Cardinal Health successfully defends bundled pricing
Clients Cardinal Health, Inc.
Jones Day represented Cardinal Health, Inc. in antitrust litigation commenced by competitor Suture Express in Kansas federal court in December 2012. The plaintiff claimed tying, bundling, and exclusive dealing, alleging that Cardinal's and another distributor’s discounts on distribution of all medical and surgical products when the customer commits to include suture and endo products were anticompetitive. The plaintiff was a specialty distributor (not a broadline distributor like the defendants) that chose to distribute only suture and endo products and thus could not offer the same bundle. The plaintiff sought more than $200 million in damages, attorney's fees, and to enjoin defendants from using a common industry pricing practice.
The court dismissed the plaintiff’s monopolization and conspiracy claims on a motion to dismiss. Jones Day subsequently filed a summary judgment motion showing that the plaintiff could not prove market power or anticompetitive harm. In March 2016, the court granted summary judgment to both defendants on all claims. In doing so, the court emphasized defendants’ evidence of declining prices and profit margins, competitors’ growth, and aggressive competition among all broadline distributors, including via similar bundles. The Tenth Circuit affirmed in March 2017, and the Supreme Court denied certiorari in October 2017. Given that the law regarding bundled discounts provides little clear guidance, the ability to prevail on the papers was a major accomplishment.
Suture Express Inc. v. Cardinal Health Inc., No. 2:12-cv-02760-RDR-KGS (D. Kan.); Suture Express v. Owens & Minor, No. 16-3065 (10th Cir.); No. 16-1487 (U.S.) cert. denied (2017)