The U.S. Court of Appeals for the Ninth Circuit has revived plaintiffs’ state antitrust claims in In re: Western States Wholesale Natural Gas Litigation, finding that federal regulation of the interstate natural gas market does not preempt state antitrust law claims that energy companies manipulated intrastate transactions.

The Ninth Circuit ruled that Congress intended its amendments to the Natural Gas Act to provide states with the flexibility to regulate the industry – not to preempt such efforts.  Under the law, the federal government can regulate only transportation of natural gas between states, interstate natural gas wholesales, and the energy companies involved in interstate transport or wholesales.

The case arose out of claims that the defendants violated antitrust laws by manipulating the natural gas market and selling natural gas at artificially high prices, leading to the energy crisis of 2000-2002.  These claims were based on admissions by energy companies that their employees reported false data to price index publications.  Buyers and sellers rely on these price indices to set the actual market price for natural gas.  The energy traders also allegedly engaged in “wash sales,” which are prearranged trades involving a sale and a purchase for equal volumes.  Plaintiffs claim the price manipulation limited competition and violated antitrust laws.

Defendants sought to dismiss state antitrust law claims by arguing that such state law claims were preempted by the Natural Gas Act, which gives the Federal Energy Regulatory Commission (“FERC”) the power to set wholesale prices.  The U.S. District Court for the District of Nevada agreed and dismissed the claims.

The Ninth Circuit’s opinion rejected the district court’s analysis of the Natural Gas Act by distinguishing between prices under FERC’s jurisdiction and ones outside its jurisdiction.

The price index publications compile prices across the natural gas industry and include not only prices for interstate transactions – which are regulated by the federal government – but also transactions that occur in a single state.  The court held that the NGA does not preempt plaintiffs’ state antitrust claims because they arise out of price manipulation associated with intrastate transactions falling outside of the FERC’s jurisdiction.

Boycotts, spying and defamation are the Chicago way of snuffing out competition in the prom dress market, according to an antitrust lawsuit filed against Peaches Boutique in the U.S. District Court for the Northern District of Illinois.

Hannah’s Boutique Inc., a prom dress seller in the Chicago market alleges in Hannah’s Boutique Inc. v. Barbara Ann Surdej et al. that established prom dress retailer Peaches Boutique and its principals used hardball tactics in blocking competition from newcomer Hannah’s in violation of the Sherman Act and various Illinois state laws.  According to Hannah’s complaint, Peaches’ suppression of competition has inflated prom dress prices and reduced consumer options.

Hannah’s alleges that during the last 25 years, defendant Peaches Boutique has established “a reputation as one of the most fashionable and customer service oriented” prom dress retailers in Chicago.  Allegedly, Peaches has been able to dominate the market by stocking over 20,000 dresses in every size and color.

According to Hannah’s, Peaches engaged in illicit anticompetitive conduct at formal wear expos, where retailers gather each year to place dress orders for the upcoming season.  Peaches allegedly met with designers at the 2011 and 2012 expos and threatened to no longer carry the designers’ dresses if they continued to do business with Hannah’s.  Hannah’s alleges that the combination of Peaches’ threats and its dominance in the Chicago market forced designers to stop filling Hannah’s dress orders and remove Hannah’s as a vendor on their websites.

Peaches’ owners allegedly slandered Hannah’s (which is owned by a Muslim), asking the designers’ sales representatives, “How can you sell to those Muslims; they barbecue goats.”  Peaches also allegedly falsely accused Hannah’s of selling knockoff dresses and selling below the designers’ discount prices.

Hannah’s alleges that Peaches then sent employees into Hannah’s to take photos and videos of its stock and invoices.  Peaches allegedly used the spying to ensure that designers were following through with a boycott of Hannah’s.

According to Hannah’s, Peaches has also engaged in predatory and anticompetitive behavior against other competitors.  The complaint names five other formal wear boutiques that were allegedly forced out of the Chicago market since 2004.

“Peaches’ espionage and monitoring, orchestration of conspiracies and concerted refusals to deal, and elimination of horizontal competition has no pro-competitive benefits and no legitimate business justification,” the complaint alleges.

Antitrust claims against the main supplier of nutritional additives for infant formula in the United States have been thrown out because the plaintiff’s claims were too speculative to establish standing, a federal judge in Maryland has ruled.

Judge William D. Quarles of the U.S. District Court for the District of Maryland granted defendant Martek Biosciences Corp. summary judgment in BNLfood Investment SARL v. Martek Biosciences Corp., finding that plaintiff BNLfood had failed to show an antitrust injury from Martek’s service agreements and alleged monopoly.

BNLfood alleged that in 2002, Martek began providing infant formula manufacturers – the Mead Johnson Company, Nestle Ltd., Abbott Laboratories, and PBM Products LLC – with nutritional supplements for brain and eye development, known as ARA and DHA.  Martek’s customers controlled over 90 percent of the baby formula market.

According to BNLfood’s complaint, three of the formula makers agreed to sole source agreements, in which they agreed to buy the nutrition supplements from only Martek.  Nestle did not sign a contract, but informally agreed to use only Martek for its ARA and DHA needs.

BNLfood, a Belgian company that extracts ARA and DHA from foods, began expanding to serve larger markets like the United States in 2009.  BNLfood claims that it was turned away by all four of the major U.S. formula companies because the Martek sole source agreements reached into 2016.

BNLfood also argued Martek employees investigated BNLfood by visiting BNL’s new facilities and collecting company information at trade shows.  The complaint included emails between Martek executives discussing how big of a threat BNL posed as a competitor.

The court was unconvinced by BNLfood’s arguments.  Judge Quarles found that BNLfood was only speculating that the sole source agreements were the reason BNLfood’s expansion failed in the U.S.

 “This evidence does not suggest that Martek was specifically targeting BNLfood or trying to exclude it from the U.S. market.  Instead it was trying to determine whether BNLfood was actually a competitive threat,” Judge Quarles wrote.

An Illinois federal judge has dismissed a class action alleging that Live Nation Entertainment Inc. illegally tied mandatory parking fees to concert tickets, finding that neither the $9 fee nor Live Nation’s economic power were significant enough to warrant action under antitrust and consumer protection laws.

Judge Gary Feinerman of the U.S. District Court for the Northern District of Illinois threw out plaintiff’s claims in Batson v. Live Nation Entertainment Inc. et al., after ruling that Live Nation’s $9 parking fee – which is imposed on each concert-goer regardless of whether he or she drives to the concert – does not violate either antitrust laws or the Illinois Consumer Fraud and Deceptive Business Practices Act (the “ICFA”).

Plaintiff James Batson attended a concert by the musical group O.A.R. in July 2010.  Batson’s ticket, which he purchased directly from the Live Nation box office at Chicago’s Charter One Pavilion, stated “$9 PRK PAID”.

Although Batson walked to the concert, the parking fee was included in the price of his ticket.  He was not informed of the fee at the time of purchase, and there was no way for him to transfer the $9 amount to another service or a voucher certificate to park at the venue during a future event.

The original complaint argued Live Nation’s monopoly in the entertainment promotion and ticket sales market allowed it to illegally tie products and charge unnecessary fees in violation of federal antitrust law and the California unfair competition statute.  

After defendants filed their motion to dismiss, Batson amended his complaint to drop the antitrust and California law claims, and to allege that Live Nation’s parking fee violates various public policies (including public policies against tying arrangements and drunk driving), and thus should be considered unfair under the ICFA.

The court held that Batson had failed to show any violation of public policy, and thus could not establish any violation of the ICFA by Live Nation.

Judge Feinerman found Live Nation’s parking fee cannot violate public policy against tying because Live Nation does not have a significant share of the parking market, and the fee does not restrict competition in the parking market.

The court also found that the fee did not violate public policies favoring clean transportation and against drunk driving.  Judge Feinerman did not find it plausible that the $9 fee would cause concert-goers to drink and drive rather than walk to the concert.  “That certainly is not what Batson did; he walked to the concert, bought his ticket, and then did not go back home, pick up his car, and claim his rightful parking space.”