Justia U.S. 2nd Circuit Court of Appeals Opinion Summaries

Plaintiffs, wholesale dealers in pharmaceutical products, filed a putative class action alleging that defendants violated the anti-monopolization provision of the Sherman Act, 15 U.S.C. 2, by breaching defendants' contracts to supply two of their competitors with an unbranded version of defendants' patented drug for resale under the competitors' own labels. The court rejected plaintiffs' claim that these contracts gave rise to a "duty to deal" enforceable by third-party customers such as themselves under the antitrust laws. The court concluded that plaintiffs failed to allege facts that would place this case within Aspen Skiing Co. v. Aspen Highlands Skiing Corp.'s narrow exception to the long recognized right of a trader or manufacturer engaged in an entirely private business, freely to exercise his own independent discretion as to parties with whom he will deal. Plaintiffs' complaint failed to state a claim upon which relief can be granted and it was properly dismissed by the district court under Rule 12(b)(6). Accordingly, the court affirmed the judgment of the district court. View "Louisiana Wholesale Drug Co. v. Shire LLC" on Justia Law

Plaintiff filed suit under the Sherman Act, 15 U.S.C. 1,2, alleging that defendants, a group of five competing electronics firms, have attempted to leverage their ownership of certain key patents to gain control of a new technology standard for USB connectors and, by extension, to gain monopoly power over the entire USB connector industry. The court held that, under principles articulated in a line of recent Supreme Court decisions extending from Arbaugh v. Y&H Corp. to Sebelius v. Auburn Regional Medical Center, the requirements of the Foreign Trade Antitrust Improvement Act (FTAIA), 15 U.S.C. 6a, are substantive and nonjurisdictional in nature. Because Congress has not clearly stated that these requirements are jurisdictional, they go to the merits of the claim rather than the adjudicative power of the court. In so holding, the court overruled the court's prior decision in Filetech S.A. v. France Telecom S.A. The court also concluded that, although the FTAIA's requirements are nonjurisdictional and thus potentially waivable, the court rejected plaintiffs' argument that defendants somehow have waived them by contract in this case; foreign anticompetitive conduct can have a statutorily required direct, substantial, and reasonably foreseeable effect on U.S. domestic or import commerce even if the effect does not follow as an immediate consequence of defendant's conduct, so long as there is a reasonably proximate causal nexus between the conduct and the effect; the court rejected the interpretation of "direct...effect" advanced by the Ninth Circuit in United States v. LSL Biotechnologies in favor of the interpretation advocated by amici curiae the United States and the FTC and adopted by the Seventh Circuit in its en banc decision in Minn-Chem, Inc. v. Agrium, Inc.; and the court need not decide, however, whether plaintiff here has plausibly alleged the requisite "direct, substantial, and reasonably foreseeable effect" under the proper standard. Accordingly, the court affirmed on alternative grounds the judgment of the district court dismissing plaintiff's claims. View "Lotes Co., Ltd. v. Hon Hai Precision Industry Co." on Justia Law

United appealed the district court's order denying United's motion to dismiss an antitrust complaint brought against it by DHL. At issue was whether DHL had sufficient notice of the availability of the claim against a Chapter 11 debtor to satisfy due process requirements and render the claim discharged. The court concluded that the district court applied an incorrect standard in accepting as true DHL's allegation that it was not aware of, or with due diligence could not have become aware of, sufficient facts to plead an antitrust claim that would survive a motion to dismiss in the context of a bankruptcy proceeding. Therefore, the court remanded for further development of the facts concerning (a) what DHL knew or reasonably should have known in time to present an antitrust claim in the bankruptcy proceeding, or to file a late proof of claim or move to amend the reorganization plan and (b) what United knew or reasonably should have known concerning DHL's claim. View "DPWN Holdings (USA), Inc. v. United Airlines, Inc." on Justia Law

Plaintiffs in this consolidated action sought relief on behalf of two large putative classes - one whose members bought auction rate securities and one whose members issued them - alleging that defendants triggered the market's collapse by conspiring with each other to simultaneously stop buying auction rate securities for their own proprietary accounts. The district court dismissed plaintiffs' complaints pursuant to Rule 12(b)(6). The court affirmed, holding that plaintiffs' complaints did not successfully allege a violation of Section 1 of the Sherman Act, 15 U.S.C. 1. Although the court did not reach the district court's implied-repeal analysis under Credit Suisse Securities (USC) LLC v. Billing, the district court was ultimately correct that the complaints failed to state a claim upon which relief could be granted. View "Mayor and City Council of Baltimore v. Citigroup, Inc." on Justia Law

This case involved an alleged bid-rigging scheme that sought to defraud various New York State and City government agencies in connection with the purchase by those agencies of a particular brand of mobile radio. Gatt, an admitted past participant in the purported scheme, sought to recover damages from alleged co-conspirators for losses arising from the termination of Gatt's at-will distribution contract for those radios. Gatt raised federal and state antitrust claims arising under the Sherman Act, 15 U.S.C. 1; the Donnelly Act, N.Y. Gen. Bus. Law 340; and New York common law. The court concluded that Gatt lacked antitrust standing to pursue its antitrust claims and that its common law claims were properly dismissed as a matter of law. Therefore, the court affirmed the district court's dismissal of Gatt's complaint. View "Gatt Communications, Inc. v. PMC Associates, L.L.C." on Justia Law

Plaintiffs brought suit against numerous foreign airlines alleging a conspiracy to fix prices in violation of state antitrust, consumer protection, and unfair competition laws. The district court dismissed those claims as expressly preempted by federal law. The Federal Aviation Act, 49 U.S.C. 41713(b)(1), preempted state-law claims "related to a price, route, or service of an air carrier." The court concluded that "air carrier" in that provision applied to foreign air carriers and therefore, affirmed the judgment. View "In re Air Cargo Shipping Services Antitrust Litigation" on Justia Law

Plaintiff, a retail consumer of electricity in New York City, sued KeySpan, a producer of electricity in New York, alleging that it colluded with one of its rivals to increase installed capacity prices. Plaintiff also alleged that Morgan Stanley, a financial firm, facilitated KeySpan's anticompetitive conduct. Plaintiff subsequently appealed from the district court's dismissal of his federal and state antitrust claims against KeySpan and Morgan Stanley. The court agreed with the district court that plaintiff lacked standing to pursue his federal claims because he was an indirect purchaser and that his claims were otherwise barred by the filed rate doctrine. View "Simon v. Keyspan Corporation" on Justia Law

In an antitrust class action alleging a conspiracy to fix prices in violation of the Sherman Act, 15 U.S.C. 1, the district court entered summary judgment in favor of defendants, manufacturers and sellers of “publication paper,” a type of paper used in preparing printed material of various types. Plaintiffs, direct purchasers of defendants’ paper products, claimed that defendants’ price hikes mirrored each other in amount and occurred in close succession and were instituted pursuant to an agreement, rather than independently. Plaintiffs also claimed that, in the same time frame, two defendants coordinated the closure of paper mills in order to reduce the supply of publication paper. The Second Circuit vacated in part. A jury could reasonably find that defendants entered into an agreement to raise the price of publication paper, and that, as implemented, this agreement damaged plaintiffs. View "In re: Publ'n Paper Antitrust Litig." on Justia Law

In these parallel cases, separate petitions were filed requesting the district court to set a "reasonable" rate after ASCAP and BMI were unable to agree on licensing fees with DMX, a provider of background/foreground music. In both cases, the district court adopted DMX's proposals. The court held the Second Amended Final Judgment (AFJ2) permitted blanket licenses subject to carve-outs to account for direct licensing and the court rejected ASCAP's claim that a blanket license with an adjustable carve-out conflicted with the AJF2. The court concluded that the district court in both cases found that ASCAP and BMI did not sustain their burdens of proving that their proposals were reasonable; no legal error contributed to these findings and the findings supported by the record were not clearly erroneous; and in both instances, the district court had the authority to set a reasonable rate for DMX's licenses. Accordingly, the court held that the district court did not err in setting DMX's licensing rates with ASCAP and BMI and that the rates set by the district court were reasonable. View "Broadcast Music, Inc. v. DMX Inc.; American Society of Computers, Authors and Publishers v. THP Capstar Acquisition Corp." on Justia Law

This action involved the single-copy magazine industry, i.e., the business of selling magazines for purchase by consumers at retail outlets. Anderson appealed (1) from a judgment of the district court dismissing their complaint alleging that defendants, who were suppliers and business competitors, conspired to drive Anderson out of business in violation of section 1 of the Sherman Antitrust Act, 15 U.S.C. 1, and New York law, and (2) from an order denying Anderson's motion for reconsideration and for leave to file a proposed amended complaint. The court concluded that even if the original complaint did not meet the Twombly/Igbal standard, Anderson's proposed amended complaint, which contained additional factual allegations, met that standard and should have been allowed. Accordingly, the court vacated the judgment of dismissal and remanded for further proceedings. View "Anderson News, L.L.C. v. American Media, Inc." on Justia Law