Litigation Note: Crowell & Moring Wins Tying and Exclusive Dealing Case on Summary Judgment

Washington, D.C. – March 8, 2016: Crowell & Moring LLP is pleased to announce that client Owens & Minor Distribution, Inc. (O&M), the nation’s largest distributor of medical-surgical supplies, prevailed in an antitrust tying and exclusive dealing lawsuit alleging over $200 million in damages brought by a competitor, specialty distributor, Suture Express, Inc. (Suture Express). Suture Express challenged contracting practices that offer differential pricing to customers depending on whether they procure distribution of suture and endo products, which tend to be the most profitable, from O&M or Cardinal Health, a co-defendant to O&M in the case. Suture Express's theory was that the pricing differential was so large that it could not effectively compete for distribution of suture and endo products, and that customers have no choice but to agree because they need the other medical-surgical products that O&M and Cardinal Health, but not Suture Express, distribute. After extensive fact and expert discovery, O&M, along with its co-defendant Cardinal Health, filed a motion for summary judgment and Suture Express filed a cross motion for partial summary judgment on liability. On March 3, 2016, Judge Daniel D. Crabtree of the U.S. District Court for the District of Kansas granted O&M and Cardinal Health's motion for summary judgment and denied Suture Express's motion, dismissing all claims and awarding defendants costs. Judge Crabtree found that Suture Express failed to provide sufficient evidence that either O&M or Cardinal Health possessed the market power necessary to support Suture Express’s claims, or that competition had been harmed. Judge Crabtree acknowledged that the undisputed facts revealed a competitive market in which distribution prices and margins have been declining. Judge Crabtree also found that O&M and Cardinal Health successfully established procompetitive benefits from the challenged contracting practices, which further negated Suture Express’s claims.

Crowell & Moring served as lead counsel to O&M in this matter. The team was led by Shari Ross Lahlou and included John Gibson, Luke van Houwelingen, and Diane Shrewsbury.