Investors Corp. of Vermont v. Bayer AG, No. 1011-04 Cncv (Norton, J., June 1, 2005) 

[The text of this Vermont trial court opinion is unofficial. It has been reformatted from 

the original. The accuracy of the text and the accompanying data included in the Vermont 

trial court opinion database is not guaranteed.] 

STATE OF VERMONT 

Chittenden County, ss.: 

INVESTORS CORPORATION OF VERMONT 

 

v. 

BAYER AG, ET AL. 

ENTRY 

 This matter concerns allegations of unfair trade practices. The plaintiff, Investors 

Corporation of Vermont, has sued the defendants for allegedly restraining trade of 

Ethylene Propylene Diene Monomer (EPDM), a component of Ethylene-propylene 

elastomers, which are the third-most common forms of synthetic rubber in the world. 

Investors Corporation seeks to form a class of all Vermont persons or business entities 

that indirectly purchased EPDM from the defendants from January 1994 through 

December 2002. Investors Corporation claims violations of 9 V.S.A. §§ 2453, 2465 

(Vermont antitrust law) and 9 V.S.A. §§ 2543, 2461 (Vermont consumer fraud law), as 

well as unjust enrichment. 

 The defendants move to dismiss pursuant to V.R.C.P. 12(b)(6) for failure to state a 

claim upon which relief can be granted. The defendants argue that damages are too 

speculative given that the putative class of plaintiffs are mere indirect purchasers of 

downstream products, of which EPDM formed only a component part. In essence, the 

defendants’ argument is that the putative class lacks standing under the Vermont antitrust 

and consumer fraud law. 
 In the alternative, the defendants request that this court stay this action pending 

resolution of a federal action by direct purchasers of EPDM. This federal action has been 

consolidated in the U.S. District Court for the District of Connecticut. See In re Ethylene 

Propylene Diene Monomer (EPDM) Antitrust Litig., 277 F. Supp. 2d 1373, 1373 (2003). 

The defendants argue that such a stay is warranted given the Vermont statute’s directive 

that courts “take all necessary steps to avoid duplicate liability, including but not limited 

to the transfer or consolidation of all related actions.” 9 V.S.A. § 2465(b). 

 A Rule 12(b)(6) motion “should not be granted unless it is beyond doubt ‘that 

there exist no facts or circumstances that would entitle the plaintiff to relief.’” Richards v. 

Town of Norwich, 169 Vt. 44, 48 (quoting Amiot v. Ames, 166 Vt. 288, 291 (1997)). The 

court “assumes that all factual allegations pleaded in the complaint are true . . . 

accept[ing] as true all reasonable inferences that may be derived from plaintiff’s 

pleadings.” Id. at 49. “A court should be ‘especially reluctant to dismiss’ a cause of 

action on the basis of the pleadings when the theory of liability is novel or extreme 

unless, ‘beyond doubt, there [are] no circumstances or facts which plaintiff[] could prove 

which would entitle [her] to relief.’” In re Judicial Review of A.G., 151 Vt. 167, 169 

(1989) (quoting Assoc. of Haystack Property Owners, Inc. v. Sprague, 145 Vt. 443, 446–

47 (1985)) (second and third alterations in original). 

 The Vermont Consumer Fraud Act provides broad remedies for consumers injured 

by unfair trade practices and antitrust violations. “The Act expressly states that any

consumer, reinforced by the definition of consumer as ‘any person,’ who suffers injury 

may bring an action under the statute against a ‘seller, solicitor or other violator.’” Elkins 

v. Microsoft Corp., 174 Vt. 328, 331 (2002) (quoting 9 V.S.A. §§ 2453(a), 2461(b)). 

Moreover, “the express legislative intent behind the statute [is] to ‘protect the public’ 

against ‘unfair or deceptive acts or practices’ and to ‘encourage fair and honest 

competition.’” Id. (quoting 9 V.S.A. § 2451). “In light of this purpose, . . . the VCFA is 

‘remedial in nature’ and therefore must be construed ‘liberally so as to furnish all the 

remedy and all the purposes intended.’” Id. (quoting State v. Custom Pools, 150 Vt. 533, 

536 (1988)). “Of course, liberal construction does not allow [courts] to stretch the 

language beyond legislative intent.” Id. 

 In a recent ruling, this court held that a putative class of consumers did not have 

antitrust standing to sue Visa and Mastercard for alleged injuries they incurred by 
3

purchasing items from merchants who used financial services from these institutions. See 

Fucile v. Visa U.S.A., Inc., No. S5160-03 CnC, 2004 WL 3030037 (Dec. 27, 2004)

(Norton, J.). Visa and Mastercard had settled a multidistrict class action from merchants 

who alleged that the defendants had tied debit card services with credit card services in 

violation of federal antitrust law. See id. at *1 (citing In re Visa Check/Mastermoney 

Antitrust Litig., 297 F. Supp. 2d 503 (E.D.N.Y. 2003)). The plaintiff, Fucile, argued that 

the inflated costs of these financial services were passed along to consumers by 

merchants who used them. In dismissing this complaint, this court adopted the antitrust 

standing principles articulated in Associated General Contractors v. Calif. State Council 

of Carpenters, 459 U.S. 519 (1983), at least to the extent that these principles were 

consistent with Vermont law, which, unlike federal law, allows indirect purchaser suits. 

Applying the Associated General Contractors factors, this court held that Fucile’s injury 

was too attenuated and remote from the alleged antitrust violation and his damages were 

too speculative. Fucile at *4–5. Fucile therefore lacked antitrust standing. 

 Here, Investors Corporation stands in a different posture than Fucile. Unlike 

Fucile, Investors Corporation and the putative class purchased the item allegedly affected 

by the defendant’s actions (i.e., EPDM), albeit in varied forms as a component of 

Ethylene-propylene elastomers. According to the complaint, EPDM comprises 80 to 85 

percent of Ethylene-propylene elastomers. Financial services, by contrast, are not 

components of common consumer goods, except, perhaps, in an extraordinarily abstract 

sense. Given that EPDM is a significant component of the product that putative class 

members purchased, the injury in this case is not as attenuated and remote and the 

damages are not as speculative. 

 As this court stated in Fucile, the relevant factors from Associated General 

Contractors are (1) whether there is a causal connection between the antitrust violation 

and the alleged harm, 459 U.S. at 537; (2) the directness of the injury, considering the 

“chain of causation,” id. at 540; (3) whether the violator had an improper motive, id. at 

537 and n.35; (4) whether the plaintiff’s injury was of a type that Congress sought to 

redress by providing a private remedy, id. at 538; (5) whether the alleged damages are 

speculative, id. at 542; and (6) whether the nature of the action will keep “the scope of 

complex antitrust trials within judicially manageable limits,” id. at 543. 

 Applying these factors to the instant case, there first exists a causal connection 

between the defendants’ alleged price fixing and the putative class’s injury. Because 
4

EPDM is a significant component part of the finished rubber products at issue, an 

increase in its price could have a ripple affect in the finished products, thereby increasing 

prices for the ultimate consumers. 

 The defendants argue that there are countless other inputs that determine the 

ultimate price of Ethylene-propylene elastomers, such as different marketing by thirdparty sellers, different forms of distribution, and different types of manufacturing. These 

multiple variables, the defendants argue, render injury and damages impossibly 

speculative, and therefore the causal chain cannot be established. This may or may not be 

true, and other courts have expressed strong concerns about stretching antitrust law to 

cover damages in cases like these. See, e.g., Crouch v. Crompton Corp., Nos. 02 CVS 

4375, 03 CVS 2514, 2004 WL 2414027, *18–25, 2004 NCBC 7, ¶¶ 71–86 (N.C. Super. 

Ct. 2004) (analyzing complexity and costliness of adjudicating antitrust case based on 

rubber compounds and chemicals that form component of tire products at issue).1 Indeed, 

the court in Crouch noted, citing a plea agreement from Canada, that at least in the case 

of tires, rubber compounds and chemicals form a mere 1 percent of the ultimate price of 

the finished product. Id. at *20–21, 2004 NCBC 7, ¶ 76 (citing The Queen v. Crompton 

Corp. [2004] F.C. ----). 

 Such facts, however, are far afield Rule 12(b)(6) motion analysis. The court will 

be better suited to assess whether Investors Corporation will be able to prove causation 

based on the alleged antitrust violation at the class certification and summary judgment 

stages. At this point in the proceeding, however, the court is not confident in holding that 

Investors Corporation lacks an ability to show causation. See Knevelbaard Dairies v. 

Kraft Foods, Inc., 232 F.3d 979, 989 (9th Cir. 2000) (holding that “disputed claims of 

causation and injury cannot be decided on a Rule 12(b)(6) motion”). Hence, factors one 

and two weigh in favor of standing. 

 

1

 Of course, the court’s concerns in Crouch were partially based on the lack of express 

statutory indirect purchaser standing in North Carolina or any definitive ruling by the North 

Carolina Supreme Court on indirect purchaser standing. Id. at *10–12, 2004 NCBC 7, ¶¶ 46–

50. This is not the case in Vermont. See 9 V.S.A. § 2465(b); Elkins, 174 Vt. at 337–38 

(holding that § 2465(b) was mere clarification and Vermont consumer fraud law has 

always allowed indirect purchaser suits). 
5

 Second, the court can infer an improper motive based on Investors Corporation’s 

allegations. The alleged price-fixing was a conspiracy throughout U.S. and European 

markets, evidenced by coordinated price hikes close in time and amount. Investors 

Corporation alleges that defendants met during the class period; discussed prices, 

customers, and markets; agreed to charge prices at certain levels; issued price 

announcements in conformance with these agreements; and allocated markets and 

customers in accordance with these agreements. One defendant, Crompton Corporation, 

has pleaded guilty to violating antitrust laws, and others have been contacted by antitrust 

authorities. These facts are enough to infer that the defendants had an improper motive to 

injure consumers like Investors Corporation and those in the putative class by allegedly 

fixing prices at artificially high levels. See Sullivan v. Tagliabue, 828 F. Supp. 114, 117 

(D. Mass. 1993) (finding sufficient evidence to raise issue as to improper motive where 

plaintiff alleged that defendant sought to restrain and monopolize commerce and took 

action toward that goal). The third factor therefore weighs in favor of standing for 

Investors Corporation. 

 Third, the injury that Investors Corporation and the putative class suffered appears 

to be within the type of injury that the Legislature intended to address through the 

Vermont antitrust and consumer fraud law. If Investors Corporation can demonstrate that 

the increased EPDM prices affected the price of the goods purchased, then it will have 

established the type of injury to indirect purchasers that the Legislature intended to 

remedy by allowing indirect purchaser suits. The fourth factor weighs in favor of 

standing for Investors Corporation. 

 Finally, as the court noted above, the damages may be somewhat speculative, and 

this weighs slightly against standing. But the court is not confident at this stage that 

Investors Corporation will not be able to employ economic models to assess how the 

price of EPDM affected the price of downstream products. As the U.S. Court of Appeals 

for the Ninth Circuit has recognized, “Complex antitrust cases . . . invariably involve 

complicated questions of causation and damages.” Forsyth v. Humana, Inc., 114 F.3d 

1467, 1478 (9th Cir. 1997). This case will likely prove to be no exception, but that is not 

reason enough to dismiss for lack of standing. 

 Considering this analysis, the court holds that Investors Corporation has standing 

to bring this antitrust and consumer fraud action. At the same time, however, the court 

does not wish to enunciate a bright-line rule regarding antitrust standing. As the Supreme 
6

Court of the United States noted in Associated General Contractors, standing 

determinations must ultimately rest on case-by-case analyses. 459 U.S. at 536–37 (1983). 

The court does not wish to suggest that in all cases where a product affected by anticompetitive behavior is a component of a finished product, antitrust standing exists for 

the consumer of the finished product. There may well be cases where products form such 

an minuscule portion of the finished product that antitrust standing is lacking. Indeed, in 

an abstract and theoretical way, the financial services in Fucile were part of the consumer 

goods at issue in that these goods could not have ultimately fallen into the hands of all 

paying consumers without the transactional means that were affected by price fixing. But 

even if the court were to consider such transactional means to be a part of the consumer 

goods as EPDM is to finished rubber products, they form an entirely less significant 

portion of the consumer goods. Transactional means of acquiring goods, therefore, cannot 

provide grounds for standing to sue the entities that provided them. 

 The defendants also argue that Investors Corporation lacks standing to bring an 

unjust enrichment claim because Investors Corporation and members of the putative class 

did not directly confer any benefit to the defendants. Vermont law does not require that 

the enrichment be directly conferred from one party to another in order for the latter party 

to have a colorable claim for unjust enrichment. “Under a quasi-contract theory of unjust 

enrichment, the law implies a promise to pay when a party receives a benefit and 

retention of the benefit would be inequitable.” Brookside Memorials, Inc. v. Barre City, 

167 Vt. 558, 559 (1997) (mem.). 

 As with the antitrust and consumer fraud claims, the link between purchases by 

Investors Corporation and the putative class and benefits to the defendants may be 

tenuous, but it is still properly alleged in the complaint. Moreover, because of the alleged 

antitrust and consumer fraud activities, it would be inequitable for the defendants to 

retain these benefits. Investors Corporation has therefore stated a valid unjust enrichment 

claim. The fact that Investors Corporation and the putative class did not deal directly with 

the defendants is not relevant, as long as the elements for unjust enrichment are pleaded. 

See In re K-Dur Antitrust Litig., 338 F. Supp. 2d 517, 544–45 (D.N.J. 2004); In re 

Cardizem CD Antitrust Litig., 105 F. Supp. 2d 618, 670–71 (E.D. Mich. 2000). 

 Finally, the defendants argue in the alternative that the court should stay this 

action pending resolution of the federal direct purchaser action, contending that the 

Vermont Consumer Fraud Act’s instruction that courts “take all necessary steps to avoid 
7

duplicate liability” suggests that a stay is appropriate. Antitrust law in the United States 

has an inherent problem of duplicate liability. Federal courts do not allow antitrust 

defendants to use a pass-on defense to show that the damages from anticompetitive 

behavior were ultimately absorbed by downstream purchasers. See Illinois Brick Co. v. 

Illinois, 431 U.S. 720, 724–26 (1977). At the same time (and as a result of the no pass-on 

defense rule), federal courts also do not allow antitrust suits by indirect purchasers. See 

id. at 730–35. Therefore, defendants in federal court are liable for all damages, even if a 

plaintiff was able to relay the costs of anticompetitive activities to downstream 

consumers. Most states, including Vermont, however, have passed “Illinois Brick

Repealer” laws, allowing indirect purchasers to recover for injuries related to antitrust 

violations. Donald I. Baker, Federalism and Futility: Hitting the Potholes on the Illinois 

Brick Road, 17-Fall Antitrust 14, 14 (2002). Because most state indirect purchaser 

antitrust actions stem from federal direct purchaser actions, see Ronald W. Davis, 

Indirect Purchaser Litigation: ARC America’s Chickens Come Home to Roost on the 

Illinois Brick Wall, 65 Antitrust L.J. 375, 376 (1997), damages will inevitably be 

assessed twice against an antitrust defendant: once by the direct purchasers for all 

damages, even those passed along down the distribution chain, and then again by the 

indirect purchasers for whatever damages were actually passed along the distribution 

chain. Id. at 397–98; Baker, supra, at 16–17; see also Crouch v. Crompton Corp., Nos. 02 

CVS 4375, 03 CVS 2514, 2004 WL 2414027, *15–17, 2004 NCBC 7, ¶¶ 60–65 (N.C. 

Super. Ct. 2004) (discussing North Carolina cases triggered by events on federal level). 

 At first glance, the provision cited by the defendants would seem to combat this 

double recovery problem. But the very allowance of indirect purchaser antitrust suits 

gives rise to duplicate liability in the sense described above. Even if the court were to 

stay this action and await final resolution of the federal action, Investors Corporation and 

the putative class would still have a right to recover for injuries passed along to them 

from the direct purchasers under Vermont’s statutory scheme. 

 A more reasonable interpretation of the “all necessary steps” provision is that the 

legislature intended consolidation of cases within Vermont to avoid overlapping damages 

to various classes. Indeed, the “steps” that the legislature identified included “transfer or 

consolidation of all related actions.” 9 V.S.A. § 2465(b). Such steps would not address 

the duplicate liability that occurs with both federal direct purchaser and state indirect 

purchaser suits. 
8

 The court also notes that it could find no other state Illinois Brick repealer laws 

requiring stays in a case such as the instant action. Several state statutes include similar 

language, see, e.g., 740 Ill. Comp. Stat. 10/7-2 (“[I]n any case in which claims are 

asserted against a defendant by both direct and indirect purchasers, the court shall take all 

steps necessary to avoid duplicate liability for the same injury including transfer and 

consolidation of all actions.”); Minn. Stat. § 325D.57 (“In any subsequent action arising 

from the same conduct, the court may take any steps necessary to avoid duplicative 

recovery against a defendant.”); N.Y. Gen. Bus. Law § 340(6) (“In any action in which 

claims are asserted against a defendant by both direct and indirect purchasers, the court 

shall take all necessary steps to avoid duplicate liability including but not limited to the 

transfer and consolidation of all related actions.”); S.D. Codified Laws § 37-1-33 (“In any 

subsequent action arising from the same conduct, the court may take any steps necessary 

to avoid duplicative recovery against a defendant.”), but state courts have not defined 

these provisions to require stays in circumstances like those in this case. 

 The court could find only one statute that expressly warrants stays pending 

resolution of out-of-state direct purchaser litigation, but such stays are only authorized 

where indirect purchasers have obtained a judgment or settlement “prior to the 

completion of a direct purchaser’s action.” Haw. Stat. Ann. § 480-13(c)(7). Hawaiian 

courts are required to delay disbursement of damage awards to indirect purchasers until 

the direct purchasers’ suits are resolved, the statute of limitations has run, or “in such a 

manner that will minimize duplication of damages to the extent reasonable and 

practicable.” Id. Even this statute seems to recognize that duplication of damages will 

occur; it simply attempts to minimize such duplication. These statutes provide little 

guidance, but they do not support the issuance of stay in this action. 

 The defendants cite Asher v. Abbott Labs., 307 A.D.2d 211, 212, 763 N.Y.S.2d 

555, 556 (N.Y. App. Div. 1998), in support of a stay pending a federal action. This 

court’s reasoning in this case, however, had nothing to do with New York’s statutory 

mandate that courts “take all necessary steps to avoid duplicate liability” in state antitrust 

cases. Rather, the appellate court merely held that interests of “comity, orderly procedure, 

and judicial economy” required a stay pending the conclusion of the federal action, 

particularly where “the federal action commenced first and discovery [had] been 

completed.” Id. at 211; 763 N.Y.S.2d at 556. 
9

 The court is similarly inclined to abide by the goals of comity, orderly procedure, 

and judicial economy, but the defendants have provided little argument that a stay in this 

case would serve these goals. Although the multidistrict action in federal court is off to a 

head start, its discovery may not encompass the same areas necessary in this case, 

especially because injury here, if any, will involve costs passed down a distribution chain. 

Federal direct purchaser suits do not delve into such matters. The court therefore sees no 

need to halt this action only to have to engage in discovery anyway after the federal 

action concludes. 

 Moreover, issuing a stay and delaying a recovery for Investors Corporation and 

the putative class potentially for years would be contrary to the broad remedial purpose of 

the Vermont Consumer Fraud Act. As the court noted above, “the [Vermont Consumer 

Fraud Act] is ‘remedial in nature’ and therefore must be construed ‘liberally so as to 

furnish all the remedy and all the purposes intended.’” Elkins v. Microsoft Corp., 174 Vt. 

328, 331 (2002) (quoting State v. Custom Pools, 150 Vt. 533, 536 (1988)). A stay would 

not conform with this statutory purpose. 

ORDER 

 For the foregoing reasons, the defendants motion to dismiss and alternative motion 

for a stay are DENIED. 

 Dated at Burlington, Vermont, June 1, 2005. 

_________/s/_______________ 

Richard W. Norton Judge