The Antitrust Attorney Blog

The San Diego Daily Transcript Named me a 2014 Top Attorney Finalist for Corporate Litigation in San Diego

August 4, 2014 | Bona Law PC

Most of The Antitrust Attorney Blog entries focus on antitrust and competition law, which I suppose isn’t a surprise. But that hides the fact that I am a business litigator as well. While many of my matters relate to antitrust, some of them don’t.

So I thought this award would present a good opportunity for me to remind you that although I really enjoy antitrust, I can also help you with straight-up business disputes. This includes everything from basic breaches of contract to complex global disputes spanning several jurisdictions. It also includes, of course, appellate attorney work, which I write about from time-to-time.

In fact, my antitrust background gives me a leg-up in business and corporate litigation because I have spent years studying markets: I understand how companies compete in a market, which helps me to quickly grasp how an industry or company functions. This experience improves my ability to incorporate business considerations into my descriptions of various options for the client throughout the litigation process.

Many lawyers look at litigation as a game, to win at all costs, instead of understanding that litigation is just one of several tools to use—offensively or defensively—to develop a competitor’s position in the marketplace. It is important at every decision point to recognize that—unlike the litigator that probably works with a bunch of other competitive litigators that stress winning above all else—the client cares about the result relative to the cost.

Indeed, having my own business has further focused my sensitivity to the client’s perspective. I think I understand the client’s need to find someone that (1) they trust; (2) will pursue their goals, with the overall context of the business in mind; (3) will do great work. That may sound like the typical gobbledygook from a lawyer, but I think most businesses that have had to hire litigators will tell you that those three points are everything.

I started Bona Law PC in March 2014 and it is now August. Time flies. So far so good. I’ve been quite busy and I love the work. Even though people told me that I couldn’t do antitrust outside of a big firm, I have done a lot of antitrust. In fact, we are filing an Amicus Brief to the US Supreme Court this week in an antitrust case.

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The Antitrust Law Journal, Patent Assertion Entities, and Politics

July 27, 2014 | Bona Law PC

As you know, I am a big fan of the Antitrust Law Journal, which is produced by the American Bar Association’s Antitrust Law Section. It is the journal where antitrust lawyering meets antitrust economics and academics. I like to hang out at this intersection.

A couple weeks ago, another issue of the Antitrust Law Journal arrived. I haven’t had a chance to read any of the articles yet—as I’ve been fortunately quite busy—but I skimmed it and it looks like a good one. Let’s review it together.

It is a double symposium issue, which is great because symposium issues can be a bummer if you don’t like the topic. This gives you twice the odds of liking at least some of the articles. The two topics are (1) Patent Assertion Entities, and (2) Politics and Antitrust.

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Is the FTC a Libertarian Government Agency?

July 16, 2014 | Bona Law PC

Probably not. But any government agency that files an amicus brief supporting an Institute for Justice case challenging anticompetitive state action deserves some libertarian props.

If I had to name a favorite government agency, I would pick the FTC. I don’t agree with many of their positions, of course, and have gone up against them before. But they work hard to rein in anticompetitive state and local conduct and that is meaningful. In those instances, they are champions of competition. These state and local boards shouldn’t violate the antitrust laws.

Andrew Gavil, the Director of the Office of Policy Planning at the FTC, testified before the House Committee on Small Business on “Competition and the Potential Costs and Benefits of Professional Licensure.” This is an issue that I have studied for many years and the FTC has been and remains a leader in protecting competition from needless entry barriers by state and local boards.

Let’s take a quick look at Andrew Gavil’s written statement, which officially presents the views of the Federal Trade Commission by a 5-0 vote.

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The FTC Orders Ski-Equipment Companies to Start Competing Again

July 9, 2014 | Bona Law PC

Sometimes competition is a real hassle.

If your company has a loyal customer or longtime employee, you feel betrayed when a competitor swoops in to try to “steal them.”

If you are the Miami Heat, you probably don’t like that the Cleveland Cavaliers are trying to hire your best player, LeBron James. Of course, a few years ago, the Heat signed James from Cleveland. (On a side note, this Minnesota Timberwolves fan wonders whether a LeBron James move to Cleveland will lead to a Kevin Love trade for Number 1 draft pick, Andrew Wiggins).

Update: LeBron James is indeed “coming home” to Cleveland.

I just started watching Breaking Bad. (I know, what took me so long?). Anyway, it is apparent in the early episodes that drug cartels shovel heavy resources into extinguishing competition. They certainly don’t seem too happy about this Heisenberg fellow coming in to outcompete them with a superior product. Perhaps in a later season, “Better Call Saul” will help Walter White file a Sherman Act, Section 2 Antitrust lawsuit against some of these monopolists that are restraining him from competing in certain geographic markets?

The bottom line is that as great as competition is—for almost everyone—it isn’t always enjoyable to those that must compete.

It is much easier to complacently offer the same product or service for a highly-profitable price than to constantly refine your wares and cut prices to attract and keep customers.

Perhaps a couple major ski equipment manufacturers were thinking along those lines if we are to believe the FTC’s allegations that ended in settlements approved today?

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What Does the Supreme Court’s Decision in Halliburton Co. v. Erica P. John Fund, Inc. Mean for Antitrust Law?

July 3, 2014 | Bona Law PC

The defendants in Halliburton Co. v. Erica P. John Fund, Inc. failed to show the US Supreme Court the “special justification” necessary to overturn settled precedent.

As we explained in a previous post, the Supreme Court in this case agreed to reconsider its 1988 decision in Basic v. Levinson, which allowed a shareholder class in a securities fraud lawsuit to satisfy statutory “reliance” requirements by invoking a presumption that stock prices traded in “efficient” markets incorporate all material information, including alleged misrepresentations.

But between then and now, academics, economists, and commentators chipped away at the economic theory underlying this presumption, which is based upon “the efficient capital markets hypothesis.”

So if a legal precedent depends upon an economic theory that now appears less valid than it did before, do you overrule it or keep it in place because it has ingrained itself into a larger legal structure?

Here is a similar question from real estate: If part of the wood in a load-bearing wall has started to rot, do you replace it? The Supreme Court held that you do, if you can show a “special justification.”

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We Filed an Amicus Brief to the Minnesota Supreme Court in a Property Rights Case

June 29, 2014 | Bona Law PC

We are proud to announce that we filed an amicus curiae brief with the Minnesota Supreme Court on behalf of the Minnesota Vacation Rental Association last week in Dean et al. v. City of Winona, a case concerning municipal power and the right to rent out one’s residential property.

Four property owners represented by the Institute for Justice Minnesota Chapter challenged a City of Winona, Minnesota ordinance that caps the number of rental licenses per residential block to thirty percent (“the thirty-percent rule”). In other words, if you live in one of Winona’s low-density residential districts, your right to rent your home is subject to your neighbors’ exercise of theirs.

Here’s the background:

The City of Winona, Minnesota was unhappy with parking, density, and aesthetic issues in the residential areas near the Winona State University campus. Rather than enforce existing laws against problem residents (students), the City of Winona decided to expropriate its residents’ property rights by restricting the number of homes that could be rented out to 30% of the houses on a given block.

Thus, if six houses comprise your block, owners of only two houses on the block could obtain a license to rent to tenants.

Four homeowners challenged the thirty-percent rule after facing ruinous financial consequences as a result of the rule. One homeowner, who was deployed to Iraq, almost lost his home because the city wouldn’t let him rent it, thus depriving him of rental income to cover the mortgage payment.

Another couple bought a home in Winona for their daughter to live in while she was in college and as an investment that would provide rental income. After their daughter left, the home sat empty on the market because they couldn’t rent it and interested buyers backed out when told of the rental restriction.

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The Lanham Act and POM Wonderful LLC v. Coca Cola: A Cause of Action for Competitors

June 20, 2014 | Bona Law PC

Many of my cases will pit one competitor against another in litigation. An antitrust claim is often at the center of the dispute, but a number of other claims can find their way into the case; sometimes even in a starring role.

Litigation between competitors can include, for example, trade secret or intellectual property disputes, tortious interference claims, and Lanham Act claims, to name just a few. Our focus today is on the Lanham Act because the U.S. Supreme Court last week issued an interesting opinion on its scope in POM Wonderful LLC v. Coca Cola Company.

The question was whether The Federal, Food, Drug and Cosmetic Act (FDCA) precluded a plaintiff from filing a Lanham Act claim related to food labeling. Justice Kennedy explained for a unanimous court (which did not include Justice Breyer) that plaintiffs can pursue their claim about pomegranate-blueberry juice labeling: The statutes don’t conflict—they complement each other.

First, some background. The Lanham Act is a federal private right of action to enforce trademark rights, as well as (and relevant here) “unfair competition through misleading advertising or labeling.” What is particularly interesting about the Act is that it is specifically designed for competitors. That is, consumers that discover false advertising or labeling can’t bring a Lanham Act case. Only competitors that can “allege an injury to a commercial interest in reputation or sales,” have standing. You might recall that the Court addressed Lanham Act standing earlier this term in Lexmark International, Inc. v. Static Control Components, Inc., discussed here.

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How Much Does it Cost to Litigate an Antitrust Case?

June 5, 2014 | Bona Law PC

If you ask this question to an antitrust lawyer, you will receive some form of “it depends” in response. That’s true. It does depend. And you will inevitably follow up with, “What does it depend upon?” Let’s see if we can begin to answer that question.

What we are discussing here is not a class-action antitrust lawsuit, but an antitrust claim by one business or individual against another. Class-action antitrust cases usually incorporate some contingency-fee approach and are lawyer-centered rather than client-centered cases. That is, the plaintiff law firms act as “private-attorney generals” to enforce the antitrust laws through the class-action vehicle. Those cases are very different than the typical case brought by a company against its competitor, supplier, or customer. You can read our article on defending against class certification in antitrust cases here.

Antitrust cases are expensive. Usually. But if managed effectively, they don’t need to cost nearly as much as they did when big law firms held a virtually monopoly on the cases by convincing clients that only they had the requisite resources to file such a massive claim.

With the combination of technological advancements and third-party providers, I believe that, in many instances, hiring a big law firm to run your antitrust case is a costly mistake. We’ll get into that more below.

I am not going to get into actual numbers here because fees and other costs vary and will change over time. But if you are considering antitrust litigation, studying the components of an antitrust lawsuit will help you (1) understand what you are paying for and (2) figure out how to reduce your costs.

Below are the primary-cost drivers of an antitrust case. Of course, every case is different and a lot can come up in litigation that is unexpected and unusual. That keeps it interesting, but also increases cost variances. The list below doesn’t hit everything, but I hope it helps you.

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Government Entities that Compete in Markets Must Face Antitrust Scrutiny

May 16, 2014 | Bona Law PC

A few years ago, now-Chief Justice then-Nominee John Roberts invoked an umpire analogy during his confirmation hearings, explaining that “My job is to call balls and strikes and not to pitch or bat.” I love baseball, so I can appreciate any description that marries law and baseball.

Without getting into the substance of Chief Justice Robert’s point, let’s examine that analogy in a slightly different context:

Let’s say you are in the midst of a serious competitive ballgame. You reach the seventh inning, the score is tied 3 to 3 (good pitching, lots of great defensive plays, maybe a solo home run, and a couple manufactured runs for your team—something for everyone). The umpires have called a good game, but they haven’t been perfect.

You are the home team, so you go out to pitch in the top of the seventh inning. But instead of a batter coming up for the other team, the home plate umpire takes off his mask, grabs a bat and goes up to bat. Well, this is unexpected. Suddenly you are playing against the umpire?

Okay, you are a good pitcher, you can handle it. It is odd, but life is about making adjustments. You wait for a new umpire, but the spot behind the catcher remains vacant. What is going on? You call a time-out and ask.

After hearing the answer, you go back to the mound thinking “this is crazy.” The umpire is, indeed, now competing against you. But there isn’t a new umpire. The original umpire is still the umpire. He will still make the calls, while playing the game.

Pitch one: A fastball right down the middle, an obvious strike. No swing. “Ball One,” you hear from behind the batter’s helmet. That doesn’t seem fair. But, you’ve seen worse calls, so you ready pitch two.

Pitch two: A change-up over the plate. “Ball two.” Now, you are livid. Two strikes, but your hitter is calling the game, so you are behind in the count 2-0. This is the point where you start to ready your bean-ball pitch, but you smartly realize that if you throw at the hitter, the umpire, who is also the hitter, will probably throw you out of the game.

Pitch three: Another fast-ball down the middle. You know he won’t swing. “Ball three.” The umpire-hitter then takes first base. “That was only ball three,” you yell at the foolish ump, who can’t count. You were initially angry, but you see that he made a fool of himself for not being able to count, so your anger subsides a little. You chuckle, while getting ready to throw another pitch.

But then the umpire explains that not only does he still make the calls, but he can also change the rules during the game. So, at least for now, three balls not four balls is a walk. At this point, you let out a string of expletives, articulating that it isn’t really competition if the other side doesn’t have to follow the rules and can change them at will.

So, that was half-way amusing, but what’s the point?

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The Antitrust Laws Encourage Stealing

April 22, 2014 | Bona Law PC

That’s right, the antitrust laws care so much about competition that they even prohibit agreements among competitors to not steal. In a society that morally condemns stealing, this is counter-intuitive (and a good reason to learn a little bit about antitrust).

You might wonder now whether I will engage in some philosophy gymnastics to convince you that stealing is okay. No, but I will provide a concrete example, then offer some advice. Not as fun, but perhaps more useful.

So California is abuzz with recently released documents in an antitrust class action by employees against giant Silicon Valley employers like Google, Inc., Apple Inc., Intel Corp and Adobe Systems Inc. The case is scheduled for trial soon and news reports suggest a settlement is likely.

Update: As expected, the parties have reportedly agreed to settle the antitrust case.

What happened? The class-action employees accused major Silicon Valley employers of agreeing not to steal each other’s employees. If true, that’s kind of a big deal under the antitrust laws.

It doesn’t sound so bad, right? How can anyone get any work done if everyone is trying to steal everyone’s employees? And it just seems impolite. Competitors are so tough on each other—can’t we have just a little bit of dignity and not try to hire away your competitor’s employees? The sort of war that can ensue among competing employers for a scarce resource—quality technology employees—can make a truce very tempting.

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