Antitrust and Unfair Competition Law

Antitrust and Unfair Competition Law: E-briefs, News and Notes, June 2021

Welcome to the June E-briefs, News and Notes. We hope you find this edition useful. Please get in touch if you have any suggestions for new features or you wish to help with the publication.  I want to thank Anjalee M. Behti, Zelle LLP and Kerry C. Klein, Farmer Brownstein Jaeger Goldstein Klein & Siegel LLP for contributing the E-briefs found below.  E-briefs is in need of additional volunteer authors.  If you would like to be on the email list of attorneys to whom I send out requests for help, please let me know. There is no obligation to take on any particular case, but if you get the email messages about e-briefs, you can jump in when time/interest allows.  Thanks. bob@reconnollylaw.com.

E-Briefs

Sixth Circuit Denies Direct Purchaser Standing to Plaintiffs in Auto Parts Case | Anjalee M. Behti, Zelle LLP

Anjalee M. Behti, Zelle LLP

The Sixth Circuit reversed a Michigan district court decision that allowed a putative class of purchasers of automotive anti-vibration rubber parts to maintain a direct purchaser case alleging price-fixing for the parts. In re Auto. Parts Antitrust Litig., No. 20-1599, 2021 WL 1940427, at *1 (6th Cir. May 14, 2021).  The three-judge panel ultimately centered its decision on the language in the settlement agreements.

Specifically, the panel addressed whether the Illinois Brick direct purchaser rule has any effect on the interpretation of an antitrust class action settlement under Michigan law.  Defendants argued Plaintiffs did not have direct purchaser standing because they settled all their claims as part of a class of indirect purchasers under the settlement agreements.  The court ruled in favor of Defendants, finding Plaintiffs’ argument that they purchased the auto parts “directly” from subsidiaries of a defendant manufacturer unpersuasive.

Background

Defendants’ appeal stems from litigation arising from the manufacture and sale of automotive anti-vibration rubber parts.  A putative class of end-payor purchasers sued several manufacturers and suppliers in 2013. The end-payor litigation settled in 2016 and 2017 for $80.4 million.  That settlement class excluded persons or entities who purchased parts directly or for resale. 

Prior to the district court’s entering of final judgments approving settlement agreements in the end-payor suit, three individual plaintiffs brought a putative class action against the same manufacturers and suppliers seeking money damages on behalf of all direct purchasers of anti-vibration rubber parts.  Plaintiffs alleged they purchased auto parts from a Firestone repair shop, which is owned by a subsidiary of one of the defendants, Bridgestone Corporation, in addition to two other retail shops which are allegedly related to Bridgestone.  Shortly after Plaintiffs filed their direct purchaser suit, the district court entered final judgments in the end-payor lawsuit, enjoining all settlement class members from bringing claims arising from or relating to the released claims.  One year later, Defendants sought to enjoin Plaintiffs from litigating their claims in the direct purchaser suit because the settlement agreements in the end-payor lawsuits prevented them from pursuing federal antitrust claims as indirect purchasers.  The district court denied Defendants’ motion, finding Plaintiffs had standing under the ownership or control exception to Illinois Brick.

“Clear and unambiguous” language of settlement agreements bars direct-purchaser suit

Focusing its analysis on interpretation of the settlement agreements, the panel considered whether the agreements bar Plaintiffs from maintaining their direct purchaser suit under Michigan law.  Interpreting the “clear and unambiguous” language of the settlement agreements, the panel found that the agreements “unambiguously” barred Plaintiffs from maintaining their direct purchaser suit. Auto Parts, 2021 WL 1940427, at *3 (citing Michigan Mut. Ins. Co. v. Dowell, 204 Mich. App. 81, 87, 514 N.W.2d 185 (1994)).  The settlement class definition explicitly excludes those that purchased auto parts “directly or for resale.” 

Plaintiffs alleged they purchased the parts from Bridgestone Retail Operations, LLC and other retailers, which purchased parts from Bridgestone Americas, Inc., which purchased from one of the named Defendants.  The panel found, by definition, Plaintiffs’ purchases were not direct.  The panel cited the Supreme Court’s recent Apple v. Pepper opinion, stating that “direct purchasers are those who buy ‘immediately from the alleged antitrust violators,’ and indirect purchasers are those ‘who are two or more steps removed from the violator in a distribution chain[.]’” Apple Inc. v. Pepper, 139 S. Ct. 1514, 1520 (2019).  Particularly in light of Plaintiffs’ concession that they did not purchase “immediately” from any of the named Defendants, the panel found that the indirect nature of the purchases barred Plaintiffs from bringing a direct-purchaser suit.

Ownership or control exception under Illinois Brick

Plaintiffs also urged for direct purchaser status under the ownership or control exception to Illinois Brick.  Under that exception, an indirect purchaser may bring a federal antitrust suit when a defendant owns or controls its direct purchaser. See Jewish Hosp. Ass’n of Louisville, Ky., Inc. v. Stewart Mech. Enters., Inc., 628 F.2d 971, 975 (6th Cir. 1980).  The panel rejected this argument, discerning that Plaintiffs’ argument answers a question of antitrust standing, “not a question that bears on our interpretation of the settlement agreements.” Auto Parts, 2021 WL 1940427, at *5.  It further noted, “[t]hat Plaintiffs might be considered to have standing under Illinois Brick does not alter the reality that they indirectly purchased anti-vibration rubber parts from Defendant Bridgestone Corporation.” Id.  The panel took its observation one step further – “By nevertheless claiming that the exception applies to them, Plaintiffs concede that they are in fact indirect purchasers. How so? Well, because the ownership-or-control exception applies only to indirect purchasers.” Id. (citations omitted). Further, the settlement agreements include several exclusions from the class-wide releases, namely, allowing certain indirect purchasers to bring federal antitrust claims against Defendants under certain state antitrust laws.  The settlement agreements do not list the ownership or control exception as an exclusion, thus definitively barring Plaintiffs’ attempt at direct purchaser status.

The panel rejects the district court’s finding of “other factors” in favor of Plaintiffs

The panel additionally rejected the district court’s findings that some “other factors” proved advantageous to Plaintiffs’ argument: Defendants’ failure to file a notice in the direct purchaser case that Plaintiffs’ claims were dealt with in the end-payor settlement agreements; Defendants’ failure to notify Plaintiffs of Defendants’ motion to enforce judgment; and that Plaintiffs’ claims would not be duplicative of the end-payor claims because they sought a different type of relief. The panel reiterated its focus on interpretation of the terms of the settlement agreements, ultimately disregarding these factors as unrelated to the plain meaning of the agreements.

Conclusion

The Sixth Circuit’s decision adds to ample case law applying a strict interpretation of the Illinois Brick direct purchaser rule. Where Plaintiffs did not purchase anti-vibration rubber parts directly from a named defendant, they lack standing to pursue a federal antitrust claim for money damages. Plaintiffs’ effort to find standing under the ownership or control exception to Illinois Brick also fell short as that exception is “ultimately a pragmatic carveout to a federal antitrust standing rule, not a redefinition of indirect purchaser.” Id.  The Auto Parts opinion is a reminder that where direct purchaser standing or an exception to Illinois Brick does not clearly apply and where the terms of the settlement agreement do not define “indirectly purchased” or “directly purchased,” a court is likely to turn to case law to resolve the issue – that is, evaluate the terms of the settlement agreements de novo.

Supreme Court of Pennsylvania Addresses Contractual No-hire Provision in a Case of First Impression in Pittsburgh Logistics Sys. V. Beemac Trucking, LLC | Kerry C. Klein, Farmer Brownstein Jaeger Goldstein Klein & Siegel LLP

Kerry C. Klein, Farmer Brownstein Jaeger Goldstein Klein & Siegel LLP

The Pennsylvania Supreme Court recently issued a decision addressing the following issue: “Are contractual no-hire provisions which are part of a services contract between sophisticated business entities enforceable under the laws of this Commonwealth?” Pittsburgh Logistics Sys. v. Beemac Trucking, LLC, No. 31 WAP 2019, 2021 Pa. LEXIS 1853 (April 29, 2021).  After a lengthy discussion of decisions of courts in other jurisdictions, the Pennsylvania Supreme Court answered the question of first impression “no” given the particular facts in the case before it. The court relied on recent statements by the U.S. Department of Justice indicating its position that naked no-poach agreements are per se violations of the Sherman Act.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

Pittsburgh Logistics Systems (“PLS”) is a third-party logistics provider that arranges for the shipping of its customers’ freight with selected trucking companies. Beemac Trucking (“Beemac”) is a shipping company that conducts non-exclusive business with PLS. Id. at *1. The contract between the two companies included both a non-solicitation provision and the no-hire provision that is the focus of the appeal. The no-hire provision provided:

CARRIER agrees that, during the term of this Contract and for a period of two (2) years after the termination of this Contract, neither CARRIER nor any of its employees, agents, independent contractors or other persons performing services for or on behalf of CARRIER in connection with CARRIER’S obligations under this Contract will, directly or indirectly, hire, solicit for employment, induce or attempt to induce any employees of PLS or any of its Affiliates to leave their employment with PLS or any Affiliate for any reason.

Id. at *2. After Beemac hired four PLS employees, PLS filed an action alleging breach of contract and other causes of action. The court issued a preliminary injunction enjoining Beemac from employing the former PLS employees. Id. at *3. In a related action, PLS sued its former employees for breach of contract, and the court in that case also issued a preliminary injunction preventing the former employees from working for Beemac.  Id. The court subsequently held a consolidated hearing on both actions. With respect to the PLS action against its former employees, the court ordered no injunctive relief for one of the employees, and enjoined the other three employees only from soliciting PLS clients in accordance with their employment agreements. Id. at *4. With respect to the PLS action against Beemac, the court first determined that the contractual provision governing non-solicitation of PLS customers was ancillary to the main purpose of the agreement, and was necessary to protect PLS’s interest in its customers. Id. at *5. In contrast, the court determined that the no-hire contracts are “void against public policy because they essentially force a non-compete agreement on employees of companies without their consent, or even knowledge, in some cases.” Id. at *6. Finding that PLS did not have a substantial likelihood of success on the merits, the court vacated the injunction prohibiting Beemac from hiring former PLS employees. Id. at *6-7.

PLS filed an appeal to the Superior Court, which issued an en banc opinion affirming the lower court’s ruling. The Superior Court agreed with the lower court that the no-hire provision violated public policy by preventing non-signatories (PLS employees) from exploring alternate work opportunities in a similar business. Id. at *7-8. The Supreme Court of Pennsylvania granted allowance of appeal to address the following issue: “Are contractual no-hire provisions which are part of a services contract between sophisticated business entities enforceable under the laws of the Commonwealth?” Id. at *9-10.

PENNSYLVANIA SUPREME COURT OPINION

Due to the lack of Pennsylvania case law governing no-hire provisions, the court reviewed decisions from other jurisdictions addressing similar provisions. Id. at *10. The court first summarized three decisions in which courts found such provisions unenforceable, including the California Court of Appeal’s decision in VL Sys., Inc. v. Unisen, Inc. In that case, VL Systems (“VLS”) was a provider of computer consulting services that entered into a contract with Star Trac to provide assistance for migrating to a new server. Id. at *13. The contract contained a provision that Star Trac would not attempt to hire VLS’s personnel during the term, or within 12 months, of the agreement.  Id. After the contract was completed, VLS hired a senior engineer, who a few months later accepted a position with Star Trac. Id. at *13-14. VLS filed an action against Star Trac in which the court entered judgment in favor of VLS. Id. at *14. The Court of Appeal reversed. It noted that, while courts have upheld narrowly drawn provisions which limit the employment mobility of nonparties, the contract at issue contained a very broad provision that applied to all VLS employees, regardless of whether they worked for Star Trac or were even employed by VLS at the time. Id. at *15. The Pennsylvania Supreme Court also summarized a Texas appellate court case and a Wisconsin Supreme Court decision holding that no-hire provisions are unenforceable.

The court also discussed three cases from other jurisdictions in which courts reached conclusions that the no-hire provisions presented by those cases were enforceable. Id. at *17-26. In all three cases, courts found that the no-hire provisions at issue were narrowly tailored to protecting the companies’ interest in retaining skilled workers, and did not substantially restrict employees’ opportunities to secure employment in their particular fields.

Against this background, the court analyzed the parties’ arguments. PLS argued that it had a legitimate business interest in protecting its employee assets from poaching by its business partners. Id. at *26. PLS explained that the no-hire provision was intended to disincentivize a carrier from “poaching that which PLS values most  – its employees, who by virtue of PLS’s involvement in training them, develop the specialized knowledge and expertise that makes them so attractive to one who might be inclined to transact business directly with a shipper.” Id. at *27. It also argued that the Superior Court erred by focusing on the interests of non-parties (PLS employees) who are only precluded from working for Beemac and are not barred from employment with any other entity in the trucking/logistics field. Id. at *28. PLS further asserted that the Superior Court erred in relying on VL Systems, arguing that the decision was not a per se rejection of no-hire provisions but rather was fact-specific. Id. at *31.

Beemac argued that the lower court correctly applied Pennsylvania law regarding restraints of trade in holding that the no-hire provision violates public policy. Id. at *32. Beemac also argued that the United States Department of Justice (“DOJ”) has recently taken a strong stand against no-hire provisions. Beemac noted that the U.S. District Court for the Western District of Pennsylvania relied on a statement of interest filed by the DOJ in determining that plaintiffs had sufficiently alleged that the no-poach agreements were a per se violation of the antitrust laws in In re Ry. Indus. Employee No-Poach Antitrust Litig., 395 F. Supp. 3d 464 (W.D. Pa. 2019). Id. at *34. Beemac further noted that the DOJ submitted a similar statement of interest in another case alleging that Duke University had entered into an unlawful agreement with the University of North Carolina to prevent lateral hiring of certain medical employees, in Seaman v. Duke University, 2019 U.S. Dist. LEXIS 163811 (M.D.N.C. Sept. 25, 2019). Id. That case resulted in a settlement that required a monetary payment and significant injunctive relief. Id. The Attorney General of the Commonwealth of Pennsylvania filed a brief supporting Beemac’s assertion that, along with the DOJ, several state attorneys general have actively focused on no-hire restrictions. Id. at *34-35.

The Pennsylvania Supreme Court reviewed the factual findings of the lower court deferentially while resolving issues of law de novo. Id. at *39. The court recognized that “Pennsylvania common law has treated restrictive covenants as restraints on trade that are void as against public policy unless they are ancillary to an otherwise valid contract.” Id. The court employed a balancing test to determine the reasonableness of the restraint in light of the parties’ interests that the restraint aims to protect and the harm to other contractual parties and the public. Id. at *40. The court relied on a “Rule of Reason” test for evaluating the reasonableness of ancillary restrains from the Restatement (Second) of Contracts:

(1) A promise to refrain from competition that imposes a restraint that is ancillary to an otherwise valid transaction or relationship is unreasonably in restraint of trade if

(a) the restraint is greater than is needed to protect the promisee’s legitimate interest, or

(b) the promisee’s needis outweighed by the hardship to the promisor and the likely injury to the public.

Id. at *40-41. The court noted that the reasonableness test set forth above is consistent with the DOJ’s guidance for human resource professionals, which explains that naked no-poach agreements are per se illegal. Id. at *41, n. 8. However, the DOJ advised that legitimate joint ventures are not per se illegal and has advocated for the rule of reason to apply to ancillary restraints on trade. Id.

In the case at hand, the court found that PLS had a legitimate interest in preventing its business partners from poaching its employees, who had developed specialized knowledge in the course of their employment. Id. at *41. However, the court determined that the no-hire provision was both greater than needed to protect PLS’s interest, and creates a probability of harm to the public. Id. at *42. The court specifically noted that the no-hire provision prevented Beemac from hiring or soliciting all PLS employees, regardless of whether the PLS employees had worked with Beemac during the term of the contract. Id. The court also recognized that the no-hire provision impairs the employment opportunities and job mobility of PLS employees, who are not parties to the contract, without their knowledge or consent. Id. Finally, the court found that, by undermining free competition in the labor market in the shipping and logistics industry, the no-hire provision creates a likelihood of harm to the general public. Id. at *43. The court therefore concluded that the no-hire provision unreasonably retrains trade and is therefore unenforceable. Id. at *44.

Olean Wholesale Grocery Coop v. Bumble Bee Foods, 993 F.3d 774 (9th Cir. 2021) (Follow Up) | Robert Connolly, Law Office of Robert Connolly

In  last month’s E-briefs, Lesley Weaver and Matt Melamed, Bleichmar, Fonti & Auld LLP covered this case, writing in part: “In Olean Wholesale Grocery Coop v. Bumble Bee Foods, 993 F.3d 774 (9th Cir. 2021), the Ninth Circuit vacated and remanded a district court order certifying three classes in an antitrust case involving an admitted price-fixing conspiracy by producers of packaged tuna.  Most notably, the panel stated that, in order for statistical evidence to establish Rule 23(b)(3) predominance, a district court must conclude the percentage of uninjured class members must be de minimis.  Olean, Slip Op. at 32. This high standard pushes class certification ever closer to demanding detailed discovery far beyond establishing mere predominance.  (here).

A Ninth Circuit judge has called for a vote on rehearing the appeal and the Court of Appeals had invited briefs on whether the entire court should review the case after a divided opinion mentioned above. “The parties are directed to file simultaneous briefs setting forth their respective positions as to whether this case should be reheard en banc. The parties should specifically discuss whether Federal Rule of Civil Procedure 23(b)(3) requires a district court to find that no more than a “de minimis” number of class members are uninjured before certifying a class.”   Id., Order, Case No. 19-56514, Dkt. Entry 101, (9th Cir. April 28, 2021). 

Two public interest groups, the American Antitrust Institute and Public Citizen, among others, filed amicus briefs: AAI (here); Public Citizen. (here).

Section News

Students Can Join the Section for Free

Law students can join up to three sections of the California Lawyers’ Association (CLA) for free?  We’d love to have you. Find more information here.

Celebrating Women in Competition Law in California | September 9, 2021

The Fifth Annual “Celebrating Women in Competition Law in California” panel presentation and networking event will be held on Thursday, September 9, 2021 at 5:30pm. The event will feature a fantastic lineup of panelists who will engage in a lively discussion moderated by the Honorable Beth Labson Freeman. We have our fingers crossed that local health guidelines will allow us to hold this event in person. Please mark your calendars now and you will receive notification when registration opens in early July.

31st Annual Golden State Institute | November 17-18, 2021

Please save the date for the 31st Annual Golden State Institute on November 17-18, 2021!

This annual marquee event sponsored by the Antitrust and Unfair Competition Law Section promises expert panels on front page issues and cutting-edge legal developments, along with the unrivaled socializing and networking opportunities the Antitrust and Unfair Competition Law Section is renowned for. 2021 also marks the return of the Section’s star-studded California Antitrust Lawyer of the Year events. Don’t miss out!

For major sponsorship options, please email Antitrust@CAlawyers.org.

Section’s Executive Committee

The Antitrust and Unfair Competition Law Section is managed by its Executive Committee. The Executive Committee is charged with overseeing the Section’s current activities and developing new programs and initiatives to further the development of antitrust and competition law in California. A core component of the Executive Committee’s work is to provide opportunities to develop the next generation of California antitrust and unfair competition law practitioners.

The Executive Committee is composed of a maximum of 20 members. Members are required to be active and to contribute to the Section’s programs and initiatives, to participate in programs, and to attend the Section’s monthly remote meetings and quarterly in-person meetings. Each member has a tenure of three years with the possibility of three renewable one-year terms.

Applications for new Ex-Com members is no closed and under review by the current Ex-Com members.  For a list of current Ex-Com officers, please click here.  There are numerous committees in the Section and all actively seek volunteers to help with the Section’s work.  Please contact an Ex-Com member for more information about how to get involved.

A Deeper Dive: Federal Agents Back to Business as Usual: Drop-In Interviews and Search Warrants

Robert Connolly

As life begins to return to normal, and hopefully continues in that direction, it is worth noting that investigative agencies are also returning to normal investigative techniques, including conducting drop-in interviews and executing search warrants.  Of course, neither of these techniques disappeared completely during the pandemic, but they were reduced greatly as agents, like the rest of us, reduced travel and reduced face to face contact.  I don’t have any statistics to rely on but anecdotal evidence indicates that agents are “on the road again.”

Many firms issue client alerts on how to deal with drop-in interviews and search warrants. Being prepared is key to eliminating or minimizing damaging mistakes that can occur during an interaction with a federal agent (or state agent or in Europe, during a dawn raid). This “deeper dive” is not a substitute for a comprehensive check list of “How to handle a Search Warrant/Drop-in Interview” but more of reminder that businesspeople might be in need a refresher with emphasis on a couple of points:

A.  Drop-In Interviews

It is agood idea for employees to understand that during an investigation federal agents may show up unannounced at a business, home, or other location (an airport or hotel for foreign executives traveling to the US).  Without a plan in advance of how to handle such a situation, individuals may panic. They may lie (false statement), they may destroy documents after the agent leaves (obstruction), or they will try to cooperate but they will not accurately remember an event they are questioned about that may have taken place years ago.  An honest mistake by a witness may be perceived as a false statement by the government.  The agents are prepared; the executive being interviewed is not. Lying and destroying documents are very bad ideas.  They may lead to criminal charges even if the alleged conduct under investigation never took place.  Even having an innocent faulty recollection can create problems later.  Potential witnesses should realize that the agents dropping-in have a plan and facts unknown to the witness and the element of surprise does not work in the witnesses’ favor.  Moreover, agents always work in pairs so they have two witnesses to what was said–the executive is alone.  It is OK to tell the agents that you would  be happy to cooperate but you want to set up a meeting at a later time–after you consult with a lawyer.

There’s much more to advising a potential witness about how to handle a drop-in interview.  The point here is simply that it may be time to review or create a plan so that company employees are prepared to handle themselves appropriately. 

B.        Search Warrants

By now it is well understood that search warrants are a completely acceptable tool used by the Antitrust Division/FBI during criminal antitrust investigations.  In fact, as long as the government can convince a judge that it has probable cause to get a warrant issued, search warrants are favored in criminal investigations. The search itself sends the message that probable cause exists and the ability to take documents from the company files reduces/eliminates the government’s concerns that all relevant documents might not be produced. Finally, during a search warrant, the agents will use the opportunity to try to interview company employees to learn as much as they can about the company and the subject executives. 

Have a plan for your corporate clients. If you don’t have one, create one. If it’s been a while since you’ve updated one, now may be a good time.  Corporate personnel change and it’s the people in the company that need to know how to handle a search warrant.  Of course, a search warrant is unlikely to happen, but if one does, not having an effective plan can be disastrous. 

Some common features of an “In Case Of Search Warrant” plan:

  • Company employees should know who to immediately contact–both inside/outside counsel.
  • Someone from the company should be in charge until counsel arrives.
  • Ask for a copy of the search warrant.
  • Keep a record of what is seized.
  • Cooperate in the collection of documents but do not be interviewed or answer questions about the company.
  • DO NOT DESTROY/HIDE OR OTHERWISE OBSTRUCT THE COLLECTION OF RECORDS  (It’s a separate and serious criminal offense and you may want any “hot” documents in plea negotiations with the  DOJ at a later time.)

This a very brief list of some of the Do’s and Don’ts to consider.  The point of this message is simply to note that business as usual is returning for government agents as well and it may be a good time to refresh or institute for employees interacting with federal state of local agents.

NOTE:   Inside the FBI Podcast: Procurement Collusion Strike Force

It is not only large companies that may be subject to a search warrant.  The Antitrust Division, in cooperation with various US Attorney Offices and a spectrum of federal agencies, have created the Procurement Collusion Strike Force focusing on bid rigging in government contracts.  The FBI has published a podcast: Inside the FBI Podcast: Procurement Collusion Strike Force (here) (On this episode of Inside the FBI, we talk about the novel approach federal investigators and prosecutors are taking to deter antitrust crimes before they happen and detect and prosecute them when they do.)

Agency Updates

Antitrust Division, US Department of Justice

May 20, 2021 Broiler Chicken Producer Indicted for Price Fixing and Bid Rigging

A federal grand jury in Denver, Colorado, returned an indictment charging Norman W. Fries Inc., dba Claxton Poultry Farms (Claxton), headquartered in Claxton, Georgia, with participating in a nationwide conspiracy to fix prices and rig bids for broiler chicken products.

May 11, 2021 Antitrust Division and Fellow Members of the Multilateral Pharmaceutical Merger Task Force Seek Public Input

The U.S. Department of Justice’s Antitrust Division is pleased to be a part of the Multilateral Pharmaceutical Merger Task Force (Task Force), along with its counterpart competition enforcement agencies — the Federal Trade Commission (FTC), the Canadian Competition Bureau, the European Commission Directorate General for Competition, the United Kingdom’s Competition and Markets Authority, and Offices of State Attorneys General.

The Task Force, initiated by the FTC, seeks to identify concrete and actionable steps to refresh and update the analysis of pharmaceutical mergers. To facilitate a robust discussion of the ways to study the impact of pharmaceutical mergers, the Task Force requests public input, including from health policy experts, economists, attorneys, scientists, health care practitioners, academics, and consumers, on issues potentially implicated with pharmaceutical mergers. For more details about providing comments to the Task Force, including submission and timing information, please see the FTC’s Notice. Following public comment, the Task Force anticipates hosting a public workshop.

Federal Trade Commission

May 20, 2021 Statement of FTC Acting Bureau of Competition Director Maribeth Petrizzi on Bureau’s Motion to Dismiss Request for Preliminary Relief in Illumina/GRAIL Case

May 11, 2021  Multilateral Pharmaceutical Merger Task Force Seeks Public Input

Staff from the Federal Trade Commission, Canada’s Competition Bureau, the European Commission Directorate General for Competition, the U.K.’s Competition and Markets Authority, the U.S. Department of Justice’s Antitrust Division, and Offices of State Attorneys General has issued a notice seeking public comment to inform their review of how to best update their approaches to analyzing the effects of pharmaceutical mergers. 

The Task Force has requested comments from the public on all issues concerning pharmaceutical mergers, including theories of harm, the role of innovation, market definition, and remedies. The public comment period is open only through June 25, 2021, and seeks input on the following seven issues:

1. What theories of harm should enforcement agencies consider when evaluating pharmaceutical mergers, including theories of harm beyond those currently considered?

2. What is the full range of a pharmaceutical merger’s effects on innovation? What challenges arise when mergers involve proprietary drug discovery and manufacturing platforms?

3. In pharmaceutical merger review, how should we consider the risks or effects of conduct such as price setting practices, reverse payments, and other ways in which pharmaceutical companies respond to or rely on regulatory processes?

4. How should we approach market definition in pharmaceutical mergers, and how is that implicated by new or evolving theories of harm?

5. What evidence may be relevant or necessary to assess, and if applicable, challenge a pharmaceutical merger based on any new or expanded theories of harm?

6. What types of remedies would work in the cases to which those theories are applied?

7. What factors, such as the scope of assets and characteristics of divestiture buyers, influence the likelihood and success of pharmaceutical divestitures to resolve competitive concerns?

For more details about providing comments to the Task Force, including submission and timing information, please see the FTC’s Notice. Following public comment, the Task Force anticipates hosting a public workshop.

May 5, 2021  FTC Acting Chairwoman Slaughter Announces New Appointments to Agency Leadership Positions

Names Austin King Associate General Counsel for New Rulemaking Group. Hires Gaurav Laroia as Attorney-Advisor for Consumer Protection.

California AG’s Office

May 11, 2021  Attorney General Bonta Launches New Racial Justice Bureau, Announces Virtual Convening Against Hate Crime with Big City Mayors

April 29, 2021Attorney General Rob Bonta Launches New Diversity, Equity, and Inclusion Effort within the California Department of Justice

Other News and Notes

  • Amy Klobuchar, Antitrust: Taking on Monopoly Power from the Gilded Age to the Digital Age, Book Review, New York Times, April 28, 2021, Amy Klobuchar on Breaking up Giant Corporations, Liaquat Ahamed. (here).

    For a video conversation with Senator Klobuchar about her book, see, A Conversation with Senator Klobuchar with Mark Zandi, Chief Economist, Moody’s Analytics, May 17, 2021 at the Free Library of Philadelphia  (here). 
  • Webinar: Business Litigation Series: Attorneys’ Fees: Best Practices for Litigating a Motion
    JUNE 9, 2021 @ 12:00 PM – 1:00 P
    This program offers 1 participatory MCLE credit.  Presented by the Business Law Section and the Litigation Section
  • Diverse Team To Lead MDL Against Robinhood, Other Brokers, Nathan Hale, May 18, 2021, Law 360.  Law 360 is a paid service.  The article reports the significant diversity of the attorneys selected by the court to prosecute investors claims in the MDL litigation. 

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