Duane Morris Antitrust Class Action Review – 2024

because it was ancillary to collaborative business relationships between the defendants. Id. at *41. The court also concluded that the so-called “quick look” analysis was not appropriate because the alleged anticompetitive harm was not plainly obvious and the alleged no-hire agreement had both vertical and horizontal elements. Therefore, the court analyzed the adequacy of the plaintiffs’ Sherman Act claim under the rule of reason, and dismissed the plaintiff ’ s claim for failure to allege sufficient information about the labor market to prove the agreements had an anticompetitive impact. Id. at *55. Numerous important class action cases in 2023 involved allegations that compensation for athletes had been artificially depressed due to anticompetitive restraints. One in particular utilized the so-called “quick- look” analysis to adjudicate the plaintiff ’ s claims. In Smart, et al. v. NCAA, 2023 U.S. Dist. LEXIS 130570 (E.D. Cal. July 27, 2023), a group of Division I Volunteer Coaches filed a class action alleging that the defendants, the National Collegiate Athletic Association (NCAA) and its member schools, violated the Sherman Act by illegally conspiring to fix the compensation of category of Division I coaches at $0. According to the rules at issue, Division I sports limit the number of paid coaches per team. However, through a NCAA bylaw, member schools agreed to allow one additional coach, a “Volunteer Coach,” who was unpaid . Volunteer Coaches generally worked over 40 hours per week and performed most of the same duties as paid coaches, such as attending all practices and games, traveling for away games, and preparing game strategies. Id. at *5. The plaintiff Volunteer Coaches alleged that they suffered antitrust injury because their compensation of $0 was below the compensation they would have received in a competitive market. Id. at *13. The defendants moved to dismiss, arguing that the plaintiffs’ antitrust allegations were conclusory because they failed to allege facts showing that they would have received more compensation without the bylaw dictating the number of paid coaches. In denying the motion, the court concluded that the plaintiffs sufficiently alleged an antitrust injury because it was plausible that the plaintiffs would have been paid a salary above $0 but for the NCAA ’ s adoption of the bylaw. The court applied a “quick-look analysis,” under which “anticompetitive effect is established . . . where the plaintiff shows that a horizontal agreement to fix prices exists, that the agreement is effective, and that the price set by such an agreement is more favorable to the defendant than otherwise would have resulted from the operation of market forces.” Id. at *18. The plaintiffs’ alleged that the NCAA and its member schools established the additional coaching position as a “volunteer” position and set the salary at $0, and that other non-volunteer coaches received high salaries with significant increases. Thus, the plaintiffs alleged, the bylaw was successful in allowing non-volunteer coaching salaries to raise without paying for additional coaches. Under a quick-look analysis, the court found that the plaintiffs alleged facts that were sufficient to state a claim for violation of the Sherman Act. Two other cases involving so called no-poach or no-hire agreements received full rule of reason analysis, rather than per se treatment over the past year. The first, Southern California Electric Firm, et al. v. Southern California Edison Co., 2023 U.S. Dist. LEXIS 54428 (S.D. Cal. Jan. 10, 2023), involved allegations by the defendant ’ s former employees that the defendant ’ s policy banning them from acting as independent line installation contractors in regions that the defendant served as an electrical utility violated the Sherman Act. The defendant is a utility company that generates, transmits, and distributes electric power throughout Central, Coastal, and Southern California, and controls an exclusive market comprising more than 87 billion kWh of electricity distributed to hundreds of cities, counties, and tribal lands in a region spanning 50,000 square miles. Id. at *2. When a new or existing customer within the territory applied for electrical service from the defendant through a distribution line extension or service extension, the applicant had to either (i) pay the defendant directly to plan, design and/or install the new distribution line extension or service extension; or (ii) hire a “qualified” third-party contractor or sub-contractor to design (Applicant Designer) and/or install (Applicant Installer) the new distribution line extension or service extension in accordance with the defendant ’ s design and specifications. Id. at *3. The defendant ’ s tariff rules set forth certain minimum requirements for a contractor to be qualified, and the plaintiffs asserted that the requirements ultimately prohibited them from working in any manner on construction projects requiring the defendant ’ s approval, oversight, or involvement. Id. The plaintiffs alleged that the defendant violated

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