Antitrust plaintiffs are continuing to find their antitrust flights are being grounded by federal courts’ application of the Supreme Court’s Twombly case. 

 In Tam Travel, Inc., et al. v. Delta Airlines, Inc., et al. (In re Travel Agent Commission Antitrust Litigation), No. 07-4464 (6th Cir. Oct. 2, 2009), the Sixth Circuit affirmed dismissal, by the Northern District of Ohio, of a complaint alleging that multiple airlines conspired to fix the commissions they paid the plaintiff travel agencies.

 Citing specific commission amounts, the plaintiffs had alleged that the defendants conspired lock-step to reduce, cap, and eventually eliminate the payments of so-called “base commissions” (a percentage of the ticket price).  According to the complaint, when one airline cut its commission to a certain amount, the other airlines soon followed, matching dollar-for-dollar.  This occurred five times between 1995 and 2002.  The complaint also specified the times and places of numerous meetings attended by the defendants, during which the defendants allegedly had the opportunity to conspire. click here for more »

Congressional Democrats took another step today towards stripping the health insurance industry of the antitrust exemption it has enjoyed for more than six decades.

The House Judiciary Committee voted 20 to 9 to repeal the antitrust exemption health insurers have under the 1945 McCarran-Ferguson Act.  Democrats on the committee are seeking to include the repeal in the House health care reform bill that is now being put together.

Meanwhile, Senate Majority Leader Harry Reid announced plans today to include the partial McCarran-Ferguson repeal in the Senate version of the health care reform bill.  Democrats on the Senate Judiciary Committee conducted a hearing last week that was largely critical of the health insurers’ antitrust exemption. 

Democratic lawmakers have increased their scrutiny of the antitrust exemption following the health insurance industry’s criticism of health care reform efforts.

 If Congressional Democrats follow through with this effort, it is likely that the partial McCarran-Ferguson repeal will be included in the final health care package.

Democrats on the Senate Judiciary Committee are going after health and medical malpractice insurers after a leading industry group turned against the Senate Finance Committee’s version of health care reform… and the DOJ may not be far behind. 

Last Tuesday, America’s Health Insurance Plans (“AHIP”), a trade group for health insurers, released a PriceWaterhouseCoopers report indicating that the Senate Finance Committee bill would raise insurance premiums.  Shortly after release of the report, however, PWC blunted the impact of its own report by issuing a statement that it had only been asked to focus on certain sections of bill – and none of the cost-saving measures.

On Wednesday, Chairman Pat Leahy (D.-Vt.) of the Senate Judiciary Committee chaired a hearing on his legislation to repeal the McCarran-Ferguson Act’s exemption from the federal antitrust laws for health and medical malpractice insurers.  The hearing was scheduled prior to AHIP’s announcement, but the announcement clearly heightened the stakes at the hearing.  click here for more »

A customer-allocation conspiracy has been put on ice by the U.S. Department of Justice in a plea deal reached in Cincinnati federal district court.

Arctic Glacier International, Inc., a packaged-ice company located in St. Paul, has agreed to plead guilty to violating the Sherman Act and to pay a $9 million fine for allocating customers in the Detroit area.  Three former executives from the company have also pled guilty to charges related to the conspiracy, and Arctic Glacier has agreed to cooperate in the ongoing investigation.

This deal, along with the massive fine, underscores the perils and increasingly large penalties associated with antitrust violations.   It also highlights the importance of seeking sound legal advice when undertaking joint business actions involving other companies.  Maximum penalties for violations of the Sherman Antitrust Act can carry penalties of up to 10 years in jail, $1 million fines for individuals, and $100 million fines for corporations.

This investigation by the DOJ and the FBI has also frozen another company in its tracks for alleged participation in similar activities.  Home City Ice Company pleaded guilty on June 17, 2008, to conspiring to allocate customers.

A group of California pharmacies seeking to block Pfizer’s proposed buyout of Wyeth has already filled the prescription for an amended complaint in response to last week’s dismissal of their suit alleging the deal would be unhealthy for competition and jobs.

U.S. District Judge Maxine Chesney in San Francisco had given the pharmacies until Nov. 6 to cure their complaint, which she dismissed for failing to show in which product markets the acquisition would eliminate competition.  The deal has already received FTC approval.

One representative of the California Pharmacists Association claimed the acquisition would “create the largest pharmaceutical company in the world,” thus giving it power to raise drug prices.  A Pfizer representative countered that the suit was “without merit.” click here for more »