antitrust

American Express Co. v. Italian Colors Restaurant

Italian Colors Restaurant, along with other merchants, sued American Express in a class action lawsuit for alleged antitrust violations for compelling merchants to accept American Express credit cards and pay exorbitant rates. In the agreements those merchants signed with American Express, they agreed to use bilateral arbitration rather than class actions in resolving any disputes. Italian Colors argues that this bilateral arbitration clause would create prohibitive costs for any pursuit of their legal rights. This effectively immunizes American Express from any liability under the Sherman Antitrust Act. Therefore, courts must not enforce the arbitration agreement in this context. American Express contends that courts should adhere to the terms of arbitration agreements unless the terms would violate substantive United States law. From a policy standpoint, Italian Colors claims that arbitration is a poor vehicle to vindicate antitrust claims because the length of time an arbitral proceeding would take would create problems for potential claimants, creating difficulty in pursuing a claim before the statute of limitation expires and removing a disincentive for corporate abuse. American Express notes the myriad benefits of arbitration over litigation, specifically arguing that arbitration is more beneficial to lower income plaintiffs and less subject to abuse by frivolous or vengeful lawsuits.

Questions as Framed for the Court by the Parties

Whether federal arbitration law recognizes an “effective vindication” exception to class-arbitration waivers that allows courts to ignore arbitration agreements and permit class-action lawsuits where individual plaintiffs’ claims are so small that no single plaintiff would rationally bring a bilateral, one-on-one arbitration to vindicate federal rights.

Issue

Can courts refuse to enforce class-arbitration waivers and permit class-action lawsuits where a plaintiff’s individual claim is worth much less than the cost of bringing that claim? 

top

Written by

Edited by

Additional Resources
Submit for publication
0

American Needle, Inc. v. National Football League, et al.

Issues

Is a professional sports league a single entity under Section 1 of the Sherman Act?

 

In 2001, the National Football League ("NFL") granted Reebok International Ltd. ("Reebok") an exclusive license to manufacture headwear featuring the logos and trademarks of every professional football team in the NFL. Because of this new arrangement, American Needle, Inc. (“ANI”) lost its 20-year license to manufacture such apparel. ANI argues that the NFL's contract with Reebok violates the Sherman Act, because the NFL and its member teams should not be considered a single economic entity. The NFL and Reebok contend that the member teams are united to produce a common product, namely professional football games, and thus are a single entity that is not subject to the regulations of the Sherman Act. In this case, the U.S. Supreme Court will decide whether or not the NFL is a single entity under Section 1 of the Sherman Act.

Questions as Framed for the Court by the Parties

1. Are the NFL and its member teams a single entity that is exempt from rule of reason claims under Section 1 of the Sherman Act simply because they cooperate in the joint production of NFL football games?

2. Is the agreement of the NFL teams among themselves and with Reebok International, in which the teams agreed not to compete with each other in the licensing and sale of consumer headwear and clothing decorated with the teams' respective logos and trademarks, and not to permit any licenses to be granted to Reebok's competitors for a period of ten years, subject to a rule of reason claim under Section 1 of the Sherman Act?

Respondent, National Football League (“NFL”), is an unincorporated association of 32 professional football teams that produces an annual season of football games and the Super Bowl championship game. See American Needle, Inc. v.

Written by

Edited by

Additional Resources

·      Wex: Antitrust

·      Washington Post: Trust-busting the NFL

Submit for publication
0

Animal Science Products, Inc., et al., v. Hebei Welcome Pharmaceutical Co. Ltd., et al.

Issues

Is a court bound to defer to a foreign government’s interpretation of its domestic law when appearing before the court?

 

This case will decide whether American courts are bound to accept a foreign government’s interpretation of its own laws. Animal Science Products Inc. (“Animal Science Products”) argues that a “binding deference standard”, which requires courts to accept an appearing foreign government’s description of its laws, inhibits a court’s ability to independently reach an accurate determination of foreign law. Furthermore, Animal Science contends, the lower court’s decision to uphold binding deference misapplied the Supreme Court’s holding in United States v. Pink. Hebei Welcome Pharmaceuticals (“Hebei”) counters that requiring courts to accept an appearing foreign government’s reasonable statement of its laws appropriately balances judicial independence and international comity concerns. Moreover, Hebei asserts that the court below was correct in finding United States v. Pink to support binding deference. This issue affects how federal courts interpret foreign law in international litigation. Accordingly, this case will impact international litigation strategy and entities with operations that are regulated outside of the U.S.

Questions as Framed for the Court by the Parties

Whether a court may exercise independent review of an appearing foreign sovereign’s interpretation of its domestic law (as held by the Fifth, Sixth, Seventh, Eleventh, and D.C. Circuits), or whether a court is “bound to defer” to a foreign government’s legal statement, as a matter of international comity, whenever the foreign government appears before the court (as held by the opinion below in accord with the Ninth Circuit).

In 2005, Animal Science Products, Inc. and various Vitamin C producers in the United States (“Animal Science Products”) filed suit in the Eastern District of New York against Hebei Welcome Pharmaceuticals Co. (“Hebei”), a Chinese pharmaceutical company and its holding company, alleging that Hebei was a co-conspirator who established an illegal cartel for price-fixing purposes. Animal Science Products, Inc., et al. v. Hebei Welcome Pharmaceutical Co. Ltd., et al., 837 F.3d 175, 179 (2d Cir. 2016) at 5–6.

Written by

Edited by

Additional Resources

Submit for publication
0

Apple Inc. v. Pepper

Issues

Are App Store customers “direct purchasers” of Apple who have standing to bring a suit alleging antitrust violations?

In this case, the Supreme Court will determine whether customers of the iPhone’s App Store are considered direct purchasers of Apple. The question of direct purchaser status under the Illinois Brick doctrine is necessary to grant standing and proceed with an antitrust class action accusing Apple of monopolizing the market for iPhone apps. The Ninth Circuit held, and the class action representatives now argue, that customers of the App Store are direct purchasers because Apple functions as a distributor for app developers. Apple disagrees, arguing that it sells its distribution services to app developers, who are its direct purchasers; moreover, Apple asserts that it does not possess key price-setting power. The Court’s decision in this case will have implications for who may bring antitrust actions, potentially opening the door to duplicative damages and excessive private litigation.

Questions as Framed for the Court by the Parties

Whether consumers may sue for antitrust damages anyone who delivers goods to them, even where they seek damages based on prices set by third parties who would be the immediate victims of the alleged offense.

In 2007, Apple released the original iPhone. In re Apple iPhone Antitrust Litig., 846 F.3d 313, 315–16 (9th Cir. 2017). One year later, Apple launched the “App Store,” through which iPhone users may purchase and download applications (“apps”).

Written by

Edited by

Additional Resources

Submit for publication
0

Credit Suisse Securities (USA) v. Billing

Issues

The Securities and Exchange Commission (SEC) heavily regulates public offerings of securities. Does the SEC’s jurisdiction automatically displace the application of antitrust law to these offerings, or does antitrust immunity for an offering of securities only occur when Congress has specifically expressed the intent to exempt a particular practice from antitrust liability?

 

Glen Billing and other investors filed a class action lawsuit against Credit Suisse First Boston Ltd. and other Wall Street investment firms, alleging that the firms violated the Sherman Antitrust Act, by artificially inflating the prices of securities in initial public offerings. The Court of Appeals for the Second Circuit, splitting with other courts, held that since Congress had not specifically immunized this conduct from antitrust liability, the Sherman Act should apply despite the Securities and Exchange Commission’s regulation of this area. The Supreme Court’s decision in this case will help resolve whether conduct already heavily regulated by the SEC should be automatically immune from antitrust liability, or whether antitrust immunity should only be granted where Congress has expressed a specific intent to immunize the conduct at issue.

Questions as Framed for the Court by the Parties

Whether, in a private damages action under the antitrust laws challenging conduct that occurs in a highly regulated securities offering, the standard for implying antitrust immunity is the potential for conflict with the securities laws or, as the Second Circuit held, a specific expression of Congressional intent to immunize such conduct and a showing that the SEC has power to compel the specific practices at issue..

Glen Billing and other investors filed a class action lawsuit against Credit Suisse First Boston Ltd. (“Credit Suisse”) and other Wall Street investment firms. In re Initial Public Offering Antitrust Litigation, 287 F.Supp.2d 497 (S.D.N.Y. 2003) (“In re IPO”). Billing alleged that the firms had violated the Sherman Antitrust Act, 15 U.S.C.

Submit for publication
0

Henry Schein Inc. v. Archer and White Sales Inc.

Issues

Does an arbitration agreement containing a provision that excludes certain claims from arbitration negate a provision in the same agreement that delegates the question of whether an issue should be heard by an arbitrator, rather than a court?


This case asks the Supreme Court to consider whether an arbitration agreement that incorporates the American Arbitration Association’s (“AAA”) rules delegates the question of arbitrability to the arbitrators, in light of an express exclusion clause for injunctive relief, where the plaintiff sought both damages and injunctive relief. The arbitration agreement at issue in this case includes a “carve-out” provision excluding from arbitration any claims seeking injunctive relief. Rule 7(A) of the AAA’s rules states that the arbitrator has the power to rule on the arbitrability of any claim or counterclaim. Petitioner Henry Schein, Inc. argues that the incorporation of the AAA rules “clearly and unmistakably” delegates all questions of arbitrability to the arbitrator, and that, because some issues are delegated to the arbitrator, the presumption of arbitrability should be read to delegate to the arbitrator the question of the application of the exclusion clause. On the other hand, Respondent Archer and White Sales, Inc. contends that the question of arbitrability should remain for the court to decide because of the explicit carve-out exemption. The outcome of this case has heavy implications for the efficiency and fairness of dispute resolution.

Questions as Framed for the Court by the Parties

Whether a provision in an arbitration agreement that exempts certain claims from arbitration negates an otherwise clear and unmistakable delegation of questions of arbitrability to an arbitrator.

The dispute in this case originates from 2016. Respondent Archer and White Sales, Inc. ("Archer") is a distributor of dental equipment, purportedly nationally recognized for its low prices and quality service. Archer & White Sales, Inc. v. Henry Schein, Inc., (E.D. Tex. 2017) at 1. Archer competed directly against Petitioner Henry Schein, Inc. ("Henry Schein"), the country’s largest distributor of dental equipment.

Written by

Edited by

Additional Resources

Submit for publication
0

Leegin Creative Leather Products v. PSKS, Inc.

Issues

Should the Court review resale price maintenance agreements on a case-by-case basis instead of holding such agreements illegal on their face, given that resale price maintenance could enhance competition and benefit consumers?

 

Kaye’s Kloset, a boutique apparel store in Texas, claims that Leegin Creative Leather Products, a manufacturer of brand-name leather products, has violated U.S. antitrust law by requiring retailers to maintain a price floor on Brighton-brand accessories. Under Supreme Court precedent, resale price maintenance (RPM) agreements are per se illegal. However, Leegin argues that RPM agreements should instead be evaluated under a rule of reason because RPM has significant pro-competitive effects. Kaye’s Kloset responds that RPM is never pro-competitive and thus the per se rule against RPM should stand. In this case, the Supreme Court will re-examine the economics of a controversial marketing strategy. The Court’s decision will impact how manufacturers distribute their products, how industries market these products, and how consumers shop for these products. 

Questions as Framed for the Court by the Parties

This Court has held that antitrust “per se rules are appropriate only for conduct that . . . would always or almost always tend to restrict competition.”  Modern  economic analysis establishes that vertical minimum resale price maintenance does not meet this condition because the practice often has substantial competition-enhancing effects. The question presented is whether vertical minimum resale price maintenance agreements should be deemed per se illegal under Section 1 of the Sherman Act, or whether they should instead be evaluated under the rule of reason.

 

Leegin Creative Leather Products (“Leegin”) is a California-based leather manufacturer that produces and markets women’s accessories. Brief for Petitioner at 2.

Acknowledgments

The authors would like to thank for Professor George Hay for his insight into this case.

Submit for publication
0

National Collegiate Athletic Association v. Alston

Issues

Do the National Collegiate Athletic Association’s restrictions on “non-cash education-related benefits” for college athletes violate federal antitrust law under the Sherman Act?

This case asks the Supreme Court to decide whether the National Collegiate Athletic Association (“NCAA”) eligibility rules, which limit student-athletes from receiving compensation in order to preserve “amateurism,” violate federal antitrust law under Section 1 of the Sherman Act. The Sherman Act proscribes restrictions on commerce or trade among the several states. The student-athletes assert that the NCAA’s compensation restrictions, under a “rule of reason” standard of federal antitrust law, are unlawful restraints of trade that generate anticompetitive effects. In response, the NCAA argues that the challenged compensation system passes muster under the “rule of reason” standard because it preserves a clear line of demarcation between amateur college sports and professional sports while promoting socially important non-commercial values. This case has implications for intercollegiate athletics, joint ventures, and antitrust law.

Questions as Framed for the Court by the Parties

Whether the U.S. Court of Appeals for the 9th Circuit erroneously held, in conflict with decisions of other circuits and general antitrust principles, that the National Collegiate Athletic Association eligibility rules regarding compensation of student-athletes violate federal antitrust law.

The National Collegiate Athletic Association (“NCAA”) governs intercollegiate sports by administering rules related to its member schools’ student

Written by

Edited by

Additional Resources

Submit for publication
0

Ohio v. American Express Co.

Issues

What is the proper antitrust analysis to apply to a two-sided market in which anticompetitive practices injuring one side of the market simultaneously benefit the other side of the market?

The Supreme Court will determine whether American Express can contractually prevent merchants from steering customers’ credit-card choice at point-of-sale. The Second Circuit reversed the lower court, deciding in favor of American Express because of insufficient proof of anticompetitive effects in light of benefits captured by assessing both the merchant and customer sides of the market. Several states, joined by the United States, argue that American Express’s anti-steering provisions burden consumers and merchants by increasing prices. American Express counters that price increases correspond to increases in product value. If the Court upholds the Second Circuit’s test that considers both sides of a two-sided market, this would significantly change the long-standing approach to assessing antitrust claims, and affect the way the credit card market operates.

Questions as Framed for the Court by the Parties

Whether, under the “rule of reason,” the government's showing that American Express' anti-steering provisions stifle price competition on the merchant side of the credit-card platform suffices to prove anti-competitive effects and thereby shifts to American Express the burden of establishing any pro-competitive benefits from the provisions.

In 2010, the three largest credit card networks in the United States—American Express (“Amex”), Visa, and MasterCard—were sued by the United States and seventeen States for violating federal antitrust laws. United States v. American Express Co., 838 F.3d 179, 192 (2d Cir.

Written by

Edited by

Additional Resources

Submit for publication
0
Subscribe to antitrust