Antitrust - Michael Eric Ross and Jeffrey S. Cashdan

• Publication year: 2000

Antitrustby Michael Eric Ross* and

Jeffrey S. Cashdan**

The Eleventh Circuit's 1999 term was unremarkable for its antitrust jurisprudence. The court published only three antitrust decisions.¹

I. MCA Television Ltd. v. Public Interest Corp.²

MCA Television Ltd. ("MCA"), which licenses syndicated television shows, brought an action asserting breach of contract and copyright infringement claims against Public Interest Corp. ("PIC"), its licensee which owns a television station. PIC counterclaimed, alleging breach of contract and violation of Section 1 of the Sherman Act. PIC maintained that MCA unlawfully conditioned licensing of several of its television shows, in exchange for advertising time, on PIC's willingness to license episodes of another show {Harry and the Hendersons), for cash as well as advertising time. PIC reluctantly agreed to this arrangement, contending it would not have chosen to license Harry and the Hendersons if it had not been forced to do so as a condition of obtaining the licenses for the other shows it desired. PIC alleged this arrangement constituted per se unlawful tying.³

After a bench trial, the district court held that PIC had breached its licensing contracts with MCA and had willfully infringed MCA's copyrights. As for PIC's antitrust counterclaim, the district court held that the licensing arrangement constituted unlawful tying, but that PIC had failed to prove it suffered any "antitrust injury" to support its claim for damages.⁴

PIC appealed the lower court's judgment on MCA's breach of contract and copyright infringement claims and on the issue of damages for the antitrust violation. MCA cross-appealed the antitrust liability judgment. As to the contract claims, the Eleventh Circuit affirmed the liability finding and remanded the case for reconsideration of damages.⁵ The appellate court followed the same course for the antitrust counterclaim, affirming the liability ruling and remanding for reconsideration of damages.⁶

As to the antitrust claims, the Eleventh Circuit held that MCA's arrangement constituted "block booking," which the Supreme Court long ago deemed per se unlawful under Section 1 of the Sherman Act.⁷ Block booking occurs when copyrighted material is sold only as a package and the licensee must accept an unwanted license in the package to obtain the license sought.⁸ The challenged arrangement here was a clear case of block booking. As such, the court properly held that it could not depart from established Supreme Court precedent despite increasing momentum in antitrust circles to re-evaluate certain per se unlawful practices under the rule of reason. Indeed, reasonable arguments can be made that the presumption of market power inherent in the view that all block booking arrangements are per se unlawful is flawed, and that case-by-case factual analysis is necessary to properly gauge the competitive effects of a particular arrangement. Until the Supreme Court accepts such arguments (or Congress steps into the fray), the Eleventh Circuit's hands are tied.⁹

II. Morton's Market, Inc. v. Gustafson's Dairy, Inc.¹⁰

This case principally concerned application of the statute of limitations to a price-fixing action. A group of milk retailers brought suit against milk producers for price-fixing in Florida. Defendants contended that the private actions were time barred because most of the allegedly unlawful conduct had occurred more than four years prior to initiation of the private lawsuit. Plaintiffs contended that the statute of limitations had not expired because it did not start to run until four years prior to filing of the suit and because the statute of limitations had been tolled. The district court granted a motion for summary judgment, accepting all of defendants' arguments.¹¹

On appeal the Eleventh Circuit reversed.¹² First, the court held that evidence supported the view that the statute of limitations did not begin to run until less than four years before the filing of the action because of the continuing nature of the alleged antitrust conspiracy, thus bringing the case within the applicable statute of limitations.¹³ The court thus found that a jury issue existed as to whether the statute of limitations had expired.¹⁴

Second, the Eleventh Circuit held that even if the statute of limitations had run in whole or in part as to plaintiffs' claims, it may have been tolled for two reasons.¹⁵ Initially, the court considered statutory tolling. The court held that because plaintiffs' private action was brought within one year of a government investigation that bore a "real relationship" to the claims raised by plaintiffs' action, the statute of limitations had been tolled.¹⁶ The court explained that pursuant to Section 16(i) of the Clayton Act,¹⁷ private...