Gibbons Law Alert

Gibbons Law Alert

Author: Kevin R. Reich

Opinion Holds That Non-Monetary Reverse Payments Trigger Actavis Antitrust Scrutiny, Creating Split Within D.N.J.

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Posted in Antitrust

On November 12, 2014

An opinion issued on October 6, 2014, by Judge Sheridan of the United States District Court for the District of New Jersey further muddied the legal waters as to what type of “reverse payments” made by makers of brand-name pharmaceuticals to their generic competitors to settle patent litigation are subject to antitrust scrutiny under the Supreme Court’s decision in FTC v. Actavis. Judge Sheridan held that Actavis applies to non-monetary payments, such as a promise by the brand-name manufacturer in exchange for which the generic agrees to delay entry. Importantly, however, a non-monetary payment must be capable of being reliably converted to a monetary value so that it can be evaluated against the Actavis factors. Judge Sheridan’s holding runs counter to Judge Walls’s decision earlier this year in In re Lamictal Direct Purchaser Antitrust Litigation, which limited Actavis to reverse payments involving an exchange of cash and was the subject of a prior blog post.

Delaware Enacts Legislation Authorizing 20-Year Statute of Limitations for Certain Breach of Contract Actions

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Posted in General Litigation

On September 22, 2014

Delaware has recently enacted legislation authorizing parties to a written contract involving at least $100,000 to agree to a statute of limitations of up to 20 years for actions based on that contract. The amendment to 10 Del. C. § 8106, embodied in new subsection (c), gives parties to a written contract the freedom to agree to a limitations period longer than the typical three or four years from accrual of the cause of action, without the need to resort to Delaware’s technical requirements for a contract under seal. The synopsis to the legislation explains that examples of the limitations period to be stated in the contract include, without limitation, (i) a specific period of time, (ii) a period of time defined by reference to the occurrence of another event, another document or agreement or another statutory period, and (iii) an indefinite period of time.

Recent D.N.J. Opinion Offers Roadmap to Practitioners Defending Antitrust Claims

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Posted in Antitrust

On June 30, 2014

A recent opinion from the District of New Jersey illustrates the breadth of defenses available to an entity accused of violating the antitrust laws. World Phone Internet Services, Pvt. Ltd., a provider of VoIP services in India, and its majority shareholder, TI Investment Services, LLC, sued Microsoft (owner of Skype), alleging that Microsoft’s intentional failure to abide by the requirements of India’s licensing regime for VoIP service providers allowed it to undercut World Phone’s pricing, which advantage Microsoft supposedly used to quash its competitors. In granting Microsoft’s motion to dismiss the complaint in TI Investment Services, LLC v. Microsoft Corp., the Court relied on four independent grounds to decide that plaintiffs’ claims of monopolization and collusion did not pass muster under the Sherman Act.

The Foreign Trade Antitrust Improvements Act: A Recent Take in the S.D.N.Y.

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Posted in Antitrust

On June 3, 2013

The Foreign Trade Antitrust Improvements Act (“FTAIA”) removes from the ambit of the Sherman Antitrust Act otherwise actionable anti-competitive conduct abroad that does not have a “direct, substantial, and reasonably foreseeable” effect on domestic commerce. Questions persist as to what effects qualify as being sufficiently “direct” and also whether the FTAIA is jurisdictional in nature or goes to the substantive merits of a claim. A recent decision out of the Southern District of New York addressed both questions in dismissing an antitrust suit brought by one Chinese corporation against its Chinese competitors.

Antitrust Pleading Standards: A(nother) Cautionary Tale

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Posted in Antitrust

On April 8, 2013

A New Jersey federal district court’s March 18th opinion granting defendants’ motions to dismiss an antitrust complaint is yet another reminder of the need to inject precision and factual detail into an antitrust claim in order to meet the strict pleading requirements applicable to such claims. The putative class of indirect purchaser plaintiffs in In re Ductile Iron Pipe Fittings (“DIPF”) Indirect Purchaser Antitrust Litigation brought a total of ten claims, alleging principally that iron pipe fitting manufacturers and distributors conspired to fix prices and monopolized the domestic iron pipe fitting market in violation of Sherman Act Sections 1 and 2. In holding that the pleadings failed to establish antitrust impact with sufficient specificity (but granting plaintiffs leave to amend their complaint), the Court reasoned as follows:

Third Circuit Affirms Plaintiffs’ Zero-Damages Antitrust Victory, Restricting the Scope of What Constitutes “Reliable” Expert Damages Data

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Posted in Antitrust

On October 12, 2012

The Third Circuit’s 94-page opinion in antitrust case ZF Meritor, LLC v. Eaton Corp., issued on September 28, 2012, offers something for everyone in its smorgasbord of holdings concerning the law of exclusive dealing, proof of damages, and Article III standing. The opinion is most notable for rejecting the notion that above-cost prices can render an otherwise unlawful exclusive dealing agreement lawful, reinforcing the viability of de facto exclusive-dealing arrangements under Sections 1 and 2 of the Sherman Act, and ratcheting up the gatekeeper role courts play under Daubert.

Second Circuit Reverses Award of Summary Judgment in Price-Fixing Action, Based on Clarification of Matsushita and Examination of Antitrust Causation

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Posted in Antitrust

On August 23, 2012

On August 6, 2012, ten days after the Third Circuit issued its opinion in Superior Offshore International, Inc. v. Bristow Group, Inc. — the subject of a prior blog entry — the Second Circuit decided In re Publication Paper Antitrust Litigation, which sheds additional light on the proof required to sustain a claim for horizontal price-fixing under Section 1 of the Sherman Act. Recognizing, but not relying on, the evidentiary distinction between direct and circumstantial evidence discussed in Superior Offshore International, the Court instead assessed the totality of the evidence to determine whether it supported a reasonable inference of an illegal agreement. Importantly, the Court made clear that although an antitrust plaintiff must point to record evidence giving rise to such an inference in order to defeat summary judgment, it need not also disprove the possibility of non-conspiratorial conduct. In addition, the Court held, a plaintiff must show that the illegal agreement was both a material and a but-for cause of the alleged price increase.

Third Circuit Sets High Bar for Proof of Price-Fixing, Affirms Dismissal on Summary Judgment Based on Twombly

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Posted in Antitrust / Appellate

On August 6, 2012

The Third Circuit’s July 27, 2012, opinion in Superior Offshore International, Inc. v. Bristow Group, Inc., confirms that an antitrust plaintiff relying on circumstantial evidence of price-fixing must demonstrate something more than merely parallel behavior, not only to survive a motion to dismiss, as the Supreme Court held in Bell Atlantic Corp. v. Twombly, but also to defeat summary judgment. Thus, unless a plaintiff can present record evidence that is plausibly suggestive of, and not just consistent with, an illegal agreement to fix prices, a defendant moving for summary judgment should prevail. Indeed, without evidence of a manifest agreement not to compete, Superior Offshore International (“SOI”) suggests that courts will not infer an illegal price-fixing arrangement even where participants in an oligopoly market raise prices despite a weakening of demand for their services.

Third Circuit Concludes that Tying Arrangement Does Not Violate New Jersey’s Truth-in Consumer Contract, Warranty, and Notice Act

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Posted in General Litigation

On July 12, 2012

The New Jersey Truth-in-Consumer Contract, Warranty, and Notice Act (the “NJ Warranty Act”) prohibits a seller from offering to consumers any warranty containing a provision that violates a “clearly established legal right” under state or federal law. The Third Circuit analyzed the scope of this “clearly established legal right” in its July 2, 2012 opinion in McGarvey v. Penske Auto Group and suggested that a warranty will be upheld absent a blatant violation of law.

Second Circuit Finds No Anti-Competitive Conduct in Eatoni v. RIM, Applies “Manifest Disregard of the Law,” Post-Hall Street

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Posted in Antitrust / Appellate

On June 28, 2012

In a summary order issued on June 21, 2012, the Second Circuit in Eatoni Ergonomics, Inc. v. Research in Motion Corp., affirmed the Rule 12(b)(6) dismissal of Eatoni’s monopolization complaint against BlackBerry maker RIM for failure adequately to plead anti-competitive conduct. Significantly, the Court held that individual instances of alleged misconduct that are not anti-competitive on their own do not state a claim under Section 2 of the Sherman Act when considered together.

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