Stay current on the latest developments from agencies including the CFPB, Federal Reserve, FDIC, and OCC to advise clients on real-life regulatory situations.
Suture Express Inc. couldn’t prove that its rivals in medical-surgical supply illegally restrained competition by offering bundled pricing on a broad array of products, according to a March 14 decision ( Suture Express, Inc. v. Owens & Minor Distrib., Inc. , 2017 BL 78558, 10th Cir., No. 16-3065, 3/14/17 ).
The U.S. Court of Appeals for the Tenth Circuit affirmed a lower court’s dismissal of Suture Express’ claims against national suppliers Owens & Minor Distribution Inc. (O&M) and Cardinal Health 200 LLC.
Suture Express’s case has been pending while the law on what it takes to prove illegal tying has shifted. The appellate court decision shows how much more difficult it will be to prove tying claims under a tightening standard.
Suture Express claimed that the defendants bundled key products together to keep out competition. The plaintiff is a less comprehensive seller, but offers lower prices on a few products.
The court said that Suture Express failed to prove that either rival had the market power to create an illegal tie, which forces a customer to buy some products at a higher price to ensure supply of a different, critical product that can’t be obtained elsewhere.
Even if Suture Express could prove the defendants had market power to create such a tie, the court said the plaintiff didn’t prove that competition as a whole suffered from its rivals’ conduct. Suture Express alleged that Cardinal and O&M tied up more than half of the larger market for specific products, keeping those customers from buying the came goods cheaper from Suture Express.
But the court noted that half of the customers that weren’t tied to a supplier still didn’t choose to buy from Suture Express. Because Cardinal and O&M’s margins kept dropping, while overall medical and surgical supply market revenues increased, the court reasoned that competition in the overall market was functioning just fine.
Suture Express brought its claims in 2012, alleging that Cardinal and O&M had restrained trade since 2007. The district court allowed Suture Express’ claims to proceed, but it found in favor of Cardinal and O&M when Suture Express couldn’t produce evidence needed to prove Sherman Act, Clayton Act and state law violations.
Debevoise & Plimpton in New York and Quinn Emanuel Urquhart & Sullivan in New York represented Suture Express. Crowell & Moring in Washington represented O&M, while Jones Day in New York represented Cardinal Health.
To contact the reporter on this story: Eleanor Tyler in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Fawn Johnson at email@example.com
The court's decision is at http://src.bna.com/mXU.
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)