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Tenth Circuit decisions
CSMN Investments, LLC v Cordillera Metropolitan District
The plaintiff in this case sought to operate an addiction treatment center. However, Colorado state law required the approval of a municipal planning director and the municipal planning board before it could open the facility. After the local officials granted CSMN the right to operate an outpatient facility, two groups of citizens in the community filed suit in Colorado state court, seeking to reverse that decision. The citizens lost their suit, and one of the groups lost an appeal of that decision. CSMN thereafter filed a civil rights action in federal district court against the two citizen groups, claiming violations of the Americans with Disabilities Act and the Fair Housing Act. The citizen groups moved to dismiss the claims, arguing that their actions were protected by Noerr-Pennington immunity. After the district court agreed and dismissed the case, CSMN appealed to the Tenth Circuit.
The court noted that ‘under the Noerr-Pennington “line of cases . . . genuine petitioning is immune from antitrust liability, [but] sham petitioning is not.” ’  To identify a ‘sham,’ the court turned to the Supreme Court’s two-step test from Professional Real Estate Investors, Inc v Columbia Pictures Industries, Inc. Under the first step, the court asks whether the petitioning had ‘an objectively reasonable basis.’  If so, the inquiry ends. If the petitioning did not have an objectively reasonable basis, then at the second step the court would examine ‘the subjective motivation behind the petitioning.’ 
The court only needed the first step. It noted that the citizen groups’ losses in the Colorado state court did not automatically mean the cases had no objectively reasonable basis. Instead, the question was whether the cases were ‘so baseless that no reasonable litigant could realistically expect to secure favorable relief.’  Since the citizens were at least partially successful on some of their claims, and because the Colorado state court issued lengthy and reasoned opinion rather than summarily dismissing the cases as frivolous, the Tenth Circuit concluded that the citizens’ cases had an objectively reasonable basis. As such, the court affirmed the district court’s dismissal based on Noerr-Pennington immunity. Though the case was the Tenth Circuit’s first application of Professional Real Estate Investors beyond a pure antitrust context, its analysis will be effective in future antitrust cases.
District court decisions
In re EpiPen (Epinephrine Injection, USP) Mktg
In a high-profile decision following a lengthy discovery period, the District of Kansas granted the defendant summary judgment in In re EpiPen (Epinephrine Injection, USP) Marketing, Sales Practices & Antitrust Litigation. The case dates back to 2017, when Sanofi-Aventis US LLC sued Mylan, Inc and Mylan Specialty, LP, alleging that Mylan took anticompetitive actions to prevent Sanofi’s Auvi-Q from taking a share of the market for epinephrine auto-injectors (EAIs) from Mylan’s EpiPen. Specifically, Sanofi claimed that Mylan used exclusive dealing and deceptive conduct to monopolize the market for EAIs, in violation of section 2 of the Sherman Act. After the case was joined with various actions from consumers in a multi-district litigation process, the case came before the District of Kansas on summary judgment.
The court concluded that there were no section 2 violations. This required the court to first ask whether there was sufficient evidence to show that Mylan (1) had monopoly power in the EAIs market, and (2) willfully acquired or maintained that power, as opposed to ‘growth or development as a consequence of a superior product, business acumen, or historic accident.’  The court rested its conclusion on the second prong. It separately determined that there was insufficient evidence to create a triable issue of fact both on whether Mylan’s actions were anticompetitive and on whether the actions led to an antitrust injury.
On the lack of a showing of anticompetitive behavior, the court began by noting that Mylan acknowledged that its contracts with pharmacy benefit managers (PBMs) included larger rebates if the PBMs exclusively promoted EpiPen instead of Sanofi’s product or other EAIs. But, citing the Third Circuit’s decision in ZF Meritor, LLC v Eaton Corporation, the court determined that Mylan’s conduct would only violate section 2 of the Sherman Act if it failed a rule of reason analysis. More specifically, the court marched through the seven factors that the Third Circuit used in ZF Meritor for assessing anticompetitive exclusive dealing: ‘(1) whether the defendant has “significant market power[;]” (2) whether there is substantial market foreclosure; (3) whether the contract’s duration is “sufficient . . . to prevent meaningful competition by rivals[;]” (4) “an analysis of likely or actual anticompetitive effects considered in light of any procompetitive effects[;]” (5) whether defendant “engaged in coercive behavior[;]” (6) “the ability of customers to terminate the agreements[;]” and (7) the “use of exclusive dealing by competitors of the defendant[.]” ’ 
According to the court, Mylan’s ‘dominant’ position in EAIs meant it met the first ZF Meritor prong. However, the court held that was the only prong of the seven that favored a showing of anticompetitive behavior. The facts did not satisfy the third and sixth prongs of the ZF Meritor test – the aspects looking at the duration of contracts and the ability for customers to terminate those agreements – because Mylan’s contracts were for 2.5 years or less and generally were terminable without cause on 90 days’ written notice. This bore out in practice, too, as the court noted that Mylan’s contracting counterparties ‘frequently renegotiated rebate contracts’ with both Mylan and Sanofi, ‘invoked their early termination provisions,’ and ‘made changes to formulary coverage and rebate percentages.’ 
Next, the court concluded that ‘Mylan’s exclusive offers providing payors greater discounts for excluding rivals – without more – don’t amount to unlawful anticompetitive conduct.’  This was especially true because some payors rejected exclusivity and others removed the exclusivity shortly after entering into the arrangement. There was no evidence that Mylan offered ‘all-or-nothing’ rebates with a threat to cut off payers from EpiPen access if they did not agree to exclusivity. This meant Sanofi could not meet the fifth prong of the ZF Meritor test, which asks whether the defendant engaged in coercive conduct.
The court also concluded that there was insufficient evidence of substantial foreclosure and anticompetitive effects, meaning the second and fourth factors of the ZF Meritor test weighed in favor of Mylan. On the second factor, there was no substantial foreclosure because Sanofi’s expert calculated that, at most, only 31 percent of the US population was foreclosed. Sanofi’s expert argued that number underestimated the foreclosure because it did not account for ‘spillover’ effects, such as doctors prescribing EpiPen over alternatives because they know that EpiPen will be available to their patients. But the court determined that was a ‘leap,’ and noted that most patients could still access Sanofi’s product. Also, the fourth factor – whether anticompetitive effects outweighed procompetitive effects – was not met, in part because ‘intent to harm a rival, protect and maximize profits, or do all the business if they can, is neither actionable nor sanctioned by the antitrust laws.’ 
Finally, the court held that the facts indicated that exclusive contracts are ‘a normal competitive tool within the [EAI drug] industry,’ satisfying the seventh ZF Meritor factor. Therefore, the facts did not meet the ZF Meritor rule of reason test for exclusive dealing because ‘the record show[ed] that Mylan’s exclusive contracts were relatively short in duration and easily terminable, they were not the product of any unlawful coercion on Mylan’s part, and they didn’t foreclose Sanofi from competing in the EAI drug market.’ 
Separately, the court determined that Sanofi’s failure to provide facts to meet the rule of reason analysis for exclusive dealing meant that, like the Third Circuit in Eisai, Inc v Sanofi Aventis US, LLC, there was no requirement to address the defendant’s argument that its conduct was not anticompetitive under the price-cost test. In the process, though, the court restated the proper analysis for a price-cost test, which requires a showing that the defendant both (1) priced its product ‘below an appropriate measure of cost,’ and (2) had a dangerous probability of recouping its investment in below-cost prices. ‘A plaintiff’s characterization of its claim as an exclusive dealing claim does not take the price-cost test off the table,’ because ‘contracts in which discounts are linked to purchase (volume or market share) targets are frequently challenged as de facto exclusive dealing arrangements on the grounds that the discounts induce customers to deal exclusively with the firm offering the rebates.’  As such, the court noted that the question is whether ‘price is the clearly predominant mechanism of exclusion.’  If so, then ‘so long as the price is above-cost, the procompetitive justifications for, and the benefits of, lowering prices far outweigh any potential anticompetitive effects.’  Still, after reciting the test, the court concluded it did not need to determine whether price was the predominant mechanism of Mylan’s alleged exclusion because the facts would eventually fail on the rule of reason.
In addition, the court concluded that there was no antitrust injury. To show an antitrust injury, Sanofi had to point to how the ‘challenged conduct affected the prices, quantity or quality of goods or services, not just [Sanofi’s] own welfare.’  On prices, Sanofi’s expert calculated the price that Mylan would have charged but for competition from Sanofi, but, according to the court, did not ‘quantify what the price of EpiPen would have been but-for Mylan’s anti-competitive conduct – i.e., its exclusionary rebate contracts.’  Since, as Mylan’s expert argued, EpiPen prices dropped when Mylan began to rely more heavily on exclusive offers in response to competition from Sanofi, the court concluded that exclusivity led to lower prices – or at least did not increase prices to the extent of causing an antitrust injury. There was also insufficient evidence that Mylan’s conduct harmed output, as Mylan’s output increased over time and the court rejected Sanofi’s ‘assumption’ that ‘output would be higher in a competitive world.’  Finally, the court determined that Auvi-Q and EpiPen were ‘interchangeable,’ undermining Sanofi’s argument that Mylan’s conduct prevented consumers from accessing a purportedly better quality product in Auvi-Q.
Sufficiency of pleadings – monopolization and attempted monopolization
Altitude Sports & Entertainment, LLC v Comcast Corporation
A regional sports network that broadcasts local professional hockey, basketball, lacrosse, and soccer games in the Denver area sued a cable television provider that reaches 92 percent of cable customers in the Denver metropolitan area. The plaintiff, Altitude, alleged that the defendant, Comcast, both attempted to monopolize and actually did monopolize the Denver designated market area (DMA) regional sports programming market. The court granted Comcast’s motion to dismiss the monopolization claim, but allowed Altitude to move forward on its attempted monopolization claim.
To prove its monopolization claim, Altitude had to show that (1) Comcast had monopoly power in the Denver DMA regional sports programming market, (2) Comcast willfully acquired or maintained this power through exclusionary conduct, and (3) Comcast’s actions resulted in harm to competition. Addressing the third step first, the court ended its analysis after concluding that Altitude failed to allege that Comcast’s actions harmed competition. According to the court, Denver DMA regional sports programming market has two sides: a ‘sell side’ in which regional sports networks sell their content to multi-channel video programming distributors (MVPDs), and a ‘buy side’ in which consumers purchase the content packages from the MVPDs. Altitude alleged that after Comcast made Altitude unavailable to Comcast subscribers in 2019, amid contract negotiations, Comcast lost customers to other viewing options, such as ‘cord-cutting.’  The court concluded that this loss of customers to other ‘buy side’ competitors indicated that Altitude had not met its burden of showing that Comcast’s actions harmed competition on the ‘buy side,’ even if the court assumed there was harm on the ‘sell side’ of the market. As such, the court dismissed the monopolization claim.
The court allowed Altitude’s attempted monopolization claim to go forward, however. To establish attempted monopolization, Altitude had to allege that Comcast (1) engaged in predatory or anticompetitive conduct, (2) had a specific intent to monopolize, and (3) had a dangerous probability of achieving monopoly power.
On the first prong, the court determined that Altitude adequately pleaded anticompetitive conduct both by citing an alleged refusal to deal, which pointed to Comcast’s alleged misrepresentations to customers about Altitude, and describing Comcast’s purported ‘scheme to vertically integrate Altitude’s programming into Comcast’s other NBC-branded sports programming.’  The refusal-to-deal conclusion was the most substantial, with the court stating that to plead a refusal to deal, Altitude had to allege that (1) Comcast and Altitude had a preexisting, voluntary, and profitable course of dealing with a ‘rival,’ (2) Comcast’s discontinuation of the preexisting course of dealing suggested ‘a willingness to forsake short-term profits to achieve an anti-competitive end,’ and (3) Comcast’s ‘refusal to deal was part of a larger anticompetitive enterprise.’  According to the court, the parties had engaged in a profitable relationship from 2004 to 2019. Since the court found it is plausible that Comcast is ‘barely’ in the regional sports programming market ‘as a rapid entrant,’ Altitude met the first prong. Next, the court determined that Comcast’s alleged loses to ‘cord-cutting’ and purported sacrifices of short-term profits for the long-term goal of driving Altitude out of the market was ‘thin, but plausible.’  Finally, the court concluded that Altitude adequately alleged ‘irrational conduct but for its tendency to harm competition’ by describing Comcast’s purported choice to sacrifice the profits of the Altitude relationship, thereby meeting the final prong of the refusal-to-deal test.
Altitude also met the second prong of the attempted monopolization test, which requires a specific intent to monopolize. The court expressed skepticism about whether Altitude could produce evidence of Comcast’s alleged specific intent to monopolize the Denver DMA regional sports programming market by vertically integrating once Altitude is forced out of the market. Yet, it concluded the claim was at least plausible in light of the concept that ‘Rule 12(b)(6) dismissals are particularly disfavored in fact-intensive antitrust cases.’ 
Finally, the court found that Altitude’s complaint sufficiently pleaded that Comcast has a dangerous probability of achieving monopoly power. The court cited the Horizontal Merger Guidelines’ definition of a ‘rapid entrant,’ and concluded that Altitude sufficiently pleaded that Comcast was in the Denver DMA regional sports programming market because it could rapidly enter. The court acknowledged that ‘Altitude has not cited a case holding that a zero [percent] market share defendant had a dangerous probability of monopolizing a market.’  But, absent Tenth Circuit authority holding that a rapid entrant with zero percent market share is not in the market, the court permitted ‘Altitude’s novel theory’ to go forward. It noted that rapid entry is a ‘fact-intensive inquiry,’ and Comcast’s scale and success as a regional sports network in other geographic areas make Altitude’s allegations plausible enough to survive the motion to dismiss.
Sufficiency of the pleadings – price-fixing conspiracy
Budicak, Inc v Landing Trade Group, LLC
The plaintiff in this case alleged a price-fixing conspiracy in violation of section 1 of the Sherman Act. This required a showing of ‘(1) a contract, combination, or conspiracy among two or more independent actors; (2) that unreasonably restrains trade; and (3) is in, or substantially affects, interstate commerce.’  The plaintiff met the first prong by alleging that Lansing, a commodities trading group, had conversations with Cascade, a trade publication, about its intent to delay shipping certificate cancellations to drive profits, with an intent for Cascade to publish articles to ‘give [the Scheme] the gas],’ and later pay Cascade employees to publish information that helped Lansing.
Next, the court determined that the rule of reason applied to the analysis, since Lansing and Cascade are not horizontal competitors, and per se treatment has historically been reserved for horizontal price-fixing, bid rigging, market divisions, and production limitations – types of conduct in which court have ‘considerable experience’ with the type of allegations at issue. The court agreed with the Second Circuit that market definition allegations are ‘deeply fact-intensive,’ and concluded it was sufficient for the plaintiffs to plead that the proper market is wheat futures and options contracts on the Chicago Board of Trade. Further, the plaintiffs adequately alleged market power and the ability to shift the price of wheat futures and options by pointing to the allegation that Lansing held all available registered wheat shipping certificates in March 2015, and that Cascade was a ‘widely circulated and read’ publication in the industry. And, since the court found that the plaintiff had alleged indirect evidence that the alleged conduct led to trading that did not reflect true supply and demand, the plaintiffs met their burden of pleading an unreasonable restraint of trade. Because Lansing conceded the third prong, this was sufficient to state a claim for price-fixing in violation of section 1.
Sufficiency of the pleadings – refusal to deal
H&C Animal Health, LLC v Ceva Animal Health, LLC
A pet products distributor alleged that an animal pharmaceuticals manufacturer and retailer refused to provide pheromone-based pet-behavior products, allowing the defendant to raise prices after the supply in the marketplace was diminished. Analyzing a motion to dismiss, the court said the plaintiff needed to allege two things to meet the test for a refusal to deal in violation of section 2 of the Sherman Act: (1) ‘a preexisting voluntary and presumably profitable course of dealing between the monopolist and rival’ and (2) ‘the monopolist’s discontinuation of the preexisting course of dealing must suggest a willingness to forsake short-term profits to achieve an anti-competitive end.’  The court determined that the key word in the first part of the test was ‘rival.’  According to the court, ‘prior to entering into a distribution agreement,’ the plaintiff distributor and the defendant manufacturer ‘were not rivals’ for the sale of pheromone-based pet behavior products. Because it could not find support for the proposition that Aspen Skiing extends ‘to situations in which manufacturers refuse to supply product or raise prices on product to distributors’ when the distributor is not also a horizontal rival, the court ended its analysis after determining that the plaintiff failed to meet the first prong of the refusal-to-deal test.
Sufficiency of the pleadings – tying and refusal to deal
Chase Manufacturing, Inc v Johns Manville Corporation
The plaintiff in this case successfully argued that the defendant’s actions in allegedly using its market power in a tying market (fiberglass and expanded perlite) to coerce customers to also purchase products in the tied market (calsil) created a per se tying violation. In the Tenth Circuit, the per se tying test requires a plaintiff to show that ‘(1) two separate products are involved; (2) the sale or agreement to sell one product is conditioned on the purchase of the other; (3) the seller has sufficient economic power in the tying product market to enable it to restrain trade in the tied product market; and (4) a “not insubstantial” amount of interstate commerce in the tied product is affected.’  The plaintiff met all four requirements. The first, second, and fourth prongs were straightforward, based on the allegations. On the third prong, by pointing to market dynamics in which the defendant is one of three manufacturers in the fiberglass and expanded perlite market (the tying market) amid capacity constraints, the plaintiff met its burden of alleging market power without the court having to analyze the allegations relating to market shares.
Separately, the plaintiff also included claims for refusal to supply, which the court analyzed under the refusal-to-deal standard. The defendant allegedly discontinued sales of perlite and calsil to a specific distributor to prevent the plaintiff from obtaining those products. The court concluded that these allegations – that the defendant was ‘effectively holding its products ransom’ – were sufficient to survive a motion to dismiss.
Finally, the plaintiff alleged that the defendant’s exclusive dealing harmed competition in the calsil marketplace. The court noted that an exclusive dealing claim must show that a defendant’s actions ‘foreclose competition in a substantial share of the line of commerce affected.’  Since the plaintiff alleged that the defendant’s exclusive contracts with distributors prevented the plaintiff from accessing all but two of the 218 largest store locations for calsil in the United States, the court determined that it met its pleading burden.
 CSMN Invs., LLC v. Cordillera Metro. Dist., 956 F.3d 1276, 1279 (10th Cir. 2020).
 Id. at 1280.
 Id. at 1281.
 Id. at 1281–82.
 Id. at 1282.
 Id. at 1283 (quoting BE & K Const. Co. v. NLRB, 536 U.S. 516, 525 (2002)).
 Id. (citing Pro. Real Est. Invs., Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49, 60–1 (1993)).
 Id. (citing Pro. Real Est. Invs., Inc., 508 U.S. at 60).
 Id. at 1287.
 Id. at 1287 (quoting Pro. Real Est. Invs., Inc., 508 U.S. at 62).
 Id. at 1283.
 In re EpiPen (Epinephrine Injection, USP) Mktg., Sales Pracs. & Antitrust Litig., ___ F. Supp. 3d ___, No. 17-MD-2785-DDC-TJJ, 2020 WL 8374137 at *1 (D. Kan. Dec. 17, 2020).
 Id. at *35.
 Id. (citing US v. Grinnell Corp., 384 U.S. 563, 570–71 (1966))
 Id. at *35.
 Id. at *39.
 Id. at *40 (citing McWane, Inc. v. FTC, 783 F.3d 814, 834 (11th Cir. 2015); ZF Meritor, LLC v. Eaton Corp., 696 F.3d 254, 271 (3d Cir. 2012)).
 Id. at *40 (quoting ZF Meritor, 696 F.3d at 271–72).
 Id. at *42.
 Id. at *43.
 Id. at *44.
 Id. at *45.
 Id. at *46 (citing LePage’s Inc. v. 3M, 324 F.3d 141, 159 (3d Cir. 2003)).
 Id. at *50.
 Id. at *51.
 Id. at *49 (quoting SCFC ILC, Inc. v. Visa USA, Inc., 36 F.3d 958, 969 (10th Cir. 1994)).
 Id. at *48 (quoting Concord Boat Corp. v. Brunswick Corp., 207 F.3d 1039, 1062 (8th Cir. 2000)).
 Id. at *51.
 Id. at *38 (citing Eisai, Inc. v. Sanofi Aventis U.S., LLC, 821 F.3d 394, 409 (3d Cir. 2016)).
 Id. at *36 (citing Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co., Inc., 549 U.S. 312, 318, (2007); Brooke Grp. Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 222 (1993); Eisai, Inc. v. Sanofi Aventis U.S., LLC, 821 F.3d 394, 408 (3d Cir. 2016)).
 Id. at *37 (quoting ZF Meritor, LLC v. Eaton Corp., 696 F.3d 254 (3d Cir. 2012)
 Id. at *38.
 Id. at *59 (quoting Cohlmia v. St. John Med. Ctr., 693 F.3d 1269, 1281 (10th Cir. 2012)).
 Id. at *59 (emphasis in original).
 Id. at *60.
 Altitude Sports & Ent., LLC v. Comcast Corp., ___ F. Supp. 3d ___, No. 19-CV-3253-WJM-MEH, 2020 WL 8255520 at *1 (D. Colo. Nov. 25, 2020).
 Id. at *4.
 Id. at *18.
 Id. at *6 (citing Lenox MacLaren Surgical Corp. v. Medtronic, Inc., 762 F.3d 1114, 1119 (10th Cir. 2014).
 Id. at *7.
 Id. at *3.
 Id. at *7.
 Id. at *15.
 Id. at *6 (citing Lenox MacLaren Surgical Corp., 762 F.3d at 1129).
 Id. at *8.
 Id. at *10 (citing Novell, Inc. v. Microsoft Corp., 731 F.3d 1064, 1075 (10th Cir. 2013)).
 Id. at *10.
 Id. at *11.
 Id. at *12.
 Id. (quoting Spanish Broad. Sys. of Fla., Inc. v. Clear Channel Commc’ns, Inc., 376 F.3d 1065, 1070 (11th Cir. 2004)).
 Id. at *15.
 Id. at *14 (citing U.S. Dep’t of Justice and Fed. Trade Comm’n, Horizontal Merger Guidelines § 5.1 (Aug. 19, 2010)).
 Id. at *14.
 Budicak, Inc. v. Lansing Trade Grp., LLC, 452 F. Supp. 3d 1029, 1052 (D. Kan. 2020).
 Id. (citing TV Commc’ns Network, Inc. v. Turner Network Television, 964 F.2d 1022, 1027 (10th Cir. 1992)).
 Id. at 1052
 Id. at 1053–54 (“Plaintiffs provide no cases, and the Court has uncovered none, where a court afforded per se analysis to a price-fixing conspiracy between non-competitors.”).
 Id. at 1056 (quoting Todd v. Exxon Corp., 275 F.3d 191, 199–200 (2d Cir. 2001)).
 Id. at 1057.
 H&C Animal Health, LLC v. Ceva Animal Health, LLC, ___ F. Supp. 3d ___, No. 20-2271-JWB, 2020 WL 6384303, at *3–4 (D. Kan. Oct. 30, 2020).
 Id. at *5 (quoting Novell, Inc. v. Microsoft Corp., 731 F.3d 1064, 1074–75 (10th Cir. 2013)).
 Id. at *6–7.
 Id. at *7.
 Chase Mfg., Inc. v. Johns Manville Corp., No. 19-CV-00872-MEH, 2020 WL 1433504, at *3 (D. Colo. Mar. 23, 2020).
 Id. at *3 (quoting Suture Express, Inc. v. Owens & Minor Distrib., Inc., 851 F.3d 1029, 1037 (10th Cir. 2017)).
 Id. at *7–8.
 Id. at *11 (citing Novell, Inc. v. Microsoft Corp., 731 F.3d 1064, 1072 (10th Cir. 2013)).
 Id. at *12.
 Id. at *12 (quoting Crocs, Inc. v. Effervescent, Inc., 248 F. Supp. 3d 1040, 1058 (D. Colo. 2017)).