The FTC alleges that these three competitors violated Section 5 of the Federal Trade Commission Act (“FTCA”) by conspiring to fix prices for ductile iron pipe fittings, which are used in municipal water systems around the United States.  The FTC’s complaint also charges McWane with illegally maintaining monopoly power in the market for domestically-produced pipe fittings.   Sigma has settled its claims via a consent decree, which does not include an admission of liability or monetary penalties. 

According to the FTC, “McWane invited Sigma and Star to collude with it” in 2008 by outlining a plan to raise and fix prices for imported iron pipe fittings.  The FTC alleges that the companies agreed, exchanged information through a trade association called the Ductile Iron Fittings Research Association (DIFRA), and subsequently raised their prices in January and June of 2008.

The FTC also alleges that McWane and Sigma entered into a separate anticompetitive agreement to restrain trade in the market for domestic pipe fittings.  In 2009, as part of the Stimulus Act, Congress allocated more than $6 billion to water infrastructure projects, with a mandate that only domestic materials – including pipe fittings – could be purchased with the stimulus dollars.  The FTC alleges that McWane illegally maintained monopoly power in this market for domestically-produced pipe fittings by successfully persuading Sigma to “abandon” its efforts to enter the market, agreeing instead to act as a distributor for such materials for McWane.

The proposed settlement order against Sigma would prohibit Sigma from a variety of anticompetitive activities relating to ductile iron pipe fittings, including: (1) participating in or maintaining any conspiracy to fix, raise, or stabilize the prices of these pipe fittings; (2) allocating or dividing markets, customers, or business opportunities for these pipe fittings; and (3) participating in or facilitating any agreement between competitors to exchange sales information or other competitively sensitive information relating to the price of these pipe fittings.  The proposed settlement order will be subject to public comment for 30 days, after which the FTC will decide whether to make the settlement order final.  The FTC is scheduled to make its final decision on February 6, 2012.

Although price fixing cases are more commonly prosecuted as criminal violations of the Sherman Act by the U.S. Department of Justice, Section 5 of the FTCA also provides the FTC with the power to bring such cases.  Although uncommon, there is some history of the FTC pursuing price fixing cases, such as the 2001 case against AOL Time Warner and Vivendi Universal for conspiring to fix prices of audio and video recordings of the “Three Tenors” concerts.

Plaintiffs are New York and Vermont dairy farmers.  Defendants are Dairy Farmers of America, Inc. (DFA) and Dairy Marketing Services LLC (DMS).  (Dean Foods was originally a defendant but it settled in May for $30 million.)  DFA is the largest dairy cooperative in the United States, and it not only produces, but also processes, markets and distributes raw Grade A milk.  DMS is a milk marketing agency allegedly created, owned and controlled by DFA and certain other cooperatives.  Some of the plaintiffs are members of DFA.  All of the plaintiffs have, at some point since 2002, sold their milk to processors through DMS. 

Plaintiffs sued DFA and DMS in October 2009 on behalf of all similarly situated dairy farmers in New York, Vermont and ten other Northeast states – an area designated by the USDA as “Federal Milk Market Order 1.”  Order 1 also is the relevant geographic market alleged by plaintiffs. 

Plaintiffs claim that defendants have conspired to fix and suppress the prices plaintiffs receive from cooperatives and processors for their raw Grade A milk, in violation of Sections 1 and 2 of the Sherman Act.  As damages, plaintiffs seek the amount they have been underpaid.  As injunctive relief, they seek to enjoin the alleged conduct and require divestiture of defendants’ processing plants.  

Judge Reiss evaluated plaintiffs’ motion under In re IPO, 471 F.3d 24 (2d Cir. 2006), which requires a “rigorous analysis” of the Rule 23 requirements and “enough evidence” that each of them has been met.  Where plaintiffs lost the motion was on Rule 23(a)(2)’s commonality requirement, specifically as to impact.  Commonality was satisfied as to “the formation, duration and implementation of the alleged conspiracy.”  However, as to adverse impact, Judge Reiss said there was “a clear failure of proof” with respect to plaintiffs’ expert report:  (1) adherence to opinions that plaintiffs had conceded were incorrect; (2) apparent use of incorrect prices in calculating damages; and (3) failure to consider the existence of either non-conspirator processing plants or class members who benefited or broke even from the alleged conduct. 

However, Judge Reiss also said that the expert analysis “may ultimately prove to be an acceptable means of analyzing causation and damages in this case,” though it is not “presently sufficient to perform this task because too many uncertainties remain . . . .”  Her other findings also indicate potential for success: Rule 23(a)(1) numerosity was satisfied, with 9,000 class members dispersed throughout several states.  Rule 23(a)(3) typicality was satisfied to the same extent as commonality, i.e., as to formation, duration and implementation but not adverse impact, for the same reasons as commonality.  And the 23(a)(4) adequacy of the named plaintiffs could be satisfied with subclasses represented by separate counsel, which would overcome the potential conflicts.  Given that prerequisite to certification, Judge Reiss declined to reach 23(a)(4)’s adequacy of class counsel.  She also declined to reach Rule 23(b)’s predominance requirement.

In light of the invitation to renew the class motion, defendants sought to extend their time to serve expert reports from December 16 until whenever plaintiffs serve their new report(s) (if they do).  Judge Reiss denied that motion, finding “no good cause to further delay the provision of expert reports in this ongoing litigation.”  No deadline has been set to renew the class motion.

The shippers alleged that Horizon entered into a conspiracy with other carriers, including Sea Star Line, Crowley Maritime Corp. and Trailer Bridge Inc., to fix prices by increasing their rates to supracompetitive levels and by uniformly setting fuel surcharges for freight services between Puerto Rico and the U.S., which are largely controlled by the defendant carriers.

The case is In re: Puerto Rican Cabotage Antitrust Litigation, which was filed in 2008 in the United States District Court for the District of Puerto Rico.

Judge Daniel Dominguez dismissed the claims against Trailer Bridge, holding there was no evidence that it was involved in the price fixing conspiracy.  Horizon and the remaining carriers entered into a settlement with the class in 2009 for $52.25 million, which received final approval in September 2011. 

Several other shippers that had opted out of the class, including Home Depot and Wal-Mart, settled with Horizon earlier this year.

The settlement follows years of civil and criminal litigation.  In February, Horizon pled guilty to conspiring to fix prices and agreed to pay a $45 million fine which was lowered to $15 million to save the company from bankruptcy.  Sea Star agreed to pay a $14.2 million criminal fine in November.  Two former executives of Sea Star and three from Horizon also incurred fines and prison sentences.

The companies manufacture bearings for the automotive and aerospace industries. 

The Commission is investigating whether the companies violated European Union (“EU”) laws prohibiting cartels and restrictive business practices by allegedly entering into agreements which fixed the prices for ball-bearings.  The Commission noted that the inspections are part of a preliminary investigation and do not mean that the companies have committed any anticompetitive behavior. 

SKF, the world’s largest rolling bearings manufacturer, said its offices in Gothenburg, Sweden and Schweinfurt, Germany were visited by EU Officials. 

SKF and Schaeffler are both cooperating with the investigation.

The plaintiffs in Matthew Edwards et al., v. National Milk Producers Federation, aka Cooperatives Working Together et al. allege that from 2003 to 2010 several dairy companies and trade groups, including Land O’Lakes, Dairy Farmers of America, Agri-Mark, Dairylea, National Milk Producers Federation, and Cooperatives Working Together (“CWT”), engaged in the premature slaughter of cows as part of a scheme to raise the price of milk and other dairy products by decreasing the supply of milk. 

The plaintiffs claim that defendants manipulated the supply of milk which led to higher prices through “herd retirements” coordinated by the CWT.

Dairy farmers in every state participate in CWT, producing almost 70% of the nation’s milk.  Dairy farmers submit bids for the price at which they sell their herds for slaughter through the retirement program.  The plaintiffs allege that more than 500,000 healthy cows were slaughtered prematurely under the program which reduced the supply of milk by approximately 10 billion pounds and resulted in a $9.55 billion total increase in the price of milk.

CWT members say that the program, which ended in 2010, was created to assist dairy farmers who were losing money and that the program operated in full compliance with the antitrust laws.

The dairy price-fixing class action lawsuit is brought on behalf of U.S. consumers who purchased milk and other dairy products (including cream, half & half, yogurt, cottage cheese, cream cheese and sour cream) from 2004 through the present.

The plaintiffs allege that Defendant egg producers and trade groups engaged in a conspiracy to manipulate the supply of, and thereby fix prices for, domestically sold eggs in violation of section 1 of the Sherman Act.  Plaintiffs charge that defendants’ objective was to take advantage of consumers’ “relatively inelastic” demand for eggs as well as the fact that eggs are commodities and have no market substitutes.

Ruling on the prior motions to dismiss on September 26, 2011, District Judge Gene E.K. Pratter granted the motions to dismiss of Hillandale Gettysburg L.P., Hillandale Farms Inc., Hillandale Farms East, Inc. and the United Egg Association while denying the remaining four motions to dismiss.

The question before the court was whether plaintiffs adequately alleged particularized facts that each defendant was a participant in the conspiracy.

The court rejected attempts by the plaintiffs to implicate certain defendants by use of the generic reference “defendants” where there were no particularized facts pertaining to a specific defendant within the complaint.

After the court found the existence of sufficient facts that explicitly detailed the participation of the four defendants whose motions were denied, the defendants again moved, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, for the court to enter an order dismissing any claim that defendants engaged in a conspiracy to reduce the production, or raise the price, of “egg products” based on a theory that the only purported conspiracy for which any facts are alleged is a conspiracy to reduce the supply of “shell eggs.”

Defendants complained that the complaint’s references to “egg products” might be an entree for plaintiffs to expand the scope of discovery to information not relevant to the case.  The court, however, was not persuaded.

Judge Pratter denied this additional motion noting that Rule 12(b)(6) should not be used to chisel issues for trial.  Additionally, Judge Pratter found that defendants did not adequately show why the well-pled facts supporting the conspiracy to reduce the supply of “shell eggs” would not also suffice to support a conspiracy to reduce the supply of “egg products” or why they should be considered separate markets.

In denying defendants’ motion, Judge Pratter ruled it more prudent for defendants to address their concerns through pretrial devices which provide a more appropriate means for circumscribing the scope of discovery and defining the issues.

The former basketball star at the University of San Francisco, five-time winner of the NBA Most Valuable Player Award and a 12-time All-Star, is suing the NCAA, the Collegiate Licensing Company (“CLC”) and Electronic Arts, Inc. (“EA”), claiming that they are violating federal antitrust laws with licensing practices that enable them to profit from college basketball players’ likenesses long after they’ve left college.

The complaint in Russell v. NCAA, which was filed in federal court in the Northern District of California, alleges that the defendants violated Section 1 of the Sherman Act by engaging in a price-fixing conspiracy and a boycott that “unlawfully foreclosed class members from receiving compensation in connection with the commercial exploitation of their images, likeness and/or names following their cessation of intercollegiate athletic competition.”

The complaint claims that the defendants’ practices of having student-athletes contract away their rights to the commercial use of their images is the product of an anticompetitive conspiracy and results in unjust enrichment, entitling the plaintiff to damages and injunctive relief.  Russell is challenging the validity of the form used to achieve the transfer of rights. 

The market for collegiate merchandise is significant.  The complaint cites the CLC website for the proposition that “there is a ‘$4.0 billion annual market for collegiate licensed merchandise.’”  Russell claims that while the defendants continue to reap financial benefits from players’ participation in collegiate sports, even former players are “foreclosed from participating or sharing” in the “commercial benefits from the sale and use of the players’ images,” notwithstanding the fact that the players have moved on from their respective collegiate careers. 

The complaint focuses on the development of EA’s video games, such as “NCAA Basketball” and “NCAA Football,” which incorporate “photorealistic” graphics of players and venues. 

The suit is being brought as a class action under Rules 23(b)(2) and (b)(3) of the Federal Rules of Civil Procedure.  Russell is the putative representative of two classes: one class of certain former student-athletes (for purposes of antitrust damages and injunctive relief), and one class of certain current and former student-athletes (for purposes of declaratory and injunctive relief). 

This is the latest chapter in the perennial debate over the propriety of compensating collegiate athletes.  The complaint references a number of such pending litigations in California state and federal courts, including In re NCAA Student-Athlete Name & Likeness Licensing Litigation, and suggests the possibility of consolidation.

The judge denied the defendants’ motion to dismiss the plaintiffs’ complaint in Association of Taxicab Operators USA v. Yellow Checker Cab Company of Dallas/Fort Worth Inc.  Defendants’ motion relied exclusively on immunity afforded under the state action doctrine.  But as Judge Godbey’s decision explained, defendants failed to make the essential showing that “a municipality expressly authorized or actively supervised their mergers or pricing.” 

Plaintiffs, led by a trade association of taxicab companies, allege that permit fees defendants charged drivers to operate in the Dallas-Fort Worth area were anticompetitive.  According to plaintiffs, through a variety of entities and agreements, two individuals control over 52 percent of the authorized taxi cabs in the area.  Their lawsuit seeks injunctive relief breaking up the defendants’ grip on the market and monetary damages. 

Both parties and the court agreed that California Retail Liquor Dealers Assoc. v. Midcal Aluminum, Inc., 445 U.S. 97, 105 (1980), sets forth the two-prong test applicable when private actors claim immunity from the antitrust laws under the state action doctrine.  “First, the challenged restraint must be one clearly articulated and affirmatively expressed as state policy; second the policy must be actively supervised by the State itself.”  Id .

Defendants argued they meet the first prong of the Midcal test, citing a Texas state law directing municipalities to “license, control, and otherwise regulate each private passenger vehicles … that provides passenger taxicab transportation services for compensation.”  The statute permits municipal regulation of (1) entry into the taxicab business by controlling the total number of persons providing the service, (2) rates charged, and (3) safety and insurance requirements.  Through this statute, defendants argued, “Texas clearly articulated and affirmatively expressed its policy to regulate taxicabs through its cities.”

But Judge Godbey was unmoved.  While the statute “shows Texas wants municipalities to regulate competition,” he wrote, it “does not authorize private taxicab companies to create monopolies or fix [] fees without municipal approval.” 

The court was equally unimpressed with defendants’ argument that they met the second Midcal prong.  To show that the price fixing challenged by plaintiffs is actively supervised by the state, and therefore immune from the antitrust laws under the state action doctrine, defendants cited ordinances giving municipalities the authority to regulate fees.  As Judge Godbey’s decision points out, “mere authorization does not satisfy the active supervision requirement.”  “Defendants,” Judge Godbey continued, “do not claim that a municipality established, reviewed, regulated or monitored the fees.”

Ruling that the complaint, on its face, does not demonstrate that defendants’ actions are shielded under the state action doctrine, Judge Godbey denied defendants’ motion to dismiss.

As part of the plea bargain struck with the Department of Justice, Bridgestone is pleading guilty to violations of the Foreign Corrupt Practices Act and Sherman Act, and will pay a $28 million fine.

The alleged antitrust conspiracy concerns the sale of marine hose, a flexible rubber hose used to transfer oil between tankers and storage facilities.

According to the Department of Justice, Bridgestone and its co-conspirators agreed to allocate shares of the marine hose market by not competing for one another’s customers either by not submitting prices or bids, or by submitting intentionally high prices or bids to certain customers.  Bridgestone allegedly received marine hose prices for customers from an alleged “coordinator” of the conspiracy and then sold the marine hose to those customers at collusive and noncompetitive prices.  The Department of Justice claims that Bridgestone concealed the conspiracy through code names, private email accounts, and telephone numbers.

The plea agreement commends Bridgestone’s cooperation with the Department of Justice, and acknowledges Bridgestone’s “extensive remediation” efforts.

The European General Court has annulled the European Commission’s 31.66 million euro antitrust fine assessed against beer brewer Koninklijke Grolsch NV.  In case T-234/07, Koninklijke Grolsch v. Commission, the European General Court focused on the imputed liability to Koninklijke Grolsch for actions of its subsidiary, Grolsche Bierbrouwerij Nederland BV.

This appeal stems from a 2004 case in which the Commission found a cartel among the Netherlands’ four largest beer brewers.  The Commission determined that Koninklijke Grolsch NV, Heineken NV (jointly and severally liable with its subsidiary Heineken Nederland BV), Bavaria NV and InBev NV divided the Dutch market and coordinated on prices, price increases, and various commercial conditions.

The conduct resulted in fines totaling 273.78 million euros (including 219.28 million to Heineken and 22.85 million euros to Bavaria).  InBev was not fined as it was granted full leniency for participating in the investigation.  The three penalized companies appealed.

In June 2011, the European General Court reduced the fines assessed to Heineken and Bavaria by a total of  23.42 million euros  after finding there was a lack of evidence on the coordination of commercial terms.

On the remaining appeal, the European General Court ruled in favor of Koninklijke Grolsch stating that the Commission failed to demonstrate why Koninklijke Grolsch, which had not directly participated in the alleged cartel, should be liable.  There is a rebuttable presumption in EU law that a parent company exercises decisive influence over the conduct of a wholly owned subsidiary.  However, in the case at hand, the Commission did not discuss the economic, legal, and organizational links between Grolsche Bierbrouwerij Nederland and Koninklijke Grolsch.  Thus there was insufficient evidence to attribute liability to Koninklijke Grolsch NV.

The European Commission fared better in T-216/06, Lucite International and Lucite International UK v. Commission. In this case, Lucite International, a division of Mitsubishi Rayon Co. appealed a 25 million-euro fine from the Commission for colluding on acrylic glass prices.

Lucite claimed its fine should be reduced due to attenuating circumstances.  Lucite alleged its participation was limited to lower-level employees acquired after its 1999 purchase of Imperial Chemicals Industries plc (ICI).  Further, a commercial policy put in place by Lucite after the acquisition of ICI worked to undermine the cartel.  The European General Court disagreed, and ruled that Lucite failed to show “the Commission erred in its assessment of attenuating circumstances.”