Landmark Cases

Blecher Collins & Pepperman has handled significant litigation impacting jurisdictions across the country. Many of our landmark cases are frequently cited as authority in the antitrust province and in other related areas of complex litigation.

A sample of our noteworthy reported decisions appears below:

United States Supreme Court Cases

(right of a State to sue parens patriae on behalf of its citizens)

(antitrust injury an element independent of per se violation)

(no antitrust liability for price squeeze not below cost)

California Supreme Court Cases

(purchaser victimized by price discrimination has the right to sue under California Business & Professions Code section 17045)

(summary judgment under antitrust laws in state court)

(elements of tort of intentional interference with prospective advantage and interpretation of California Business & Professions Code section 17200)

Intentional Interference with Prospective Economic Advantage

Blecher Collins & Pepperman represented the plaintiff Korea Supply Company (KSC) against Lockheed Martin in the case that ultimately established the standard for bringing a claim for tortious interference with prospective economic advantage under California law. The California Supreme Court affirmed a Court of Appeal decision allowing KSC the right to seek compensatory and punitive damages for interference with prospective business opportunities against Lockheed Martin, which had received a contract to supply radar equipment allegedly secured by bribes and sexual favors in violation of the Foreign Corrupt Practices Act. After seven years of litigation, and following a three-month trial, the parties settled the case. The terms of settlement are confidential.

Price Discrimination/Unfair Competition

Blecher Collins & Pepperman represented ABC International Traders (ABC), a wholesale distributor of telephone equipment and other electronic products, in a suit against Matsushita, the producer of Panasonic products, for engaging in unfair competition by, inter alia, giving secret unearned discounts to other distributors that were not offered or made available to ABC. ABC alleged economic damage because its primary competitors could buy Matsushita products at effectively lower prices. In a decision described as “stunning,” the California Supreme Court opened the way for victimized buyers in California to sue for damages against a price-discriminating seller. Beyond favorably resolving ABC’s vital business problem, the ruling Blecher Collins & Pepperman obtained brought California law into line with federal law.

Blecher Collins & Pepperman prosecuted an action for a number of companies that operated small newspapers and radio stations. The complaint alleged that the lender for these stations breached various agreements and state laws by intimidating and driving away companies that wanted to buy their assets. Blecher Collins & Pepperman settled the case.

Service Monopoly

Blecher Collins & Pepperman represented a group of independent service organizations (ISOs) in an antitrust action against Eastman Kodak, a supplier and competitor in the high volume photocopier and micrographic equipment repair business. Kodak had stopped selling needed replacement parts to ISOs, thereby freezing them out of the market and creating a service monopoly. Blecher Collins & Pepperman presented a compelling case and a San Francisco jury found that Kodak had violated federal antitrust law. The Ninth Circuit affirmed that finding.

Blecher Collins & Pepperman prosecuted a case on behalf of 12 independent service organizations that maintained and repaired Powerware UPS (uninterruptible power source) equipment. The complaint alleged that the manufacturer of the equipment violated federal antitrust and other laws by refusing to sell replacement parts and requiring the use of diagnostic software that served no purpose other than preventing customers from utilizing independent service.

Blecher Collins & Pepperman represented plaintiff Med Alert Ambulance against Atlantic Health System, which owned several large hospitals in Northeastern New Jersey, and a competing ambulance company. Blecher Collins & Pepperman filed suit in federal court in Newark, New Jersey alleging monopolization, monopoly leveraging, unlawful tie-ins, and claims of tortious interference arising out allegations that the hospitals owned by Atlantic Health Systems favored its own ambulance service over the competing Med Alert ambulance system by not providing a hospital bed to the referring hospital unless that hospital used Atlantic’s ambulance service to accomplish the inter-hospital critical care transport. The court denied the defendants’ motion for summary judgment and the matter was resolved by agreement of the parties.

Monopoly Power

Blecher Collins & Pepperman successfully defended Syufy Enterprises, a California-based owner and operator of a chain of Las Vegas movie theatres, in a case brought by the U.S. Department of Justice alleging Syufy had unlawfully acquired all the first-run motion picture theatres in Las Vegas in violation of anti-merger and monopoly laws. The Government’s goal was to force Syufy to give up the theatres it had purchased from former competitors, but Blecher Collins & Pepperman demonstrated that Syufy’s acquisitions did not injure competition because there were no barriers to entry—other competitors could and did enter the market—and Syufy did not have the power to control prices or exclude competition. After trial, the court decided in favor of Syufy. The Ninth Circuit affirmed this decision in a frequently cited legal opinion.

Blecher Collins & Pepperman defended Century Theaters and Cinemark USA in an antitrust lawsuit filed by a competitor movie theater in the Palm Springs area. The lawsuit purported to challenge preferential distribution of first run motion pictures by Universal Film Exchange and Sony Pictures Releasing to Century’s The River 15 theater complex in Rancho Mirage. Century and Cinemark vigorously denied the allegations and asserted that their conduct was lawful under the antitrust laws. Blecher Collins & Pepperman successfully obtained summary judgment for Century and Cinemark.

Restraint of Trade

The Los Angeles Memorial Coliseum Commission retained Blecher Collins & Pepperman to litigate against the National Football League (NFL), which was blocking the Raiders from relocating their NFL franchise from Oakland to Los Angeles. Blecher Collins & Pepperman successfully proved that the NFL’s rule requiring three-fourths of the NFL members to approve a team’s relocation into another team’s territory unlawfully restrained trade in violation of federal antitrust law. In a precedent-setting decision, the court found the NFL liable. The Raiders subsequently moved to the L.A. Coliseum, and the Coliseum Commission received $15 million.

Soon after, Blecher Collins & Pepperman litigated a similar issue against the National Basketball Association (NBA) that enabled the Clippers to relocate their NBA team to Los Angeles from San Diego.

Blecher Collins & Pepperman represented the student-athlete class against the NCAA in a certified, antitrust class action alleging that the NCAA violated the federal antitrust laws by restricting amounts of athletic-based financial aid. The NCAA settled and paid an additional $218 million for use by current student-athletes to cover the costs of attending college, paid $10 million to cover educational and professional development expenses for former student-athletes, and enacted new legislation to permit Division I institutions to provide year-round comprehensive health insurance to student-athletes.

Blecher Collins & Pepperman represented an agency that was the largest provider of local temporary nurses to hospitals and other institutions in Arizona. Health Temp filed an antitrust lawsuit in federal court in Phoenix alleging that an association and its approximately 50 member hospitals entered into an agreement to unlawfully fix the hourly rates to be paid to temporary healthcare agencies. After discovery concluded, the parties settled the case on confidential terms.

Blecher Collins & Pepperman represented Quake Global, Inc., a San Diego based designer and manufacturer of satellite modems, in litigation and arbitration involving antitrust and breach of contract claims against ORBCOMM, a satellite communications services provider. Blecher Collins & Pepperman concluded a successful renegotiation of Quake’s contract with ORBCOMM, the owner of the satellite network.

Sham Infringement

Blecher Collins & Pepperman brought a successful antitrust action against Johnson & Johnson on behalf of Handgards, a Nebraska company engaged in the manufacturing, distribution, and sale of disposable plastic gloves. The case concerned Johnson & Johnson’s bad faith prosecution of a patent infringement suit against Handgards as an integral part of an overall plan to monopolize the industry and eliminate Handgards as a competitor in the sale of disposable gloves. The jury found Johnson & Johnson liable, and Handgards recovered $19 million in damages after two trials and two appeals. The court found that Johnson & Johnson had abused litigation to stifle competition from Handguards and established this particular behavior as a new principle of antitrust law.

Telecommunications Litigation

Representing the National Communications Association (NCA), Blecher Collins & Pepperman prosecuted the only successful case against AT&T for its activities restricting long-distance resellers. At trial, the jury found for NCA and awarded $1.8 million in damages. The district court supplemented the judgment to include pre-judgment interest, for a total award of $2,194,431.84. The district court denied AT&T’s motions for judgment as a matter of law and for a new trial. On appeal, AT&T argued that the evidence supporting the jury verdict was insufficient and that the district court erroneously instructed the jury regarding the burden of proof. The Second Circuit disagreed with both contentions and affirmed the trial court.

In 2000, Blecher Collins & Pepperman successfully represented Caltech International Telecom in the only case against an incumbent local exchange carrier, Pacific Bell, for the maintenance of its monopoly by excluding potential competitors from entering the local telephone service market.

This case, initiated by Internet service providers (ISPs), alleged that incumbent telephone companies, which owned infrastructure and facilities needed to provide digital subscriber line (DSL) service, had monopolized and attempted to monopolize regional DSL markets. The ISPs claimed that the telephone companies accomplished this through squeezing the providers’ profits by charging them high wholesale prices for DSL transport and charging consumers low retail prices for DSL internet service. Ultimately, the U.S. Supreme Court held that Pacific Bell d/b/a AT&T did not violate the Sherman Act when it charged other ISPs a high fee to buy space on its phone lines to deliver an Internet connection. In short, the Court ruled that there is no antitrust liability for a price squeeze where there is no predatory or below cost pricing at the retail level.

Equipment Monopoly

In the early 1970s, AT&T and GTE were the two basic telephone companies in the United States. Plaintiff ITT hired Blecher Collins & Pepperman to represent them in separate suits against these giants to break up their powerful monopoly in the telephone equipment and service business. The suits were successful, and private antitrust cases became the trailblazer for the wider, government-led effort that followed challenging the entrenched telecommunications monopolies.

Blecher Collins & Pepperman prosecuted a California Cartwright Antitrust Act case on behalf of some large companies and governmental agencies, including the County of Los Angeles. The complaint alleged that two energy providers conspired to restrict the flow of natural gas into the State of California. The case settled on a confidential basis.

Intellectual Property

Blecher Collins & Pepperman represented a class of music composers and owners of sound recordings against ABC. The plaintiffs alleged that the ABC television network included musical compositions and sound recordings in episodes of soap operas (General Hospital, All My Children, and One Life to Live) without obtaining proper licenses in violation of copyright law. After an initial settlement prompted the intervention of the major record companies and publishers, the case ultimately settled, and received court approval, for $65 million and payments were distributed to the individual copyright owners.

Blecher Collins & Pepperman represented a class of musical composers and owners of sound recordings against Viacom and its MTV Networks division. Plaintiffs alleged that Viacom included musical compositions and sound recordings in various shows without obtaining proper licenses in violation of copyright law. The case settled for $12.5 million and payments were distributed to the individual copyright owners.

Securities

Blecher Collins & Pepperman filed a minority shareholder lawsuit in Los Angeles Superior Court. Warlick is the former President and CEO of the Fatburger hamburger chain. Warlick’s investment group was the largest minority shareholder group of Fatburger. The suit alleged that the Fog Cutter investment group used fraudulent and unlawful means, in violation of the California state securities laws and in breach of its fiduciary duties, to engage in a scheme to dilute the holdings of common shares of Warlick and his investment group from about a 35% share of the common stock to less than 5% without any compensation. The lawsuit sought damages in excess of $10 million for the fair compensation of the common stock of the Warlick Group which suffered from the dilution. It was litigated together with a related action in which Warlick sought damages for wrongful termination under his Employment Agreement, retaliation based on his objections to unlawful conduct, and discrimination based on his race.

Professional Liability

Blecher Collins & Pepperman represented the City of Inglewood in a legal malpractice case against its former law firm and in an insurance coverage action against the city’s excess liability carrier for denial of coverage resulting from an adverse verdict in a reverse racial discrimination case against the city. The city filed both cases in Los Angeles County Superior Court. The city claimed its former attorneys’ representation in the underlying case fell below the standard of care and that the city’s excess insurance liability carrier should have reimbursed defense costs and indemnified on the adverse judgment in the amounts in excess of the City’s self-insured retention. Blecher Collins & Pepperman directed and coordinated the strategy in these parallel but separate lawsuits, and achieved favorable pre-trial settlements in both cases within approximately one month of one another.

Blecher Collins & Pepperman represented a now defunct waterbed mattress company in a legal malpractice case against its former law firm. The plaintiff alleged that the defendant law firm failed to dispense proper advice to the plaintiff so that it could make a fully informed evaluation of a settlement offer in the underlying antitrust case. The parties settled during trial. The terms of the settlement are confidential.