Chapter VIII. Management of Multidistrict Indirect Purchaser Litigation

• Pages: 211-223

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CHAPTER VIII

MANAGEMENT OF MULTIDISTRICT INDIRECT

PURCHASER LITIGATION

If direct purchaser cases are large and complex, indirect purchaser

litigation is even more so. Every direct purchaser presumably had

multiple customers for the affected product, and those customers may in

turn have resold the affected product further down the chain of

distribution. In other words: more affected parties, potentially at

different points in the chain of distribution, and with smaller claims than

the direct purchasers’ claims.797 The natural, or at least usual, result is

the multiplication of litigation: if the direct purchasers filed cases in a

half-dozen federal districts (usually ending up consolidated, in some

fashion, in a single district), the indirect purchasers are likely to file

multiple actions, more likely in state courts—although now more likely

to be removed to federal court under the Class Action Fairness Act of

2005 (CAFA).798 This Chapter primarily describes the pre-CAFA world,

but with some suggestions of how CAFA might affect it. If CAFA

results in an increase of indirect purchaser cases being removed to

federal court, the role of the multidistrict litigation process in

coordinating cases (as discussed in Part A.2 below) will become

increasingly more important, and the need for coordination among state

courts relatively less so.

Moreover, although this Handbook focuses on the indirect purchaser

component of antitrust litigation, the indirect purchaser cases will coexist

with direct purchaser litigation, and sometimes with federal and/or state

enforcement actions, both civil and criminal. Usually any enforcement

action will precede the direct purchaser litigation, which will in turn

precede the indirect purchaser litigation, but nothing prevents a different

sequence in any particular litigation.

This multiplicity of litigation creates the need for some degree of

coordination. Although plaintiffs and defendants may have strategic

797. By definition, the amount of the indirect purchaser’s claim will be smaller

than that of the direct purchaser, unless the indirect purchaser bought

100% of the direct purchaser’s affected products (or bought from multiple

direct purchasers), and the direct purchaser passed on 100% of the

overcharge.

798. Class Action Fairness Act of 2005 (CAFA), Pub. L. No. 109-2, 119 Stat.

4 (2005).