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We are honored to serve as the editors for GCR’s US Courts Annual Review. The reviewed decisions cover a broad spectrum, including hot topics, perennial favorites and rarely seen issues. Each chapter in this review covers noteworthy 2019 decisions from a particular circuit, and together these chapters show how antitrust continues to be an active area for disputes and judicial resolution.
For years, one of the hottest topics has been the bar against federal antitrust lawsuits by indirect purchasers, established in Hanover Shoe v United Shoe Machinery Co 1 and Illinois Brick Co v Illinois. 2 In 2019, the Supreme Court addressed Illinois Brick in Apple, Inc v Pepper, 3 holding that privity, not proximate cause, determines who is an indirect purchaser. The Ninth Circuit also addressed the direct purchaser rule in In re NFL’s Sunday Ticket Antitrust Litigation, 4 providing additional clarity on the application of Illinois Brick to single conspiracies that involve alleged conspirators at multiple levels of the supply chain.
And there were more hot topics. The Second Circuit addressed two-sided markets in US Airways, Inc v Sabre Holdings Corporation, 5 applying the principles of Ohio v American Express. 6 The Second Circuit and the courts in the Southern District of New York also issued a series of antitrust opinions relating to financial products, frequently addressing the issue of antitrust standing. Another hot topic is ancillary restraints, an issue addressed by the Sixth Circuit in Medical Center at Elizabeth Place, LLC v Atrium Health System, 7 in which it joined the majority side of a circuit split in holding that the standard for deciding whether a joint venture’s restraint is ancillary and therefore subject to rule of reason analysis is whether a plausible justification exists for the restraint.
Pleading standards make frequent appearances in federal decisions, and 2019 was no different. The Tenth Circuit held that antitrust plaintiffs must not only plead that the allegations demonstrate an agreement, but also that the agreement made economic sense and defendants had a motive to conspire, in Llacua v Western Range Association. 8 The Fourth Circuit likely will consider in 2020 whether a 2019 district court decision improperly granted a motion to dismiss because the plaintiff failed to ‘summon evidence tending to exclude the possibility of independent action’; that case is Rojas v Delta Airlines, Inc. 9
The courts also considered merger issues. In United States v AT&T, Inc, 10 the DC Circuit held that the district court did not clearly err in applying economic principles and real-world marketplace facts to reject the government’s attempt to block the transaction, reflecting the difficulties in challenging vertical mergers. The Third Circuit denied fees to the prevailing plaintiff (the State of Pennsylvania) under Clayton Act section 16 because the plaintiff prevailed on the basis of section 13(b) of the FTC Act, which does not provide for fees. 11 The Eighth Circuit affirmed the use of a particular methodology to analyze a merger in the context of a preliminary injunction, in Federal Trade Commission v Sanford Health, 12 and aligned itself with the DC Circuit regarding merger precedent.
Several decisions considered antitrust issues within the context of regulatory schemes. These included Louisiana Real Estate Appraisers Board v FTC, 13 in which the Court held that courts do not have jurisdiction to review FTC decisions under the FTCA unless they are cease-and-desist orders. In Diverse Power, Inc v City of LaGrange, 14 the Court considered the applicability of the state-action doctrine to activities of non-sovereign political subdivisions of a state. In Breiding v Eversource Energy, 15 the First Circuit held that the filed-rate doctrine prohibited the application of the antitrust laws to conduct in the energy industry. In US Futures Exchange, LLC v Board of Trade of the City of Chicago, Inc, 16 the Seventh Circuit addressed whether a CFTC rule preempted the antitrust laws.
The courts continue to grapple with the use of expert testimony for class certification. In In re Wholesale Grocery Products Antitrust Litigation, 17 the Court affirmed the district court’s refusal to certify a class because the class’s expert failed to account for differences between a benchmark and the comparator and failed to consider non-conspiratorial factors that could affect the expert’s analysis. In In re Rail Freight Fuel Surcharge Antitrust Litigation, 18 the DC Circuit rejected class certification because the plaintiffs’ expert failed to demonstrate any damage for 2,000 class members, or 13 per cent of the class; the decision also sheds light on the importance of expert testimony in establishing classwide injury.
Less frequent topics were also covered. The Robinson-Patman Act made a rare appearance in the Third Circuit in 2019 in Spartan Concrete Products, LLC v Argos USVI, Corporation. 19 That Court explained that plaintiffs must offer strong evidence showing that the discriminatory pricing by the defendant actually caused harm to the plaintiff’s ability to compete. A district court in the Fourth Circuit addressed Copperweld immunity at the motion to dismiss stage, in CSX Transportation, Inc v Norfolk Southern Railroad Co. 20 The Seventh Circuit addressed Noerr-Pennington issues in very long-running litigation in the US Futures Exchange, LLC v Board of Trade of the City of Chicago, Inc case noted above.
All in all, it was an interesting year in antitrust. We hope you find this book useful, and we look forward to next year’s look at what unfolded in 2020.
1 392 U.S. 481 (1968).
2 431 U.S. 720 (1977).
3 139 S. Ct. 1514 (2019).
4 933 F.3d 1136 (9th Cir. 2019).
5 938 F.3d 43 (2d Cir. 2019).
6 138 S. Ct. 2274 (2018).
7 922 F.3d 713 (6th Cir.), cert. denied, 140 S. Ct. 380 (2019).
8 930 F.3d 1161 (10th Cir. 2019).
9 425 F. Supp. 3d 524 (D. Md. 2019).
10 916 F.3d 1029 (D.C. Cir. 2019).
11 Federal Trade Commission, et al. v Penn State Hershey Medical Center, et al., 914 F.3d 193 (3rd Cir. 2019).
12 926 F.3d 959 (8th Cir. 2019).
13 917 F.3d 389 (5th Cir. 2019).
14 934 F.3d 1270, 1271 (11th Cir. 2019).
15 939 F.3d 47 (1st Cir. 2019).
16 No. 18-3558 (7th Cir. Mar. 23, 2020).
17 946 F.3d 995 (8th Cir. 2019).
18 934 F.3d 619, 620 (D.C. 2019).
19 929 F.3d 107 (2019).
20 No. 18-CV-530, 2019 WL 4564564 (E.D. Va. Sept. 9, 2019).