Justia U.S. 7th Circuit Court of Appeals Opinion Summaries

Rooftops sells tickets to view Cubs games and other events at Wrigley Field from the roofs of buildings it controls. Chicago has an ordinance allowing the rooftop businesses. Before the 2002 season, the Cubs installed a windscreen above the outfield bleachers, obstructing the views from rooftop businesses and sued Rooftops, claiming misappropriation of Cubs’ property by charging fees to watch games.The parties settled by entering into the License Agreement running through 2023. Rooftops agreed to pay the Cubs 17% of their gross revenues in exchange for views into Wrigley Field. The Agreement contemplated Wrigley Field's expansion. In 2013, the Cubs released a mock‐up of its proposed renovation, showing that rooftop businesses would be largely blocked by the construction. The city approved the plan over objections. Rooftops claimed that Cubs’ representatives used the threat of blocking views and other “strong-arm tactics” as leverage to force a sale, and sued, alleging: attempted monopolization; false and misleading commercial representations, defamation, false light, and breach of the non‐disparagement provision; and breach of contract. The court denied Rooftops’ motion for a preliminary injunction. The Seventh CIrcuit affirmed its dismissal of monopolization claims because Major League Baseball’s antitrust exemption applies; Rooftops failed to establish a plausible relevant market; and the Cubs cannot be limited by antitrust law from distributing their own product. The contract's plain language did not limit expansions to Wrigley Field's seating capacity. View "Right Field Rooftops, LLC v. Chicago Cubs Baseball Club, LLC" on Justia Law

Methodist and Saint Francis are the two largest hospitals in Peoria, Illinois. Saint Francis is considerably larger and more profitable. Methodist filed suit, charging Saint Francis with violating the Sherman Act by entering into exclusive contracts with insurance companies, covering more than half of all commercially-insured patients in the area. Methodist argued that it could not obtain a sufficiently high volume of patients to enable it to invest in improvements. The Seventh Circuit affirmed summary judgment in favor of Saint Francis, noting that health insurers regard Saint Francis as a “must have” hospital, because it provides certain services that the other hospitals in the area do not provide, such as solid-organ transplants, neonatal intensive care, and a Level 1 trauma center. The contracts are a form of requirements contract; an insurance company may get better rates from a hospital by agreeing to an exclusive contract, which will drive more business to the hospital. The contracts are of fixed duration; when they terminate, the insurance companies are free to contract with other hospitals. Competition-for-the-contract is protected by the antitrust laws and is common. The court noted that none of the other four area hospitals had joined the case and the Department of Justice declined to file a case. View "Methodist Health Services Corp v. OSF Healthcare System" on Justia Law

The district court certified eight classes, consisting of persons in Illinois and Missouri who take eye drops manufactured by six pharmaceutical companies for treatment of glaucoma. Plaintiffs claimed that the defendants’ eye drops are unnecessarily large and wasteful, in violation of the Illinois Consumer Fraud Act, 815 ILCS 505/1, and the Missouri Merchandising Practices Act, Mo. Rev. Stat. 407.010, so that the price of the eye drops is excessive and that the large eye drops have a higher risk of side effects. There was no claim that members of the class have experienced side effects or have been harmed because they ran out of them early. The Seventh Circuit vacated with instructions to dismiss. The court noted possible legitimate reasons for large drops, the absence of any misrepresentation or collusion, and that defendants’ large eye drops have been approved by the FDA for safety and efficacy. “You cannot sue a company and argue only ‘it could do better by us,’” nor can one bring a suit in federal court without pleading that one has been injured. The plaintiffs allege only “disappointment.” View "Eike v. Allergan, Inc." on Justia Law

BMS provides administrative services to bankruptcy trustees. It uses Rabobank as the depositary for banking services that BMS provides through its software. Crane, the trustee in the Integrated bankruptcy, hired BMS; the contract required Crane to hire Rabobank for banking services in the proceeding. In a separate contract, Crane authorized Rabobank to withdraw its monthly fee. The plaintiff, a law firm, was a creditor of Integrated and filed a bankruptcy claim, ultimately receiving a distribution of $12,472.55. It would have received $12,666.90, but for its part of Rabobank’s fee, and more had Rabobank paid interest on the estate’s deposits. Plaintiff sued under the Bank Holding Company Act, 12 U.S.C. 1972(1)(E), which states that a bank shall not "extend credit, lease or sell property of any kind, or furnish any service, or fix or vary the consideration for any of the foregoing, on the condition … that the customer shall not obtain some other credit, property, or service from a competitor of such bank … other than a condition … to assure the soundness of the credit.” The Seventh Circuit affirmed dismissal. Had Rabobank conditioned its provision of services on the trustee never hiring any other bank in any bankruptcy proceeding, it would constitute exclusive dealing. No one forced Crane to deal with BMS and Rabobank and there was no argument that the fee was exorbitant, or would have been lower with a different bank. View "McGarry & McGarry, LLC v. Rabobank, N.A." on Justia Law

Advocate Health Care and NorthShore University HealthSystem operate hospital networks in Chicago’s northern suburbs. They propose to merge. The Clayton Act forbids asset acquisitions that may lessen competition in any “section of the country,” 15 U.S.C. 18. The Federal Trade Commission and the state sought an injunction, pending the Commission’s consideration of the issue. To identify a relevant geographic market where anticompetitive effects of the merger would be felt, plaintiffs relied on the “hypothetical monopolist test,” which asks what would happen if a single firm became the sole seller in a proposed region. If such a firm could profitably raise prices above competitive levels, that region is a relevant geographic market. The Commission’s expert economist chose an 11-hospital candidate region and determined that it passed the hypothetical monopolist test. The district court denied a preliminary injunction, finding that the plaintiffs had not demonstrated a likelihood of success on the merits, but stayed the merger pending appeal. The Seventh Circuit reversed; the geographic market finding was clearly erroneous. The evidence was not equivocal: most patients prefer to receive hospital care close to home and insurers cannot market healthcare plans to employers with employees in Chicago’s northern suburbs without including some of the merging hospitals in their networks. The district court rejected that evidence because of some patients’ willingness to travel for care; its analysis erred by overlooking the market power created by the remaining patients’ preferences (the “silent majority” fallacy). View "FTC v. Advocate Health Care Network" on Justia Law

From 1992-2013, a Milwaukee ordinance limited taxicab permits to those in existence on January 1, 1992 that were renewed. The ordinance lowered the ceiling over time by virtue of the nonrenewals. By 2013 the number of permits had diminished from 370 to 320. The price of permits on the open market soared as high as $150,000. In 2013, after a successful equal protection and substantive due process challenge, the city conducted a lottery, which attracted 1700 permit seekers. Milwaukee had only one taxicab per 1850 city residents, a much lower ratio than comparable cities. The city eliminated the cap in 2014. In the meantime, “ridesharing” companies such as Uber, had diminished the profitability of the existing taxi companies. Plaintiffs, cab companies, alleged that the increased number of permits has taken property without compensation. The Seventh Circuit affirmed dismissal. The taxi companies were aware that there was no guarantee that the ordinance would remain in force indefinitely, and that, were it repealed, they would be faced with new competition that would threaten their profits. The ordinance gave them no property right; its repeal invaded no right conferred by the Constitution. The court similarly rejected state-law claims of breach of contract, promissory estoppel, and equitable estoppel. View "Joe Sanfelippo Cabs, Inc. v. City of Milwaukee" on Justia Law

Plaintiffs own and operate Chicago taxicabs or livery vehicles or provide services to such companies, such as loans and insurance. Taxi and livery companies are tightly regulated by the city regarding driver and vehicle qualifications, licensing, fares, and insurance. Ride-share services, such as Uber, are less heavily regulated and have a different business model. Chicago’s 2014 ride-share ordinance allows the companies to set their own fares. The plaintiffs challenged the ordinance on four Constitutional and three Illinois-law grounds. The district judge dismissed all but the two claims that accuse the city of denying the equal protection of the laws by allowing the ride-shares to compete with taxi and livery services without being subject to the same regulations. The Seventh Circuit ordered dismissal of all seven claims. There are enough differences between taxi service and ride-share service to justify different regulatory schemes. Chicago has legally chosen deregulation and competition over preserving the traditional taxicab monopolies. A legislature, having created a statutory entitlement, is not precluded from altering or even eliminating the entitlement by later legislation. View "Ill. Transp. Trade Ass'n v. City of Chicago" on Justia Law

Clorox decided to sell the largest-sized containers of its products only to discount warehouses such as Costco and Sam’s Club. Ordinary grocery stores, including Woodman’s, could only obtain smaller packages. Arguing that package size is a promotional service, Woodman’s sued Clorox for unlawful price discrimination under the Robinson-Patman Act, 15 U.S.C. 13(e). The district court denied Clorox’s motion to dismiss. On interlocutory appeal, the Seventh Circuit reversed. Only promotional “services or facilities” fall within subsection 13(e). Size alone is not enough to constitute a promotional service or facility for purposes of subsection 13(e); any discount that goes along with size must be analyzed under subsection 13(a). The convenience of the larger size is not a promotional service or facility. View "Woodman's Food Mkt, Inc. v. Clorox Co." on Justia Law

The plaintiffs (purchasers of containerboard) filed suit under the Sherman Act, 15 U.S.C. 1, alleging that the defendants (producers and sellers of containerboard) agreed “to restrict the supply of containerboard by cutting capacity, slowing back production, taking downtime, idling plants, and tightly restricting inventory,” which led to an increase in the price of containerboard. The court certified a class under FRCP 23: All persons that purchased Containerboard Products directly from any of the Defendants or their subsidiaries or affiliates for use or delivery in the United States from at least as early as February 15, 2004 through November 8, 2010. The proposed definition carved out the defendants themselves, entities or personnel related to them, and governmental entities. The Seventh Circuit affirmed after examining: whether common questions predominate; whether antitrust injury can be proved using a common method; whether the amount of damages can be proved using a common method; and whether a class action is superior. The court noted that no defendant challenged the Purchasers’ experts and there were few factual disputes. A “smattering” of individual contract defenses did not undermine the superiority of the (b)(3) class action. View "Kleen Prods. LLC v. Int'l Paper Co." on Justia Law

A class action filed against Dairy Farmers of America (DFA), a dairy marketing cooperative, Keller’s Creamery, a butter manufacturer, two DFA officers, and two Keller’s officers, alleged a conspiracy to purchase cheese traded on the Chicago Mercantile Exchange in order to help DFA and Keller’s manipulate the price of Class III milk futures. The parties named in the initial complaint reached a settlement (DFA Settlement), which the district court approved in 2014. In 2012, plaintiffs filed an amended class action complaint, adding Schreiber Foods as a defendant and alleging violations of sections 1 and 2 of the Sherman Act, the California Cartwright Act, the Commodity Exchange Act, and RICO. The district court dismissed the section 2 Sherman Act claims. In 2013, the court granted Schreiber summary judgment on the remaining claims. The Seventh Circuit affirmed, rejecting arguments that the district court abused its discretion by limiting discovery to only “high-level” employees and prohibiting the depositions of several employees and in including Schreiber in the DFA Settlement. View "Indriolo Distribs., Inc. v. Schreiber Food, Inc." on Justia Law