Ohio v. American Express: The Supreme Court Credits American Express’s Anti-Steering Provisions

In a 5-4 decision in Ohio v. American Express, the Supreme Court affirmed that the anti-steering provisions of American Express’s merchant agreement do not violate Section 1 of the Sherman Act.

Credit card companies’ core business involves two transactions. First, the credit card company provides credit services to its cardholders, as well as additional benefits such as frequent flier miles, cash back, etc. Second, in exchange for a per-transaction fee, the credit card company assumes the risk and costs the merchant would otherwise incur in extending credit to its customers. The credit card company also provides the merchant a customer base that will be more likely to patronize those merchants that accept the credit card.

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Carl Hittinger, Tyson Herrold Author Article that Assesses Congressional Attempts to Update FTC Merger Review Process

Partner Carl Hittinger and Associate Tyson Herrold authored an article published June 22, 2018, by The Legal Intelligencer. The article, “How Smart is the Proposed Merger Review SMARTER Act?,” discusses a long-awaited bill before Congress that would significantly streamline the standards for the Federal Trade Commission’s (FTC) merger review process and finally align the different standards of the FTC and the Department of Justice for obtaining preliminary injunctions in merger reviews, which will have a major impact on corporations.

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Did You Know the ‘Plausibility’ Standard Can Be Used for More Than Pleading Antitrust Claims?

Partners Robert Abrams, Gregory Commins, and Danyll Foix authored an article published in the Global Competition Review’s “The Antitrust Review of the Americas 2018.” Their article reviews how the “plausibility” pleading standard announced by the Supreme Court in recent years has changed not only how claims are alleged, but also how this standard may be useful in motions to dismiss, strike, and amend antitrust and class action claims. In these motions, three decisive substantive issues have emerged – whether standing is plausibly alleged, whether the alleged class includes uninjured members, and whether the alleged class members are ascertainable. Their article considers plausibility-based motions that can challenge claims at the onset of antitrust and class action litigation and the emerging substantive issues to be considered by parties pursuing or defending antitrust class action litigation.

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Class Actions Now Flowing From FTC and DOJ’s No-Poach Enforcement

Partner Carl Hittinger and Associate Tyson Herrold authored an article published by The Legal Intelligencer on May 5, 2018. The article, “Class Actions Now Flowing from FTC and DOJ’s No-Poach Enforcement,” discusses the increase of class action lawsuits brought under Section 1 of the Sherman Act against national franchises for imposing employee no-hire agreements on their franchisees.

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DOJ Now Targeting HR Professionals for Criminal Antitrust Violations

Partner Carl Hittinger and Associate Tyson Herrold authored an article published by The Legal Intelligencer on March 30, 2018. The article, “DOJ Now Targeting HR Professionals for Criminal Antitrust Violations,” examines the Department of Justice’s (DOJ) ongoing enforcement of certain no-poach employee and wage-fixing cases. Specifically, the article lists DOJ complaints successfully filed against employers and analyzes the difference between naked restraints and ancillary restraints.

Hittinger and Herrold report that Makan Delrahim, assistant attorney general for the antitrust division of the DOJ, has recently announced that no-poach and wage-fixing collusive agreements will remain a top priority at the Trump DOJ and significantly will be prosecuted not only as civil antitrust violations but also as criminal antitrust violations against companies and involved individuals.

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The Department of Justice Weighs In on the Application of North Carolina Dental Examiners to the Florida State Bar

The Department of Justice (DOJ) recently took the uncommon step of submitting an amicus brief to weigh in on a motion to dismiss. TIKD Services, LLC v. The Florida Bar, No. 1:17-cv-24103 (S.D. Fla. filed Nov. 8, 2017), Dkt. 115. Specifically, the DOJ intervened to clarify whether the analysis set forth in the Supreme Court’s decision in North Carolina State Board of Dental Examiners v. FTC, 135 S. Ct. 1101 (2015), about which we wrote here and here, applied to the Florida Bar’s attempts to regulate a new technology that simplifies contesting a traffic ticket in Florida.

In TIKD Services, the plaintiff TIKD developed a cellphone app for drivers who receive a traffic ticket. The app allows the user to upload the ticket, pay a fixed fee and contest the ticket without having to appear in court. Although the app developer is not an attorney, the user’s case is assigned to one of a network of independent attorneys licensed in Florida, and the user and the attorney enter into a separate representation agreement.

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Should a Judge’s Personal Judicial Experience Affect Antitrust Pleadings?

When the U.S. Supreme Court scrapped Conley v. Gibson’s “no set of facts” federal pleading standard in Twombly (2007) and Iqbal (2009), courts initially struggled to apply the inherently ambiguous “plausibility” standard. In the immediate aftermath, some courts frankly misconstrued Twombly and Iqbal to invite a Daubert-style “gate keeper” appraisal of complaints in which judges could (and should) prune claims that, based on their own personal experience with the subject matter at issue, appeared dubious. One potential source of this confusion is a single sentence in the Supreme Court’s Iqbal opinion: “Determining whether a complaint states a plausible claim for relief will … be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” While the U.S. Court of Appeals for the Third Circuit has largely rectified this misconception, courts occasionally toss daunting complex claims based on skepticism and a concern about costly and burdensome discovery rather than a correct application of the plausibility standard. A recent antitrust decision by U.S. District Judge Mark A. Kearney of the Eastern District of Pennsylvania provides a model framework for analyzing plausibility.

Read the full article via The Legal Intelligencer.

Join Us for a Teleconference on New ABA Publication, “Antitrust Class Actions Handbook”

The ABA recently released a new publication that should be of interest to antitrust practitioners, the Antitrust Class Actions Handbook, Second Edition. The Handbook comprehensively addresses issues that arise before, during and after the filing of an antitrust class action. The ABA Antitrust Section is hosting a teleconference featuring Handbook authors and editors this Friday, February 23, 2018, at 12 p.m. EST/11 a.m. CST/9 a.m. PST. BakerHostetler partner Dan Foix, one of the authors, will be a speaker.

As a bonus, teleconference attendees will receive a code allowing them a 20% discount on purchase of the Handbook.  The teleconference description with a button for registration can be found here.

 

No Health Care Merger Too Small for the FTC to Take an Antitrust Look

In our November and December 2016 articles, we discussed the Federal Trade Commission’s proclivity to challenge health care mergers, even when the purported anticompetitive effects of the relatively economically limited merger would be confined to a local geographic region. For example, in 2014, the FTC, joined by the Idaho state attorney general, in St. Alphonsus Medical Center Nampa v. St. Luke’s Health System successfully forced two small hospitals to unwind a consummated merger that affected only 81,557 people in the town of Nampa, Idaho. In 2016, the FTC blocked the merger of Penn State Hershey Medical Center and Pinnacle Health System, both of which mostly operate in a small, four-county area surrounding Harrisburg, Pennsylvania. In 2017, the FTC  in In re CentraCare Health challenged and obtained a favorable settlement in a merger in St. Cloud, Minnesota involving a physician group that operated only four health clinics employing only 40 doctors. The merger was small enough to avoid triggering the Hart Scott Rodino Act’s reporting rules.

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Has the Third Circuit Just Scrambled ‘Umbrella Damages’?

A recent decision by the Third Circuit permits plaintiffs to pursue antitrust damages for egg products supplied by non-conspiring parties. This decision could represent a crack in the “umbrella damages” rule that precludes plaintiffs from seeking damages for transactions with parties that are not part of an alleged antitrust conspiracy.

Umbrella damages often come up in cases where an alleged conspiracy could increase the price level across a market. In such situations, it is said that non-conspirators are able to increase their prices without fear of losing market shares because they are protected by the conspiracy’s price “umbrella.” Courts usually cite two main rationales for concluding that plaintiffs lack antitrust standing to recover damages for alleged anticompetitive prices paid to non-conspirators selling under a conspiracy’s umbrella. First is the high degree of uncertainty with attributing the non-conspirators’ prices to the conduct of the alleged conspirators. See Mid-West Paper Prods. Co. v. Cont’l Group, 596 F. 2d 573 (3rd Cir. 1979). Second is the amount of speculation inherent in tracing the distribution chain and apportioning the amount of overcharge to the alleged conspirators to avoid multiple liability. See Illinois Brick Co. v. Ill., 431 U.S. 720 (1977).

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