Washington State

Office of the Attorney General

Attorney General

Bob Ferguson

T-Mobile/Sprint Merger Amicus Brief
Impax Pay-for-Delay Monopolization Amicus Brief
Healthcare Notification Program
Live Nation Entertainment Consent Decree
Jersey Mike's No Poach Litigation and Settlement
Mercury's Coffee Non-Compete Litigation and Settlement
Fidelity/Stewart Merger
CVS/Aetna Merger Litigation and Settlement
Franchisee No Poach Initiative
No Poach Amicus Briefs
Hershey-Pinnacle Merger Amicus Brief
CHI Franciscan/The Doctor's Clinic Price Fixing and Anticompetitive
CRT Price Fixing Litigation and Settlement
Lidoderm Pay-for-Delay Monopolization Settlement
Suboxone Pay-for-Delay Monopolization Litigation
Generic Drugs Price Fixing Litigation
Questcor Monopolization Settlement
Springleaf/OneMain Merger Consent Decree
Provigil Pay-for-Delay Monopolization Settlement
LIBOR Bid-Rigging Settlement
LCDs Price Fixing Litigation and Settlement
St. Luke's/Saltzer Medical Group Merger Amicus Brief
Albertsons/Safeway Merger Consent Decree
AT&T/T-Mobile Merger
DDAVP Monopolization Settlement
E-books Price Fixing Settlement
National Express/Petermann School Bus Merger Consent Decree 
DRAM Price Fixing Litigation

 

T-Mobile/Sprint Merger Amicus Brief

In 2020, Washington filed an amicus brief in the T-Mobile/Spring merger trial, where a group of 18 states challenged the merger of the third and fourth largest national wireless providers. The amicus brief responded to a statement of interest filed earlier by the Department of Justice arguing that a group of states does not have the authority to challenge a national merger on behalf of the nation. Washington's reply argued that states are independent enforcers of the antitrust laws, and it is the role of the court, not any federal agency, to decide the lawfulness of a merger. While the states lost the trial and the merger was approved, the court agreed with the notion that states have the authority to challenge national mergers.

 

Impax Pay-for-Delay Monopolization Amicus Brief

Washington led the attorneys general of 23 states and the District of Columbia in an amicus brief for the Fifth Circuit in support of the Federal Trade Commission in their case against Impax Laboratories. The brief argues that a restraint of trade can only be justified by or balanced against procompetitive benefits or objectives that have a logical nexus to the restraint itself. Oral argument in this matter had been scheduled for April 27, 2020, but has been postponed due to the COVID-19 public health crisis.

 

Healthcare Notification Program

In 2019, the Washington State Legislature passed House Bill 1607, that provides the attorney general with notice of all material health care transactions in this state so that the attorney general has the information necessary to determine whether an investigation under the consumer protection act is warranted for potential anticompetitive conduct and consumer harm. House Bill 1607 went into effect on January 1, 2020 as RCW Chapter 19.390.

 

Live Nation Entertainment Consent Decree

In 2010, Washington and a group of 18 other states, in conjunction with the Department of Justice, reviewed the merger of Live Nation and Ticketmaster into Live Nation Entertainment, and approved it subject to certain conditions memorialized in a consent decree. An investigation by the Department of Justice concluded that Live Nation Entertainment had violated the consent decree, and in order to resolve it, Live Nation Entertainment settled in 2020 with the multistate group and the Department of Justice, modifying, clarifying, and extending the original consent decree for five more years in order to preserve competition in the market.

 

Jersey Mike's No Poach Litigation and Settlement

In 2018, Washington filed a first-in-the-nation lawsuit by a state attorney general against a company for its use of no-poach clauses. As part of its No-Poach Initiative (see below), Washington discovered that national restaurant chain Jersey Mike’s used no-poach provisions in its franchise agreements with franchise owners that restricted the mobility of Jersey Mike’s employees within the franchise system. These no-poach provisions reduced horizontal competition for the fast food workers’ labor, and are thus considered per se violations of the State’s Consumer Protection Act. Unlike dozens of companies that came before it in the State’s investigation, Jersey Mike’s refused the State’s settlement offer to resolve the investigation without a complaint. Consequently, the State filed a lawsuit in King County Superior Court against Jersey Mike’s corporate headquarters and its Washington-based franchisees. This was the first lawsuit against a company for its use of no-poach clauses by a state attorney general. Nearing the close of discovery and with only two months to trial, Jersey Mike’s settled the lawsuit by agreeing to pay $150,000 and end its use of no-poach provisions nationwide.

 

Mercury's Coffee Non-Compete Litigation and Settlement

In 2019, Washington entered into a consent decree with King County coffee chain Mercurys Coffee to void all of its existing non-compete agreements. The consent decree—the first of its kind for the Washington Attorney General’s office—was the result of the Antitrust Division’s investigation into Mercurys Coffee’s use of non-compete agreements with all employees—over 700 in the preceding five years, and including low-wage, hourly workers—that prevented employees from working at competing coffee shops within 10 miles of any Mercurys location for eighteen months after leaving the company. This restrictive non-compete agreement had the practical effect of preventing all Mercurys employees, including baristas, from working at most coffee shops in King County and parts of Snohomish County. This practice constituted an unfair method of competition in violation of the State’s Consumer Protection Act. As a result of the State’s investigation and settlement negotiations, Mercurys Coffee agreed to enter into a consent decree eliminating all then-in-effect non-compete agreements. Under the consent decree, Mercurys could seek leave from the Attorney General’s Office to use tailored non-competes for certain senior level executives. In addition, the company agreed to pay $50,000 to reimburse the Attorney General’s office for its attorneys' fees and costs associated with the investigation.

 

Fidelity/Stewart Merger

In 2018, Fidelity National Financial and Stewart Information Services announced a merger deal that would combine two of the country’s largest title insurance providers. Washington conducted an investigation in conjunction with the Federal Trade Commission, which resulted in the Federal Trade Commission filing an administrative action to block the transaction, alleging that the deal would substantially reduce competition for title insurance and other services provided by the two companies. The parties abandoned the deal a few days later.

 

CVS/Aetna Merger Litigation and Settlement

In 2018, Washington and a group of four other states, in conjunction with the Department of Justice, reviewed the merger of CVS and Aetna, two of the country's leading sellers of individual prescription drug plans. The multistate group and the Department of Justice concluded that the transaction would substantially lessen competition in the market and filed a lawsuit to block the merger. After several months of litigation, the parties entered into a consent decree requiring the divestiture of certain assets in order to preserve competition.

 

Franchisee No Poach Initiative

In January 2018, the Washington Attorney General launched the “No-Poach Initiative”—a two-year, industry-wide investigation into franchise systems’ use of “no-poach” provisions. Franchise no-poach provisions were clauses included in franchise agreements that franchise owners signed with corporate headquarters that restricted employee mobility within the same franchise system. Because these provisions reduce competition for franchise workers’ labor, economist assert that no-poach provisions stagnate wages and other benefits, and reduce opportunities for low-wage workers. Where the Antitrust Division found use of no-provisions, the franchise systems were offered an opportunity to sign an Assurance of Discontinuance (AOD) that committed the companies to ending the use of these provisions nationwide. Companies that refused to enter into an AOD were faced with a lawsuit. At the conclusion of the initiative in early 2020, Washington had secured AODs from every franchise that has a significant presence in Washington. With AODs signed by over 225 franchise systems eliminating the use of no-poach provisions across all 50 states and the District of Columbia, Washington’s initiative impacted 4,700 franchise locations in Washington, nearly 200,000 franchise locations nationwide, and freed up the competition for millions of workers’ labor throughout the United States.

 

No Poach Amicus Briefs

In 2019, Washington submitted amicus briefs in three separate class actions filed in federal district court in the Eastern District of Washington against fast food chains over those companies' use of no poach clauses in franchise agreements. The amicus briefs responded to statements of interest filed earlier by the U.S. Department of Justice arguing, in favor of the defendants’ motions to dismiss, that franchise no poach agreements should be evaluated under the more lenient rule of reason standard. Washington's reply argued that determination of the proper standard—per se like Washington believes, or rule of reason as DOJ argues—is premature at this phase of litigation as discovery had yet to commence. Washington further stressed its extensive experience investigating and litigating no poach cases to directly counter erroneous factual assumptions DOJ made in its statements of interest. Based on that experience, Washington advised the district court that franchisors would have a heavy burden to secure rule of reason treatment. More, Washington noted that state antitrust law does not necessarily mirror its federal analogs, and accordingly, DOJ's opinions on the application of federal law does not resolve plaintiffs' state law cause of action. The underlying class actions settled before the district court could opine on the merits of the parties' or the regulators’ briefs.

 

Hershey-Pinnacle Merger Amicus Brief

Washington sponsored and drafted an amicus in support of Pennsylvania in its appeal to the Third Circuit of a lower court ruling that denied the Commonwealth’s request for attorney’s fees based upon the court’s view that the Commonwealth is not a “substantially prevailing party” under Section 16 of the Clayton Act because it obtained “only” a preliminary injunction. While Pennsylvania lost the appeal, the court did not strike Washington's argument down.

 

CHI Franciscan/The Doctor's Clinic Price Fixing and Anticompetitive Merger Litigation and Settlement

In 2017, Washington filed a lawsuit challenging two consummated transactions CHI Franciscan entered into on the Kitsap Peninsula. In the first, CHI Franciscan acquired WestSound Orthopaedics, a 7-member orthopedics practice. In the second, CHI Franciscan entered into a Professional Services Agreement with The Doctors Clinic, a multispecialty clinic, under which the The Doctors Clinic would join CHI Franciscan's payer contracts. The deals combined the largest providers of primary care and orthopedic physician services in the Kitsap region, greatly reducing choices and raising prices for Kitsap consumers. The parties settled days before trial, under a consent decree requiring CHI Franciscan to restore competition for healthcare services by, among other things, offering separate contracting for primary care and orthopedic services, to divest a controlling share of an ASC it had acquired. CHI Franciscan also agreed to pay $2.5 million that the state distributed as grants to health clinics and organizations to increase access to health care services for Kitsap Peninsula.

 

CRT Price Fixing Litigation and Settlement

In 2012 Washington filed a price-fixing lawsuit against manufacturers of cathode ray tubes, or CRTs, a technology once ubiquitous in television screens and computer monitors. Defendants included LG, Philips, Samsung, Toshiba, Panasonic, Hitachi, and Chunghwa. In 2018, the case resolved, with the Defendants agreeing to pay over $39 million to resolve the state's claims. After a claims period, over $20 million in funds were distributed to consumers and state agencies in 2020.

 

Lidoderm Pay-for-Delay Monopolization Settlement

Washington was part of a multistate working group investigating alleged pay for delay agreements regarding Lidoderm pain patches, a pain-relief drug that treats complications from shingles, between Endo Pharmaceuticals and Teikoku Pharma. The companies entered into agreements with the multistate prohibiting them from paying or incentivizing a generic drug maker to delay entry into the drug market or to delay researching, developing, manufacturing, marketing or selling any drug product. The states also secured a payment of 2.3 million to enforce the injunctive terms and for enforcement against anti-competitive conduct in the pharmaceutical industry.

 

Suboxone Pay-for-Delay Monopolization Litigation

In September 2016, Washington along with a group of states filed suit against drug makers Indivior (f/k/a Reckitt Benckiser Pharmaceuticals) and MonoSol Rx for conspiring to block generic entry for Suboxone – a prescription drug used to treat opioid addiction. The states allege that Indivior and MonoSol Rx engaged in a scheme to thwart generic competition by switching the formulation of Suboxone from a tablet to a dissolving film, and resulting in consumers paying artificially inflated prices for Suboxone. This case has been filed in the Eastern District of Pennsylvania and litigation is ongoing.  

 

Generic Drugs Price Fixing Litigation

Washington and a group of fifty-four other states and U.S. territories has sued several generic drug manufacturers for an alleged market allocation and price fixing scheme involving 15 drugs, and a second market allocation and price fixing scheme involving over a hundred drugs, which have resulted in substantial prices increases. The case is in its discovery phase and the states’ investigation is ongoing.

 

Questcor Monopolization Settlement

Washington and a small group of states, along with the Federal Trade Commission reached a $100 million settlement with Mallinckrodt Pharmaceuticals, plc, a global specialty pharmaceutical company, to resolve claims that it engaged in unlawful monopolization when it acquired a competitive product from Novartis to protect its monopoly over a drug approved for the treatment of a catastrophic devastating neurologic disorder affecting infants and children under 2 years of age. As a result of the anticompetitive acquisition, the price for the drug increased dramatically over the last decade.

 

Springleaf/OneMain Merger Consent Decree

Washington, in conjunction with the Department of Justice, reviewed the merger between OneMain Financial and Springleaf Holdings, Inc., the two largest providers of traditional installment loans to subprime borrowers in the nation. Washington concluded that the transaction would substantially lessen competition in several cities throughout the state, and entered into a consent decree with the parties requiring the divestiture of 8 Springleaf branch locations in order to preserve competition.

 

Provigil Pay-for-Delay Monopolization Settlement

The State of Washington is part of a group of states that in 2017 reached a settlement agreement with Cephalon, Inc., Teva Pharmaceutical Industries, Ltd., Teva Pharmaceuticals USA, Inc., and Barr Pharmaceuticals, Inc. in an antitrust case relating to the sale of the prescription pharmaceutical Provigil®. Provigil® and generic versions of Provigil® (modafinil) are primarily prescribed for the treatment of certain sleep disorders. The $125 million settlement was distributed to the states, and funds were distributed to consumers in 2019.

 

LIBOR Bid-Rigging Settlement

Washington was part of a multistate group of 45 attorneys general investigating accusations of bid-rigging involving the manipulation and suppression of the London Interbank Offered Rate (LIBOR), a daily rate showing the average interest rate that some banks charge each other to borrow money). LIBOR is a benchmark interest rate that affects financial instruments worth trillions of dollars, and has a widespread impact on global markets and consumers. As a result of this investigation, several banks have disgorged over $500 million in wrongful profits, which have been distributed to not-for-profit entities and institutional investors. These cases returned more than $12.8 million to Washington government and nonprofit entities. Washington entities that have received money back in the previous cases are: Bill and Melinda Gates Foundation, Housing Authority of Snohomish County, PeaceHealth, Washington State Investment Board, Fred Hutchison Cancer Research Center, Tacoma Employees Retirement System, and Western Conference of Teamsters Pension Trust Fund.

 

LCDs Price Fixing Litigation and Settlement

In August 2010, after nearly a year of investigation, Washington sued a group of global manufacturers of TFT-LCD panels, a display technology commonly used televisions, computer monitors, laptops, and cell phones. Washington alleged that the manufacturers engaged in a worldwide conspiracy to fix the price of TFT-LCD panels between 1998 and 2006, causing consumers and the state to pay inflated prices for products incorporating these panels. After nearly 5 years of litigation, including several appeals, the manufacturers agreed to pay $63 million to resolve Washington’s claims, one of the largest recoveries in an antitrust case by Washington to date. In addition, many of the manufacturers agreed to injunctive relief prohibiting them from colluding on the sales of TFT-LCD panels in the future, and to implement antitrust compliance programs. After a claims process, Washington distributed approximately $43 million in settlement checks to consumers and state agencies.

 

St. Luke's/Saltzer Medical Group Merger Amicus Brief

Washington co-authored a 16-state amicus brief in support of the State of Idaho and the Federal Trade Commission urging the Ninth Circuit to affirm a lower court decision concluding that the acquisition of the Saltzer Medical Group, a prominent physician group, by the St. Luke’s Health System, substantially lessened competition in Nampa, Idaho, in violation of the antitrust laws. The Ninth Circuit affirmed the lower court decision.

 

Albertsons/Safeway Merger Consent Decree

Washington and a group of states, along with the Federal Trade Commission, reviewed the proposed acquisition of Safeway, Inc. by Cerberus Capital Management, the parent company of Albertsons. Both chains operated a substantial number of grocery stores in Washington. After several months of investigation, Washington concluded that the proposed transaction would substantially lessen competition in the grocery store market, and, in order to preserve competition, required the parties to enter into a Consent Decree to divest approximately 25 stores across the state to third parties.

 

AT&T/T-Mobile Merger

Washington led a group of approximately 20 states in an investigation into the proposed acquisition of T-Mobile USA by AT&T. After a 6-month investigation, in conjunction with the Department of Justice, Washington and a group of states filed a lawsuit to block the proposed merger, alleging that the proposed transaction would substantially lessen competition in the wireless telecommunications industry, and increase prices for consumers. After several months of litigation, the parties ultimately abandoned the transaction.

 

DDAVP Monopolization Settlement

Washington participated in a multistate investigation of Ferring B.V. and Aventis Pharmaceuticals, Inc., involving the drug DDAVP, an antidiuretic used for the treatment of diabetes and to treat bed wetting. The multistate investigation focused on whether Ferring and Aventis had fraudulently obtained a patent on DDAVP tablets in order to thwart generic competition and maintain monopoly pricing on the drug, in violation of federal and state antitrust laws. The investigation resulted in a 33-state settlement in which Ferring and Aventis agreed to pay $3.45 million to the states for their wrongful conduct. 

 

E-books Price Fixing Settlement

Washington was part of a multistate settlement in a case involving alleged price-fixing of E-books. The settlement is with Hachette Book Group Inc., HarperCollins Publishers L.L.C. and Simon & Schuster Inc., three of the largest publishers in the United States. The states alleged that these publishers and certain co-conspirators agreed to, among other things, increase retail E-Book prices for all consumers. Under the terms of the settlement, the three publishers have agreed to pay a total of more than $69 million to consumers to resolve these claims, and have agreed to change their business practices to restore competition among E-book retailers. Washington consumers received approximately $2 million under the settlement.

 

National Express/Petermann School Bus Merger Consent Decree

Washington reviewed the proposed acquisition of Petermann Partners Inc. by National Express Group PLC, in conjunction with the Department of Justice. National Express Group owns Durham School Services, one of the largest school bus companies in the country, and which holds contracts with a variety of school districts in Washington state. Petermann also contracted with numerous school districts in the state. Washington determined that the proposed acquisition would substantially lessen competition in the market for school bus services, and required National Express to divest its school bus contracts with the Battle Ground & Hockinson school districts to a new vendor in order to preserve competition. In addition, National Express entered into a Consent Decree that was filed in the Western District of Washington. The Consent Decree preserves competition for school bus services by requiring, among other things, National Express to make available bus depots to school districts or competing vendors that wish to use them in order to facilitate competitive bidding. 

 

DRAM Price Fixing Litigation

Washington and a group of states sued several global manufacturers of Dynamic Random Access Memory computer chips in 2006. The states accused the defendants of fixing the prices of computer chips between 1998 and 2002. The states reached settlements with the major manufacturers in 2010 and in 2012 settled with the smaller manufacturers. The total settlement value was more than $290 million for the states and a nationwide class of purchasers represented by private attorneys, and funds were distributed to consumers in 2014 . Defendants include Samsung, Micron, Hynix, Infineon, Toshiba, Hitachi and others. 

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