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Antitrust Advocate

News, developments and practical advice from the antitrust litigation trenches

Supreme Court Rules That “Pay for Delay” Generic Drug Patent Settlements Are Not Shielded From Antitrust Liability

By Jonathan Lewis and Lee Simowitz on Posted in Antitrust Litigation, FTC Act, Healthcare, Patents

The Supreme Court has held that the antitrust laws may forbid patent settlements that delay the market entry of generic drugs in return for large payments from manufacturers of competing branded drugs.  The Court’s ruling rewarded the dogged efforts of the Federal Trade Commission to expose those settlements—which the FTC labels “pay for delay”—to antitrust scrutiny.

Under the Hatch-Waxman Act, manufacturers can bring generic drugs to market through an accelerated approval procedure by the Food and Drug Administration, if the generic manufacturer asserts that the patent on the branded drug is either invalid or not infringed.  Makers of patented drugs, however, can hold up FDA approval of the generic by filing patent infringement litigation.  Those infringement cases are often settled when the branded manufacturer pays large sums—sometimes hundreds of millions of dollars—to the generic manufacturer in return for its agreement not bring the generic to market for several years.  In the interim, the branded drug manufacturer can earn substantial profits free from generic competition.  These settlements are often referred to as “reverse payments,” because they are based on payments by the branded drug manufacturer plaintiff to the generic manufacturer defendant, unlike the more common pattern in which defendants pay plaintiffs to settle litigation.

The FTC has argued for a decade that such settlements amounted to non-competitive agreements of the sort condemned by the antitrust laws.  Several federal courts of appeal, however, held that the settlements were lawful so long as their effects fell within the scope of the patent, i.e., that the exclusion of the generic was no greater than what would have resulted from a valid patent.

The Supreme Court, in a 5-3 opinion by Justice Breyer, held that the settlements could not be judged strictly on the basis of the potential scope of the drug patent because patents, he wrote, “may or may not be valid, and may or may not be infringed.”  Instead, the Court explained, such settlements must be evaluated by application of the antitrust rule of reason, balancing the anticompetitive effect of exclusion of the generic product against the benefits of the settlement.  Otherwise, the Court said, “payment in return for staying out of the market . . . simply keeps prices at patentee-set levels, potentially producing the full patent-related . . . monopoly return while dividing that return between the challenged patentee and the patent challenger.  The patentee and the challenger gain; the consumer loses.”

The Court, however, rejected the FTC’s argument that reverse payment settlements should be regarded as presumptively unlawful, and should be evaluated under a “quick look” approach rather than the rule of reason’s potentially complex weighing of net competitive effects.  The Court said that “the likelihood of a reverse payment bringing about anticompetitive effects depends upon its size, its scale in relation to the payor’s anticipated future litigation costs, its independence from other services for which it might represent payment, and the lack of any other convincing justification.”

The case represents the third high profile litigation victory for the FTC in 2013.  Earlier this year, the Supreme Court agreed with the FTC that a general grant of governmental powers to a local hospital authority did not shield an allegedly anticompetitive hospital acquisition from antitrust challenge.  Only last month, the United States Court of Appeals for the Fourth Circuit upheld the FTC’s conclusion that a state dental board made up almost entirely of dentists could not forbid non-dentist providers from performing tooth whitening services.

All three cases have a common core.  In each instance, at the FTC’s request, courts rejected attempts to carve out economic preserves in which the antitrust laws would not apply.  Moreover, in each instance, the courts appear to have been influenced by the FTC’s arguments that application of the antitrust laws would help reduce health care costs. 

Drawing on the experience of members of our intellectual property and healthcare teams, our team of antitrust lawyers has the depth and experience to handle the most significant antitrust litigation and transactions.  If you have any questions regarding this matter, or would like to learn more about our healthcare antitrust capabilities, please contact Jonathan L. Lewis, jllewis@bakerlaw.com or 202.861.1557, or Lee H. Simowitz, lsimowitz@bakerlaw.com or 202.861.1608.

Update: Are the Regulators Coming for the Patent Trolls?

By Bill Devinney on Posted in Patents

 

We recently wrote about a workshop held by the Department of Justice and the Federal Trade Commission to discuss perceived abuses by patent acquisition entities.  The workshop included a panel discussion about whether the potential harm to innovation and competition caused by PAEs, particularly with regard to patent aggregators who may acquire market power, or with PAEs who coordinate their activities with patent owners or competitors of the defendants, could violate the Sherman Act.  Ultimately, the panelists seemed to agree that PAEs warrant antitrust scrutiny, but actions under the Sherman Act would present challenges, such as defining the relevant markets, or avoiding the Noerr Pennington doctrine.

The White House recently released a paper by the National Economic Council and the Council of Economic Advisors, as well as legislative recommendations and executive actions based on the findings in that report.  Despite acknowledging the potential competitive benefits of patent aggregators, the report concluded that “patent assertion entities (PAEs) (also known as ‘patent trolls’) have had a negative impact on innovation and economic growth.”  Like the workshop panel, the report concluded that PAEs take advantage of the uncertain scope of many patents by threatening to sue thousands of entities at once, often without specific evidence of any infringement.  Many targets simply settle rather than face the uncertain prospect of patent infringement litigation.  Those defendants that proceed to verdict often spend far more on attorneys’ fees than would have been required for a patent license.

The report confirmed the workshop panel’s observation that PAEs are immune from some of the factors that normally restrain patent owners when filing suit.  Primarily, PAEs need not fear counterclaims by potential infringers, or reputational damage in the marketplace, because they do not practice any patents.

Moreover, according to the report, PAEs suppress innovation and competition at all levels of the market.  Although PAEs do extract settlements from large companies, most PAE suits target small and inventor-driven companies.  Also, PAEs are increasingly targeting end users of products, including many small businesses. The report’s findings are consistent with other studies evaluating PAEs:  “A range of studies have documented the cost of PAE activity to innovation and economic growth.”

In addition to the report, the Administration announced several legislative recommendations and executive actions.  The executive actions included holding additional workshops by the DOJ and FTC to discuss potential agency responses to PAE activity.  Because it believed the previous workshops provided invaluable information, the Administration will hold more workshops to seek support and consensus for policies and laws to address the perceived abuses by PAEs.

While the White House’s recent releases do not specifically address antitrust enforcement, they suggest the Administration will support efforts by the DOJ and FTC to reign in anticompetitive activity by PAEs, including prosecution under the Sherman Act when appropriate.

Antitrust Law Encourages Accountable Care Organizations (“ACOs”) Formation

By Jonathan Lewis and Lee Simowitz on Posted in Healthcare

Once again, the staff of the Federal Trade Commission (“FTC”) has rebutted claims by physician groups that state legislation is needed to allow independent physicians to collaborate. 

In support of legislation introduced in Connecticut, eight medical organizations representing more than 9,000 Connecticut physicians claimed that “federal antitrust laws prohibit Connecticut physicians from collective discussions about certain critical aspects of care coordination,” including the kinds of negotiations necessary to form ACOs.  The FTC submitted a letter to the Connecticut legislature urging the rejection of the legislation sought by the physicians and disputing the physicians’ assertion that the antitrust laws are a barrier to the formation of efficient collaborations that benefit consumers.  “This premise,” according to the FTC staff, “is simply and categorically wrong.”

Well before the passage of the Patient Protection and Affordable Care Act (“ACA”) and its introduction of Medicare’s Shared Savings Programs, the federal antitrust agencies—the FTC and the Department of Justice—provided general guidance on collaborations among competitors, issued joint statements specifically geared toward the application of the antitrust laws to the healthcare industry, including physician network joint ventures and other provider collaborations, and made public opinion letters regarding the antitrust treatment of proposed healthcare collaborations.  After the passage of the ACA, the federal antitrust agencies and Centers for Medicare and Medicaid Services (“CMS”) even worked together to develop policies that encourage participation in ACOs and ensure coordination among and between the agencies.

The antitrust agencies also released a joint statement explaining their enforcement policy approach to ACOs is “to ensure that health care providers have the antitrust clarity and guidance needed to form procompetitive ACOs that participate in both Medicare and commercial markets.”  In addition, the antitrust agencies established a process for ACOs to seek expedited review if concerned about antitrust risk.  In April, for example, the antitrust agencies released a summary of their activities in this area noting that they received two requests for voluntary expedited review and fielded more than thirty questions.

In the words of the FTC, “the antitrust laws do not stand in the way of health care providers in Connecticut” or elsewhere “who form ACOs or other collaborative arrangements that are likely to reduce costs and benefit health care consumers through improved efficiency and improved coordination of care.”

Drawing on the experience of members of our healthcare team in complementary areas of health law, including transactions, tax, labor and employment, and healthcare regulation, our team of antitrust lawyers have the depth and experience to handle the most significant antitrust healthcare matters.  If you have any questions regarding this matter, or would like to learn more about our healthcare antitrust capabilities, please contact Jonathan L. Lewis, jllewis@bakerlaw.com or 202.861.1557, or Lee H. Simowitz, lsimowitz@bakerlaw.com or 202.861.1608.

NC Dentists Can’t Stop Competition from Other Providers of Teeth-Whitening Services

By Jonathan Lewis and Lee Simowitz on Posted in Antitrust Litigation, FTC Act, Government Investigations, Healthcare

Court ruling may impact how professionals attempt to limit competition from alternative providers.

The North Carolina State Board of Dental Examiners (“Board”) failed to convince the United States Court of Appeals for the Fourth Circuit that the Board’s successful effort to “expel non-dentist providers from the North Carolina teeth-whitening market” is immune from antitrust attack.  Instead, in a ruling last week, the Court found the case to be “about a state board run by private actors in the marketplace taking action outside of the procedures mandated by state law to expel a competitor from the market.”  The Court affirmed the ruling by the Federal Trade Commission (“FTC”) that the Board’s connection with state government was insufficient to shield the Board from the antitrust laws.

With the growth and availability of teeth-whitening services from non-dentist providers, a number of dental associations across the country have embarked on a campaign to limit competition from these alternative providers.  In some states, legislation was introduced to define the practice of dentistry to include teeth-whitening except for use of an over-the-counter product for personal use.  In other states, like North Carolina, the dental boards took the view that the provision of teeth-whitening services requires a dental license and sent cease-and-desist letters to stop these competitive teeth-whitening services.

After receiving complaints from dentists about non-dentists offering teeth-whitening services, often at a significantly lower price than offered by dentists, the Board sent at least 47 cease-and-desist letters to 29 non-dentist teeth-whitening providers.  Those letters, among other things, demanded that the non-dentist cease-and-desist “all activity constituting the practice of dentistry.”  The Board’s letters, the Court said, “effectively caused non-dentists to stop providing teeth-whitening services in North Carolina and also caused manufacturers and distributors of teeth-whitening products used by these non-dentist providers to exit and hold off entering North Carolina.”  The Board went even further, and sent cease-and-desist letters to landlords who rented kiosk space in malls to teeth-whitening services.

The FTC sued the Board to stop its exclusion of non-dentist teeth whiteners from the market and it won.  On appeal, the Court swiftly rejected the Board’s attempt to justify its efforts to exclude non-dentist teeth whiteners on health and safety grounds, and also made quick work of the Board’s main argument—that it is exempt from the antitrust laws under the “state action” doctrine, which exempts from the antitrust laws anticompetitive restraints imposed by the states “as an act of government.”

The Court identified three ways to qualify for an antitrust exemption under the “state action” doctrine:  (1) state legislature and state supreme courts when acting legislatively automatically qualify as sovereign entities; (2) private actors can qualify when acting pursuant to a “clearly articulated and affirmatively expressed [] state policy” and their conduct is “actively supervised by the State itself”; and (3) even without active state supervision, municipalities and “substate governmental entities” qualify “when they act pursuant to state policy to displace competition with regulation or monopoly public service.”

The Board argued that, as a state agency, it was acting “pursuant to state policy to displace competition with regulation” and, thus, qualified for an antitrust exemption under number (3) above.  But the Court rejected the Board’s claim that it is a state agency, concluding instead that it is a private actor.  Significantly, the Court noted that even though the Board is a state created agency charged with granting dental licenses that can also seek a court order enjoining the unlicensed practice of dentistry, six of its eight members are active dentists that are elected by other dentists.  As such, the Court agreed with the FTC that “when a state agency is operated by market participants who are elected by other market participants, it is a ‘private’ actor” that  must satisfy the requirements under number (2) above to qualify for an antitrust exemption.

Having rejected the Board’s claim that it automatically qualified for an antitrust exemption, the Court also was unconvinced by the Board’s other argument that the “‘particular anticompetitive acts’” being challenged were approved by the state.  The Court noted that “the cease-and-desist letters were sent without state oversight and without the required judicial authorization.”

The Court then went on to affirm the FTC’s other findings that:  (1) the Board has the capacity to conspire under § 1 of the Sherman Act; (2) the Board’s members are separate economic actors who cannot escape liability under § 1 of the Sherman Act by organizing under a “single umbrella”; (3) the Board engaged in a combination or conspiracy under § 1 of the Sherman Act; (4) the Board’s behavior was likely to cause significant anticompetitive harms, because “[i]t is not difficult to understand that forcing low-cost teeth-whitening providers from the market has a tendency to increase a consumer’s price for that service”; and (5) the Board’s behavior violated § 1 of the Sherman Act.

What does the Court’s decision mean for dental boards in other states?  The Court answered that question when it said “if the Board was actively supervised by the State, it would be entitled” to an antitrust exemption under the “state action” doctrine.  But dentists and other health care professionals should be mindful of the FTC’s continuing enforcement initiative to identify and challenge conduct at the outer bounds of the state action doctrine, and to prevent professional organizations from using that doctrine to build competitive obstacles to non-professional providers.

With more than 20 full-time antitrust lawyers in our Washington, D.C. office alone (more than 40 firm wide), we have the depth and experience to handle the most significant antitrust litigation and challenging transactions.  If you have any questions regarding this matter, or would like to learn more about our antitrust capabilities, please contact Jonathan L. Lewis, jllewis@bakerlaw.com or 202.861.1557, or Lee H. Simowitz, lsimowitz@bakerlaw.com or 202.861.1608.

Court Approves $158.6 Million Settlement Obtained by BakerHostetler’s Antitrust Lawyers

By Danyll Foix on Posted in Antitrust Litigation, BakerHostetler, Class Action Litigation, Sherman Act 1, Uncategorized

The U.S. District Court for the Eastern District of Tennessee granted final approval of the $158.6 million settlement in the ongoing Southeast Milk Antitrust Litigation lawsuit brought by BakerHostetler’s antitrust lawyers. 

Judge J. Ronnie Greer’s May 17, 2013 order approved the third settlement in the case.  It was entered between plaintiffs and defendant Dairy Farmers of America (DFA) and its related entities and included payments of $158.6 million.  The two previous settlements were reached in July 2011 with defendants Dean Foods for $140 million and Southern Marketing Agency and James Baird for $5 million plus changes in milk marketing conduct.  In total, the BakerHostetler team recovered more than $300 million for the class, which represents more than 70 percent of the estimated damages in the case.

In addition to the monetary award, DFA agreed to change its business conduct in the Southeast, including taking steps to increase raw milk prices; removing cancellation penalties on certain full-supply agreements with bottling plants and not entering into new full-supply agreements during the settlement’s term; modifying membership agreements to improve farmer ability to change cooperatives; enhancing price-related information on milk checks; boosting transparency through auditing and disclosure commitments; and facilitating delegate votes on additional meaningful changes to conduct. 

The BakerHostetler team working on behalf of the certified class of Southeastern dairy farmers was led by group chair Bob Abrams and includes Robert Brookhiser, Gregory Commins, Jr, Joanne Lichtman, Terry Sullivan, William DeVinney, Dan Foix, Carey Busen, Bridget Merritt and Nicole Skolout.

LIBOR Going Forward: How Will Dismissal of Antitrust Claims Affect Investigations and Private Claims?

By Bill Devinney on Posted in Antitrust Litigation, Government Investigations, Sherman Act 1

We recently wrote about the dismissal of the plaintiffs’ antitrust claims against banks involved in the LIBOR manipulation scandal for failure to allege an antitrust injury.  Since that dismissal, the court has granted plaintiffs leave to move to amend their complaints, although the court openly questioned whether the plaintiffs’ proposed amendments cured the defects in the antitrust claims.

The more interesting development, however, may be yet to come:  the decision’s effect on the ongoing investigations by the Department of Justice Antitrust Division, individual states’ antitrust bureaus, the European Commission, and individual European countries’ antitrust authorities.  The court downplayed the relevance of its findings to any criminal antitrust investigation: “even though a defendant might have violated the Sherman Act and thus be subject to criminal liability, it is a separate question whether Congress intended to subject the defendant as well to civil liability.”  Similarly, in concluding its opinion, the court observed that “there are many requirements that a private plaintiff must satisfy, but which government agencies need not.” 

Despite those observations, the court’s reasoning would cast doubt on whether defendants’ actions imposed any restraint on commerce, as required to prove a violation under Section 1 of the Sherman Act.  For example, the court found that the banks do not compete with one another in setting LIBOR, nor is the process intended to be competitive.  Even after LIBOR is set, it is used by all firms in the affected financial markets.  Thus, according to the court, the defendants never colluded to avoid competing in any market in which they otherwise should have been in competition.

The court’s opinion comes as the DOJ’s antitrust division and state antitrust bureaus continue to investigate the scandal, presumably, for violations of Section 1 of the Sherman Act or the various state equivalents.  Indeed, in 2009, the DOJ’s criminal and antitrust divisions filed a three-count criminal complaint against individual UBS traders, one count of which alleged that the defendants violated Section 1 of the Sherman Act by conspiring to restrain trade or commerce. Similarly, foreign antitrust and competition authorities, which often look to U.S. decisions as persuasive authority, launched their own investigations.  For example, Joaquin Almunia, the European Commissioner responsible for Competition, expects the EC’s first decisions on the LIBOR manipulation scandal by the end of the year, and Asian competition authorities are conducting their own investigations.  Targeted banks may have more bargaining power when negotiating a plea deal if the DOJ cannot credibly wield the Sherman Act as a prosecutorial cudgel.

The court’s opinion, therefore, may push both regulators and civil claimants to pursue fraud-based, rather than antitrust, theories of liability. UBS, in its plea agreement with the Department of Justice, has already pled guilty to one count of wire fraud, but not any antitrust violation.  Similarly, while some plaintiffs’ antitrust claims have been dismissed, other plaintiffs who brought fraud based claims remain viable.  Thus, few view the court’s opinion to mean that the banks will emerge unscathed.  But future claimants, whether public agencies or private plaintiffs, must carefully consider how to frame their claims for any losses arising out of the LIBOR manipulation.

NC Governor Signs Law Banning Most Favored Nations Provisions in Health Care Contracts

By Jonathan Lewis and Lee Simowitz on Posted in Healthcare, Sherman Act 1

Despite opposition and Blue Cross Blue Shield of North Carolina’s claim that it “has not used ‘most favored nation’ clauses in [its] new contracts and in fact [they are] not part of our strategy to use those clauses on contracts executed in the future,” on May 8 North Carolina’s Governor, Pat McCrory, signed into law legislation that outlaws the use of most favored nation (“MFN”) provisions in health care provider contracts.

The “Freedom to Negotiate Health Care Rates” legislation provides, in relevant part, that no contract with a health care provider shall:

(1) Prohibit, or grant a health insurance carrier an option to prohibit, the provider from contracting with another health insurance carrier to provide health care services at a rate that is equal to or lower than the payment specified in the contract.

(2) Require the provider to accept a lower payment rate in the event that the provider agrees to provide health care services to any other health insurance carrier at a rate that is equal to or lower than the payment specified in the contract.

(3) Require, or grant a health insurance carrier an option to require, termination or renegotiation of an existing health care contract in the event that the provider agrees to provide health care services to any other health insurance carrier at a rate that is equal to or lower than the payment specified in the contract.

(4) Require, or grant a health insurance carrier an option to require, the provider to disclose, directly or indirectly, the provider’s contractual rates with another health insurance carrier.

(5) Require, or grant a health insurance carrier an option to require, the nonnegotiated adjustment by the issuer of the provider’s contractual rate to equal the lowest rate the provider has agreed to charge any other health insurance carrier.

(6) Require, or grant a health insurance carrier an option to require, the provider to charge another health insurance carrier a rate that is equal to or more than the reimbursement rate specified in the contract.

The new law takes effect on October 1, 2013, and applies to contracts “entered into, renewed, or amended on or after that date.”

Early this year, we reviewed Michigan’s enactment of a ban on the use of MFN provisions by insurers, HMOs, and nonprofit health care corporations in contracts with providers.  That ban, which takes effect January 1, 2014, was cited by the Department of Justice Antitrust Division, Michigan, and Blue Cross Blue Shield of Michigan (“Michigan BCBS”) as a reason for ending nearly 2 ½ years of antitrust litigation challenging Michigan BCBS’s use of MFN provisions in its contracts with Michigan hospitals.  The parties to that litigation agreed the relief sought by DOJ and Michigan was now unnecessary and the litigation between them should be dismissed, because of the ban.

With more than 20 full-time antitrust lawyers in our Washington, D.C. office alone (more than 40 firm wide), we have the depth and experience to handle the most significant antitrust litigation and challenging transactions.  If you have any questions regarding this matter, or would like to learn more about our antitrust capabilities, please contact Jonathan L. Lewis, jllewis@bakerlaw.com or 202.861.1557, or Lee H. Simowitz, lsimowitz@bakerlaw.com or 202.861.1608.

DOJ Announces Changes to Antitrust Division’s “Carve Out” Practice

By Erik Raven-Hansen on Posted in Government Investigations

On April 12, 2013, the Department of Justice announced changes to the Antitrust Division’s carve out practices concerning negotiations with companies that plead guilty to criminal antitrust violations.  These changes were issued in the first statement of Assistant Attorney General Bill Baer.

Corporate plea agreements commonly contain a non-prosecution provision that insulates corporate employees from the threat of criminal prosecution.  The DOJ will often exclude, or “carve out,” certain employees, leaving them unprotected by the corporate plea agreement.  In the past, the Antitrust Division carved out only individuals (i) it believed to be particularly culpable and/or (ii) refused to cooperate with the government’s investigation.  The names of all carved-out individuals would then be made publicly available in the body of the plea agreement filed in the district courts where charges were brought.

Going forward, the Antitrust Division announced two notable changes to these practices.  First, the Division will only carve out employees who the government has “reason to believe were involved in criminal wrongdoing and who are potential targets of our investigation.”   Put otherwise, it will no longer carve out employees for reasons unrelated to culpability; therefore, the only employees the Division is now likely to carve out are those it believes may be appropriate to prosecute.  Employees may choose not to cooperate for a variety of legitimate reasons, and this change removes the concomitant negative stigma which previously affected those persons.

Second, the Antitrust Division will no longer “include the names of the carved-out employees” in the plea agreement itself.  Instead, these names will be listed in an appendix that the Division will request be filed under seal.  Although the courts retain the latitude to reject this request, this increases the likelihood that names of carved out individuals may be kept confidential, consistent with the public policy rationale that it is not ordinarily appropriate to publicly identify uncharged third-party wrongdoers.

Both of these policy changes appear to be welcomed by the antitrust bar.  In narrowing the employees who may be carved out, the Antitrust Division has increased the transparency of the carve out process, such that employees who are carved out will now know they are targeted for prosecution.  Similarly, the move to file the names of carved out employees under seal will prevent the public from inferring wrongdoing until those employees are formally charged.  Together, these policy changes evince the Division’s recognition of the importance of protecting uncharged individuals from the negative publicity of the plea bargain process, and offers corporations a greater degree of certainty in the outcome of the plea.

A copy of the statement issued by Assistant Attorney General Baer is available here.

Where (and What) Is the Harm?

By Bill Devinney on Posted in Antitrust Litigation, Sherman Act 1
Antitrust claims in LIBOR manipulation cases dismissed for lack of antitrust injury.

The recent LIBOR suppression scandal has given rise to numerous lawsuits, both individual and putative class actions based on several theories of recovery, that have been consolidated in the Southern District of New York.  LIBOR is calculated by averaging certain British Banking Association members’ estimates of the rate at which that bank could borrow funds in the inter-bank market.  But investigations by domestic and foreign regulatory agencies found that at least some banks consistently reported artificially low rates which, in turn, suppressed LIBOR. 

The resulting lawsuits included claims that the banks violated the antitrust laws by engaging in a price fixing conspiracy.  Specifically, the plaintiffs claimed that, because defendants conspired to suppress LIBOR—the benchmark “price” for borrowing funds—the plaintiffs paid more for, or earned less from, financial instruments purchased either directly from the defendants or in the secondary market.

Initially, the plaintiffs’ antitrust claims appear viable.  It is well-settled that manipulating any aspect of price, such as an interest rate component, violates the Sherman Act, and courts have allowed other cases alleging rate manipulation, such as reporting false data to distort benchmark rates for different commodities, to proceed as antitrust claims.  Moreover, regulatory investigations uncovered emails between different member banks asking, and agreeing, to report lower borrowing rates in order to suppress LIBOR.  Those emails tend to exclude the possibility that the banks acted independently—a requirement to plead a plausible antitrust conspiracy that is often found lacking by courts—rather than in concert.

Despite their facial appeal, the district court dismissed all of the plaintiffs’ antitrust claims.  The district court acknowledged that suppressing LIBOR could be a form of horizontal price fixing, and that at least some plaintiffs would have been injured by that suppression.

The court cautioned, however, that not every loss stemming from anticompetitive activity, even an alleged per se violation, inflicts an antitrust injury, i.e., an injury caused by restricting competition.  It did not matter, according to the court, that the banks competed with one another outside the LIBOR-setting process; the process of setting LIBOR itself, which gave rise to plaintiffs’ injuries, was not competitive.  Moreover, the banks did not achieve any competitive advantage over other banks, or other sellers of financial products, since those competitors also sold products tied to a suppressed LIBOR.  Thus, plaintiffs’ injuries did not arise from defendants’ restriction of competition.   Accordingly, the court dismissed all of the plaintiffs’ antitrust claims for failure to allege an antitrust injury.

Promoting Healthcare Competition – The FTC’s Recent Comments on State Legislative/Regulatory Efforts Impacting Competition from APRNs

By Jonathan Lewis and Lee Simowitz on Posted in Healthcare

In recent years, the Federal Trade Commission (“FTC”) has frequently commented on state efforts to either expand, or restrict competition faced by doctors from advanced practice registered nurses (“APRNs”).  Generally speaking, there are four broad types of APRNs:  (1) certified registered nurse anesthetists (“CRNAs”); (2) certified nurse midwives (“CNMs”); (3) clinical nurse specialists (“CNSs”); and (4) nurse practitioners (“NPs”), or advanced registered nurse practitioners (“ARNPs”).  The FTC has commented on bills, regulations, and resolutions affecting the scope of services that APRNs can provide in Alabama (CRNAs), Connecticut (APRNs), Florida (ARNPs), Kentucky, (APRNs), Missouri (CRNAs), Tennessee (CRNAs), Texas (APRNs), West Virginia (APRNs), and, most recently, Illinois (CRNAs).

The FTC’s initiatives are part of its competition advocacy function; the FTC recognizes that harm to competition can result as effectively from legal restrictions as from private actions.  The FTC has consistently argued against restrictions that exclude less costly consumer alternatives to doctors, lawyers, or other higher-priced professionals.  The FTC’s input is not always welcome in state and local forums, where doctors and other professionals often exercise strong influence over state legislatures and regulatory bodies.

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