Legal Library: Cases and Proceedings

In December 2018, the Federal Trade Commission announced that the operators of Florida-based student loan debt relief scheme Student Debt Doctor are banned from the debt relief business as part of agreements settling allegations that they collected illegal upfront fees and falsely promised to help some consumers enroll in government programs that would reduce or forgive their student loan debt. In June 2022, the agency announced that it is sending 22,817 checks totaling more than $2 million to borrowers who lost money to the scheme.

The FTC required global healthcare company Grifols S.A. to divest blood plasma collection centers in three U.S. cities, among other conditions, as part of a settlement resolving charges that Grifols’ acquisition of Florida-based Biotest US Corporation is anticompetitive and violates federal antitrust law. The complaint alleges that, as proposed, the acquisition would harm competition in the markets for collection of human blood plasma in Lincoln, Nebraska, Augusta, Georgia, and Youngstown, Ohio. Grifols and Biotest US are the only companies that operate plasma collection centers in these cities, and, without a remedy, the merger would result in a merger-to-monopoly in these cities. Under the terms of the proposed settlement, Grifols will divest its plasma collection centers in these three cities to KedPlasma, which is a subsidiary of Kedrion Biopharma Inc., a leading manufacturer of protein products and the fifth-largest producer of plasma proteins worldwide. 

The complaint also alleges that, absent a remedy, the acquisition would harm the U.S. market for hepatitis B immune globulin, or HBIG, a plasma-derived injectable medicine that provides hepatitis B antibodies for preventing hepatitis B infections. When Grifols announced the proposed acquisition in December 2017, Biotest US owned 41 percent of ADMA Biologics, Inc., which has the largest share in the U.S. market for HBIG and competes with Grifols and one other supplier.  Biotest US has recently transferred its ownership share in ADMA to The Biotest Divestiture Trust, the parent company of Biotest US. Because Grifols is only seeking to acquire Biotest US and not its parent, Grifols will not acquire any ownership interest in ADMA under the proposed acquisition. Under the proposed consent agreement, Grifols is prohibited, without prior notification, from acquiring any ownership interest in ADMA or obtaining any rights to nominate or obtain representation on the ADMA Board of Directors.

In June 2018, the operators of a Los Angeles-based student loan debt relief scam agreed to settle Federal Trade Commission charges that they falsely claimed to be affiliated with the Department of Education, charged consumers illegal upfront fees, and collected monthly fees they claimed would be credited toward consumers’ student loans. In February 2021, the FTC sent refunds totaling to people who lost money as a result of the scam.

Fortiline, LLC, a company that distributes ductile iron pipe, fittings and accessories throughout much of the United States, agreed to  settle charges that it violated federal antitrust law by inviting a competitor to raise and fix prices. This is the first case where the FTC has challenged an invitation to collude by a firm that is both a direct competitor with, and a distributor for, the invitee. According to an administrative complaint filed by the FTC, on two occasions in 2010, Fortiline invited a competing firm, which mainly manufactures ductile iron pipe but also engaged in direct sales to contractors, to collude on pricing in North Carolina and most of Virginia. In some areas, Fortiline competes with this firm – identified in the complaint as “Manufacturer A” – by distributing ductile iron pipe (“DIP”) products made by another DIP manufacturer, identified as “Manufacturer B.” In other areas, Fortiline distributes the product of Manufacturer A. The FTC’s complaint alleges that on two occasions when Fortiline was competing with Manufacturer A, Fortiline communicated an invitation to collude on DIP pricing.The proposed consent order prohibits Fortiline from entering into, attempting to enter into, or inviting any agreement with any competitor to raise or fix prices, divide markets, or allocate customers.

The FTC filed a complaint in federal district court alleging that Endo Pharmaceuticals Inc. and several other drug companies violated antitrust laws by using pay-for-delay settlements to block consumers’ access to lower-cost generic versions of Opana ER and Lidoderm with an agreement not to market an authorized generic – often called a “no-AG commitment” – as a form of reverse payment. The complaint, filed in the Eastern District of Pennsylvania, alleges that Endo paid the first generic companies that filed for FDA approval – Impax Laboratories, Inc. and Watson Laboratories, Inc. – to eliminate the risk of competition for Opana ER and Lidoderm, in violation of the Federal Trade Commission Act. Opana ER is an extendedrelease opioid used to relieve moderate to severe pain. Lidoderm is a topical patch used to relieve pain associated with post-herpetic neuralgia, a complication of shingles. The FTC is seeking a court judgment declaring that the defendants’ conduct violates the antitrust laws, ordering the companies to disgorge their ill-gotten gains, and permanently barring them from engaging in similar anticompetitive behavior in the future.  Teikoko Pharma USA and Teikoku Seiyaku Co., Ltd. agreed to a stipulated order resolving FTC charges.

In November 2016, the FTC voluntarily dismissed the complaint in this action.  On January 23, 2017, the FTC refiled charges related to the Lidoderm agreements in federal court in California (Federal Trade Commission vs. Allergan plc; Watson Laboratories, Inc., et al) and refiled charges related to the Opana ER agreement in a Part 3 administrative proceeding.  (In re Impax Laboratories, Inc.)