United States District Court, Northern District of Illinois, E.D
December 30, 1982
OBERWEIS DAIRY, INC., PLAINTIFF,
ASSOCIATED MILK PRODUCERS, INC., ET AL., DEFENDANTS.
The opinion of the court was delivered by: Shadur, District Judge.
MEMORANDUM OPINION AND ORDER
Oberweis Dairy, Inc. ("Oberweis") has sued Associated Milk
Producers, Inc. ("AMPI") and Central Milk Producers
Cooperative ("CMPC")*fn1 alleging violations of the Sherman
Act, 15 U.S.C. § 1 and 2. Oberweis has moved for summary
judgment on the issue of liability, contending AMPI and CMPC
are collaterally estopped from litigating that issue as a
result of the holding in Alexander v. National Farmers
Organization, 687 F.2d 1173 (8th Cir. 1982). In turn AMPI and
CMPC have moved for "partial summary judgment" on certain
Oberweis claims. For the reasons stated in this memorandum
opinion and order:
1. This Court finds (a) certain facts and issues
have been determined with preclusive effect in
Alexander and (b) AMPI and CMPC are collaterally
estopped from relitigating those facts and issues in
2. This Court denies the AMPI-CMPC motion.
Oberweis is a dairy engaged in the business of buying raw
milk and marketing Grade A milk in the greater Chicago
area.*fn2 AMPI is a large dairy cooperative. CMPC is a
federation of cooperatives, including AMPI. Dairy cooperatives
operate to increase the market power of member dairy farmers
by various means.*fn3
Alexander was a private antitrust action begun in 1971 when a
large dairy cooperative, Mid-America Dairymen, Inc. ("Mid-Am")
sued National Farmers Organization ("NFO"), a rival
organization of dairy and other farmers. NFO counterclaimed
against Mid-Am, AMPI, CMPC and others, and AMPI counterclaimed
against NFO. At the District Court level all substantive
antitrust claims of the parties were rejected. In re Midwest
Milk Monopolization Litigation, 510 F. Supp. 381 (W.D.Mo. 1981)
On appeal the conclusion NFO had not violated the antitrust
laws was affirmed on other grounds. But the Court of Appeals
for the Eighth Circuit found "Mid-Am, AMPI and CMPC did
conspire to monopolize milk and eliminate competition through
the use of predatory, anticompetitive and unlawful tactics."
Alexander, 687 F.2d at 1179.*fn4 Oberweis invokes Alexander in
its effort to preclude AMPI and CMPC from litigating their
liability in this action.
By way of counterattack, AMPI and CMPC contend they are
entitled to "partial summary judgment" on Oberweis' claims for
damages arising from:
1. purchases of raw milk from suppliers not
controlled by AMPI or CMPC;
2. handling, hauling and premium charges for
certain raw milk in purchases from AMPI-CMPC; and
3. alleged AMPI-CMPC acts with co-conspirators.
AMPI and CMPC contend the first type of claim is barred under
the "indirect purchaser" doctrine of Illinois Brick Co. v.
Illinois, 431 U.S. 720, 97 S.Ct. 2061, 52 L.Ed.2d 707 (1977).
As for the other two types, they contend Oberweis (a) has not
produced in the discovery process, (b) is now precluded from
producing or (c) admittedly does not have any factual evidence
supporting those claims.
Oberweis has miscast its current motion as one seeking
summary judgment on AMPI-CMPC liability. As Oberweis' own Mem.
5-8 indicates, it rather wants a ruling that (1) certain
specific facts and issues have been determined in Alexander and
(2) AMPI and CMPC are precluded from relitigating those issues
here. Summary judgment "on the issue of liability alone" is
appropriate under Fed.R.Civ.P. ("Rule") 56(c) only when a party
has moved under Rule 56(a) or 56(b) and has established there
is no genuine issue of fact material to liability, but the
court does find a genuine issue as to the amount of damages.
Though the Rules provide no specific procedural vehicle for the
relief Oberweis seeks, Rule 16 comes closest to doing so. See
Wetherill v. University of Chicago, 548 F. Supp. 66, 67 & n. 3
Even apart from that procedural problem, Alexander could not
conceptually have determined AMPI-CMPC's liability to Oberweis.
"[B]efore the private plaintiff in an antitrust action can
recover damages, he must establish not only that the defendant
has violated the antitrust laws, but also that the violation
proximately caused injury to his business or property." 15 J.
Von Kalinowski, Antitrust Laws and Trade Regulation § 111.01,
at 111-1 (1981) ("Von Kalinowski"). Alexander did decide AMPI
and CMPC conspired in violation of the antitrust laws, but
their liability in that action necessarily depended on the
Court's also finding "that NFO was a specific target of the
conspiracy." 687 F.2d at 1191.
There was of course no corresponding finding in
Alexander that the AMPI-CMPC conspiracy "proximately caused
injury to" or targeted Oberweis' business. Oberweis cannot
therefore be put in a position where "only the issue as to the
amount of damages" remains in this action. Oberweis Motion at
1. That issue can be reached only after Oberweis satisfies its
burden as to causation. 15 Von Kalinowski § 111.01, at 111-1 to
111-2. Any collateral estoppel effect of Alexander cannot and
does not eliminate that burden.
Oberweis' mischaracterization of its motion has misdirected
the argument between the parties. Essentially three questions
are really presented:
1. What relevant facts and issues did
Alexander determine, with possibly preclusive
2. Can Oberweis satisfy the general
requirements for invocation of offensive
3. Are there specific reasons why collateral
estoppel should not be applied against AMPI and
CMPC in this action?
Those questions are addressed in turn.
1. Alexander's Relevant Holdings
Alexander found specifically (all these are direct quotes
from the Court of Appeals' opinion):
(a) In any commercially meaningful sense, Grade
A milk is . . . a relevant product market for
antitrust purposes. . . . 687 F.2d at 1191.
(b) [T]he record reveals public
assertions . . . by CMPC that it represents over
ninety percent of the producers selling into the
Chicago market, and supplies over ninety percent
of that market's fluid milk use. Id. at 1192.
(c) [T]he defendants do not seriously dispute,
nor could they on this record, that they acted in
concert with the intent to eliminate competition
and gain sufficient control of milk to enable
them to set higher prices. Id. at 1193.
(d) AMPI, Mid-Am and CMPC did conspire to
monopolize and eliminate competition in the
marketing of Grade A milk produced in the
Midwest, through the use of discriminatory
pricing, coercive supply disruptions and threats
of similar conduct, as well as bad faith
harassment and threats of litigation against
independent buyers of NFO milk. Id.
(e) This conspiracy violates Sections 1 and 2
of the Sherman Act, notwithstanding the
Capper-Volstead exemption [of cooperatives from
certain antitrust law liability], because it
involved the concerted use of predatory and other
unlawful, anti-competitive means to eliminate
competition and pursue monopoly power.
Id. at 1191.
Then the Court of Appeals surveyed the defendants' overt
acts, id. at 1194-1207, including some in the Chicago marketing
region, id. at 1196-99. All the activity cited in that survey
fell in the 1969-71 period, and there is nothing to indicate a
holding of illegality either before or after those years.*fn5
As AMPI points out (Ans. Mem. 13 n. 5) the Chicago-area overt
acts described in Alexander occurred only in 1970-71.
In this action Oberweis claims damages allegedly arising
from AMPI and CMPC conduct beginning in 1957 and continuing to
date, Complaint ¶ 21, insofar as those fall within the statute
of limitations, id. ¶ 26. But Oberweis has not responded to
AMPI's point on the time frame of Alexander's holding. Because
Alexander's findings relevant here are focused on the 1970-71
period, any collateral estoppel effect must be so limited.*fn6
2. General Collateral Estoppel Principles
In Montana v. United States, 440 U.S. 147, 153, 99 S.Ct. 970,
973, 59 L.Ed.2d 210 (1979) the Supreme Court described the
doctrine of collateral estoppel:
Under collateral estoppel, once an issue is
actually and necessarily determined by a court of
competent jurisdiction, that determination is
conclusive in subsequent suits based on a
different cause of action involving a party to
the prior litigation.
Collateral estoppel is integral to civil practice because it
permits conservation of adversarial and judicial resources and
minimizes the possibility of inconsistent judicial decisions.
Id. at 153-54, 99 S.Ct. at 973-74.
"Offensive" collateral estoppel, approved for the federal
courts in Parklane Hosiery Co. v. Shore, 439 U.S. 322, 99 S.Ct.
645, 58 L.Ed.2d 552 (1979), permits a plaintiff to foreclose a
defendant's relitigating an issue previously lost by that
defendant in an action with another party. Even though that
usage had been criticized by some courts and commentators, the
Court held (id. at 331, 99 S.Ct. at 651-52, footnote omitted):
We have concluded that the preferable approach
for dealing with these problems in the federal
courts is not to preclude the use of offensive
collateral estoppel, but to grant trial courts
broad discretion to determine when it should be
applied. The general rule should be that in cases
where a plaintiff could easily have joined in the
earlier action or where, either for the reasons
discussed above or for other reasons, the
application of offensive estoppel would be unfair
to a defendant, a trial judge should not allow
the use of offensive collateral estoppel.
Determination of fairness requires the defendant to have had
a "full and fair" opportunity to litigate the claims in the
earlier action. Id. at 332, 99 S.Ct. at 652.*fn7
Just last year the operative principles were restated in the
context of a summary judgment motion in a private antitrust
action, GAF Corp. v. Eastman Kodak Co., 519 F. Supp. 1203,
1211-12 (S.D.N.Y. 1981) (citations omitted):*fn8
Briefly stated, the following are preconditions
to the application of collateral estoppel: (1)
the party against whom collateral estoppel is
asserted must have been a party, or in privity
with a party, to the prior action; (2) there must
have been a final determination of the merits of
the issues sought to be collaterally estopped;
(3) the issues sought to be precluded must have
been necessary, material, and essential to the
prior outcome; (4) the issues sought to be
precluded must have been actually litigated in
the prior action, with the party against whom the
estoppel is asserted having had a full and fair
opportunity to litigate the issues; and (5) the
issues actually and necessarily decided in the
prior litigation must be identical to the issues
sought to be estopped. . . . In addition, in
exercising its discretion, the trial court may
only invoke offensive collateral estoppel when
the plaintiff could not have easily joined in the
prior action and when application of the doctrine
would not be unfair to the defendant.
AMPI and CMPC would have done well to focus on those
"preconditions" to Oberweis' use of collateral estoppel
Unfortunately, due in part to Oberweis'
mischaracterization of its motion, AMPI and CMPC did not
follow GAF's logical and clear legal outline.
3. pplication of Collateral Estoppel in This Action
Beyond doubt the principal GAF "preconditions" to offensive
collateral estoppel have been met. AMPI and CMPC were
defendants in Alexander and litigated that action fully over a
decade. They had every reason to contest every issue in
Alexander vigorously and under the same procedural conditions
prevailing here. See Pinto Trucking Service, Inc. v. Motor
Dispatch, Inc., 649 F.2d 530, 533 n. 4 (7th Cir. 1981). As a
general matter, then, there is no element of potential
unfairness to AMPI and CMPC. It remains to consider the
specific objections raised by AMPI and CMPC.
AMPI and CMPC pose the legal question whether offensive
collateral estoppel is available between private antitrust
actions. Otherwise most of their objections go in one way or
another to the finality of Alexander, to the identity of the
issues involved in that and this action, and to certain
allegedly questionable legal tests applied in Alexander. But
throughout their discussion AMPI and CMPC have argued to avoid
to Oberweis.*fn10 Having swallowed whole Oberweis'
characterization, AMPI and CMPC wasted much of their effort
instead of concentrating (as they should have) on why
collateral estoppel as to specific issues and facts might be
a. Collateral Estoppel in Private Antitrust Actions
AMPI (Ans. Mem. 3-5) and CMPC (Ans. Mem. 2-4) argue
collateral estoppel is not available between private antitrust
actions. Their argument is based on tortured legislative
history and logic.
Before its amendment in 1980 Clayton Act § 5(a) (15 U.S.C. § 16(a))
provided a final judgment against a defendant in a
governmental civil or criminal antitrust action "shall be prima
facie evidence against such defendant" in a private antitrust
action. In 1980 Section 5(a) was amended by adding:
Nothing contained in this section shall be
construed to impose any limitation on the
application of collateral estoppel, except that,
in any action or proceeding brought under the
antitrust laws, collateral estoppel effect shall
not be given to any finding made by the Federal
Trade Commission under the antitrust laws or
under section 45 of this title which could give
rise to a claim for relief under the antitrust
That amendment was intended to override some court decisions
that had interpreted the former "prima facie evidence"
language to preclude (inferentially) full collateral estoppel
effect to a prior government action in a private action.
See H.R. Rep. No. 874, 96th Cong., 2d Sess. 2-6, reprinted in
1980 U.S.Code Cong. & Ad. News 2716, 2752, 2752-56; National
Comm'n for the Review of Antitrust Laws and Procedures, Report
to the President and the Attorney General, Antitrust & Trade
Reg.Rep. (BNA) No. 897, at 29-31 (Jan. 18, 1979). Its entire
focus was on the collateral estoppel effect to be given future
government antitrust actions.
AMPI and CMPC somehow read into the amendment the notion
that before 1980 there could be no collateral estoppel effect
given to private antitrust actions in later private actions.
They not only embrace the questionable restrictive reading of
pre-amendment Section 5(a) but also infer the section had
implicitly denied any collateral estoppel effect to private
Instead the thrust of the 1980 amendment is precisely the
opposite: Congress wanted to clarify the applicability of
universal collateral estoppel principles to government
antitrust actions, unfettered by a narrow reading of Section
5(a). This was the import of the National Commission's Report,
id. at 30 (footnote omitted):
[T]he majority of the Commission recommends that
Congress amend the statute to make it clear that
the prima facie effect afforded prior litigated
judgments won by the government does not preclude
courts, in their discretion, from applying in
antitrust cases the principles of collateral
estoppel now applicable in other types of
litigation. A defendant who lost either a prior
government or private suit could be precluded
from relitigating against subsequent plaintiffs
those issues fully and fairly contested and
necessary to the result in the first action. In
this way, the deterrent effect of the antitrust
laws will be enhanced and complex antitrust cases
can be litigated and adjudicated more
AMPI and CMPC would distort the phrase "or private suit" to
mean the Commission was recommending creating the possibility
of collateral estoppel use of a private action.
That is simply nonsense, for it is plain the Commission was
rather seeking to make sure government actions were brought
into parity with the existing status of private actions for
collateral estoppel purposes.*fn12
See 15 Von Kalinowski §
109.04, at 109-29 to 109-32 and July 1982 Supp. § 109-04,
b. Finality of Alexander
AMPI implies (Ans. Mem. 2) and CMPC argues (Ans. Mem. 21-22)
Alexander is not a final judgment on the merits. Of course
Alexander's being subject to review en banc or by the Supreme
Court does not affect its finality. See 1B Moore's Federal
Practice § 0.416, at 2252-53 (1982).*fn13
c. Identity of the Issues
AMPI (Ans. Mem. 5-10) and CMPC (Ans. Mem. 11-14, 19-20, 23)
contend the conspiracy in Alexander was not the same as the
conspiracy alleged by Oberweis. That position makes sense only
if translated into an argument Alexander could not establish
AMPI-CMPC liability in this action. Otherwise the
conspiratorial facts and issues determined in Alexander are
identical to those here — though Oberweis is obligated to
prove it too was a target of AMPI-CMPC antitrust violations
found in Alexander. Even Oberweis came to see this dimly. R.
Mem. 3-5, 8.
Nor is this conclusion altered by Oberweis' original
opposition to consolidation of this case with
Alexander for discovery purposes. AMPI Ans. Mem. 8-9; CMPC Ans.
Mem. 24. Alexander was a suit between competitors, involving
claims of antitrust violations throughout the Midwest. Oberweis
was a buyer operating in a limited market, so the two actions
did not fully occupy the identical universe. Pl.R.Mem. 9. Yet
that does not foreclose Oberweis' use now of AMPI-CMPC
antitrust violations over time periods and in the geographic
area covered by the Complaint here. It is irrelevant that the
geographic areas of the two actions differ (AMPI Ans.Mem. 2,
10-12 and CMPC Ans.Mem. 14-15). What controls is that Alexander
included this action's relevant area.
d. Assertedly Differing Legal Standards
AMPI (Ans.Mem. 2, 15-22) and CMPC (Ans.Mem. 6-11, 20-21)
argue vigorously about Alexander's supposed laxity in requiring
a lesser showing of a relevant geographic market on NFO's
conspiracy claims than on its actual and attempted
monopolization claims against AMPI and CMPC. See 687 F.2d at
1181-82, 1192-93. True enough, the lesser showing was in part
responsible for the Court of Appeals' reversing Midwest Milk on
the conspiracy claims but affirming dismissal of the
actual/attempted monopolization claims. That difference however
related to NFO's effort to show a ten-state-wide conspiracy and
monopolization — an effort found adequate as to the former but
inadequate as to the latter. Id. at 1192-93.*fn14
What is significant for this case, though, is the
Chicago market — and here there was no doubt about AMPI-CMPC
antitrust violations under the strictest of standards. Id. at
1192, 1194, 1196-99, 1207. Thus even if Alexander were
considered to have applied in some respects a legal rule
different from one prevailing in this Circuit, Alexander's
finding of antitrust violations in the Chicago market is
available for collateral estoppel use in this action.
AMPI (Ans.Mem. 23-24) and CMPC (Ans.Mem. 18-19, 20) also
object to Alexander's treatment of the Noerr-Pennington
doctrine, under which joint efforts to influence public
officials are not themselves illegal under the Sherman Act. See
687 F.2d 1195-96. AMPI and CMPC claim misuse of the doctrine
led to the Alexander holding, precluding reliance on Alexander
in this action and Circuit. That argument hardly merits
1. Application or non-application of the
doctrine to NFO is totally irrelevant to
liability as between Oberweis and AMPI-CMPC.
2. In any case even a cursory glance shows
Alexander's use of Noerr-Penning-ton evidence was
not crucial to its overall findings. See 687
F.2d at 1196.
e. Unfairness to AMPI-CMPC
AMPI (Ans.Mem. 26-29) and CMPC (Ans. Mem. 22-26) assertions
about the unfairness of applying collateral estoppel against
them either (1) rehash the objections already discussed or (2)
suggest no determination of their liability would be proper on
Oberweis' motion. Neither set of arguments needs further
Still another "fairness" contention involves Oberweis'
discovery shenanigans in this action. AMPI Ans.Mem. 6, 29;
CMPC Ans.Mem. 24-26. But any Oberweis discovery sins argue for
appropriate sanctions under Rule 37, not for a reward to
AMPI-CMPC on this motion. Moreover, the very contention comes
with ill grace from AMPI, whose own discovery actions in
Alexander were condemned as "outrageous" and as justifying "the
most severe sanctions upon AMPI — . . . default judgment
against it." 687 F.2d at 1205.*fn15
This Court finds AMPI and CMPC collaterally estopped from
relitigating the facts and issues referred to under
"Alexander's Relevant Holdings": essentially whether Grade A
milk is a relevant product market, whether AMPI and CMPC
conspired to monopolize the market for Grade A milk and to
eliminate competition in the Chicago Regional Market Area in
the 1970-71 period, thus violating Sherman Act §§ 1 and 2, and
whether they controlled over 90% of the Chicago market. Only
those facts and issues, raised by Oberweis' multifarious claim
for damages (Complaint ¶¶ 21-24, 26), have been determined
adversely to AMPI and CMPC in Alexander. But those
determinations ought to be and are given preclusive effect in
One easy answer to AMPI-CMPC's "partial summary judgment"
motion is there is no such animal in their terms. Rule 56(d)
is not designed for the use AMPI-CMPC intend: "the singling
out of limited issues on which the Court's advice may be
obtained." Mendenhall v. Barber-Greene Co., 531 F. Supp. 947,
948 (N.D.Ill. 1981). See also Malcak v. Cooney, 93 F.R.D. 830,
831 n. 1 (N.D.Ill. 1982).
Rule 56(d) does allow a court to determine some material
facts "appear without substantial controversy," but only
when a party has moved unsuccessfully for a "full" summary
judgment under Rule 56(a) or 56(b). Here AMPI-CMPC do not move
for full summary judgment, nor do they really seek summary
judgment on a "part" of a claim in the sense meant in the same
Rules. Oberweis' Complaint ¶¶ 21-23, 26) states one
single-count claim for damages, the "parts" of which are
aspects of that whole claim rather than discrete "sub-claims."
Essentially AMPI-CMPC want a ruling that certain Oberweis
damages cannot be assessed or have not been proved. "Partial
summary judgment" is their invented mechanism to gain that
1. Claimed Failures To Prove Damages
Their focus on damages issues is most evident in the part of
their motion dealing with (1) handling, freight and premium
charges on Oberweis' purchases from AMPI-CMPC*fn17 and (2)
alleged illegal acts of AMPI-CMPC and unnamed co-conspirators.
Their whole argument in that area (Mem. 29-32, 32-34, 35-37;
R.Mem. 18ff.) is that certain damages have not been shown in
the discovery process.*fn18
Even were Rule 56 susceptible to such use, Oberweis would be
entitled to all favorable inferences from the facts of record,
United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct.
993, 994, 8 L.Ed.2d 176 (1962). In that light even the claimed
absence of specific facts on specific parts of Oberweis'
damages claim would not mean AMPI-CMPC are now entitled to
"partial" judgment as a matter of law. Because favorable
inferences would be available to Oberweis from its more general
factual showings (see Ans.Mem. 12-18, describing its discovery
evidence), a ruling against Oberweis on a Rule 56 motion would
be extremely unlikely. This suggests another reason why Rule 56
is really not fit for AMPI-CMPC's intended use.
2. Illinois Brick Issue
AMPI-CMPC make a different contention on a third set of
claims, arising from Oberweis' purchases from 23 suppliers
allegedly not controlled by AMPI-CMPC. Those claims, involving
both raw milk prices and handling/service charges, are
assertedly barred by the indirect purchaser doctrine of
Illinois Brick. Mem. 19-27, 29; R.Mem. 10-18. Entirely aside
Rule 56 considerations, AMPI-CMPC's appeal to Illinois Brick is
Clayton Act § 4 (15 U.S.C. § 15) provides a treble-damage
remedy to "[a]ny person who shall be injured in his business or
property by reason of anything forbidden in the antitrust
laws." On its face Section 4 "contains little in the way of
restrictive language." Reiter v. Sonotone Corp., 442 U.S. 330,
337, 99 S.Ct. 2326, 2330, 60 L.Ed.2d 931 (1979). Section 4
reflects Congress' broad remedial and enforcement purposes in
enacting the antitrust laws. See Pfizer Inc. v. India,
434 U.S. 308, 313-14, 98 S.Ct. 584, 587-88, 54 L.Ed.2d 563 (1978).
Illinois Brick stated a limitation on the otherwise broad
sweep of Section 4, holding indirect purchasers of concrete
block were not parties "injured" within Section 4's meaning.
431 U.S. at 729, 97 S.Ct. at 2066. Such indirect purchasers
obtained concrete block from general contractors, who in turn
obtained the block from masonry contractors, themselves the
direct purchasers from the defendant manufacturers. Id. at 726,
97 S.Ct. at 2064-45. Three interrelated reasons were held to
bar Section 4 actions by both direct and indirect purchasers:
1. There was an unacceptable risk of
duplicative recovery of damages from a single
overcharge by an antitrust defendant.
Id. at 730-31, 97 S.Ct. at 2066-67.
2. Splintered recoveries and litigation burdens
under a rule requiring apportionment of damages
among direct and indirect purchasers might chill
private enforcement of the antitrust laws.
Id. at 745-47, 97 S.Ct. at 2074-75.
3. Direct purchasers were the group most likely
to press their claims vigorously under Section 4.
Id. at 735, 97 S.Ct. at 2069.
Illinois Brick's rationale was recently summarized and
reaffirmed in Blue Shield of Virginia v. McCready, ___ U.S.
___, 102 S.Ct. 2540, 2546, 73 L.Ed.2d 149 (1982). McCready held
a health plan subscriber had Section 4 standing to sue for the
plan's failure to reimburse psychotherapy expenses incurred for
services provided by psychologists, while providing
reimbursement for services rendered by psychiatrists. Although
that distinction arguably harmed psychologists directly and
subscribers only indirectly or remotely, id. 102 S.Ct. at 2544,
the Court refused to apply Illinois Brick to bar recovery (id.
102 S.Ct. at 2546, footnote omitted):
[Illinois Brick] focused on the risk of duplicative
recovery engendered by allowing every person along
a chain of distribution to claim damages arising
from a single transaction that violated the
antitrust laws. But permitting respondent to
proceed in the circumstances of this case offers
not the slightest possibility of a duplicative
exaction from petitioners. McCready has paid her
psychologist's bills; her injury consists of Blue
Shield's failure to pay her. Her psychologist can
link no claim of injury to himself arising from his
treatment of McCready; he has been fully paid for
his service and has not been injured by Blue
Shield's refusal to reimburse her for the cost of
his services. And whatever the adverse effect of
Blue Shield's actions on McCready's employer, who
purchased the plan, it is not the employer as
purchaser, but his employees as subscribers, who
are out of pocket as a consequence of the plan's
failure to pay benefits.
Moreover, the Court went on to hold McCready had satisfied
the "[a]nalytically distinct" question whether her injuries
were "too remote" from an antitrust violation. Id. 102 S.Ct. at
2547. It looked (id. 102 S.Ct. at 2548):
(1) to the physical and economic nexus between
the alleged violation and the harm to the
(2) more particularly, to the relationship of the
injury alleged with those forms of injury about
which Congress was likely to have been concerned
in making defendant's conduct unlawful and in
providing a private remedy under § 4.
Surveying the facts, the Court concluded (id. 102 S.Ct. at
2549, 2551, citations and footnote omitted):
Where the injury alleged is so integral an aspect
of the conspiracy alleged, there
can be no question but that the loss was
precisely "`the type of loss that the claimed
violations . . . would be likely to cause.'"
As a consumer of psychotherapy services entitled
to financial benefits under the Blue Shield plan,
we think it clear that McCready was "within that
area of the economy . . . endangered by [that]
breakdown of competitive conditions" resulting
from Blue Shield's selective refusal to
Although McCready was not a competitor of the
conspirators, the injury she suffered was
inextricably intertwined with the injury the
conspirators sought to inflict on psychologists
and the psychotherapy market. In light of the
conspiracy here alleged we think that McCready's
injury "flows from that which makes defendants'
acts unlawful" . . . and falls squarely within
the area of congressional concern.
Oberweis (Complaint ¶ 23c-h) has alleged AMPI-CMPC control
the price and supply of substantially all raw milk in the
Chicago region (see also Ans.Mem. 2-3, 7). More critical to the
present motion, there is evidence to indicate the AMPI-CMPC
conspiracy controls the price of the raw milk Oberweis buys
from all its sources.*fn19
Oberweis thus claims harm from all
its purchases, harm caused by the AMPI-CMPC conspiracy. That
provides the required "nexus" between AMPI-CMPC's violation and
Oberweis' harm from purchases from the 23 separate suppliers.
Oberweis also asserts precisely the kind of injury with
which Congress was concerned in providing the Section 4
remedy. It is irrelevant here, as in McCready, that Oberweis
was not a competitor of AMPI-CMPC.*fn20 Finally (and
controlling under McCready and Illinois Brick) there is no
danger of duplicative recovery here. No "chain of distribution"
is involved, and the 23 suppliers are not potential plaintiffs
harmed by the alleged AMPI-CMPC conspiracy. It could be
inferred that their prices were also set by AMPI-CMPC. In sum
the concerns underlying Illinois Brick (and specifically its
distinct concerns about remoteness of injury) are absent here.
McCready, as Supreme Court authority, obviates any need to
discuss the District Court and Court of Appeals cases cited by
AMPI-CMPC. Nevertheless all those cases are distinguishable:
1. In Mid-West Paper Products Co., two groups of
plaintiffs were denied Section 4 standing:
(a) indirect purchasers, where there was no
showing (596 F.2d at 578) "they have absorbed
the illegal overcharge in its entirety," and
(b) direct purchasers from defendants'
competitors, where there was no showing
defendants controlled or set competitors'
prices (id. at 583-87).
Here Oberweis has some factual predicate for its
assertions (a) it has absorbed all the
overcharges in its purchases from the 23
suppliers and (b) AMPI-CMPC control the 23
2. In both In re Folding Carton Antitrust
Litigation, 88 F.R.D. 211, 217-20 (N.D.Ill. 1980)
and Liang v. Hunt, 477 F. Supp. 891, 896 (N.D.Ill.
1979), classic Illinois Brick situations were
involved: Plaintiffs denied standing were linked
only indirectly to defendants' antitrust
3. After briefing was completed, AMPI-CMPC
directed attention to newly-decided
California v. Standard Oil Co., 691 F.2d 1335 (9th
Cir. 1982). Even a cursory reading (at 1340-41)
discloses California was decided on classic
Brick facts and special problems of "speculative"
Illinois Brick and its progeny clearly do not bar Oberweis'
recovery of damages sustained in purchases from the 23
allegedly independent suppliers of raw milk. Illinois Brick's
limitations do not apply to defendants who control their
"independent" competitors' prices.*fn21
AMPI and CMPC are bound by, and may not relitigate in this
action, the Alexander determinations identified in the Summary
of the "Oberweis' Motion" section of this opinion.*fn22 On the
other side of the coin, the AMPI-CMPC motion for "partial
summary judgment" is denied in all respects.