Two More FTC Nominees Pass Senate Committee, Await Full Senate Vote
On Jan. 25, Donald Trump nominated Christine S. Wilson and Noah Joshua Phillips to the U.S. Federal Trade Commission (FTC).
Christine Wilson currently serves as senior vice president for regulatory and international affairs at Delta Air Lines. She was a partner at O’Melveny & Myers LLP and Kirkland & Ellis LLP following her service as chief of staff to FTC Chairman Timothy Murtis from 2001 to 2002. Wilson graduated from the University of Florida and received her law degree from Georgetown.
Noah Phillips currently is chief counsel to Sen. John Cornyn of Texas, the current Senate majority whip. Prior to joining Cornyn’s office, Phillips worked as a litigator in private practice and clerked for Judge Edward C. Prado of the 5th U.S. Circuit Court of Appeals. Phillips graduated from Dartmouth College and received his law degree from Stanford.
The nominations of Wilson and Phillips bring the total number of FTC commissioners nominated by Trump to four, joining Joseph Simons and Rohit Chopra, whose nominations were announced in October. Only two commissioners currently are serving on the five-member commission: acting Chairman Maureen Ohlhausen, who recently was nominated to the U.S. Court of Federal Claims; and Terrell McSweeny, whose term already expired. McSweeny indicated, however, that she will stay until someone is nominated to fill her seat, which is marked for a Democrat. If the four Trump nominees are confirmed, that will leave one seat open on the commission for a Democrat to maintain the agency’s intended 3-2 political balance.
All four nominees appeared at a confirmation hearing before the Senate Commerce Committee on Feb. 14. On Feb. 28, the Senate Commerce Committee voted to approve the four nominations, which now await a vote of the full Senate.
FTC Sues Three Largest U.S. Dental Supply Companies
On Feb. 12, the FTC filed an administrative complaint against Benco, Henry Schein and Patterson, the three largest dental supply companies in the nation, which together comprise approximately 85 percent of the $10 billion market. The FTC noted in its press release that “this case reflects the Commission’s ongoing efforts to ensure competition in the healthcare industry.”
The antitrust suit alleges that the companies conspired and agreed not to offer discounts to buying groups representing independent dentists, thus depriving them of their collective purchasing power. The complaint includes exchanges between executives of Benco and Henry Schein detailing the agreement as well as attempts to monitor and ensure compliance. It also alleges that Patterson previously did not have the same policy as Benco — in which Benco instructed its sales force to refuse to recognize, work with or offer discounts to buying groups — but adopted such a policy after entering into the agreement in 2013. Benco was also charged with a Section 5 violation for inviting a fourth competitor to collude.
3rd Circuit Articulates Direct Purchaser Standing Framework in Egg Product Lawsuit
The 3rd Circuit revived a lawsuit filed by Kraft, General Mills, Kellogg and Nestle against several egg producers in an opinion issued on Jan. 22.
In 2016, District Judge Gene Pratter of the Eastern District of Pennsylvania dismissed the case. He found that, because not all of the egg products purchased by the plaintiffs as ingredients for goods like mayonnaise or waffles were from the alleged conspirators, the plaintiffs were seeking “umbrella damages.” The central allegation of the case contended that the egg producers had intentionally reduced the population of egg-laying hens, thereby reducing the supply of eggs and driving up prices, for nearly a decade.
The 3rd Circuit ultimately reversed the District Court’s grant of summary judgement, concluding that the food manufacturers did have standing, but remanded the case to the District Court for further proceedings.
Relying on the U.S. Supreme Court’s 1983 opinion in Assoc. Gen. Contractors, the 3rd Circuit articulated the following five-factor framework for determining whether direct purchasers can sue when they purchase from multiple suppliers:
(1) the connection between the antitrust violation and the harm to the plaintiff (together with the intent of the defendant to cause that harm);
(2) whether antitrust laws were intended to provide redress to the type of injury the plaintiff alleges;
(3) the directness of the injury;
(4) the existence of more direct victims of the alleged antitrust violations; and
(5) the potential for duplicative recovery or complex apportionment of damages.
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