California ex rel. Becerra v. Sutter Health, No. 18-565398

State sued Sutter Health, the largest hospital system in northern California, alleging that Sutter engaged in anticompetitive behavior in violation of the Cartwright Act by 1) establishing, increasing and maintaining Sutter’s power to control prices and exclude competition; 2) foreclosing price competition by Sutter’s competitors; and 3) enabling Sutter to impose prices for hospital healthcare services and ancillary products that far exceed the prices it would have been able to charge in an unconstrained, competitive market. The complaint alleges that Sutter did this by: Preventing insurance companies from negotiating with it on anything other than “all or nothing†system-wide basis, requiring health insurers under the terms of contract with Sutter Health to negotiate with all the Sutter Health system or face termination of their contract; Preventing insurance companies from giving consumers more low-cost health plan options, for example, charging a $200 out-of-pocket cost for an outpatient surgery performed by a facility outside of the preferred group and $100 for outpatient surgery performed by a facility inside the preferred group; Setting excessively high out-of-network rates for patients who must seek care outside of their provider network; Restricting publication of provider cost information and rates. The complaint alleged three causes of action under the Cartwright Act: price tampering and fixing; unreasonable restraint of trade; and combination to monopolize. The state sought injunctive relief, disgorgement and attroneys fees.

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State of California v. Teva Pharmaceutical Industries, Ltd. et al., No. 2:19-cv-03281 (E.D. Pa. 2019)

California agreed to four settlement agreements with pharmaceutical companies to resolve claims that they entered into collusive “pay-for-delay agreements.â€
The state argued that Teva delayed entry of generic competition through four pay-for-delay agreements that illegally maintained its monopoly over Provigil sales between 2006 and 2012. This resulted in artificially high costs of Provigil for consumers. The state secured $69 million for California and a 10-year injunction prohibiting Teva from entering into pay-for-delay agreements. As part of the $69 million settlement, a $25,250,000 consumer fund will be created for California residents who purchased Provigil, Nuvigil or Modafinil during this time.
The state also argued that Teva, Endo Pharmaceuticals, and Teikoku entered into pay-for-delay agreements regarding Lidoderm, a medical patch to relieve shingles pain. In June 2019, the state settled with Endo Pharmaceuticals, securing an eight-year injunction against further pay-for delay agreements and payment of $760,000. The settlement also included a 20-year injunction against Teikoku, a partner in the production of Lidoderm with Endo.

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New York et al. v. Deutsche Telekom AG et al., No. 1:19-cv-5434 (S.D.N.Y.)

States challenged merger of T-Mobile and Sprint, the third and fourth-largest mobile telecommunications providers in the U.S., alleging that shrinking the national wireless carrier pool down from four to three providers would decrease competition and create higher prices for consumers. The US Department of Justice and seven states entered into a settlement with the parties…

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Settlement Agreement Between States and Little Caesar Enterprises 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.

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Settlement Agreement Between States and Five Guys Franchisor LLC

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.

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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.

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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.

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California v. TRW, No. 2:18-cv-13286 (E.D. Mich.) filed 10/22/18

State alleged, as part of multidistrict litigation of antitrust claims against auto parts manufacturers, that TRW conspired with other parts manufacturers to rig bids for, fix and maintain the price of Occupant Safety Restraing Systems, installed in cars purchased by the state.State alleged violations of Sherman Act sec. 1 and the Cartwright Act (Cal Bus. & Prof. Code sec. 16720) and California’s Unfair Competition Law (Cal. Bus. & Prof. Cod sec. 17200). State sought damages and “deadweight loss” (gneeral damage to state) and disgorgement. Settlement was $122,500. TRW agreed to cooperate fully with the state in investigating other participants in the conspiracy.

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California et al. v. Teikoku Seikayu Co.(Lidoderm), No. 3:18-cv-00675 (N.D. Cal. 01/31/18)

Plaintiff states alleged that defendant, the producer of Lidoderm (pain medication), paid or incentivized generic drug makers to delay entry into market to protect its monopoly on Lidoderm. (“pay for delay”) The settlement agreement, which expires in twenty years, prohibits Teikoku from entering into agreements that restrict generic drug manufacturers from researching, manufacturing, marketing, or selling products for a period of time and requires Teikoku to cooperate in an ongoing investigation into similarly anticompetitive conduct by other drug manufacturers, among other things.

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State of California ex rel. Becerra v. Watson Laboratories, Inc., No. 17-cv-00562 (N.D. Cal. Feb. 3, 2017)

Plaintiff state filed complaint alleging violations of the Sherman Act and California’s Cartwright Act. the complaint alleged an anticompetitive pay-for-delay agreement with respect to the Lidoderm pain relief patch. According to the complaint, Watson Pharmaceuticals Inc. colluded with its competitors and fixed the price of the generic version of the drug.
Watson, which subsequently was acquired by Teva Pharmaceutical Industries Ltd., allegedly agreed to settle a patent infringement suit with its competitor Endo Pharmaceuticals Inc., which was the only producer of the name-brand pain relief patch. Pursuant to the agreement, Endo agreed to allow Watson to sell branded Lidoderm at no cost, if Watson agreed to hold off on its release of a generic version of the drug. Then, when Watson released its generic version, Endo did not release its own generic version for nearly eight months, the suit claims.
According to the complaint, “The threat of generic entry to Lidoderm posed significant financial risks for the company,†and “Endo knew that generic competition would decimate its Lidoderm sales and that any delay in generic competition would be highly profitable for Endo, but very costly for consumers.â€
California settled with Endo for a $760,000 payment (not characterized as attorneys’ fees or civil penalties) and an eight-year injunction preventing future pay-for-delay conduct.

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