Antitrust Law Daily No news from High Court on fate of pending petitions in antitrust, FTC cases
Monday, October 5, 2020

No news from High Court on fate of pending petitions in antitrust, FTC cases

By Peter Reap, J.D., LL.M.

Petitions in cases challenging the arrangement between the NFL and DirecTV as anticompetitive and refusal to deal claims against Comcast remain pending. Some questions on FTC Section 13(b) authority also continue to await action.

On the first day of the U.S. Supreme Court’s October 2020 Term, the Court did not reveal its plans for pending petitions in antitrust and FTC cases. Petitions that remain pending since earlier this year include an antitrust challenge to the arrangement between the NFL and DirecTV that essentially requires fans to purchase a bundled package of all NFL Sunday games in order to ensure access to games between teams outside of their local markets. Other pending petitions ask whether the FTC may unilaterally reinterpret an injunction years after its entry to seek contempt sanctions based on a more restrictive standard found nowhere in the injunction itself, and if the Seventh Circuit erred in holding that a refusal-to-deal claim against Comcast under Section 2 of the Sherman Act may proceed despite the presence of valid business justifications for the refusal. A petition pertaining to FTC enforcement authority also remains pending, despite the Court agreeing to take up the issue last term. A chart lists, pending and denied petitions, along with a summary of the questions presented and the current status of each case of interest to antitrust and trade regulation attorneys for the current term.

Pending petitions. Remaining pending before the Court is the NFL’s petition regarding its antitrust loss to subscribers of NFL Sunday Ticket. The challenged arrangement between the NFL and DirecTV essentially requires fans to purchase a bundled package of all NFL Sunday games in order to ensure access to games between teams outside of their local markets. The Ninth Circuit held that the viewers who brought the case adequately alleged injury to competition. The NFL presented two issues in its appeal. This decision created a circuit split with five other circuits that have concluded that the activities of an integrated joint venture like a sports league cannot be condemned without a full rule-of-reason analysis, according to the NFL. Also, the Ninth Circuit allegedly deepened an existing circuit conflict, when it allowed indirect purchasers who do not allege that they paid a price fixed by the alleged conspirators nevertheless to pursue a damages claim against them (National Football League v. Ninth Inning, Inc.Dkt. 19-1098).

Also unanswered is a petition from Hi-Tech Pharmaceuticals, Inc. on whether the FTC’s interpretation of an injunction years after its entry to seek contempt sanctions based on a more restrictive standard that was not found in the injunction violates Fed. R. Civ. P. 65(d) and due process. The Eleventh Circuit upheld a federal district court judgment ordering a dietary supplement manufacturer and several individuals to pay $40 million to the FTC for violating 2008 injunctions that prohibited them from marketing supplements as weight loss products without competent and reliable scientific evidence that substantiates the representation. The petition states that Federal Rule of Civil Procedure 65(d) mandates, and courts have consistently held, that injunctions must "describe in reasonable detail—and not by referring to the complaint or other document—the act or acts restrained or required." The petitioner argues that years after the injunctions were granted, the FTC decided that the same kind of extensive testing required for new drugs should also be required for dietary supplement claims (Hi-Tech Pharmaceuticals, Inc. v. FTCDkt. 19-1445).

Also remaining pending is the petition by Comcast seeking review of a decision by the Seventh Circuit reinstating Viamedia’s antitrust lawsuit against Comcast alleging that Comcast illegally tied the purchase of its ad rep services to Interconnects it controlled, which had been thrown out in 2018. Viamedia, an ad rep, brought suit against Comcast alleging that Comcast used its monopoly power over the cooperative Interconnects to force its smaller retail cable television competitors to stop doing business with Viamedia, thereby gaining monopoly power over the market for advertising representation services. The Seventh Circuit held that Comcast engaged in an illegal tying arrangement. Comcast argues in its petition that the Seventh Circuit misapplied precedent with respect to §2 of the Sherman Act regarding a company’s right to a refusal to deal when there is a valid business reason, and requests the Supreme Court review what it considered with the Seventh Circuit’s mischaracterization of a refusal to deal as tying (Comcast Corp. v. Viamedia, Inc.Dkt. 20-319).

FTC Act, Section 13(b) authority. The Court previously granted the FTC’s petition for review of a decision of the U.S. Court of Appeals in Chicago that Section 13(b) of the FTC Act authorizes only restraining orders and injunctions and not, as the FTC has long viewed it, restitution. The Court also agreed to consider the FTC’s ability to collect monetary relief under Section 13(b) in connection with a decision of the U.S. Court of Appeals in San Francisco, upholding an award of equitable monetary relief. The cases were consolidated for briefing and oral argument, and are awaiting decision by the High Court (FTC v. Credit Bureau Center, LLCDkt. 19-825AMG Capital Management, LLC v. FTCDkt. 19-508).

Still undecided is the fate of a petition for review of another Ninth Circuit decision that questions Section 13(b) authority. At issue is a decision of the U.S. Court of Appeals in San Francisco affirming a judgment against the defendants in an action against Publishers Business Services (Publishers Business Services, Inc. v. FTC, Dkt. 19-507).

Denied petitions. The Supreme Court today denied petitions in three RICO and two advertising cases. Left standing are RICO decisions in Grace Int’l Assembly of God v. Gennaro Festa,Dkt. 20-33Youngblood-West v. Aflac Inc.Dkt. 19-1455; and Center for Immigration Studies v. CohenDkt. 19-1324; and advertising decisions in GlaxoSmithKline LLC v. United Food and Commercial Workers Local 1776Dkt. 19-1444; and Living Essentials, LLC v. State of WashingtonDkt. 19-998.

For details about these and other petitions and cases pending before the Supreme Court, please consult this chart.

Attorneys: Gregg H. Levy (Covington & Burling LLP) and Beth A. Wilkinson (Wilkinson Walsh LLP) for National Football League. Paul C. Ray (Paul C. Ray, Chtd.) and Jeffrey A. Lamken (MoloLamken LLP) for AMG Capital Management, LLC, Black Creek Capital Corp., Broadmoor Capital Partners, LLC, Level 5 Motorsports, LLC and Park 269 LLC. Robert F. Parsley (Miller & Martin PLLC) and Anne M. Voigts (King & Spalding LLP) for Hi-Tech Pharmaceuticals, Inc. Arthur J. Burke (Davis Polk & Wardwell LLP) and Ross B. Bricker (Jenner & Block LLP) for Comcast Corp. and Comcast Cable Communications Management, LLC. Michael Haskel (Haskel & Wright PLLC) for Grace International Assembly of God. Gregory Pandolfo (Goodman Jurist & Pandolfo LLP) for Falcon General Construction Services, Inc. Dimitry Joffe (Joffe Law PC) for Leigh Ann Youngblood-West. James C. Grant (Davis Wright Tremaine LLP) for Aflac Inc. Howard William Foster (Foster PC) for Center for Immigration Studies. Nina M. Gussack (Pepper Hamilton LLP) and Jay P. Lefkowitz (Kirkland & Ellis LLP) for Glaxosmithkline LLC. William S. Consovoy (Consovoy McCarthy PLLC) for Living Essentials, LLC and Innovation Ventures, LLC.

Companies: AMG Capital Management, LLC; Ninth Inning, Inc.; National Football League; Hi-Tech Pharmaceuticals, Inc.; Comcast Corp.; Comcast Cable Communications Management, LLC; Viamedia, Inc.; Falcon General Construction Services, Inc.; Grace International Assembly of God; Aflac Inc.; Center For Immigration Studies; GlaxoSmithKline LLC; Living Essentials, LLC; Innovation Ventures, LLC

MainStory: TopStory Antitrust GCNNews FederalTradeCommissionNews Advertising RICO

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