cpg-retail-litigation.kotchen.comConsumer Goods & Retail Industry Litigation Blog

Consumer Goods & Retail Industry Litigation Blog skip to main | skip to sidebar Consumer Goods & Retail Industry Litigation Blog Addressing Litigation-Related Issues Relevant to Consumer Packaged Goods Manufacturers ("CPGs"), Retailers, CPG Advertisers, Consumers, and their attorneys. Issues Include Antitrust, Securities, Advertising, and Commercial Litigation. Monday, March 7, 2016 News America Marketing Settles Advertiser Antitrust Claims for $280 Million News America Marketing agreed last week to pay approximately $280 million to settle claims brought by advertising customers for alleged antitrust overcharges. The settlement was announced on the first day of trial, at which Dial Corporation, Heinz, and a class of over 550 other consumer goods manufacturers sought to recover $674 million in antitrust overcharges, which would have been automatically trebled to over $2 billion under the antitrust laws. On February 23, News America entered into settlement agreements with a few class members – Johnson & Johnson, General Mills, Dannon, and Reckit Benckiser. A class-wide settlement on behalf of the remaining class members was announced on February 29 for $244 million, along with injunctive relief that would limit the duration of News America’s exclusive contracts with retailers. The total payments by News America were reported at $280 million. The lawsuit accused News America of engaging in exclusive dealing and monopolizing the market for in-store advertising and free-standing inserts (FSIs”) in violation of Section 1 and 2 of the Sherman Antitrust Act. Several competitors previously sued News America for some of the same misconduct, and entered into sizeable settlement agreements with News America: $125 million for Insignia Systems, $500 million for Valassis, and $29.5 million for Floorgraphics. Posted by Daniel Low at 12:14 AM Links to this post Labels: advertiser , consumer packaged goods manufacturer (CPG) , news america marketing Thursday, January 28, 2016 Advertiser Class Action Against News Corp Related to In-Store Advertising Scheduled for February 29, 2016 Trial A class action lawsuit filed by Dial Corporation against News Corporation has survived multiple procedural hurdles and appears to be headed for trial on February 29. On June 18, 2015, Dial won a motion for class certification, permitting Dial’s lawsuit to proceed as a class action. The court found that Dial had satisfied the requirements of Federal Rule of Civil Procedure 23, and certified a class of "non-retailer consumer packaged goods firms . . . which have directly purchased in-store promotions from News Corp. . . . and were not subject to mandatory arbitration clauses." News Corp. argued that class certification was inappropriate where some class members potentially benefited from decreased competition, as the lack of competition created a larger network of stores in which News Corp.’s customers could place ads. The court found that the question of potential ancillary benefits was subject to common proof at trial. The court also found that, although damages may present individualized issues, common issues predominated, as a key common issue was whether News Corp. is liable under the antitrust laws. On January 15, 2016, Dial defeated News Corp’s motion for summary judgment. The court’s Order denied summary judgment on the Section One exclusive dealing claim under the Sherman Act because, "on the current record, this Court cannot conclude as a matter of law that the procompetitive benefits of the exclusive contracts are outweighed by the harm to competition." In denying summary judgment on the Section Two monopolization count, the court found that "Plaintiffs present ample evidence that News Corp. intended to use their exclusive retailer contracts . . . to exclude rivals," and that "Plaintiffs present[ed] evidence sufficient to withstand summary judgment that News Corp.’s exclusionary acts may be anticompetitive." Trial has been scheduled for February 29, 2016. News Corp. previously entered into settlement agreements with competitors Floorgraphics and Insignia over related conduct, as discussed in previous posts . Posted by Daniel Low at 5:41 PM Links to this post Labels: class action , consumer packaged goods manufacturer (CPG) , news america marketing Tuesday, November 25, 2014 Retailer Challenges Clorox’s Club Pack” Policy as Robinson-Patman Violation Woodman’s Food Market, Inc. recently filed a lawsuit against The Clorox Company, alleging that Clorox’s policy of no longer selling large pack” – a.k.a. club pack” – products outside of the club channel violates the Robinson-Patman Act. Alleged Facts Woodman’s is a large-format grocery store that competes against Sam’s Club and Costco. Clorox’s club pack products are cheaper per unit compared to smaller pack products, and Woodman’s had been purchasing the club pack products for years. In September 2014, Clorox informed Woodman’s that, as of October 1, 2014, it would only sell its club pack products to club stores – i.e. Costco, Sam’s Club, and B.J’s. Woodman’s describes the competitive consequence of Clorox’s new policy as follows: As a consequence of this new policy, two of Woodman’s primary competitors, Sam’s Club and Costco, will be able to buy and sell at retail special large packs of Clorox products that Woodman’s will no longer be able to sell giving a significant competitive advantage to these competitors of Woodman’s. In addition, because the unit price on these large pack items is significantly lower than the unit price charged for small packs of these same products, Sam’s Club and Costco will generally be able to buy and ultimately sell these large pack items at significantly lower unit costs than will be available to Woodman’s and ultimately its retail customers. Complaint ¶ 36. Alleged Robinson-Patman Act Violation and Relief Sought Woodman’s alleges that Clorox’s new policy violates three provisions of the Robinson-Patman Act, 15 U.S.C.A. §§ 13(a), (d), and (e). Section 13(a) of the Robinson-Patman Act prohibits selling products of like grade and quality” at different prices, if the price differences may injure competition. Woodman’s alleges that Clorox’s new policy violates § 13(a) because Sam’s Club and Costco will be able to purchase Clorox’s products for less per unit than Woodman’s and thus resell the products for less per unit, which will diminish Woodman’s ability to compete on price. Sections 13(d) and (e) of the Robinson-Patman Act prohibit a seller from granting advertising and promotional allowances or services to customers unless they are available to all competing customers on proportionally equal terms. [1] Woodman’s alleges that Clorox’s new policy violates these sections – primarily § 13(e) – because Clorox is now making available a special pack/package size to the club channel that is not available to Woodman’s. Woodman’s seeks declaratory and injunctive relief that would prevent Clorox from selling its club packs” only to the club channel and prevent Clorox from providing services and prices to the club channel that are not also proportionally made to Woodman’s. Woodman’s also filed a preliminary injunction motion at the same time as it filed its complaint, seeking an order from the Court (under §§ 13(d) and (e) of the Robinson-Patman Act) that would require Clorox to continue to sell its club packs” to Woodman’s during the pendency of the lawsuit. On November 24, 2014, Clorox filed its response to the motion for a preliminary injunction; this response was filed under seal and therefore is not publicly available. A decision on the preliminary injunction will likely be made in the first quarter of next year. Among other things, the court will likely address in its decision the likelihood of success of Woodman’s argument that Clorox’s policy restricting the sale of club packs outside the club channel violates §§ 13(d) and (e) of the Robinson-Patman Act. Implications of the Woodman’s...