Oregon ex rel. Rosenbloom v. LG Electronics, No. 120810246, (Ore. Cir. Ct., Multnomah Cty)

October 9, 2020

Oregon filed suit against cathode ray tube (CRT) manufacturers, alleging that they illegally agreed upon the pricing of CRTs. The Attorney General filed this action on behalf of the State of Oregon and Oregon natural persons, and sought restitution, civil penalties, disgorgement and injunctive relief.

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

October 9, 2020

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.

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

October 9, 2020

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.

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United States and North Carolina v. Charlotte-Mecklenburg Hospital Authority d/b/a Carolinas Healthcare System

October 9, 2020

North Carolina and USDOJ filed suit alleging that Atrium Health, formerly known as Carolinas HealthCare System illegally reduced competition in the health care market in Charlotte and limited consumers’ ability to shop around for better deals on health care. Atrium is based in Charlotte and operates Carolinas Medical Center and nine other hospitals in the Charlotte area. It dominates the hospital market in the Charlotte region with a 50 percent share of the market and approximately $8.7 billion in annual revenues. The state alleged that Atrium acted unlawfully to preserve its dominance in the Charlotte health care market by using its market power to require steering restrictions in its contracts with every major insurer. These provisions have prevented insurers from, among other things, introducing health plans that encourage patients to use medical providers that offer lower priced, higher-quality services. The plaintiffs sought injunctive relief and attorneys fees. After the court denied defendants’ motion to dismiss, the parties settled. Under the terms of the settlement, Atrium is prohibited from using anticompetitive steering restrictions in contracts between commercial health insurers and its providers in the Charlotte, North Carolina metropolitan area. These steering restrictions prevented health insurers from promoting innovative health benefit plans and more cost-effective healthcare services to consumers.

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

October 9, 2020

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.

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People v. Pratibha Syntex Ltd., No. BC499751 (Cal. Super. Ct., LA Cty. Dec. 10, 2015)

October 9, 2020

Plaintiff state filed suits against international apparel manufacturer for gaining an unfair competitive advantage over American companies by using pirated software in the production of clothing imported and sold in California. The complaint alleged that the foreign apparel manufacturer, based in India, who did not paid software licensing fees has a significant cost advantage in the low-margin business of apparel manufacturing, shipment and sales. The company did not pay licensing fees for software products manufactured by Adobe, Microsoft, Symantec and others. Since 2010, Pratibha shipped approximately 19,000 pounds of apparel products into California. The complaint alleges that the company obtained an unfair advantage because it can redirect money saved by using pirated software to hire employees and to expand their facilities and their research and development efforts. Furthermore, American companies that are developing software, particularly software that is used in the garment industry, are discouraged from investing in new technology and products if they know their software will be used illegally. In December 2015, a settlement was reached, the first time a state has secured a legally enforceable judgment against an international company for these types of violations. The settlement requires Pratibha Syntex to pay $100,000 in restitution within 30 days. The settlement prohibits Pratibha Syntex from using unlicensed software or reproducing any part of a copyrighted software program without the permission of the legitimate copyright holder, and further requires the company to perform four complete audits of the software on their computers and fix any violations within 45 days. In addition, Pratibha Syntex must draft an information technology policy statement regarding the use of licensed software and distribute this policy to all employees

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FTC and Pennsylvania v. Penn State Hershey Medical Center, 838 F.3d 327 (3d Cir. 2016)

October 9, 2020

The FTC administratively challenged the combination of Penn State Hershey Medical Center and PinnacleHealth System, alleging that the merger would substantially reduce competition for general acute care inpatient hospital services in the area surrounding Harrisburg, Pennsylvania, leading to higher costs and reduced quality. The FTC and Pennsylvania filed a motion for preliminary injunction in federal court in Pennsylvania. The court denied the motion by the FTC and Pennsylvania in an opinion filed under seal, holding that the plaintiffs did not properly define the relevant geographic market. The FTC and Pennsylvania appealed to the 3rd Circuit, which reversed the district court and granted the preliminary injunction. The Third Circuit rejected the District Court’s reasoning on all counts: market definition, the relevance and persuasiveness of the parties’ 5-year contracts with payers, whether the claimed efficiencies were cognizable and potentially sufficient to overcome the government’s prima facie case, and how the equities should be balanced in an FTC preliminary injunction proceeding. The parties abandoned the merger. The 3d Circuit denied Pennsylvania’s claim for attorneys’ fees on the grounds that the relief was granted under FTC Act Sec. 13(b), which does not authorize attorneys’ fees to prevailing parties.

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FTC and Illinois v. Advocate Health Care Network

October 9, 2020

The FTC administratively challenged the proposed merger of Advocate Health Care Network and NorthShore University HealthSystem, alleging it would create the largest hospital system in the North Shore area of Chicago. According to the complaint, the combined entity would operate a majority of the hospitals in the area and control more than 50 percent of the general acute care inpatient hospital services. The FTC and the State of Illinois filed for a preliminary injunction to prevent the merger before the FTC’s administrative trial. The district court denied the motion for preliminary injunction based on a finding that “plaintiffs ha[d] not shouldered their burden of proving a relevant geographic market.” The state and the FTC appealed. The 7th Circuit reversed and remanded the case. The court of appeals held that the district court’s geographic market finding was clearly erroneous, and approved the hypothetical monopolist test. The court also cited the “silent majority” fallacy, which overlooks the market power of the patients who are not willing to travel for hospital care.

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In the Matter of Cabell Huntington Hospital, Inc.’s Acquisition of St. Mary’s Medical Center, No. 15-C-542, Cabell Cty. Ct., WV

October 9, 2020

The attorney general reached an agreement with two hospitals in the Huntington WV area who were merging. The agreement requires, among other things 1) that St. Mary’s Medical Center will be maintained as a free-standing, general acute care, faith-based organization for the seven-year period;2) Neither hospital will increase its service rates beyond the benchmark rate established by the West Virginia Health Care Authority; 3) If the combined operating margins of the hospitals exceed an average of 4 percent during any three-year period, the hospitals’ rates will be reduced by the amount of excess for the following three years; 4) Both hospitals will release employees from any non-compete agreements following the termination of their employment 5) The hospitals will maintain open staffs and grant privileges to all qualified physicians, and not terminate privileges to those who start offering services in competition to the hospitals (excluding groups that historically have operated under exclusive agreements) 6) The hospitals will not oppose the award of a certificate of need by the state Health Care Authority to any health care provider that seeks to provide services in their market area; 7) the hospitals will establish a fully integrated and interactive medical record system at both facilities so that patient encounters can be readily available to physicians at both hospitals; 8) they will notify the Attorney General’s Office within 90 days of any proposed addition or deletion of any health care service line.

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Puerto Rico v. Beltran et al.,

October 9, 2020

Puerto Rico filed administrative charges against 34 school bus contractors who provided services to the state Department of Education, alleging that they agreed to fix prices and reduce services to a number of municipalities, as well as limiting geographic markets. the parties paid $170,000 and agreed to injunctive provisions to prevent future violations.

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