STATE OF MINNESOTA
IN COURT OF APPEALS
individually and on behalf of all others similarly situated,
Crompton Corporation, et al.,
Filed August 22, 2006
Hennepin County District Court
File No. MC 02-19278
Garrett D. Blanchfield, Jr., Frances E. Baillon, Reinhardt Wendorf & Blanchfield, E-1250 First National Bank Building, 332 Minnesota Street, St. Paul, MN 55101 (for appellant)
Michael A. Lindsay, Michael Skoglund, Dorsey & Whitney LLP, 50 South Sixth Street, Suite 1500, Minneapolis, MN 55402-1498, and
James S. Simonson, Gray, Plant, Mooty, Mooty & Bennett
PA, 500 IDS Center,
Benjamin G. Bradshaw, O’Melveny & Myers, LLP,
J. Andrew Read, Jones Day,
Considered and decided by Shumaker, Presiding Judge; Willis, Judge; and Ross, Judge.
S Y L L A B U S
Indirect-purchaser standing under the Minnesota Antitrust Act is limited to those who participate in the market restrained by the alleged antitrust violation.
O P I N I O N
This is a case about alleged price-fixing under the Minnesota Antitrust Act in the sale of chemicals used in the tire-manufacturing process. In this appeal from judgment on the pleadings for lack of standing, appellant tire-consumer Diane Lorix argues that the district court erred by applying an incorrect standing standard and by determining that her claimed injuries are too remote to confer standing. We conclude that Lorix lacks standing because she does not allege that she is a participant in the market restrained by the alleged antitrust violations. We therefore affirm.
Lorix’s complaint asserts that respondents Crompton Corporation, Uniroyal Chemical Company, Inc., Uniroyal Chemical Company Limited, and Bayer Corporation conspired to fix the price of rubber-processing chemicals that are sold for use in manufacturing automobile tires. Lorix does not allege that she purchased any overpriced chemicals herself. Lorix alleges instead that she purchased tires that had been made using these chemicals and that she overpaid because the tire manufacturers passed the overcharges resulting from respondents’ price-fixing of the chemicals along to her as an ultimate consumer of tires. Lorix purports to represent a class of similarly situated consumers.
Respondents moved for judgment on the pleadings, arguing that because Lorix lacks standing, she has failed to state a claim on which relief can be granted. The district court found that Lorix failed to allege that she is a participant in the allegedly restrained market and that Lorix’s injuries are too remote to confer standing. It granted respondents’ motion and dismissed Lorix’s lawsuit. Lorix’s appeal follows.
Did the district court err by determining that Lorix’s injuries are too remote from the alleged antitrust violation to confer standing and by dismissing Lorix’s claims for lack of standing?
Lorix argues that the district court erred by dismissing her
antitrust claim against respondents. A
district court may dismiss a claim on the pleadings when a plaintiff fails to
set forth a legally sufficient claim for relief.
Lorix challenges the district court’s determination of her
lack of standing. To have standing, a
party must have “a sufficient stake in a justiciable controversy.” State by
Humphrey v. Philip Morris Inc., 551 N.W.2d 490, 493 (
We will look to construction of federal antitrust law when
applying the state statute. In 1971, the
must consider the reach of the
Lorix asserts that she was indirectly injured by respondents’ alleged conspiracy to fix the price of their rubber-processing chemicals. She concedes that she did not purchase respondents’ chemical products. She argues instead that as a result of respondents’ conspiracy, which allegedly resulted in automobile-tire manufacturers being illegally overcharged when buying chemicals necessary in their manufacturing process, these manufacturers passed the overcharges on to tire purchasers. She alleges that the antitrust statute entitles her to damages because she paid a premium for automobile tires because of these overcharges.
Lorix argues that section 325D.57 confers indirect-purchaser standing to any purchaser indirectly injured by an antitrust violation, however attenuated the link between the antitrust violation and the purchase. Lorix would have us read the ambiguous term, “indirectly,” without any limitation whatsoever. At oral argument, Lorix’s counsel expounded, insisting that even those who purchase used goods would have standing to sue a remote manufacturer if the purchaser paid more for the used goods than she would have absent an antitrust violation. Lorix’s counsel also maintained that even a television purchaser would have indirect-purchaser standing to sue an oil company for antitrust violations if price fixing increased the cost of gasoline, which in turn increased the cost of transportation and ultimately the cost of the television. Counsel went so far as to declare that every Minnesota citizen could bring an antitrust suit against rubber-processing chemical manufacturers because price-fixing resulted in the increased price of tires, which in turn increases the cost of transportation and, therefore, the cost of goods transported by truck.
argument stretches the term “indirectly” far beyond reason. Antitrust violations always “cause ripples of
harm to flow” throughout the economy, but antitrust legislation is not intended
“to allow every person tangentially affected by an
antitrust violation to maintain an action.”
counter, arguing that to have standing to bring an antitrust claim, an indirect
purchaser must be a participant in the allegedly restrained market. We agree.
Federal courts have consistently held that an antitrust plaintiff must
be a consumer or competitor in the market restrained by alleged antitrust
violations. Assoc. Gen. Contractors v. Calif. State Council of Carpenters, 459
U.S. 519, 538–39, 103 S. Ct. 897 908–09 (1983) (noting that antitrust
legislation protects “the economic freedom of participants
in the relevant market”); Brunswick Corp. v. Pueblo
Bowl-O-Mat, Inc., 429
Lorix’s complaint alleges that respondents conspired to fix the price of rubber-processing chemicals they sold to tire manufacturers and that, as a result, she paid more for the tires made with respondents’ rubber-processing chemicals than she otherwise would have paid. Our standard of review requires that we accept these allegations as true. See Martins, 616 N.W.2d at 740 n.9. But Lorix fails to allege any facts to allow an inference that she is a participant in the rubber-processing-chemical market, which is the market restrained by respondents’ alleged antitrust violations. We therefore conclude that Lorix lacks standing to maintain an antitrust suit against respondents and that she has therefore failed to state a claim upon which relief can be granted.
D E C I S I O N
Because Lorix is not a participant in the market restrained by respondents’ alleged antitrust violations, Lorix lacks standing to sue under the Minnesota Antitrust Act. The district court did not err by entering judgment on the pleadings in respondents’ favor.