Judge Lucy Koh, nominated by President Biden to the Ninth Circuit court of appeals, cast the deciding vote in a 2-1 ruling that reversed the lower court and allowed a medical supply company to go to trial on  its claim that another company was violating the antitrust laws. The claim was that the defendant company was pursuing an illegal tying arrangement that was effectively forcing hospitals to buy a higher priced product.  Trump judge Eric Miller dissented. The January 2024 decision was in Innovative Health LLC v Biosense Webster Inc.

 

What Happened in this Case?

 Biosense Webster Inc (“Biosense”) manufactures and sells to hospitals CARTO 3, a cardiac mapping system that is used to diagnose and help treat heart rhythm problems. It also sells catheters used with the system and provides free clinical support for those who purchase the system and its catheters. Innovative Health LLC (“Innovative”) manufactures and sells catheters that are less expensive and can be used with CARTO-3. Innovative contends that Biosense’s requirement that hospitals must buy catheters from Biosense  to get free clinical services is an illegal tying arrangement that harms it, leads to higher prices, and violates federal and state antitrust laws.

Innovative filed an antitrust suit against Biosense in federal court. After discovery, the court granted Biosense’s motion for summary judgment and dismissed the case. Innovative appealed to the Ninth Circuit.

 

How Did Judge Koh  and the Ninth Circuit Rule and Why is it Important?

Judge Koh cast the deciding vote in a 2-1 ruling that reversed the lower court and held that Innovative should have a chance to prove its antitrust claims at trial. Trump judge Eric Miller dissented and would have upheld the judgment for Innovative.

The majority carefully examined the facts and the law and found that Innovative had “produced sufficient evidence” that could lead a jury to conclude that cardiac mapping systems, catheters, and clinical support services are separate products and that it violated the law for Biosense to tie them together.  Although Biosense provided its clinical support services for free to those who bought its catheters, the court went on, Biosense’s conduct boosted the sale of its “more expensive” catheters, harming Innovative.

Judge Koh’s deciding vote is obviously important to Innovative obtaining justice and compensation for what it contends was a clear violation of antitrust laws. It also sets an important precedent in the Ninth Circuit, which includes California,  Alaska, Arizona, Idaho, Hawaii, Montana, Nevada, Oregon, and Washington,  concerning how to prove an illegal tying arrangement, which can “restrain free trade” and  lead to higher prices. In addition, the ruling is an example of the importance of promptly confirming fair-minded Biden nominees like Judge Koh to our federal courts.