Appendix A. Survey Of State Indirect Purchaser Jurisprudence and Legislation

• Pages: 397-441

397

APPENDIX A

SURVEY OF STATE INDIRECT PURCHASER

JURISPRUDENCE AND LEGISLATION

Indirect purchaser claims are creatures of state law, which varies

from jurisdiction to jurisdiction. This Handbook has described

generally the ways in which state law varies. This Appendix provides

information on each of the 50 states, the District of Columbia, Guam,

Puerto Rico, and the U.S. Virgin Islands.

In recent years, litigation on behalf of indirect purchasers under

state law appears to have been concentrated largely in multi-party,

multistate, multidistrict litigation. In those cases, federal district

courts have sought to discern the treatment to be given to indirect

purchaser claims, often in the absence of controlling and definitive

state court case law. Thus, the decisions reached, and reported here,

must be regarded as less than definitive. The district courts’ Erie

predictions are sometimes inconsistent; some are based only on the

failure of a party to meet its burden or to present a sufficiently

persuasive argument. The decisions may prove helpful as starting

points for future research, but practitioners should be aware of their

provisional nature.

Much of the recent jurisprudence deals as well with the defense

argument that a state’s decision not to follow Illinois Brick does not

end the discussion, in that an indirect purchaser may still lack

antitrust standing under the multifactor test explained in Associated

General Contractors of California v. California State Council of

Carpenter s (AGC).1 The decisions have varied from state to state,

depending on the rendering courts’ interpretations of “repealer”

legislation and/or statutes providing for harmonization of the

interpretations of state and federal antitrust and consumer protection

laws.

1. 459 U.S. 519 (1983). There are five factors: (1) whether plaintiffs’

injury is of a kind that the antitrust laws were intended to redress, (2)

whether there is a causal connection between the antitrust violation

and the harm alleged, and whether the defendant intended to cause

that harm, (3) whether the injury or direct or speculative, (4) whether

there are more direct victims of the alleged violations, and (5) the

potential for duplicative recovery or co mplex apportionment of

damages. Id. at 537-45.

398 Indirect P urchaser Litigation Ha ndbook

Several courts have recently dealt with efforts to raise indirect

purchaser claims cast as claims for damages under state unfair trade

practice laws and for unjust enrichment.2

A. Alabama

Alabama’s statutory rule, which predates Illinois Brick, expressly

grants standing to any person who has been injured “by an unlawful

trust, combine or monopoly, or its effect, direct or indirect” to sue to

recover “the sum of $500 and all actual damages.”3 The effect of this

provision seems limited by case law declaring that Alabama antitrust

law is concerned only with intrastate activity—activities that occur

within the geographic boundaries of this state.4 This appears to

preclude application of those laws to activity that crosses state

boundaries.

Alabama has a class certification rule that is substantially similar

to Federal Rule of Civil Procedure 23,5 but its court and legislature

have grappled with the certification process in addressing the race to

2. One court, declining to dismiss indirect purchaser claims brought

under the rubric of unjust enrichment for lack of sufficient analysis of

the controlling law, noted that such claims generally afford relief

only in the absence of an adequate remedy at law. Such claims should

not, therefore, lie in states where antitrust or trade regulation law

affords a remedy. See In re Flash Memory Antitrust Litig., 643 F.

Supp. 2d 1133, 1163 (N.D. Cal. 2009) (denying, without prejudice,

motions to dismiss indirect purchasers’ unjust enrichmen t claims

asserted under the laws of Arizona, Florida, Ma ssachusetts,

Minnesota, New Hampshire, North Carolina, and Tennessee); see

also In re Intel Corp . Microprocessor Antitrust Litig., 496 F. Supp.

2d 404, 420 -22 (D. Del. 2007) (dismissing unjust enrichment claims,

noting that under RESTATEMENT OF RESTITUTION § 107(1) such a

claim can be invoked only where the parties have not entered into a

contract).

3. ALA. CODE § 6-5-60(a); In re Chicken Antitrust Litig. Am. Poultry,

669 F.2d 228, 239 n.18 (5th Cir. 1982).

4. See In re New Motor Vehicles Can. Export Antitrust Litig., 800 F.

Supp. 2d 328, 380-81 (D. Me. 2011); Archer Daniels Midland Co. v.

Seven Up Bottling Co., 746 So. 2d 966, 989 -90 (Ala. 1999) and

Abbott Labs. v. D urrett, 746 So. 2d 316, 339 (Ala. 1 999) (two

dissenting justices concluded that the statute should be interpreted to

afford a cause of action for anticompetitive activities outside the

state’s borders that resulted in damage as the result of purchases and

sales made within the state); see also Griffiths v. Blue Cross & Blue

Shield, 147 F. Supp. 2d 1203, 220 (N.D. Ala. 2001) (“[I]f the

restraint itself can be characterized as crossing state borders, then it

would be outside the regulation of the Alabama antitrust statutes.”).

5. See Ala. R. Civ. P. 23.

Appendix A 399

the courthouse by class action plaintiffs. The court of appeals

authorized ex parte conditional class certification in the court in

which the first claim was filed to allow it to retain sole jurisdiction

over the claim.6 More recently, the state supreme court declared that

practice to be improper and required that class certification cannot be

had without notice to the defendant. It also declared that an Alabama

court cannot hear a class action claim if there is a prior-filed action in

another court involving substantially identical class allegations.7

The state legislature also added requirements to the class

certification procedure, requiring judges to establish a discovery

schedule for the class certification issue, similar to the process under

Federal Rule of Civil Procedure 16, and giving parties a right to

request an evidentiary hearing on class certification.8 The statute also

codified the requirement for a “rigorous analysis” of the elements of

class certification.9 Thus, when certifying a class, a judge must

identify each of the four prerequisite elements of Rule 23(a) and the

additional element in Rule 23(b), explaining in detail how the

proponents of class certification have proven each element.10 This

rigorous analysis has resulted in denial of certification for most

proposed classes of indirect purchasers.11

B. Alaska

The Alaska Restraint of Trade and Monopolies Act12 was

amended in 2003 to allow monetary relief for indirect purchasers, but

such claims can only be brought by the state’s attorney general.13

6. Ex parte Voyager Guar. Ins., 669 So . 2d 198 (Ala. Civ. App. 1995).

7. Ex parte AmSouth Bank, 735 So. 2d 1151, 1154 (1999) (court issued

mandamus to stay a second -filed state court class action pending a

decision on certification in a first -filed class action pending in federal

court, saying that the state court should refuse to exercise jurisdiction

“once it i s apprised of the fact that another court has assumed

jurisdiction of substantially the same case”) cited with approval by

Ex Pa rte J.E. Estes Wood Co., 42 So. 3 d 104 (Ala. 2010); Ex par te

Prudential Ins. Co. of Am., 721 So. 2d 1135 (Ala. 19 98); Ex parte

First Nat’l Bank, 717 So. 2d 342 (Ala. 1997).

8. ALA. CODE § 6-5-641(b), (c).

9 Id. § 6-5-641(e).

10. Gen. Motors Acceptance Corp. v. City of Red Ba y, 825 So. 2d 746

(Ala. 2002).

11. William Page, The Limits o f State Indirect Purcha ser Suits: Class

Certification in the Shadow of Illinois Brick, 67 ANTITRUST L.J. 1, 24

(1999) (citing cases that show Alabama courts ta ke a “skeptical

view” toward class certification of indirect purchasers).

12. ALASKA STAT. § 45.50.562-598.

13. Id. § 45.50.577(i).