Legal Library: Cases and Proceedings

To settle FTC charges that its actions violated the antitrust laws, the Board of Dental Examiners of Alabama agreed to stop requiring on-site supervision by licensed dentists of alignment scans of prospective patients’ mouths seeking to address misaligned teeth or gaps between teeth. According to the complaint, the board amended a rule to prohibit dental hygienists and other non-dentist practitioners from performing scans inside a patient’s mouth without on-site dentist supervision. The complaint alleges that the Board unreasonably excluded from competition providers of teledentistry-based teeth alignment products and services, and that it did this without adequate active supervision from neutral state officials, in violation of the FTC Act.

In July 2021, the owners of a New Jersey-based company that sells septic tank cleaning products agreed to a permanent ban on telemarketing and will pay more than $1.6 million to settle FTC charges that the company and its telemarketer made illegal robocalls to consumers, including tens of millions of calls to numbers listed on the agency’s DNC Registry. In addition, the defendants will turn over a residential property as part of the settlement. The complaint names as defendants: Environmental Safety International, Inc. or ESI; ESI’s two officers, brothers Joseph Carney and Sean Carney; and their other brother Raymond Carney.

Casey’s General Stores, Inc., Buck’s Intermediate Holdings, LLC, and Steven Buchanan agreed to divest retail fuel assets in local gasoline and diesel fuel markets across two states to settle Federal Trade Commission charges that Casey’s proposed acquisition would violate federal antitrust law. The complaint alleges that the acquisition as proposed would harm competition for retail sale of gasoline in seven local markets in Nebraska and Iowa. Under the terms of the proposed consent order, Casey’s is required to divest six retail fuel outlets, three Casey’s outlets and three Bucky’s outlets, to Western Oil II, LLC and its affiliate Danco II, LLC within 10 days after Casey’s completes the acquisition. On June 9, 2021 the Commission announced the final consent agreement in this matter.

Reckitt Benckiser Group plc has agreed to pay $50 million to settle Federal Trade Commission charges that it violated the antitrust laws through a deceptive scheme to thwart lower-priced generic competition to its branded drug Suboxone. According to the complaint, before the generic versions of Suboxone tablets became available, Reckitt and its former subsidiary Reckitt Benckiser Pharmaceuticals, now known as Indivior, Inc., developed a dissolvable oral film version of Suboxone and worked to shift prescriptions to this patent-protected film. Worried that doctors and patients would not want to switch to Suboxone Film, Reckitt allegedly employed a “product hopping” scheme where the company misrepresented that the film version of Suboxone was safer than Suboxone tablets because children are less likely to be accidentally exposed to the film product. Indivior has agreed to pay an additional $10 million to settle FTC charges. On May 10, 2021, the FTC announced that it sent nearly $60 million in payments to consumers who were victims of the scheme.

Wine and spirits maker E. & J. Gallo Winery has agreed to divest several product lines and remove certain others from its asset purchase agreement with competitor Constellation Brands, Inc. to settle Federal Trade Commission charges that their proposed $1.7 billion transaction would violate federal antitrust law. The complaint alleges that unremedied, the proposed acquisition would eliminate head-to-head competition between Gallo and Constellation and thereby was likely to substantially lessen competition in the United States for six types of wine-and-spirits products: entry-level on-premise sparkling wine, low-priced sparkling wine, low-priced brandy, low-priced port, low-priced sherry, and high color concentrates.The FTC announced approval of the final order in April 2021.

Arko Holdings Ltd. and Empire Petroleum Partners, LLC have agreed to divest retail fuel assets in local gasoline and diesel fuel markets across four states to settle Federal Trade Commission charges that Arko’s proposed acquisition of Empire would violate federal antitrust law. The Commission announced final approval of the consent order in October 2020.

Pharmaceutical companies AbbVie Inc. and Allergan plc have agreed to divest assests to settle Federal Trade Commission charges that AbbVie's proposed $63 billion acquisition of Allergan would violate federal antitrust law. On Sept. 4, 2020, the Commission announced the final consent agreement in this matter.

Tri Star Energy, LLC, Hollingsworth Oil Company, Inc., C & H Properties, and Ronald L. Hollingsworth, which operate fuel outlets and convenience stores, agreed to settle FTC charges that Tri Star’s acquisition of retail outlets and related interests of Hollingsworth would violate antitrust law. The complaint alleges that the proposed acquisition would harm competition for both retail gasoline sales and retail diesel fuel sales in the two local markets of Whites Creek, Tennessee and Greenbrier, Tennessee. Under the proposed consent agreement, Tri Star would be required to divest to Cox Oil Company, Inc. retail fuel assets in Whites Creek and Greenbrier within 10 days after Tri Star completes the acquisition. On August 14, 2020, the Commission announced it had approved the final consent order in this matter.

The Federal Trade Commission issued an administrative complaint alleging that Benco, Henry Schein and Patterson, the nation's three largest dental supply companies, violated U.S. antitrust laws by conspiring to refuse to provide discounts to or otherwise serve buying groups representing dental practitioners. These buying groups sought lower prices for dental supplies and equipment on behalf of solo and small-group dental practices seeking to gain discounts by aggregating and leveraging the collective purchasing power and bargaining skills of the individual practices. The complaint also alleges an FTC Act Section 5 violation against Benco for inviting a fourth competing distributor to join the conspiracy.

Reckitt Benckiser Group plc has agreed to pay $50 million to settle Federal Trade Commission charges that it violated the antitrust laws through a deceptive scheme to thwart lower-priced generic competition to its branded drug Suboxone. According to the complaint, before the generic versions of Suboxone tablets became available, Reckitt and its former subsidiary Reckitt Benckiser Pharmaceuticals, now known as Indivior, Inc., developed a dissolvable oral film version of Suboxone and worked to shift prescriptions to this patent-protected film. Worried that doctors and patients would not want to switch to Suboxone Film, Reckitt allegedly employed a “product hopping” scheme where the company misrepresented that the film version of Suboxone was safer than Suboxone tablets because children are less likely to be accidentally exposed to the film product. Invidior has agreed to pay an additional $10 million to settle FTC charges.

Retail fuel station and convenience store operator Alimentation Couche-Tard Inc. and its affiliate CrossAmerica Partners LP agreed to divest 10 fuel stations in Minnesota and Wisconsin to settle Federal Trade Commission charges that ACT’s proposed acquisition of Holiday Companies would violate federal antitrust law. The FTC later alleged that they violated a 2018 order requiring divestitures of 10 retail fuel stations in Minnesota and Wisconsin to Commission-approved buyers no later than June 15, 2018. They agreed to pay a $3.5 million civil penalty to the FTC to settle the allegations.

Össur Hf and College Park Industries, Inc., both makers of prosthetic limbs, have agreed to divest College Park’s myoelectric elbow business to settle Federal Trade Commission charges that Össur’s proposed acquisition of College Park would violate federal antitrust law.

Rent-to-own operators Aaron’s Inc., Buddy’s Newco, LLC, and Rent-A-Center, Inc. agreed to settle FTC charges that they negotiated and executed reciprocal purchase agreements in violation of federal antitrust law. The complaints allege that from June 2015 to May 2018, Aaron’s, Buddy’s, and Rent-A-Center each entered into anticompetitive reciprocal agreements with each other and other competitors. The three proposed consent agreements prohibited the rent-to-own companies and their franchisees from entering into any reciprocal purchase agreement or inviting others to do so, and from enforcing the non-compete clauses still in effect from the past reciprocal purchase agreements. After a public comment period, the Commission announced the final consent agreements.

Rent-to-own operators Aaron’s Inc., Buddy’s Newco, LLC, and Rent-A-Center, Inc. agreed to settle FTC charges that they negotiated and executed reciprocal purchase agreements in violation of federal antitrust law. The complaints allege that from June 2015 to May 2018, Aaron’s, Buddy’s, and Rent-A-Center each entered into anticompetitive reciprocal agreements with each other and other competitors. The three proposed consent agreements prohibited the rent-to-own companies and their franchisees from entering into any reciprocal purchase agreement or inviting others to do so, and from enforcing the non-compete clauses still in effect from the past reciprocal purchase agreements. After a public comment period, the Commission announced the final consent agreements.

Rent-to-own operators Aaron’s Inc., Buddy’s Newco, LLC, and Rent-A-Center, Inc. agreed to settle FTC charges that they negotiated and executed reciprocal purchase agreements in violation of federal antitrust law. The complaints allege that from June 2015 to May 2018, Aaron’s, Buddy’s, and Rent-A-Center each entered into anticompetitive reciprocal agreements with each other and other competitors. The three proposed consent agreements prohibited the rent-to-own companies and their franchisees from entering into any reciprocal purchase agreement or inviting others to do so, and from enforcing the non-compete clauses still in effect from the past reciprocal purchase agreements. After a public comment period, the Commission announced the final consent agreements.

Polyurethane foam producers FXI Holdings, Inc. and Innocor, Inc. have agreed to divest polyurethane foam pouring plants in three regional markets to Future Foam, Inc., to settle Federal Trade Commission charges that FXI’s proposed $850 million acquisition of Innocor would violate federal antitrust law. The FTC alleges that the combination of FXI and Innocor would substantially lessen competition for low-density conventional polyurethane foam used in home furnishings in three regional markets: the Pacific Northwest (Oregon and Washington); the Midwest states of Indiana, Michigan, and Ohio; and Mississippi. To remedy the proposed transaction’s anticompetitive effects, the proposed order requires the companies to divest FXI’s foam-pouring plant in Kent, Washington and Innocor’s foam-pouring plants in Elkhart, Indiana and Tupelo, Mississippi to Future Foam no later than 10 days after the close of the acquisition. On April 20, 2020, the Commission voted 5-0 to approve the final order settling the charges.

Veterinary service providers Compassion First and National Veterinary Associates, or NVA, have agreed to divest facilities in three locations to MedVet Associates, LLC, to settle Federal Trade Commission charges that Compassion First’s proposed $5 billion acquisition of NVA would violate federal antitrust law. According to the complaint, as proposed, the acquisition would harm competition in and around Asheville, N.C., and Greenville, S.C.; between Norwalk, Conn., and Yonkers, N.Y.; and  in and around Fairfax and Manassas, Va. for various specialty and emergency veterinary services, by eliminating close, head-to-head competition between the parties. Under the proposed settlement agreement, the order requires Compassion First and NVA to divest one clinic in each of the three geographic markets.

Food distributor US Foods, Inc. has agreed to divest assets to settle Federal Trade Commission charges that US Foods, Inc.’s proposed $1.8 billion acquisition of Services Group of America, Inc. would violate federal antitrust law. The complaint alleges that, in Eastern Idaho, Western North Dakota, Eastern North Dakota, and the Seattle area, the transaction would eliminate a key broadline distributor and limit customers’ ability to switch between distributors to obtain better pricing and service. Under the proposed consent agreement, within 30 days of the acquisition closing, US Foods must divest three FSA distribution centers: one in Boise, Idaho; another in Fargo, North Dakota (FSA competes in both Eastern and Western North Dakota out of this facility); and a third in the greater Seattle area. On Nov. 19, 2019, the FTC announced that it has approved a final order settling the charges.

The FTC’s December 2016 complaint alleged that between 2011 and 2016 the defendants called timeshare property owners falsely claiming that they had a buyer or renter ready to buy or rent their properties for a specified price, or making false promises to sell the timeshares quickly. A May 2018 settlement order permanently banned the defendants from timeshare resale services and telemarketing and required them to surrender approximately $3.4 million worth of assets to the Commission. On October 10, 2019, the FTC mailed 8,088 refund checks totaling nearly $2.7 million to consumers defrauded by the scheme.