Seventh Circuit Sheds Light on Foreign Reach of Federal Antitrust Laws

Dugan_Brady-WEB135AlfanoFeatured Expert Contributor – Antitrust & Competition, U.S. Department of Justice

Sitting in for Featured Expert Contributor Mark J. Botti on this post are Squire Patton Boggs partner J. Brady Dugan and associate Peter C. Alfano, both in the firm’s DC office.

Whether U.S. antitrust laws reach wholly foreign conduct is a question that has been addressed by all levels of the federal court system over the past decade, including by the U.S. Supreme Court.1 Nevertheless, it is a question as to which many companies, in the U.S. and abroad, may feel there is not a clear answer. Consider, for example, a corporation that purchases a product in the U.S. that was finished or assembled overseas. If the finished product includes a component that the assembler purchased at a price that had been inflated by an overseas price-fixing conspiracy among the component manufactures, can the U.S. purchaser of the finished product sue the component seller in U.S. court for treble damages? Can the overseas assembler recover damages from the overseas component manufacturer in the U.S.? Or to put it another way, can a foreign corporation that manufactured and sold a product overseas, to an overseas assembler, be sued for price-fixing in the U.S. by a U.S. customer of the foreign assembler? It will come as no surprise that the answers to these questions are very fact-specific. But recently, a panel of the U.S. Court of Appeals for the Seventh Circuit issued a decision that helps clarify the law. Continue reading

WLF Developments You May Have Missed During the Holidays

new yearHere’s some things you may have missed from Washington Legal Foundation during the December 2014 holidays season.

WLF Amicus Briefs:

  • King v. Burwell (On December 29, 2014, WLF asked the U.S. Supreme Court to reverse an appeals court ruling that, if upheld, would allow IRS to appropriate billions of dollars a year without authorization from Congress.)
  • In re: Deepwater Horizon (On December 24, 2014, WLF filed a brief in the U.S. Court of Appeals for the Fifth Circuit, urging it to remove the court-appointed Claims Administrator who evaluates all claims filed by those seeking to recover economic losses suffered as a result of the 2010 Gulf of Mexico oil spill. )

WLF Publications

WLF Legal Pulse Posts

Struggle over Federal Environmental Law Preemption of Public Nuisance Suits Heats Up in Kentucky

faulkFeatured Expert Column − Complex Serial and Mass Tort Litigation

by Richard O. Faulk, Hollingsworth LLP*

It’s been a long wait for those who believe the federal Clean Air Act preempts public nuisance claims under state common law.

When the Supreme Court reversed and remanded Connecticut v. American Electric Power in 2011, it refused to rule on the preemption issue—leaving the question for the U.S. Court of Appeals for the Second Circuit to resolve on remand.1 Before that could happen, however, the plaintiffs withdrew their complaints—and the opportunity vanished.2

When a federal district court granted dismissal of a public nuisance claim in Bell v. Cheswick Generating Station, the opportunity rose again. Hopes were high that the Third Circuit would affirm the dismissal, but alas, the court reversed. Nevertheless, the case rose to the Supreme Court on a petition for certiorari. Numerous amicus curiae briefs were submitted to support the petition, but the Supreme Court denied review. Many were left wondering whether the Supreme Court’s remand of the issue in AEP truly reflected the Court’s interest in the issue—or whether it was simply a matter of appellate housekeeping. Continue reading

A Key Ruling for Food Labeling Class Action Defendants Issued on “Reasonable Consumer” Standard

Smith_JamesGuest Commentary

by James D. Smith, Bryan Cave LLP

In what seems likely to become a defining case on appeal, Northern District of California Judge Lucy Koh granted summary judgment this week in a long-running food labeling class action. The plaintiff in Brazil v. Dole Packaged Foods, LLC, No. 12-CV-01831-LHK (N.D. Cal.), alleges that 10 Dole products are misbranded because their labels say the products contain “All Natural Fruit.” Mr. Brazil contends this is false because the products contain ascorbic acid (commonly known as Vitamin C) and citric acid (found in citrus). Both of those ingredients, of course, are naturally occurring compounds; many food manufacturers add them because of their natural preservative effects. The 10 products include diced apples, pears, oranges, and grapefruit packed in juice. For the past two years, Mr. Brazil and his counsel have pressed this litigation, alleging that the product labels somehow deceived him because neither he nor any other reasonable consumer would believe that fruit packed in juice contains Vitamin C or citric acid.

The procedural history is long, but readers interested in food labeling class actions in the Northern District of California may want to review Judge Koh’s earlier substantive rulings. By the time she granted summary judgment on December 8, Judge Koh had narrowed the case to a single injunction class. As an aside, Judge Koh’s November 6, 2014, order decertifying the damages class nicely shows why a hedonic damages regression analysis—which many food labeling class action plaintiffs try to rely on to show class-wide damages—isn’t feasible in these types of cases. This most recent ruling in Brazil is noteworthy because it explains that a named plaintiff’s subjective interpretation of a label isn’t sufficient to meet the burden of proving that the label is likely to mislead consumers under California’s Unfair Competition Law (“UCL”).

Granting summary judgment, Judge Koh concluded “there is insufficient evidence that the ‘All Natural Fruit’ label statement on the challenged Dole products was likely to mislead reasonable consumers and that the label statements were therefore unlawful on that basis.” That plaintiff did not attempt to use consumer surveys to establish that the labeling statements could mislead a significant portion of the public or of targeted consumers. Instead, he relied on informal FDA statements that “natural” means nothing artificial or synthetic “has been included in, or has been added to, a food that would not normally be expected to be in the food.” (Emphasis added.) As we’ll see, that plaintiff’s failure to establish that consumers would not normally expect ascorbic acid or citric acid to be in the food doomed his claims. Continue reading

WLF Web Seminar to Assess Whether Third Time is the Charm at SCOTUS on “Injury-in-Law” Standing

PodiumPic1Tomorrow at 10:00 a.m. EDT, Washington Legal Foundation is hosting its final Web Seminar program of 2014. The program will address a critically important case currently awaiting cert consideration by the U.S. Supreme Court, and the larger issues the case implicates.

No-Injury Class Actions: The Rise of Statutorily-Created Harm and the Need for High Court Intervention will be an hour-long live event featuring two appellate experts as our panelists: Andy Pincus of Mayer Brown LLP and Meir Feder of Jones Day. If you are interested in viewing the program live online, you can register for free HERE. If you cannot view it live but would like to watch the video from our online archive, please email WLF Legal Studies Division Chief Counsel Glenn Lammi at glammi@wlf.org.

The petition pending before the Supreme Court that offers the context for our discussion arises from a U.S. Court of Appeals for the Ninth Circuit ruling, Spokeo v. Robins. The case squarely presents the issue of whether private plaintiffs suing under a federal statute that defines certain action or inaction as an “injury” (injury-at-law) must also demonstrate that they have “case or controversy” standing under Article III of the U.S. Constitution (injury-in-fact). The question has been decided differently in a number of federal circuits, and the Supreme Court has twice passed on opportunities to resolve the split. In 2012, after hearing oral arguments, the Court dismissed as improvidently granted another case from the Ninth Circuit, First American Financial v. Edwards. Earlier this year during its October 2013 term, the Court denied review to an Eighth Circuit decision, First National Bank of Wahoo v. Charvat.

The Court has requested that the Solicitor General of the U.S. provide the justices with the federal government’s view of the case and issues. The Solicitor General’s brief has not yet been filed.

Ninth Circuit Thwarts Plaintiffs’ Efforts to Evade Removal Under CAFA

Cruz-Alvarez_FFeatured Expert Contributor – Civil Justice/Class Actions

Frank Cruz-Alvarez, Shook, Hardy & Bacon, L.L.P. with Rachel A. Canfield,  Shook, Hardy & Bacon, L.L.P.

Addressing a question of first impression, the U.S. Court of Appeals for the Ninth Circuit Court of Appeals, sitting en banc, weighed into an issue that has split the circuit courts involving the invocation of federal mass-action jurisdiction. Corber v. Xanodyne Pharmaceuticals, Inc.¸ Nos.13-56306 & 13-56310, — F.3d —-, 2014 WL 6436154 (9th Cir. Nov. 18, 2014). This is just one in a series of recent federal decisions limiting plaintiffs’ efforts to avoid federal class or mass action jurisdiction.

To prevent class-action abuse, the Class Action Fairness Act of 2005 (“CAFA”) expands federal jurisdiction over certain class or mass actions that fall within its purview. Corber, 2014 WL 6436154, at *11. In pertinent part, CAFA defines mass actions as any civil action in which “monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiff’s claims involve common questions of law or fact.” 28 U.S.C. § 1332(d)(11)(B)(i).

Treated as companion cases, Romo v. Teva Pharmaceuticals USA, Inc., and Corber v. Xanodyne Pharmaceuticals, Inc., were two of twenty-six cases pending before the district court, and more than forty actions filed in California state courts, alleging injuries due to the ingestion of an ingredient found in certain pain relief drugs. Corber, 2014 WL 6436154, at *7. A number of the actions were brought by one group of plaintiffs’ attorneys who sought to obtain coordination of the actions pursuant to section 404 of the California Code of Civil Procedure, which permits coordination of civil actions containing a common question of fact or law if one judge hearing all of the actions for all purposes will promote the ends of justice. Id. at *8-9. In an attempt to obtain coordination in state court and evade federal jurisdiction, these plaintiffs’ attorneys superficially segmented the cases to involve fewer than 100 plaintiffs and crafted the petitions for coordination absent an express proposal that the actions be jointly tried. Continue reading

Update: Senate Judiciary Committee Chairman Urges Payment Processors to Deter Online Copyright Piracy

copyrightwarningIn our October 2, 2014 post, Profit, Not Ideology, Motivates Cyberlockers that Facilitate Copyright Infringement, we noted that a Digital Citizens Alliance study found that 29 out of the 30 cyberlockers it reviewed accepted payment using a MasterCard or Visa credit card. We urged those payment processors to follow the example of PayPal, which has worked aggressively to deny such piracy-facilitating sites the use of its service.

Today, the current Chairman of the Senate Judiciary Committee, Senator Patrick Leahy, added his influential voice to those pressing for further MasterCard and Visa action. He sent letters to the CEOs of those businesses asking them to swiftly review the complaints against those cyberlockers and to ensure that payment processing services offered to those sites, or any others dedicated to infringing activity, cease.”

Senator Leahy also made the important point that not only do the payment processors “unwittingly contribute” to cyberlockers’ profitability, they also “lend[ ] the sites a harmful imprimatur of legitimacy” by allowing their logos to appear on the sites. He continued, “A consumer wondering whether a site is offering lawful access to copyrighted content may easily trust the cyberlocker’s legitimacy if world-respected payment processors service the site.”