Antitrust Bulletin - June 2014

Antitrust Suit Against Wholesale Grocers Revived by Appellate Court

On May 21, 2014, in In re: Wholesale Grocery Products Antitrust Litig., a three-judge panel of the Eighth Circuit vacated an order of summary judgment in favor of defendants SuperValu, Inc., and C&S Wholesale Grocers, Inc., two wholesale grocers who allegedly divided up geographic markets by way of reciprocal noncompetition agreements executed in the context of SuperValu's transfer of its New England assets to C&S. The Western District of Wisconsin had granted summary judgment in favor of the nation's two largest wholesale grocers on the grounds that the noncompetition agreement was not a per se antitrust violation because it applied only to former customers and theoretically permitted the wholesalers to compete for existing and future customers.

The Eighth Circuit disagreed and found that, while the face of the agreement did not show a naked restraint on trade, a genuine issue of material fact was created when the written agreement was considered in light of emails indicating that the basis for the asset transfer deal was that SuperValu would not compete in New England and the fact that neither wholesaler competed in the other's territory.

Dismissal of Suit Based on Foreign Activity Affirmed

On June, 4, 2014, in Lotes Co., LTD. v. Hon Hai Precision Industry Co., Ltd. et al., the U.S. Court of Appeals for the Second Circuit affirmed dismissal of an antitrust suit arising from foreign activity where a patent owner was asserting claims related to a Chinese patent. The Second Circuit affirmed the district court's decision that dismissal was proper because any impact on U.S. commerce from the foreign activity did not "give rise to" the antitrust claims under the Foreign Trade Antitrust Improvements Act (FTAIA).

Notably, the Second Circuit overruled a prior decision and held that FTAIA restrictions are substantive and not jurisdictional meaning that they deal with the merits of the claim rather...