Antitrust Law Daily Wrap Up, WORTH NOTING—Other Antitrust and Trade Regulation developments, (Apr 28, 2017)

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

ACQUSITIONS & MERGERS NEWS: The FTC has approved Sycamore Partners II, L.P.’s application for approval to sell to Dollar General Corporation the assets it acquired under a 2015 FTC settlement in which Dollar Tree, Inc. agreed to divest certain Family Dollar Stores, Inc. stores to Sycamore. The consent order settled FTC charges that Dollar Tree’s merger with Family Dollar was anticompetitive. To resolve the charges, the Commission required Dollar Tree to divest to Sycamore the 330 Family Dollar stores identified. The Commission also required Sycamore to obtain FTC approval if it decided to sell all or almost all the assets it acquired within three years of the sale (Dollar Tree, Inc., FTC Dkt. No. C-4530).

ADVERTISING—N.D. Ill.: Nestle Purina Petcare Co. was unable to state Lanham Act and Illinois consumer protection claims against Oil-Dri Corp. of America for allegedly misrepresenting that its patent covering its Tidy Cats Lightweight cat litter was valid. Flyers for Tidy Cats stated that Oil-Dri had valid patents for its lightweight clumping clay blend, and also for "blend materials later used by [Oil-Dri’s] competitors." Nestle attached a sample of the flyer in question, but did not allege the time and place of its distribution. Also, there was no evidence that Oil-Dri acted in bad faith. While the validity of patent was disputed, Oil-Dri’s copy of the patent spoke for itself. Nestle did not allege that any of the specific statements in Oil-Dri’s flyer are objectively false, nor did the flyers state that Nestle’s product infringed. Nestle therefore failed to show falsity or disregard for the truth (Oil-Dri Corporation of America v. Nestle Purina Petcare Company, April 24, 2017, Kendall, V.).

CONSUMER PROTECTION NEWS: Legislation was introduced in the Senate on April 25 that would clarify that providing "conversion therapy" to members of the lesbian, gay, bisexual, and transgender or LGBTQ community in exchange for monetary compensation, or advertising such services, would constitute an unfair and deceptive act or practice subject to enforcement and rulemaking under the FTC Act. The measure would provide state attorneys general with the authority to enforce this provision in federal court, according to a statement released by Democrats on the Senate’s Health, Education, Labor, and Pensions Committee.

PRIVACY—D. Minn.: A federal district court in in Minnesota certified a class to pursue Telephone Consumer Protection Act claims against a provider of lead-testing services marketed to pediatricians over purported faxing of unsolicited advertisements. A motion to dismiss the claims of Sandusky Wellness Center, LLC, an Ohio medical clinic, by defendants MedTox Scientific, Inc. and MedTox Laboratories, Inc., was denied (Sandusky Wellness Center, LLC v. MedTox Scientific, Inc., April 25, 2017, Schiltz, P.).

STATE UNFAIR TRADE PRACTICES NEWS: Indiana has passed a law prohibiting the establishment, promoting, operation, or participation in a pyramid promotional scheme. Senate Bill 283 specifies the enforcement powers of the attorney general with respect to a person who establishes, operates, or promotes a pyramid promotional scheme, and provides for a private cause of action for a consumer deceived by a pyramid promotional scheme. In certain circumstances, the burden of showing that a person benefitted from a pyramid scheme lies with the plan or operation or a person involved with the plan or operation. The Act removes references to pyramid promotional schemes in the Indiana Deceptive Consumer Sales Act. The Act increases the maximum amount of a civil penalty that may be imposed upon a pyramid promotional scheme to $10,000. SB 283 was signed by the Governor on April 21, 2017 and is effective on July 1.

Attorneys: Brant D. Penney (Reinhardt, Wendorf & Blanchfield) and Brian J. Wanca (Anderson + Wanca) for Sandusky Wellness Center, LLC. Geoffrey W. Castello, III (Kelley Drye & Warren LLP) and Jeffrey R. Mulder (Bassford Remele PA) for Medtox Scientific, Inc. and Medtox Laboratories, Inc. Michael P. Mazza (Michael P. Mazza LLC) and Shawn Michael Collins (The Collins Law Firm, P.C.) for Oil-Dri Corp. of America. David A. Roodman (Bryan Cave, LLP) and Khara Coleman (Pugh, Jones & Johnson, PC) for Nestle Purina PetCare Co.

Companies: Sandusky Wellness Center, LLC; Medtox Scientific, Inc.; Medtox Laboratories, Inc.; Oil-Dri Corp. of America; Nestle Purina PetCare Co.; Dollar Tree, Inc.; Family Dollar Store, Inc.; Sycamore Partners II, L.P.; Dollar General Corporation, Dollar Express, LLC

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