The United States Court of Appeals for the Second Circuit has affirmed the dismissal of J.P. Morgan Chase & Co. and two of its subsidiaries, J.P. Morgan Chase Bank, Inc. and J.P. Morgan Futures, Inc., from In re: Amaranth Natural Gas Commodities Litigation, a suit brought by natural gas futures contracts purchasers that alleged J.P. Morgan aided and abetted the massive price manipulation scheme that led to the 2006 collapse of a multi-billion dollar hedge fund, Amaranth Advisors, LLC.

In the fall of 2006, Amaranth, a hedge fund that had heavily invested in natural gas futures, collapsed after losing more than $6 billion in just a few days.  A Senate investigation eventually found that Amaranth had taken positions in natural gas futures and swaps so massive that its trading directly affected domestic natural gas prices and price volatility.

Traders in natural gas futures contracts brought a price manipulation suit against Amaranth and parties that allegedly aided Amaranth, claiming that Amaranth violated the Commodities Exchange Act by exploiting its influence in order to increase prices on natural gas.  Plaintiffs have already settled with Amaranth for $77.1 million.

Plaintiffs’ claims that J.P. Morgan aided and abetted Amaranth’s price manipulation scheme through its services as Amaranth’s futures commission merchant and clearing broker, however, did not survive motions to dismiss for failure to state a claim.

The Second Circuit affirmed the district court’s decision that plaintiffs failed to state a claim that J.P. Morgan aided and abetted Amaranth’s scheme to manipulate the prices of natural gas futures contracts.  The Second Circuit held that due to the scienter requirement of a commodities manipulation claim, there can be “no manipulation without intent to cause artificial prices.”  The plaintiffs failed to allege that J.P. Morgan knew that Amaranth specifically intended to manipulate the price of natural gas futures, and that J.P. Morgan intended to help.

The appellate court also relied on the principle that a broker cannot be held liable for aiding and abetting when it merely performs the services that it contracted to provide.  The court stated that J.P. Morgan’s “seemingly minimal involvement” distinguished this case from authorities holding that a broker can be held liable when it plays “a dominant and knowing role” in its client’s market manipulation.

The U.S. Court of Appeals for the Tenth Circuit has rejected Novell, Inc.’s bid to resurrect its antitrust claims accusing Microsoft Corporation of maintaining its monopoly in the operating systems market by withdrawing its support for WordPerfect and other Novell applications.

The Court affirmed the decision of the U.S. District Court for the District of Utah in Novell v. Microsoft Corp. granting Microsoft judgment as a matter of law on Novell’s antitrust claims after a hung jury failed to return a verdict at trial.

In November 2004, Novell filed its antitrust complaint alleging that in the 1990s Microsoft engaged in anticompetitive conduct that caused WordPerfect—a dominant word processor in the 1980s and early 1990s—to lose market share to Microsoft Word.  Novell claimed that Microsoft’s conduct in the 1990s damaged its business and forced the company to sell WordPerfect and other software programs to Corel Corp. at a loss of more than $1 billion.

Novell’s claim that Microsoft sought or maintained a monopoly in a market for applications generally, or office suite applications more particularly, was dismissed on the ground that the statute of limitations for conduct back in the 1990s had long since run.

Novell sought to keep its antitrust claims alive by alleging that Microsoft had maintained its monopoly in the operating systems market by withdrawing its support for WordPerfect and other Novell applications—which support had made it easy for consumers to use those applications on Microsoft operating systems.  Although this claim was also based on Microsoft’s conduct in the 1990s, it was not barred by the statute of limitations because the statute was tolled on such a claim as a result of the U.S. government’s long-running antitrust case against Microsoft based on allegations of monopolization of the operating systems market.  Although Novell was permitted to bring this claim to trial, the jury deadlocked on the claim, and then the district court dismissed it as a matter of law.

The Tenth Circuit agreed with the district court’s ruling that, as a matter of law, Novell could not show that Microsoft’s withdrawal of Windows 95 support for Novell applications was monopoly behavior in violation of Section 2 Sherman Act.  The Court noted that the Supreme Court and the Tenth Circuit have rejected the idea that an alleged monopolist must give a helping hand to rivals.  The Court stated that “the proper focus of Section 2 isn’t on protecting the competitors but on protecting the process of competition, with the interests of the consumers, not competitors, in mind.”

The Court relied on the general rule that a company is free to decide with whom to assist or deal, rejecting Novell’s claim that it came within the exception set forth in the U.S. Supreme Court’s decision in Aspen Skiing Co. v. Aspen Highlands Skiing Corp.  Under Aspen, a monopolist can be found to have violated the Sherman Act if it ends a voluntary, profitable business relationship with a rival solely to attain an anticompetitive end, which cost the monopolist short term profits.  However, the Tenth Circuit held that Novell failed to prove that Microsoft willingly gave up short-term profits when it withdrew its support for Novell applications.  The Court stated that “to the contrary, all the evidence suggests that Microsoft’s decision came about as a result of a desire to maximize the company’s immediate and overall profits.”

Plaintiffs seeking to represent a class of software engineers employed by Silicon Valley giants are asking the U.S. District Court for the Northern District of California to certify a settlement class and to approve a $20 million settlement of antitrust claims reached with Intuit Inc., The Walt Disney Co.’s Pixar Animation Studios Inc., and Lucasfilm Ltd.

If the settlement in In re: High-Tech Employee Antitrust Litigation is approved, Intuit would pay $11 million, and Lucasfilm and Pixar would pay a combined $9 million.  The three settling defendants would also cooperate with plaintiffs in continuing the litigation against Apple Inc., Google Inc., Intel Corp., Adobe Systems Inc. and other non-settling defendants, who are alleged to have conspired not to compete for each other’s software engineers and effectively fixing their salaries.

Plaintiffs filed their suit in May 2011, following an investigation by the U.S. Department of Justice that concluded that Silicon Valley businesses had entered into “facially uncompetitive” agreements not to compete for one another’s engineers.

The plaintiffs accuse the high-tech companies of agreeing to alert one another when one made an offer to another’s employee, to limit packages for prospective employees to prevent bidding wars, and to refrain from recruiting each other’s personnel.  These agreements allegedly caused the engineers to be paid between 10 and 15 percent less than they would have been in a competitive market.

The scope of the proposed class is still being litigated.  The court denied plaintiffs’ initial motion for certification of a class of all salaried employees of the defendants, expressing skepticism that plaintiffs would “be able to show that Defendants maintained such rigid compensation structures that a suppression of wages to some employees would have affected all or nearly all Class members.”  The court, however, gave plaintiffs leave to file a supplemental motion for class certification.

In May 2013, the plaintiffs sought certification of a more limited class of technical employees, claiming that this group of workers was targeted by the anti-poaching agreements and fixing of salaries.  In opposing certification of this more narrow class, the defendants argued that plaintiffs still could not prove that the alleged agreements among the seven Silicon Valley companies affected more than 60,000 employees with thousands of different job titles.

The court has yet to rule on this latest motion for class certification, which was the subject of a hearing in August.

The U.S. District Court for the Southern District of New York has decided that the U.S. Supreme Court’s recent upholding of a contractual waiver of class arbitration prevents three messaging companies from escaping arbitration of their antitrust claims against a large group of wireless companies in the putative class action of In re: A2P SMS Antitrust Litigation.

Plaintiffs Club Texting Inc., TextPower Inc. and iSpeedbuy LLC are asserting a putative class action – based on claims that an antitrust conspiracy raised prices for bulk commercial text messages – against several providers of wireless service and others, including Sprint Nextel Corp., AT&T Mobility LLC, and Verizon Wireless LLC.

Judge Alison J. Nathan ordered most of the claims into arbitration, rejecting the plaintiffs’ arguments that the filing and administrative fees of arbitration made it an impracticable forum, citing the Supreme Court’s recent decision in Am. Express Co. v. Italian Colors Rest. (“American Express”), 133 S.Ct. 2304 (2013).

Plaintiffs sell transmitting services, which manage the transmission of mass texts used by businesses for advertising campaigns and other applications.  Plaintiffs allege that the defendant wireless service providers participated in a conspiracy that created a system that inflated the connectivity and per-message fees for such mass texts.

The court granted defendants’ motion to compel arbitration pursuant to the arbitration provision in the agreement plaintiffs had with Neustar, Inc., which leases the necessary codes for plaintiffs’ texts.  Although plaintiffs did not sue Neustar, defendants argued that plaintiffs’ dispute with them still fell within the scope of their agreement with Neustar, and thus was subject to arbitration.

The court agreed with defendants that they could enforce the Neustar agreement’s arbitration clause against plaintiffs under the principle of equitable estoppel, which permits non-signatories to an arbitration agreement to compel arbitration when they seek to resolve issues that are intertwined with the estopped party’s arbitration agreement.

Judge Nathan rejected the plaintiffs’ argument that the arbitration agreement is unenforceable in their case because the filing and administrative fees attached to arbitration are so high as to make access to the forum impracticable.  Judge Nathan held that plaintiffs’ allegations of high arbitration costs were insufficient to escape arbitration in light of the Supreme Court’s decision in American Express.  The court cited that decision’s statement that “the fact that it is not worth the expense involved in proving a statutory remedy does not constitute the elimination of the right to pursue that remedy.”  133 S.Ct, at 2310-11 (emphasis in original).

Judge Nathan held that plaintiffs’ failed to show any such deprivation of their right to pursue their claims. “Assuming that filing fees and administrative costs could in fact render a form impracticable, and that these costs in this case would be as high as plaintiffs claim, this ‘does not constitute the elimination of [plaintiffs’] right to pursue’ their claims in arbitration in this case.”