Source: http://traderegulation.blogspot.com/2012/06/
Timestamp: 2019-04-26 08:19:25+00:00

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An alleged conspiracy among foreign producers of potash — a naturally occurring mineral used in agricultural fertilizers and other products — to fix prices charged to U.S. purchasers was not outside the scope of the Sherman Act, the U.S. Court of Appeals in Chicago, sitting en banc, ruled earlier this week.
The purchasers satisfied the requirements of the Foreign Trade Antitrust Improvements Act 1982 (FTAIA) with respect to challenged transactions that were not straightforward import transactions subject to the more general antitrust rules for effects on commerce.
The FTAIA makes clear that “the Sherman Act does not apply to every arrangement that literally can be said to involve trade or commerce with foreign nations.” The FTAIA excludes foreign activities, other than import trade or commerce, from the scope of the Sherman Act, unless the conduct has a “direct, substantial, and reasonably foreseeable effect” on domestic or import commerce.
The complaint alleged an international cartel in a commodity, and it asserted that the cartel succeeded in raising prices for direct U.S. purchasers of potash. The FTAIA’s requirements of substantiality and foreseeability were easily met. The complaint alleged that 5.3 million tons of potash were imported into the United States in one year alone and the vast majority of these imports came from the defendants. Over a five-year period, the price of potash allegedly increased by over 600 percent. Moreover, the effects alleged were a rationally expected outcome of the challenged conduct. It was objectively foreseeable that an international cartel with a grip on 71 percent of the world’s supply of a homogeneous commodity would charge supracompetitive prices, and in the absence of any evidence showing that arbitrage was impossible, those prices (net of shipping costs) would be uniform throughout the world.
Further, the effects were “direct” and not too remote, the court ruled. This was not a case where an action was undertaken in a foreign country and filtered through many layers, finally causing a few ripples in the United States. The court followed the Department of Justice approach with respect to the meaning of "direct" in the statute.
The Justice Department had suggested in a friend-of-the-court brief that the direct effects exception should not be limited to effects that follow as an immediate consequence of the challenged conduct. "Direct" is best defined as "reasonably proximate," according to the government brief.
Thus, the allegations stated a claim, as required by Federal Rule of Civil Procedure 8, and were enough to withstand a motion to dismiss under Rule 12(b)(6).
The case was before the appellate court because a district court decision (2010-2 Trade Cases ¶77,112), denying the defendants’ motion to dismiss, was certified for interlocutory appeal. An earlier decision of a three-judge panel, which reversed the lower court’s ruling after concluding that the complaint failed to meet the requirements of the FTAIA (2011-2 Trade Cases ¶77,611), was vacated in December 2011. The panel had suggested that the issue of whether the FTAIA was an element of a Sherman Act claim or jurisdictional in nature was ripe for reconsideration.
Before taking on the particular issues in this case, the full appellate court considered whether the FTAIA was an element of a Sherman Act claim or was jurisdictional in nature. The court overruled a 2003 en banc decision of the Seventh Circuit, (United Phosphorus, Ltd. v. Angus Chem. Co., 322 F.3d 942, 2003-1 Trade Cases ¶73,971) and held that the FTAIA was an element of the Sherman Act. The FTAIA did not use the word “jurisdiction” or any commonly accepted synonym, it was noted. Instead, it spoke of the “conduct” to which the Sherman Act (or the Federal Trade Commission Act) applied.
Thus, a party contesting the propriety of an antitrust claim implicating foreign activities was required, at the outset, to use Federal Rule of Civil Procedure 12(b)(6), not Rule 12(b)(1). Because foreign connections were unlikely to be difficult to detect, parties who wanted to argue that a particular claim failed the requirements of the FTAIA would be able to do so within these generous time limits, the court reasoned.
The June 27, 2012, decision in Minn-Chem, Inc. v. Agrium Inc., No. 10-1712, will appear at 2012-1 Trade Cases ¶77,943.
For the second consecutive year, New York City-based Cleary Gottlieb Steen & Hamilton has been ranked as having the best antitrust practice by Vault.com, a source of ratings, rankings, and insight for law students and lawyers.
The rankings were based on a poll of 17,000 associates, who were asked to vote for up to three firms they consider strongest in their own practice area. Associates were not permitted to vote for their own firms.
Cleary Gottlieb was mentioned by nearly 46% of the respondents. The firm was described as “international,” “diverse,” “quirky,” and “bookish.” A firm-wide commitment to international legal work was noted.
Arnold & Porter, which was tied with Cleary Gottlieb at the top in last year’s list, dropped to number two. The firm was mentioned by 40% of the respondents.
Further details regarding the antitrust rankings are available here.
An individual and three Ohio businesses could proceed with federal RICO and Ohio Corrupt Practices Act claims against an electric utility and its subsidiary (Duke Energy Corp. and Duke Energy International, Inc.), the U.S. Court of Appeals in Cincinnati has ruled.
The utilities allegedly made “side agreements” to pay substantial and unlawful rebates to large customers, including General Motors, in exchange for withdrawing their objections to a rate-stabilization plan that the utilities had proposed as part of a move to market-based rates. The plaintiffs sufficiently alleged: (1) money laundering and mail fraud; (2) proximate cause; and (3) obstruction of justice.
According to the court, the alleged transfer of money—from large customers to the utility, from the utility to one of its affiliates, and from the affiliate back to the large customers—tainted the money, which became the proceeds of mail fraud. The plaintiffs thus alleged a cognizable claim of money laundering based on mail fraud.
The defendants argued that they were not required to disclose any rebates because differential pricing was not, by itself, a fraudulent practice. The plaintiffs, however, alleged that the utilities had engaged in mail fraud by using the mails to inform their customers that everyone had to pay “mandatory and unavoidable” electricity charges.
Because these mailings implied that all customers paid the same rate, the plaintiffs adequately alleged that the utilities had engaged fraud by failing to disclose their side agreement with large customers.
The utilities argued that: (1) the plaintiffs’ theory of liability rested on the independent actions of the Public Utilities Commission of Ohio (PUCO) and (2) the remedy sought by the plaintiffs would require the PUCO to enforce the law. The argument was flawed because the utilities confused the relationship between an allegedly wrongful act and a proximately caused injury with the relationship between an allegedly wrongful act and a remedy for a proximately-caused injury.
The PUCO did not the cause the plaintiffs’ alleged injury; the defendants did, through an allegedly fraudulent scheme. The fact that the plaintiffs had to bring their case before the PUCO or the court did not mean that a third party had disrupted the chain of causation. The defendants’ argument that a finding of proximate cause would be speculative—because the PUCO might not have found the rebates to be unlawful—was also unavailing.
The plaintiffs sufficiently alleged obstruction of justice as a predicate act for their Ohio Corrupt Practices Act claim against the utilities. The plaintiffs alleged that the utilities’ legal counsel “consciously and deceptively denied,” in on-the-record proceedings before the Ohio Supreme Court, the existence of side agreements between the utilities and some of their customers.
Obstruction of justice under Ohio law involved the communication of false information to any person for the purpose of hindering the discovery of a crime. The selective payment of rebates, the court noted, was a felony in Ohio. Therefore, the communication of false information to any person—for the purpose of hindering the discovery of the selective payment of rebates—constituted obstruction of justice.
The defendants argued that the alleged communication of false information had occurred in civil proceedings, but that fact was irrelevant. Ohio’s obstruction of justice law contained no requirement that a false statement had to be made in a criminal proceeding. The defendants’ contention that the alleged obstruction was made in defense of the corporation did not shield the defendants’ counsel from liability.
Even if corporations were not considered “persons,” corporate counsel was not permitted to freely make false statements before a court and evade liability for obstruction of justice.
The decision is Williams v. Duke Energy International, Inc., CCH RICO Business Disputes Guide ¶12,222.
Labels: Civil RICO, mail farud, money laundering, obstruction of justice, Ohio Corrupt Practices Act, Williams v. Duke Energy International Inc.
Claims by former recipients of collegiate football scholarships that the National Collegiate Athletic Association (NCAA) violated federal antitrust law by entering into an agreement with member schools to restrict the number of football scholarships awarded by each school to a prescribed number and by prohibiting multi-year scholarships did not sufficiently plead a valid relevant market, the U.S. Court of Appeals in Chicago has ruled. Dismissal of the suit was therefore affirmed.
The complaining student-athletes, alleging that the bylaws prevented them from obtaining scholarships that covered the entire cost of their college educations, failed to allege that the NCAA’s actions had an anticompetitive effect in a relevant commercial market, the court stated.
The transactions that NCAA member schools made with premier athletes—full scholarships in exchange for athletic services—were not noncommercial, since schools could make millions of dollars as a result of those transactions. Thus, they were, to some degree, commercial in nature, and therefore took place in a relevant market with respect to the Sherman Act, the court remarked. Moreover, because the bylaws were not inherently or obviously necessary for the preservation of amateurism, the student-athlete, or the general product of college football, they could not be presumptively procompetitive.
However, the plaintiffs’ complaint did not adequately identify either of the markets upon which they claimed the bylaws had an anticompetitive effect—the market for bachelor’s degrees and the market for student-athlete labor.
It was not apparent whether the plaintiffs believed that the bylaws affected an overall market for bachelor’s degrees, which would impact scholarship athletes and non-athletes alike, or some subsidiary market that only concerned athletes attempting to obtain educational degrees in exchange for athletic services.
Even if adequately alleged, such a relevant market would have been problematic in that (1) given the small proportion of bachelor’s degree candidates who were scholarship athletes who scholarships had not been renewed, the anticompetitive impact would have been very minimal; and (2) bachelor’s degrees were not automatically received or guaranteed upon payment of tuition. The difference between a market for educational services and a market for bachelor’s degrees was "of vital importance," the appellate court noted.
While a labor market for student-athletes would have described a cognizable market under the Sherman Act, nothing resembling a discussion of a relevant market for student-athlete labor could be found in the plaintiffs’ amended complaint, the court observed.
The June 18 decision is Agnew v. National Collegiate Athletic Association, 2012-1 Trade Cases ¶77,939.
On the last day of the October 2011 term, the U.S. Supreme Court granted petitions for certiorari in two closely-watched antitrust cases: (1) a Federal Trade Commission (FTC) action challenging a Georgia hospital combination, and (2) a consumer class action against cable provider Comcast Corporation.
In the FTC action, the Court will consider the scope of the state action doctrine. At the request of the FTC, the U.S. Solicitor General in March petitioned the Court to review a decision of the U.S. Court of Appeals in Atlanta (2011-2 Trade Cases ¶77,722, 663 F.3d 1369), holding that the proposed combination of the only two hospitals in Albany, Georgia, was immune from antitrust attack under doctrine. The appellate court had upheld dismissal (2011-1 Trade Cases ¶77,508, 793 F. Supp. 2d 1356) of the Commission’s complaint for injunctive relief pending the completion of an administrative proceeding.
In April 2011, the FTC issued an administrative complaint challenging the transaction (CCH Trade Regulation Reporter ¶16,588). The FTC alleged that a local hospital authority’s purchase of Palmyra Park Hospital’s assets from HCA, Inc. and subsequent lease to Phoebe Putney Health System, Inc. (PPHS)—the operator of Phoebe Putney Memorial Hospital—would substantially lessen competition or tend to create a monopoly in the inpatient general acute-care hospital services market in Georgia’s Dougherty County and surrounding areas. The agency also sought injunctive relief to prevent the consummation of the plan prior to the completion of the administrative proceeding. Pending conclusion of the court action, the FTC stayed its administrative proceedings (CCH Trade Regulation Reporter ¶16,620).
(2) whether such a state policy, even if clearly articulated, would be sufficient to validate the alleged anticompetitive conduct, given that the local government entity neither actively participated in negotiating the terms of the hospital sale nor had any practical means of overseeing the hospital’s operation.
According to the petition, the case presents the question of whether a hospital’s acquisition of its only rival, effectuated by using a substate governmental entity’s general corporate powers, is exempt from antitrust scrutiny under the “state action doctrine.” The appellate court decision conflicts with decisions of the Fifth, Sixth, Ninth, and Tenth Circuits, the agency contends.
The petition for review, FTC v. Phoebe Putney Health System, Inc., Dkt. 11-1160, was granted on June 25, 2012.
The Court has also decided to consider a decision of the U.S. Court of Appeals in Philadelphia (2011-2 Trade Cases ¶77,575, 655 F.3d 182), upholding the certification of a class of approximately two million cable television customers in the Philadelphia area. The customers allege that Comcast engaged in monopolization, attempted monopolization, and market or customer allocation through a series of acquisitions and cable system swap arrangements.
The appellate court ruled that the lower court satisfied the “rigorous analysis” standard established in In re Hydrogen Peroxide Antitrust Litigation (2008-2 Trade Cases ¶76,453, 552 F.3d 305) in determining that questions of fact or law common to class members predominated over individual issues, for purposes of meeting the certification requirements of Federal Rule of Civil Procedure 23(b)(3).
The High Court may see things differently.
In its petition, Comcast asked: whether a district court may certify a class action without resolving “merits arguments” that bear on prerequisites for certification under Federal Rule of Civil Procedure 23, including whether purportedly common issues predominate over individual ones under Rule 23(b)(3).
The petition for review, Comcast Corp. v. Behrend, Dkt. 11-864, was granted on June 25, 2012.
The Michigan Farm and Utility Equipment Act did not require two dealers to make an election of remedies between their breach of contract and dealer law claims against equipment manufacturer Deere & Company, the U.S. Court of Appeals in Cincinnati has ruled.
The district court did not err in refusing to reduce a jury’s award of more than $5.4 million in damages against Deere in a lawsuit brought by the two dealers against Deere for termination of their dealership agreements in violation of the Michigan statute, among other claims.
Deere argued that the clear and unambiguous language of the dealer law required the dealerships to elect to recover either on their breach of contract claim or their statutory claim, but not both. No case has analyzed this provision, and Deere does not explain which words in this provision create the obligation it asserts, the court noted.
Subsection 1 of Section 5 of the Act provided that the dealer may elect to pursue either a contract remedy or the remedy provided in the Act, the court observed. Subsection 2 did not generally require a dealer to choose between its statutory claim and its breach of contract claim. Rather, it provided that a dealer’s pursuit of a contract remedy did not bar its right to pursue a statutory remedy as to inventory not affected by the contract remedy.
To the extent Section 5 required an election of remedies, its purpose was to protect against double recovery. Once the dealers opted not to seek the remedy of inventory buy-back under the statute, and instead sought the statutory remedy of recovery of the loss of asset value, no further election was required, the court determined.
Michigan’s comparative-fault scheme did not require a reduction in the jury’s award of damages, based on the jury’s finding of 65% of the fault allocated to Deere and 35% of the fault allocated to a dealer.
The jury found Deere liable to the dealers on three separate grounds. The district court had instructed the jury that, in the event it found Deere liable on any of those grounds, the damages should amount to the loss of net asset value for the dealerships.
One of the theories of liability was subject to Michigan’s comparative fault statute. If Deere had been found liable only on that claim, the damages would have been reduced in proportion to the jury’s fault allocation, according to the court. But the award of damages for loss of net asset value was also supported by two additional theories of liability—a breach of contract claim and the violation of the Farm and Utility Equipment Act—either of which was adequate grounds to support the plaintiffs’ recovery of the full amount of damages assessed without any reduction of fault to one of the dealers, the court decided.
The June 13, 2012 decision is Laethem Equipment Co. v. Deere & Co., CCH Business Franchise Guide ¶14,846.
Former professional football players failed to plausibly allege that the National Football League (NFL) and its member teams restrained trade in the market for the players’ images and likenesses by not allowing them the rights to films and images from the games in which they played, the federal district court in St. Paul, Minnesota, has ruled. The players failed to establish any concerted action that was illegal under the Sherman Act.
The players relied “heavily, almost exclusively,” on the Supreme Court's 2010 decision in American Needle, Inc. v. NFL, 2010-1 Trade Cases ¶77,019, 130 S. Ct. 2201, the court explained. However, the decision did not support their claims. In American Needle, the Supreme Court held that the NFL and its member teams were capable of conspiring to restrain trade for NFL-related merchandise that each team owned separately from the NFL.
The historical game footage at issue in the current matter was owned by the NFL either alone or in conjunction with the teams involved in the game being filmed. These entities had to cooperate to produce and sell these images; no one entity could do it alone, according to the court. The NFL and its teams were capable of conspiring to market each team’s individually-owned property, but not property the teams and the NFL could only collectively own.
Moreover, the former players did not explain what market might exist in game footage that featured only that footage to which any player can claim to be individually entitled—a single player’s image without any NFL logos or marks. Thus, even if there was concerted action to restrain trade in the former players' images, that agreement was "necessary to market the product" and was therefore not illegal.
If the NFL refused to pay the former players for the use of their images in its copyrighted material, then the former players might have a claim for a violation of their right of publicity. However, this was a royalties issue, not an antitrust issue. Therefore, the former players’ complaint was dismissed with prejudice.
The June 13 decision is Washington v. National Football League, 2012-1 Trade Cases ¶77,926.
Although it was very likely that Amazon’s “Conditions of Use and Privacy Notice” disclosed sufficient information to negate computer users’ Washington Consumer Protection Act (CPA) claims, limited discovery would be appropriate on the issue of whether Amazon accessed the users’ computers without authorization, the federal district court in Seattle has ruled. The computer users’ Computer Fraud and Abuse Act (CFAA) claim was dismissed with prejudice.
The users would satisfy the injury element only if they could demonstrate that Amazon accessed their computers or their information without authorization, the court observed. The issue of authorization was “quite complicated.” Amazon’s Conditions of Use and Privacy Notice appeared to notify visitors that it would take the very actions complained of: place browser and Flash cookies on their computers and use those cookies to monitor and collect information about their navigation and shopping habits.
Amazon’s motion to dismiss, to the extent that it relied on exhibits including Amazon’s Conditions of Use and Privacy Notice, was construed as a motion for summary judgment, and the computer users would be provided a reasonable opportunity to present all pertinent material. Limited discovery concerning Amazon’s conditions and notice, their location on the website, and each plaintiff’s use of the site would likely be both beneficial and appropriate, according to the court.
Non-monetary detriments could not constitute loss, contrary to the computer users’ contention, and they alleged nothing from which a calculable loss could be inferred, the court concluded.
The June 1 opinion in Del Vecchio v. Amazon.com, Inc. will be reported at CCH Advertising Law Guide ¶64,728.
The Federal Trade Commission is amending its franchise disclosure rule to raise the monetary thresholds used to determine whether a franchise sale is exempt from the rule, which requires presale disclosure information to prospective franchise purchasers.
The 2007 amendments to the franchise rule provide three exemptions based on a monetary threshold in 16 CFR Part 436 .8 (CCH Business Franchise Guide ¶6018).
(3) Franchise sales to large entities that have been in business for at least five years and have a net worth of at least $5,424,500 (currently $5 million), §436.8(a)(5)(ii).
The franchise rule requires the FTC to adjust the monetary thresholds every four years, based on the Consumer Price Index. The adjustments will take effect on July 1, 2012.
The Commission voted 5-0 to approve the Federal Register Notice on the adjustments. Further information on the franchise rule amendments appear here on the FTC website.
Johnson & Johnson Agrees to Spin Off Bone Fracture System to Complete Takeover of Synthes, Inc.
The FTC will require Johnson & Johnson to sell its system for surgically treating serious wrist fractures, under the terms of a proposed consent order resolving charges that Johnson & Johnson’s proposed $21.3 billion acquisition of Synthes, Inc. would illegally reduce competition for these systems.
Johnson & Johnson has announced its intention to sell the system, along with the rest of its product line for treating traumatic injuries, to Biomet, Inc.
If the deal were allowed to proceed as originally proposed, the Commission stated, Johnson & Johnson and Synthes together would have more than 70 percent of the U.S. market for the wrist fracture treatment systems.
"J&J and Synthes are direct competitors for these important systems used in the surgical treatment of traumatic wrist fractures," said Richard Feinstein, Director of the FTC's Bureau of Competition. "This order will ensure that the hospitals and surgeons that use these systems to care for consumers will not face higher prices or reduced innovation in the future."
According to the FTC's June 11 complaint, Johnson & Johnson’s proposed acquisition of Synthes would harm competition in the U.S. market for volar distal radius plating systems, internal devices that are surgically implanted on the underside of the wrist to achieve proper alignment of the radius bone following a fracture.
Distal radius fractures, in which a portion of the radius closest to the wrist is broken, typically happen when someone braces for a fall, and are among the most common types of fractures. Such fractures most often occur when an older person falls or when people are playing sports. While many people with distal radial fractures can be treated with conventional casts, if the radius bone is displaced, surgery almost always is required. Volar distal radius plating systems are the primary option for surgeons because they are easy to implant, reduce recovery times, and enable patients to move more freely than casts.
The complaint alleges that the U.S. market for volar distal radius plating systems is highly concentrated. Synthes is the leading maker of volar distal radius plating systems in the United States, accounted for 42 percent of all U.S. sales in 2010, and has a strong clinical reputation in the trauma field.
Johnson & Johnson acquired its system—known as DVR—from Hand Innovations in 2006, and it was among the first anatomically contoured volar distal radius plating system. Many surgeons still consider the DVR system to be the best volar distal radius plating system available, and it accounted for 29 percent of all system sales in 2010.
The proposed order settling the FTC's charges preserves competition in the U.S. market for volar distal radius plating systems by requiring Johnson & Johnson to sell its U.S. DVR assets to a qualified buyer within 10 days of when the deal is consummated.
While the Commission's competitive concern with this transaction is limited to volar distal radius plating systems, Johnson & Johnson has opted to sell its entire trauma portfolio, which includes the DVR assets, to Biomet, a successful orthopedics company with a recognized brand name, an extensive nationwide sales force, and existing relationships with surgeons and hospitals.
Biomet's current volar distal radius plating system is not competitively significant, and the FTC believes that Biomet, once it acquires the DVR assets, will be able to replicate the competition in the U.S. market for such systems that existed before Johnson & Johnson's acquisition of Synthes.
The proposed order will allow the FTC to appoint an interim monitor to oversee the sale of the DVR assets to Biomet, and to appoint a trustee to sell the assets if they are not successfully divested by J&J within the time required.
Details of the FTC's complaint and proposed consent order—In the Matter of Johnson & Johnson, FTC Dkt. No. C-4363—appears here on the FTC website.
Labels: acquisitions and mergers, divestitures, In the Matter of Johnson and Johnson, Sythes Inc.
The U.S. Court of Appeals in Cincinnati has ruled that Robinson-Patman Act claims should not have been dismissed against retail electricity service provider Duke Energy Corporation for discriminating in price between different purchasers through Duke subsidiaries and an affiliated company.
Dismissal of the action (2009-1 Trade Cases ¶76,595) brought by individuals and businesses based in Ohio was reversed, and the case was remanded. The antitrust claims were not barred by the filed-rate doctrine and were adequately stated.
The complaining customers adequately alleged injury and competitive disadvantage sufficient to survive a Rule 12(b)(6) motion to dismiss, the court ruled. The complaining customers alleged that they suffered competitive disadvantage compared to certain favored companies as a result of alleged “indirect rebates to General Motors Corporation and other large consumers in exchange for their withdrawal of objections to a rate-stabilization plan under review by the Public Utilities Commission of Ohio (PUCO). The complaining customers would have had to pay substantially more for electricity than their competitors due to the rebates.
The court also rejected Duke’s argument that electricity was not a commodity within the scope of the Robinson-Patman Act. The defendants suggested that electricity was not a commodity because the Act used terms such as “goods, wares, or merchandise to refer to commodities, and these terms were not commonly applied to electricity. Moreover, the complaining customers were not required to purchase for resale in order to pursue a Robinson-Patman Act claim, the court held. The defendants’ contention that the Robinson-Patman Act applied only to the resale of a purchased product was not consistent with case law.
The complaining customers’ federal claims against Duke were not barred by the filed-rate doctrine, the court ruled. The filed-rate doctrine barred challenges to the reasonableness of a filed rate. The complaining customers’ claims did not concern the particular rate set by the PUCO, but rather payments made outside of the rate scheme. The complaining customers argued that the side agreements were not filed with any agency, including the PUCO, and are unlawful. The allegation that certain large consumers, by receiving a rebate, effectively paid a lower rate than the complaining customers did not transform the action into an attack on filed rates.
The June 4 decision is Willams v. Duke Energy International, Inc., 2012-1 Trade Cases ¶77,913.
Labels: Filed-Rate Doctrine, Price Discrimination, Robinson-Patman Act, Williams v. Duke Energy International Inc.
The full U.S. Court of Appeals in New York City will not review a panel’s decision holding that a class action waiver provision contained in commercial contracts between merchants and charge card issuer/servicer American Express Company was unenforceable. A request from American Express for an en banc rehearing of the decision denying enforcement of the class action waiver provision (2011-1 Trade Cases ¶77,366) was denied.
In March 2011, the panel decided that the class action waiver was void because it precluded the complaining merchants from enforcing their statutory rights under the antitrust laws. The record demonstrated that the size of any potential recovery by an individual plaintiff would be too small to justify the expense of bringing an individual action. The court noted that there was no rule that class action waivers in arbitration agreements were per se unenforceable or per se unenforceable in the context of antitrust actions. The enforceability of a class action waiver in an arbitration agreement had to be considered on its own merits, in the court’s view.
It was the second time that the court had considered the issue. An earlier decision (2009-1 Trade Cases ¶76,478), also rejecting the class action waiver provision, was vacated (2010-1 Trade Cases ¶76,994) in light of the U.S. Supreme Court’s 2010 decision in Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 2010-1 Trade Cases ¶76,982. In Stolt-Nielsen, the Supreme Court held that under the Federal Arbitration Act (FAA) the agreement of the parties was the basis for determining whether to subject claims to class arbitration.
Shortly, after the panel’s March 2011 decision was published, the Supreme Court decided AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740. In that decision, the High Court held that state law may not be used to invalidate a class action waiver in an arbitration agreement on the ground that the only economical way to litigate the claim was through a class action.
A strong dissent from the denial of rehearing en banc was written by Chief Judge Dennis Jacobs. The dissent contended that the holding could not be squared with the FAA, employed a dubious ground of distinction to overcome the U.S. Supreme Court’s 2011 holding in Concepcion, and precariously relied on dicta that large “arbitration costs” cannot be allowed to prevent a plaintiff from “effectively vindicating” a statutory right.
The May 29 decision is In re: American Express Merchants’ Litigation, 2012-1 Trade Cases ¶77,910.

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