Litigation & Investigations

The Department of Justice (“DOJ”) announced this week that an activist investment manager has agreed to pay a record $11 million to settle allegations that it violated the requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act” or “Act”) by improperly relying on the “investment-only” exemption to avoid reporting the transaction and observing the appropriate waiting period.

A popular weapon used to contain health care expenditures is the creation by payors and employers of tiered provider networks, which by differentiated co-pays attempt to steer insureds to less expensive choices.  In connection with such networks, providers will often provide better pricing in order to be placed on more favorable tiers.

Judge takes “the healthcare world as it is, and not as the FTC wishes it to be.”

The mere possession of monopoly power does not violate federal antitrust laws. The laws only address the anticompetitive acquisition, maintenance, or abuse of that power.

The NCAA scored a victory last week with the denial of class certification in an antitrust suit challenging the association’s former ban on multiyear scholarships (the “One Year Rule”) and its cap on scholarships (the “GIA Cap”). Plaintiff had alleged that those rules constituted a concerted effort by the NCAA and its member schools to thwart competition.

The Sixth Circuit on Tuesday voted 2 to 1 to reverse a district court’s grant of summary judgment under which a defendant hospital network had been found to be a single entity incapable of conspiring with itself in an anticompetitive manner under Section 1 of the Sherman Act.

In the latest chapter in the litigation wars against college athletics, on March 8, 2016, another antitrust class action was filed against the NCAA in its “home court,” the United States Southern District of Indiana.

On Monday, March 7, 2016, the Massachusetts Supreme Judicial Court (“SJC”) rejected the “selective tender rule” as contrary to Massachusetts insurance law and sound public policy in Insurance Company of the State of Pennsylvania v. Great Northern Insurance Company.

An upstart rodeo association, created and owned by professional rodeo cowboys, challenged that its competitor’s bylaws aimed at the new association and its participants constituted agreements that unreasonably restrain trade and monopolize the market in violation of Sections 1 and 2 of the Sherman Act. 

An ophthalmologist cooperative in Puerto Rico settled charges with the Federal Trade Commission (“FTC”) last week that it orchestrated an illegal boycott of a health plan.

The Federal Trade Commission (FTC) announced on January 21, 2016 increased jurisdictional thresholds for premerger notification filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the HSR Act).

In Boyle v. Zurich American Insurance Company, SJC-11791 (Sept. 14, 2015), the Supreme Judicial Court (SJC) affirmed an award of $2,250,000 plus interest against an insurer for failing to defend its insured on a $50,000 policy and for failing to make reasonable efforts to settle the suit. 

The federal antitrust enforcement agencies have trumpeted their preferences for structural, as opposed to conduct, remedies as the solution to potentially anticompetitive mergers.

On June 30, 2015, the same day as the launch of Apple’s new streaming music service, the Second Circuit Court of Appeals coincidentally affirmed a district court ruling that Apple conspired with five of the country’s largest book publishers to fix prices for ebooks and coerce Amazon to change its pricing model to accommodate those higher, fixed prices.

Eighteen months after the deal was first announced, Sysco Corporation (“Sysco”) and US Foods, Inc. (“USF”) abandoned their $3.5 billion merger following the Federal Trade Commission’s (the “FTC” or “Commission”) decisive victory in obtaining a preliminary injunction blocking the transaction.

In the context of our representation of institutional investors, our experience reveals that they have been confronting an increasingly difficult process in recovering their losses from alleged violations of securities laws. 

In an April 22, 2015 letter to the New York State Department of Health (DOH), the Federal Trade Commission (FTC) cautioned that part of the State’s Medicaid reform program may sanction anticompetitive behavior.

The Federal Trade Commission (“FTC”) last week green-lighted Medtronic, Inc.’s (“Medtronic”) $42.9 billion acquisition of Covidien plc (“Covidien”) after Medtronic agreed to a settlement that requires Medtronic to divest its drug-coated balloon catheter products to Spectranetics, a Colorado-based medical technology company.

On November 20, 2014, the Federal Circuit issued its decision in Versata Software, Inc. v. Callidus Software, Inc. reversing the district court’s denial of a motion to stay pending a Covered Business Method (“CBM”) review of the patents asserted by Versata in the action.

Directors of an insolvent corporation face a host of difficult questions. Should they wind up operations or file for bankruptcy to preserve assets for creditors, or chart a riskier course that could lead the company back to profitability and possibly create value for shareholders?