In summary
Sherman Act violations:
- Deslandes v McDonald's USA, LLC. Franchise employees challenged McDonald's 'no-poach' clauses, which restricted their movement between franchises, as violating section 1 of the Sherman Act. The district court initially ruled these clauses as being ancillary to the broader franchise agreement, not illegal per se. The Seventh Circuit remanded for a more thorough antitrust analysis, emphasising that the ancillary nature of such clauses requires detailed examination beyond a quick-look approach.
- In Re Deere & Company Repair Service Antitrust Litigation. Agricultural buyers accused Deere & Co of monopolising tractor repair services by controlling essential repair tools and software, which allegedly inflated repair costs. The district court allowed the case to proceed, rejecting Deere's arguments against standing and the Illinois Brick rule. The court found sufficient grounds under both section 1 and section 2 of the Sherman Act, with ongoing discovery and class certification discussions.
- In Re Dealer Management Systems Antitrust Litigation. CDK Global and Reynolds and Reynolds faced allegations of colluding to restrict third-party access to their dealership management software, suppressing competition. The court found potential Sherman Act violations, particularly regarding a 2015 data-sharing agreement. Summary judgment was denied on several claims, with further litigation required to substantiate allegations relating to exclusive dealing and monopolisation.
Class action and fee award cases:
- Amory Investments, LLC v Utrecht-America Holdings, Inc. The Seventh Circuit reviewed allegations against Rabobank in the Broiler Chicken Antitrust Litigation, where the plaintiffs claimed Rabobank was part of a price-fixing conspiracy. The district court initially dismissed the claims for insufficient evidence, and the Seventh Circuit upheld this decision, emphasising the need for proof of an agreement under section 1 of the Sherman Act.
- In re Broiler Chicken Antitrust Litigation – Fee Award. The Seventh Circuit vacated an interim US$57.4 million fee award to class counsel, initially deemed a market rate. The court found that the district court had failed to consider relevant fee bids and awards from other circuits and did not justify denying discovery on attorneys' fees. The case was remanded for reassessment of the fee award and discovery request.
- In re Broiler Chicken Antitrust Litigation – Summary Judgment. The court addressed summary judgment motions, finding sufficient evidence to proceed against 11 defendants involved in alleged price-fixing, while dismissing claims against seven.
Consumer protection and FTC actions:
- Federal Trade Commission v Credit Bureau Center, LLC. Website faced scrutiny for using a 'negative option feature', unlawfully enrolling customers into a subscription by default. The district court initially ordered US$5 million in restitution, but this was overturned by the Seventh Circuit due to issues with restitution under the Federal Trade Commission Act (FTCA), section 13(b). Following Supreme Court guidance, the Seventh Circuit reinstated the award under FTCA section 19, allowing broader consumer redress.
- In re NorthShore University HealthSystem Antitrust Litigation. NorthShore University HealthSystem faced allegations that the merger between NorthShore and Highland Park Hospital led to monopolistic practices and inflated prices. The court upheld the plaintiffs' ability to meet class certification requirements, with summary judgment motions by NorthShore largely denied. The court found sufficient evidence of anticompetitive conduct and allowed the class action to proceed, though it entered summary judgment on NorthShore's quality of care defence.
Discussion points
- Ancillary restraints
- Quick-look versus full analysis
- Monopolisation claims
- Collusion and data sharing
- Exclusive dealing and monopolisation
- Proof of conspiracy
- Fee award standards
- Discovery and fee assessment
- Summary judgment standard
- Class certification in antitrust cases
- Quality of care defence
Referenced in this article
- Amory Invs. LLC v Utrecht-America Holdings, 74 F.4th 525 (7th Cir. 2023)
- Amory Invs. LLC v Utrecht-America Holdings, No. 22-1858 (7th Cir. May 16, 2022)
- In re Broiler Chicken Antitrust Litig., 80 F.4th 797 (7th Cir. 2023)
- In re Broiler Chicken Antitrust Litig., No. 1:16-cv-08637 (N.D. Ill. Apr. 29, 2022)
- In re Broiler Chicken Antitrust Litig., No. 1:16-cv-08637 (N.D. Ill. June 30, 2021)
- In re Broiler Chicken Antitrust Litig., No. 16-cv-08637, 2021 WL 2207142 (N.D. Ill. June 1, 2021)
- In re Broiler Chicken Antitrust Litig., No. 16-cv-08637, 2022 WL 6124787 (N.D. Ill. Oct. 7, 2022)
- In re Broiler Chicken Antitrust Litig., No. 16-cv-08637, 2023 WL 7220170 (N.D. Ill. Nov. 2, 2023)
- In re Broiler Chicken Antitrust Litig., No. 16-cv-08637 (N.D. Ill. June 25, 2020)
- In re Broiler Chicken Antitrust Litig., No. 16-cv-08637 (N.D. Ill. May 27, 2022)
- In re Broiler Chicken Antitrust Litig., No. 16-cv-8637, 2022 WL 1262084 (N.D. Ill. Feb. 11, 2022)
- In re Broiler Chicken Antitrust Litigation, No. 1:16-cv-08637 (N.D. Ill. May 5, 2022)
- In re Dealer Mgmt. Sys. Antitrust Litig., 680 F. Supp. 3d 919 (N.D. Ill. 2023)
- In re Deere & Co. Repair Serv. Antitrust Litig., No. 3:22-cv-50188, 2023 WL 8190256 (N.D. Ill. Nov. 27, 2023)
- In re Deere & Co. Repair Serv. Antitrust Litig., No. 3:22-cv-50188 (N.D. Ill. Oct. 24, 2022)
- Deslandes v McDonald's USA, LLC, No. 17 C 4857, 2022 WL 2316187 (N.D. Ill. June 28, 2022), vacated and remanded, 81 F.4th 699 (7th Cir. 2023), cert. denied, 144 S. Ct. 1057 (2024)
- Fed. Trade Comm'n v Credit Bureau Ctr., LLC, 325 F. Supp. 3d 852 (N.D. Ill. 2018), aff'd in part, vacated in part, 937 F.3d 764 (7th Cir. 2019)
- Fed. Trade Comm'n v Credit Bureau Ctr., LLC, 81 F.4th 710 (7th Cir. 2023), cert. denied sub nom. Credit Bureau Ctr. v FTC, No. 23-853, 2024 WL 3014598 (U.S. June 17, 2024)
- Fed. Trade Comm'n v Credit Bureau Ctr., LLC, 937 F.3d 764 (7th Cir. 2019)
- Fed. Trade Comm'n v Credit Bureau Ctr., LLC, No. 17 C 194, 2021 WL 4146884 (N.D. Ill. Sept. 13, 2021), aff'd, 81 F.4th 710 (7th Cir. 2023)
- In re NorthShore Univ. HealthSystem Antitrust Litig., 657 F. Supp. 3d 1077 (N.D. Ill. 2023)
- 15 U.S.C. § 57b(a)–(b)
- 15 U.S.C. § 8403
- 15 U.S.C. § 8404(a)
- Clayton Act § 7
- FTCA § 13
- FTCA § 13(b)
- FTCA § 19
- Restore Online Shoppers' Confidence Act (ROSCA)
- ROSCA § 5
- Sherman Act
- Sherman Act § 1
- Sherman Act § 2
- Fed. R. Civ. P. 12(b)(6)
- Fed. R. Civ. P. 12(c)
- Fed. R. Civ. P. 23(b)(3)
- U.S. Const. article III
Sherman Act violations
Deslandes v McDonald's USA, LLC
In 2017, McDonald's franchise employees Deslandes and Turner filed a consolidated complaint seeking relief under section 1 of the Sherman Antitrust Act due to a hiring restriction preventing the plaintiffs from taking a better-paying position at a rival McDonald's franchise.1 In the amended complaint, Deslandes argued that the restraint was unlawful either per se or under quick-look analysis.2 The defendants filed a motion to dismiss arguing that the restraint should be analysed under the rule of reason, adding that to make a plausible claim, the plaintiff was required to include allegations of market power in the relevant market, which she failed to do.3
In ruling on the motion to dismiss, the Northern District of Illinois concluded that the plaintiffs had stated a claim that might be unlawful under quick-look analysis, but that the alleged restraint could not be illegal per se because 'it was ancillary to an output-enhancing agreement, namely the franchise agreement itself, which increased output of burgers and fries'.4 The court gave the plaintiff an opportunity to amend her complaint to add allegations that would support the finding of an unlawful restraint under the rule of reason, which she declined to do.5 The parties proceeded with discovery and the court denied the plaintiff's motion for class certification.6
In June 2022, the district court partially granted the defendant's motion for judgment on the pleadings and denied Deslandes's and Turner's motion for summary judgment due to Deslandes's failure to allege plausibility under the rule of reason.7
In this case, the Seventh Circuit Court of Appeals found that the district court's reasoning regarding the ancillary nature of McDonald's no-poach clauses is inconclusive on many fronts. First, the Court stated that the lower court's approach of treating the restraint as ancillary, because it appears in franchise agreements that expand the output of burgers and fries, treats increased output as 'justifying detriments' to monopsony pricing.8
The Court found that using the appearance of a clause, within a larger contract, that increases output, may incorrectly attribute the increase of output to that clause.9 The Court questioned whether the no-poach clause actually promotes the production of food at restaurants or if, instead, it takes advantage of the workers' sunk costs and helps the franchise, without increasing output at all.10
Finally, the Court noted the classification of a restraint as ancillary is a defence complaints need not anticipate or plead around.11 Rather, it argued, the complaint did in fact identify a plausible antitrust claim that required discovery, economic analysis and, potentially, a trial.12 For these reasons, the judgment was vacated and remanded for further proceedings.13
In Re Deere & Company Repair Service Antitrust Litigation
In October 2022, a group of agricultural crop farms and farmers filed their consolidated complaint and brought a putative multidistrict class action suit against Deere & Co, alleging antitrust violations under the Sherman Act relating to the plaintiffs' purchases of Deere tractors.14 In November 2023, the Northern District of Illinois denied Deere's motion for judgment on the pleadings, allowing the suit alleging violations of sections 1 and 2 of the Sherman Act to proceed.15
This case is about alleged anticompetitive horizontal restraints on trade and the monopolistic conduct of the Deere company. The plaintiffs allege that Deere and its authorised dealerships engaged in a concerted effort to withhold the necessary know-how and software to repair its tractors from its customers and potential competitors.16 According to the plaintiffs, 'Deere deliberately designed its Tractors so that both the diagnosis and the completion of a repair frequently requires software tools and resources ("Repair Tools") that Deere keeps under tight lock'.17 When a tractor needs maintenance or repairs, a Deere customer must go to a dealership.18 Dealerships are 'independently-owned businesses that work in close collaboration with Deere'.19 Deere, however, according to the plaintiffs' allegations, 'maintains significant and active oversight, support, and direction for the Dealerships' operation', including by providing the dealerships and their authorised technicians with the necessary repair tools to perform 'certain maintenance and repairs' of the tractors.20 The issue here, the plaintiffs argue, is that only Deere and its dealer-authorised technicians have access to the repair tools, and they allege that Deere withholds these resources from farmers and independent repair shops.21 Deere does so, the plaintiffs allege, because repair parts and services are 'far more profitable than sales of the original equipment' and that this part of Deere's business has 'been growing far faster than original equipment sales'.22 Accordingly, the plaintiffs allege that Deere restricts access to its repair tools to preserve 'supracompetitive monopoly profits'.23
The Northern District of Illinois addressed Deere's motion for judgment on the pleadings after the court 'cajoled' Deere into filing an answer and a motion for judgment on the pleadings under Rule 12(c), rather than a Rule 12(b)(6) motion, which the court attributed to a matter of 'timing'.24 In its motion, Deere argued that the plaintiffs lacked article III and antitrust standing, as well as that the plaintiffs did not state claims for their various Sherman Act section 1 and 2 claims.25 Ultimately, the court denied Deere's motion and concluded that the plaintiffs had standing and had sufficiently pleaded each of their claims.
The district court first found that the plaintiffs had sufficiently pleaded standing under article III of the United States Constitution. In attacking the 'traceability' element of article III standing, Deere argued that the plaintiffs lacked standing because they failed to allege that they 'purchased Repair Services from a Deere dealership involved in the alleged conspiracy'.26 The court found this argument unavailing, however, because, for each named plaintiff, the plaintiffs alleged three things: (1) they own a tractor and purchased Deere repair services from a dealership; (2) the co-conspirators include independently owned dealerships with agreements with Deere giving them the right to sell new Deere tractors, parts and Deere repairs services; and (3) all the dealerships are co-conspirators.27 After construing the allegations in the light most favourable to the plaintiffs and drawing all reasonable inferences in favour, the court found that the plaintiffs adequately pleaded article III standing.28
Next, Deere argued that the plaintiffs failed to plead 'antitrust standing' for three reasons: (1)the plaintiffs were not direct purchasers of repair services from Deere as needed to satisfy the direct purchaser rule under Illinois Brick; but even if they were direct purchasers, the plaintiffs (2)could not avail themselves of the 'conspiracy exception' to the rule and (3)did not join the co-conspirator dealerships as party defendants.29
As to Deere's first argument, the district court found Illinois Brick inapplicable because – rather than alleging a passing-off of price increases downstream to consumers – the plaintiffs here alleged that Deere and its dealerships created an 'ecosystem' that raised the price for repair services.30 This meant that the dealerships themselves implemented the inflated price for repair services in the first instance.31 Accordingly, the court found that a direct purchase of repair services by the plaintiffs from dealerships at inflated prices occurred here, making Illinois Brick's direct purchaser rule inapplicable.32
Second, even if the direct purchaser rule did apply, the court found that the plaintiffs' allegations fell under the 'conspiracy exception' of the rule, which does not bar a plaintiff's claim as long as it 'is a direct purchaser from at least one member of the conspiracy'.33 Because the plaintiffs alleged as much, the court found that their claims were not barred on this account, too.34 Last, Deere argued that the plaintiffs' complaint failed because they did not name and join the alleged co-conspirators – the dealerships – as party defendants. The court examined the relevant case law in the Seventh Circuit, which involved a 'fulsome analysis' of In re Brand Name Prescription Drugs Antitrust Litigation, on which Deere relied, and ultimately found that it was not controlling. After deciding it was 'writing on a clean slate', as there was no binding, controlling authority, the court determined that the dealerships did not need to be joined as defendants under the plaintiffs' allegations because the concerns of double recovery, complicated damages calculations and increased enforcement of antitrust statutes – as outlined in Illinois Brick – were inapplicable.35
Deere then argued that the plaintiffs did not plausibly allege a relevant primary market nor an alleged aftermarket to support their single-brand aftermarket claim. In that context, the plaintiffs alleged that Deere was 'indisputably the biggest player in the market for Tractors in the United States' and 'has a larger market share than that of its next two largest competitors, Case New Holland and Kubota Corp., combined'.36 The court found these allegations sufficient to plead a relevant primary market. Next, after examining the Supreme Court of the United States' seminal case involving single-brand aftermarket repair claims, Kodak, and the Seventh Circuit case law since, the court found the plaintiffs plausibly alleged both 'bait and switch' and lack-of-knowledge theories necessary to maintain their Kodak-style claim.37
The court then turned to Deere's arguments against each of the plaintiffs' seven substantive counts, with the court denying Deere's motion at each turn.38 As to counts I to III, the alleged section 1 violations, the court found that the plaintiffs' allegations of a conspiracy in restraint of trade, a group boycott and unlawful tying, were all sufficiently pleaded as per se violations.39 On counts I and II, the conspiracy and group boycott claims, the court found that the plaintiffs' allegations of vertical agreements between Deere and the dealerships supported a finding of an 'overall' or 'overarching' conspiracy from which horizontal agreements could be inferred. As to the tying claim, count III, Deere took issue with the plaintiffs' allegations that it had appreciable economic power in the tying (tractor) market. But the court found that the allegations supported that Deere did have such power in the tractor market, and that Deere had been able to tie repair services and restrict competition in that market. The court thus allowed count III to proceed too.
Last, the court quickly dispensed with Deere's arguments as to counts IV to VII, finding that the plaintiffs' Kodak-style section 2 claims could proceed because they plausibly alleged that Deere had market power in the tractor market and monopoly power in the repair services market, and that it had engaged in anticompetitive conduct by excluding competitors from being able to engage in repair services.40
At the time of writing, the parties are engaging in discovery and will soon begin briefing class certification issues in this case.
In Re Dealer Management Systems Antitrust Litigation
Resulting from alleged anticompetitive conduct that began in 2013–2015, Loop, LLC (AutoLoop), Motor Vehicle Software Corporation (MVSC) and a group of automobile dealerships (collectively, the plaintiffs) sued CDK Global, LLC (CDK) and the Reynolds and Reynolds Company (Reynolds) (collectively, the defendants) for various federal and state law antitrust violations.41 'Dozens of parties... had sued Defendants, resulting in various settlements, and consolidation of the case by the Judicial Panel of Multidistrict Litigation.'42 When the case reached the Northern District of Illinois, the surviving claims included AutoLoop's claims against CDK for 'horizontal conspiracy and exclusive dealing in violation of Sherman Act [Section] 1 [and] monopolization in violation of Sherman Act [Section] 2, and parallel Florida state law claims'.43 The dealers' surviving claims consisted of conspiracy and antitrust claims under Sherman Act sections 1 and 2 against CDK, as well as connected state law antitrust and consumer-protection claims.44 MVSC's surviving claims consisted of conspiracy claims under Sherman Act sections 1 and 2 against Reynolds, along with connected California and Illinois state law claims.45 The defendants' counterclaims were to be resolved in separate orders.46 Before the district court were defendants' motions for summary judgment on all remaining claims.47
The plaintiffs accused the defendants of anticompetitive conduct in the marketplace for 'dealership management software' (DMS) and a connected submarket for 'data integration'.48 These 'service[s] ... render... the data stored in those systems commercially functional' for car dealerships.49 AutoLoop represented a class of 'automotive software application vendors' and the dealerships represented 'a nationwide class of retail automobile dealerships'.50 CDK and Reynolds 'are automotive technology companies that offer [DMS] software [used] by car dealerships to collect, manage, and deploy data they generate'.51 The defendants also provide data integration to process DMS data (CDK's 3PA and Reynolds's RCI)52 to be used for car dealers' software applications that 'provide services like inventory management, customer relationship management, warranty services, repair orders, and electronic vehicle registration and titling'.53 Various third-party 'data integrators' operate independently of the defendants.54 However, the defendants control 70 per cent of the relevant market.55
Even before the alleged illegal conduct, the plaintiffs complained of the defendants' aggressive contracts with lengthy commitments and penalties for switching.56 RCI and 3PA also offered incentives for using their services, such as easier access to data.57 Beginning in 2013, the plaintiffs alleged that the defendants took aggressive, concerted action 'to prevent independent [data] integrators from serving dealers with [Defendants'] DMS'.58 This alleged anticompetitive conduct drove out third-party data integrators and 'help[ed] [Defendants] and suppress[ed] other competition'.59 While independent third-party data integrators were undisputed as being 'cheaper', the defendants contended that they left data and systems 'unsafe'.60 Data safety is a serious concern for the automotive industry.61
Around 2013, CDK started to restrict third-party access to its DMS.62 Reynolds had done the same starting around 2006.63 Despite the undisputed security concerns, the plaintiffs alleged these restrictions were primarily motivated by desires for more profit.64 Reynolds even 'whitelisted' (exempted) certain third-party data integrators from its security measures, allegedly due to 'business concerns'.65
The plaintiffs alleged that the defendants' concerted action began when Reynolds's DMS restrictions began to impact third-party integrators owned by CDK.66 Reynolds's restrictions resulted in a CDK campaign 'to pressure Reynolds to stop its [DMI] blocking efforts'.67 As a result, the plaintiffs presented evidence that dealerships threatened to stop working with Reynolds.68 Around August 2013, the defendants began discussing a 'business solution' to what they deemed a mutual problem.69 The defendants denied any 'conspiratorial agreement' resulting from these discussions.70 However, Reynolds began to lessen restrictions on access to its DMS for integrators connected with CDK.71 The plaintiffs also alleged that CDK informed Reynolds of its decision to restrict access to its DMS before the public announcement.72
Central to the allegations was the defendants' February 2015 agreement that included a data exchange agreement that did not allow for the defendants to share information 'about how to integrate with the other's DMS... without the other party's written consent'.73 The 'contractual restriction of access never expired'.74 The defendants also agreed not to access each other's DMS through third parties and gave each other favourable terms for access via 3PA and RCI.75 The plaintiffs also presented evidence that a Reynolds executive informed third parties that it was 'adamant about removing all third parties from the Reynolds system [and] forming agreements and alliances with all the major DMS players [like CDK]'.76 As a result of the alleged illegal agreement, the plaintiffs claimed the DMS and app market became less competitive, RCI and 3PA prices rose, and a major third-party data integrator suffered.77
The district court found that a jury could view the agreement as evidence of an illegal agreement under section 1, defeating CDK's motion for summary judgment.78 The court found there was sufficient evidence to rebut any argument that the defendants acted independently, including 'CDK implement[ing] an unwritten deal to stop competing [with Reynolds) on the issue of [DMS] openness'.79 The court also rejected CDK's remaining arguments, including that the alleged illegal agreement did not have a sufficient enforcement mechanism.80 However, since such an agreement was not a per se violation of the Sherman Act, the court ruled that a rule-of-reason analysis would be required at trial.81 Yet, the district court ruled that the automobile dealerships would only be entitled to injunctive relief, as their expert report only evinced indirect damages.82 AutoLoop, however, would be eligible for damages.83
For the remaining section 1 claims, the alleged exclusive dealing under the February 2015 agreement warranted summary judgment because there was '[no] evidence of a causal link between the exclusive dealing provisions and [third-party] foreclosure from the market'.84 To have defeated summary judgment, AutoLoop must have shown evidence that proved more than a third party being cut off from the relevant market.85 For the section 2 monopolisation claim, the district court ruled that 'AutoLoop [must] show cause why the court should not dismiss AutoLoop's monopolization claim, as proving that claim to a jury would require proving the [Section] 1 conspiracy yet would yield no additional damages'.86
For Reynolds's independent motion for summary judgment on MVSC's claims (MVSC had previously settled with CDK),87 the court ruled that summary judgment was granted for MVSC's section 1 conspiracy claim. However, summary judgment was denied as it related to 'block[ing] MVCS's access to independent data integration' for the same reasons AutoLoop and the automobile dealerships' section 1 conspiracy claim survived.88 MSVC's claim centred on access to electronic vehicle registration (EVR) and titling in specific states, which requires partnering with DMVs.89 MVSC's service was a competitor with Reynolds's EVR service; as a result, MVSC alleged that Reynolds priced it out of RCI, which would have improved its EVR service.90 The alleged conspiracy centred on Reynolds and CDK agreeing to work together to diminish MVSC's business, akin to their action to limit access to their DMS.91 However, MVSC's business remained steady and even grew in California.92 Still, the district court found that MVSC had presented enough evidence to support its group boycott theory as to its EVR programme.93 Further, while 'Reynolds was under no obligation to offer MVSC... generous prices', it still proposed terms that were 'so unreasonable that the offer amount[ed] to an effective refusal [to deal]'.94
Class action and fee award
Amory Investments, LLC v Utrecht-America Holdings, Inc
In January 2023, in Amory Investments, LLC v Utrecht-America Holdings, Inc, the Seventh Circuit heard oral argument on whether the plaintiffs in In re Broiler Chicken Antitrust Litigation(Broiler Chicken) can plausibly allege that a third-party agricultural bank was part of a price-fixing conspiracy.95 In July 2023, the Seventh Circuit affirmed the Northern District of Illinois's ruling, holding that while third parties could potentially be liable under the Sherman Act, unilateral action by a bank did not rise to the level of an agreement, and therefore did not violate the Sherman Act.96
Broiler Chicken involves a consolidated direct action and multiple class actions brought by various consumers and purchasers of broiler chickens against producers who largely control the broiler chicken market.97 The plaintiffs allege that, between 2008 and 2016, the defendants conspired to maintain high prices for broiler chickens by controlling the supply.98
Rabobank, an agricultural bank, is among the largest lenders to chicken producers.99 In 2021, several direct-action plaintiffs sued Rabobank under the Sherman Act.100 They alleged that Rabobank participated in the alleged conspiracy to limit the supply of chicken in the marketplace by passing information and communications among the chicken producers engaged in the alleged conspiracy.101
In June 2021, the district court granted Rabobank's motion to dismiss for failure to state a claim without prejudice, offering the plaintiffs the opportunity to amend their complaint to include new facts gathered in discovery.102 The court held that emails between Rabobank executives and large chicken sellers could not establish Rabobank's participation in the alleged conspiracy, reasoning that Rabobank's significant position in the chicken industry rendered the correspondences reasonable.103
Some plaintiffs chose to amend their complaints.104 In February 2022, the district court once again dismissed the claims against Rabobank, this time with prejudice.105The court explained that the amended complaints failed to contain allegations of Rabobank acting as a communications conduit.106The emails from Rabobank allegedly urging producers to cut production were one-sided, made in self-interest and did not support the claim that Rabobank conveyed information between producers.107In April 2022, the district court entered a final judgment of dismissal of the claims against Rabobank.108 Less than two weeks later, the plaintiffs filed their notice of appeal.109
On appeal, the Seventh Circuit affirmed the district court's dismissal on similar grounds.110 The court emphasised that a violation of section 1 of the Sherman Act requires evidence of an agreement, not unilateral action or advice.111 The court indicated that parties such as service providers could be prosecuted in antitrust conspiracies if they participate in an agreement among producers, but that the facts pleaded against Rabobank failed to plausibly allege such a claim.112
In re Broiler Chicken Antitrust Litigation
United States Court of Appeals, Seventh Circuit
In August 2023, the Seventh Circuit vacated and remanded the Northern District of Illinois's interim fee award, explaining that the district court's failure to consider bids made by class counsel in auctions in other cases and out-of-circuit fee awards was an abuse of discretion.113
In December 2021, a subset of the plaintiffs in Broiler Chicken entered into a US$181 million settlement agreement with a subset of the defendants.114 Class counsel for the settling plaintiffs sought an interim fee award, and one objector sought discovery regarding attorneys' fees.115 The district court declined to order discovery and awarded US$57.4 million, or approximately one-third of the settlement award, in attorneys' fees, reasoning that the high number of antitrust cases in the Seventh Circuit awarding one-third of the common fund as attorneys' fees suggested such awards were market rate.116
The Seventh Circuit found the district court's reasoning insufficient.117 The Seventh Circuit explained that circuit law required the district court to estimate what bargain would have been struck ex ante.118 In its calculations, the district court had inappropriately discounted bids class counsel had made in auctions around the time the underlying litigation began, wrongly concluding that the Seventh Circuit had rejected the consideration of bids with declining fee-scale award structures.119 The district court also abused its discretion in excluding from its consideration fee awards to class counsel in Ninth Circuit cases.120 The Seventh Circuit reasoned that class counsel's continued decision to litigate in the Ninth Circuit informed counsel's position in a hypothetical ex ante bargain.121 Last, the court remanded the discovery request because the district court had not provided any rationale for its decision to decline a discovery order.122
United States District Court, Northern District of Illinois
In June 2023, the district court in Broiler Chicken denied in part and granted in part the defendants' collective motions for summary judgment.123 The plaintiffs alleged that the defendants had intentionally implemented decreases in broiler production in a conspiracy to increase prices, while the defendants claimed the decreases were due to market conditions.124 The defendants primarily consisted of broiler producers, but also included Agri Stats, a company that surveyed and reported on broiler producers and industry statistics.125
In its decision, the court considered economic evidence such as expert regression analyses and parallel non-competitive conduct.126 The court found the economic evidence in favour of a conspiracy relatively strong but emphasised that, in the Seventh Circuit, a Sherman Act violation generally requires non-economic evidence of an express agreement to be evaluated in conjunction with economic evidence.127
As non-economic evidence, the court considered statements and communications by and between the defendant-producers.128 The court then determined whether the available non-economic evidence against individual defendants, together with the economic evidence, was sufficient for a reasonable jury to find in favour of the plaintiffs.129 The court concluded that there was sufficient evidence against 11 defendants and insufficient evidence against seven defendants; the court denied and granted the defendants' motions for summary judgment accordingly.130
Having individually addressed the defendant-producers, the court then weighed the allegations against Agri Stats.131 The plaintiffs argued that the defendants had used reports by Agri Stats to facilitate their conspiracy.132 The court granted summary judgment for Agri Stats, reasoning that the defendants' use of reports by Agri Stats did not indicate that Agri Stats had actively participated in the conspiracy.133 The court further emphasised that because Agri Stats was not a broiler producer that profited from decreases in broiler production, the available economic evidence was irrelevant, and as such, stronger non-economic evidence than what was sufficient against defendant-producers was required to deny Agri Stats' motion for summary judgment.134
Consumer protection and FTC actions
Federal Trade Commission v Credit Bureau Center, LLC
After a journey to the US Supreme Court, this Seventh Circuit case centred on defendant Michael Brown's role in the business Credit Bureau Center, which employed a 'negative option feature'.135 A 'negative option feature' is a tool employed by websites to lure customers into paid subscriptions if they do not affirmatively opt out of the subscription.136 A negative option feature is a violation of US law.137 Brown's website purported to offer 'free credit scores', yet used a negative option feature to enrol unsuspecting customers into a US$29.94 monthly subscription fee.138 Brown's website drew the attention of the Federal Trade Commission (FTC), resulting in this action.139
At the district court, Brown was ordered 'to pay more than $5 million in restitution' and was enjoined from continuing his illegal activity.140 When the matter first reached the Seventh Circuit, the Circuit overturned the restitution award, creating a Circuit split over the permissibility of restitution awards under the Federal Trade Commission Act (FTCA) section 13(b) and overruling FTC v Amy Travel Service.141 After agreeing with the Seventh Circuit's interpretation in FTC v AMG Capital Management, LLC, the US Supreme Court turned this case back to the Seventh Circuit.142 When the Seventh Circuit returned the case to the district court, the US$5 million restitution award was reinstated, this time under the Restore Online Shoppers' Confidence Act (ROSCA) and FTCA section 19.143
This time, the Seventh Circuit fully agreed with the district court and kept the restitution award in place.144 Instead of ordering restitution under FTCA section 13, the award was issued under FTCA section 19, due to a previous finding that Brown violated ROSCA section 5.145 Unlike FTCA section 13, section 19 allows the court to 'grant such relief as the court finds necessary to redress injury to consumers', such as 'the refund of money' and 'the payment of damages'.146 Brown objected 'that the amended judgment violate[d] the mandate rule and... the law of the case'.147 However, the Seventh Circuit countered that it did not previously restrict the award of any monetary relief, but only that monetary relief could not be ordered under FTCA section 13.148 Further, the Seventh Circuit rejected Brown's argument that there was not a change in the law since its prior ruling.149 Nor did it find merit in Brown's arguments that the FTC waived reliance on FTCA section 19 or that the restitution award 'must be limited to net profits that can be traced to the underlying fraud'.150
Ultimately, the one modification to the amended judgment ordered by the Seventh Circuit was not argued by Brown, but previously acknowledged by the FTC at oral argument: the amended judgment's language requiring 'excess money' from restitution to be 'deposited to the U.S. Treasury as disgorgement' swept beyond FTCA section 19.151
In re NorthShore University HealthSystem Antitrust Litigation
This case is about the alleged illegal monopolisation and artificially inflated prices resulting from the merger of two healthcare companies. The procedural background includes five sets of class-certification briefings that resulted in the plaintiffs finding a new class representative and the court putting the other Rule 23(b)(3) issues on hold.152 Here, the court considered the other Rule 23(b)(3) decertification arguments presented by NorthShore and the parties' renewed cross-motions for summary judgment.153
In early 2000, Evanston Northwestern Healthcare Corporation, known as NorthShore, merged with Highland Park Hospital.154 Prior to the merger, NorthShore owned two hospitals and, since then, NorthShore has operated the three hospitals as one entity.155 Additionally, before the merger, NorthShore hired a consulting firm to evaluate its payor contracts, resulting in the recommendation that NorthShore's contracted rates should be adjusted to make them more profitable, as they were underpriced.156 Consequently, the FTC filed an administrative complaint against NorthShore, alleging the merger lessened competition and allowed NorthShore to raise prices.157
After an FTC judge deemed the price increases to be in violation of section 7 of the Clayton Act, the FTC on appeal issued a final order ordering NorthShore to allow payors and managed care organisations (MCOs) with pre-existing contracts to renegotiate such contracts, which NorthShore complied with.158 After the FTC issued its final order, the plaintiffs filed this case as a proposed class action on behalf of all end payors who purchased healthcare services directly from NorthShore.159
NorthShore argued that the plaintiffs had not satisfied Rule 23(b)(3)'s predominance and superiority requirements.160 For summary judgment, Northshore stated that the plaintiffs had not defined the relevant market and argued that they are barred from pursuing damages arising after the 2008 FTC-imposed remedy.161
First, the court examined the predominance and superiority arguments. The court held that, contrary to NorthShore's position, the plaintiffs' expert who performed the difference-in-difference analysis was both qualified and reliable and, therefore, his conclusions did not undermine the predominance argument.162 It found that the predominance requirement was satisfied because the class is 'at the very least' capable of proving antitrust impact through the reliable data introduced by the expert. Further, the court stated that NorthShore's argument as to why the plaintiffs cannot establish superiority relies on their failed predominance argument.163
Second, the court examined NorthShore's summary judgment motion. The court noted that it is the plaintiffs who bear the burden of showing both monopoly power and the relevant market to prevail on their claims – which the court deemed were satisfied.164 The court found that, at this stage, the plaintiffs are not required to establish the relevant market but rather show that a 'genuine dispute' over the relevant market exists, which was done through their expert testimony.165 Additionally, because the letters the FTC mandated NorthShore to send after its 2008 final order did not suggest that any MCO would be waiving their right to damages, NorthShore's motion for summary judgment was denied.166
The court held that because a genuine dispute over relevant market power exists, the plaintiffs were not entitled to summary judgment on the issue of liability.167 However, the court entered summary judgment for the plaintiffs regarding NorthShore's quality of care defence, finding that NorthShore had not offered adequate evidence from which a reasonable jury could conclude that NorthShore's improvements in quality were caused by, and the result of, the merger.168
Footnotes
1. Deslandes v McDonald's USA, LLC, No. 17 C 4857,2022 WL 2316187, at *1 (N.D. Ill. June 28, 2022), vacated and remanded,81 F.4th 699 (7th Cir. 2023), cert. denied, 144 S. Ct. 1057 (2024).
2. ibid.
3. ibid.
4. ibid.
5. id.at *2.
6. ibid.
7. id.at *7.
8. Deslandes, 81 F.4that 703.
9. id.at 704.
10. ibid.
11. id.at 705.
12. ibid.
13. ibid.
14. In re Deere & Co. Repair Serv. Antitrust Litig.,Consolidated Complaint, No. 3:22-cv-50188 (N.D. Ill. Oct. 24, 2022) (ECF No. 85).
15. In re Deere & Co. Repair Serv. Antitrust Litig., No. 3:22-cv-50188, 2023 WL 8190256, at *34 (N.D. Ill. Nov. 27, 2023).
16. id.at *2.
17. ibid.
18. ibid.
19. ibid.
20. ibid.
21. ibid.
22. ibid.
23. ibid.
24. id.at *3.
25. id. at *4.
26. ibid.
27. id.at *5.
28. ibid.
29. id.at *8–10.
30. ibid.
31. ibid.
32. ibid.
33. ibid.
34. ibid.
35. id.at *15.
36. id.at *17.
37. id.at *19–20.
38. id.at *24–25.
39. ibid.
40. id.at *33–34.
41. In re Dealer Mgmt. Sys.Antitrust Litig., 680 F. Supp. 3d 919, 932–34 (N.D. Ill. 2023).
42. id. at 935.
43. ibid.
44. ibid.
45. ibid.
46. id. at 935, n.7.
47. id. at 936.
48. id. at 932.
49. ibid.
50. ibid.
51. id. at 933.
52. id. at 942.
53. ibid.
54. ibid.
55. id. at 941.
56. id. at 942.
57. id. at 943.
58. ibid.
59. ibid.
60. id. at 943, 966.
61. id. at 944–45.
62. id. at 946–47.
63. id. at 947.
64. id. at 946–47.
65. id. at 947–48.
66. id. at 948.
67. ibid.
68. ibid.
69. id. at 949 (internal quotation marks omitted).
70. ibid.
71. id. at 950.
72. id. at 952.
73. id. at 954.
74. ibid.
75. ibid.
76. id. at 956.
77. id. at 957–61.
78. id. at 962–63.
79. id. at 965.
80. id. at 969.
81. id. at 969–72.
82. id. at 973–74.
83. id. at 974–78.
84. id. at 980.
85. ibid.
86. id. at 981.
87. id. at 992.
88. id. at 992, 999.
89. ibid.
90. id. at 994–95.
91. id. at 995–96.
92. id. at 997–98.
93. id. at 1005.
94. id. at 1006.
95. Amory Invs. LLC v Utrecht-America Holdings, 74 F.4th 525, 526 (7th Cir. 2023). The panel consisted of US Circuit judges Frank Easterbrook, Amy St Eve and Thomas Kirsch.
96. ibid.
97. See, eg, In re Broiler Chicken Antitrust Litig., No. 16-cv-08637 (N.D. Ill. May 27, 2022) (ECF No.5644).
98. ibid.
99. The case documents use 'Rabobank' as the designated name for several related entities, including Utrecht-America Holdings, Inc, Rabo AgriFinance LLC, Rabobank USA Financial Corporation and Utrecht-America Finance Co. See, eg, In re Broiler Chicken Antitrust Litig., No. 16-cv-08637, 2021 WL 2207142, at *1 n.2 (N.D. Ill. June 1, 2021).
100. In re Broiler Chicken Antitrust Litig., No. 16-cv-08637, 2021 WL 2207142, at *1 (N.D. Ill. June 1, 2021).
101. ibid.
102. id.at *3.
103. id. at *1.
104. In re Broiler Chicken Antitrust Litig., No. 1:16-cv-08637 (N.D. Ill. June 30, 2021) (ECF Nos.4799, 4801, 4803, 4805, 4807, 4809).
105. In re Broiler Chicken Antitrust Litig., No. 16-cv-8637, 2022 WL 1262084 (N.D. Ill. Feb. 11, 2022).
106. id.at *2.
107. id.at *1.
108. In re Broiler Chicken Antitrust Litig., No. 1:16-cv-08637 (N.D. Ill. Apr. 29, 2022) (ECF No.5568). Final judgment was subsequently entered atIn re Broiler Chicken Antitrust Litigation, No. 1:16-cv-08637 (N.D. Ill. May 5, 2022) (ECF No.5583).
109. In re Broiler Chicken Antitrust Litig., No. 16-cv-08637 (N.D. Ill. June 25, 2020) (ECF No.5627);Amory Invs. LLC v Utrecht-America Holdings, Inc., No. 22-1858 (7th Cir. May 16, 2022) (ECF No.1).
110. Amory Invs., 74 F.4th at 526.
111. ibid.
112. ibid.
113. In re Broiler Chicken Antitrust Litig., 80 F.4th 797, 800 (7th Cir. 2023).
114. In re Broiler Chicken Antitrust Litig., No. 16-cv-08637, 2022 WL 6124787, at *1 (N.D. Ill. Oct. 7, 2022).
115. ibid.
116. id.at *4–5.
117. Broiler Chicken, 80 F.4th at 800.
118. id. at 802.
119. id. at 803.
120. id.at 804.
121. ibid.
122. ibid.
123. In re Broiler Chicken Antitrust Litig., No. 16-cv-08637, 2023 WL 7220170, at *1 (N.D. Ill. Nov. 2, 2023).
124. id. at *2.
125. id. at *2–3.
126. id. at *3–10.
127. id. at *10–11.
128. id. at *11.
129. id. at *11–25.
130. id. at *36.
131. id. at *25–28.
132. id. at *25.
133. id.at *26.
134. id. at *27.
135. Fed. Trade Comm'n v Credit Bureau Ctr., LLC, 81 F.4th 710, 713 (7th Cir. 2023), cert. denied sub nom. Credit Bureau Ctr. v FTC, No. 23-853, 2024 WL 3014598 (U.S. June 17, 2024).
136. id. at 715.
137. 15 U.S.C. § 8403; Credit Bureau Ctr., 81 F.4th at 715.
138. Credit Bureau Ctr., 81 F.4th at 713.
139. ibid.
140. See, eg, Fed. Trade Comm'n v Credit Bureau Ctr., LLC, 325 F. Supp. 3d 852 (N.D. Ill. 2018), aff'd in part, vacated in part, 937 F.3d 764 (7th Cir. 2019), and amended, No. 17 C 194, 2021 WL 4146884 (N.D. Ill. Sept. 13, 2021).
141. See, eg, Fed. Trade Comm'n v Credit Bureau Ctr., LLC, 937 F.3d 764 (7th Cir. 2019); Credit Bureau Ctr., 81 F.4th at 713.
142. Credit Bureau Ctr., 81 F.4that 714.
143. See, eg,Fed. Trade Comm'n v. Credit Bureau Ctr., LLC, No. 17 C 194, 2021 WL 4146884 (N.D. Ill. Sept. 13, 2021), aff'd, 81 F.4th 710 (7th Cir. 2023).
144. Credit Bureau Ctr., 81 F.4th at 719.
145. id. at 716.
146. 15 U.S.C. §§ 57b(a)–(b), 8404(a); Credit Bureau Ctr., 81 F.4th at 716.
147. Credit Bureau Ctr., 81 F.4th at 716.
148. ibid.
149. id. at 716–17.
150. id. at 717–18.
151. id. at 719.
152. In re NorthShore Univ. HealthSystem Antitrust Litig.,657 F. Supp. 3d 1077, 1082 (N.D. Ill. 2023).
153. ibid.
154. ibid.
155. ibid.
156. id. at 1083.
157. ibid.
158. ibid.
159. ibid.
160. id.at 1084.
161. id.at 1084.
162. id. at 1086.
163. id. at 1092.
164. id. at 1093.
165. id. at 1094.
166. id. at 1099.
167. id. at 1098.
168. id.at 1122.
Originally published by Global Competition Review
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