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From Antitrust Law Daily, May 22, 2017

High Court rejects state action, exclusive dealing questions

By Jeffrey May, J.D.

The U.S. Supreme Court continues to clean up its docket. With one month left in the October 2016 term, the Court today rejected two petitions in antitrust cases.

First, the Court refused to disturb a decision by the U.S. Court of Appeals in New Orleans that a state agency authorized with regulating nursing education within the state of Louisiana was entitled to Eleventh Amendment immunity or "sovereign immunity" as an arm of the state in a suit alleging that the agency colluded with its members to terminate the accreditation of a public university as a nursing education provider.

A nursing student questioned the appellate court’s decision to affirm dismissal of the student’s claims for lack of subject matter jurisdiction. The petitioner was a student at a Louisiana school whose BSN nursing program was involuntarily terminated by the board.

In her petition, the student contended that, under the Court’s decision in N.C. State Bd. of Examiners v. FTC, the Midcal active supervision test was an essential prerequisite of Parker immunity for any non-sovereign entity, public or private, controlled by active market participants. In this case, the Respondent is a "Board" under ParkerMidcal, and N.C. Dental Bd. of Examiners, and the district court and Fifth Circuit failed to adhere and apply the standards for the "State Action Test" articulated in the Fifth Circuit’s 1998 decision in Earles v. State Bd. Of Certified Accountants, 139 F 3d. 1033, it was argued (Rodgers v. State of Louisiana Board of NursingDkt. 16-1114).

Exclusive dealing. The Supreme Court also refused to weigh in on putative class action allegations that a bank used exclusive dealing arrangements—with more than 50 percent of the Chapter 7 Bankruptcy Trustees in the United States—to eliminate the bank’s need to compete for over a billion dollars of banking deposits of Chapter 7 estates. The Supreme Court had been asked what constitutes an exclusive dealing arrangement under the Bank Holding Company Act, 12 U.S.C. §1972.

Left standing is a decision of the U.S. Court of Appeals in Chicago, which held that the challenged conduct did not amount to an exclusive dealing arrangement. The petitioner asserted that the Seventh Circuit decision conflicted with previous Supreme Court decisions on exclusive dealing arrangements under the Clayton Act (15 U.S.C. §14). The relevant provisions of the Bank Holding Company Act and the Clayton Act were functionally identical, it was argued, and they both conditioned the decision about whether an exclusive dealing arrangement existed on the practical consequences of the agreements. The Seventh Circuit failed to recognize that requirement, it was suggested (McGarry & McGarry v. Rabobank N.A.Dkt. 16-1277).

Attorneys: William Todd Hughey (The Hughey Law Firm, PLLC) for Kourtney S. Rodgers. Carrie LeBlanc (Jones Shows, Cali & Walsh, L.L.P.) for Louisiana Board of Nursing. William Dunnegan (Dunnegan & Scileppi LLC) for McGarry & McGarry, LLC. Allison A. Davis (Davis Wright Tremaine, LLP) for Rabobank N.A.

MainStory: TopStory Antitrust

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