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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The FTC Is Looking You Up and Down(stream): Insights From the Acting Director of the Bureau of Competition on Antitrust Enforcement for Vertical Mergers

Since Assistant Attorney General Delrahim’s inaugural remarks on vertical mergers (covered here), the business press has been atwitter about the antitrust enforcement agencies’ views of those mergers. Bruce Hoffman, the acting director of the Federal Trade Commission Bureau of Competition, recently delivered a speech explaining that the FTC will continue to review vertical mergers as part of its enforcement efforts, and providing insight into the FTC’s current analysis of proposed vertical mergers.[1]

As background, Hoffman described that the FTC applies the same broad analysis to vertical mergers that it does to horizontal mergers: it defines the relevant markets, tests theories of harm, and examines the efficiencies created by the merger. But vertical mergers pose analytical challenges that horizontal mergers do not. Horizontal mergers combine competitors, which necessarily reduces competition by removing substitute goods from the market. Although a horizontal merger may create efficiencies or other pro-competitive effects, they are not a natural consequence.

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New Antitrust Division Chief Prioritizes Regulation of Standard Setting Organizations

As we discussed in our May 2017 article, the current head of the DOJ’s Antitrust Division, Makan Delrahim, brings considerable intellectual property experience to the division. Delrahim started his legal career at the Office of the U.S. Trade Representative as deputy director for intellectual property rights. He later served on the Intellectual Property Task Force while serving a stint at the DOJ in the early 2000s. Then-acting Antitrust Division Chief R. Hewitt Pate referred to Delrahim as a “patent lawyer.” Therefore, it is not surprising that, in a Nov. 10 maiden speech at the University of California’s Transactional Law and Business Conference, Delrahim chose to discuss antitrust violations in IP licensing, specifically urging federal and state antitrust enforcement agencies to prioritize review of standard setting organizations (SSOs). Continue Reading

The Trump DOJ’s View on Merger Enforcement and Remedies Explained

President Trump’s head of the Department of Justice’s Antitrust Division, Makan Delrahim, recently explained that the division will cut back on behavioral commitments such as consent orders regulating conduct and will instead rely more on structural changes such as divestitures to remedy merger concerns. This could signal significant changes in how the DOJ resolves concerns with proposed mergers going forward.

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Supreme Court to Decide First Antitrust Case in Two Years

On Oct. 16, the U.S. Supreme Court granted certiorari in United States v. American Express, the court’s first antitrust case of the 2017 term and the first antitrust case they have reviewed since 2015. The American Express case presents complex questions about the legality of anti-steering provisions in agreements between credit card companies and the merchants that agree to accept their cards. It also presents the Supreme Court with an opportunity to provide real guidance for the first time on the application of the rule of reason, which is used to assess the anticompetitive effects of a “contract, combination … or conspiracy in restraint of trade” under the Sherman Act. This case will also be the first antitrust case which antitrust expert Justice Neil Gorsuch will join.

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Antitrust Partner Dan Foix Presents at AAI Conference

Danyll Foix, an antitrust partner in BakerHostetler’s Washington, DC office, will be a speaker at the 11th Annual Private Enforcement Conference of the American Antitrust Institute on November 7, 2017.

Foix will join a panel discussion of “Agriculture Antitrust Class Actions,” which will review recent private enforcement actions in agricultural industries, consider challenges specific to such cases, and discuss relevant structural remedies beyond monetary relief.

Following the panel discussion, Senator Amy Klobuchar (D-MN), Ranking Member, Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, is scheduled to deliver a keynote address.

Additional information, including registration information, is available at AAI’s website.