Antitrust and Unfair Competition Law


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Welcome to the December E-briefs, News and Notes. This edition includes three E-Briefs as well as summaries of the panels at the 31st Annual Golden State Antitrust and Unfair Competition Law Institute held virtually on November 18, 2021. Agency Updates contains links to important DOJ/FTC press releases. A Deeper Dive contains the GSI panel summaries. Lastly, in the News and Notes section there is a link to the George Washington Law’s James F. Humphreys Complex Litigation Center publication: Inclusivity and Excellence: Guidelines and Best Practices for Judges Appointing Lawyers to Leadership Positions in MDL and Class-Action Litigation.

If you would like more information about getting involved in the Section, or to help with E-briefs in particular, please reach out.  Thanks.


Court Declines Request To Add UCL Claim in In re Apple iPhone Antitrust Litigation Following Success of Claim in Related Action

James S. Dugan, associate, Zelle LLP


In the longstanding In Re Apple iPhone Antitrust Litigation, Case 4-11-cv-06714 (N.D. Cal. filed November 8, 2021), Judge Yvonne Gonzalez Rogers of the Northern District of California issued an order on November 8, 2021, denying the Consumer Plaintiffs’ (“Plaintiffs”) request to file a fourth amended complaint in their monopolization suit against Apple. Plaintiffs sought to add a claim under California’s Unfair Competition Law (“UCL”) following success on a UCL claim in the related action, Epic Games, Inc. v. Apple Inc. (“Epic Games/Apple”). The Court identified various points in the protracted litigation at which Plaintiffs had an opportunity to add such a UCL claim but opted not to. Analyzing the request under Federal Rules of Civil Procedure 15 and 16 (“Rule 15” and “Rule 16”), the Court concluded that allowing a fourth amended complaint would improperly “modify the trial and pre-trial schedule” and “reopen the pleadings for additional Rule 12 motions.” The order provides an instructive analysis of motions for leave to amend when it is not entirely clear whether Rule 15 or Rule 16 governs the request. In addition to denying the request to amend, the Court also denied Apple’s motion to compel Plaintiffs to submit a trial plan.


In Re Apple iPhone Antitrust Litigation was initially filed over a decade ago and suffered additional delay in part due to the COVID-19 pandemic and an appeal to the U.S. Supreme Court, which ruled that app users had standing to sue Apple for the alleged overcharges paid in the App Store. On a number of occasions in the recent history of the litigation, Plaintiffs either amended their complaint without adding a UCL claim or did not request to amend their complaint at all. The Court summarized these instances, beginning with Plaintiffs’ decision not to request to amend in June of 2020 when the parties stipulated to a revised schedule and reset the trial date for July 11, 2022. Similarly, Plaintiffs did not request to amend their complaint in January of 2021, when the briefing schedule was again extended at the parties’ request.

When Plaintiffs did amend, they elected not to include a UCL claim despite such a claim being included in the complaints for two related actions. The complaints in both the Developer Class case and the Epic Games/Apple case included a UCL claim prior to the filing of the Consumer Plaintiffs’ most recent amended complaint. In addition, throughout the preparation for the expedited trial in the Epic Games/Apple case, “the Court repeatedly requested input from the Consumer Plaintiffs and the Developer Plaintiffs including their perspectives on the legal issues being litigated, including the UCL.” However, as the Court recounted, “Not once did the Consumer Plaintiffs request to amend their complaint.”

Following a bench trial in the Epic Games/Apple case, the Court issued an opinion on September 10, 2021, which included “a finding against Apple on the UCL claim.” Shortly thereafter, “counsel for Consumer Plaintiffs filed the instant motion, never really explaining why they never alleged a UCL claim but merely stating that they would be ‘remiss not to,’ given the Court’s decision in the Epic Games/Apple case.”


The Court first had to decide whether the motion for leave to amend should be evaluated under Rule 15 or Rule 16 as the parties disputed which applied in this instance. “Two potential rules apply,” noted the Court: Rule 15(a) which governs “Amendments before Trial” and Rule 16(b) which governs “Modifying a Case Schedule.” “Rule 15(a) generally governs when parties may amend their pleadings and Rule 16(b) governs amendments that would alter the Court’s pretrial schedule.” Apple argued that Rule 16 applied because if the motion was granted it “would result in a change to the Court’s scheduling order.” Plaintiffs countered that Rule 16 did not apply because the Court had not “entered a scheduling order that sets a deadline for amendments to the pleadings.” Noting that the case law within the Northern District was mixed and acknowledging “the lengthy procedural history” of the case, the Court opted to apply both Rule 15 and 16 in evaluating the request.

Rule 16 analysis

“Rule 16 requires diligence and allows changes due to matters not reasonably foreseeable at the time the scheduling order was issued.” The Court was not convinced that diligence could be found in Plaintiffs’ request and swiftly denied it under a Rule 16 analysis. First noting that Rule 16 did apply because “the request to reopen pleadings to add a new claim would entirely disrupt an already tight schedule,” the Court reasoned that “Consumer Plaintiffs have utterly failed to explain their delay in raising this issue.” Analyzing Plaintiffs’ proposed amendments, the Court found that the “three new theories under the UCL and additional remedies” in conjunction with the addition of “generic bald allegations which would be subject to Rule 12 practice” justified a denial of the motion on Rule 16 grounds. 

Rule 15 analysis

The Court proceeded to deny the motion under Rule 15 as well. Under Rule 15 the Court weighs five factors in ruling on a motion for leave to amend: (1) bad faith; (2) undue delay; (3) prejudice to the opposing party; (4) futility of the amendment; and (5) whether the movant has previously amended its pleadings to cure deficiencies.

The Court began with prejudice, citing case law for the proposition that “[p]rejudice is the touchstone of the inquiry under Rule 15(a)” and that the “need to reopen discovery” may be an indicator of prejudice. While acknowledging that “the UCL claim overlaps with the facts and theory set out in the operative complaint,” the Court still concluded that additional fact and expert discovery would be required. Further, the Court was not persuaded that briefing on class certification could be done with “succinct supplemental briefing.” Accordingly, the prejudice factor weighed against granting the motion.

The Court then proceeded with the undue delay factor, likewise finding that it weighed against granting the motion. The Court pointed to the numerous opportunities (outlined in the background section above) that Plaintiffs had to add a UCL claim to their complaint and reasoned, “Plaintiffs waited nearly two years after this case had come back to this Court from appeal before seeking leave to add the UCL claim, and only as a result of having read this Court’s decision.”

Discussed next, the futility factor was the first and only significant factor to weigh in favor of granting the motion for leave to amend. Apple argued that the claim for equitable relief under the UCL was futile because there was an adequate remedy at law. Rejecting this, the Court stated that “nothing precludes plaintiffs from seeking restitution under the UCL in the alternative from their other remedies sought” and that the claim was therefore not futile.

Following futility, the Court considered whether the amendment sought was a result of the repeated failure to cure deficiencies by amendments previously allowed. Stating that the “current motion for leave to amend does not seek to cure any deficiency,” the Court concluded that while the factor weighed in favor of granting the motion, it carried “little applicability in this context.”

Lastly, the Court examined the bad faith factor. Citing a sole supporting case, Apple argued that Plaintiffs acted in bad faith by waiting to bring the UCL claim until after the Epic Games/Apple opinion. The Court disagreed, stating that while the motion was unduly delayed, it did not “rise to the level of bad faith.” Despite this, however, the Court could not “discern any credible reason for delay.” Admonishing Plaintiffs’ counsel, the Court stated, “It appears counsel would like to benefit from 20-20 hindsight. Thus, the Court could view the motion as one of gamesmanship or the result of negligence in failing to allege a claim which was found to be successful.” Nonetheless, because there was a lack of bad faith, the Court found the factor to be neutral “in terms of granting the motion.”

Balancing the factors, the Court denied Plaintiffs’ motion under Rule 15: “To find otherwise, would require this Court to entirely modify the trial and pre-trial schedule in this action which already requires the parties to double track pretrial motions and trial preparation, and would reopen the pleadings for additional Rule 12 motions.”

Motion to compel plaintiffs to submit a trial plan

In summary fashion, the Court also denied Apple’s motion to compel Plaintiffs to submit a trial plan under Local Rule 7-11. The Court agreed with Plaintiffs that the motion improperly included “a procedural objection to plaintiffs’ motion for class certification . . . .”  Stating that “the gravamen of the motion are arguments for denial of class certification including procedural objections,” the Court granted Plaintiffs’ motion to strike Apple’s motion to compel the submission of a trial plan and thus denied the latter as moot.

What’s next in In Re Apple iPhone Antitrust Litigation

The parties are awaiting a decision on class certification. A hearing on Plaintiffs’ motion for class certification was held on November 16, 2021, but ended without Judge Gonzalez Rogers issuing a ruling.

Three Times Is Not a Charm: Uber Gets Desoto Cab Company’s Third Amended Complaint Alleging Anticompetitive Practices Dismissed

Anthony Leon, in-house counsel in San Francisco, CA.

On November 18t, 2021, United States District Judge Jeffrey S. White dismissed most anticompetition claims brought against Uber Technologies, Inc. by San Francisco’s oldest cab company Desoto, recently renamed as Flywheel. Desoto Cab Company, Inc. v. Uber Technologies, Inc., et al., Case 4:16-cv-06385-JSW (N.D. Cal. November 18, 2021)

After two prior dismissal orders, respectively in August 2019 and March 2020, it was Flywheel’s third attempt since 2016 to establish Uber’s practices have been driving competitors out of the ride-hailing and rideshare markets. Yet, the Court granted, in part, and denied, in part, Defendants’ motion to dismiss most of Plaintiff’s claim, leaving them only with an unfair competition and injunctive relief claim.

In its complaint, Plaintiff articulated ten causes of actions against Defendants including monopolization and attempted monopolization in violation of the Sherman Act, violation of the Lanham Act, violation of the California Unfair Competition Law, and six unreasonable rates claims in violation of the California Public Utility Code (PUC). Id. at 1.

The Court dismissed the Sherman Act claims and the unreasonable rates claims brought under the California PUC, with no leave to amend, but dismissed only in part the UCL claims.

Plaintiffs failed to establish a monopolization or attempted monopolization claim under the Sherman Act

The Court dismissed with prejudice Plaintiff’s monopolization and attempted monopolization claims under the Sherman Act. It reminded that showing monopoly power remains an essential part of such claims, and it shall not be evaluated based on an actor’s market share, but rather on its ability to maintain that market share. Id. at 3.

Here, Plaintiff failed to show Defendants have practiced in a such manner that it created barriers to entry for new competitors or barriers to expansion for existing competitors in the San Francisco Ride-Hail Market. The Court did not agree with Plaintiff’s allegations that, on its own, Defendants’ brand awareness and customer loyalty would be sufficient to cause a barrier to entry or expansion. Id. at 3. Also, Defendants’ programs to facilitate a driver’s leasing or purchase of a vehicle at a lower price is not on its own an anti-competitive action because Defendants do not restrict their drivers from contracting with other transportation network companies (TNC), such as Lyft. Id. at 5.

Further, Plaintiffs failed to show that network effects acted as barriers to entry and to expansion, unlike Sidecar did in their own case against Defendant. SC Innovations v. Uber Technologies, Inc. No. 18-cv-07440-JCS, 2020 WL 2097611 (N.D. Cal. May 1, 2020). In this case, Plaintiffs did not sufficiently allege that there were anticompetitive effects on both sides of the two-sided ride-hailing platform, nor did they sufficiently allege the liquidity network effects at play cause established and former competitors not to be able to raise capital. Id. at 4, 5.

Finally, the Court confirmed its previous conclusion from the original complaint that, while it agrees with Plaintiff’s allegations of below cost pricing, Plaintiff did not “sufficiently alleged a dangerous probability of recoupment because . . . it ha[d] not sufficiently alleged that barriers to entry will prevent competitors from entering the market.” Id. at 5.

The Court finds it has no authority to rule on the unreasonable rates claims

Plaintiffs brought unreasonable rates claims in violation of the California PUC, claims that would by statute be handled by the California Public Utility Commission (CPUC), Sec. 1759 of Cal. PUC. Plaintiffs alleged that, because the CPUC has not exerted its authority or exercised jurisdiction over, regulated, addressed, or ruled on the rates charged by TNCs, the Court should be allowed to rule on these claims.

Traditionally, Courts use the three-part Covalt test to determine whether they are deprived of jurisdiction over PUC claims under Section 1759 of the California PUC, San Diego Gas & Electric Co. v. Superior Court, 13 Cal. 4th 893, 916-18 (1996) (“Covalt”). If the answer to all of the following questions is “yes,” then the Court should not rule on the issue: (i) the CPUC has the authority to adopt a policy; (ii) has it exercised that authority, and (iii) whether the court action at issue would hinder that policy. Id. at 7.

The Court first recognized that the CPUC has the authority to adopt a policy about TNCs rates. Id. at 8. To answer the second prong, the Court recognized it must focus on whether the CPUC has exercised its authority over an issue rather than a particular utility. It therefore agrees with the Defendant that the CPUC did so by continuing to collect information about TNCs fares, including information about how Uber calculates its fares. Id. at 7, 8. Finally, the Court found that ruling on Plaintiff’s rates claims would hinder the CPUC’s exercise of authority, because the CPUC has yet to complete constructing a regulatory framework for TNCs, including regulations for rate-related concerns. Id. at 9.

Therefore, the Court disagreed with Plaintiff on its authority to rule on the unreasonable rates claims and dismissed them with no leave to amend. Id. at 9.

UCL claims are dismissed in part

Plaintiff’s UCL claim is based on the alleged violations under the Sherman Act, the PUC claims, the Lanham Act claim, as well as alleged violations of the Americans with Disabilities Act, non-compliance with insurance requirements, and failure to comply with certain San Francisco regulations. Id. at 9. Because the Court concluded Plaintiff has not alleged a violation of the Sherman Act and cannot state its PUC claims, the Court has granted Defendants’ motion to dismiss the UCL claim to the extent it is premised on those claims. Id. at 10.

On the other grounds, the Court dismissed the UCL claims in part and orders Plaintiff to limit the claims to alleged violations of the Lanham Act. Plaintiff failed to allege statutory standing by insufficiently showing an injury in fact, and a loss of money or property as a result of the unfair competition, Cal. Bus. & Prof. Code § 17204. Specifically, Plaintiff argued harm in the form of increased costs without showing that these costs would not have been required but for Defendants’ actions or inactions to comply with ADA and San Francisco’s regulatory requirements.  Id. at 11, 12.

The Court then dismissed Plaintiff’s allegation that they are entitled to restitution on their UCL claim, but denies the motion to dismiss the injunctive relief claim as Defendant did not challenge it. Plaintiff believed they had a vested interest in its drivers’ leasing fees who left and now drive using Defendants’ platform. The Court found that there are no sufficient facts supporting a reasonable inference that Plaintiff’s interest in its lease payments were vested. Further, it is insufficient to draw a reasonable inference that funds in Defendant’s possession could be traceable to those leases. Id. at 14.


The Court dismissed, in part, and granted, in part, Uber’s motion to dismiss, without further leave to amend. After amending their complaint for the third time, Flywheel’s case is left with only a handful of claims from their original complaint. This order marks another predatory pricing lawsuit avoided by Uber against competitors, particularly traditional cab services.

Second Circuit Blows Away Retailers’ “Umbrella” Claims Against AMEX

Bob Connolly,   Law Office of Robert Connolly

A class of retailers who do not accept American Express cards sued for damages as “umbrella” plaintiffs–retailers who alleged they had their own swipe fees increased because their credit card vendors followed Amex’s lead. The Second Circuit dismissed the suit holding that the non-Amex retailers were not efficient enforcers of the antitrust laws and therefore lacked antitrust standing. In re American Express Anti-Steering Rules Antitrust Litigation, Case No., 20-1766 (2d Cir. November 22, 2021) (hereinafter “Amex Anti-Steering Lit.”).

“Umbrella Plaintiffs”

The suing stores do not accept American Express.  They sued as “umbrella” plaintiffs, claiming their own credit card fees were increased due to Amex’s Anti-Steering Rules on merchants that do accept American Express as a form of payment.  The plaintiff retailers alleged that these Anti-Steering Rules, when combined with Amex’s higher merchant fees, have raised fees throughout the industry, including the fees they pay.  The umbrella theory “seeks to hold price-fixers liable for harm allegedly flowing from the illegal conduct even though the price-fixing defendants received none of the illegal gains and were uninvolved in their competitors’ pricing decisions.” Amex Anti-Steering Lit., at 12-13 citing, In re Coordinated Pretrial Proceedings in Petroleum Prods. Antitrust Litig., 691 F.2d 1335, 1339 (9th Cir. 1982).

The Second Circuit described the classic umbrella scenario being as when ‘“[a] cartel cuts output, which elevates price throughout the market.’ Because of that price umbrella, ‘customers of fringe firms (sellers that have not joined the cartel) pay this higher price, and thus suffer antitrust injury, just like customers of the cartel’s members.”’ Amex Anti-Steering Lit., at 12. (citation omitted).

Plaintiffs Not “Efficient Enforcers”

The Second Circuit, like the district court, rejected the umbrella argument claim because the non-Amex merchants could not be considered “efficient enforcers” of antitrust law. The key principle underlying the efficient enforcers test is proximate cause, and the Second Circuit held that appellants failed to show the required direct connection between the harm and the alleged antitrust violation.  Upholding the district court decision, the Second Circuit found that “The appellants are not efficient enforcers of the antitrust laws and therefore lack antitrust standing.” Id. at 21 (footnote omitted).

To determine whether a party can sue under the antitrust laws—whether the party has “antitrust standing”—the court applied the “efficient enforcer” test. The efficient-enforcer test is an elaboration on the proximate cause requirement of Associated General Contractors of California, Inc. v. California State Council of Carpenters (AGC), 459 U.S. 519, 535-36 (1983).

Whether a plaintiff is an “efficient enforcer” depends on four factors: (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.” Amex Anti-Steering Lit., at 12 (citing AGC, 459 U.S. at 535-36).  The court found that “Because the four efficient-enforcer factors do not establish antitrust standing, we affirm the district court’s judgment.” Amex Anti-Steering Lit., at 13.

1.         Directness of Injury

The court noted that in the context of antitrust standing, proximate cause generally follows the first-step rule and “[o]ur court has repeatedly followed the first-step rule in the antitrust context.” Id. at 15.  The Court found that the appellants did not suffer a direct injury from the alleged antitrust violation.  The first step was Amex raising the prices for Amex accepting merchants: “Amex did  not raise the appellants’ fees.  Nor could it have: the appellants do not accept American Express cards.? Id. at 16-17.

2.         The Existence of More Direct Victims

This factor considers whether denying the plaintiff a remedy would leave the alleged harm undetected or unremedied. The court noted that Amex merchants were harmed and did sue.  (“[t]he merchants who have a relationship with Amex were harmed at the first step by Amex’s Anti-Steering Rules. And those merchants have already sued Amex.” Id. at 18.  Accordingly, the Court of Appeals “follow[ed] our precedent in holding that “the second efficient-enforcer factor weighs against … antitrust standing in this case.” Id. at 18 (citation omitted).

3.         Is the Claim “Highly Speculative?”

The court did not find that the plaintiffs’ claim for damages was “highly speculative,” but this did not confer antitrust standing. “The appellants’ injury may have been foreseeable, predictable, and even calculable, but proximate cause—especially in the economic harm context—requires more than foreseeability.” Id. at 20 (citation omitted).

4.         Risk of Duplicative Recoveries

While there was no risk of duplicative recoveries in the case, this factor also was not sufficient to overcome the lack of “first step” injury. Id. at 21.

Conclusion:  While Plaintiffs had the better of the argument on two of the four efficient enforcers factors, taken as a whole, and based primarily on lack of proximate cause, “the four efficient-enforcer factors do not establish antitrust standing.”  Id.

California Unfair Competition Law

The Second Circuit noted that dismissal of the appellants’ federal antitrust claims did not necessarily require the dismissal of their claims under the California Unfair Competition Law (“UCL”) and California antitrust law. Id. at 22-23 (citation omitted).  Nonetheless, the Court held that the appellants’ California law claims fail for similar reasons as the federal claims–lack of standing. Id.  The court reviewed California decisions and found that “the California legislature, like Congress, was ‘familiar with the common-law rule’ of proximate cause,” and “[a]ccordingly, the lack of proximate cause in this case means that the appellants cannot state a claim under the Cartwright Act.” Id. at 23-24.

Section News

Remembering Guido Saveri

Eric P. Enson  Partner, Jones Day

Guido Saveri passed away in San Francisco on October 18, 2021. He was 96 years old. To those who knew him, he was a consummate lawyer, driven, dedicated and passionate about his clients and their causes.  But he was also kind, professional and a family man.  To those who did not know him, you almost certainly know his work.  He and his brother started the law firm of Saveri & Saveri in the 1950s with a focus on antitrust litigation.  Early in his career, he served as counsel on a number of groundbreaking lawsuits that led the way for current-day class action litigation.  Perhaps his most noteworthy matter was that of Continental Ore Co. v. Union Carbide Corp., in which the Supreme Court found that antitrust plaintiffs should be given the full benefit of their proof by viewing it as a whole without compartmentalizing the various factual components. 

Throughout his career, Guido was appointed as lead or co-lead counsel in numerous antitrust class actions filed around the nation, including In Re Baby Food Antitrust Litigation, In Re Brand Name Prescription Drugs Antitrust Litigation, In re Citric Acid Antitrust Litigation and In Re Dynamic Random Access Memory Antitrust Litigation, just to name a few.  He also frequently spoke and wrote on emerging aspects of antitrust law.  In 2007, the Antitrust and Unfair Competition Law Section of the California Bar recognized Guido as the Antitrust Lawyer of the Year.

My fondest memory of Guido came during the Tableware trial.  As we were arguing jury instructions, Guido, who had been sitting in the last row of the gallery watching the proceedings, came running up to the bar with his hand in the air calling out “That’s not what Continental Ore says, Your Honor!”  That’s just the kind of lawyer he was.

Guido will be missed greatly.  Condolences to his family and many friends. 

Congratulations on a Fantastic Golden State Antitrust and Unfair Competition Law Institute

The Antitrust and Unfair Competition Law Section hosted the Golden State Antitrust and Unfair Competition Law Institute (GSI) on November 18, 2021. This is the Section’s marquee event and this year attendees/participants included private and public sector attorneys, academics, experts, judges, and law students. Due to the pandemic, the event was hosted virtually but the good news is that approximately 150 people were able to participate.  This was a remarkable turnout and a tribute to the quality and diversity of the panels. The programs included recent developments in antitrust and unfair competition law, managing an antitrust practice, big stakes antitrust trials, and remarks by California Supreme Court Justice Martin Jenkins.  Summaries of the panels are collected below in the Deeper Dive section.

The uncertainty of the pandemic situation made planning the conference a tremendous challenge but the event went off smoothly.  Special thanks go to Co-Chairs Rob McNary and Aaron Sheanin, past Chairs, Liz Castillo and Jiamie Chen and the CLA staff led by Victoria Loeffler.  We also could not put this program on without the generous support of our sponsors.

The 31st Annual Antitrust Lawyer of the Year Reception and Dinner with some additional programming will take place in May 2022 (registration to follow closer to the event).  The Section and its members will honor and congratulate Dan Wall, of Latham & Watkins LLP, as the 2021 Antitrust Lawyer of the Year.

The GSI Outdoor Welcome Reception Was a Hit

On November 17, 2021, 83 attorneys, law students, and others joined together outdoors for cocktails and hors d’oeuvres at the Vault Garden in the heart of downtown.  This may have been a record attendance for this event. It was wonderful to meet in person with so many colleagues/friends after such a long shut down.  The reception was sponsored by Western Alliance Bank.

A Deeper Dive: Recap Of Panels At Golden State Institute

In the section below we present summaries of the various panels that were held at the November’s Golden State Institute. While they are all worth reading, Anu Reddy’s summary of the recent developments in antitrust and unfair competition law panel is an excellent recap of that invaluable panel’s deep knowledge.  Kevin Yeh’s write up of the interview with California Supreme Court Justice Martin J. Jenkins is also very interesting.  Please benefit from reading all the write-ups.

Disclaimer:  The GSI panel recaps have not been reviewed by the panelists. The summaries don’t purport to capture verbatim the remarks made.  Transcripts of the panel discussions, along with the program materials, will appear in the Spring edition of the Section’s Competition journal. 

We were very fortunate, as usual, to have numerous panelists from various government agencies.  The panelists speak on their own behalf.  Their views are their own and do not represent the views of the agency where they work.

Recent Developments in Antitrust and Unfair Competition Law

Anupama Reddy, Joseph Saveri Law Firm LLP


  • Thomas Greene, Trial Attorney, Antitrust Division, U.S. Department of Justice.
  • Colleen E. Huschke, Deputy District Attorney, Consumer Protection Unit of the San Diego County.
  • Shana M. Wallace, Professor of Law (antitrust, civil procedure and legal ethics), Indiana University Maurer School of Law in Bloomington.
  • Moderator: Malinda Lee, Deputy Attorney General, Healthcare Rights and Access Section’s Competition Unit in the California Attorney General’s Office.

Federal Antitrust Developments: Prof. Shana M. Wallace

Professor Wallace kicked off the panel with an overview of recent federal antitrust developments. She selected cases that made interesting contributions in three key areas of antitrust law: Section 2, Section 1 and Section 7. For Section 2, she selected Comcast v. Viamedia, which she flagged as asolid case left on the books for practitioners bringing Section 2 cases or those seeking relevant precedent on refusals to deal. For Section 1 civil cases, Professor Wallace gave an overview on NCAA v. Alston, and noted important observations that the Supreme Court made regarding monopsonies and price-fixing in labor markets. On the criminal side of Section 1 jurisprudence, Professor Wallace walked us through criminal no-poach cases recently brought by the government.

Section 2: Comcast v. Viamedia

Professor Wallace briefly described the procedural history. The Seventh Circuit reversed a district court decision dismissing a refusal to deal claim at the motion to dismiss stage and granting summary judgment on a tying claim. Comcast submitted a petition for writ of certiorari to the Supreme Court. The Supreme Court issued a “call for the views of the Solicitor General” (CVSG) in December 2020. The Department of Justice counselled against granting certiorari opining that the Seventh Circuit’s “fact bound” decision had correctly applied precedent, including Aspen Skiing.

Professor Wallace prepared a helpful demonstrative to describe the facts and competitive dynamics of the case. She explained that the market includes several levels, and the alleged anticompetitive conduct eliminated competition from at least two levels. Comcast had a division called Comcast Spotlight which offered advertising services. Comcast competed with its two cable rivals RCN and WOW!. RCN and WOW! used Viamedia to market and sell its advertising. There was competition between Viamedia and Comcast. In return there was also competition between the cable providers and Comcast for local advertising revenue. Comcast acquired hundreds of local cable companies over the past few decades, and in doing so, took over the formerly cooperative “interconnects.” RCN and WOW! held out for several years and eventually gave in. Competition for local advertising revenue disappeared with the disappearance of Viamedia. This resulted in Comcast being the only entity offering local advertising rep service.

Prof. Wallace noted that this case was an opportunity for the Supreme Court to further limit Aspen Skiing. Comcast’s position was that Aspen Skiing is “clinging to life” and is an “artefact of an earlier era.” One decision that was discussed in a lot of detail was Novell v. Microsoft Corp.,[1] where Judge Gorsuch discussed how to measure harm.  She outlined a debate on measuring harm, which has come to be colloquially known as the “no economic sense” test. The test comes in part from an amicus brief filed by the Government in Trinko, but also in large part from economic literature. The test sounds terse: “if you can’t think of any economic benefit to this activity, maybe it is illegal. But if you can think of any, then it should be fine.” Comcast took this reading of the test. The government, at oral argument at the Seventh Circuit, insisted that it was a balancing test.

Key takeaways: The case includes a great distillation of Aspen Skiing factors and efficiencies. For any plaintiff lawyer or government enforcer, here the Seventh Circuit offered a great mantra endorsing the competency of the judiciary in the wake of an antitrust violation. To wrap up, she discussed the Seventh Circuit’s response: “[C]ourts are often called upon to undertake complicated, long-term supervision of complex cases and remedies. The judiciary need not and should not adopt a posture of learned helplessness in the face of proven antitrust violations. In this antitrust case, we are not ready to cry ‘uncle’ based on the unsubstantiated claim that this case poses ‘insoluble administrability problems.”

Section 1 (civil): NCAA v. Alston[2]

The District Court (Judge Claudia Wilken) struck down NCAA rules limiting the education related benefits schools may offer student athletes. The NCAA appealed. The District Court did not disturb NCAA rules limiting undergraduate athletic scholarship and other compensation related to athletic performance. According to Professor Wallace, this case has a very straightforward Rule of Reason analysis. The case focused on the NCAA’s monopsony power in the market and the significant anticompetitive effects of its market power. Justice Kavanaugh’s concurrence “drops a bomb on everything,” where he noted that “a monopsony cannot launder its price-fixing of labor by calling it product definition.”

Section 1 (criminal): No Poach

Professor Wallace first reminded everyone about the government’s consent decree regarding “no poach” agreements as civil per se violations in 2001. See United States v. Adobe, Apple, Google, Intel, Intuit & Pixar (D. D. C. 2011). She then proceeded to flag two important new cases: United States v. Jindal, 4:20-cr-00358 (E.D. Tex.), United States v. Hee and VDA OC LLC, 2:21-cr-0098 (D. Nev.), and United States v. Surgical Care Affiliates, 3:21-cr-011 (N. D. Tex.).

Section 7, Mergers: Publishing

United States sued Penguin Random House and Simon & Shuster, et. al, 1:21-cv-02886 (D.D.C.). Professor Wallace explained that this is a case focused on monopsony power—a rarity when she began practice as an antitrust lawyer—where the government seeks to enjoin Penguin Random House, the world’s largest book publisher, from buying Simon & Shuster due to resulting monopsony power.

Recent Developments in Federal Civil Procedure: Thomas Greene 

Jurisdiction: Ford Motor Co. v. Montana Eighth Judicial District[3]

Mr. Greene highlighted this case as a “glimmer of light” for plaintiffs after a long dry spell of jurisdictional cases. He began the discussion on Ford Motor Co. v. Montana Eighth Judicial District with some background general jurisdiction and specific jurisdiction, and then proceeded to outline the Bristol-Myers Squib Co. v. Superior Court[4] decision where a California trial court had no jurisdiction over a case brought on behalf of persons injured by a drug who did not take the drug in California or reside in California.

In Ford, automobile failures of Ford cars in Montana and Minnesota assertedly caused injuries to a driver and a passenger. Based on Bristol-Myers, Ford asserted that since the cars were both purchased outside of the forum states: “the place of accident and injury is immaterial [so] Montana’s and Minnesota’s courts have no power over these cases.” The majority, led by Justice Kagan, focuses on the Court’s prior jurisprudence arguing that: “our most common formulation of the rule demands that the suit ‘arise out of or relate to the defendant’s contacts with the forum.” Mr. Greene also noted that Justice Kagan’s decision resulted in some strong reactions from the conservative side of the Court, particularly with regard to the “relating to” language. In his words, two concurring opinions, one by Justice Alito and another authored by Justice Gorsuch and joined by Justice Thomas, suggest that the way the case was decided might be the jurisdictional equivalent of “The Return of the Jedi.”

Standing: TransUnion LLC v. Ramirez[5]

This case arises under the Fair Credit Reporting Act. TransUnion is a credit reporting agency which added a feature to cross-link its credit reporting feature with the federal government’s “terrorist list.” For example, Mr. Greene explained, for an individual named “Joe Smith,” “Joe Smithe” would be a match and “J. Smithe” would be a match. The named plaintiff in the case, Mr. Ramirez, and his wife went to a Nissan dealership in Dublin, California. They selected a car and started discussing credit terms with the dealer’s staff. The dealer did a credit check and told Mr. Ramirez that he could not sell him a car because he was a “terrorist.” Mr. Ramirez sued the credit reporting agency, TransUnion, on behalf of himself and a class of similarly situated individuals. The jury awarded each class member $984.22 in statutory damages and $6,353.08 in punitive damages for a total award of more than $60 million.

The question before the Supreme Court was whether all 8,185 members of the class had standing to bring this action. Justice Kavanaugh, writing for Chief Justice Roberts and Justices Alito, Gorsuch and Barrett, starts his decision with a headline: “No concrete harm, no standing.” This case yielded two very strong dissents from Justices Thomas and Kagan, who viewed this decision as a “poke in the eye” to Congress’s law-making power. Mr. Greene summed up this case with a quote from Justice Kagan’s elegant dissent: “Congress is better suited than courts to determine when something causes a harm or risk of harm in the real world. For that reason, courts should give deference to those congressional judgments.”[6]

Class Actions: Moser v. Benefytt, Inc.[7]

Mr. Greene explained that this case is a class action arising from unwanted sales calls in violation of the Telephone Privacy Act. In the trial court, the defendant had not challenged the jurisdiction of the court over non-California claims under Fed. R. Civ. P. 12(h). When the defendant raised the jurisdictional issue, the trial court concluded that defendant “had waived its personal jurisdiction defense by not raising it at the motion to dismiss stage.” Defendant then appealed to the Ninth Circuit pursuant to Rule 23(f). Notwithstanding the language of Rule 12(h), Circuit Judges Bress and Bybee concluded that such a challenge was proper in a Rule 23(f) appeal. The majority vacated class certification and remanded to the trial court to consider defendant’s jurisdictional objection. Texas District Court Judge Cardone dissented, arguing that “a personal jurisdiction challenge like [defendant’s] can only be raised ‘by motion under [Rule 12].’”[8]

Class Actions: “Problem Cases”

Olean Wholesale Grocery Coop., Inc. v Bumble Bee Foods LLC[9]

Mr. Greene noted that this case could potentially upend class action practice, and it is therefore critical for antitrust lawyers to monitor this decision. Olean is a price fixing case against major tuna packers litigated by the San Francisco Office of the Antitrust Division. This decision focusses specifically the role of potential uninjured persons in the certified classes in assessing predominance under Fed. R. Civ. P. 23(b)(3). There was a battle of experts over predominance. Using regression analysis, plaintiffs’ expert calculated that ~4% of the proposed classes were uninjured. Defendants’ expert challenged plaintiffs’ expert use of averaging and concluded that ~28% of the proposed class members were uninjured.

The majority remands the case to the district court to resolve the different determinations of the plaintiffs and defendants’ experts. However, importantly, the court adopts with approval a D.C. Circuit decision requirement that anything more than 4-6% of uninjured persons in a class will defeat predominance. This decision draws a strong decision from Circuit Judge Hurwitz, in dissent, concluding that “our case law squarely forecloses the majority’s approach. The critical question is not what percentage of class members is injured, but rather whether the district court can economically ‘winnow out’ injured plaintiffs to ensure they cannot recover for injuries they did not suffer.”[10]

Hodges v. Comcast Cable Communs. LLC[11]

As part of the agreement required in order to subscribe to Comcast, plaintiff signed an arbitration agreement. Comcast removed the case to federal court and sought enforcement of its arbitration agreement. The Ninth Circuit just ordered Comcast to respond to plaintiff’s petition for rehearing en banc, including its alternative request for certification of issues to the California Supreme Court.

Mr. Greene quickly summarized two new pieces of legislation: Criminal Antitrust Anti-Retaliation Act,[12]and Competitive Health Insurance Reform Act[13]. He also flagged an important change in the Federal Rules of Civil Procedure, Fed. R. App. P. 3, which was recently amended to eliminate confusion over notices of appeal.

California Developments: Ms. Colleen E. Huschke

Ms. Huschke began with an overview of legislative changes in California law. She touched upon changes in the area of automatic renewals and debt collection. She then proceeded to flag some important new cases in California courts that may be of particular interest to UCL practitioners.

New Legislative Developments: Amendment to California’s Automatic Renewal Law (AB 390 (Berman); Business & Professions Code § 17602)

The new Automatic Renewal Law will become effective July 1, 2022. The amendments affect all automatic renewal contracts. Ms. Huschke noted that the amendments to the ARL law fill in gaps to the original law and strengthen the ARL. Specifically, she noted additional notice requirements, particularly for trial products. She also noted that notice must be provided in a clear and conspicuous format. Finally, she flagged the changes in the statue which are aimed at improving the ease of cancellation of contracts for customers. Ms. Huschke noted two specific methods for cancellation: a prominently located direct link, or an immediately accessible termination email. 

California Amends Sections of the Song-Beverly Consumer Warranty Act AB 1221 (Flora); Civil Code §§ 1791, 1794.4

Ms. Huschke noted that this piece of legislation covers recurring service contracts. The amendments are applicable only to service contracts entered into on or after January 1, 2022. Per the amendments, a service contract must include a clear description and identification of the product, and if a class of products, a description that is “sufficiently clear so the buyer is able to discern the products covered” as well as the point in time or event when the contract commences and the duration of the contract by time or objective measure of use. Cal. Civil Code § 1794.4(c)(1)-(2). She particularly noted that practitioners in the area should take a look at the language addressing “affirmative consent” and “cancellation.”

Ms. Huschke noted two new statutes that affect debt collection: AB 1405 (Wicks); Civil Code §§ 1788.300-1788.307 and SB 531 (Wieckowski); Civil Code § 1788.14.5, which requires notification of assignment of debt upon written request. Finally, she noted, on November 3, 2020 California voters passed Proposition 24, a ballot initiative to enact the California Privacy Rights Act of 2020 (CPRA). The CPRA which amends and expands the CCPA becomes effective January 1, 2023 with enforcement beginning in July 2023.

In case updates, Ms. Huschke first discussed Villanueva v. Fidelity National Title Company,[14] Lee v. Luxottica Retail North America, Inc.,[15] and Best v. Ocwen Loan Servicing, LLC.[16] She then discussed Serova v. Sony Music Entertainment[17] in some detail.Serovainvolves an anti-SLAPP motion filed by Sony in response to the plaintiff’s claims that Michael Jackson was not the lead vocalist on three of ten tracks on an album released by the company. The plaintiff purchased the album and then filed a lawsuit against Sony as well as the Cascio defendants, alleging that the Cascio defendants lied to Sony about Michael Jackson’s participation on the three disputed tracks. The trial court found the statements were likely to deceive a reasonable consumer. Sony appealed. The appellate court found that there was a public interest in these statements. The California Supreme Court has granted review.

[1] 731 F.3d 1064 (10th Cir. 2013).
[2] 141 S. Ct. 2141 (2021).
[3] 592 U.S. __, 141 S. Ct. 1017 (2021).
[4] 582 U.S. __, 137 S. Ct. 1773 (2017).
[5] 594 U.S. __, 141 S. Ct. 2190 (2021).
[6] Id., at 2226 (Kagan dissent).
[7] 8 F.4th 872 (2021).
[8] Id. at 880.
[9] 993 F.3d 774 (2021).
[10] Id. at 794-95 (citing Torres v. Mercer Canyons, Inc., 835 F.3d 1125, 1137 (9th Cir. 2016)).
[11] 2021 WL 4127711 (Sep. 19, 2021).
[12] 15 U.S.C. § 7a-3.
[13] Public Law 116-327 (116th Congress, Jan. 13, 2021) (Amendments to 15 U.S.C. 1013),
[14] 11 Cal.5th 104 (2021).
[15] 65 Cal.App.5th 793 (1st DCA 2021).
[16] 64 Cal.App.5th 568 (4th DCA 2021).
[17] 44 Cal.App.5th 103 (2020).

A Conversation with California Supreme Court Justice Martin J. Jenkins

Kevin Yeh, Deputy City Attorney at San Francisco City Attorney’s Office

As has been the tradition for many Golden State Institutes, the Antitrust and Unfair Competition Law Section was honored to host a justice of the California Supreme Court in a wide-ranging and enlightening conversation.  This year’s guest was the Honorable Martin J. Jenkins.  Joining him were Paul Moore (Deputy Attorney General, Antitrust Section, California Department of Justice), Elizabeth Pritzker (Partner, Pritzker Levine LLP), and Leeanna Bowman-Carpio (Student, U.C. Hastings).

A Son of San Francisco

Justice Jenkins was born in San Francisco in 1953 and grew up in the Ingleside neighborhood.  His father was a custodian at the iconic Coit Tower and his mother worked as a nurse.  Jenkins described San Francisco as “a magical place.”  He came of age in the City by the Bay during the tumult of the ’60s and ’70s, where he had a “bird’s eye view” of the mayhem rippling across all parts of society.  From protests against the Vietnam War, to the Free Love movement, to the strikes that rocked San Francisco State University, Jenkins witnessed institutions being toppled as a younger generation started to find its voice—much of it in his hometown.

Yet Justice Jenkins remembers a quainter city as well, one where Italian was still being spoken in North Beach (the historically Italian district, where one would now be hard-pressed to find anyone speaking Italian), and where he felt safe enough as a young child to ride around town on his bicycle.  He recalls San Francisco as being a “cultural melting pot,” one which was much more middle class and blue collar than the San Francisco of today.  It was, as he said, “a wonderful place to grow up.”

An Education

Jenkins proceeded to earn an Associate of Arts degree from the City College of San Francisco before attending Santa Clara University, where he was a defensive back and team captain for the Broncos.  He continued to pursue football by briefly playing professionally for the Seattle Seahawks, during which he played a few pre-season games, including against the 49ers.  But as fate would have it, his pro career was cut short after a playing injury left him hospitalized at St. Mary’s Hospital.

It was fate, too, that St. Mary’s Hospital, at the time, was across the street from the University of San Francisco School of Law, from which Jenkins would eventually graduate.

Justice Jenkins had never thought about attending law school. He had studied history and economics in college and thought about becoming either a high school teacher or a coach.  He spoke with one of his football coaches at Santa Clara about possibly going pro, but the coach told him that pro football players typically came from USC, not SCU. Rather, the coach advised, Jenkins should become a lawyer, because though teaching was a noble calling, he could do far more for the community as a lawyer.  The coach even arranged for Jenkins to meet with three black law students at Santa Clara to discuss their experiences, including Mike Espy, who would go on to be Secretary of Agriculture.

Alas, Jenkins went ahead and played pro football, and it took an injury before he literally landed in front of a law school.

A Career of Service

After graduating from USF, Justice Jenkins began his career at the Alameda County District Attorney’s Office. He later joined the Criminal Section in the Civil Rights Division of the U.S. Department of Justice, where he worked on cases involving racial violence.  Asked why he entered public interest law, Jenkins credited his father and the example he gave through his many years of service at Coit Tower.  The elder Jenkins would take time to speak with visitors to San Francisco and give them tours of the Tower. Despite his modest position as a custodian, his father, Justice Jenkins said, was “giving back” and “adding value to people’s lives,” and pursuing public interest law was how a lawyer could do the same thing.

Jenkins then worked as in-house counsel at Pacific Bell.  At some point, his now-colleague on the California Supreme Court, Carol Corrigan, called him and reported that his name kept coming up as someone who would make a good judge. While Jenkins did not feel that he had enough experience, he thought he had at least broad experience.  He sought advice from mentors and was eventually persuaded that he might be interested in joining the bench.

In 1989, Governor George Deukmejian appointed Jenkins to the Alameda County Municipal Court, and in 1992, Governor Pete Wilson appointed him to the Alameda County Superior Court.  In 1997, President Bill Clinton nominated Jenkins to be a judge on the United States District Court for the Northern District of California and he was confirmed later that year.  After over a decade as a federal judge, Jenkins returned to the California judiciary as a justice on the First District Court of Appeal, where he served from 2008 to 2019.

Jenkins left the bench in 2019 to serve as Judicial Appointments Secretary for Governor Gavin Newsom.  In that role, he assisted with the appointment of 45 judges.  In 2020, Governor Newsom named Jenkins to be an Associate Justice of the Supreme Court of California, where he continues to serve.  He is the first openly gay justice in California history.

Judicial Philosophy

Despite his service at multiple levels of the judiciary, Justice Jenkins does not believe that where he sits affects how he handled cases. Ultimately, he says, what matters is fidelity to the law. Of course, a judge’s perspective can be different based on the court: trial judges weigh facts; intermediate appellate judges remedy legal errors; and courts of last resort determine policy insofar as they choose their cases and settle conflicting decisions among lower courts.  But he thinks that “the toolbox that a trial judge uses is the same as the tool box of an appellate judge.”

Judge Jenkins pushed back on the notion that law can be completely neutral.  “The subtext of law is values based,” he argues, because law is ultimately about how people and institutions order themselves. Resolving legal issues divorced from the reality of how it affects people does not make a lot of sense to him. Using antitrust as an example, Jenkins noted that antitrust is generally described as merely seeking to benefit “consumers.”  But in many cases, minority or systematically disadvantaged groups may be disproportionately affected.  For instance, overconcentration among medical providers can disproportionately affect certain segments of the community who need care, but lack access to it. The most successful judges and lawyers, Jenkins noted, are those who find ways for issues of inclusivity to be reflected in their field, even in one as seemingly neutral as antitrust.

What Makes a Good Judge

As Judicial Appointments Secretary, Justice Jenkins and the Governor had long discussions about what qualities made a good judge and what sorts of candidates to seek. He also thought about ways to find candidates that might have been overlooked in the past.

Among the qualities necessary for being a good judge are intellectual ability, curiosity, integrity, a strong sense of ethics, and a commitment to community service.  The most critical quality, however, is humility, because “someone smart who isn’t tethered to humility will be driven by ego,” which Jenkins believes to be a dangerous path.  A judge, he says, needs to know his or her own biases, strengths, and weaknesses.  Because there is no blueprint for the job, one must know himself or herself, be reflective, and be a good listener in order to be a fair adjudicator.  Hence the importance of humility.

Jenkins thinks that good judges can come from anywhere, thus he has made efforts to reach out broadly. Jenkins performed outreach by visiting 25 counties to give presentations on how judges are chosen. He pushed to publish the names and biographies of the Commission on Judicial Nominees Evaluation, which assists the Governor in selecting judges. He also sought to think outside the box in identifying relevant experience. For example, whereas engagement in bar associations is largely seen as a plus factor for judicial candidates, Jenkins noted that service in a Parent Teacher Association is an equally favorable sign of community service, but failing to recognize this might lead to the exclusion of attorneys with young children who have limited time to engage in bar activities, but may nevertheless be deeply involved in their communities.

The Importance of Diversity

Justice Jenkins heavily emphasized the importance of diversity in the profession and on the bench.  Broad-based and different experiences in life—as much as subject matter expertise—can help with solving complicated legal problems and suggesting answers. Seeing things in a broader context is always going to be better than not doing so, Jenkins argued.  For example, going to a school with a diverse student body showed him the importance of converging cultures and allowed him to interact with others different from him.  It allowed for ideas to cross-pollinate and thus add value to one’s own work.  Law cannot simply be learned from books, he said, because law is ultimately about people and the ability to persuade a jury of twelve random individuals to believe your cause. Thus, a successful lawyer understands other people’s perspectives, and diversity is the means to do so.

As a judge, Justice Jenkins thinks that being from a diverse background has made him a better arbiter by allowing him to be more open to the people and issues that come before him.  Furthermore, he argues that having a diverse bench is ultimately better for the law because it instills confidence among the people who appear before the court when they see others who look like them in a robe.

In terms of building a diverse bench, Justice Jenkins said that he has tried to combat the persistent myth that one needs to know a governor or a senator, or be from a certain background, to be a serious judicial candidate.  Instead, he has tried to find ways to get lawyers from all backgrounds to see themselves in these positions.  The trouble, he says, is often not that people are unqualified, but that otherwise qualified candidates from underrepresented backgrounds do not understand the application process and do not know how to navigate it. Thus, Justice Jenkins advocates for stronger mentorship.  He helped develop a program open to anyone that will assign a sitting judge to help mentor them.  “The importance of mentoring cannot be understated, no matter where you are,” he says.

Final Thoughts

Just as humility is a necessary trait for a judge to effectively serve the community, Justice Jenkins thinks it is equally important for one’s emotional and mental health. “Understand that you’re human,” and “tell yourself you’ll do better tomorrow,” he advises.  Have others around you to help you “check yourself.” 

As for himself, Justice Jenkins started retaking piano lessons two years ago just for fun—a hobby that he is picking up after a several-decade hiatus.

Big Stakes Merger: Federal Trade Commission, et al. v. Thomas Jefferson University, et al., Civil Action No. 20-01113 (E.D. Pa.)


James A. Donahue, Executive Deputy Attorney General, Commonwealth of Pennsylvania
Jamie E. France, Of Counsel, Gibson, Dunn & Crutcher LLP
Shira Liu, Counsel, Crowell & Moring LLP (moderator)
Paul H. Saint-Antoine, Partner, Faegre Drinker Biddle & Reath LLP

Cheryl Johnson

In FTC, et al. v. Thomas Jefferson University, et al., the Federal Trade Commission and the Commonwealth of Pennsylvania sued to enjoin a $599 million merger between two Philadelphia-area healthcare systems under Section 7 of the Clayton Act.  After an extensive evidentiary hearing involving the testimony of twenty witnesses, the district court denied the government’s request for a preliminary injunction, resulting in a rare loss by the FTC in a hospital merger case.  Trial counsel for the FTC and Pennsylvania Attorney General’s Office, as well as for Defendant TJU, offered their insights on the hearing and the lessons they learned from this high-profile merger case.

The panel discussed strategies and lessons learned by the attorneys handling the FTC’s challenge to the merger of Jefferson and Einstein, two Philadelphia-based health systems. After discovery and then a six-day evidentiary hearing on the government’s request to enjoin the merger pending the FTC’s administrative proceeding, Eastern District of Pennsylvania District Court Judge Pappert denied the injunction, rejecting the government’s market definitions as not conforming with “commercial realities.”

The government argued three markets would be impacted by the merger (two inpatient general acute services markets and an IP acute rehabilitation services market), which satisfied the traditional “hypothetical monopolist” test and produced HHI increases that created a presumption of illegality. It also produced direct evidence of the reduced competition. While the defense team urged a weakened competitor and efficiencies defenses, it primarily focused on discrepancies in insurer testimony and the Third Circuit’s Hershey’s statement that relevant markets must comport to “commercial realities.”

The panel discussed the difficulties of defining markets with the two-stage model in which health care providers compete: 1) first, for inclusion in the insurers’ networks and 2) then, for attracting patients for hospital services. While most experts widely rely in part at least, on patient diversion statistics to measure patient preferences and willingness to travel, panel members noted the differing results generated by use of driving time versus driving distances and had differing views on the relevance of the statistics to each of the two stages of the model.

The parties discussed the challenges of the divided views of the major insurers in the Philadelphia area on the competitive effects of the merger, with the Court rejecting some insurer testimony as not credible. The challenges of preparing insurer and expert witnesses and the need to support their testimony with course of business documents was noted. The pandemic setting during which discovery and the evidentiary hearing took place, albeit mostly remotely, increased the challenges. Both sides acknowledged the importance of good reliable technology, good deposition vendors, reliable internet connections, backup plans for technology failures and counsel cooperation in scheduling.

Big Stakes Antitrust Trial: In Re National Collegiate Athletic Association Athletic Grant-in-Aid Cap Antitrust Litigation, No. 4:14-md-02541-CW (N.D. Cal.), No. 19-15566 (9th Cir.), 20-512 (S.Ct.)

Bob Connolly Law Office of Robert Connolly

Panelists: Jeffrey L. Kessler Co-Executive Chairman, Winston & Strawn LLP; Jeffrey A. Mishkin Of Counsel, Skadden, Arps, Slate, Meagher & Flom LLP; Dr. Daniel A. Rascher Ph.D., Partner, OSKR, LLC; Aaron M. Sheanin (moderator) Partner, Robins Kaplan LLP

In the landmark trial, Alston v. National Collegiate Athletic Association, a class of NCAA Division 1 basketball and football players brought suit under the Sherman Act to challenge the NCAA rules limiting the amount of financial aid and benefits that student-athletes may receive. Posttrial appeals resulted in a unanimous decision by the United States Supreme Court, affirming the class plaintiffs’ victory. The Supreme Court held that the district court’s injunction pertaining to certain NCAA rules limiting the education-related benefits such as scholarships for graduate school, payment for academic tutoring and paid post-eligibility internships that schools may make available to student-athletes is consistent with established antitrust principles. Alston affirmed that the National Collegiate Athletic Association (NCAA) rules restricting student-athletes’ educational benefits are not entitled to deference and are subject to antitrust scrutiny under a “rule-of-reason” analysis. The panel discussed the litigation as well as prospects for additional litigation underway and suits yet to be filed challenging NCAA restrictions on compensation for student-athletes.

Moderator Aaron Sheanin asked: “How did we get from NCAA v. Board of Regents in 1984 to Alston in 2021?” Mr. Mishkin, who was involved on the defense side in Alston, offered that once Supreme Court decided to hear Alston, one of the key issues was how today’s Supreme Court would read the decision of 37 years ago in Board of Regents. In Board of Regents the Supreme Court found a violation of the antitrust laws in restrictions on the number of college football games that could be broadcast. In the decision, however, the Supreme Court went out of its way to say it would be pro-competitive and lawful for the NCAA to have rules that maintain a distinction between amateur collegiate sports on one hand and professional sports on the other.  The distinction created a different product, gave consumers an additional choice, which are well recognized pro-competitive justifications.  This was dicta, not the holding of Board of Regents, but as a result several circuits were applying a “quick look” to certain restrictions and permitting them without a full trial rule of reason analysis.  Justice Gorsuch writing for a unanimous Court didn’t accept that Board of Regents established a “quick look” for NCAA restrictions. The Court said what Board of Regents said about the pro-competitive benefit of NCAA rules was only in passing and didn’t bind future courts. Most importantly, Alston also said the nature of college sports and the market has changed since 1984 and based on today’s reality, the NCAA was not entitled to a quick look and would have to defend its rules under a full rule of reason analysis and trial.

Mr. Kessler, representing the student-athlete, agreed that this was an accurate description why Board of Regents couldn’t be read as creating a “quick look” or any special antitrust treatment for college sports. The lower court decisions in Alston only meant that in dealing with these amateur restrictions the rule of reason would apply. The players are delighted the Supreme Court granted certiorari because Alston so strongly affirmed the district court and Ninth Circuit decisions.  The NCAA could no longer argue in any circuit that its restrictions deserved special deference and/or quick look analysis. The rule of reason applies and NCAA rules are analyzed the same as restrictions in any other market.

Dr. Rascher, a leading sports economist, commented on how that the economic landscape of college sports football and basketball in particular, had changed over the years. Back when Board of Regents was decided, Division I programs were generating $1 million dollars annually but today that figure exceeds $100 million. Market revenue has exploded.  Over 80 schools have now joined Division I. Schools, conferences, and NCAA have worked in different ways to increase revenue streams.  Athletics is used now as a way to bring in revenue from alumni.  On the athlete side, their value has continued to grow. Non-price competition has increased in terms of post graduate scholarships/internships, and other education-related benefits. A big question in Alston was the question of consumer demand.  Has the big money in college sports, including some incremental gain in the money athletes can pocket, diminished demand for the game by consumers? Dr. Rascher answered that demand for college sports has only grown; few people care about the benefits the student-athlete receives.

Mr. Mishkin added that Judge Wilkin’s (the trial judge) rule of reason decision continued to recognize that maintaining a distinction between amateur and professional sports is still pro-competitive. Where the judge disagreed with NCAA was with what rules are needed. Under the rule of reason, the judge found that any payments related to education can’t be limited because consumers wouldn’t care. But every case is a new case; the restriction will be different, and the economics may be different so the results could be different. Mr. Kessler opined that the change in economics is not just the size of the pool of money. It had to do with the character of how these sports are viewed.  In Board of Regents there was still a concept in the Supreme Court dictum that having a Division I basketball team was like having the student newspaper, i.e. an extracurricular activity.  What has become clear, at least for these schools and these sports, is that they have become gigantic businesses. University of Alabama conditioning coaches make $550K a year!  Once one realizes that Division I sports are huge money-making enterprises, it is easier to see the athletes are labor. 

Dr. Rascher added that we haven’t seen a decline in the fans’ perception of college sports.  The main point is that they are student-athletes, i.e. the players need to take and attend classes. Dr. Rasher said that historically, we’ve seen that, as more money comes into the system and some goes to the student-athletes, there hasn’t been a reduction in demand.

Moderator Sheanin asked the panelists to comment on what Alston may mean for current ongoing NCAA litigation and future litigation, especially in light of Justice Kavanaugh’s sharply worded concurrence in which he voiced concerns about the legality of the NCAA’s remaining compensation rules. Mr. Kessler offered that the view Justice Kavanagh was articulating was not a separate point from the majority but what Justice Kavanaugh believed are the implications of the majority decision. That decision has taken away the ability to argue that the NCAA is treated any differently as a business when it operates as a busines and therefore they are subject to normal antitrust laws. The NCAA is not above antitrust laws.

Mr. Mishkin commented that the NCAA has been in nonstop antitrust litigation since 2008.  There is no end in sight. Every time the NCAA regulates, it creates new facts and opens itself up to new antitrust litigation. That is not sustainable for a regulatory body to face this enormous burden and expense. The NCAA will be reluctant to regulate and will push down to the conference the role of regulating in an effort to decentralize decision making.  That will, of course, invite its own litigation. Mr. Kessler offered that the that NCAA should get out of the business of regulating compensation and benefits and stick to regulating the safety of the sports. 

Dr. Rascher added that letting the conferences decide compensation rules takes the NCAA out of the equation and may slow lawsuits because individual conferences may have different/better pro-competitive needs to have compensation restrictions to maintain a competitive balance.

Note:   There was much more to this panel than what is outlined in this summary.  The full panel discussion will appear in the next issue of the Section’s Competition journal.

Agency Updates

This feature includes selected press release from the Antitrust Division, USDOJ, the Federal Trade Commission and the California Attorney General’s Office. It does not include all press releases issued by those offices.  This appears to be a truly transitional time in antitrust enforcement and reading the press releases can be very helpful to stay on top of changes.


To link to all Antitrust Division, DOJ press releases, click here.

Jonathan Kanter was confirmed on November 16, 2021, as Assistant Attorney General for the Antitrust Division. Throughout his career, Mr. Kanter has been a leading advocate for strong and meaningful antitrust enforcement and competition policy.

Mr. Kanter has been a partner in the Washington, D.C. offices of two national law firms and was the founder of a boutique antitrust law firm dedicated to promoting antitrust enforcement. Mr. Kanter began his career as an attorney for the Federal Trade Commission’s Bureau of Competition. He earned his J.D. from Washington University in St. Louis and his B.A. from State University of New York at Albany.

November 23, 2021

The Department of Justice filed a civil antitrust lawsuit to stop United States Sugar Corporation (U.S. Sugar) from acquiring its rival, Imperial Sugar Company (Imperial Sugar). The complaint, filed in the U.S. District Court for the District of Delaware, alleges that the transaction would leave an overwhelming majority of refined sugar sales across the Southeast in the hands of only two producers. As a result, American businesses and consumers would pay more for refined sugar, a significant input for many foods and beverages.

November 2, 2021

The U.S. Department of Justice filed a civil antitrust lawsuit to block Penguin Random House’s proposed acquisition of its close competitor, Simon & Schuster. As alleged in the complaint filed in the U.S. District Court for the District of Columbia, this acquisition would enable Penguin Random House, which is already the largest book publisher in the world, to exert outsized influence over which books are published in the United States and how much authors are paid for their work.

Federal Trade Commission

November 19, 2021

Federal Trade Commission Chair Lina M. Khan announced several new additions to the FTC’s Office of Policy Planning. Olivier Sylvain, Meredith Whittaker, Amba Kak, and Sarah Myers West will be working with the agency’s Chief Technology Officer and technologists as part of an informal AI Strategy Group and in partnership with policy experts across the agency to provide insight and advice on emerging technology issues. John Kwoka will be working with competition economists and attorneys on an updated approach to merger review policies.

November 12, 2021

The Federal Trade Commission has released a preliminary draft Strategic Plan for Fiscal Years 2022 to 2026 for public review and comment. 

November 10, 2021

The modified final order requires, among other conditions, that 7-Eleven, Inc. and Marathon divest 124 retail fuel outlets to Anabi Oil, 106 outlets to Cross America Partners, and 62 outlets to Jacksons Food Stores. The order also prohibits 7-Eleven from enforcing any noncompete provisions as to any franchisees or employees working at or doing business with the divested assets.

November 10, 2021

The Federal Trade Commission will require generic drug marketers ANI Pharmaceuticals, Inc. and Novitium Pharma LLC to divest, to Prasco LLC, ANI’s development rights to one generic drug used to treat common infections and assets with respect to another generic drug used to treat inflammation as part of a settlement resolving charges that ANI’s $210 million acquisition of Novitium likely would be anticompetitive. The divestitures are for generic sulfamethoxazole-trimethoprim oral suspension, also known as SMX-TMP, and generic dexamethasone tablets.

California Department of Justice

For a complete list of California AG press releases click here.

November 8, 2021

California Attorney General Rob Bonta and Pennsylvania Attorney General Josh Shapiro today led a multistate coalition in urging the U.S. Court of Appeals for the Third Circuit to ensure the availability of affordable and accessible healthcare by protecting competition in local healthcare markets. The coalition of attorneys general filed an amicus brief in Federal Trade Commission v. Hackensack Memorial Hospital and Englewood Healthcare Foundation, asking the Court to affirm a district court decision to halt the merger of competing hospital systems in New Jersey under federal antitrust law.

Other News and Notes

The James F. Humphreys Complex Litigation Center at George Washington Law has released Inclusivity and Excellence: Guidelines and Best Practices for Judges Appointing Lawyers to Leadership Positions in MDL and Class-Action Litigation. The Diversity Guidelines and Best Practices offer concrete suggestions for giving lawyers across the profession an equal opportunity to be appointed to multidistrict litigation (MDL) and class-action leadership positions.

“Women have been earning law degrees and entering private practice at similar rates to men for at least the past 30 years. The number of minority group members graduating from law school and entering private practice has also been rising. These statistics would appear to ensure that more women and diverse attorneys would be in leadership roles in the legal profession. But they are not,” said GW Law Dean Dayna Bowen Matthew. “The publication of Diversity Guidelines and Best Practices underscores GW Law’s steadfast commitment to increasing inclusivity across the legal profession.”

In a major ruling that bolsters the European Union’s efforts to clamp down on the world’s largest technology companies, Google lost an appeal on Wednesday to overturn a landmark antitrust ruling by European regulators against the internet giant.

The decision by the Luxembourg-based General Court related to a 2017 decision by the European Commission, the bloc’s executive branch, to fine Google 2.4 billion euros (about $2.8 billion) for giving preferential treatment to its own price-comparison shopping service over rival services.  NY Times, November 10, 2021 Adam Saratiano. 

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