In the

United States Court of Appeals

For the Seventh Circuit ____________________

No. 18-2619

MCGARRY & MCGARRY, LLC,

Plaintiff-Appellant,

v.

BANKRUPTCY MANAGEMENT SOLUTIONS, INC.,

Defendant-Appellee.

____________________

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 17 CV 5779 — Joan H. Lefkow, Judge.

____________________

ARGUED NOVEMBER 7, 2018 — DECIDED SEPTEMBER 5, 2019

____________________

Before ROVNER, SYKES, and BARRETT, Circuit Judges.

SYKES, Circuit Judge. McGarry & McGarry, LLC, a creditor 

in a closed Chapter 7 bankruptcy case, tried three times to 

bring a price-fixing claim against Bankruptcy Management 

Solutions, Inc. (“BMS”), the trustee’s software-services

provider. In the first suit, McGarry alleged claims under the

Sherman Act and the Illinois Antitrust Act. Because McGarry 

is not a direct purchaser of bankruptcy software services, the 

district court dismissed the Sherman Act claim, see Ill. Brick
2 No. 18-2619

Co. v. Illinois, 431 U.S. 720 (1977), and relinquished jurisdiction over the state-law claim.

McGarry tried a different tack and moved to reopen the 

bankruptcy proceedings. The bankruptcy court denied that 

request because the case had been closed for more than three 

years. Undeterred, McGarry filed a new lawsuit in state 

court alleging a stand-alone claim under the Illinois Antitrust Act. The state statute has an “Illinois Brick repealer” 

provision that permits indirect purchasers to sue. BMS 

removed the case to federal court and moved to dismiss. The

district judge granted the motion because McGarry is not 

even an indirect purchaser of bankruptcy software services; it 

does not purchase these services at all. McGarry appealed.

We affirm. McGarry is a one-time creditor in a closed 

Chapter 7 bankruptcy case. It does not participate in the 

market for bankruptcy software services in any way that 

would make it a proper plaintiff to bring an antitrust claim

against a firm that provides those services to bankruptcy 

trustees.

I. Background

A Chapter 7 bankruptcy petition creates a bankruptcy

estate, which becomes the temporary legal owner of the 

debtor’s property. 11 U.S.C. § 541(a). When a petition is filed, 

the Executive Office of the U.S. Trustee (a division of the 

U.S. Department of Justice) appoints a trustee to administer 

the estate. The trustee collects and liquidates nonexempt 

estate assets to maximize the return to creditors. The trustee 

also files periodic reports with the bankruptcy court and the 

U.S. Trustee. Id. § 704.
No. 18-2619 3

The reports are prepared on special software, and trustees typically use one of three providers to supply these 

services. BMS is the largest supplier of bankruptcy software 

services. The complaint alleges that BMS has a market share 

of approximately 50% as measured by the total number of 

bankruptcy trustees in the country. Epiq Systems and 

TrusteSolutions have 35% and 15%, respectively. A trustee 

normally does not use more than one software-services 

provider at any one time. 

For many years BMS partnered with banks to jointly deliver services to the estate. Under this model BMS directed 

the trustee to deposit the estate’s funds into a partner bank,

and in return the trustee received integrated casemanagement and banking services. The bank earned money 

from the deposit and paid interest to the estate and a fee to 

BMS. This business model relied on the existence of a

“spread” between the interest the bank could charge its 

borrowers and the interest it paid to its depositors. The 

model worked well as long as interest rates remained high 

enough to support the bank’s flexibility to work within the

spread, allowing all parties to prosper. 

But the model collapsed with the economic downturn in 

2008. Interest rates declined precipitously from more than 

4% in late 2007 to near 0% one year later, so the spread 

evaporated. BMS had to adapt to a new reality. It soon 

designed a different business model: it would sell its software services in combination with banking services (as it 

had in the past), but the bank would charge a set percentage 

of the estate’s funds as a fee for the combined services and 

pay a portion of that fee to BMS. For this new model to 

work, however, BMS had to overcome two obstacles. First, it
4 No. 18-2619

needed its competitors to also adopt the new arrangement. 

The complaint alleges that sometime before 2011 BMS 

approached Epiq Systems and TrusteSolutions and proposed the new billing model. Both agreed to implement a 

similar system. 

Second, BMS needed the Executive Office of the U.S. 

Trustee to suspend its rule prohibiting trustees from using 

estate funds to pay bank fees. All three providers asked the

Executive Office to do so. In April 2011 the agency suspended the rule. All three providers then changed their billing 

model. Now the standard agreement requires the estate to 

pay a combined fee for software and banking services based 

on a percentage of the funds in its bank account. 

In May 2011 Integrated Genomics, Inc., a software developer specializing in genome analysis, filed a Chapter 7 

petition in the U.S. Bankruptcy Court for the Northern 

District of Illinois. The U.S. Trustee appointed Eugene Crane

as trustee. Crane contracted with BMS for software services 

and deposited the estate’s funds with Rabobank, BMS’s

partner bank. Crane also contracted directly with Rabobank, 

authorizing it to automatically withdraw a fee from the 

estate’s account.

McGarry & McGarry, a Chicago law firm and an unsecured creditor of Integrated Genomics, filed a claim in the 

Chapter 7 proceeding. On August 30, 2013, Crane filed his

final report listing a service-fee payment of $514.16 to 

Rabobank, which deducted that sum from the estate’s 

account. McGarry did not object to the fee. The estate’s 

funds were disbursed, and the case was closed in April 2014. 

McGarry received $12,472 of its allowed claim of $78,308.
No. 18-2619 5

Two years later McGarry learned that most, if not all, of 

the $514.16 fee went to BMS. In September 2016 McGarry 

filed a class-action lawsuit against BMS in the Northern 

District of Illinois alleging violations of the Sherman Act, 

15 U.S.C. § 1, and the Illinois Antitrust Act, 740 ILL. COMP.

STAT. 10/3 (2018). The district judge granted BMS’s motion to 

dismiss, applying the “indirect purchaser” doctrine announced in Illinois Brick. There the Supreme Court explained 

that indirect purchasers are not proper parties to bring a 

price-fixing claim under the Sherman Act; the claim belongs 

to the direct purchaser. Illinois Brick Co., 431 U.S. at 735. 

McGarry was neither a direct nor an indirect purchaser of 

bankruptcy software services, so the judge dismissed the 

federal claim with prejudice. She then relinquished supplemental jurisdiction over the state-law claim, dismissing it 

without prejudice. McGarry did not appeal.

Instead, McGarry moved to reopen the Chapter 7 proceeding with the aim of raising the issue there. Because the 

motion was not made within a reasonable time, the bankruptcy judge denied it. McGarry filed a new class-action 

complaint against BMS, this time in Cook County Circuit 

Court. This second suit alleged a stand-alone price-fixing 

claim under the Illinois Antitrust Act. BMS removed the case

to federal court, where it was assigned to the judge who 

handled the first case. A motion to dismiss followed, see FED.

R. CIV. P. 12(b)(6), and the judge dismissed the case for 

failure to state a claim. Referring back to her earlier order, 

the judge reasoned that although the Illinois antitrust statute

permits indirect purchasers to sue, that feature of the law

does “nothing to help McGarry ... for it has admitted that it 

is not a purchaser at all.”
6 No. 18-2619

II. Discussion

We review a dismissal order de novo. Deppe v. Nat’l Collegiate Athletic Ass’n, 893 F.3d 498, 500 (7th Cir. 2018). The 

Illinois Antitrust Act prohibits any agreement to fix, maintain, or stabilize the price of any commodity or service. 

740 ILL. COMP. STAT. 10/3. The Act expressly requires harmonization with federal antitrust law as interpreted by the 

federal courts, see id. § 10/11, so Illinois courts interpret the 

state antitrust law in harmony with “[f]ederal case law 

construing analogous provisions of [f]ederal legislation”—

here, Section 1 of the Sherman Act. People ex rel. Scott v. Coll. 

Hills Corp., 435 N.E.2d 463, 469 (Ill. 1982). McGarry alleges a 

conspiracy to fix the price of bankruptcy software services, a

per se violation of federal and Illinois antitrust law. See, e.g.,

Catalano, Inc. v. Target Sales, Inc., 446 U.S. 643, 647 (1980); 

Baker v. Jewel Food Stores, Inc., 823 N.E.2d 93, 100 (Ill. App. Ct. 

2005).

Both Article III and the Sherman Act impose threshold

barriers on a party bringing an antitrust suit in federal court.

Article III limits “the judicial power of the United States to 

the resolution of ‘Cases’ and ‘Controversies.’” Hein v. Freedom From Religion Found., Inc., 551 U.S. 587, 597 (2007). To 

satisfy the case-or-controversy requirement, a plaintiff must 

establish standing to sue. Id. at 598. Three elements comprise 

the “irreducible constitutional minimum” of standing: (1) a 

concrete and particularized injury in fact that is (2) fairly 

traceable to the alleged action of the defendant and (3) likely 

to be redressed by a favorable decision. Lujan v. Defenders of 

Wildlife, 504 U.S. 555, 560 (1992).

McGarry has pleaded sufficient facts to support

Article III standing, though just barely. The complaint 
No. 18-2619 7

alleges that the $514.16 fee Rabobank deducted from the

Integrated Genomics Chapter 7 account and paid to BMS

was greater than it would have been absent the price-fixing 

conspiracy. The inflated fee reduced the pot of money from 

which unsecured creditors were paid, and McGarry alleges

it received a smaller distribution as a result. If true, the 

difference is likely quite small given the modest amount of 

the fee. Still, “financial injuries are prototypical of

[Article III] injuries.” Milwaukee Police Ass’n v. Flynn, 863 F.3d 

636, 639 (7th Cir. 2017); see also Korte v. Sebelius, 735 F.3d 654, 

667 (7th Cir. 2013). And there is a causal connection between 

the injury and the alleged conspiracy that can be remedied 

by a favorable judicial decision.

But the “Sherman Act has additional rules for determining ‘whether the plaintiff is the proper party to bring a 

private antitrust action.’” Loeb Indus., Inc. v. Sumitomo Corp., 

306 F.3d 469, 481 (7th Cir. 2002) (quoting Associated Gen. 

Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 

459 U.S. 519, 535 n.31 (1983)). These requirements have been 

“incautiously lumped together under the umbrella term of 

‘antitrust standing.’” Id. at 480. But this nomenclature, like

that of its cousins “prudential standing” and “statutory 

standing,” is a “misnomer.” Lexmark Int'l, Inc. v. Static 

Control Components, Inc., 572 U.S. 118, 127 (2014); see also id.

at 128 n.4 (describing “statutory standing” as “an improvement” over “prudential standing” because it “correctly 

places the focus on the statute” but is nevertheless “misleading”).

We’ve previously noted our concern with the term “antitrust standing” because of its potential for confusion with 

Article III standing. See U.S. Gypsum Co. v. Ind. Gas Co., 
8 No. 18-2619

350 F.3d 623, 627 (7th Cir. 2003). The latter, of course, is a 

necessary requirement for a justiciable case or controversy. 

The former, on the other hand, concerns a different issue: 

which plaintiffs may bring the cause of action. See Hammes v. 

AAMCO Transmissions, Inc., 33 F.3d 774, 778 (7th Cir. 1994) 

(“‘[A]ntitrust standing’ is not a jurisdictional requirement ... .”).

Federal antitrust law provides a treble-damages remedy

to “any person ... injured in his business or property by 

reason of anything forbidden in the antitrust laws.” 

15 U.S.C. § 15(a). Though broadly phrased, the Supreme 

Court has construed this language “to limit the parties who 

may bring an antitrust action to (1) those who have suffered 

the type of injury that the antitrust laws were intended to 

prevent and (2) those whose injuries are a result of the 

defendant’s unlawful conduct.” Serfecz v. Jewel Food Stores, 

67 F.3d 591, 595 (7th Cir. 1995) (citing Brunswick Corp. v. 

Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977)). Because 

antitrust violations “may be expected to cause ripples of 

harm to flow through the Nation’s economy,” the Court has 

held that “Congress did not intend to allow every person 

tangentially affected by an antitrust violation to maintain an 

action to recover threefold damages for the injury to his 

business or property.” Blue Shield of Va. v. McCready, 457 U.S. 

465, 476–77 (1982). Some injuries are “too remote from the 

violation and the purposes of the antitrust laws to form the 

predicate for a suit.” Id. at 477.

For price-fixing claims in particular, the Supreme Court 

long ago held that persons downstream in the distribution 

chain are not proper plaintiffs. The “indirect purchaser” 

doctrine announced in Illinois Brick “forbids a customer of 
No. 18-2619 9

the purchaser who paid a cartel price to sue the cartelist, 

even if his seller—the direct purchaser from the cartelist—

passed on to him some or even all of the cartel’s elevated 

price.” Motorola Mobility LLC v. AU Optronics Corp., 775 F.3d 

816, 821 (7th Cir. 2015). As we’ve noted, the district judge 

invoked the Illinois Brick principle in dismissing the Sherman 

Act claim in McGarry’s first suit.

The analogous provision in the Illinois Antitrust Act is 

phrased in terms similar to its federal counterpart, but there 

is one notable difference: Illinois has adopted an “Illinois 

Brick repealer” clause that permits indirect purchasers to 

sue. 740 ILL. COMP. STAT. 10/7(2). But that provision doesn’t 

apply here. As the district judge noted, McGarry isn’t even 

an indirect purchaser of bankruptcy software services. The 

law firm is just a former creditor of a Chapter 7 debtor in a 

closed bankruptcy case. It doesn’t purchase bankruptcy 

software services at all.

The inapplicability of the Illinois Brick repealer provision 

in the state statute raises the possibility that the judgment in 

McGarry’s first case has preclusive effect in this second suit.

“When an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is 

conclusive in a subsequent action between the parties, 

whether on the same or a different claim.” RESTATEMENT 

(SECOND) OF JUDGMENTS: ISSUE PRECLUSION–GENERAL RULE

§ 27 (AM. LAW INST. 1980), quoted in B&B Hardware, Inc. v. 

Hargis Indus., Inc., 135 S. Ct. 1293, 1303 (2015). The Illinois 

Antitrust Act’s harmonization provision, 740 ILL. COMP.

STAT. 10/11, bolsters the case for preclusion. But BMS hasn’t 
10 No. 18-2619

developed a preclusion argument along these lines, so we 

proceed to the main thrust of McGarry’s appeal.

McGarry argues that although it is not a purchaser of 

bankruptcy software services, it is nonetheless a proper 

plaintiff to bring this price-fixing claim under the multifactor test derived from the Supreme Court’s decision in

Associated General Contractors, 459 U.S. at 537–44. As we’ve 

synthesized it in earlier cases, the test examines several 

factors to determine whether the plaintiff has demonstrated 

the necessary “direct link” between the alleged antitrust 

violation and the claimed antitrust injury. Sanner v. Bd. of 

Trade of Chi., 62 F.3d 918, 926–27 (7th Cir. 1995).

The Associated General Contractors factors include:

(1) The causal connection between the alleged 

antitrust violation and the harm to the plaintiff; 

(2) Improper motive; 

(3) Whether the injury was of a type that Congress sought to redress with the antitrust laws; 

(4) The directness between the injury and the 

market restraint; 

(5) The speculative nature of the damages;

[and]

(6) The risk of duplicate recoveries or complex 

damages apportionment.

Id. at 927 (quotation marks omitted). Together, the first three 

factors relate to what courts commonly refer to as “antitrust 

injury.” Nelson v. Monroe Reg’l Med. Ctr., 925 F.2d 1555, 1563–

64 (7th Cir. 1991); see also Novell, Inc. v. Microsoft Corp., 

505 F.3d 302, 311 (4th Cir. 2007). The remaining factors
No. 18-2619 11

address whether the plaintiff is among those “who can most 

efficiently vindicate the purposes of the antitrust laws.” 

Serfecz, 67 F.3d at 598 (quotation marks omitted).

The factors are neither strict requirements nor exclusive 

analytical tools. They simply illustrate the areas of inquiry

that may be relevant to a case-specific evaluation of “the 

plaintiff’s harm, the alleged wrongdoing by the defendant[], 

and the relationship between them.” Associated Gen. Contractors of Cal., 459 U.S. at 535.

To put the inquiry more generally, McGarry must

demonstrate that its injury is “of the type the antitrust laws 

were intended to prevent.” Brunswick Corp., 429 U.S. at 489. 

It’s not enough to allege that the injury is merely causally 

linked to the alleged anticompetitive behavior. Id. McGarry

must also demonstrate that its injury “is attributable to an 

anti-competitive aspect of the practice under scrutiny.” Atl. 

Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 334 (1990). In 

other words, the injury must flow directly “from higher 

prices or lower output, the principal vices proscribed by the 

antitrust laws.” Popp v. Cash Station, Inc., 613 N.E.2d 1150, 

1158 (Ill. App. Ct. 1992) (quotation marks omitted).

McGarry hasn’t alleged the type of injury the antitrust 

laws were meant to prevent. It claims that absent the conspiracy, BMS would not have been able to charge a percentage of the estate’s funds as a fee for its bankruptcy software 

services. But of course McGarry is not a participant in the 

market for bankruptcy software services. Instead its alleged

injury is quite attenuated from the claimed price-fixing

violation. McGarry alleges that the conspiracy caused the 

estate to pay a higher fee for the combined banking and 

software services, which reduced the funds available in the 
12 No. 18-2619

Chapter 7 estate to pay claims (however modest the reduction), which caused unsecured creditors like McGarry to 

receive a smaller distribution. This alleged injury is too 

remote to serve as the predicate for an antitrust suit.

But even if we concluded that McGarry had adequately 

pleaded an antitrust injury, the law firm must also demonstrate that it can “efficiently vindicate the purposes of the 

antitrust laws.” Kochert v. Greater Lafayette Health Servs., Inc., 

463 F.3d 710, 716 (7th Cir. 2006) (quotation marks omitted).

The fourth Associated General Contractors factor—“the directness between the injury and the market restraint”—weighs 

particularly heavily here. We usually presume that competitors and consumers in the relevant market are the only

parties who suffer antitrust injuries and are in a position to 

efficiently vindicate the antitrust laws. Associated Gen. Contractors of Cal., 459 U.S. at 538; see also In re Aluminum Warehousing Antitrust Litig., 833 F.3d 151, 158 (2d Cir. 2016) 

(collecting cases). 

In Blue Shield of Virginia v. McCready, the Supreme Court

carved out a narrow exception. There the Court held that 

Carol McCready, a patient treated by a clinical psychologist,

suffered an antitrust injury when her insurer, allegedly in 

concert with a professional organization of psychiatrists, 

refused to reimburse her psychologist’s fees because the 

health plan covered only psychiatrists. McCready, 457 U.S. at 

480–81. The Court held that McCready’s injury was “inextricably intertwined with the injury the conspirators sought to 

inflict” on the market. Id. at 484. As the Court later described 

its holding, what mattered was that the plaintiff was a 

participant in the market targeted by the alleged conspiracy
No. 18-2619 13

and was “directly harmed by the [insurer’s] unlawful conduct.” Associated Gen. Contractors of Cal., 459 U.S. at 529 n.19. 

McGarry, however, is not a participant in the market for

bankruptcy software services. It is simply a creditor of a 

Chapter 7 debtor. McGarry’s alleged injury is thus entirely 

derivative of the estate’s injury. We held decades ago that

“[m]erely derivative injuries sustained by employees, officers, stockholders, and creditors of an injured company do not 

constitute ‘antitrust injury’ sufficient to confer antitrust 

standing.” Sw. Suburban Bd. of Realtors, Inc. v. Beverly Area 

Planning Ass’n, 830 F.2d 1374, 1378 (7th Cir. 1987) (emphasis 

added); see also Cong. Bldg. Corp. v. Loew’s, Inc., 246 F.2d 587, 

590 (7th Cir. 1957) (“The courts have uniformly denied 

recovery to ... creditors ... who claimed injury as the result 

of alleged antitrust violations.”) (citations omitted). The 

Supreme Court has agreed in dicta. See Associated Gen. 

Contractors of Cal., 459 U.S. at 533–34 (citing with approval

Loeb v. Eastman Kodak Co., 183 F. 704, 709 (3d Cir. 1910), 

which held that a creditor of an injured company does not 

have antitrust standing).

There is, after all, a more appropriate person to pursue 

the claim should it be in the estate’s interest to do so: the 

trustee. Because a trustee in bankruptcy owes a fiduciary 

duty to an estate’s creditors, In re Salzer, 52 F.3d 708, 712 (7th 

Cir. 1995), the trustee could “pursue the debtor’s claim 

against [the alleged conspirators] on behalf of all the debtor’s

creditors equally, without preference for any particular 

creditor. That injury is much more efficiently measured on 

behalf of the debtor, moreover, rather than in fortuitous 

segments claimed by those creditors who happen to sue.” 

IIA PHILLIP E. AREEDA ET AL., ANTITRUST LAW ¶ 353c, at 298–
14 No. 18-2619

99 (4th ed. 2014). “The existence of an identifiable class of 

persons whose self-interest would normally motivate them 

to vindicate the public interest in antitrust enforcement 

diminishes the justification for allowing a more remote 

party ... to perform the office of a private attorney general.” 

Associated Gen. Contractors of Cal., 459 U.S. at 542.

Because McGarry does not participate in the market for 

bankruptcy software services in any meaningful way, it is 

not an appropriate plaintiff to bring this price-fixing claim. 

The case was properly dismissed.

AFFIRMED