Management of Multidistrict Indirect Purchaser Litigation

• Pages: 265-276

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CHAPTER VIII

MANAGEMENT OF MULTIDISTRICT INDIRECT

PURCHASER LITIGATION

If direct purchaser cases are large and complex, indirect

purchaser litigation may be 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, indirect purchaser

litigation involves more affected parties, potentially at different

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

direct purchasers’ claims.1

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)).2 CAFA expands the federal courts’ diversity jurisdiction

over class action litigation. CAFA, which is discussed in greater

detail in Chapter IV, facilitates removal of indirect purchaser cases to

federal court. Therefore, the multidistrict litigation process for

coordinating cases (as discussed in this chapter) has become, and

may continue to become increasingly common, making 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

1. 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 percent of the direct purchaser’s affected products (or

bought from multiple direct purchasers), and the direct purchaser

passed on 100 percent of the overcharge.

2. Class Action Fairness Act o f 2005 (CAFA), Pub. L. No. 109-2, 119

Stat. 4 (2005). Though CAFA’s impact on indirect purchaser

litigation is unclear, the Federal Judicial Center’s April 2008 interim

report on CAFA found, among other things, “that the number of class

actions based on diversity of citizenship jurisdiction filed in or

removed to the federal courts increased after CAFA’s effective date.”

FED. JUDICIAL CTR., IMPACT OF THE CLASS ACTION FAIRNESS ACT ON

THE FEDERAL COURTS: PRELIMINARY FINDINGS FROM PHASE TWO’S

PRE-CAFA SAMPLE OF DIVERSITY CLASS ACTIONS AT 1 (2008),

availa ble at http://ftp.resource.org/courts.gov/fjc/cafa1108.pdf.