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Think Indirect Purchaser Liability is Dead? Think Again.

Posted  June 22, 2009

Since the Supreme Court’s 1977 decision in Illinois Brick Co. v. Illinois, 431 U.S. 720, plaintiffs have not been able to recover damages suffered by indirect purchasers from anticompetitive conduct stemming from §1 of the Sherman Act.  While this bar has existed for more than 30 years, plaintiffs are not without recourse.

That’s because more than 25 states enacted laws, sometimes called “Illinois Brick repealers,” that specifically permit recovery for indirect purchasers for violations of state antitrust laws.  The Supreme Court upheld these laws in California v. ARC America Corp., 490 U.S. 93 (1989).  The Court found that “[s]tate laws to this effect are consistent with the broad purposes of the federal antitrust laws: deterring anticompetitive conduct and ensuring the compensation of victims of that conduct.”

Of course, litigation under state laws has its disadvantages.  First, the anticompetitive conduct in question must affect the commerce of that state.  So, if a defendant violates New York law, it cannot pursue a claim for other damages suffered in Arkansas.  Also, state courts typically restrict discovery procedures more so than federal courts, which makes it more difficult to prove anticompetitive conduct.

So what states have enacted “Illinois Brick repealers”?  They include Alabama, Arkansas, California, Colorado, the District of Columbia, Hawaii, Idaho, Illinois, Kansas, Maine, Maryland, Michigan, Minnesota, Mississippi, Nebraska, Nevada, New Mexico, New York, North Dakota, Oregon, Rhode Island, South Dakota, Utah, Vermont, West Virginia, and Wisconsin.

Tagged in: Antitrust Legislation,