Third Circuit: Non-pharmaceutical cases

Third Circuit decisions

Spartan Concrete Products, LLC v Argos USVI, Corporation

Spartan Concrete Products, LLC (Spartan) brought suit against Argos USVI, Corporation (Argos), 1 alleging that Argos violated the Robinson-Patman Act (RPA) 2 by giving a Spartan competitor a 10 per cent volume discount on bulk cement. Specifically, Spartan contended that the discount gave its only rival, Heavy Materials, such a competitive advantage on St Thomas that Spartan was forced to terminate its operations on that island. 3 After a bench trial, the District Court of the Virgin Islands granted a directed verdict in favor of Argos, concluding that, while Spartan established the elements of an RPA claim, Spartan failed to offer sufficient evidence of antitrust injury and damages. 4 On appeal, the Third Circuit affirmed the District Court’s decision.

In 2010, Spartan, which operated on St Croix, looked to expand its ready-mix concrete business by entering the St Thomas market. At the time, Heavy Materials was the only supplier of ready-mix concrete on St Thomas. 5 Spartan’s entry led to fierce competition and a price war between the two companies, and by slashing its prices, Spartan obtained a 30 per cent share of the ready-mix market on the island. 6 However, over time, this war became unsustainable, and Spartan incurred over $3 million in losses over three years. 7 In 2013, the two companies entered an arrangement whereby Spartan would end its operations on St Thomas and Heavy Materials would stop selling on St Croix. 8 During the time of the price war, Argos was the only provider of bulk cement on St Thomas. Although it sold bulk cement to both Spartan and Heavy Materials, it only offered Heavy Materials, which accounted for nearly 80 per cent of its sales, a 10 per cent volume discount. 9

The Third Circuit affirmed the District Court’s decision that Spartan failed to establish antitrust injury. To recover damages under the federal antitrust laws, 10 a plaintiff must prove antitrust injury, or an ‘actual injury attributable to something the antitrust laws were designed to prevent.’ 11 Therefore, as the appellate court explained, to succeed, Spartan had to reasonably prove a causal connection between the price discrimination and the damage it suffered. 12 Spartan argued that it proved antitrust injury through evidence of its $3 million in losses and eventual cessation of operations in St Thomas caused by the price war. It also contended that price was an important factor in jobs it won. 13 However, the Court found these arguments insufficient. First, Spartan admitted that it performed no analysis and provided no records to support its assumption that 90 per cent of jobs lost were a result of price difference between Spartan and Heavy Materials. Second, Spartan did not identify nor provide testimony from any purported lost customers. Third, evidence from trial showed that Spartan lost sales for reasons other than price, including quality, and lost revenues as a result of writing off bad debt. Finally, the Court noted that Spartan was able to compete with Heavy Materials for three years through the price war, even achieving, at one point, a 30 per cent market share. 14 Given this, although it was undisputed that Argos gave Heavy Materials a discount, the Third Circuit concluded that Spartan failed to present evidence connecting the discount to its inability to compete and its eventual cessation of operations in St Thomas. Therefore, antitrust injury was not established. 15

Even though RPA claims are not the most common antitrust cases brought by plaintiffs, this decision serves as a reminder that any potential plaintiff in an RPA suit within the Third Circuit needs to have or develop strong evidence showing that any discriminatory pricing it received harmed its ability to compete. On the other hand, for defendants, this precedent and the Court’s analysis could be used as a way to attack claims brought under RPA based on failure to prove antitrust injury.

McGary v Williamsport Regional Medical Center

Dr Susan McGary filed suit against Williamsport Regional Medical Center (the Medical Center), Susquehanna Health System (Susquehanna Health) and doctors George Manchester, Scott Croll, John Burks and Mark Osevala (collectively, the defendants), 16 claiming that the Medical Center’s refusal to rehire or grant Dr McGary privileges violated sections 1 and 2 of the Sherman Act 17 and various Pennsylvania state laws. The US District Court for the Middle District of Pennsylvania granted the defendants’ motion for summary judgment, and the Third Circuit affirmed. 18

Dr McGary practiced cardiothoracic surgery at the Medical Center for nearly a decade before leaving in 2007. Four years later, she decided she wanted to return, but the Medical Center did not offer her employment, explaining that it did not have enough work to support her and its current cardiothoracic surgeon, Dr Osevala. Dr McGary then looked to open her own private practice and perform surgeries at the Medical Center. 19 However, her application for privileges was denied because she did not meet the Medical Center’s credentialing criteria. 20 Dr McGary protested that these criteria were too stringent, and thus, Dr Manchester, the Medical Center’s Chief Medical Officer, suggested that Dr McGary research cardiothoracic credentialing standards at other hospitals in the area. Based on McGary’s findings, the Medical Center revised its criteria. Nevertheless, Dr McGary still believed she was ineligible, and thus, opened an outpatient vein surgery facility and brought this action. 21

A Sherman Act section 1 claim requires ‘concerted action’ by the defendants. The District Court granted summary judgment in the defendants’ favor based on its determination that, here, the defendants were a single entity incapable of engaging in the requisite concerted action. 22 On appeal, Dr McGary argued that Dr Osevala had personal economic interests, including his employment retention and an incentive bonus, that were separate from Susquehanna Health’s and the Medical Center’s economic interests for excluding her, and thus, she did claim concerted action. 23 In its decision, the Third Circuit explained that because ‘concerted action requires two or more distinct entities to agree to take action,’ a parent and wholly owned subsidiary and, typically, a company and its employees and officers are incapable of conspiring. 24 However, the Court acknowledged that exceptions to this general rule existed. These exceptions included situations in which a single entity is made up of independent, competing economic interests, such as a hospital with medical professionals who compete with each other, and situations in which employees act for their own interests outside those of their employers. 25

The Court explained that Susquehanna Health was incapable of concerted action with the Medical Center, its wholly owned subsidiary, and other than Dr Osevala, none of the other defendant doctors were in competition with Dr McGary or would be affected by Dr McGary’s practice. Thus, only Dr Osevala was capable of conspiring with the Medical Center or Susquehanna Health. 26 The evidence presented as to Dr Osevala was his recommendation to Dr Manchester that the Medical Center did not have enough work to support two cardiothoracic surgeons. However, this mere recommendation was not enough; to prove concerted action between a hospital and an employee, ‘there must be something such as a conscious commitment by the medical staff to coerce the hospital into accepting its recommendation.’ 27 Therefore, based on this insufficient evidence of concerted action, the Third Circuit upheld the summary judgment ruling as to the section 1 claim. 28

With respect to Sherman Act section 2, Dr McGary contended that the defendants’ use of the 100/100 criteria and their failure to process her application in accordance with the Medical Center’s by-laws established her monopolization and attempted monopolization claims. 29 However, the Third Circuit agreed with the District Court that these claims both failed. First, as to the monopolization claim, the Court explained that there was ‘no reason to believe that rejecting qualified practitioners . . . would aid the hospital in maintaining monopoly power.’ 30 Indeed, Dr McGary did not produce evidence that the Medical Center had an economic motive to deny privileges to a qualified surgeon. 31 Second, to succeed on an attempted monopolization claim, a plaintiff must ‘point to specific, egregious conduct that evinced a predatory motivation and specific intent to monopolize,’ such as exclusionary conduct. 32 Here, however, the Third Circuit concluded that Dr McGary had not alleged any such egregious behavior by the Medical Center and noted that she failed to show what motive the Medical Center had in excluding qualified surgeons. 33

This decision serves as a reminder that hospitals accused of violating the antitrust laws based on decisions regarding physician employment or privileges need to assess (1) whether the plaintiff adequately alleges that two or more distinct entities engaged in concerted conduct under section 1 and (2) whether the plaintiff can show an economic motive for the hospital’s action that supports a section 2 claim.

Federal Trade Commission, et al v Penn State Hershey Medical Center, et al

In December 2015, the Federal Trade Commission (FTC) and the Commonwealth of Pennsylvania (Commonwealth) filed an administrative complaint 34 against Penn State Hershey Medical Center (Hershey) and Pinnacle Health (Pinnacle) (collectively, the defendants), 35 alleging that the proposed merger between the two healthcare companies would substantially lessen competition in violation of section 7 of the Clayton Act. 36 At the same time, the FTC and Commonwealth filed a complaint for temporary restraining order and preliminary injunction pursuant to section 13(b) of the Federal Trade Commission Act (the FTC Act) 37 and section 16 of the Clayton Act 38 in the US District Court for the Middle District of Pennsylvania to prevent the merger’s consummation during the administrative proceeding. 39 In May 2016, the Middle District of Pennsylvania denied the preliminary injunction, 40 but in October 2016, the Third Circuit reversed and directed the District Court to enter the injunction pending the outcome of the administrative proceeding. 41 Shortly thereafter, Hershey and Pinnacle terminated their merger agreement, indicating that the injunction was the reason. 42

Thereafter, the Commonwealth moved for attorneys’ fees and costs, arguing that it had substantially prevailed under section 16 of the Clayton Act. 43 The defendants opposed the motion by contending that the Commonwealth could not pursue attorneys’ fees and costs under section 16 of the Clayton Act because the Third Circuit had applied section 13(b) of the FTC Act in ordering the injunction. 44 The District Court denied the Commonwealth’s motion but not based on the argument offered by the defendants. Instead, the District Court refused the Commonwealth’s request for fees because the Commonwealth had not substantially prevailed under section 16 of the Clayton Act. 45 On appeal, the Third Circuit affirmed the denial of fees, but based on the reasoning offered by the defendants, not the District Court. 46

In its ruling, the Third Circuit explained that in its prior decision imposing the preliminary injunction, it had relied solely on section 13(b) of the FTC Act, which does not provide for attorneys’ fees. 47 The Third Circuit first made clear that its prior decision rested only on section 13(b) because it expressly applied section 13(b)’s standard for preliminary injunction, which is ‘resolved by weighing the equities and considering the Commission’s likelihood of ultimate success to determine whether such action would be in the public interest.’ 48 This section 13(b) standard is considered both different from and easier to satisfy than the preliminary injunction standard applied under section 16 of the Clayton Act. 49 Second, the Third Circuit noted that it had examined the extensive legislative history of the Clayton Act and found nothing showing Congress’s intent to empower courts to extend its fee-shifting provision to other statutes. 50 Third, the Third Circuit distinguished this situation from a Supreme Court case, Maher v Gagne, 51 in which the Court permitted the award of attorneys’ fees for a statutory claim that was pendant to constitutional claims. 52 Unlike in Maher, here, the case did not involve pendant constitutional claims, and the express language of section 16 of the Clayton Act states that a plaintiff must substantially prevail in an ‘action under this section’ to be awarded fees. 53 Finally, the Third Circuit dismissed the argument that if it rejected the Commonwealth’s fee request it would force the Commonwealth to pursue a separate action under section 16, which would be judicially inefficient. The Court determined that this concern did not outweigh the statutes’ plain language. 54

This precedent can be useful to defendants in FTC Act section 13(b) cases, or possibly other statutes if the same reasoning aligns, to challenge a plaintiff’s request for attorneys’ fees and costs.

Cable Line, Inc, et al v Comcast Cable Communications of Pennsylvania, Inc, et al

Cable installation companies Cable Line, Inc and McLaughlin Communications, Inc (collectively, the plaintiffs) brought suit against Comcast Cable Communications (Comcast), Decisive Communications (Decisive) and Vitel Communications (Vitel) (collectively, the defendants), 55 claiming that the defendants drove them out of business by conspiring to restrain trade in the market for the provision of cable installation in violation of section 1 of the Sherman Act 56 and state antitrust laws. 57 The US District Court for the Middle District of Pennsylvania dismissed the federal antitrust claim.

Before going out of business, the plaintiffs worked primarily for Comcast, the dominant supplier of internet service in the Mid-Atlantic region. In 2009, Comcast initiated a nationwide plan to reduce the number of cable installers that it used, and pursuant to the plan, it initiated a request for proposal (RFP) process. During the RFP process, a Comcast representative informed the plaintiffs that they should ‘ramp up’ their operations. The plaintiffs took this suggestion to mean that their bids in the RFP process were successful, and thus, they invested in new warehouses, vehicles and technicians. However, neither plaintiff won the Comcast contract. Comcast chose the defendants Decisive and Vitel as its exclusive cable installers in the Mid-Atlantic. 58

In their complaint, the plaintiffs advanced numerous reasons as to why Comcast decreased the number of its installers and selected Decisive and Vitel. These reasons included Comcast (1) bringing about consolidation in the installation market to increase its margins, (2) inducing installation companies to expand capital to ‘ramp up’ investment and then foreclose these companies from the market, (3) selecting the lowest-cost installers, (4) choosing subcontractors with the highest performance metrics even though Comcast knew the metrics had been manipulated, and (5) selecting subcontractors that would assist Comcast in defrauding stockholders through the under-reporting of follow-up service calls. 59 Further, the plaintiffs’ suit alleged a violation of the Sherman Act either through an unlawful monopsony or hub-and-spoke conspiracy. 60 On appeal, the Third Circuit concluded that neither of these theories had merit and affirmed the District Court’s dismissal. 61

As to the monopsony theory, the Third Circuit first explained that a monopsony ‘exists when a market is controlled by one buyer.’ 62 To successfully state a monopsony claim, a plaintiff must plead both ‘monopsony power and conduct by the monopsonist that excludes its rivals.’ 63 Monopsony claims are ordinarily brought under section 2 of the Sherman Act 64 as they are a form of monopoly. However, the plaintiffs only raised section 2 for the first time in their appellate reply brief. This alone, contended the Third Circuit, was enough to undermine this theory. 65 Regardless, the Third Circuit also concluded that the plaintiffs’ monopsony argument was insufficient on its merits. The plaintiffs conceded that Comcast was not the only buyer of cable installation services in the area. Also, the plaintiffs’ complaint fails to allege how Comcast unlawfully excluded these other buyers from the market for cable installation services. Without these allegations, the plaintiffs did not adequately allege a relevant market, a predicate of their claim. 66 Overall, the plaintiffs asked the Court ‘to impose antitrust monopsony liability merely because a purchaser with market power in a vaguely defined market decided to reduce its number of suppliers,’ and the Third Circuit was unwilling to extend antitrust liability so broadly. 67

Regarding the plaintiffs’ other theory, a hub-and-spoke conspiracy includes a dominant purchaser or supplier as the hub and the distributors as the spokes. Horizontal agreements among the distributor spokes form the rim. 68 The plaintiffs argued that the defendants established a hub-and-spoke conspiracy to restrain trade in the cable installation market. However, the Third Circuit determined that the plaintiffs’ allegations as to this theory were both insufficient and contradictory. First, the complaint did not allege any facts from which an agreement between Decisive and Vitel could be inferred. Second, the complaint conceded that Decisive and Vitel did not know about Comcast’s goal to consolidate the cable installation market until after the RFP process was completed. 69 As the plaintiffs’ hub-and-spoke theory also failed, the Third Circuit affirmed the dismissal of the antitrust claim. 70

In dicta, the Third Circuit questioned whether the plaintiffs’ section 1 claim could be treated as tying and exclusive dealing claims, 71 as in the Supreme Court case of Jefferson Parish Hospital District No. 2 v Hyde. 72 There, a hospital contracted exclusively with a single anesthesiology practice to provide anesthesiology services tied to the hospital’s provision of surgeries. Rival anesthetists brought suit under section 1, but because they did not establish that the hospital had market power for surgeries, their claim failed. 73 Here, as the plaintiffs did not raise this theory in their complaint, at the District Court or on appeal, the Third Circuit did not express a view as to whether Comcast tied these exclusive cable installer services to its internet service, a service over which it may have had monopoly power, so as to achieve monopoly-like margins. 74

This decision demonstrates the need for plaintiffs to ensure that their allegations fit their antitrust case theories. In addition, when considering filing suit against a company that potentially has monopoly or market power, a plaintiff should investigate whether any of the company’s conduct may be deemed exclusionary under the antitrust laws.

Shulman v Facebook.com (Inc), et al

Jack Shulman filed suit against Facebook.com (Facebook), Cable News Network (CNN), National Public Radio (NPR) and Public Broadcasting Service (PBS) (collectively, the defendants) 75 for alleged violations of Sherman Act section 2 76 and the RPA. 77 Specifically, Mr Shulman claimed that the defendants conspired to hinder the ability of Advances Magazine, the trade name Mr Shulman used for his social media posting, to operate profitably on Facebook by (1) suspending Advances Magazine’s operations on Facebook through falsely alleging that Shulman spammed and (2) charging more to Advances Magazine ‘pay-ins’ for advertising on Facebook than that charged to CNN, PBS and NPR. 78 The District Court of New Jersey dismissed his claims, and the Third Circuit affirmed. 79

In upholding dismissal, the Third Circuit first explained that the Sherman Act section 2 claim failed because the complaint did not specify a relevant market that the defendants were alleged to have monopolized. Possession of monopoly power in a relevant market is required for a claim under section 2. 80 Moreover, the Third Circuit also concluded that the RPA claim failed because the RPA does not apply to advertising; it applies to commodities. 81 Under Third Circuit precedent, advertising services have been deemed outside the scope of the RPA. 82

This decision serves as a reminder that to successfully plead a Sherman Act section 2 monopolization claim, the complaint must identify a relevant product and geographic market that are being monopolized. In addition, as to the RPA, companies setting up pricing structures that may vary based on customer should understand which types of products may be subject to the RPA and which are not.

Helicopter Helmet, LLC v Gentex Corporation, et al

Helicopter Helmet, LLC (Helicopter Helmet), a manufacturer of helicopter helmets, sued two of its competitors, Gentex Corporation and Gibson & Barnes (collectively, the defendants) 83 alleging monopolization and conspiracy claims under the federal antitrust laws and various other federal and state laws. Specifically, Helicopter Helmet alleged that the defendants influenced federal officials to release reports containing false information about Helicopter Helmet for the purpose of hampering Helicopter Helmet’s ability to compete. 84 The District Court of Delaware dismissed the complaint, and the Third Circuit affirmed. 85

First, the Third Circuit concluded that the antitrust claims failed because Helicopter Helmet failed to establish antitrust injury – losses that flow from harm to competition in the market. Helicopter Helmet argued that because there were only six helmet manufacturers, any damage inflicted on one manufacturer by the defendants’ actions affects the entire market. However, antitrust injury cannot be established by a plaintiff contending it would have performed better absent a defendant’s conduct. 86 Instead, ‘there must be a causal link between the alleged injury and an antitrust violation’s anticompetitive effects.’ 87 Helicopter Helmut failed to allege a harm to competition or consumers from the defendants’ conduct, nor did it aver a link between this harm and any damages it suffered. 88 Moreover, federal officials removed the false reports and terminated an exclusive contract with Gibson & Barnes. Thus, in addition, Helicopter Helmet failed to allege a particularized harm it suffered as a result of the defendants’ actions. 89

Second, the Third Circuit agreed with the District Court that the Noerr-Pennington doctrine precluded Helicopter Helmet’s federal antitrust claims. Pursuant to the Noerr-Pennington doctrine, ‘antitrust liability cannot be predicated solely on petitioning to secure government action.’ 90 Because Helicopter Helmut premised its antitrust claims on the defendants’ alleged attempts to influence federal agency action, these claims failed. 91

This decision reiterates the importance of not neglecting to plead antitrust injury – antitrust claims must be tied to harm to competition, not simply harm to a competitor. Further, in challenging an action, defendants need to be aware of a possible defense under the Noerr-Pennington doctrine.

District court decision

In re: Railway Industry Employee No-Poach Antitrust Litigation

Plaintiff employees filed a class action against their employers, railroad equipment manufacturers, alleging the employers entered into unlawful no-poach agreements by which the employers agreed not to solicit or hire each other’s employees. 92 The defendants, Wabtec, Knorr and Faiveley NA 93 and several of their subsidiaries, moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6), and to strike the class action allegations under Federal Rule of Civil Procedure 12(b)(1). 94 In their motion, the defendants argued that (1) no-poach agreements should be assessed under the rule of reason, not be per se illegal, and as such, the plaintiffs’ complaint failed because it did not define a relevant market; (2) the plaintiffs’ allegations did not plausibly suggest an overarching conspiracy beginning in 2009; and (3) the class action averments were insufficient to satisfy Federal Rule of Civil Procedure 23’s (Rule 23) requirements for typicality and predominance at the class certification stage. 95 The Western District of Pennsylvania court granted the motion to dismiss in part and denied it in part (without prejudice), and it granted the motion to strike with leave to amend. 96

First, the District Court determined that the no-poach agreements alleged in this matter were per se illegal, not subject to the rule of reason. The Court explained that the defendants entered into these horizontal agreements with their competitors to allocate employees so as to minimize competition for the employees. 97 Moreover, these agreements were ‘naked’ restraints – meaning, there were no plausible efficiency justifications and they were not ancillary to any legitimate business arrangement. 98 Case law and the Department of Justice’s position supported the Court’s conclusion. 99 Indeed, the Department of Justice filed a statement of interest and participated in the motion to dismiss hearing to articulate its position that no-poach agreements should be analyzed as per se illegal, unless they are ancillary to a separate legitimate collaboration or transaction, and here, per se treatment was appropriate. 100 Given that the District Court concluded that the no-poach agreements were per se illegal, the plaintiffs were not required to include factual allegations regarding the relevant market where the anticompetitive effects occurred. 101

Second, the Western District of Pennsylvania court agreed with the defendants that the plaintiffs failed to plead a single or overarching conspiracy since 2009. The District Court explained that, at most, the plaintiffs alleged three bilateral conspiracies: (1) from 2009 to 2016, Wabtec and Knorr executives entered into and managed an express no-poach agreement; (2) from 2011 to 2015, executives at Knorr and Faiveley entered into and managed a no-poach agreement; and (3) from 2014 to 2016, executives at Wabtec and Faiveley entered into and managed a no-poach agreement. 102 The Court then noted the plaintiffs did not make averments from which it was plausible to conclude that prior to 2014 Wabtec knew about Knorr and Faiveley’s agreement, Knorr knew about Faiveley and Wabtec’s agreement, or Faiveley knew about Wabtec and Knorr’s agreement. However, the Court determined that by 2014, when each company had entered into a bilateral agreement with its two largest competitors, it was plausible to infer that the three bilateral agreements were part of an overarching conspiracy. 103 Moreover, the plaintiffs alleged additional facts to show that the defendants had a motive to collude, which supported the reasonable inference that the overarching conspiracy began by 2014, including that there was high demand and limited supply of skilled workers, that directly soliciting employees from another company was particular effective, and that proper competition between the companies for employees allowed employees to negotiate for better compensation. 104 Overall, the Court determined that the plaintiffs sufficiently plead that the defendants entered three bilateral agreements, and that by 2014, these bilateral agreements were part of an overarching conspiracy among the defendants. 105

Third, with respect to the defendants’ motion to strike the class action allegations, the District Court examined Rule 23’s typicality and predominance requirements and whether the complaint sufficiently alleged that the defendants colluded to restrict the soliciting or hiring of all defendant employees. 106 The Court concluded that the plaintiffs’ allegations demonstrated that discovery would uncover evidence that the named plaintiffs’ claims are typical of the class. In so doing, the Court explained that the plaintiffs alleged that the no-poach agreements affected all employees’ compensation, and while there may be factual differences among employee types, it could not determine that these potential differences created a conflict between the named plaintiffs and putative class members that would make the named plaintiffs’ claims ‘atypical’ of the class. 107 The Court also noted that there was a ‘low threshold’ for the typicality requirement. 108 However, the Court found that the plaintiffs’ allegations were insufficient for a prima facie showing that the predominance requirement was met or that discovery was likely to substantiate the plaintiffs’ predominance averments. 109 After reviewing case law in other no-poach cases, the District Court explained that to satisfy predominance at the motion to strike stage, the plaintiffs had to set forth factual allegations suggesting ‘that discovery will likely reveal evidence that antitrust impact may be proven on a classwide basis for all employees,’ such as ‘evidence that compensation structures for all defendants were so rigid that the compensation of all class members, including employees with skills specific to the railway equipment supply industry and employees without skills specific to that industry, were tethered together.’ 110 Because the plaintiffs’ factual allegations were conclusory and did not address the defendants’ compensation structures, the District Court granted the defendants’ motion to strike the class allegations. 111

Finally, the Court determined that the plaintiffs’ class definition was overbroad. 112 The plaintiffs sought to represent one class consisting of all individuals employed by any defendant since 2009. However, this definition lacked the necessary precision. 113 Based on the Court’s analysis of the plaintiffs’ allegations, an overarching conspiracy did not commence until 2014, and the defendant Faiveley did not enter an agreement until 2011. Therefore, a class definition that included employees from all defendants from 2009 was overbroad and imprecise. 114


Notes

1 929 F.3d 107 (2019).

2 15 U.S.C. § 13(a). To prove an RPA violation, a plaintiff must establish that ‘(1) sales were made to two different purchasers in interstate commerce; (2) the product sold was of the same grade and quality; (3) the defendant discriminated in price as between the two purchasers; and (4) the discrimination had a prohibited effect on competition.’ 929 F.3d at 113 (citing Feesers, Inc. v Michael Foods, Inc., 498 F.3d 206, 212 (3d Cir. 2007)).

3 929 F.3d at 109–10.

4 Id. at 111–13.

5 Id. at 109.

6 Id. at 110.

7 Id.

8 Id. After Spartan moved to amend its complaint, Argos then motioned the Court to amend its answer to add counterclaims, including antitrust violations against Spartan for conspiring to allocate ready-mix concrete markets with Heavy Materials. As the District Court denied the parties’ motions based on the parties’ exercise of undue delay throughout the proceedings, the market allocation counterclaim was never litigated. Id. at 111.

9 Id.

10 15 U.S.C. § 15.

11 Spartan Concrete, 929 F.3d at 113 (citing J. Truett Payne Co. v Chrysler Motors, Corp., 451 U.S. 557, 562 (1981)).

12 Id. at 113.

13 Id. at 113–14.

14 Id. at 113–15.

15 Id.

16 775 F. App’x 723 (2019).

17 15 U.S.C. §§ 1, 2.

18 Id. at 727.

19 Id. at 725–26.

20 The criteria required a cardiothoracic surgeon to have performed 100 heart surgeries and 100 lung surgeries in the past year (‘100/100 criteria’). The 100/100 criteria had been established years earlier when Dr McGary was a practicing cardiothoracic surgeon at the Medical Center. Id. at 726.

21 Id.

22 Id. at 727. In the Third Circuit, to prove a section 1 violation, a plaintiff must show, ‘(1) concerted action by the defendants; (2) that produced anticompetitive effects within the relevant product and geographic markets; (3) that the concerted actions were illegal; and (4) that [plaintiff] was injured as a proximate result of the concerted action.’ Gordon v Lewistown Hosp., 423 F.3d 184, 206–07 (3d Cir. 2005).

23 McGary, 775 F. App’x at 727.

24 Id. at 727–28.

25 Id. at 728.

26 Id.

27 Id. (citing Mathews v Lancaster Gen. Hosp., 87 F.3d 624, 639–640 (3d Cir. 1996)).

28 Based on the same reasons, the Third Circuit also affirmed the grant of summary judgment as to Dr McGary’s conspiracy to monopolize claim under Sherman Act section 2. Id. at 730. In addition, for similar reasons, the Court upheld summary judgment as to McGary’s civil conspiracy in restraint of trade claim under Pennsylvania law. Id. at 732–33.

29 Id. at 729–30. To succeed on a monopolization claim, a plaintiff must show: ‘(1) the possession of monopoly power in the relevant market and (2) the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident.’ Broadcom Corp. v Qualcomm Inc., 501 F.3d 297, 306–07 (3d Cir. 2007). For an attempted monopolization claim, the plaintiff must prove, ‘(1) that the defendant has engaged in predatory or anticompetitive conduct with (2) a specific intent to monopolize and (3) a dangerous probability of achieving monopoly power.’ Id. at 317.

30 McGary, 775 F. App’x at 729 (citing Weiss v York Hospital, 745 F.2d 786, 828 (3d Cir. 1984)).

31 Id.

32 Id. at 730 (citing Phila. Taxi Ass’n, Inc. v Uber Techs., Inc., 886 F.3d 332, 341 (3d Cir. 2018)).

33 Id.

34 Complaint, In the Matter of Penn State Hershey Medical Center and Pinnacle Health, No. 9368, available at www.ftc.gov/system/files/documents/cases/151214hersheypinnaclecmpt.pdf.

35 914 F.3d 193 (2019).

36 15 U.S.C. § 18.

37 15 U.S.C. § 53(b).

38 15 U.S.C. § 26.

39 Complaint, Federal Trade Commission, et al. v Penn State Hershey Medical Center, et al., No. 1:15-cv-2362, available at www.ftc.gov/system/files/documents/cases/160408pinnacleamendcmplt.pdf.

40 FTC v Penn State Hershey Med. Ctr., 185 F. Supp. 3d 552, 564 (M.D. Pa. 2016).

41 FTC v Penn State Hershey Med. Ctr., 838 F.3d 327, 353–54 (3d Cir. 2016).

42 Penn State Hershey Medical Center, 914 F.3d at 195.

43 Id. Section 16 of the Clayton Act states, in part, that ‘[i]n any action under this section in which the plaintiff substantially prevails, the court shall award the cost of suit, including a reasonable attorney’s fee, to such plaintiff.’ 15 U.S.C. § 26.

44 Penn State Hershey Medical Center, 914 F.3d at 195.

45 Id. at 195–96. The District Court based its determination on two reasons. First, the injunction, in and of itself, did not terminate the merger and make the Commonwealth a prevailing party. Second, because the Third Circuit’s decision to impose the injunction was based on the FTC and Commonwealth’s likelihood of success on the merits, the grant of relief was not technically on the merits. Id. at 196.

46 Id.

47 Id.

48 Id. at 197 (citing 15 U.S.C. § 53(b)).

49 Id. For injunctive relief pursuant to section 16 of the Clayton Act, ‘courts generally apply the traditional four-part preliminary injunction standard that includes a consideration of: (1) the likelihood of success on the merits; (2) the threat of irreparable harm in the absence of an injunction; (3) the possibility of substantial harm to other interested parties; and (4) the public interest.’ Id.

50 Id. at 197–98.

51 448 U.S. 122 (1980).

52 Penn State Hershey Medical Center, 914 F.3d at 198–99.

53 Id. at 199.

54 Id.

55 767 F. App’x 348 (2019).

56 15 U.S.C. § 1.

57 Cable Line, 767 F. App’x at 350. The district court did not assert supplemental jurisdiction over the state antitrust claims, and those claims were not addressed by the Third Circuit. Id.

58 Id.

59 Id. at 350–51.

60 Id. at 351.

61 Id.

62 Id.

63 Id.

64 15 U.S.C. § 2.

65 Cable Line, 767 F. App’x at 351.

66 Id. at 351–52.

67 Id.

68 Id.

69 Id.

70 Id.

71 Id.

72 466 U.S. 2 (1984).

73 Id. at 6–7, 28–29.

74 Cable Line, 767 F. App’x at 352.

75 788 F. App’x 882 (3d Cir. 2019).

76 15 U.S.C. § 2.

77 15 U.S.C. § 13.

78 Shulman, 788 F. App’x at 884.

79 Id. at 884–85.

80 Id. at 885 (citing Broadcom Corp. v Qualcomm Inc., 501 F.3d 297, 306–07 (3d Cir. 2007)).

81 Id. The RPA states, ‘It shall be unlawful for any person engaged in commerce, in the course of such commerce, either directly or indirectly, to discriminate in price between different purchasers of commodities of like grade and quality . . . . 15 U.S.C. § 13.

82 Shulman, 788 F. App’x at 885 (citing Advo, Inc. v Philadelphia Newspapers, Inc., 51 F.3d 1191, 1195 n.3 (3d Cir. 1995)).

83 774 F. App’x. 96 (3d Cir. 2019).

84 Id. at 97–98.

85 Id.

86 Id. at 97 (citing Brunswick Corp. v Pueblo Bowl-O-Mat, Inc., 429 U.S. 477 , 488–89 (1977)).

87 Id. (quoting Phila. Taxi Ass’n, Inc v Uber Technologies, Inc., 886 F.3d 332, 343 (3d Cir. 2018)).

88 Id. at 98.

89 Id.

90 Id. (quoting Armstrong Surgical Center, Inc. v Armstrong County Memorial Hosp., 185 F.3d 154, 158 (3d Cir. 1999)).

91 Id.

92 395 F. Supp. 3d 464 (W.D. Pa. 2019).

93 Wabtec acquired Faiveley N.A. in 2016. Id. at 473.

94 Id. at 471.

95 Id.

96 Id.

97 Id. at 480–81.

98 Id. at 481.

99 Id. at 481–82 (outlining cases).

100 Id. at 485; statement of interest of the United States, In re Ry. Indus. Emp. No-Poach Antitrust Litig., MDL No. 2850 (W.D. Pa. Feb. 18, 2019).

101 Railway Industry, 390 F. Supp. 3d at 471, 481. Agreements that are illegal per se are presumed anticompetitive without need for further examination. On the other hand, under the rule of reason, a plaintiff must prove that an agreement had an anticompetitive effect in a relevant product and geographic market (among other elements), and thus, a plaintiff must define these relevant markets in its complaint. Id. at 479.

102 Id. at 486.

103 Id. at 486–93.

104 Id. at 487. Under Third Circuit jurisprudence, to succeed on a horizontal agreement claim based on circumstantial evidence, ‘a plaintiff must allege both parallel conduct and something more, which we have sometimes called a plus factor. This more could include evidence (1) that the defendant had a motive to enter into a conspiracy, (2) that the defendant acted contrary to its interests, or (3) implying a traditional conspiracy.’ Id. at 486 (citing In re Ins. Brokerage Antitrust Litig., 618 F.3d 300, 321–22 (3d Cir. 2010)).

105 Id. at 493. The District Court did dismiss, with leave to amend, two defendant subsidiaries for the plaintiffs’ failure to allege specific facts that the subsidiaries engaged in conduct that violated the Sherman Act. Id. at 493–95.

106 Id. at 495–514. Under Rule 23(a)(3), named plaintiffs may sue on behalf of the class if ‘the claims or defenses of the representative parties are typical of the claims or defenses of the class,’ and pursuant to 23(b)(3), a class action can be maintained if ‘the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.’ Fed. R. Civ. P. 23(a)(3), (b)(3).

107 Railway Industry, 390 F. Supp. 3d at 504.

108 Id. at 499 (citing Newton v Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154, 183 (3d Cir. 2001)).

109 Id. at 504–14.

110 Id. For example, in In re: High-Tech Employee Antitrust Litigation, 985 F. Supp.2d 1167, 1177–78, 1192 (N.D. Cal. 2013), the Court certified the class when plaintiffs narrowed it from all employees to ‘technical employees.’ In Seaman v Duke Univ., No. 1:15-CV-462, 2018 U.S. Dist. Lexis 16136, at *8 (M.D.N.C. Feb. 1, 2018), the Court certified a class of ‘faculty’ members but not a class that also included non-faculty.

111 Railway Industry, 390 F. Supp. 3d at 514.

112 Id. at 514–16.

113 ‘The definition must be precise, objective, and presently ascertainable.’ Id. at 514–15 (quoting Manual for Complex Litigation (Fourth) § 21.222 (2004)).

114 Id. at 515.

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