January Antitrust Bulletin

January 10, 2014

Sixth Circuit Issues Detailed Reversal of Summary Judgment in Antitrust Class Action

On Jan. 3, 2014, the United States Court of Appeals for the Sixth Circuit reversed a district court’s grant of summary judgment to the defendants in an antitrust class action alleging a market-division and output-restriction conspiracy involving raw and processed milk. The court’s detailed decision addressed four principal issues: (1) whether the conspiracy as alleged would have constituted a per se violation, or instead would have been subject to the less stringent “rule of reason” analysis; (2) whether or not such a rule of reason analysis could appropriately be limited to a “quick look” analysis in that case; (3) whether the district court erred in excluding the plaintiffs’ expert testimony regarding the relevant geographic market — a necessary element of a full rule of reason analysis — under Daubert; and (4) whether the plaintiffs’ expert testimony adequately established “antitrust injury.”

The Sixth Circuit’s review of the per se issue was complicated by the hybrid horizontal and vertical aspects of the alleged conspiracy, which the plaintiffs claimed followed from a 2001 merger of the two largest milk processing companies in the United States and their pre- and post-merger relationships with raw milk suppliers. Ultimately, however, it agreed with the district court that the essence of the claimed anticompetitive agreement was vertical (i.e., between the milk processer and raw milk supplier defendants), and that the rule of reason analysis therefore was appropriate.

Turning to the second issue, the Sixth Circuit noted that the district court had not actually determined whether a “quick look” or a full-blown rule of reason analysis was warranted, and remanded that issue with comments appearing to suggest that a “quick look” would be sufficient. After extensive analysis of the plaintiffs’ expert evidence, including detailed review of the deposition testimony of the plaintiffs’ experts, the Sixth Circuit also concluded that the district court had erred both in excluding the plaintiffs’ evidence on the applicable geographic market and in concluding that their expert evidence failed to establish antitrust injury.

First Civil Settlement Reached in Automotive Parts Antitrust Class Action

On Dec. 17, 2013, plaintiffs in one portion of the automotive parts antitrust litigation currently pending in the U.S. District Court for the Eastern District of Michigan reached a $4.56 million proposed settlement with defendant Nippon Seiki Co., Ltd., and related entities, which manufacture automotive instrument panel clusters. This is the first such settlement reached in the ongoing civil class action litigation. That litigation parallels the U.S. Department of Justice’s ongoing criminal investigation of the automotive parts industry, which so far has led to criminal charges against approximately two dozen companies and over two dozen individual executives, as well as over $1.8 billion in criminal fines. The proposed settlement currently is pending court approval.

FTC Seeks Public Comment on Proposed Sale of Advantage Rent a Car

On Jan. 7, 2014, the U.S. Federal Trade Commission announced that it is seeking public comment through Jan. 22, 2014, on a Canadian private equity firm’s bid to acquire Advantage Rent a Car out of bankruptcy. Advantage was owned by Hertz Global Holdings, Inc., until late 2012, when Hertz sold Advantage in order to resolve charges by the FTC that Hertz’s acquisition of competing rental car company Dollar Thrifty Automotive Group, Inc. would have been anticompetitive.

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