July 18, 2016

Health Plan Members Convince Ninth Circuit to Revive Antitrust Class Action Against Dominant Northern California Healthcare Provider Sutter Health

By Rosa M. Morales

An antitrust class action challenging the dominance of healthcare provider Sutter Health in Northern California received a new lease on life Friday as the U.S. Court of Appeals for the Ninth Circuit held that plaintiffs’ geographic market allegations were sufficiently detailed and plausible to survive a motion to dismiss.

In Djeneba Sidibe, et al. v. Sutter Health, No. 14-16234 (9th Cir. July 15, 2016), a three-judge panel unanimously reversed and remanded the district court’s dismissal of the third amended complaint.  Acting on behalf of an alleged class of health plan members, the plaintiffs charge that Sutter Health violated Sections 1 and 2 of the Sherman Act and California’s Cartwright Act.

Matthew L. Cantor of Constantine Cannon argued on behalf of the putative class that the district court erred by requiring plaintiffs to allege “evidentiary facts” to support the “plausibility” of plaintiffs’ geographic market definition at the pleadings stage.  The Ninth Circuit agreed, holding that plaintiffs had indeed pleaded sufficient allegations to render their markets plausible.

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Categories: Antitrust Litigation

    July 15, 2016

    Consumer Financial Protection Bureau’s Far-Reaching Proposed Rule Would Free Consumers From Class Action Bans In Mandatory Arbitration Clauses

    By James J. Kovacs

    Consumer lawsuits got a big boost on May 3, 2016, when the Consumer Financial Protection Bureau (“CFPB”) published its long-awaited proposed rule to prohibit class action bans in mandatory arbitration clauses.

    Mandatory pre-dispute arbitration clauses require plaintiffs to seek remedial relief before an arbitrator instead of a state or federal court. If adopted, the CFPB’s proposed rule would effectively eliminate the use of pre-dispute arbitration agreements to block class-action lawsuits, affecting a large number of entities that offer financial services to consumers.

    Arbitration agreements have long been favored in the United States. Notably, in 2011, the Supreme Court held that federal arbitration law preempts any state law attempting to prohibit class-action waivers in arbitration agreements.

    However, in passing the Dodd-Frank Act, Congress authorized  the CFPB to conduct analysis and “prohibit, or impose conditions and limitations” on arbitration agreements between consumers and financial services providers.  In March 2015, the CFPB finished its analysis and released its Arbitration Study – a study designed to review mandatory pre-dispute arbitration clauses in contracts for credit cards, checking accounts, prepaid cards, payday loans, private student loans, and mobile-wireless services. The study determined that the six consumer-finance markets contained a significant number of mandatory pre-dispute arbitration clauses impacting “tens of millions of consumers.”

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    Categories: Antitrust Litigation

      July 7, 2016

      Retailers Win Reversal of Visa/MasterCard Case at Second Circuit Court of Appeals

      New York, New York (July 7, 2016) – After a four-year fight, Constantine Cannon won the reversal of a class action settlement that attempted to resolve merchant antitrust claims against Visa, MasterCard, and the nation’s largest banks.  The settlement tried to force the entire existing U.S. merchant community, and future merchants that accept Visa and MasterCard, to release all antitrust claims in exchange for limited money damages and virtually worthless injunctive relief.  In the words of the Second Circuit, “class counsel knew at the time the Settlement Agreement was entered into that this relief was virtually worthless to vast numbers of class members.”  As one member of the court put it, “This is not a settlement; it is a confiscation.”

      Constantine Cannon represented dozens of the nation’s largest retailers along with a majority of the original class representatives who objected to the settlement when it was first announced in July 2012.  Our objector clients included a who’s who of the nation’s retailers:  Walmart, Amazon, Gap, Costco, Starbucks, Lowe’s, and 7-Eleven, among many others, along with prominent merchant trade associations representing thousands of individual members, including RILA, NACS, and the National Grocers Association.

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      Categories: Antitrust Litigation

        July 5, 2016

        The Antitrust Week In Review

        Here are some of the developments in antitrust news this past week that we found interesting and are following.

        Appeals Court Nixes $7.25B Credit Card Swipe Fee Settlement.  A $7.25 billion settlement between merchants and Visa Inc. and MasterCard Inc. over credit card transaction fees was rejected Thursday by a federal appeals court, a ruling praised by a retail trade association as a victory for consumers.  The U.S. Court of Appeals for the Second Circuit in Manhattan said the 12 million merchants covered by the antitrust class action were inadequately represented by law firms that gave merchants who stood to gain little or nothing no opportunity to opt out of the deal.   Jeffrey Shinder, managing partner of Constantine Cannon, which is representing dozens of major retailers challenging the settlement, including The Gap Inc., Barnes & Noble Inc., Starbucks Corp., Nike Inc., Amazon.com Inc., Wal-Mart Stores Inc. and The Wendy’s Co., praised the ruling, calling it “a vindication of pretty much everything we argued.”

        EU Regulators Readying Third Google Antitrust Charge: Sources.  Alphabet’s Google may face a third EU antitrust charge as soon as next month, this time focusing on its revenue mainstay AdWords ad placement service, according to sources.  The world’s most popular Internet search engine is already under fire from the European Commission for promoting its shopping service at the expense of rivals and for using its Android mobile operating system for smartphones to squeeze out competitors.  The Commission has asked Google rivals to share information related to search advertising with the tech giant, a step suggesting the EU competition enforcer could be poised to hit Google with a fresh charge, the sources said.

        Slowdown in Merger Deals Attributed to Political Uncertainty.  Uncertainty is being blamed for a string of declines in acquisitions announced during the first half of the year in almost every sector, location and size compared with the same period in 2015.  About $1.6 trillion worth of deals were announced this year through Thursday, according to data compiled by Thomson Reuters.  That represented a 19 percent slump from the first half of the year in 2015 and a slight increase from the same period in 2014.  Mergers and acquisitions bankers and lawyers have attributed the slowdown to concerns about mergers being blocked by antitrust regulators after some prominent deals fell apart for that reason.

        Supreme Court Agrees to Review ATM Fee Antitrust Lawsuit.  The U.S. Supreme Court has agreed to hear appeals by Visa Inc., Mastercard Inc. and several U.S. banks seeking to throw out lawsuits claiming they conspired to inflate the prices of ATM access fees in violation of antitrust law.  The high court will hear the companies’ bid to overturn an August 2015 ruling by the U.S. Court of Appeals for the District of Columbia Circuit that revived three related class action lawsuits.  The appeals court said a district court erred when it concluded that consumers had no standing to sue and had not adequately alleged antitrust violations.

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        Categories: Antitrust Litigation, International Competition Issues

          June 27, 2016

          The Antitrust Week In Review

          Here are some of the developments in antitrust news this past week that we found interesting and are following.

          Merging UK Firms Face More Costs, Bureaucracy with Brexit.  British companies planning mergers with EU peers will face more legal costs and regulatory hassles after Britain leaves the European Union as they will have to deal with two antitrust watchdogs, according to competition experts.  On the other hand, freed from strict EU state aid rules, Britain would have a free hand to prop up ailing companies such as steel producers if it chose to do so.  Britain’s vote to leave the EU could upset the current system, under which British competition rules are modeled on EU laws, and decisions by the country’s courts and tribunals must be consistent with the principles and judgments of the top EU courts in Luxembourg.

          Anthem Faces Showdown with Antitrust Cops in Bid for Cigna.  Anthem Inc. and Cigna Corp. are preparing for a showdown with senior Justice Department officials in their effort to persuade the government to allow the health insurers to combine, lest they wind up dueling in court over a $1.85 billion breakup fee, according to sources.  This phase of a merger review can feel like a roller coaster ride, antitrust experts caution, with the outcome difficult to predict as companies jockey with enforcers in last-ditch meetings.

          EU Regulators to Rule on $130 Billion Dow, DuPont Deal by July 28.  EU antitrust authorities will decide by July 28 whether to allow the $130 billion merger of U.S. chemical company Dow Chemical Co and its rival DuPont, one of several large agribusiness deals.  The companies requested approval on Wednesday, according to a filing on the European Commission website.

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          Categories: Antitrust Enforcement, Antitrust Litigation, International Competition Issues

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