Settlement Agreement Between States and Dunkin’ Brands, Inc.

Fourteen states investigated “no-poach†agreements (clauses, often contained in franchise agreements, which prevent workers from switching between employers of the same franchise in order to obtain a better job with a higher salary or improved working conditions). The states settled with four national fast food franchisors, Dunkin’, Arby’s, Five Guys, and Little Caesars, who agreed to cease using “no-poach†agreements that restrict the rights of fast food workers to move from one franchise to another within the same restaurant chain. Under the terms of the settlements, the franchisors will stop including no-poach provisions in any of their franchise agreements and stop enforcing any franchise agreements already in place. The franchisors have also agreed to amend existing franchise agreements to remove no-poach provisions and to ask their franchisees to post notices in all locations to inform employees of the settlement. Finally, the franchisors will notify the attorneys general if one of their franchisees tries to restrict any employee from moving to another location under an existing no-poach provision. Since the investigation began, Wendy’s provided confirmation that it never used no-poach provisions in their contracts with franchisees. Investigations into Burger King, Popeyes, and Panera continue.

Read More →

Settlement Agreement Between States and Arby’s Restaurant Group, Inc.

Fourteen states investigated “no-poach†agreements (clauses, often contained in franchise agreements, which prevent workers from switching between employers of the same franchise in order to obtain a better job with a higher salary or improved working conditions). The states settled with four national fast food franchisors, Dunkin’, Arby’s, Five Guys, and Little Caesars, who agreed to cease using “no-poach†agreements that restrict the rights of fast food workers to move from one franchise to another within the same restaurant chain. Under the terms of the settlements, the franchisors will stop including no-poach provisions in any of their franchise agreements and stop enforcing any franchise agreements already in place. The franchisors have also agreed to amend existing franchise agreements to remove no-poach provisions and to ask their franchisees to post notices in all locations to inform employees of the settlement. Finally, the franchisors will notify the attorneys general if one of their franchisees tries to restrict any employee from moving to another location under an existing no-poach provision. Since the investigation began, Wendy’s provided confirmation that it never used no-poach provisions in their contracts with franchisees. Investigations into Burger King, Popeyes, and Panera continue.

Read More →

In the Matter of the Investigation of Compulink Technologies, Inc.Assurance No. 17-137 (July 28, 2017)

Defendants are providers of GovDelivery, a cloud-based digital communications solution. New York State government entities issued RFPs seeking bids for GovDelivery solutions. Compulink submitted bids. In order to provide the necessary number of bids for the procurement process in New York, Compulink arranged for Milenio, run by the wife of Compulink’s owner, and another bidder to submit bids at a higher price than Compulink’s. Compulink was awarded contracts as a result fo these sham bids. Although the bids were rigged, the investigation determined that the sham bids were submitted to satisfy the requirements for an expedited procurement process, rather than to secure higher prices. The parties agreed not to communicate with others concerning bids, not to hold themselves out as separate entities, and allow the AG to monitor their future conduct. They also paid $75,000 in civil penalties..Denise Arboleda, President of Milenio Technology, also pled guilty to failure to obey the command of a subpoena.

Read More →

FTC and Plaintiff States v. Mallilnckrodt Ard Inc. (formerly Questcor), No. 1:17-cv-00120 (D.D.C. Jan. 18, 2017)

Four states and the FTC reached a $100 million settlement with Mallinckrodt plc and its US subsidiary, formerly known as Questcor Pharmaceuticals, Inc. resolving a lawsuit accusing Questcor of monopolizing the market for Achthar, the only adrenocorticotropic hormone (ACTH) based therapeutic drug sold in the United States. ACTH is used as a last resort to treat infantile spasms and multiple sclerosis. Questcor allegedly blocked competition for Acthar by disrupting the bidding process and acquiring the U.S. rights for Synacthen Depot, the only other ACTH based drug sold in the world. In 2001, Questcor bought the rights to Acthar and increased the price of it by 85,000 percent, charging over $34,000 for a vial of the drug that used to cost $40 per vial. In 2012, Novartis Pharma A.G sold the U.S. rights of Synacthen, Achthar’s only competitor. The complaint alleges that three other companies had all conducted due diligence and submitted formal offers for Synacthen with plans to develop and launch Synacthen in the United States in direct competition with Questcor. However, perceiving the threat to its U.S. monopoly if a rival drug company purchased the assets, Questcor stepped in to outbid the three other companies, offering Novartis $135 million in guaranteed payments with only vague plans for Synacthen and after very limited due diligence. Through the acquisition, Questcor sought to extinguish the most likely challenges to its Acthar monopoly. According to the complaint, this allowed Questcor to continue charging over $34,000 per vial for H.P. Acthar Gel. In addition to paying $100 million in disgorgement, Under the settlement, Mallinckrodt will pay $100 million. The company will also be required to license a competitor to the rights it acquired from Novartis to commercialize and develop Synacthen in the United States, including the Synacthen trademark, along with clinical trial data and certain intellectual property related to manufacturing and formulation. Mallinckrodt is also prohibited from taking actions that would interfere with clinical trials or clinical plans for Synacthen.

Read More →

State of Wisconsin et al. v. Indivior, No. 16-5073 (E.D. Pa. Sept. 22,2016)

Plaintiff states alleged that the makers of Suboxone, a drug used to treat opioid addiction, engaged in a scheme to block generic competitors and raise prices. Specifically, they are conspiring to wtich Suboxone from a tablet version to a flim in order to prevent or delay generic entry. The states allege that the manufacturers engaged in “product hopping” in which a company makes slight changes to its product to extend patent protections and prvent generic alternatives. The complaint was filed under seal.

Read More →

In the Matter of NFL Ticketing Investigation, Assurance No. 16-181(NY Attorney General Antitrust Bureau (Nov. 15, 2016)

Plaintiff states entered into a settlement agreement with the National Football League under which the NFL would discontinue its league-wide mandatory price floor (no tickets could be sold on the NFL secondary market platform for a price less than a season ticket holder’s price) and would not direct or require ticketing practices designed to preclude fans from using competing ticket exchanges.

Read More →

Connecticut et al. v. Aurobindo Pharma et al. Civ. Action No. (D.Conn. Dec. 15, 2016)

Twenty states filed a federal lawsuit against six generic drug manufacturers, alleging that they entered into long-running and well coordinated illegal conspiracies in order to unreasonably restrain trade, artificially inflate and manipulate prices and reduce competition in the United States for two drugs: doxycycline hyclate delayed release, an antibiotic, and glyburide, an oral diabetes medication. The lawsuit was filed under seal to avoid compromising a continuing investigation. In the complaint, the states allege that the misconduct was conceived and carried out by senior drug company executives and their marketing and sales executives. The complaint further alleges that the defendants routinely coordinated their schemes through direct interaction with their competitors at industry trade shows, customer conferences and other events, as well as through direct email, phone and text message communications. The states further allege that the drug companies knew that their conduct was illegal and made efforts to avoid communicating with each other in writing or, in some instances, to delete written communications after becoming aware of the investigation. The states allege the anticompetitive conduct, including price-fixing and price maintenance, market allocation and other anticompetitive acts, caused significant, harmful and continuing effects in the country’s healthcare system. The states sought an injunction to prevent the companies from engaging in illegal, anticompetitive behavior and also sought equitable relief, including disgorgement. An additional 20 states joined the complaint in March 2017.

Read More →

New York et al. v. Cephalon, No. 2:16-cv-04234 (E.D. Pa. Aug. 4, 2016)

In May 2015, the FTC settled a “pay-for-delay” suit against Cephalon for injunctive relief and $1.2 billion, which was paid into an escrow account. The FTC settlement allowed for those escrow funds to be distributed for settlement of certain related cases and government investigations. In August 2016, forty-eight states filed suit in the Eastern District of Pennsylvania against Cephalon alleging anticompetitive conduct by Cephalon to protect the profits it earned from having a patent-protected monopoly on the sale of its landmark drug, Provigil. According to the complaint, Cephalon’s conduct delayed generic versions of Provigil from entering the market for several years. The complaint alleged that as patent and regulatory barriers that prevented generic competition to Provigil neared expiration, Cephalon intentionally defrauded the Patent and Trademark Office to secure an additional patent, which a court subsequently deemed invalid and unenforceable. Before it was declared invalid, Cephalon was able to use the patent to delay generic competition for nearly six additional years by filing patent infringement lawsuits. Cephalon settled those lawsuits by paying competitors to delay sale of their generic versions of Provigil until at least April 2012. Consumers, states, and others paid millions more for Provigil than they would have had generic versions of the drug launched by early 2006, as expected. A settlement was filed with the complaint, which includes $35 million for distribution to consumers who bought Provigil.

Read More →

United States et al. v. Anthem et al., No. 1:16-cv-01493 (D.D.C., July 21, 2016)

The US and plaintiff states sued to block the merger of two of the country’s largest health insurers. The complaint alleges that their merger would substantially reduce competition for millions of consumers who receive commercial health insurance coverage from national employers throughout the United States; from large-group employers in at least 35 metropolitan areas, including New York, Los Angeles, San Francisco, Denver and Indianapolis; and from public exchanges created by the Affordable Care Act in St. Louis and Denver. The complaint also alleges that the elimination of Cigna threatens competition among commercial insurers for the purchase of healthcare services from hospitals, physicians and other healthcare providers. According to the complaint, the merger would eliminate substantial head-to-head competition in all these markets, and it would remove the independent competitive force of Cigna, which has been a leader in the industry’s transition to value-based care. the court granted the injunction. Anthem appealed to the DC Circuit, which affirmed the district court.

Read More →

In re Natixis Funding Corp., Agreement, Feb. 18, 2016)

Plaintiff states entered into settlement agreement with Natixis Funding Corp. for fraudulent and anticompetitive conduct in municipal bond derivative transactions with state and local government entities and nonprofits across the country. Natixis will pay $29,950,000 as part of a coordinated 22-state and private class settlement. The funds will mostly be applied to restitution for municipalities, counties, government agencies, school districts and nonprofits that the states allege were harmed when they entered into municipal derivatives contracts with Natixis. In 2008, the plaintiff states, in parallel with the U.S. Department of Justice and federal regulatory agencies, began their investigation of the municipal bond derivatives market. In these markets, tax exempt entities such as municipalities, school districts, and nonprofit organizations issue municipal bonds and reinvest the proceeds until the funds are needed or enter into contracts to hedge interest rate risk. These investigations revealed anticompetitive and fraudulent conduct involving individuals at a number of large financial institutions, including Natixis, and certain brokers with whom they had worked. Certain Natixis employees and their counterparts at other institutions rigged bids, submitted noncompetitive courtesy bids and fraudulent certificates of arms-length bidding to government agencies. The misconduct led local and state governments, as well as nonprofits, to enter into municipal derivatives contracts on less advantageous terms than they would have otherwise. Natixis agreed to pay $23.4 million into a settlement fund and $1.5 million to the attorneys general as an additional payment. Natixis also agreed not to submit non-competitive bids or refrain from bidding on, or coordinate the preparation of bids for municipal derivatives and to cooperate with ongoing investigations.

Read More →