Mergers & Acquisitions

American Needle Ten Years Later By Michael A. Lindsay

ALMOST TEN YEARS AGO THE U.S. Supreme Court revisited the question of distinguishing single-actor conduct from an agreement among multiple actors. The question is obviously critical because by definition there cannot be an agreement in restraint of trade in violation of Section 1 of the Sherman Act unless there are at least two participants whom the law considers separate persons for anti - trust purposes. Although answers to some parts of this question have become clearer over the past ten years, other parts remain both vexing and unanswered.

The Economics of Professional Sports League Broadcasts By Michael Cragg, Daniel Fanaras, and Daniel Gaynor

IT HAS BEEN NEARLY TEN YEARS SINCE the Supreme Court’s American Needle decision,1 and one might think that sports-related antitrust litigation would have generated greater clarity for both legal and economic principles relating to professional leagues generally, and those involving the output of sports leagues, specifically. But this has not been the case. Many courts continue to struggle with myriad issues relating to professional sports collaborations: defining broadcast “output,” determining what is (and is not) a venture-level product, assessing various justifications of venture-level restraints, and constructing the proper “but-for world” under a rule of reason analysis.


Justice John Paul Stevens: Keeping the Antitrust Flame Alive By William Kolasky

WH E N J U S T I C E J O H N P A U L S T E V E N S died last July, at age 99, his obituaries focused not only on the length of his tenure on the Supreme Court—nearly 35 years, making him the third longest-serving and second oldest justice in Supreme Court history—but also on how he had evolved over time from “a Republican antitrust lawyer into the outspoken leader of the court’s liberal wing.”1 These obituaries typically cited some of his more notable opinions on civil liberties, such as his opinion in Rasul v. Bush,2 and his strong dissents in two of the Court’s most controversial decisions over the last two decades, Bush v. Gore and Citizens United


Circuit Splits Affecting Standing: Real or Not Real? by Ellen Meriwether

WHO CAN SUE AND FOR WHAT? This is an important threshold issue in all cases, but especially in class action antitrust cases. This article explores differences in circuit authority on the question of whether, in a class action case asserting claims under a variety of similar state laws, standing principles require that there must be a named plaintiff with a purchase or transaction in each of the states whose laws are at issue. The answer matters not just for antitrust cases,1 but also for cases brought under state consumer protection statutes,2 and other state laws.3This issue has been litigated exhaustively, with district courts even within the same circuit contradicting one another. Yet circuit authority remains surprisingly sparse, leaving practitioners in many circuits to guess as to how the court may rule in their case.

Make Up Your Mind Already: Circuit Splits Regarding the Role of Inferences at the Pleading Stage and Summary Judgment by Lisa Jose Fales and Paul Feinstein

IT IS WELL-SETTLED THAT BOTH DIRECT and circumstantial evidence may be used to prove the existence of an antitrust conspiracy. As courts have recognized, however, only rarely in antitrust conspiracy cases will there be direct evidence of an express agreement. 1 Without such “smoking gun” evidence, conspiracies nearly always must be proven through inferences drawn from circumstantial evidence.2 Consequently, how a court treats such inferences has a significant impact on substantive antitrust liability. This is particularly true at both the pleading stage and at summary judgment. In this context, this article examines two circuit splits relating to the treatment of inferences: the first regarding whether competing inferences can be weighed on a motion to dismiss, and the second regarding the scope of permissible inferences at summary judgment.

When Courts Part Ways: Circuit Splits and Disharmony Impacting Antitrust Class Actions By Emmy L. Levens and Brent W. Johnson

THOUGH THE TEXT OF FEDERAL Rule of Civil Procedure 23 has remained relatively constant over the last 15 years, vigorous battles have been waged over the proper way to apply Rule 23’s language. The Supreme Court has opined several times of late to clarify its meaning. Despite this guidance, apparent circuit splits exist as to at least three issues affecting antitrust class actions: (1) whether class certification requires a showing of “ascertainability” separate from what the elements of Rule 23 require; (2) how to apply Rule 23’s predominance requirement to proposed classes containing “uninjured” class members” and the number of uninjured class members allowed under the rule; and finally (3) whether Rule 23(f ) permits immediate appeals of orders striking class certification allegations.

Parting the Seas: Circuit Splits on the Horizon By Kellie Lerner, William Reiss, and Noelle Feigenbaum

THE CLASS ACTION MECHANISM offers numerous efficiencies. In a class action, for example, the parties may litigate thousands of individual cases as one and may reach a global resolution in a single settlement. Class actions are also a powerful deterrent to would-be wrongdoers, who risk shouldering the time and cost of litigating a massive case if they commit unlawful acts that affect a class of similarly situated victims.


Seventh Circuit Sets Up Potential Supreme Court Review of FTC Monetary Relief Authority By M. Sean Royall, Richard H. Cunningham, Olivia Adendorff, and Ashley Rogers

FOR MORE THAN 3 0 Y EARS , THE Federal Trade Commission has sought and obtained monetary remedies styled as equitable restitution, disgorgement, and/or contractual rescission pursuant to Section 13(b) of the FTC Act. Indeed, in recent years many of the FTC’s largest monetary remedies have been obtained using the agency’s Section 13(b) authority, including, among many other matters, a $1.2 billion settlement with Teva Pharmaceutical Industries in a matter involving pay-for-delay allegations; up to $1.2 billion in a settlement with Volkswagen relating to allegedly misleading claims about “clean diesel”; at least $575 million in a settlement with Equifax relating to a 2017 data breach; and $448 million in a district court judgment against AbbVie for alleged antitrust violations.

Understanding the FTC’s Monetary Equitable Remedies Under Section 13(b) for Antitrust Violations by Gerald A. Stein

UNTI L RECENTLY, THE F EDERAL Trade Commission’s ability to seek monetary equitable remedies (particularly disgorgement and restitution) for alleged antitrust violations— whether ongoing, impending, or stale—went virtually unchallenged. After it first gained statutory authority under Section 13(b)1 of the FTC Act to bring suit in federal district court to preliminarily enjoin conduct that “is violating, or is about to violate” the antitrust laws, the FTC successfully convinced many federal courts that Section 13(b) also impliedly allowed the FTC to seek standalone permanent injunctions and monetary equitable remedies regardless of whether a defendant’s alleged anticompetitive conduct was ongoing or completed long ago.2

Illinois Brick After Apple v. Pepper By Ryan M. Sandrock and Miriam C. Carroll

ON MAY 1 3 , 2 019 , THE SUPREME Court issued its opinion in Apple v. Pepper.1 The Court had an opportunity to overhaul the Illinois Brick rule, which dictates that only the first or direct purchaser, rather than subsequent or indirect purchasers, may recover damages from an antitrust violator. 2The Court could have followed the Antitrust Modern - ization Committee’s suggestion to allow both direct and indirect purchaser suits for the same conduct.3The Court also had a chance to explain how longstanding antitrust doctrines apply to technology platforms.

You Can’t Change Doctrines in Midstream: Apple v. Pepper, Private Antitrust Enforcement, and the Continuing Viability of Illinois Brick’s Indirect Purchaser Doctrine by Michael G. McLellan

WHEN THE SUPREME COURT granted certiorari in Apple Inc. v. Pepper,1 observers speculated that the Court may be preparing to modify its jurisprudence to expand or change the availability of private rights of action for damages under the federal antitrust laws. That did not happen—the Court ultimately issued a narrow decision leaving its precedent largely untouched. But the case nevertheless serves as a significant indicator of the current Court’s view of the proper role and conduct of private antitrust litigation and warrants careful examination, particularly by counsel for online retailers distributing their wares via agency or consignment sales models.

Post-Amex Steering Restrictions: Lingering Questions from United States v. Charlotte-Mecklenburg Hospital Authority By Nicholas A. Widnell and Brian A. Hayles

THE D E P A RTME N T O F J U S T I C E and North Carolina filed a complaint against The Charlotte-Mecklenburg Hospital Authority (CMHA) in the U.S. District Court for the West - ern District of North Carolina challenging contractual restrictions between CMHA and commercial health insurers (payers) in Charlotte that allegedly prevented those payers from offering patients financial benefits to use less expensive health care services offered by the hospital’s competitors. On April 24, 2019, CMHA entered into a consent decree with the government that modified the challenged contracts to address the alleged concerns identified in the complaint. Although CMHA made no admission of liability and the consent decree is not a litigated resolution of the government’s claims, the decree makes clear that the DOJ believes that anti-steering provisions of the sort used by CMHA violate the Sherman Act.

Is Monopsony the New Monopoly? Yes! By Roger D. Blair and Kelsey A. Clemons

IN THEIR EXCELLENT ARTICLE IN THE Spring 2019 issue of this magazine, Debbie Feinstein and Albert Teng pose a provocative question: “Is Monopsony the New Monopoly?”1 In addressing this question, Feinstein and Teng document the incomplete understanding of the economic effects of monopsony among antitrust enforcers and commentators.2 Feinstein and Teng explore some common misconceptions among antitrust enforcers and commentators, such as the notion that a monop sonist may pass on some of its cost savings to consumers in the form of lower output prices.3 Paradoxically, however, the monopsonistic reduction in input prices actually causes the firm’s marginal cost to shift to the left. There - fore, price reductions in the output market would be inconsistent with profit maximization by a monopsonist. Feinstein and Teng identified a lack of consensus


Anti-American Bias? Or Sound European Competition Law Enforcement? by Rainer Wessely

OVER RECENT YEARS THE EUROPEAN Commission has concluded a number of largescale competition investigations. Some of them, mainly in the field of antitrust and State Aid control,1 concerned behavior by U.S. companies that was found to be anticompetitive in Europe. In reaction, some voices in the United States have raised concerns about a perceived bias in EU competition enforcement against American companies, particularly large U.S. tech companies. This article will look into these allegations within the broader context of European competition enforcement, pointing out some European specificities, such as joint and decentralized enforcement by the European Competition Network and State Aid control.