United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
S. Shah United States District Judge
Plaintiffs allege that domestic steel manufacturers reduced
steel production in a concerted effort to drive up the price
of steel. Direct purchasers of steel then passed on the
higher prices to downstream customers like the plaintiffs,
who bought consumer products made with steel as well as other
materials. Plaintiffs filed suit against the defendants, the
steel manufacturers, for the indirect harm allegedly caused
by the illegal reduction in supply. Defendants move to
dismiss the amended class action complaint.
. For the following reasons, defendants'
motion is granted.
motion to dismiss under Fed.R.Civ.P. 12(b)(6) does not test
the merits of a claim, but rather the sufficiency of the
complaint. Fed.R.Civ.P. 12(b)(6); Gibson v. City of
Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). In
deciding a 12(b)(6) motion, a court accepts all well-pleaded
facts as true and draws all reasonable inferences in favor of
the plaintiff. Id. at 1521. To survive a 12(b)(6)
motion, “a complaint must contain sufficient factual
matter, accepted as true, to state a claim to relief that is
plausible on its face.” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009). In addition to the complaint, a court
may also consider documents attached to or referenced in the
complaint. Levenstein v. Salafsky, 164 F.3d 345, 347
(7th Cir. 1998) (quoting Wright v. Associated Ins. Cos.,
Inc., 29 F.3d 1244, 1249 (7th Cir.1994)). “A
complaint should not be dismissed for failure to state [a]
claim unless it appears beyond doubt that the plaintiff is
unable to prove any set of facts which would entitle the
plaintiff to relief.” Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 546 (2007).
Supreme Auto Transport LLC, based in Michigan, and fifteen
individual plaintiffs from ten states represent a purported
class of indirect purchasers of steel products. In 2008,
Supreme Auto filed suit as the sole plaintiff representing a
purported class. The original complaint alleged that
defendants orchestrated a scheme to artificially increase the
price of steel through coordinated production cuts between
January 2005 and September 2008. Plaintiffs filed an amended
complaint adding the fifteen individual plaintiffs in April
allege that defendants, who are among the largest producers
of steel in the U.S. market, instituted a plan to improve
“industry discipline” and increase both prices
and profit in the United States steel market. At the
forefront of this plan was Mittal Steel USA, the predecessor
of defendant ArcelorMittal USA, who allegedly orchestrated a
concerted cutback in steel production with the other
defendants. As a result of this illegal market restraint, the
price of steel was substantially higher than defendants'
cost of production, the domestic demand for steel was well in
excess of defendants' production, and there was a
shortage of steel on the U.S. market. Consequently,
plaintiffs allege that the price of steel was artificially
inflated and this additional cost was passed along from the
direct purchasers of steel to the purchasers of a panoply of
consumer products containing steel, including refrigerators,
dishwashers, ovens, automobiles, air conditioner units, lawn
mowers, and farm and construction equipment.
first amended complaint contains three counts: (1) violation
of state antitrust laws, (2) violation of state consumer
protection and unfair competition laws, and (3) unjust
enrichment claims under the common law of “each of the
fifty states, excluding Ohio and Indiana, and including the
District of Columbia.” Defendants now move to dismiss
each of the counts.
Article III Standing
bring a claim in federal court, a plaintiff must suffer an
injury in fact that is fairly traceable to the alleged
conduct of the defendant and likely to be redressed by a
favorable judicial decision. See Spokeo, Inc. v.
Robins, 136 S.Ct. 1540, 1547 (2016), as revised
(May 24, 2016). The burden is on the plaintiff to establish
all of these elements of Article III standing. Id.
Defendants argue that plaintiffs have not established Article
III standing in any states except those in which they reside,
and they urge this court to address plaintiffs' standing
before addressing issues of class certification. Plaintiffs
argue that the standing inquiry should be postponed until
after matters of class certification have been decided.
have met their individual Article III standing requirements.
They properly alleged an injury in fact (payment of
“supracompetitive” prices) that could be fairly
traced to defendants' alleged scheme and that would be
redressed by a favorable judicial decision. Whether Article
III poses an obstacle to adjudicating this case as a class
action should be evaluated later. In Payton v. County of
Kane, 308 F.3d 673 (7th Cir. 2002), the Seventh Circuit
said that “once a class is properly certified,
statutory and Article III standing requirements must be
assessed with reference to the class as a whole, not simply
with reference to the individual named plaintiffs.”
Payton, 308 F.3d at 680 (emphasis added). In
Arreola v. Godinez, the court addressed the question
of standing before it addressed class certification; however,
in that case it was the standing of the individual named
plaintiff that was being addressed-no inquiry was being
made into the named plaintiff's ability to serve as a
class representative at that time. Arreola v.
Godinez, 546 F.3d 788, 794- 95 (7th Cir. 2008). For now,
whether named plaintiffs can bring claims under the laws of
other states and whether plaintiffs are adequate class
representatives do not pose Article III barriers to
subject-matter jurisdiction. See Morrison v. YTB
Int'l, Inc., 649 F.3d 533, 536 (7th Cir. 2011).
addition to Article III standing, an antitrust plaintiff must
demonstrate antitrust standing at the pleading stage.
Although general “harm” to the plaintiff is
sufficient to satisfy the constitutional standing
requirement, “the court must make a further
determination whether the plaintiff is a proper party to
bring a private antitrust action.” In re Aluminum
Warehousing Antitrust Litig., 833 F.3d 151, 157 (2d Cir.
2016) (citing Associated Gen. Contractors of Cal., Inc.
v. Cal. State Council of Carpenters, 459 U.S. 519, 535
n.31 (1983)). A range of doctrines attempt to spell out
“the circumstances under which a particular party may
recover from an antitrust violator.” Loeb Indus.,
Inc. v. Sumitomo Corp., 306 F.3d 469, 480 (7th Cir.
2002). These “antitrust standing” doctrines have
arisen primarily under federal law. In Illinois Brick Co.
v. Illinois, 431 U.S. 720, 735 (1977), for example, the
Supreme Court created a “direct purchaser”
doctrine limiting treble damage actions under § 4 of the
Clayton Act to direct purchasers, and in Associated Gen.
Contractors of California, Inc. v. California State Council
of Carpenters, 459 U.S. 519, 536-45 (1983)
(“AGC”), the Court created a
multi-factor “direct injury” doctrine to measure
the link between the defendants' conduct and the
plaintiffs' injury in a federal antitrust action. Those
factors include “(1) the causal connection between the
violation and the harm; (2) the presence of improper motive;
(3) the type of injury and whether it was one Congress sought
to redress; (4) the directness of the injury; (5) the
speculative nature of the damages; and (6) the risk of
duplicate recovery or complex damage apportionment.”
Loeb, 306 F.3d at 484 (citing AGC, 459 U.S.
at 537-45). The Illinois Brick direct-purchaser
doctrine and the AGC direct-injury doctrine
“are analytically distinct.” Int'l Bhd.
of Teamsters, Local 734 Health & Welfare Trust Fund v.
Philip Morris Inc., 196 F.3d 818, 828 (7th Cir. 1999)
(citing Blue Shield of Virginia v. McCready, 457
U.S. 465, 476, 102 S.Ct. 2540, 73 L.Ed.2d 149 (1982)).
parties here focus their debate on (1) whether AGC
is the governing test for each of the state-law antitrust
claims and (2) if so, whether the first amended complaint in
this case meets the multi-factor test laid out in
AGC. I agree with defendants that AGC is
the appropriate test in each of the states for which resident
plaintiffs assert antitrust claims and that the complaint
does not meet the AGC test.
State Applications of the AGC Test
Plaintiffs point out that the Supreme Court did not address
whether the AGC factors should govern questions of
antitrust standing when plaintiffs bring state antitrust
claims to federal court. Plaintiffs cite a different Supreme
Court case, California v. ARC America Corp., 490
U.S. 93 (1989), for the proposition that “standing to
sue under state antitrust law is determined solely
with reference to state law.” Plaintiffs' Response,
 at 13 (emphasis in original). This is an overstatement.
Federal antitrust laws do not “expressly pre-empt state
laws permitting indirect purchaser recovery” and
federal antitrust laws serve “to supplement, not
displace, state antitrust remedies.” ARC
America, 490 U.S. at 101- 02. But the Supreme Court left
open the possibility that states could choose to follow
AGC specifically or federal law generally, and
defendants argue that the states at issue in this case have
done so. I agree.
assert state antitrust violations in twenty-one
states. Named plaintiffs reside in nine of the
twenty-one states. In eight of the nine named-plaintiff
states, the state courts have adopted the AGC test
or a modified version of it to determine antitrust standing.
See Defendants' Appendix 4, [176-1] at 54-56.
The remaining named-plaintiff state, Tennessee, has not said
outright that it would apply AGC or something
similar, but at least one Tennessee appellate court has
suggested that it might do so. See Tenn. Med. Ass'n
v. BlueCross BlueShield of Tenn., Inc., 229 S.W.3d 304,
311 (Tenn. Ct. App. 2007).
courts in ten of the twelve states where no named
plaintiffs reside apply the AGC test in antitrust
standing cases. See Defendants' Appendix 4,
[176-1] at 57-58. Without mentioning the AGC
standard by name, Utah and West Virginia have also
established that their courts shall look to federal law when
interpreting antitrust statutes. Utah Code Ann. §
76-10-3118 (when construing the state's antitrust laws,
Utah state courts “will be guided by interpretations
given by the federal courts to comparable federal antitrust
statutes and by other state courts to comparable state
antitrust statutes”); W.Va. Code § 47-18-16 (state
antitrust laws “shall be construed liberally and in
harmony with ruling judicial interpretations of comparable
federal antitrust statutes”); Princeton Ins.
Agency, Inc. ...