Wednesday, September 26, 2007

Sanders v. Brown (9th Cir. - Sept. 26, 2007)

Here's a good way to learn about the nature of pricing in the cigarette industry -- as well as the structure of the 1998 settlement agreement against the tobacco companies -- in the context of an antitrust challenge. Among other things, the 1998 agreement apparently operates to discourage tobacco companies from competing on price. It was also interesting to learn that the marked rise in cigarette prices after the settlement agreement is much higher than the price increase expected from the mere costs of the agreement. So there's obviously lots going on here.

Mind you, on the merits, it's a crushing victory for the tobacco companies. Who get the lawsuit dismissed at the pleading stage and unanimously prevail on appeal as well. And, conversely, a loss for Kathleen Sullivan, who argued the appeal on behalf of the plaintiff, alongside my friend Bill Urquhart (lead counsel on the brief).

That disclosure made, in my view, there's a nontrivial chance that the Supreme Court might take this one up, as the Ninth Circuit's analysis of Parker immunity conflicts with the holdings of the Second and Third Circuits. So there's a circuit split in a fairly high-profile and important case. That said, obtaining a writ of certiorari is a longshot even in the most meritorious case, so odds are the legal system ain't gonna provide a remedy on this one.