Antitrust Law Daily Wrap Up, WORTH NOTING—Other Antitrust and Trade Regulation developments, (Jan 3, 2025)

By WK Editorial Staff

A periodic roundup of other items of interest to the Antitrust and Trade Regulation community.

ANTITRUST—S.D. Miss.: A college basketball player was denied an injunction that would have prevented the National Collegiate Athletic Association (NCAA) from enforcing its Five-Year and related wavier Bylaws and its Junior College Eligibility Limitation Bylaws. The player had alleged that these rules, which would prevent him from playing another year of college basketball, violated the Sherman Act. The court noted that the dispute over his eligibility for the 2024-25 basketball season dates back to at least July. Given that this dispute with the NCAA has been ongoing, it would be improper for the court to grant an ex parte order without giving the NCAA an opportunity to be heard. The player was seeking to change the status quo, rather than maintain it (Wade v. National Collegiate Athletic Association, No. 2:24-cv-00196-TBM-RPM (S.D. Miss. Dec. 23, 2024)).

ANTITRUST—M.D.N.C.: Property management software company RealPage, Inc. was denied transfer of an antitrust suit filed by the U.S. and multiple states over its rental property pricing software. The Department of Justice and the states of North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee, and Washington challenged RealPage’s alleged “unlawful information-sharing scheme,” and “its illegal monopoly in commercial revenue management software.” RealPage argued for transfer to either the Middle District of Tennessee, because of the Multidistrict Litigation that is taking place there, or the Northern District of Texas, because that is where: its software was developed, its software is maintained, RealPage is headquartered, and where many employees, likely third parties and witnesses, are located. However, the court found that RealPage failed to show they will suffer more than inconvenience by litigating in this district or to show why the Middle District of Tennessee, or the Northern District of Texas was more convenient for Plaintiffs. Further, the court found that burdens of transfer on Plaintiffs would be considerable, given that nearly all the states would need to find local counsel to represent them in the Middle District of Tennessee, and all the states would need to do so for the Northern District of Texas (U.S. v. RealPage Inc., No. 1:24-cv-00710-LCB-JLW (M.D.N.C. Dec. 20, 2024)).

ANTITRUST—9th Cir.: A federal district court did not err in entering judgment after a jury found that WhiteWater West Industries, Ltd. did not violate the Sherman Act by monopolizing the market for sheet-wave machines, the Ninth Circuit has held. Pacific Surf Designs, Inc. (PSD) challenged the district court’s verdict form, jury instructions, and exclusion of evidence. PSD argued that the verdict form’s sequential design failed to account for its “monopoly broth” theory by preventing the jury from considering “the anticompetitive conduct alleged in the aggregate.” The district court correctly observed that PSD’s “allegations of disparagement would likely fail in isolation.” Once the jury found that WhiteWater did not engage in sham litigation, there were no illegal acts left in the broth. Therefore, the district court did not plainly err by providing a verdict form that required the jury to make sequential findings and cease deliberation after it determined there was no sham litigation. PSD also argued that it did not need to show that WhiteWater’s lawsuits were objectively baseless. Objective baselessness is the first part of the two-part sham litigation inquiry. The Ninth Circuit has recognized that a variation of that test may apply “[w]hen dealing with a series of lawsuits.” USS-POSCO Indus. v. Contra Costa Cnty. Bldg. & Constr. Trades Council, AFL-CIO, 31 F.3d 800, 811 (9th Cir. 1994). PSD argued that the district court erred by not conforming its instructions to POSCO, but the recent decision in Relevant Group, LLC v. Nourmand precluded applying POSCO here. At most, PSD alleged that WhiteWater pursued five sham lawsuits and, per Relevant Group, that number was insufficient for POSCO to apply (Pacific Surf Designs, Inc. v. WhiteWater West Industries, Ltd., No. 23-2609 (9th Cir. Dec. 23, 2024)).

ANTITRUST—9th Cir.: In a case brought by San Diego-based resort hotel chain Evans Hotels, LLC, alleging antitrust claims against multiple labor unions arising from those unions’ purported efforts to coerce one of Evans’s resorts into unionizing, the Ninth Circuit has reversed the dismissal of Evans’ claim for secondary boycott in violation of 29 U.S.C. § 158(b)(4)(ii)(B), and affirmed the dismissal of Evans’ remaining claims with prejudice. The appellate court also affirmed the district court’s order denying Evans’ motion for leave to file a fourth amended complaint, reversed the order denying the Unions’ motion for attorney fees under Cal. Civ. Proc. Code § 425.16, and remanded for the district court to determine whether the Unions achieved any practical benefit in bringing the motion. As to the Sherman Act claims, the Ninth Circuit ruled that Evans did not state a claim for attempted monopolization, or conspiracy to monopolize, in violation of Section 2 of the Sherman Act. Evans defined the relevant market as the “the market for luxury destination resorts in the cities of San Diego and Coronado....,” but Evans did not plead facts showing the Unions compete in that market. As to the secondary boycott claims, Evans stated a claim against the Unions for secondary boycott in violation of 29 U.S.C. § 158(b)(4)(ii)(B). Evans alleged the Unions threatened to oppose SeaWorld’s future park attractions, with the “object thereof” to force SeaWorld to cease doing business with Evans. 29 U.S.C. § 158(b)(4)(ii). However, Evans did not state a claim for secondary boycott in violation of 29 U.S.C. § 158(b)(4)(ii)(A). The Noerr-Pennington doctrine protects the Trades Council from statutory liability for the conduct alleged in support of the claim, according to the Ninth Circuit (Evans Hotels, LLC v. Unite Here! Local 30, No. 23-55692 (9th Cir. Jan. 2, 2025)).

ACQUISITIONS & MERGERS NEWS: President Biden has blocked the proposed acquisition of U.S. Steel by the Japanese-based Nippon Steel Corporation, concluding that the transaction may allow Nippon to threaten national security.

ACQUISITIONS & MERGERS NEWS: In light of Albertsons Companies’ announcement it has exercised its right to terminate its merger agreement with The Kroger Company after the U.S. District Court in Oregon and the King County Superior Court for the State of Washington issued injunctions with respect to the proposed merger, the FTC dismissed the complaint. The Commission’s complaint alleged that the deal would have eliminated competition between two of the largest grocery chains in the U.S. In a first for an FTC litigated enforcement action, the complaint also alleged that the proposed deal would have illegally harmed competition in labor markets, worsening wages and benefits for hundreds of thousands of grocery workers across the country. The federal district court in Portland, Oregon granted the FTC’s request for a preliminary injunction halting the transaction. Commissioners Rebecca Kelly Slaughter and Alvaro M. Bedoya praised the court’s decision: “I commend the district court for analyzing the labor market theory even after finding for the FTC on the product market claim. Importantly, the court confirmed that a substantial lessening of competition in labor markets can be an independent basis for liability. And by identifying areas where courts may need further guidance, the court set out a roadmap for enforcers to pursue” (In the Matter of The Kroger Company, Docket No. 9428, Dec. 27, 2024).

AGENCY NEWS: To better facilitate transparency regarding any relationships that may have exerted influence on the opinions expressed by the experts that the Bureau of Economics staff interact with, a disclosure policy was introduced on December 10, 2024, that will apply to all events sponsored by the Bureau of Economics including seminars, workshops, and conferences. As a result, paper presenters, co-authors of presented papers, discussants, panelists, and scientific committee members for a BE-sponsored event must disclose to FTC staff relationships, such as financial support and third-party review.

CONSUMER PROTECTION NEWS: The FTC has issued an order approving a proposed modification from the Horseracing Integrity and Safety Authority to its Assessment Methodology Rule. The modification includes changes to the methodology the Authority uses to determine assessments to fund its programs. The Horseracing Integrity and Safety Act requires the Authority to submit proposed rules (or rule modifications) to the FTC for approval. The Act requires the FTC to approve submitted rules if it finds that they are “consistent with” the Act and the FTC’s rules governing such submissions. The original Assessment Methodology Rule went into effect in April 2022 and was amended following proposed modifications by the Authority under an FTC order approved on January 9, 2023. The modification approved by the Commission and announced today will take effect on January 22, 2025.

CONSUMER PROTECTION NEWS: The FTC has referred a case against online cash advance firm Dave Inc. to the U.S. Department of Justice, which has filed an amended complaint. The FTC first brought its case against Dave Inc., charging that the company uses misleading marketing to deceive consumers about the amount of its cash advances, charges consumers undisclosed fees, and charges so-called “tips” to consumers without their consent. The amended complaint names Jason Wilk, who co-founded Dave and also serves as the company’s board chair, as a co-defendant in the allegations, that include that he and the company market their app as instantly providing consumers “up to $500” without any hidden fees. The complaint alleges that the defendants actually very rarely offer consumers anywhere near the advertised $500, often do not offer any cash advance at all, and charge consumers an “express fee” to get cash advances instantly that they do not clearly disclose before consumers give the app access to their bank accounts. The complaint also alleges that Dave and Wilk have charged consumers hundreds of millions of dollars in surprise fees that are described by Dave as “tips” (U.S. v. Dave, Inc., No. 2:24-cv-09566-MRA-AGR (C.D. Cal. Dec. 30, 2024)).

PRIVACY—E.D.N.Y.: All claims brought by Plaintiff Jillian Cantinieri on behalf of herself and a putative class against Verisk Analytics, Inc., Insurance Services Office, Inc., and ISO Claims Services Inc. (collectively, Defendants) for failing to safeguard her personally identifiable information (PII) stored in Defendants’ web portal from unauthorized access by other entities or cybercriminals were dismissed because Cantinieri lacked Article III standing to pursue her claims, the federal district court in Central Islip, New York, decided. Plaintiffs’ claims included alleged violations of the Driver’s Privacy Protection Act, FTC Act, and New York consumer protection law. Defendants are a corporation and its subsidiaries that “own, operate and maintain databases and web portals” through which they collect, contain, and provide users with access to insurance claim records, motor vehicle records from state Departments of Motor Vehicle (DMV), and the PII of millions of individuals. As early as July 5, 2021, “unauthorized entities or cybercriminals” used the Defendants’ web portal to access and obtain DMV records for Cantinieri and others. While the disclosure of Cantinieri’s PII satisfies the requirement for an injury in fact that is concrete and particularized, Cantinieri did not show that this injury is actual or imminent as required to support Article III standing for claims for damages and declaratory and injunctive relief. By way of example, the Amended Complaint alleged that due to Defendants’ disclosure of her PII, Cantinieri has “suffered repeated scam robocalls to her personal telephone number” and “has received numerous phishing email messages in further invasion of her personal privacy.” But courts have generally rejected the theory that unsolicited calls or emails are a valid injury in fact. And, even if these allegations could establish an injury in fact, the alleged injuries were not fairly traceable to the disclosure of Cantinieri’s PII. Further, Cantinieri allegedly experienced identity theft and financial fraud as well as consequences stemming from these incidents, but these allegations did do not support Cantinieri’s Article III standing because Cantinieri failed to establish that any of these alleged injuries were fairly traceable to Defendants’ disclosure of her PII (Cantinieri v. Verisk Analytics, Inc., No. 2:21-cv-06911-NJC-JMW (E.D.N.Y. Dec. 23, 2024)).

Attorneys: Clark Hicks (Hicks Law Firm, PLLC) for John H. Wade. J. Cal Mayo, Jr. (Mayo Mallette PLLC) for National Collegiate Athletic Association. David Allan Geiger, U.S. Department of Justice, for the U.S. Caroline H. Reinwald (Robinson Bradshaw & Hinson, P.A.) for RealPage, Inc. David J. Kete (Donnelly, Conroy & Gelhaar, LLP) for Thomas R. Ahern. James Robertson Martin (Zelle LLP) for Pacific Surf Designs, Inc. Chahira Solh (Crowell & Moring, LLP) for WhiteWater West Industries, Ltd. Edwin M. Boniske (Higgs Fletcher & Mack, LLP) for Evans Hotels, LLC. Luke Dowling (McCracken, Stemerman & Holsberry, LLP) for Unite Here! Local 30. Stacey Leyton, (Altshuler Berzon, LLP) for San Diego County Building and Construction Trades Council, AFL-CIO. Anthony P. Mastroianni (Locks Law Firm PLLC) for Jillian Cantinieri. Jasmeet Ahuja (Hogan Lovells US LLP) for Verisk Analytics, Inc.

Companies: National Collegiate Athletic Association; RealPage, Inc.; Pacific Surf Designs, Inc.; WhiteWater West Industries, Ltd.; Albertsons Companies: The Kroger Company; Evans Hotels, LLC; Unite Here! Local 30; San Diego County Building and Construction Trades Council, AFL-CIO; Verisk Analytics, Inc.

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