E-Briefs, News and Notes: OCTOBER 2024

By Cheryl Lee Johnson 

The FTC and 19 states alleged that Amazon monopolized by its anti-discounting strategy, and coerced use of its fulfillment services and use of its Project Nessie algorithm, in violation of the Sherman Act, FTC Act and various state antitrust and consumer laws. Amazon’s motion to dismiss was denied except as to some four state law claims, and the bench trial was bifurcated with remedies reserved for a later stage.

Pleadings as to Amazon’s anti-discount strategy and surveillance network, used to ensure Amazon sellers did not offer lower prices on other online stores, adequately alleged that Amazon’s conduct was designed to deter discounting, stifle price competition, and create an artificially high pricing floor. 2024 WL 4448815, at *6-7.  Amazon’s use of Featured Offers to entice sellers to offer low prices was not within a protected Colgate right where, as here, it was alleged that “Amazon actively deters sellers from offering lower prices and did not actually steer customers to good deals.”  Id. at *8. Finally, Amazon’s alleged coercion of sellers to use Amazon’s fulfillment services was plausibly alleged to be anticompetitive both under the Sherman and FTC Acts. Id. at *9-11.

Amazon’s argument that its conduct was procompetitive and within “well-established forms of competition” raised factual issues as to the effects of the conduct  and thus could not be considered on a motion to dismiss. Id. at *4-5. Since each form of conduct was adequately alleged to be anticompetitive, the court declined to consider their effect  cumulatively. Id. at *4, n.5.

Plaintiffs also plausibly and timely alleged a standalone unfair competition claim under FTC Act Section 5 based on Amazon’s use of its Project Nessie algorithm. Knowing that others would follow Amazon’s price hikes, Amazon allegedly used this algorithm to “juice profits” by increasing prices on products of competitors that were matching Amazon’s price, thus minimizing the chance shoppers would catch on to its price hikes.  Id. at *13-14.

Four states had various state law claims dismissed: 1) Pennsylvania’s monopolization claim was dismissed with prejudice on the ground monopolization was not cognizable under Pennsylvania’s common law (id. at *14-15);  2)  New Jersey’s and Oklahoma’s deceptive conduct claims were struck, with the court dismissing as nonactionable puffery Amazon’s representation that it seeks to be the “most customer-centric company” and advertising it has the lowest prices (id. at *16-17, 19);  and 3) Maryland’s state antitrust claim was dismissed for failure to allege effects within the state (id. at *22-23). The court rejected Amazon’s arguments that state statutes with territorial limits were inapplicable to conduct that was predominantly interstate in nature and precluded liability where markets outside the state were also affected. Id.

By Lee Berger and Travis West

On September 19, 2024, Judge Marco A. Hernandez for the District Court of Oregon granted a motion to dismiss and dismissed with prejudice Malheur Forest Fairness Coalition’s monopolization complaint against Iron Triangle.  Malheur Forest, a collection of loggers and landowners in the Malheur National Forest market area, had alleged that Iron Triangle and Malheur Lumber Company used anticompetitive tactics to obtain monopoly power in two forest products-related markets in a market area consisting of the Malheur National Forest and surrounding private forestlands.  The Court had previously dismissed the plaintiffs’ First Amended Complaint without prejudice. 

First, the plaintiffs failed to demonstrate monopoly power in the Logging Services Market through direct or indirect evidence.  For direct evidence, the Court held that the plaintiffs made no specific allegations regarding Iron Triangle’s alleged restriction of logging opportunities.  In fact, the Court noted that the U.S. Forest Service controls logging opportunities and the volume logged was out of Iron Triangle’s control. The plaintiffs also pointed at alleged direct evidence, such as the Defendants making it more difficult to process pine locally, that the Court found was not direct evidence.  Finally, the plaintiffs failed to allege supracompetitive pricing or decreased quality in the relevant market, instead alleging that logging services are performed by Iron Triangle in lieu of subcontracts.  Again, the Court held this did not constitute direct evidence of monopoly power.  The plaintiffs fared no better with their circumstantial evidence.  First, the Court rejected attempts to bootstrap market power in downstream markets to allegations regarding upstream market power.  Second, the Court rejected the notion that the “highly inelastic” supply of timber, which was set largely by the U.S. Forest Service, could be a barrier to entry because Iron Triangle faced it too.  The Court rejected this argument for the plaintiffs’ Softwood Sawlogs Market monopoly power claim, too.

The plaintiffs also alleged a tying arrangement whereby Malheur Lumber would not purchase pine sawlogs from anyone other than Iron Triangle.  The court rejected the proposed tie, which sought to tie the willingness of Iron Triangle to supply all of the pine sawlogs to Malheur Lumber’s agreement not to purchase logging services from any party other than Iron Triangle.  It noted that it had previously determined the purchase of sawlogs and the purchase of logging services were two distinct products with distinct markets and it declined the plaintiffs’ invitation to reconsider that ruling.  It also noted that the alleged tie could be for legitimate business reasons and, under Ninth Circuit case law, allegations that could just as easily suggest legal conduct as they could illegal conduct are insufficient.  The Court also found that the complaint contradicted itself on this point, such as alleging both that Malheur Lumber exclusively bought from Iron Triangle but also alleging Malheur Lumber would buy at uneconomic prices. 

Finally, the Court denied leave to amend, stating it had given a blueprint in how to cure the deficiencies of the First Amended Complaint and the plaintiffs had failed to do so.  Moreover, the Court noted that the complaint asked the Court to reconsider the U.S. Forest Service contract with Iron Triangle, something the Court was unwilling to do given that the U.S. Forest Service was not a party to the case and such a claim did not arise under the Sherman Act. 

By David Lerch

On September 30, 2024, District Court Judge Ronnie Abrams certified a proposed end-payor plaintiff (EPP) and a proposed direct purchaser plaintiff (DPP) class in In re Actos Antitrust Litigation, No. 13-CV-9244 (RA), 2024 WL 4345568, at *1 (S.D.N.Y. Sept. 30, 2024), regarding Takeda’s allegedly improper delay of the market entry of generic drugs competing with its brand drug, Actos.  The Court upheld the report and recommendation of the magistrate judge and granted class certification, rejecting challenges to the EPP class based upon lack of personal jurisdiction as to unnamed plaintiffs, predominance based upon difficulties identifying class members including timing and administrative feasibility, and a due process challenge based on procedures to challenge eligibility of class members.  The Court also rejected class certification challenges as to the DPP class based upon lack of sufficient numerosity, reasoning that the putative plaintiffs had standing based upon Takeda’s actions delaying generic entry and that without a class action, economic incentives including attorneys’ fees might preclude individual suits.

Background
In 1999, the FDA approved Takeda’s Type-2 Diabetes drug Actos, a treatment tablet containing only one active ingredient—pioglitazone (Order at 5).   In its New Drug Application (NDA) for Actos, Takeda listed one patent (the “’777 Patent”) consisting of pioglitazone and its pharmacologically acceptable salts. The ’777 Patent was set to expire in 2011, and, in 2007, the Federal Circuit upheld the patent’s validity, thus definitively preventing generic entry into the pioglitazone market until after that expiration date. See Takeda Chem. Indus., Ltd. v. Alphapharm Pty., Ltd., 492 F.3d 1350 (Fed. Cir. 2007).

Takeda twice supplemented its NDA—in 1999 and 2002—with information about newly-acquired patents (the “’584 Patent” and the “’ 404 Patent”).  In its supplements for the Actos NDA, Takeda told the FDA that these combination patents both claim the drug Actos, in addition to claiming methods of using Actos.  Under normal circumstances, this would have compelled generic drug makers seeking to compete in the Actos market to file Paragraph IV certifications under the Hatch-Waxman Act because a manufacturer would have to undermine the validity of the ’584 and ’404 patents in order for the FDA to grant the ANDA. However, when the FDA published Takeda’s supplemental patent information in its Orange Book— a source of brand patent information —it listed the ’584 and ’404 Patents only as method-of-use patents, such that there was no reason at that time for a generic Actos maker to believe that a Paragraph IV certification was required for FDA approval.

Nevertheless, in 2003, three generic manufacturers seeking to introduce a bioequivalent pioglitazone drug filed ANDAs containing Paragraph IV certifications with respect to patents ’584 and ’404. These companies agreed to share “first filer” status for purposes of the exclusivity period in marketing a generic version of Actos. The District Court stated in the class certification order that “[a]lthough their motivations for making this unnecessary certification remain unconfirmed, the competitive advantage from being a first filer under Paragraph IV for a generic Actos drug certainly provided a valuable incentive for doing so.” Actos, 2024 WL 4345568,at *4.

Takeda thereafter sued the three generics for patent infringement. After a trial, the district court entered judgment for Takeda solely based on the ’777 Patent’s continuing validity and enforceability but did not address the validity or enforceability of the combination patents. Takeda Chem. Indus., Ltd. v. Ranbaxy Labs., Ltd., No. 03-CV-8250, 2006 WL 618424, at *1–2 (S.D.N.Y. Mar. 13, 2006).  A different generic drug manufacturer, Sandoz, Inc. then filed a citizen petition with the FDA, asserting that Takeda had improperly caused the FDA to list the ’584 and ’404 patents in the Orange Book as drug product patents for Actos. It therefore asked that the FDA require all ANDA filers to make Paragraph IV certifications in order to level the playing field among generics.  At the FDA’s behest, Takeda responded to the petition by reaffirming that it correctly listed the two patents as claiming both Actos as well as specific methods of its use. In light of Takeda’s response, the FDA granted Sandoz, Inc.’s citizen petition and ruled that it would not approve a generic Actos ANDA that did not contain a Paragraph IV certification.  As a result of these events, robust generic competition for Actos was allegedly improperly delayed for almost two years past January 17, 2011, when the ’777 Patent expired.

Both the EPPs and DPPs filed class actions.  Takeda argued that the District Court should not certify the class of EPPs because of: (1) lack of personal jurisdiction over Takeda with respect to the claims of the unnamed class members; (2) failure to satisfy Rule 23(b)(3)’s predominance requirement; and that (3) the proposed methodology for determining class eligibility would violate its right to due process.

Personal Jurisdiction as to the EPP Class Members under Bristol-Myers Squibb
In the class certification order, the Court concluded that Bristol-Myers Squibb did not require it to consider whether it has personal jurisdiction as to the claims of unnamed class members and that in Bristol-Myers Squibb—a mass action rather than a class action—the Supreme Court held that the due process requirements of the Fourteenth Amendment prohibited California state courts from exercising specific personal jurisdiction with respect to the claims of out-of-state plaintiffs.  Actos, 2024 WL 4345568, at *6-8. The Court stated that the Second Circuit has yet to rule on how Bristol-Myers applies to such claims but noted that the two courts of appeals to directly address the issue—the Seventh and Sixth Circuits—have each concluded that Bristol-Myers Squibb does not require unnamed class members to establish personal jurisdiction, see Mussat v. IQVIA, Inc., 953 F.3d 441, 447–48 (7th Cir. 2020); Lyngaas v. Curaden Ag, 992 F.3d 412, 433–36 (6th Cir. 2021), and noted that the Third Circuit has similarly agreed “that Bristol-Myers did not change the personal jurisdiction question with respect to class actions.” Fischer v. Fed. Express Corp., 42 F.4th 366, 375 (3d Cir. 2022), cert. denied, 143 S. Ct. 1001 (2023). The Court also rejected a challenge under the Rules Enabling Act, stating that class actions do not abridge any substantive due process rights such that the maintenance of a class action violates the Rules Enabling Act.

Predominance as to the EPP Class Members
Takeda opposed class certification on the grounds that individual questions predominate because identifying eligible class members would involve a multistep process centered on the submission and detailed evaluation of individual affidavits for more than 300,000 class members.  The Court concluded that while individual inquiry was necessary to determine class eligibility, data is available to identify class members, whose membership can be confirmed through a claim form that includes an affidavit. The Court also concluded that EPPs would use common evidence to establish the third element of damages and that a plaintiff in an antitrust class action may establish damages through aggregate damages so long as the aggregate damages “roughly reflect” the “amount owed to class members,”  Actos, 2024 WL 4345568, at *10 (citing, e.g., Seijas v. Republic of Argentina, 606 F.3d 53, 58–59 (2d Cir. 2010)).  The Court also noted that EPP expert Rena Conti employed a common yardstick methodology to model how generic entry would have affected prices and quantities sold of Actos and its generics absent the delayed generic entry and employed data from the launch of the generic and calculated the gross overcharges using industry data of retail sales, also accounting for several offsets.  The Court agreed with the magistrate judge that the expert’s proposed aggregate damages model will produce a figure that roughly reflects the amount owed to class members. Id. The Court also credited expert Laura Craft’s rebuttal testimony that the information relevant to determining class membership was included in the data samples.

Due Process
Finally, Takeda asserted that the EPPs’ process for identifying eligible class members would violate its due process right to challenge whether a purported member is in fact eligible, to which the Court responded that the magistrate judge explicitly envisioned that Takeda could challenge a class member’s eligibility during the claims administration process. Id. at *11.

Numerosity as to DPPs
Takeda maintained that the DPPs failed to satisfy the Rule 23(a)(1) requirement that “the class [be] so numerous that joinder of all its members is impracticable.” Fed. R. Civ. P. 23(a)(1). In particular, Takeda argued that the magistrate judge: (1) erroneously found that the class contained at least 40 members and (2) misevaluated the factors relevant under Robidoux v. Celani, 987 F.2d 931, 936 (2d Cir. 1993).  In particular, Takeda argued that the Court may not presume numerosity—as it does when a class consists of at least 40 members, see Consol. Rail Corp. v. Town of Hyde Park, 47 F.3d 473, 483 (2d Cir. 1995)—because 54 of the 84 putative class members lack antitrust standing.  Takeda argued that these 54 putative class members were not efficient enforcers of the antitrust laws. Id. at *12-13.

The Court noted that “Whether a plaintiff is an efficient enforcer depends on the four factors the Supreme Court identified in Associated General Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 540–44 (1983)].” “Those factors are (1) the directness or indirectness of the asserted injury; (2) the existence of more direct victims or the existence of an identifiable class of persons whose self-interest would normally motivate them to vindicate the public interest in antitrust enforcement; (3) the extent to which the claim is highly speculative; and (4) the importance of avoiding either the risk of duplicate recoveries on the one hand, or the danger of complex apportionment of damages on the other.” Id.

As for proximate causation, the Court found that the theory of liability at issue was not that Takeda’s antitrust violation “enable[ed]” competitors’ price increases, injuring their customers who had to pay more, but instead that Takeda caused high generic prices to begin with by delaying the formation of a competitive market, citing, e.g., In re Modafinil Antitrust Litigation, another market exclusion case. 837 F.3d 238 (3d Cir. 2016), as amended (Sept. 29, 2016) (market customers in a market exclusion case had standing because they “suffer[ed] . . . from the foreclosure of choice”—unlike in a price fixing case, where only direct customers suffer harm). Actos, 2024 WL 4345568, at *12.

As to duplicative recoveries, Takeda argued that excluding the 54 putative class members was important for avoiding the risk of duplicate recoveries because the EPPs are also suing under state law to recover generic overcharges, but the magistrate judge noted that the only entities able to sue Takeda under federal antitrust law cannot recover for overcharges on generic units and so a substantial portion of the harm attributed to the defendant would go unaddressed.  The District Court agreed that the “general view among district courts” is that duplicative recovery is permissible under these circumstances. The Court nonetheless found the fourth factor non-dispositive here, as “the efficient-enforcer inquiry remains, fundamentally, one into proximate cause.” Id. at *13.

Because the 54 putative class members did have antitrust standing under Associated General Contractors of California, Inc., the Court concluded that it could presume numerosity because the DPP class contains at least 40 members. See Consol. Rail Corp., 47 F.3d at 483.

Takeda also argued that regardless of whether the Court may presume numerosity, the DPPs failed to establish that joinder is impracticable. The Court stated that while it may presume numerosity in the face of 40 class members, practicability depends on all the circumstances surrounding a case, not on mere numbers.  Relevant considerations include (1) judicial economy arising from the avoidance of a multiplicity of actions, (2) geographic dispersion of class members, (3) financial resources of class members, (4) the ability of claimants to institute individual suits, and—irrelevant here—(5) requests for prospective injunctive relief which would involve future class members. Actos, 2024 WL 4345568, at *13.

The Court stated that judicial economy favors certification because the Court might otherwise face delay and the need for additional counsel, discovery, and motion practice. In addition, the fact that the class is spread across 29 states and Puerto Rico, creates “both a significant and practical difficulty to joinder, and contrary to Takeda’s suggestion, that the parties are aware of the proposed class members’ identities and whereabouts, coordination concerns still exist.  See Alexanders Laing & Cruickshank v. Goldfeld, 127 F.R.D. 454, 457 (S.D.N.Y. 1989) (“[D]ispersion makes it difficult for joined plaintiffs to coordinate their legal strategy.”). “[G]eographic dispersion suggests joinder is impracticable,” moreover, “even when putative class members are corporate entities.”

The Court also noted that many claimants’ abilities to institute individual suits would be limited here because they would lack a monetary incentive to protect their own interests.  For numerous class members, the value of their claims, even once trebled, would likely be less than the cost of litigation (i.e., three direct purchasers’ damages would be less than $40,000 once trebled), and so joinder rather that proceeding with a class action was impractical. Actos, 2024 WL 4345568, at *14.

By Wesley Sweger

In a short opinion by Judge Ryan D. Nelson, the Ninth Circuit affirmed the district court’s order dismissing an action brought by gasoline consumers alleging a conspiracy to limit oil production. Plaintiffs are consumers, suing individually, who purchased gasoline from stores owned by defendant oil companies, including, inter alia, Exxon, Chevron, and Phillips.

Plaintiffs alleged that in March 2020, President Trump engineered an antitrust conspiracy among the United States, Saudi Arabia, Russia, and Defendants. At that time, Russia refused to renew its agreement with the Organization of Petroleum Exporting Countries (OPEC), allegedly sparking a price war with Saudi Arabia. Defendants held a meeting with Trump, hoping he could broker an agreement with Saudi Arabia and Russia to stop the price war. Trump allegedly spoke to leaders of Russia and Saudi Arabia, resulting in an agreement “that if Saudi Arabia and Russia stopped their price war, Defendants would increase their oil and gas prices.” D’Augusta v. Am. Petroleum Inst., No. 23-15878, 2024 WL 4195329 (9th Cir. Sept. 16, 2024), at*2. Subsequently, OPEC held a meeting that resulted in another agreement between Russia and Saudi Arabia to end the price war. Plaintiffs alleged that these agreements caused the price of a barrel of oil to rise from less than $20 to over $100.

Plaintiffs claimed Defendants’ alleged conduct constituted an agreement to fix gas prices in violation of Sherman Section 1 and a conspiracy to monopolize in violation of Section 2. Plaintiffs also originally sought relief for certain Defendants’ allegedly anticompetitive mergers and acquisitions in violation of Clayton Act Section 7. However, Plaintiffs’ opening brief contained no legal discussion of their Clayton Act claim, so the Court deemed any Clayton Act argument waived.

The Court affirmed dismissal of the Plaintiffs’ Sherman claims, finding they lacked subject-matter jurisdiction under the political questions and the act of state doctrines. As for any remaining allegations about Defendants’ private actions, the Court found Plaintiffs did not plead enough facts to establish direct or circumstantial evidence of conspiracy.

Political Questions Doctrine
Under the political questions doctrine, “the conduct of foreign relations lies almost exclusively with the political branches of government, leaving little for judicial review.” Id. at *4. The Court reasoned Plaintiffs’ core contention was that Trump improperly negotiated an end to an international oil price war. The Court noted that if it subjected Trump’s actions to judicial review, it would amount to second-guessing the Executive Branch’s foreign policy, limiting the President’s ability to freely negotiate with foreign powers as afforded under the Constitution.

Additionally, the Court found that the potential liability of Defendants in this case cannot be decoupled from the relevant foreign policy. It noted that oil plays a crucial role in the United States’ economic and national security interests, increasing the complexity of the foreign relations implications. By recasting the conduct of foreign relations into antitrust terms, the Court determined that it was still being asked to evaluate foreign relations decisions of sovereign nations, including our own.

The Act of State Doctrine
Recognizing there is little precedent discussing the act of state doctrine, the Court explained this doctrine provides that a federal court “will not adjudicate a politically sensitive dispute which would require the court to judge the legality of the sovereign act of a foreign state.” Id. at *6. Therefore, the Court found that because Plaintiffs alleged Russia and Saudi Arabia were “indispensable co-conspirators,” Plaintiffs’ claims sought to control how sovereign nations manage their own petroleum resources.

Remaining Allegations
The Court next turned to Plaintiffs’ remaining allegations involving solely private conduct among Defendants. The Court found Plaintiffs neither plausibly pleaded direct nor circumstantial evidence of an unlawful conspiracy.

As for direct evidence, the Court found Plaintiffs allegations to be conclusory to the extent they alleged broadly that Defendants privately “agreed [among themselves] to take any surplus oil off the market, cut their production, and substantially reduce their investment in exploration and production.” Id. at *7.

Analyzing circumstantial evidence, the Court found Plaintiffs did not plead enough facts to establish “‘circumstantial evidence’ of any parallel conduct.” Id. (Although the Court previously noted that circumstantial evidence is established by showing parallel conduct and certain “plus factors” suggesting conspiracy, the Court here framed the issue as whether Plaintiffs established circumstantial evidence of parallel conduct.) The Court found Plaintiff failed to establish parallel conduct because Plaintiffs failed to allege which Defendants reduced their oil production, or when or how they made these alleged decisions. The Court concluded by discussing that parallel conduct alone is not enough to raise an inference of an agreement when an “obvious alternative explanation” accounts for that same conduct. Id. Here, the Court found that the outbreak of the COVID-19 pandemic was the obvious alternative explanation for why Defendants may have chosen to cut oil production beginning in March 2020.

By Lillian Grinnell

 In Falcone v. Nestlé USA Inc., No.: 3:19-cv-723-L-DEB, Doc. 168 (S.D. Cal. September 26, 2024), a class action claiming violations of California’s Consumer Legal Remedies Act (“CLRA”) and Unfair Competition Law (“UCL”), Nestlé is accused of deceiving consumers with its descriptions of its chocolate products including phrases such as “sustainably sourced,” “responsibly sourced,” “sustainably harvested cocoa beans,” “improving the lives of cocoa farmers,” and “better farming, better lives.” Nestlé also labeled its products with so-called sustainability representations including “NESTLÉ Cocoa Plan” (“NCP”), “Rainforest Alliance,” and “UTZ” logos.

This lawsuit stems from the allegations that, in fact, Nestlé’s cocoa was primarily sourced from West African plantations that relied on child labor – including child slave labor – and the company was also contributing to deforestation. The suit also claimed that the NCP had caused the worsening of child labor conditions. The plaintiff, on behalf of a class of California consumers, sought injunctive relief and refunds for the products purchased.

The named plaintiff in this action was the sole class representative in this action and Nestlé challenged her standing to sue under the UCL and CLRA, in addition to standing under Article III to seek injunctive relief. But Judge Lorenz rejected that argument, as economic injury – here, paying for a product they would not have but for an allegedly false representation – was sufficient to establish standing for the UCL, and by extension the CLRA, which only requires “any” damages. Furthermore, the plaintiff’s testimony that she would want to buy Nestlé’s products in the future but for her learning of the child labor and environmental issues – issues which caused a distrust in the company’s labeling – established imminent injury, and thus Article III standing.

The plaintiff moved for class certification under Rule 23(b)(3) and (2). Both parties agreed that the proposed class met the numerosity and adequacy requirements. Nestlé challenged commonality, however, arguing that the representations at issue were not sufficiently uniform and consumers did not understand them in a uniform way. But the Court noted that in order to obtain relief on both UCL and CLRA claims, the plaintiff only needed to show that members of the public were likely to be deceived, which the plaintiff argued that she could prove on a classwide basis. Individualized proof was not necessary, and variations in the messaging and advertisements in the various products here was not fatal to class certification, the Court found. Here, many of the challenged messages were essentially interchangeable.

Nestlé also challenged the plaintiff’s typicality, claiming that she admitted that she hadn’t actually been deceived. Judge Lorenz also rejected this argument because of plaintiff’s testimony that she had been deceived. Moreover, just because a plaintiff like the one here bought a product for multiple reasons, including the false representations, did not defeat typicality according to the Court. Nor did the fact that the plaintiff had not bought every single one of the challenged products, which were, like the messages, sufficiently interchangeable.

The plaintiff’s proposed (b)(3) refund class satisfied the predominance inquiry, based on evidence of Nestlé’s own marketing research on consumer preferences that showed the widespread efficacy of sustainability messaging. And it satisfied the superiority inquiry because the individual damages were small with a large consumer class. The plaintiff also gained certification of the (b)(2) injunctive relief class as all of the proposed class members were subject to sustainability representations and the injunction requested would therefore provide relief to every member equally.

Finally, Nestlé also argued that the plaintiff’s expert opinions should be stricken because they were not timely disclosed, but the Court stated that the opinions had not been considered and the issue was moot.

The Justice Department’s Antitrust Division and Department of Transportation (DOT) today jointly announced a broad public inquiry into the state of competition in air travel. The agencies are seeking public information on consolidation, anticompetitive conduct and a wide range of issues affecting the availability and affordability of air travel options. The topics covered in the agencies’ joint Request for Information (RFI) include previous airline mergers, exclusionary conduct, airport access, aircraft manufacturing, airline ticket sales, pricing and rewards practices and the experiences of aviation workers.

     *        *        *

The agencies jointly issued the RFI requesting public comments explaining how the air travel industry has been impacted by consolidation and anticompetitive practices and identifying ways to address any harms to competition. Key topics in the RFI include:

• General state of competition in the aviation sector and its effects on passengers, workers and jobs, regions and local communities and economic growth.
• Airline consolidation and the effects of previous mergers, common ownership, joint ventures, international alliances, structural advantages, exclusionary conduct and other anticompetitive practices.
• Airport access and its impact on airlines and their ability to enter and fairly compete in different areas of the country and the world.
• Aircraft manufacturing and the impact of consolidation and anticompetitive practices on new aircraft manufacture and sale, aircraft leases or secondary markets for used aircraft.
• Air transportation sales channels, pricing and airline rewards programs and the impact on the availability, access and affordability of air travel.
• Labor market issues and the effects of consolidation and anticompetitive practices in other parts of the aviation industry on pilots, in-flight crews, ground crews, airport services, union contracts and/or travel agents or other vendors of travel services.

The public will have 60 days to submit comments at Regulations.gov, no later than Dec. 23. Once submitted, comments will be posted to Regulations.gov. All market participants are invited to provide comments in response to this RFI, including passengers, consumer advocates, pilots, in-flight and ground crews, airport authorities, employers, airlines, private and charter aircraft operators, travel agents, trade groups, industry analysts, purchasers of corporate travel services and other entities that provide or rely upon air travel services.

The FTC is taking action against rideshare operator Lyft for making deceptive earnings claims about how much money drivers could expect to make per hour and how much they could earn in special incentives.

Lyft has agreed to a proposed settlement that would require its claims about drivers’ pay to be based on typical earnings. In addition, Lyft has agreed to back up with evidence any claims it makes about drivers’ pay, clearly notify drivers about the terms of its “earnings guarantee” offers, and pay a $2.1 million civil penalty.

The U.S. Department of Justice filed the lawsuit and proposed settlement upon notification and referral from the FTC. “It is illegal to lure workers with misleading claims about how much they will earn on the job,” said FTC Chair Lina M. Khan. “The FTC will keep using all its tools to hold businesses accountable when they violate the law and exploit American workers.”

The complaint against Lyft alleges that as demand for rideshare services increased in 2021 and 2022, Lyft made numerous false and misleading claims in its advertising and marketing about how much money consumers could make if they chose to drive for Lyft.

Ads for Lyft advertised that drivers around the country could make specific hourly amounts. For example, potential drivers in Atlanta were offered up to $33 an hour, potential drivers in Portland were offered $41 an hour and potential drivers in Los Angeles were offered up to $43 an hour. Lyft failed to disclose that these amounts did not represent the income an average driver could expect to earn, but instead were based on the earnings of the top one-fifth of drivers. The complaint notes that these figures overinflated the actual earnings achieved by most drivers by as much as 30%.

In addition, the complaint notes that the hourly earnings claims Lyft made in its ads included tips paid by passengers, even though many drivers would assume any tips they received would be in addition to an hourly pay figure.

In its advertisements, Lyft also tried to entice drivers by touting “earnings guarantees,” which supposedly guaranteed that drivers would be paid a set amount if they completed a specific number of rides in a certain time. For example, one guarantee promised drivers they would make $975 if they completed 45 rides in a weekend. But these guarantees did not clearly disclose that drivers were only paid the difference between what they actually earned, and Lyft’s advertised guaranteed amount. Drivers complained to the company in large numbers that they believed the amount Lyft guaranteed would be paid as a bonus on top of whatever pay they received for completing the assigned number of rides.

     *        *        *

In addition to requiring the company to pay a $2.1 million civil penalty, the proposed settlement also will prohibit Lyft from making any earnings claim unless they have meaningful evidence to back that claim up. In addition, Lyft will be prohibited from making any claims about hourly earnings that include tips as part of the stated hourly amount. The settlement will also require Lyft to clearly disclose to drivers that, under its earnings guarantees, drivers will receive only the difference between their regular earnings and the guaranteed amount. The settlement also requires Lyft to provide notice to its drivers about the settlement.

The Federal Trade Commission is taking action to resolve antitrust concerns related to Chevron Corporation’s acquisition of rival oil producer Hess Corporation by approving a proposed consent order that would prohibit Chevron from appointing Hess CEO John B. Hess to its Board of Directors.

The FTC’s complaint alleges that Mr. Hess communicated publicly and privately with the past and current Secretaries General of the Organization of Petroleum Exporting Countries (OPEC) and an official from Saudi Arabia. In these communications, Mr. Hess stressed the importance of oil market stability and inventory management and encouraged these officials to take actions on these issues and speak about them at different events, the complaint alleges.

Mr. Hess further encouraged his OPEC competitors to stabilize production and draw down inventories, the complaint alleges. As Mr. Hess has noted publicly, there is a direct correlation between inventory levels and oil prices. Reductions in crude oil exploration and production generally lead to higher oil prices and higher prices for products derived from oil, including transportation fuels such as gasoline, diesel, jet fuel, and heating oil.

     *        *        *

As detailed in the complaint, the merger agreement between Chevron and Hess Corporation requires Chevron to take all actions necessary to appoint Mr. Hess to its Board of Directors. The FTC’s complaint alleges that, as a Chevron Board member, Mr. Hess would gain a much larger platform to amplify his supportive messaging to OPEC and others about OPEC’s market stability goals, increasing the likelihood that Chevron could align its production with OPEC’s output decisions to maintain higher oil prices. The complaint alleges that, given his prior conduct, Mr. Hess’s appointment to Chevron’s Board of Directors would heighten the risk of harm to competition, including meaningfully increasing the risk of industry coordination. The FTC’s proposed consent order would prohibit Chevron from nominating, designating, or appointing Mr. Hess to the Chevron Board, and from allowing Mr. Hess to serve in an advisory or consulting capacity to, or as a representative of, Chevron or the Chevron Board. The proposed consent order would allow Chevron to consult with Mr. Hess and allow him to serve as an advisor, consultant, or representative of Chevron, solely related to interactions and discussions with (a) Guyanese government officials about Hess’s oil-related and health ministry-related activities in Guyana, and (b) the Salk Institute’s Harnessing Plants Initiative.

OAKLAND — California Attorney General Bonta today urged California residents who purchased gas in Southern California between February 20, 2015 and November 10, 2015 to submit a claim for a payment under the state’s settlement with gas trading firms for tampering with and manipulating prices for California gasoline. Eligible Californians may submit a claim online at www.CalGasLitigation.com

“Market manipulation and price gouging are illegal and unacceptable, particularly during times of crisis when people are most vulnerable,” said Attorney General Bonta. “I am proud to deliver money back to Californians who were victims of gas price manipulation. As the People’s Attorney, I am committed to combating corporate greed and ensuring justice for the people of California.”

In July, Attorney General Bonta announced a $50 million settlement with gas trading firms, resolving allegations that Vitol, Inc. and SK Energy Americas, Inc., along with its parent company SK Trading International, secretly worked together to tamper with and manipulate spot market prices for California gasoline. If you purchased gasoline in Los Angeles, San Diego, Orange, Riverside, San Bernardino, Kern, Ventura, Santa Barbara, San Luis Obispo, and/or Imperial counties in California between February 20 and November 10, 2015, you may be eligible for a payment. The Attorney General’s settlement is in addition to a settlement of a private class action lawsuit filed in federal court.