E-Briefs, News and Notes: March 2025

The March 6, 2025 Eighth Annual Celebrating Women in Competition Law in California was an unforgettable evening of insight, inspiration, and connection. Hosted at Covington & Burling LLP in San Francisco, the event featured a powerhouse panel of female leaders in the competition bar, moderated by the Honorable Trina L. Thompson. Co-Chairs Jill M. Manning and Kate Patchen introduced the panel of exceptional female trailblazers.

Panelists shared candid reflections on pivotal career moments, strategies for overcoming bias, and advice for excelling in the field.

Judge Thompson set the tone with her wisdom: “If you do a good job wherever you go, a good job will find you.”

Catherine Simonsen highlighted the importance of mastering discovery, calling it the key to winning or losing cases. Kalpana Srinivasan spoke about the unexpected twists that shaped her career.

Michelle Park Chiu encouraged embracing opportunities even when they feel intimidating, as they foster growth and confidence.

The discussion was rich with humor, honesty, and invaluable lessons, culminating in a vibrant networking reception where attendees connected over shared experiences and ambitions. With takeaways ranging from “Deflect, Deter, Decide” to “Be fearless,” the evening was a testament to the strength, resilience, and brilliance of women in competition law.

E-Briefs thanks new contributor Anjalee M Behti for providing this great View From the Floor!

By Lillian Grinnell  

On January 15, the Supreme Court in Royal Canin U.S.A. Inc. et al. v. Wullschleger et al., in a unanimous opinion by Justice Kagan, sided with a plaintiff who originally sued Appellant Royal Canin in Missouri state court for what she alleged were deceptive marketing practices. In particular, the plaintiff asserted that she bought the dog food in question believing from its advertising that it contained certain medicine which it did not. When Royal Canin removed the case to federal court, the plaintiff, preferring state court, dismissed all federal claims (here, asserted violations of the Food, Drug, and Cosmetic Act (“FDCA”)) in the action and moved to remand the case back to state court. The District Court, however, denied the plaintiff’s claim, and she appealed to the Eighth Circuit, who reversed. Royal Canin then appealed to the Supreme Court, who granted certiorari.

When a “plaintiff amends her complaint to delete all the federal-law claims,” Justice Kagan wrote, “the federal court loses its supplemental jurisdiction over the related state-law claims. The case must therefore return to state court.” Slip op. at 1.  This is because, as the Eighth Circuit originally held, an amended complaint “supersedes an original complaint and renders the original complaint without legal effect.” Id. at 5, quoting Wullschleger v. Royal Canin U. S. A., Inc., 953 F. 3d 519, 522 (8th Cir. 2020). Because supplemental jurisdiction requires the state law claims to have arisen under the same set of facts as the asserted federal claims, a federal court may not hold onto state claims where there are no federal claims in the lawsuit which arise from the same facts – never mind where there are no federal claims at all. That the case had originally been properly removed because there had been sufficiently related claims does not make a difference.

As the Court noted, other circuits, like the Sixth, reached “the opposite conclusion, holding that a post-removal amendment cannot divest a federal court of jurisdiction” because “the existence of subject matter jurisdiction is determined by examining the complaint as it existed at the time of removal.” Id. at 6, quoting Harper v. AutoAlliance Int’l, Inc., 392 F. 3d 195, 210 (6th Cir. 2004) (internal quotation marks removed) (emphasis added).

As Justice Kagan noted, however, “[n]othing in §1367’s text—including in the text Royal Canin highlights—distinguishes between cases removed to federal court and cases originally filed there.” Id. at 8. Therefore, “[t]he pertinent rule comes from Rockwell Int’l Corp. v. United States, 549 U. S. 457, 473474 (2007): “[W]hen a plaintiff files a complaint in federal court and then voluntarily amends the complaint, courts look to the amended complaint to determine jurisdiction.”  Id.

Interestingly, however, Kagan took care to note that this rule does not necessarily give a plaintiff all the power to determine which forum is used in a given case: “[T]ake the statute laying out procedures for removal.  It provides that even ‘if the case stated by the initial pleading is not removable,’ … [t]he defendant can remove the case after receiving ‘an amended pleading’ establishing that the case is newly subject to federal jurisdiction.” Id. at 10, citing §1446(b)(3). And, indeed, “[i]f a plaintiff files a suit in federal court based on federal claims and later scraps those claims, the federal court cannot go forward with a now all-state-claim suit.” Id. at 12, citing Rockwell, 549 U.S. at 473-74.

By Sarah Van Culin  

On January 24, 2025, Judge Donato granted Meta’s motion to exclude the opinions of user plaintiffs’ expert on antitrust injury. Finding that the class certification motion depended on the expert opinions offered by Dr. Economides, Judge Donato also denied user plaintiffs’ class certification motion.

Background

In Klein v. Meta, groups of Facebook users and advertisers sued Meta, alleging claims under Section 2 of the Sherman Act and California state law. The plaintiffs allege that Meta illegally acquired and maintained a monopoly through misrepresentations over data privacy and its use of user data. User plaintiffs argue that without Meta’s misrepresentations around data privacy, it would have had to compete with other social networking sites to keep users and that this competition would have taken the form of payments to users for their data. Dr. Economides offered his expert opinion in support of class certification, discussing the concepts of zero and negative pricing. He ultimately opined that in the but-for world, Meta would have paid users $5 per month for their data, resulting in $52.8 billion in damages before trebling. User plaintiffs moved to certify a class of all U.S. Facebook users who used their profile between December 2016 and December 2020.

Order on Motion to Exclude

Meta moved to exclude Dr. Economides’ opinions as to the antitrust injury suffered by the class. While recognizing Dr. Economides is “a well-qualified economist” and that the concepts of zero and negative pricing are supported by economic literature, Judge Donato ultimately held that Dr. Economides’ opinions could not make the connection from the economic literature to the factual record before the Court. Of particular importance to Judge Donato’s analysis was evidence offered by Meta to show that no other social networking service had used payments to users for their data over other options, such as improving the services they offered. While plaintiffs directed the Court to Meta’s internal discussions about the possibility of paying consumers for their data, they could not show implementation of payments in the social networking market by Meta or their competitors. Without this final link to connect the economic theory of zero and negative pricing to the factual record before the Court, Judge Donato found that Dr. Economides’ opinions failed to meet the requirements of Federal Rule of Evidence 702 and thus should be excluded.

Order on Class Certification Motion

Without Dr. Economides’ opinion on antitrust injury, Judge Donato held that plaintiffs could not meet their burden under Rule 23 to establish commonality and predominance. Plaintiffs had relied on Dr. Economides opinions to show they could prove antitrust injury on a class-wide basis; without his opinions, they could not meet that burden. Judge Donato denied class certification and directed the parties to meet and confer as to the remaining pre-trial dates.

By Wesley Sweger

On January 10, 2025, in a lengthy opinion, Judge Chesney of the N.D. Cal. granted certification of two classes of indirect purchases: resellers and end-users. In re Disk Drive Suspension Assemblies Antitrust Litig., No. 19-MD-02918-MMC, 2025 WL 71988 (N.D. Cal. Jan. 10, 2025).

Background

Plaintiffs allege Defendants—NHK Spring Co. Ltd. and TDK Corp.—participated in a decade-long scheme to fix prices of suspension assemblies (SAs), a necessary component of hard disk drives. Hard disk drives (HDDs) are commonly used data storage devices that can either be used on their own or in computers and large servers. SAs are sold to HDD manufacturers. Resellers purchase HDDs or products containing HDDs. An example of a reseller would be Best Buy. End-users purchase “finished products” (e.g., storage devices, computers) from either HDD manufacturers, original equipment manufacturers (OEMs) (e.g., Dell, Apple), or resellers (e.g., Best Buy). 2025 WL 71988 at *2. An example of an end-user would be an individual consumer.

Defendant NHK Spring agreed to plead guilty in July 2019 to a global price-fixing conspiracy in the SA market, according to the DOJ. In turn, Plaintiffs allege they paid supracompetitive prices passed on through the chain of distribution. Both classes bring various state antitrust and consumer protection claims. (For context, indirect purchasers generally do not have standing to sue under the Sherman Act, although there are exceptions. See Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977). However, some states allow indirect purchasers to recover under their respective antitrust statutes. These states are known as “Illinois Brick repealer states.”)

Numerosity and Commonality

Defendants did not dispute numerosity is satisfied. As to commonality, the court simply found “[w]here an antitrust conspiracy has been alleged, courts have consistently held that the very nature of a conspiracy antitrust action compels a finding that common questions of law and fact exist.” 2025 WL 71988at *4.

Typicality

Defendants argued reseller Plaintiffs—three entities and two individuals—bear no resemblance to the putative class members who are big-box retailers and large-volume purchasers. They similarly argued end-user Plaintiffs—fifty-two individuals—are not typical of those members who are large corporate consumers. The Court rejected both these arguments, reasoning that in cases alleging price fixing, “the representative plaintiff’s claim is usually considered typical even though the plaintiff followed different purchasing procedures, purchased in different quantities or at different prices, or purchased a different mix of products than did the members of the class.” Id.

Adequacy of Representation

Resellers

Because resellers include individuals/entities in various parts of the distribution chain, Defendants argued that a conflict exists between Plaintiffs and the putative class members upstream from them—i.e., each reseller Plaintiff “is incentivized to argue that those upstream Resellers passed through any overcharge to them,” while “those upstream Resellers would be incentivized to argue the exact opposite.” The Court agreed with Plaintiffs that courts considering similar arguments have concluded any pass-through amounts would arise, if at all, at the time damages are allocated.

End-Users

Defendants argued there is an inherent conflict between three alleged conspiracies: (1) price-fixing SAs; (2) a conspiracy to “kill” defendant Hutchinson Technology Inc. (HTI); and (3) a conspiracy to share competitively sensitive information. Id. at *7. Defendant argued the latter two conspiracies would have lowered prices for some end-users despite the first raising prices for others. According to Defendants, non-HTI defendants may have tried to undercut HTI pricing in the second conspiracy. As for the third conspiracy, Defendants argued that a defendant lowered its prices after receiving the competitively sensitive information.

Plaintiffs did not assert that three conspiracies existed, but, rather, that one conspiracy to fix prices existed, which was aided by the alleged information sharing and was not undermined, but, rather, advanced, by attempts to eliminate HTI. Plaintiffs argued the non-HTI defendants plotted to gain market share from HTI while maintaining supracompetitive prices by agreeing that TDK would acquire HTI to prevent an HDD manufacturer from acquiring and vertically integrating. Defendant provided no evidence to the contrary. Plaintiffs also argued sharing competitively sensitive information, by its nature, does not lower prices because it helps competitors work together.

The Court agreed with Plaintiffs on all points and noted Defendants’ lack of evidence of a customer receiving a below-competitive price.

Predominance

Plaintiffs argued (1) the existence of an antitrust violation, (2) the existence of antitrust impact, and (3) the amount of aggregate damages can be established by common evidence.

Existence of Antitrust Violation

Plaintiffs pointed to the plethora of evidence, including admissions from Defendants made to the DOJ and observations from Japanese and Brazilian agencies investigating the matter.

Defendants again argued there are three conspiracies and Plaintiffs would need to establish which of the three caused each class member’s claimed loss. The Court noted its finding pertaining to adequacy that Plaintiffs do not assert the existence of three conspiracies.

Existence of Antitrust Impact and Amount of Aggregate Damages

Plaintiffs’ experts offered models to measure the impact and aggregate damages. Defendants countered in what became a battle of the experts in which the Court repeatedly noted Defendants conflated the question of whether Plaintiffs have evidence to establish their allegations on a classwide basis with the persuasiveness of such evidence.

Of the several arguments raised by Defendants, a couple are of note. Regarding antitrust impact to resellers, Defendants argued Plaintiffs’ expert fails to account for the substantial buying and selling power of large dominant entities such as Dell, Apple, and Amazon. The Court found this premature as it spoke more to individualized damages rather than impact. Regarding aggregate reseller damages, Defendant contended the value was inflated because (1) if a reseller has its headquarters in one of the five states under which reseller Plaintiffs bring claims, the reseller can recover the overcharges incurred with respect to all purchases it made in the United States; and (2) to the extent a reseller sold products to an end-user who is not a member of the putative end-user class, Defendants are not entitled to assert a pass-through defense. The Court rejected these arguments finding they did not speak to the damages model itself, but the particular figures used in the model.

Superiority

Defendants raise two arguments. First, Defendants contended many absent class members will be confused whether they are a member of the reseller class because the class definition excludes OEMs. They argue the purported confusion will render the class unmanageable. The court disagreed that excluding OEM would be confusing because it is a generally known term.

Second, Defendants argued class members will be unable to determine whether their products contains SAs manufactured by Defendants or by Suncall, a non-conspirator who occupied 3.5 to 4.4% of the SA market during the conspiracy period. As such “disputes and mini-trials over class membership are inevitable and will render the proposed class unmanageable.” Id. at *25. The Court noted that Suncall sold its SAs to only one HDD manufacturer, so any putative class member who purchased an HDD from any other HDD manufacturer is a member of one of the proposed classes.

By David Lerch

In an order filed on January 27, 2025, D.D.C. Judge Mehta denied Apple’s motion to intervene in the remedies phase of the Section 2 case filed by the United States against Google as untimely, given that the case had been pending for four years before Apple’s motion to intervene.  United States v. Google LLC, Case No. 20-cv-3010 (APM).

The D.C. Circuit has instructed courts to “especially weigh[]” four factors for a motion to intervene: (1) the “time elapsed since the inception of the suit”; (2) “the purpose for which intervention is sought”; (3) “the need for intervention as a means of preserving the applicant’s rights”; and (4) “the probability of prejudice to those already parties in the case.”  Smoke v. Norton, 252 F.3d 468, 471 (D.C. Cir. 2001)).  The court found that all of these factors weighed against Apple.

Time Elapsed Since the Inception of the Suit

The Court concluded that Apple knew or should have known from the outset of the litigation, in late 2020, that the suit would directly affect its contractual rights (Order at 9). In addition, the Court stated that Apple knew or should have known since October 8, 2024, when Plaintiffs filed their proposed remedy framework, that the remedies sought could be expansive in scope and, consequently, that Google might not be capable of adequately defending Apple’s interests during the remedial phase of the litigation.  The Court noted that waiting two-and-a-half months to intervene in a proceeding scheduled to last just eight months altogether would itself constitute a significant delay (Order at 9).

Purpose of Intervention

The Court stated that Apple sought to present evidence and argument concerning the actual effect of the proposed remedy on competition.  The Court reasoned that Apple has not established that the information it wished to present was any different than the court already considered—and largely credited—during the liability phase (Order at 11). 

Need for Intervention

The Court also concluded that the need for intervention to protect Apple’s contractual rights likewise weighed against timeliness, because the court would afford Apple an opportunity to be heard through post-hearing submissions (Order at 14).

Prejudice to Existing Parties

Finally, the Court noted that courts within the D.C. Circuit have consistently denied intervention where it would likely require additional discovery, necessitate further proceedings, or delay resolution of the case. See, e.g., Amador Cnty. v. U.S. Dep’t of the Interior, 772 F.3d 901, 902, 906 (D.C. Cir. 2014) (Order at 14).  The Court noted that the requirement of timeliness is aimed primarily at preventing potential intervenors from unduly disrupting litigation, to the unfair detriment of the existing parties.  If Apple’s motion to intervene was granted, the parties would then have to devote considerable time and resources to respond to Apple’s expert’s opinions, including the deposition of Apple’s expert, and the parties might also seek to cross-designate a rebuttal expert and demand additional discovery directly from Apple (Order at 15).  The Court concluded that the delay from postponing the evidentiary hearing would be months, not weeks and given that the case has already been pending for over four years, such a delay would be prejudicial to the parties and contrary to the public’s interest in prompt resolution of the litigation (Order 17).

In addition, the Court noted that the proposed remedy prohibits Google from paying any third party for making Google the default search engine on its devices.  Therefore, Apple’s contractual interests are not unique, and if the court were to open the door to intervention now, halfway through the remedial phase, the litigation could become even more complex and prolonged because other parties would also want to intervene. The court therefore concluded the existing parties would suffer substantial prejudice if Apple intervened (Order 18).

Order Granting Permission to Participate as Amicus Curiae

Although the Court denied Apple’s motion to intervene, the court stated that Apple could participate as amicus curiae and file a post-hearing brief alongside the parties. If one of the witnesses that Apple proffered was called to testify at the evidentiary hearing, the Court stated that Apple could also submit an affidavit from one additional fact witness that addressed facts not covered by the testimony. If the witness was not called to testify the Court stated that Apple could submit two affidavits from fact witnesses, in addition to a post-hearing brief (Order at 19).

By Maria Ramirez

On January 24, the United States District Court of the Southern District of New York granted Google’s motion to compel arbitration, staying the claims brought by Cliffy Care Landscaping LLC and Michael Stellman, two advertisers seeking to represent a class against Google. In granting the motion, the court found that these advertisers were bound by an arbitration agreement they accepted as part of their Advertising Terms of Service with Google. 

Background

In 2016, Google implemented its Advertising Terms of Service, which were amended in 2017. The modification aimed to incorporate a broad arbitration provision covering “all disputes and claims between Google and the Customer or between Google and the Advertiser that arise out of or relate in any way to the Programs or these Terms.” This amendment was communicated to all affected parties, giving them the option to accept or opt out of the arbitration clause.

Despite the court having denied Google’s petition previously, this time the court found that Google proved that Stellman accepted the arbitration terms on September 14, 2017, and that Cliffy Care accepted them on November 20, 2019, when it first signed up for an advertising account with Google.

Court’s Ruling

The court’s decision follows a thorough review of the evidence and legal arguments presented by both parties.  The court found that Google had demonstrated the existence of a valid and enforceable arbitration agreement between the parties.  In particular, the court rejected Stellman’s argument that Google failed to meet its burden of establishing the existence of an arbitration agreement. The court held the records provided by Google showed that Stellman had accepted the 2017 Terms, with the arbitration provision, on September 14, 2017. Similarly, the court found that Cliffy Care accepted the updated terms and did not dispute this fact.

The court also addressed plaintiffs’ claims that the arbitration clause was unconscionable. The plaintiffs argued that the terms were unconscionable because Google failed to provide a meaningful opportunity to opt out of the arbitration provision, and because the terms contained a unilateral modification clause, a class action waiver, and a pre-arbitration procedure. However, the court found that the plaintiffs had not provided any evidence of coercion or undue pressure from Google. The court noted the terms allowed advertisers to reject amendments within 30 days, and required a pre-arbitration notice to be submitted before arbitration could be initiated. Based on this, the court concluded that Stellman and Cliffy Care had failed to establish whether the provision was either procedurally or substantively unconscionable.

Lastly, in considering plaintiffs’ argument that their claims for public injunctive relief could not be arbitrated, the court found the claims did not seek public injunctive relief. The plaintiffs alleged that compelling them to arbitrate their claims seeking public injunctive relief would violate California’s Unfair Competition Law (UCL), which prohibits the arbitration of claims for public injunctive relief. However, the court rejected this argument, concluding plaintiffs were not seeking public injunctive relief in the first place.

The court cited the decision in Hodges v. Comcast Cable Communications and the California Crane School, Inc. v. Google LLC case, clarifying that injunctive relief is not considered “public” where the primary beneficiaries are a defined group of similarly situated individuals. In this case, the relief sought by Stellman, for instance, was not directed to the public at large but was instead aimed at a specific class of advertisers who allegedly suffered economic harm. Similarly, Cliffy Care’s claims did not seek relief benefiting the general public but focused on damages and business practices affecting a specific group of advertisers as well.

The court also addressed plaintiffs’ reliance on a prior order issued by Judge Beth Labson Freeman in a separate MDL proceeding, where an order had been issued regarding the arbitration of public injunctive relief claims under the UCL. The court noted that this prior decision did not apply to the present case.

Conclusion

The court concluded that the arbitration agreements were valid and enforceable, the plaintiffs failed to demonstrate the arbitration provisions were unconscionable or their claims sought public injunctive relief under the UCL. Therefore, their claims are compelled to be resolved through arbitration, rather than in court.

On January 27, almost four years after the Amitiza litigation started, the United States District Court for the District of Massachusetts granted Takeda’s motion to compel arbitration, concluding that the arbitration clause applied and Takeda had not waived its right to enforce it. Now all the claims involved in this action must proceed in arbitration instead of federal court.

Background

On June 25, 2021, Meijer, Inc., a direct purchaser of Takeda Pharmaceutical’s anti-constipation drug Amitiza, filed a class action against Takeda and Par Pharmaceutical, alleging that the companies had entered into a “pay-for-delay” or “no-AG” agreement. Takeda moved to compel arbitration of claims brought by Meijer, the proposed class representative, on June 14, 2024. Meijer opposed the motion, arguing that the arbitration clause in the agreement did not apply to its claims and that Takeda had waived its rights to arbitration.

Agreements

Plaintiffs allege Takeda and Sucampo entered into a marketing agreement in 2004, granting Takeda the exclusive right to sell Amitiza in the U.S. and to participate in patent litigation related to the drug. In 2010, Par Pharmaceutical applied to the FDA for approval to sell a generic version of Amitiza. Takeda opposed this move but was unsuccessful. In 2014, according to Plaintiffs, Takeda and Par entered into a settlement agreement under which Par agreed to delay the release of its generic version of Amitiza until 2021.

In a separate agreement, Meijer entered into a Product Purchase Agreement with Par, which included a dispute resolution clause requiring “that any controversy or claim arising out of or relating to this agreement will be determined only by arbitration.”

Procedural History.

The Plaintiffs filed their original complaint on June 25, 2021, and amended it on September 20, 2021. Takeda and Par Pharmaceutical moved to dismiss the complaint in December 2021. Plaintiffs voluntarily dismissed their claims against Par in August 2022 after it filed for bankruptcy. On December 27, 2022, Judge Stearns granted in part and denied in part Takeda’s motion to dismiss. Takeda then answered the amended complaint in January 2023 but did not raise arbitration as an affirmative defense. Parties engaged in discovery and, during negotiations, Par produced its copy of the agreement with the arbitration clause.

Nine months after Takeda received the settlement agreement from Par, Takeda notified Meijer in June 2024 of its intent to compel arbitration, which led to the filing of the motion to compel arbitration two days later in court.

Arbitrability

Takeda argued the arbitration clause in the Product Purchase Agreement with Par required Meijer to arbitrate its claims. Meijer did not dispute the validity of the agreement but argued the arbitration clause did not apply to its claims, the focus of the class action.

The Court determined the arbitration clause in the agreement was broad and applied to any disputes arising from or relating to the agreement. The agreement also contained a delegation provision, which provided the arbitrator, rather than the Court, would decide issues of arbitrability. The Court found the arbitration clause, therefore, applied to Meijer’s claims.

Waiver of Arbitration by Litigation Conduct

Plaintiffs contended that Takeda waived its right to compel arbitration due to its conduct in the litigation. Specifically, Meijer pointed out Takeda failed to raise arbitration as an affirmative defense in its answer and participated extensively in discovery.

The Court applied a standard for determining waiver of arbitration based on litigation conduct, focusing on whether Takeda engaged in litigation in a way that indicated an intentional relinquishment of its right to arbitrate. The Court noted that although Takeda had the agreement produced by Par for a full year before moving to compel arbitration, participated in discovery, and obtained documents that might not have been available in arbitration, it had done so in pursuit of understanding whether it had the right to arbitrate. Additionally, Takeda repeatedly requested documents related to alternative dispute resolution clauses, explaining that these could affect plaintiffs’ standing.

Furthermore, the court stated there was no evidence that Takeda had used litigation as a tactic to gain a strategic advantage during arbitration. Neither was there evidence Takeda pursued arbitration due to dissatisfaction with the progress of the litigation.

In light of these facts, the Court found no waiver of arbitration. It emphasized that doubts about waiver should be resolved in favor of arbitration, in line with First Circuit principles.

Conclusion

The court granted Takeda’s motion to compel arbitration, requiring Meijer to arbitrate its antitrust claims rather than pursue them in a Massachusetts federal court. This decision highlights the court’s interpretation of waiver principles and its adherence to the First Circuit’s directive on resolving doubts in favor of arbitration. As a result, Meijer’s claims against Takeda will proceed in arbitration rather than in the ongoing class action litigation in federal court.

On January 28, 2025, a certified class of automotive software vendors sought preliminary approval of a $630 million settlement deal with defendant CDK Global.

CDK is a Texas-based company that sells software platforms auto dealers use to run their daily sales, financing, and service operations.  Vendor plaintiffs alleged that CDK and its main rival conspired to coordinate their data access policies and eliminate competition from independent data integrators, forcing vendors to use CDK’s and its rival’s data integration services at inflated prices.

Tech vendor and named-Plaintiff AutoLoop, as well as over 240 other companies included in the class, create apps for the dealers’ management systems for inventory management, repair orders, warranty services and other functions.

According to the vendor class’s unopposed motion seeking preliminary approval of the proposed settlement, the $630 million dollar settlement figure is $140 million above the vendor class’s single damages of $490 million that it would have sought at trial—a trial that was just weeks away when the deal was reached with defendants.  Defense estimates of damages were as little as $48 million.

Of the $630 million settlement, $406 million would remain for distribution to the class members after attorney’s fees and costs, according to the filing.  The settlement is to be paid out in installments, starting with $450 million upfront and followed by three $60 million payments over the course of three years.  Class counsel noted its intention to submit an application for reimbursement of expense of up to $20 million “to recover class counsel’s significant out-of-pocket investment over years of litigation,” along with up to one-third of the overall payment and a $250,000 service award for AutoLoop.

According to the motion for preliminary approval, the settlement readily satisfies the standards for approval required by Federal Rule of Civil Procedure 23(e)(2), including that (i) class representatives and class counsel have adequately represented the class, (ii) the settlement agreement was negotiated at arm’s length, (iii) relief provided is adequate, and (iv) the distribution plan treats class members equitably relative to each other. 

The parties await approval by Judge James D. Peterson of the U.S. District Court Western District of Wisconsin.

By Sarah Van Culin

On December 4, 2024, the Ninth Circuit upheld the District Court’s denial of the American Booksellers Association’s motion to intervene in an antitrust suit brought against Amazon.com by the FTC and 19 states. The Ninth Circuit decided (without oral argument) that the American Booksellers Association’s claim involved different anticompetitive conduct in a different market and thus the ABA did not have a “significant protectable interest” in the litigation.

Background

On September 26, 2023, the FTC and 17 (now 19) state attorneys general sued Amazon.com alleging that Amazon used a series of anticompetitive and unfair strategies to maintain its monopoly power in two related markets: the online superstore market serving shoppers and the market for online marketplace services purchased by sellers.

On April 26, 2024, the American Booksellers Association filed a motion to intervene in the suit. The American Booksellers Association (“ABA”) argued that Amazon had stifled competition from its members by using its monopsony power to secure discriminatory wholesale pricing on books. Both sides opposed the motion to intervene, and the District Court denied the motion in a short order referencing the arguments made by both sides.

Ninth Circuit Opinion

In an unpublished opinion, the Ninth Circuit upheld the District Court’s denial. The Ninth Circuit distinguished between the conduct alleged by the FTC (that Amazon used its monopoly power to drive up prices paid by consumers) and that alleged by the ABA (that Amazon used its market power to secure lower wholesale prices in the market for books). As a result, the Ninth Circuit decided that intervention as of right was not warranted as the ABA would not be prejudiced by any resolution of the FTC’s action as the ABA could bring its own action against Amazon nor did the facts support permissive intervention.

Circuit Judge Bennett concurred in part and concurred in the judgment but wrote separately to address the majority’s position that the ABA alleged different anti-competitive conduct. Bennett read the FTC’s allegations to be that Amazon used its monopsonistic power on the supplier side to strengthen its monopoly power on the sales side, which would overlap with the conduct alleged by the ABA. Bennett encouraged the majority to consider Ohio v. American Express and related cases directing that conduct on both sides should be considered when dealing with an alleged platform monopolist. In a footnote, the majority rejected Bennett’s position, arguing that Bennett viewed the issues too generally and that for the purposes of intervention, the “interconnectedness” between the sales side and the purchasing side were insufficient to support intervention.

By Morgan Marmaro

Overview. AB-325 proposes to clarify that the use or distribution of any pricing algorithms trained on or that uses non-public competitor data is illegal under California’s Cartwright Act.  

Definitions. Notably, “distribution” is defined as including the sale, licensing, providing access to, or otherwise making available by any means, including through a subscription or [a] sale.” And, “nonpublic competitor data” refers to non-public data, regardless if aggregated, that is based on, derived from, or otherwise provided by a person who competes in the same market as another — unless it was distributed in a form that does not reveal any underlying competitor data (e.g., generalized industry survey results). Non-public data also includes information not widely available or easily accessible, e.g., prices or commercial terms, regardless if anonymized and extends to public-facing data whose terms of service prohibit the use of said data. 

Presumptions. AB-325 will apply presumptions to a defendant found to have either (1) distributed such a pricing algorithm to two or more persons with the intent that the algorithm be used to set or recommend a price or commercial term of a product or service in the same or a related market, and that two or more persons used it to set or recommend a price or term; or (2) used the algorithm to set or recommend a price or term and the algorithm was similarly used by another person in the same or a related market.  The three presumptions that apply to such a defendant includes establishing that they entered into a contract in restraint of trade, violating three chapters of the Cartwright Act.  For civil cases where the presumptions apply, AB-325 renders any person jointly and severally liable for violations if they distributed the algorithm and knew, or could have reasonably known, that the algorithm would (a) use, incorporate or train on non-public competitor data, or (b) be used by two or more persons to set or recommend a price or term in the same or a related market.

Defenses. The bill proposes a defense against the application of presumptions if the defendant did not develop or distribute the pricing algorithm — and can show by clear and convincing evidence that they did not have actual knowledge or could not have reasonably known that (i) the pricing algorithm used non-public competitor data, and (ii) was used by two or more persons to set or recommend a price or commercial term in the same or a related market.

Tuesday, March 11, 2025
Office of Public Affairs

The U.S. Department of Justice today announced that eight defendants have pleaded guilty for their conduct in a long-running and violent conspiracy to monopolize the transmigrante forwarding agency industry in the Los Indios, Texas, border region near Harlingen and Brownsville, Texas. The three remaining defendants to the superseding indictment remain at large as fugitives. Transmigrantes are individuals who transport used vehicles and other goods from the United States through Mexico for resale in Central America. Transmigrante forwarding agencies are U.S.-based businesses that provide services to transmigrante clients, including helping those clients complete the customs paperwork required to export vehicles into Mexico.

“The Criminal Division is committed to holding violent criminal organizations accountable in whatever markets in which they operate,” said Matthew R. Galeotti, head of the Justice Department’s Criminal Division. “Transnational criminal organizations that use violence to dominate industries will be prosecuted to the fullest extent of the law.”

“These guilty pleas bring to justice individuals who used violence and extortion to fix prices and monopolize the market for essential services that Americans rely on to earn a living,” said Director of Criminal Enforcement Emma Burnham of the Justice Department’s Antitrust Division. “The Antitrust Division will continue to use every tool at its disposal to protect the public by prosecuting violent criminals – including those who aim to corrupt America’s free markets.”

“Price fixing harms both the public and the business community,” said U.S. Attorney Nicholas J. Ganjei for the Southern District of Texas. “Schemes like this artificially drive up prices, forcing consumers to pay more than they ordinarily would. At its core, such market collusion is nothing more than theft from consumers.”

Court orders lifetime bans, monetary judgments
March 24, 2025

The Federal Trade Commission is requiring operators of a deceptive business opportunity to pay hundreds of thousands of dollars to settle allegations they misled consumers with false promises of big returns selling goods through Amazon and Walmart.

Under the settlement orders entered by the court, Trevor Duffy Young and Wessam Baiz, along with two companies associated with Baiz, will turn over the profits they made from the alleged scam, which operated under the names Lunar Capital Ventures, Ecom Genie and Profitable Automation, and before that as Valiant Consultants.

“Young, Baiz, and Baiz’s companies were part of a deceptive operation that took advantage of consumers looking to invest their hard-earned money, only to learn that promises of successful e-commerce stores were a total sham,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection. “Today’s action holds these defendants accountable by banning them from marketing or selling business opportunities and requiring payments to defrauded consumers.”

The FTC filed suit in October 2024, alleging that the companies and their operators made false claims that consumers could earn large profits from online e-commerce stores that the defendants would establish and operate for them. For example, they promised that consumers would generate sales of “$100K+ per month” and that their stores could become “million-dollar” operations. These promises rarely, if ever, materialized, and most consumers lost the tens of thousands of dollars they each invested in the business opportunity.

The court orders ban Young, Baiz, and Baiz’s companies from any involvement with the sales, marketing, or operations of any business opportunity. The orders also prohibit them from deceiving consumers about any good or service they sell or market.

March 14, 2025

As a result of the agency’s law enforcement actions, the Federal Trade Commission sent $337.3 million in refunds to consumers in 2024, according to the FTC’s annual report on refunds released today.

“Getting money back for people across the country is a top priority for the FTC,” said Chris Mufarrige, Director of the Bureau of Consumer Protection. “We will relentlessly pursue refunds for Americans who lost money to unlawful practices.”

The FTC Annual Report on Refunds to Consumers provides a breakdown of the total amount refunded by the FTC nationally, as well as the amount sent to consumers in each state. The report also includes a list of cases in which the agency sent first distribution payments in 2024.

GTCR’s acquisition of Surmodics will lead to increased concentration in a critical medical device coating market, harming patients, medical device manufacturers, the FTC alleges
March 6, 2025

The Federal Trade Commission today sued to block GTCR BC Holdings, LLC’s (GTCR) acquisition of Surmodics, Inc. (Surmodics), alleging that the deal, which seeks to combine the two largest manufacturers of critical medical device coatings, is anticompetitive.

The FTC charges that private equity firm GTCR’s proposed acquisition of Surmodics would create a combined company controlling more than 50% of the market for outsourced hydrophilic coatings. These coatings are often used by medical device manufacturers and are applied to lifesaving medical devices such as catheters and guidewires.

“Medical device makers rely on high-quality coatings in designing and bringing to market life-saving devices, such as neurovascular catheters,” said Daniel Guarnera, Director of the FTC’s Bureau of Competition. “This merger threatens to disrupt competitive dynamics that have ultimately benefited patients. Today, the FTC is stepping in to protect patients from this unlawful acquisition.”

GTCR currently owns a majority stake in Biocoat, Inc., which is the second-largest provider of outsourced hydrophilic coatings. Surmodics is the largest provider of outsourced hydrophilic coatings.

As the FTC’s complaint alleges, GTCR’s acquisition of Surmodics would lead to a highly concentrated market for outsourced hydrophilic coatings and eliminate significant head-to-head competition between Biocoat and Surmodics. This direct competition has spurred lower prices, higher quality coatings, and product innovation. The proposed deal would change those competitive dynamics and harm medical device manufacturers as well as patients, the complaint states.

Hydrophilic coatings allow physicians to maneuver medical devices within the tight confines of the body—within a blood vessel in the brain, for example—without damaging sensitive tissue or vital structures. Medical devices with hydrophilic coatings are used in a range of interventional neurovascular, structural heart, coronary, and peripheral vascular procedures.

Market Dynamics

GTCR’s acquisition of Surmodics would significantly increase market concentration in the outsourced hydrophilic coatings sector, which already suffers from few competitors. The merger would result in a level of market concentration that violates the 2023 Merger Guidelines, the FTC’s complaint states.

Internal documents from both companies, as well as competitor and customer testimony, recognize Surmodics and Biocoat as head-to-head competitors. As alleged in the complaint, Surmodics and Biocoat closely monitor each other’s business strategy and often target the same large, small, and startup medical device manufacturers, also known as original equipment manufacturers (OEMs). This fierce competition has driven Surmodics and Biocoat to improve coating quality and services, lower prices, and increase innovation. The benefits of these competitive dynamics, however, would be eliminated by the proposed merger, the FTC’s complaint alleges.

The manufacturing of hydrophilic coatings requires specialized expertise, years of research, and millions of dollars in investments. Many OEMs prefer to outsource this process instead of manufacturing it in-house. Often, OEMs outsource to coatings manufacturers with a proven track record, like Biocoat and Surmodics. Given these dynamics, it is unlikely any new coating provider could emerge to meaningfully compete with GTCR and Surmodics post-merger, the FTC’s complaint alleges.

Attorney General Bonta Issues Statement on President Trump’s Troubling Attacks on the Rule of Law and U.S. Constitution

Sunday, March 23, 2025

OAKLAND – California Attorney General Rob Bonta today issued the following statement in response to President Trump’s troubling attacks on the rule of law and U.S. Constitution: 

“More than two centuries ago, our founding fathers established three co-equal branches of government; each branch designed to act as a check on the others and curb the misuse of power by those in higher office. Today, that foundational tenet of American democracy is being stress-tested.  

The Trump Administration has repeatedly attempted to exercise authority it does not have – authority that belongs to Congress or the states – and in doing so, violated clear legal requirements set forth in the law and in the U.S. Constitution. These actions have required the co-equal judicial branch to order the Trump Administration to follow the law. At times, the Trump Administration has acted in contravention of those court orders. 

These actions are both unlawful and dangerous. Our constitutional democracy rests upon a legal system in which attorneys dutifully represent their clients, facts and law are presented to judges, and after careful consideration, those judges issue orders that must be followed. 

Attacks to undermine due process, discredit or intimidate our independent judiciary, undercut state sovereignty, or seek retribution against those who dare exercise their First Amendment right to take positions different from – or in opposition to – the President are either unlawful, inconsistent with the foundational principles of our American legal system, or both. 

President Trump’s demands for the co-equal judiciary to capitulate to the executive branch are not normal. His decree threatening sanctions and retaliation against attorneys and law firms he dislikes is not normal. These actions threaten the very foundations of our democracy, legal system, and the rule of law.  

We must continue to speak up and push back when our democratic norms are violated, our legal system undermined, and our laws broken. We must hold the President and his Administration accountable to the Constitution they swore to uphold. As California Attorney General, I promise I will.”

Friday, March 14, 2025

OAKLAND — California Attorney General Rob Bonta today announced a $1.3 million settlement with Sedera, Inc. (Sedera) and Sedera Medical Cost Sharing Community, LLC (SMC) to resolve allegations that they violated California law by advertising and selling sham health insurance plans to over two thousand Californians. In addition, the settlement resolves allegations that Sedera and SMC falsely advertised their sham plans as both novel “non-insurance” medical cost sharing products and as health care sharing ministry (HCSM) plans. An investigation by the California Department of Justice found that because, among other things, Sedera and SMC collected mandatory monthly payments in exchange for the payment of medical services, Sedera and SMC operated health plans. Health plans are required to comply with a myriad of important state consumer protection laws and regulations. Those laws and regulations require that, among other things, health plans provide coverage for all essential health benefits, including preventative care. The products offered by Sedera and SMC did not.  

“Sedera and SMC were able to sell their sham health insurance plans at lower costs precisely because those plans were a sham and failed to comply with state law. For example, they did not offer Californians the essential health benefits they were entitled to,” said Attorney General Bonta. “Today’s settlement includes not only strong injunctive terms that prohibit Sedera and SMC from marketing, selling, or operating any plans in California, but also consumer restitution and payment for civil penalties. We welcome businesses in our state, but we will not allow them to prey on our people. Lastly, to my fellow Californians: please do your research and first consider applying for affordable, reliable coverage through Covered California.”

SMC, a corporation that falsely purported to be a non-profit, created, operated, and sold unauthorized health plans through its for-profit administrative vendor, Sedera. As part of today’s settlement, Sedera and SMC: 

• Will be prohibited from selling, marketing, and operating any health plans in California.
• Will be prohibited from moving its California members to another plan or directing them to any other cost sharing entities. 
• Must delete their California customer lists and provide members with notice of their plan termination. 
• Must pay $1.3 million. Of that total,$800,000 will be for consumer restitution (two payments over six months) and $560,000 will be for civil penalties.

EDITORS’ NOTE: A copy of the settlement is available at the California Department of Justice website.