, the U.S. Court of Appeals in Chicago has held. Because Clorox’s largest packages did not constitute "promotional services or facilities," the company’s refusal to sell them to some customers did not violate that statute (Woodman’s Food Market, Inc. v. Clorox Co., August 12, 2016, Wood, D.).
Exclusive dealing. Deborah Heart and Lung Center, a well-regarded hospital that focuses on the treatment of heart, lung, and vascular disease in southern New Jersey, failed to adequately allege anticompetitive effects on a relevant market to support its challenge to an exclusive dealing arrangement that reduced the number of cardiac patients transferred to its facility. The U.S. Court of Appeals in Philadelphia ruled that a plaintiff, who asserts actual anticompetitive effects to prove a Sherman Act, Section 1 violation, must—absent evidence of market power possessed by the defendants—show anticompetitive effects on the market as a whole as opposed to a small subset of that market. Therefore, summary judgment in favor of a defending cardiology group and local hospital operator was affirmed (Deborah Heart and Lung Center v. Virtua Health Inc., August 17, 2016, Roth, J.).
Predatory pricing. An American solar-panel company’s predatory pricing claim against Chinese competitors under Section 1 of the Sherman Act was properly rejected, according to the U.S. Court of Appeals in Cincinnati, because the complaining firm failed to plead that the competitors had a reasonable prospect of recouping their costs after using below-cost pricing to drive out competition. The court did not agree with the contention that, under Section 1 of the Sherman Act, only the below-cost price element of a predatory pricing claim had to be satisfied (Energy Conversion Devices Liquidation Trust v. Trina Solar Limited, August 18, 2016, Sutton, J.).
Statute of limitations. A divided U.S. Court of Appeals in St. Louis has upheld dismissal of antitrust claims brought by service station operators and other entities that purchased pre-filled propane exchange tanks directly from distributors Ferrellgas and AmeriGas on statute of limitations grounds. The purchasers’ argument that the limitations period was restarted under the continuing violations doctrine by the distributors’ continuing sales and communications was rejected. The court did not accept the purchasers’ contention that under the U.S. Supreme Court’s 1997 decision in Klehr v. A.O. Smith Corp., 521 U.S. 179—a RICO case—each sale a defendant made to a plaintiff pursuant to the price fixing conspiracy restarted the statutory limitations period (In re: Pre-Filled Propane Tank Antitrust Litigation, August 25, 2016, Shepherd, B.).
Premerger notification rule updates. Hart-Scott-Rodino (HSR) Act rules were updated to permit filings on DVDs. The FTC also streamlined the instructions to the Premerger Notification Form, the agency announced on August 26. The final rule took effect on September 1.
Acquisitions and mergers. On the last day of the month, the Justice Department moved to block Deere & Company’s proposed acquisition of Precision Planting LLC. If allowed to proceed, the merger would end competition in the market for high-speed precision planting systems in the United States, according to the Antitrust Division’s complaint. A potential court battle looms as Deere called the allegations misguided and pledged to contest the government’s action. Stay tuned (U.S. v. Deere & Company, Case 1:16-cv-08515).

MainStory: AcquisitionsMergers Antitrust FederalTradeCommissionNews AntitrustDivisionNews

Antitrust Law Daily Wrap Up, STRATEGIC PERSPECTIVES—Top 10 antitrust law developments for August 2016, (Sep 7, 2016)

Organizations Mentioned:Bristow Group, Inc. | Clorox | Costco | Deborah Heart and Lung Center

By Jeffrey May, J.D.

Boycotts. August started with a bang, as the First Circuit shot down a long-running boycott action against the five largest converters of polystyrene products and their trade association for allegedly conspiring to block a recycling business model. The appellate court held that the complaining recycler failed to provide evidence that sufficed to raise a reasonable inference of unlawful action. Although the First Circuit had revived the antitrust claims of Evergreen Partnering Group, Inc., when it first addressed the case in 2013, the court affirmed summary judgment in favor of the defendants (Evergreen Partnering Group, Inc. v. Pactiv Corp., August 2, 2016, Torruella, J.).
ASCAP, BMI consent decrees. Because modifications to the antitrust consent decrees proposed by performing rights organizations American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music, Inc. (BMI) "would disrupt the status quo, would not be consistent with the purposes of the consent decrees, and would not be in the interest of consumers," the Department of Justice Antitrust Division announced on August 4 that it would not join the groups in recommending modifications to the settlements (U.S. v. American Society of Composers, Authors and Publishers, Case No. 41-1395; U.S. v. Broadcast Music, Inc., Case No. 64 Civ. 3787).
Class certification. In an important class action law development, the U.S. Court of Appeals in Chicago affirmed certification of a nationwide class of containerboard purchasers in a suit against producers and sellers of containerboard for conspiring to restrict output and raise prices. The court was satisfied that common methods of proof could be used to demonstrate the existence of the alleged collusion and its effect on prices in the containerboard market and that the existence and impact of any such collusion predominate over other factors that might affect an individual plaintiff’s damages (Kleen Products, LLC v. International Paper Co., August 4, 2016, Wood, D.).
Premerger notification rule violations. Caledonia Investments plc agreed to settle government allegations that it violated the premerger notification and waiting period requirements of the Hart-Scott-Rodino (HSR) Act when it acquired voting securities of helicopter services company Bristow Group, Inc. in February 2014, the Justice Department and FTC jointly announced on August 10. At the same time, the Justice Department filed a proposed settlement, subject to approval by the court, under which Caledonia Investments has agreed to pay a $480,000 civil penalty to resolve the lawsuit (U.S. v. Caledonia Investments, plc, Civil Action No. 1:16-cv-01620, FTC File No. 152 0123).
Price discrimination. Consumer products manufacturer Clorox did not engage in price discrimination in violation of Sec. 13(e) of the Robinson-Patman Act by selling the largest-sized containers of its products only to discount warehouses, such as Costco and Sam’s Club, rather than to what it deemed ordinary retailers, the U.S. Court of Appeals in Chicago has held. Because Clorox’s largest packages did not constitute "promotional services or facilities," the company’s refusal to sell them to some customers did not violate that statute (Woodman’s Food Market, Inc. v. Clorox Co., August 12, 2016, Wood, D.).
Exclusive dealing. Deborah Heart and Lung Center, a well-regarded hospital that focuses on the treatment of heart, lung, and vascular disease in southern New Jersey, failed to adequately allege anticompetitive effects on a relevant market to support its challenge to an exclusive dealing arrangement that reduced the number of cardiac patients transferred to its facility. The U.S. Court of Appeals in Philadelphia ruled that a plaintiff, who asserts actual anticompetitive effects to prove a Sherman Act, Section 1 violation, must—absent evidence of market power possessed by the defendants—show anticompetitive effects on the market as a whole as opposed to a small subset of that market. Therefore, summary judgment in favor of a defending cardiology group and local hospital operator was affirmed (Deborah Heart and Lung Center v. Virtua Health Inc., August 17, 2016, Roth, J.).
Predatory pricing. An American solar-panel company’s predatory pricing claim against Chinese competitors under Section 1 of the Sherman Act was properly rejected, according to the U.S. Court of Appeals in Cincinnati, because the complaining firm failed to plead that the competitors had a reasonable prospect of recouping their costs after using below-cost pricing to drive out competition. The court did not agree with the contention that, under Section 1 of the Sherman Act, only the below-cost price element of a predatory pricing claim had to be satisfied (Energy Conversion Devices Liquidation Trust v. Trina Solar Limited, August 18, 2016, Sutton, J.).
Statute of limitations. A divided U.S. Court of Appeals in St. Louis has upheld dismissal of antitrust claims brought by service station operators and other entities that purchased pre-filled propane exchange tanks directly from distributors Ferrellgas and AmeriGas on statute of limitations grounds. The purchasers’ argument that the limitations period was restarted under the continuing violations doctrine by the distributors’ continuing sales and communications was rejected. The court did not accept the purchasers’ contention that under the U.S. Supreme Court’s 1997 decision in Klehr v. A.O. Smith Corp., 521 U.S. 179—a RICO case—each sale a defendant made to a plaintiff pursuant to the price fixing conspiracy restarted the statutory limitations period (In re: Pre-Filled Propane Tank Antitrust Litigation, August 25, 2016, Shepherd, B.).
Premerger notification rule updates. Hart-Scott-Rodino (HSR) Act rules were updated to permit filings on DVDs. The FTC also streamlined the instructions to the Premerger Notification Form, the agency announced on August 26. The final rule took effect on September 1.
Acquisitions and mergers. On the last day of the month, the Justice Department moved to block Deere & Company’s proposed acquisition of Precision Planting LLC. If allowed to proceed, the merger would end competition in the market for high-speed precision planting systems in the United States, according to the Antitrust Division’s complaint. A potential court battle looms as Deere called the allegations misguided and pledged to contest the government’s action. Stay tuned (U.S. v. Deere & Company, Case 1:16-cv-08515).

MainStory: AcquisitionsMergers Antitrust FederalTradeCommissionNews AntitrustDivisionNews