156 F. Supp. 3d 1094
C.D. Cal.2015Background
- Novation Ventures, LLC sues after J.G. Wentworth merged with PeachTree (Peachtree Holdings) in 2011, alleging antitrust violations in the US structured-settlement factoring market.
- Plaintiff alleges post-merger common ownership and management run both brands as if separate competitors, facilitating anticompetitive conduct.
- Plaintiff contends merger and subsequent conduct violate Section 7 of the Clayton Act and Section 2 of the Sherman Act by reducing competition and potentially monopolizing the market.
- Plaintiff focuses on online AdWords bidding and competition for search results, alleging joint bidding by J.G. Wentworth and Peachtree harms competition and consumers.
- Plaintiff defines the market as the US-wide factoring of structured settlement payment rights, with post-merger J.G. Wentworth holding ~75% market share and Novation ~7%.
- Complaint asserts anti-competitive effects include foreclosing Novation from the market and elevating costs to obtain top online advertising positions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Novation have antitrust injury standing? | Novation asserts merger-related harms flow from anticompetitive conduct. | No cognizable antitrust injury; harms alleged do not reflect a loss that the antitrust laws protect. | Plaintiff lacks antitrust injury and standing; claims dismissed. |
| Can plaintiff state a Section 2 monopolization claim? | Merger and deceptive conduct create monopoly power and exclusion of competitors. | Plaintiff fails to plead monopoly power, anticompetitive conduct, or injury; also lacks intent for attempted monopolization. | Monopolization claim inadequately pleaded; attempted monopolization claim also fails. |
| Are the bid-rigging and market-definition arguments viable? | Alleges anticompetitive bidding practices in AdWords and market foreclosure. | Arguments are not adequately pleaded; brand separation does not prove exclusionary conduct; insufficient market definition. | Dismissed for lack of viable pleading on bid-rigging and market definition; not necessary to address further. |
Key Cases Cited
- Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477 (U.S. 1977) (antitrust injury and standing framework)
- Somers v. Apple, Inc., 729 F.3d 953 (9th Cir. 2013) (four elements of antitrust injury)
- Am. Ad Mgmt, Inc. v. Gen. Tel. Co. of Cal., 190 F.3d 1051 (9th Cir. 1999) (antitrust injury analysis framework)
- Sprint Nextel Corp. v. AT & T Inc., 821 F. Supp. 2d 308 (D.D.C. 2011) (competitor standing and prices; consumer harm not injury to competitors)
- Cargill, Inc. v. Monfort of Colo., Inc., 479 U.S. 104 (U.S. 1987) (price competition not per se injury; antitrust injury requires flow from anti-competitive conduct)
- Pool Water Prods. v. Olin Corp., 258 F.3d 1024 (9th Cir. 2001) (recovery not available for injuries not flowing from anticompetitive effects)
- Verizon Commc’ns Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (U.S. 2004) (monopoly power requires anticompetitive conduct)
- Facebook, Inc. v. Power Ventures, Inc., 2010 WL 3291750 (N.D. Cal. 2010) (antitrust pleading standards in the Ninth Circuit)