Chapter II Monopolization and Related Offenses

• Pages: 49-72

RESTRAINTS OF TRADE

Proof of a Contract, Combination, or Conspiracy

Defining “Agreement”: Distinguishing Unilateral from Concerted

Action

In In rePandora Media, LLC Copyright Litigation,1the court held that

Pandora failed to allege a hub-spoke-and-rim conspiracy to fix prices

among comedians and their licensing agent, Word Communications.2

Pandora alleged that Word Communications engaged in “blanket

licensing,” requiring exclusivity fromcomedians and setting a single price

for all assets in its portfolio.3Pandora further argued that individual

comedians were aware of and “necessarily” bought into the conspiracy by

affiliating with Word Collections, based on public statements by its

founder.4The court held that Pandora failed to plausibly allege “concerted

activity that is distinct from parallel conduct” by comedians affiliating

with Word Collections.5

In BRFHH Shreveport, LLC v. Willis-Knighton Medical Center,6the

Fifth Circuit held that the defendant’s threats to withhold donations to a

university if it did not cease dealing with plaintiff did not give rise to a

Section 1 violation and affirmed the dismissal of a plaintiff’s claim.7The

mere fact that the university broke off dealings with the plaintiff after the

threat was made did not evidence an agreement in violation of Section 1

because the relationship between the plaintiff and university began

1. 2022 U.S. Dist. LEXIS 198694 (C.D. Cal. 2022).

2. Id.at *38-39.

3. Id.at *4-5.

4. Id.

5. Id. (quoting In reMusical Instruments & Equip. Antitrust Litig., 798 F.3d

at 1194 n.6 (9th Cir. 2015)).

6. 49 F.4th 520 (5thCir. 2022).

7. Id.at 525.

2 2022 Annual Review of Antitrust Law Development

deteriorating, including “unambiguous efforts” to cut ties with the plaintiff

before the threat was made.8

In Hobart-Mayfield, Inc. v. National Operating Committee on

Standards for Athletic Equipment,9the Sixth Circuit affirmed thedismissal

ofa complaint alleging a conspiracy between a nonprofit developer of

safety standards for athletic equipment and helmet manufacturers based

on a press release by defendantspermitting helmet manufacturers to

decertify helmets if add-on products were attached to the helmets.10The

court held that plaintiff did not allege that the helmet manufacturers

“assented to either press release as a modification of the underlying license

agreements.”11Because Mayfield’s argument required an inference that

the origin and motive that the press releases were “part of a larger design

created by the Defendants to restrain trade,” there was no explicit

agreement.12

Proving “Agreement”: Proof of Horizontal and Vertical Agreements

(1)Proving HorizontalAgreement in a Criminal Case

In United States v. Penn,13the court denied five defendants’ motions

for acquittal on Sherman Act Section 1 bid rigging conspiracy charges.14

The court decided the motions after two mistrials caused by deadlocked

juries. Considering all evidence in the light most favorable to the

government, the court found sufficient evidence for a reasonable jury to

find a charged conspiracy existed and that each defendant knowingly

joined the conspiracy, knowing of its goal and intending to help

accomplish it.15The court held that trial testimony about the existence,

knowledge, and participation, of a conspiracy to increase prices was

sufficient to support a finding that the charged conspiracy existed., and

considered each defendants’ motion for acquittal in the context of an

existing conspiracy.16The defendants also individually argued that there

8. Id.at 528.

9. 48 F.4th 656 (6th Cir. 2022).

10. Id. at 665.

11. Id.

12. Id.

13. 2022 U.S. Dist. LEXIS 97823 (D. Colo. 2022).

14. Id.at *17.

15. Id.at *30.

16. Id.at *17-18.

Restraints of Trade3

was insufficient evidence to sustain a conviction as to each of them.17The

court held that direct and circumstantial evidence—when viewed as a

whole—was sufficient for a reasonable jury to convict each defendant.18

All five defendants were subsequently acquitted in a third trial.19

(2)Proving Horizontal Agreement in a Civil Case

In Value Drug Co. v. Takeda Pharm., U.S.A., Inc.,20the court held that

the plaintiff plausibly alleged a single, horizontal conspiracy among the

defendants, but failed to plausibly plead separate, bilateral conspiracies

between defendant Takeda and each other defendant.21The plaintiff

claimed that Takeda conspired with separate generic drug manufacurers to

stagger their entry through separate settlement agreements to deter other

generics from entering and prevent an “incremental price collapse.”22The

agreements would not have been in each generic manufacturer’s interest

unless they all conspired which made the alleged conspiracy plausible.23

“Additional key pleaded facts” supporting the plausibility of the alleged

overarching conspiracy included a “cartel enforcement mechanism” that

allowed immediate entry by generic co-conspirators upon the occurrence

of certain market events.24The same facts led the court to find that a

bilateral conspiracies between Takeda and each generic was not

plausible.25Because “all three Generics had to agree here to achieve the

object of the conspiracy as pleaded,” individual conspiracies between

Takeda and each generic manufacturer were implausible.26

In In reForeign Exchange Benchmark Antitrust Litigation,27the court

denied both parties’ motions for summary judgment as to the existence of

an alleged sixteen-bank conspiracy to widen spreads in the foreign

exchange market.28Notably, the court treated certain defendants’

17. Id.at *18-30.

18. Id.

19. United States v. McGuire et al, No. 1:21-cr-00246 (D. Colo. 2022).

20. 2022 U.S. Dist. LEXIS 58574 (E.D. Pa. 2022).

21. Id.at *17-18.

22. Id.at *6.

23. Id.at *6-10.

24. Id. at *11.

25. Id.at *15.

26. Id.at *17.

27. 2022 U.S. Dist. LEXIS 18083 (S.D.N.Y. 2022).

28. Id.at *55.