First we have news that the seven-year antitrust extortion against the music industry came crashing to an end as a federal judge approved a multi-million dollar class action settlement:
A federal judge approved a settlement agreement Friday in a music antitrust lawsuit that will result in more than 3.5 million consumers receiving nearly $13 each.With all the recent antitrust settlement money going towards schools, one wonders if antitrust isn't simply some elaborate scheme cooked up by the teacher unions.
Judge D. Brock Hornby issued a 51-page ruling in the case that began in 1996 when attorneys general across the country began investigating whether distributors and retailers had conspired to inflate CD prices.
"This settlement will put cash in the hands of millions of consumers and music CDs in libraries and schools throughout the country, and will ensure that the challenged distributor/retailer practices will not resume," Hornby wrote.
The ruling, however, does not stipulate exactly how much consumers will receive or when the checks will be distributed. More than 3.5 million consumers filed claims, now estimated at $12.63 each.
Hornby asked lawyers to present him with a report by the end of the month on how much it will cost to distribute the checks and how much each check will be.
He also deferred ruling on a plan on how millions of CDs will be distributed to the schools and libraries.
The lawsuit, signed by the attorneys general of 43 states and territories and consolidated in Portland in October 2000, accused major record labels and large music retailers facing competition from discounters like Target and Wal-Mart of conspiring to set minimum music prices.
The defendants - Sony Music Entertainment, EMI Music Distribution, Warner-Elektra-Atlantic Corp., Universal Music Group and Bertelsmann Music Group, and retailers Tower Records, Musicland Stores and Transworld Entertainment - deny any wrongdoing. Attorneys representing the companies declined to testify in court.
Of the total settlement, $75.7 million would be distributed in the form of 5.6 million music CDs sent to libraries and schools throughout the nation.
The proposed cash settlement in the case totals $67.3 million, with roughly $44 million to be distributed to the public. The remaining cash will go toward distribution costs and legal fees.
Second, the vitamin wars took a nasty turn, as a jury in Washington yesterday awarded $147 million in damages against a number of producers of B-4:
The 11-member jury ruled in favor of plaintiffs who accused Mitsui and a subsidiary, along with two smaller companies, of taking part in a broad cartel that inflated the price of vitamin B-4 between 1988 and 1998, a spokeswoman for the presiding judge said.Now, while I'm obviously sympathetic to Mitsui on the merits, arguing this shouldn't have gone before the jury is a cop-out. True, many civil juries act irrationally, but arguing that the case was too "complex" for them is patronizing. Antitrust laws aren't complex, just recklessly and unconstitutionally vague. A rational juror would have seen that and vindicated Mitsui appropriately. That the jury chose to award the plaintiffs damages they were not legally or morally entitled to is simply a reflection of our corrupt legal culture, not the intellectual capacity of the jurors.
Mitsui sells vitamin B-4 and owns an Ohio-based subsidiary called Bioproducts that manufactures the supplement used in animal and pet feeds, among other things.
The defendants will also be responsible for expenses and attorneys fees.
Mitsui has denied it had any role in the vitamin conspiracy and refused to be part of a billion-dollar, industry settlement of class-action charges against vitamin manufacturers in 1999.
Mitsui's attorney, Sutton Keany, said he will ask the judge to set aside the verdict based on the argument that the case never should have gone before a jury because it was too complex and the evidence was insufficient.
Finally, the U.S. Court of Appeals for the Sixth Circuit yesterday affirmed a summary judgment in an antitrust proceeding against various drug manufacturers over a non-compete agreement between the two companies. District Judge Louis Oberdorfer, sitting by designation and writing for the Sixth Circuit, states the case as follows:
This antitrust case arises out of an agreement entered into by the defendants, Hoescht Marion Roussel, Inc., the manufacturer of the prescription drug Cardizem CD, and Andrx Pharmaceuticals, Inc., then a potential manufacturer of a generic version of that drug. The agreement provided, in essence, that Andrx, in exchange for quarterly payments of $10 million, would refrain from marketing its generic version of Cardizem CD even after it had received FDA approval. The plaintiffs are direct and indirect purchasers of Cardizem CD who filed complaints challenging the Agreement as a violation of federal and state antitrust laws. After denying the defendants' motions to dismiss, and granting the plaintiffs' motions for partial summary judgment, the district court certified [the following question] for interlocutory appeal:It's a testament to just how little the judicial culture cares about individual rights today that a company could be found in violation of the law without a full trial on the merits. I understand why summary judgment is used in some circumstances, but here the company was entitled to at least present a defense at trial. But such is the power of the antitrust laws, where judges and lawyers are permitted to second-guess business decisions without the niceties of due process. Granted, due process would have mattered little in the end, despite the fact Andrx had every right to enter into a voluntary agreement with a competitor.
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In determining whether Plaintiffs' motions for partial judgment were properly granted, whether the Defendants' September 24, 1997 Agreement constitutes a restraint of trade that is illegal per se under section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1, and under the corresponding state antitrust laws at issue in this litigation.
[Answer]: Yes. The Agreement whereby HMR paid Andrx $40 million per year not to enter the United States market for Cardizem CD and its generic equivalents is a horizontal market allocation agreement and, as such, is per se illegal under the Sherman Act and under the corresponding state antitrust laws. Accordingly, the district court properly granted summary judgment for the plaintiffs on the issue of whether the Agreement was per se illegal.
If you read the caption of the Sixth Circuit opinion, you'll see numerous state attorneys general and interests groups as plaintiffs or supporting amici. Like most antitrust cases, Andrx was taregeted for purely political reasons—people wanted the drugs Andrx and HMR rightfully owned, and thus any action to deny the people their entitlement must be an antitrust violation.