Quinn Emanuel recently vindicated the rights of its clients to vigorously compete in a market in which they have earned a 75% share. J.G. Wentworth and Peachtree, faced claims for violation of Section 7 of the Clayton Act arising from J.G. Wentworth’s acquisition of Peachtree in 2011 and the resulting high combined market share, and of Section 2 of the Sherman Act based on alleged exclusionary practices, including coordinating bidding for Google AdWords, and misleading consumers. The plaintiff, Novation Ventures, is in the same business: purchasing structured settlement receivables.
The firm moved to dismiss all claims based on failure properly to allege antitrust injury or exclusionary conduct. Prior to oral argument, the Court granted the motion in its entirety, but with leave to amend. Novation amended its complaint on June 8, 2015, adding additional claims for violation of Section 43(a) of the Lanham Act and California Business and Professions Code Section 17200. Quinn Emanuel filed another motion to dismiss, which also was granted. Novation filed a Second Amended Complaint on October 13, 2015. Quinn Emanuel moved again to dismiss, and the district court again granted the motion, this time without leave to amend. Final judgment was entered February 10, 2016, and Novation noticed an appeal before the Ninth Circuit Court of Appeals shortly thereafter.
On October 19, 2017, a unanimous three-judge panel upheld the dismissal. The panel agreed with the District Court that Novation cannot rely on harm to consumers, if there is any, to establish its own standing but must show that it was harmed itself. Because it did not do so, the panel ruled that the lower court correctly dismissed its claims. The panel further held that Novation had not identified a false or misleading statement by J.G. Wentworth or Peachtree that would support a false advertising claim under the Lanham Act. Finally, the panel ruled that since Novation could not plead a violation of federal law on which to predicate a claim for unfair or unlawful business practices under California Business and Professions Code Section 17200, the District Court had properly dismissed that cause of action, too.