On October 24, 2017, Judge Terrence W. Boyle of the Eastern District of North Carolina declined to dismiss monopolization and other antitrust claims based on alleged tying and exclusive dealing of foam insulation products against Armacell, Inc.  K-Flex, Inc. v. Armacell, Inc., No. 5:17-CV-279-BO (E.D.N.C. Oct. 24, 2017).  The Court held that plaintiff K-Flex, Inc.’s complaint plausibly alleged that Armacell violated Sections 1 and 2 of the Sherman Act (15 U.S.C. §§ 1 & 2), Section 3 of the Clayton Act (15 U.S.C. § 14), and North Carolina’s Unfair and Deceptive Trade Practices Act (N.C.G.S.A. §  75-1.1), by conditioning sales of one product – polyethylene or “PE” foam insulation, as to which Armacell had substantial market power – on the distributor’s agreement to purchase a second type of insulation product – elastomeric foam insulation - exclusively from Armacell and coercing a distributor to terminate the plaintiff.  The opinion is notable in sustaining a monopolization claim against a manufacturer based largely on an alleged exclusive dealing/tying arrangement with a single regional distributor.      

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On October 20, 2017, Judge Sam Sparks of the United States District Court for the Western District of Texas granted a motion to dismiss antitrust claims filed against the Texas Medical Board (“TMB”) and certain of its individual members.  Allibone v. Texas Medical Board, et al., No. A-17-CA-00064-SS (W.D. Tex. Oct. 20, 2017).  Judge Sparks’s opinion provides a clear articulation of how the doctrines of sovereign immunity and the state action defense interact in antitrust cases in which state regulatory boards that include the plaintiff’s competitors are involved. 

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On October 17, 2017, Judge Mitchell S. Goldberg of the United States District Court for the Eastern District of Pennsylvania dismissed monopolization claims brought by the Attorneys General of several states against Reckitt Benckiser Healthcare (UK) Ltd. (“RBH”) premised on an alleged “product hopping” scheme designed to prevent or delay less expensive generic versions of the drug Suboxone from entering the market.  In re Suboxone (Buphrenorphine and Naloxone) Antitrust Litigation, No. 13-MD-2445, 2017 WL 4642285 (E.D. Pa. Oct. 17, 2017).  In so doing, the Court held that the mere fact that two subsidiaries are owned by a common parent is not sufficient either to consolidate the alleged market power of the two firms for the purpose of assessing monopoly power or to attribute the actions of one subsidiary to the other in evaluating allegations of exclusionary conduct. 

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On September 15, 2017, Judge James E. Gritzner of the United States District Court for the Southern District of Iowa granted a motion to dismiss antitrust claims filed against PepsiCo Inc. and its bottler-distributor subsidiary by an independent bottling company.  Mahaska Bottling Co. v. PepsiCo Inc., No. 4:16-cv-00114-JEG (S.D. Iowa Sept. 15, 2017).  In so doing, Judge Gritzner rejected the bottler’s proffered “price squeeze” theory and its other allegations of exclusionary conduct under Section 2 of the Sherman Act, as well as its proffered market definition, and found that Mahaska had failed to allege harm to competition or, relatedly, antitrust injury.  The Court also dismissed claims brought under the Robinson-Patman Act and Iowa state antitrust statutes.  While this case does not break new ground, it is useful in demonstrating again the difficulties that a distributor faces in asserting antitrust claims against a supplier that the distributor believes is seeking to end the relationship, even with unusual “in perpetuity” exclusive arrangement at issue here.     

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On June 26, 2017, a three-judge panel of the United States Court of Appeals for the Ninth Circuit affirmed the dismissal of a putative class action brought by professional minor league baseball players (“Players”) against the former commissioner of major league baseball and all thirty major league franchises (collectively “Major League Baseball” or “MLB”).  Miranda v. Selig, No. 15-16938 (9th Cir. 2017).  Players alleged that MLB’s hiring and employment policies violated federal antitrust laws and argued that minor league players did not fall within the well-established antitrust exemption for the business of baseball.  Invoking the judicial principle of stare decisis, the panel held unanimously that the baseball exemption applied to Players’ claims and affirmed the lower court’s dismissal.

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