How to Spot a Nation in Freefall

JOSEPH MARGULIES

Cornell law professor Joseph Margulies points out that when a nation doesn’t have the money to fix its roads but does give money away to help the rich get richer, that is a sign of a nation in collapse. Margulies describes the shift to neoliberal thinking under Nixon that has produced record levels of economic inequality and explains why the Trump administration’s proposed economic policies would benefit only the rich.

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Viamedia, Inc. v. Comcast Corp.

Docket: 18-2852

Opinion Date: February 24, 2020

Judge: HAMILTON

Areas of Law: Antitrust & Trade Regulation, Business Law, Communications Law

Viamedia sued Comcast under the Sherman Act, 15 U.S.C. 2, for using its monopoly power in one service market (Interconnect) to exclude competition and gain monopoly power in another service market (advertising representation) in the Chicago, Detroit, and Hartford geographic markets. Interconnect services are cooperative selling arrangements for advertising through an “Interconnect” that enables retail cable television service providers to sell advertising targeted efficiently at regional audiences. Advertising representation services assist those providers with the sale and delivery of national, regional, and local advertising slots. Viamedia’s evidence indicated Comcast used its monopoly power over the Interconnect to force its smaller retail cable television competitors to stop doing business with Viamedia; Viamedia’s customers for advertising representation (Comcast’s retail cable competitors) switched to Comcast because Comcast presented a choice: either start buying advertising representation services from us and regain access to the Interconnect or keep buying services from Viamedia and stay cut off from the Interconnect they needed to compete effectively. The strategy cost Comcast millions of dollars in the short run but eventually gave it monopoly power in these local markets for advertising representation services. The Seventh Circuit reversed the dismissal of Viamedia’s case. Giving Viamedia the benefit of its allegations and evidence, this is not a case in which Section 2 is being misused to protect weaker competitors rather than competition more generally. Viamedia has also adequately stated a claim that Comcast has unlawfully refused to deal with Viamedia and any cable competitor that bought advertising representation from Viamedia.

Sharif Pharmacy Inc. v. Prime Therapeutics LLC

Dockets: 18-2725, 18-3003

Opinion Date: February 24, 2020

Judge: HAMILTON

Areas of Law: Antitrust & Trade Regulation, Business Law

The plaintiffs (Sharif Pharmacy, J&S) were members of the Prime pharmacy network, which is owned, in part, by Blue Cross Blue Shield. Under Medicare, Medicaid, and private health insurance plans, many patients had significant financial incentives to buy their prescription drugs from pharmacies within the network. Prime terminated both plaintiffs from the network after audits uncovered invoicing irregularities. The plaintiffs claimed that their terminations from the Prime network violated the Sherman Act, 15 U.S.C. 1 and 2. Three customers joined the suit, having had to switch to different, less convenient pharmacies. The plaintiffs alleged that the audits were pretextual and that Prime really terminated their participation in its network to get rid of competition with Walgreens, with whom it had entered a joint venture. Prime sent letters to both pharmacies’ customers saying that Sharif and J&S would no longer accept their insurance and recommending that customers have their prescriptions filled at a nearby Walgreens. Prime also retained funds from both pharmacies as a result of the audits. The Seventh Circuit affirmed the dismissals of the cases by two district courts. The individual plaintiffs lacked standing. The pharmacy could not identify an appropriate geographic market where a defendant had or threatened to have monopoly power.

INTL FCStone Financial Inc. v. Farmer

Dockets: 19-2123, 19‐2111

Opinion Date: February 24, 2020

Judge: Brennan

Areas of Law: Arbitration & Mediation, Civil Procedure, Securities Law

Defendants, commodities futures investors, maintained trading accounts with FCStone, a clearing firm that handled the confirmation, settlement, and delivery of transactions. In 2018, extraordinary volatility in the natural gas market wiped out the defendants’ account balances with FCStone, leaving some defendants in debt. The defendants alleged Commodity Exchange Act violations against FCStone and initiated arbitration proceedings before the Financial Industry Regulatory Authority (FINRA). FCStone sought a declaratory judgment, claiming the parties must arbitrate their disputes before the National Futures Association (NFA), and that FINRA lacks jurisdiction over the underlying disputes. The district court ruled for FCStone, ordered arbitration and designated an arbitration forum, then stayed the case to address related issues, including the arbitration venue. The Seventh Circuit dismissed an appeal for lack of jurisdiction under 28 U.S.C. 1291 or the Federal Arbitration Act, ” 9 U.S.C. 16(a)(3). The district court’s decisions were non-final and no exception to the rule of finality applies. The court rejected an argument that the order amounted to an injunction prohibiting FINRA arbitration. A pro‐arbitration decision, coupled with a stay (rather than a dismissal) of the suit, is not appealable. The court noted that the district court did not decide whether the parties’ arbitration agreements relinquished defendants’ purported rights to FINRA arbitration.

Physicians Healthsource, Inc. v. A-S Medication Solutions, LLC

Docket: 19-1452

Opinion Date: February 24, 2020

Judge: Joel Martin Flaum

Areas of Law: Business Law, Communications Law

In February 2010, AMS sent a fax advertisement to 11,422 different numbers from a recently acquired customer list. PHI filed a putative class action suit asserting that those faxes violated the Telephone Consumer Protection Act of 1991 (TCPA), 47 U.S.C. 227. The district court subsequently certified the proposed class, granted PHI’s motion for summary judgment on liability against AMS and its CEO, entered a nearly $6 million judgment, and approved a distribution plan for that judgment. The Seventh Circuit affirmed. AMS conceded that the fax in question was an advertisement that lacked any kind of disclaimer explaining how to opt-out of future faxes. AMS did not meet its burden of proving that it had prior express invitation or permission to send faxes; even if the company from which it obtained the customer list had express permission to send faxes, that permission is not transferrable under the TCPA.