Vibo Corporation, Inc. v. Jack Conway
2012 U.S. App. LEXIS 3475
| 6th Cir. | 2012Background
- VIBO Corp. (General Tobacco) sued sixteen tobacco manufacturers and fifty-two Attorneys General for alleged Sherman Act antitrust and constitutional violations and a fraud claim, which the district court dismissed.
- The Master Settlement Agreement (MSA) of November 1998 ended multi-state litigation over tobacco advertising and imposed payments, escrow requirements, and marketing restrictions.
- Non-participating manufacturers (NPMs) could join as subsequent participating manufacturers (SPMs); grandfathered SPMs had reduced future payments, while OPMs retained the most favorable terms.
- Escrow statutes required NPMs to deposit funds into state escrow accounts for 25 years; if no future judgments occurred, deposits were returned.
- VIBO joined the MSA as an SPM in 2004 via Adherence Agreement (AA); it later sought an Amended Adherence Agreement (AAA) for better terms, which PMs refused to support after LMFN concerns were raised by PMs.
- Plaintiff asserted antitrust claims against Manufacturers and constitutional claims against Attorneys General Defendants, plus a state-law fraud claim; the district court dismissed these claims and denied injunctive relief, and the appellate court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Noerr-Pennington immunity applies to MSA actions? | VIBO asserts no immunity since manufacturers allegedly violated antitrust law directly. | Manufacturers petitioned for government action and thus enjoy Noerr-Pennington immunity. | Yes, Noerr-Pennington immunity applies. |
| State-action immunity extends to Manufacturer Defendants through Attorneys General? | Immunity does not apply to private actors in the MSA context. | State-action immunity covers private parties cooperating with states under the MSA. | Yes, state-action immunity extends to Manufacturer Defendants. |
| Midcal active supervision requirement satisfied? | MSA is a state regulatory scheme, requiring active state supervision of private conduct. | Midcal test not satisfied; no explicit state authorization for antitrust violations is shown. | Midcal not satisfied; immunity stands on other grounds, so no antitrust liability. |
| MSA Section XV waiver of constitutional claims encompasses all claims? | Waiver is limited to actions requiring Plaintiff to act or refrain from acting. | Waiver broadly covers any constitutional claims. | Waiver covers all constitutional claims related to the MSA. |
| Fraudulent inducement against Attorneys General Defendants in federal court? | Eleventh Amendment immunity waived by state consent or conduct. | There was no clear state consent to federal jurisdiction over state-law fraud claims. | Fraud claim properly dismissed; Eleventh Amendment immunity preserved. |
Key Cases Cited
- United Mine Workers of Am. v. Pennington, 381 U.S. 657 (Supreme Court 1965) (Noerr-Pennington immunizes petitioning government actions from antitrust liability)
- E. R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127 (Supreme Court 1961) (Foundation of Noerr-Pennington immunity)
- Omni Outdoor Adver. v. Columbian Outdoor, 499 U.S. 365 (Supreme Court 1991) (Noerr-Pennington scope; sham petitioning exception analysis)
- Midcal Aluminum, Inc. v. California Retail Liquor Dealers Ass’n, 445 U.S. 97 (Supreme Court 1980) (Active state supervision requirement for state-action immunity)
- Parker v. Brown, 317 U.S. 341 (Supreme Court 1943) (State-action immunity framework for states in antitrust law)