By Gordon Schnell and David Scupp

On Wednesday, the National Labor Relations Board issued a stunning decision finding that Northwestern University scholarship football players are employees of the school and therefore entitled to unionize.

The NLRB’s holding could have a profound impact on the various antitrust suits that current and former players have brought against the NCAA, challenging its restrictions on collegiate athlete compensation.

The well-reasoned decision by a regional director of the NLRB was premised on a flat-out rejection of the notion that big-time college sports are amateur pursuits by “student-athletes” who are students first, and athletes a distant second. click here for more »

By David Scupp

Shawne Alston, a former running back at West Virginia University, has filed an antitrust class action alleging the fixing of scholarship amounts by the NCAA and its five football “Power Conferences” – the ACC, Big Ten, Big 12, Pac 12, and SEC conferences.

Alston claims that the NCAA and these Power Conferences conspired to fix the amounts of athletic scholarships, formally known as the grant-in-aid (“GIA”), at a level below a student’s true cost of attending college.  Alston alleges that GIA shortfall is often several thousands of dollars.  The result, Alston alleges, is that “players cannot even make ends meet while the schools make tens of millions.”

Alston notes that although the NCAA’s Board of Governors recently approved a proposal to allow stipends to cover the gap between the GIA and the true cost of attendance, the NCAA’s members shot it down.  Their rationale, claims Alston, was an anticompetitive desire to control costs.

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By Ankur Kapoor and Rosa M. Morales

Nearly a year after the Supreme Court held in FTC v. Actavis that reverse-payment settlement agreements between branded and generic pharmaceutical companies are subject to antitrust scrutiny under the rule of reason, federal district courts are struggling with the thorny issue of whether plaintiffs need to show them the money.

More specifically, district courts remain confounded by what constitutes a “payment” for purposes of antitrust challenges to settlements of Hatch-Waxman pharmaceutical patent infringement litigation, and whether a monetary transfer from the patent holder to the alleged infringer, i.e., a “reverse payment,” is necessary to state an antitrust claim attacking the competitive effects of the settlement.  Before embarking on a rule-of-reason analysis in such cases, some district court judges seem reluctant or unwilling to say “go” before they see the green.

As discussed in a previous post – “Are Bright-Line Rules The Right Prescription For Reverse-Payment Cases?” – in January the U.S. District Court for the District of New Jersey dismissed the antitrust challenge to a reverse-payment settlement in In re Lamictal Direct Purchaser Antitrust Litigation because there was no cash payment from the patent holder to the would-be generic competitor, and narrowly interpreted Actavis as imposing a “bright-line” requirement of a cash payment.  The court therefore held that it was unnecessary to engage in the requisite full-blown rule-of-reason analysis to determine the settlement’s anticompetitive effects (if any).

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By Ankur Kapoor

The Antitrust Division of the U.S. Department of Justice (the “DOJ”) is highlighting the competitive benefits to the settlement of its challenge of the American Airlines-US Airways merger in the DOJ’s Response to Public Comments on the Proposed Final Judgment filed on Monday in the United States District Court for the District of Columbia.

The DOJ’s Response heralds the Proposed Final Judgment as “a major victory for American consumers” because “[i]t will enable Low Cost Carriers (‘LCCs’)” such as JetBlue, Southwest, and Virgin America “to fly millions of new passengers per year to destinations throughout the country” and because, by requiring divestiture of 104 slots at Ronald Reagan Washington National Airport to these three LCCs, it “fully addresses the harm that would have resulted from New American’s control of nearly 70% of the limited takeoff and landing slots” at Reagan National.

The DOJ’s Response also highlights that the proposed judgment requires divestiture of 34 slots to Southwest and Virgin America at New York LaGuardia International Airport and divestiture of fewer, other rights and interests at five other airports.  To support its claim of victory, the DOJ points to its conditioning the United-Continental merger in 2010 on the divestiture of 36 slots to Southwest at Newark Liberty International Airport and the fact that, since then, prices for certain nonstop routes from Newark have decreased substantially.

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By Allison F. Sheedy

Apple has upped the ante in the e-books case with two court filings in recent weeks that seek to prevent Judge Denise Cote of the U.S. District Court for the Southern District of New York from presiding over the upcoming jury trial on damages.

While the two-pronged attack – which argues not only lack of jurisdiction but also bias by the judge – is fairly aggressive, it is hardly surprising.  Although motions for recusal based on a judge’s lack of impartiality are rarely made – and even more rarely granted – Apple’s litigation tactics over the past few months have telegraphed that it was likely to seek the removal of Judge Cote from the case.

The e-books case encompasses several actions brought by the U.S. Department of Justice (“DOJ”), Attorneys General of various states and class action plaintiffs, which alleged that Apple’s contractual agreements with book publishers violated state and federal antitrust laws.  After the publishers settled the case, Judge Cote found in a bench trial that the DOJ and the states had proved that Apple violated Section 1 of the Sherman Act and related state antitrust laws by conspiring with the publishers to raise e-book prices.  The trial focused solely on liability, and the only relief sought was an injunction.

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