By Jeffery I. Shinder and David Scupp

We applaud the NBA for the firm stance it took against racism, which we believe should have no place in our country.  Having said that, we note that some have suggested that Donald Sterling may file an antitrust lawsuit to maintain his grip on the Clippers, or to gain some leverage to get full value for the team in a forced sale.  Notwithstanding our views on his conduct, we will attempt to analyze the antitrust legal issues dispassionately.

The sordid tale of Los Angeles Clippers owner Donald Sterling may weave its way into court via an unlikely route – the antitrust laws.

For the past week, the sports press has been abuzz regarding Sterling’s odious remarks that were caught on tape and released to the public.  Yesterday, NBA commissioner Adam Silver pulled no punches, fining Sterling $2.5 million (the maximum allowed under the league’s constitution), and banning him for life from any association with the Clippers organization or the NBA.  Sterling can no longer attend NBA games or practices, participate in Clippers player or personnel decisions, or even enter any Clippers facility.  Sterling is also barred from attending any NBA Board of Governors meetings, or participating in any other league activities.  He is effectively exiled from the league.

But can Sterling actually be exiled from the franchise that he continues to own?  In addition to instituting the fine and lifetime ban, Silver has also urged the NBA owners to force a sale of the Clippers.  Under certain enumerated circumstances, the league’s constitution permits the league to take control of a team and sell it, provided three-fourths of the league’s owners agree.  Assuming that Sterling’s offensive conduct constitutes one of the enumerated events required to force a sale (and that is not a foregone conclusion), the question arises as to whether a forced sale would violate the antitrust laws or at least raise antitrust claims that Sterling could use to enhance his weak, or non-existent, bargaining position with the league.

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By David Golden

Google, Apple, Adobe Systems, and Intel have settled an antitrust class action lawsuit brought by software engineers in the high tech industry for a reported $324 million.

The lawsuit, In re High-Tech Employee Antitrust Litigation, alleged that the four companies (along with Intuit, Pixar, and Lucasfilm) agreed to refrain from “poaching” each other’s employees, a common practice in high-tech industries where one company tries to hire the employee of another company.  Experts had estimated damages of $3 billion, which, after trebling under the antitrust laws, could have totaled $9 billion.

Because engineers and scientists who have the experience and skills to build cutting-edge hardware and software products are in great demand, high-tech companies and their recruiters frequently try to attract such employees from other companies with offers of higher salaries and bonuses.  The complaint alleged that the high-tech defendants, in violation of the Sherman Act and California state laws, agreed to not recruit each other’s employees, to notify each other when making an offer to another’s employee, and to refrain from price competition in offering positions to each other’s employees.

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By Marlene Koury

The U.S. Court of Appeals for the Sixth Circuit has upheld a Federal Trade Commission (“FTC”) order unwinding a merger of two Ohio hospitals that unsuccessfully sought to breathe life into a “weakened firm defense.”

In a unanimous opinion, a three-judge panel of the Sixth Circuit denied ProMedica’s petition to overturn a Federal Trade Commission ruling, which ordered ProMedica to divest itself of St. Luke’s after finding that the merger of two of the four hospital systems in Lucas county, Ohio, would adversely affect competition in violation of Section 7 of the Clayton Act.

ProMedica scooped up its rival St. Luke’s in a widely-publicized merger in 2010.  A year later, the FTC deemed the merger anticompetitive on the grounds that it would lead to higher prices for consumers and ordered ProMedica to divest St. Luke’s.  ProMedica then filed a petition asking the Sixth Circuit to review the FTC order. click here for more »

A View from Constantine Cannon’s London Office

By Natalia Mikolajczyk

Barclays confirmed on Friday that it has settled another case alleging that it mis-sold LIBOR-tied derivative products.

The lawsuit was filed by Domingos Da Silva Teixeira (DST), a family-owned construction and property company based in Braga, Portugal. As reported by the Financial Times, DST alleged that the British bank engaged in mis-selling, which involves misrepresenting the characteristics of a product or service, by “repeatedly induc[ing] it to restructure and replace its derivative products.”

DST identified 16 allegedly unsuitable derivative transactions, including interest-rate swaps, commodity-based swaps and a foreign-exchange swap. DST sought damages of 11.1 million euros ($15.4 million) in its claim before the Commercial Court in London. Although Barclays has admitted in a June 2012 settlement with the U.S. Department of Justice that it engaged in rigging of LIBOR and EURIBOR, Barclays maintained that DST did not suffer any loss from the manipulation. click here for more »

By Owen Glist

American Express, Chase, and Discover have prevailed in a bench trial of a class action charging that the nation’s largest credit card issuers illegally agreed to prevent cardholders from using class actions to sue them. 

While Judge William H. Pauley III of the U.S. District Court for the Southern District of New York ruled in favor of the defendants on Thursday, he also indicated the plaintiffs’ case was a near miss that just barely foundered on the crucial issue of whether the defendants had actually entered into a collusive agreement.

 The defendants – credit card issuers representing more than 80% of the credit card issuing market – had formed an industry “Arbitration Coalition” to promote the use of arbitration clauses to bar class actions.  Pursuant to a bench trial that was conducted last year – this being an exceedingly rare class action to go to trial – the district court concluded last week that plaintiffs failed “by a slender reed” to meet their burden of showing an antitrust conspiracy. click here for more »