Appendix B. Background of the Illinois Brick Decision

The Supreme Court’s decision in Illinois Brick barred most
indirect purchasers from bringing “pass-on” antitrust claims under
the federal antitrust laws. This Ha ndbook has described how states
have responded to that decision and the resulting jurisprudence. For
those who seek a deeper understanding of how the Supreme Court
arrived at its decision, this Appendix explores the case law pre-dating
Illinois Brick, the factual background, and policy considerations that
the Court considered in reaching its decision, and the decision itself,
as well as some critiques of the Court’s analysis.
A. Indirect Purchaser Jurisprudence before Illinois Brick
Section 4 of the Clayton Act addresses the standing of private
parties to sue under the antitrust laws, as follows:
[A]ny per son who shall be inj ured in his business or property by
reason of anything forbidden in the antitrust laws may sue therefor
in any district court of the United States in the district in which the
defendant resides or is found or has an agent, without respect to the
amount in controvers y, a nd shall recover threefold the damages by
him sustained, and the cost o f suit, including a reasonable
attorney’s fee.1
Before Illinois Brick Co. v. Illinois,2 the Supreme Court’s general
comments regarding standing suggested that this provision would be
interpreted broadly. In 1957, the Court wrote:
Petitioner’s claim need only be “tested under the Sherman Act’s
general prohibit ion on unreasonable restraints of trade,” and meet
the req uirement that petitioner has thereby suffered injury.
Congress has, by legislative fiat, determined that suc h prohibited
activities are injurious to the public and has provided sanctions
allowing private enforcement of the antitrust laws by an aggrieved
party. These laws protect the victims of the forbidden practices as
1. 15 U.S.C. § 15(a). Before the 1982 amendment, this language
appeared in 15 U.S.C. § 15, October 14, 1914, c. 323, § 4, 38 Stat.
731. The 1982 amendments, Pub. L. 96-349 § 4(a)(1), 96 Stat. 1964
(Dec. 29, 1982), redesignated the existing provisions as subsection
(a) and added as subsection (b) an exception for foreign states and
instrumentalities of foreign states.
2. 431 U.S. 720, 726 (1977).
444 Indirect P urchaser Litigation Ha ndbook
well as the public. Furthermore, Congress itself has placed the
private antitrust litigant in a most favorable position through the
enactment o f § 5 of the Clayton Act. In the face o f such a policy
this Court should not add req uirements to burden the private
litigant beyond what is specifically set forth by Congress in those
In 1968, the Court decided Fla st v. Cohen,4 establishing a two-
prong standing analysis under the Clayton Act applicable to all
antitrust plaintiffs, direct and indirect purchasers alike. The first
prong is the “case or controversy” requirement; it asks “whet her the
party invoking federal court jurisdiction has a ‘personal stake in the
outcome of the controversy,’ and whether the dispute touches upon
‘the legal relations of parties having adverse legal interests’”—
whether the plaintiff suffered injury-in-fact.5 The second prong is
jurisprudential; it provides standing to an individualassuming an
injury-in-fact is alleged—when “the interest sought to be protected
by the complainant is arguably within the zone of interests to be
protected or regulated by the statute or constitutional guarantee in
Because indirect purchasers who plead actual injury will
generally be able to satisfy the constitutional injury-in-fact
requirement, the central issue for indirect purchaser standing under
the Clayton Act is the prudential “zone of interest” question. Despite
the language of the Clayton Act and the Supreme Court’s general
guidance on antitrust standing before Illinois Brick, lower courts
could not agree on a consistent prudential standing rule regarding
indirect purchasers.7 Before Hanover Shoe, Inc. v. United Shoe
Machinery Corp.,8 the cases dealing with standing under the Clayton
Act did not exhibit a consistent pattern.9 To discern the interest at
stake, courts commonly applied either the “direct injury” test or the
“target area” test.10 These two tests are described below.
3. Radovich v. NFL, 352 U.S. 445, 453 -54 (1957) (citations and
footnotes omitted) (quoting Times-Picayune Publ’g Co. v. United
States, 345 U.S. 594, 614 (1953); Mandeville Island Farms v. Am.
Crystal Sugar Co., 334 U.S. 219, 236 (1948); Emich Motors v. Gen.
Motors Corp., 340 U.S. 558 (1951)).
4. 392 U.S. 83 (1968).
5. Id. at 101 (quoting citations omitted).
6. Association o f Data Processing Serv. Orgs. v. Camp, 397 U.S. 150,
153 (1970).
7. See Comment, Standing to Sue in Antitrust Ca ses: The Offensive Use
of Passing-On, 123 U. PA. L. REV. 976, 977 (1975).
8. 392 U.S. 481 (1968).
9. Comment, supra note 7, at 977.
10. Id.

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