2005 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit

9-21-2005 

# H oward H es s D e nt al v

. D e nt s pl y Intl Inc P r e c e de n t i al or N on-P r e c e de n t i al : P r e c e de nt i al D ocke t N o . 04-1979

F o l low thi s a nd a dd it ion al work s at : http://d i git alc ommon s .l a w . vi l l a nova . e du/thir dc ir c uit_2005

Thi s de c i sion i s br ou ght t o you for f r e e a nd ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i l l a no va U nive r sity S choo l of L a

w Di git al Reposit or y

. It h as be e n a c c ept e d for inclusion in 2005 D e c i sion s b y a n author i z e d a dmini s tr at or of V i l l a no va U nive r sity S choo l of L a

w Di git al Reposit or y

. F or mor e inform at ion, p le as e c ont a ct Be n j amin
. C a rl s on@l a

w . vi l l a no va . e du

. Re c omme nde d C it at ion

" H owa r d H e s s D e n t al v

. D e n tsp ly In tl Inc " (2005). 2005 D e cisio n s . P ape r 465. http://d i git alc ommon s .l a

w . vi l l a nova . e du/thir dc ir c uit_2005/465P RE CE DE NT I AL UN I TED STATES CO UR T OF A PP EALS F O R T H E T H IR D C IR C U IT

N o. 04- 1979

HO W AR D H ESS DEN TAL LA BO RA TOR I ES

I NC OR P OR AT E D; P H IL IP G U T T IE R E Z , * d /b /a D e n tu re s P lu s, o n b e h a lf of themsel ves and al l ot hers i m i l ar l ys i tuat ed, A p p e llan ts

v. DENTS P LY I NTE RNATI ONA L, I NC. *A m ended pe rC l erk' s O r derdat ed 4/ 30/ 04

N o. 04- 1980

J E R SE Y D E N T A L L A B O R A T O R I E S, f/ k/ a H ow ar d

H es s D ent al L a b o ra to rie s In c o rp o ra ted ; P H IL IP G U T T IE R E Z , * d /b /a D en tures P lus, on b eh alf o f th em selv es a n d all o thers

s i m i l ar l ys i tuat ed, A p p e llan ts2 v. D E N T S P L Y IN T E R N A T IO N A L , IN C .; A . L E V E N T H A L & S O N S , IN C .; AC CU BI T E DE NT AL L AB , I NC

. ; ADDI UM DE NT AL

PRO D U CT S; A R N O L D D E N T A L S U P P L Y C O M P A N Y ; AT L ANT A DE NT AL S UP P L Y C OM P ANY; BE NC O DE NT AL CO M P ANY; BU RK HAR T DE NT AL

S UP P L Y C OM P ANY; D A R B Y D E N T A L L A B O R A T O R Y S U P P L Y C O ., IN C .;

DEN TAL SUPPLI ES A N D E Q U IP M E N T , IN C .; E D E N T A L D IR E C T .C O M , IN C ., a s s u c c e ss o r to C ru tc h e r D e n ta l, I n c .; H E N D O N D E N T A L S U P P L Y , IN C .; H E N R Y SC H E I N , I N C

. , and i t s aff i l i at es i ncl udi ng, w i t hout lim itatio n , Z a h n D e n tal C o ., In c .; IO W A D E N T A L S U P P L Y C O .; J AHN DE NT AL S UP P L Y C OM P ANY; J B D E NT AL

S U P P L Y C O ., IN C .; J OHNS ON & L UND C O. , I NC

. ; KE NT UC KY DE NT AL

S UPP LY COM P ANY , I NC. a / k/ a K D SC L i qu i da t i on Corp. ; M A RC U S DE NT AL S UP P L Y C O; M I DWAY DE NT AL S UP P L Y I NC

. ; M OHAWK DE NT AL

CO

. , I NC

. ; NA SHV I LLE D E N T A L , IN C .; N O W A K D E N T A L S U P P L IE S , IN C .;

P AT T E RS ON DE NT AL C O M P A N Y , i t s subsi diar i es, predecessors , successors , assi gn s, a f f i l i a t e s a n d r e l a t e d c o mp a n i e s ; P E AR S ON DE NT AL3 S U P P L IE S , IN C .; RY KE R D E NT AL OF KE NT UC KY, I NC

. ; T HOMP S ON

DE NT AL CO M P ANY *A m ended pe rC l erk' s O r derdat ed 4/ 30/ 04

O n A p p ea l from the U n it ed S tat es D istri ct C o u rt

fo r th e D istri ct of

D elaw are ( D

. C

. C i vi l A ct i on N os . 99- cv- 00255 /01- cv- 00267) D i s t r i ctJ udge: H onor abl e Sue L. R obi ns on

A r gued A pr i l 7, 2005 B efor e: B A R R Y , A M B R O and G R E E N B E R G , C i r cui tJ udges ( Fi l ed Sept ember21, 2005) T hom as A

. D ubbs , E s qui r e ( A r gued) R icha rd T

. Jo ff

e, E sq u ir e G oodki nd, L abat on, R udoff & Suchar ow 100 Par k A venue, 12t h Fl oor N ew Y or k, N Y 10017 P am ela S

. T ikelli s, E sq u ir e R o b ert J. K ri n er, Jr

. E sq u ir e Chi mi c l e s & Ti k e l l i s , LLP O ne R odneySquar e, Sui t e 5004 P. O

. B ox 1035 W i l m i ngt on, D E 19899 C o u n se l f

o r A p p e llan ts R icha rd A

. R ipley , E sq u ir e M ar gar etM

. Z w i s l er , E s qui r e ( A r gued) K ell yA

. C lem en t, E sq u ir e E ri c J. M cC arthy , E sq u ir e C h arles R

. P ri ce , E sq u ir e H o w re y , S im o n , A rn o ld & W h ite 1 2 9 9 P e n n s y l v a n i a A v e n u e , N

. W. W as hi ngt on, D

. C

. 20004 B ri an M

. A d d ison , E sq u ir e D ent s pl yI nt ernat i onal , I nc. Susque hanna Com m er ce Cent er 221 W es tPhi l adel phi a St r eet Y or k, PA 17405 W

. H ard ing D ran e, Jr. , E sq u ir e Po t t e rAnd e r s o n & Corr o o n LLP 1313 N or t h M ar ketSt r eet , 6t h Fl oor P. O

. B ox 951 W i l m i ngt on, D E 19899 C

. S co ttR ee se, E sq u ir e C ooch & T ay l or 824 M ar ketSt r eetM al l , Sui t e 1000 P. O

. B ox 1680 W i l m i ngt on, D E 19899H es s D ent al change d i t s name t o “J er s eyD ent al ” dur i ng 1 t he p eri od betw een the t w o suit s. 5 Jam es J. M aro n , E sq u ir e M a r o n M a r v e l & Wi l k s , P

. A. 1300 N or t h B r oom St r eet P. O

. B ox 288 W i l m i ngt on, D E 19899 C ouns el forA ppel l ees

OPI NI ON O F THE COURT

A M B R O , C i r cui tJ udge W e c o n s i d e rc o n s o l i d a t e d a p p e a l s i n v ol v i n g t h e s a me p a rt ie s in tw o a n titr u s t s u its , H ow ard Hess D entalL ab oratori es, In c . v . D e n ts

p ly In te r n a tio n l, I

n c . (“ Hess ”) and Jer

s ey D ental L a b o ra to rie s v . D e n tsp ly In te r n a tio n a l, I n c . (“ Jer s ey D ental ”). 1 P l ai nti ffs are dental l abo rat ori es w ho hav e broug ht these ant i t rus tcl as s act i ons on behal f of them selv es and a cl as s of s i m i l ar l ys i tuat ed labs. D efe ndantD ent s pl yI nt ernat i onal , I nc. (“ D e n tsp ly ” ) m a rk e ts a rtific ial te e th u se d b yth e d e n tal la b s to m ake de ntur es . Plaint i ffs al l ege, among ot hert hi ngs , an excl us i ve- deal i ng cons pi r acyanda r e t a i l p r i c e - f i x i n g c o n s p i r acy among D ent s pl yand i t s deal er - m i ddl emen.Sect i on 4 of the C l ayt on A ctpr ovi des t hat“anyper s on 2 w ho s hal l be i nj ur ed

i n his b us i nes s orpr oper t ybyr eas on of an y thing forbi dden i n t he ant i t rus tl aw s . . . s hal l r ecove r t hr eef ol d t he damages byhi m s us t ai ned. ” 15 U

. S. C

. § 15( a) (e m p h a s i s a d d e d ). I l l i nois B r i ck

det erm i ned thatdi r ect pur chas er s ar e the onl ypar t i es “i nj ur ed” i n a mannert hat perm i t s t hem t o r ecove rdamages

. 431 U

. S. at 729, 735. I tt hus h eld th at i n d ir ec t pu rch ase r plainti ff s d o n o t hav e statuto ry sta n d in g to re c o v e r d a m a g e s u n d e r S e c tio n 4 o f th e C layt o n A c t. Id

. 6 T he D i s t r i ctC our tdeni ed Pl ai nt i ffs s tand ing t o r ecove r d a ma g e s i n b o t h s u i t s b a s e d p r i ma r i l yon Il li n o is B r i ck Co. v. Illino is , 431 U

. S. 720 ( 1977) , w hi ch hel d t hat i ndi r ectpur chas er pl ai nt i ffs do not have st atut or y s t andi ng t o r ecove rdamages for “pas s ed- on” over char ges . W e hol d t hatPl ai nt i ffs maynot 2 r ecove rdamages i n He ss (a) u n d er the “c o -co n sp ir ator” exce pt i on t o I

l l i nois B r i ck , (b ) u n d e r th e “ c o n tro l” e x c e p tio n to I l l i nois B r i ck, ( c) under a non- over char ge t heory of damages , or ( d) for“dr op s hi pm ent s . ” W h il e Pl ai nt i ffs m aynotr ecove r d a m a g e s u n d e r e ith e r th e c o n tro l ex c e p tio n o r a lo st p ro f its t h eo r yi n Jer

s ey D ental , t heydo have s t atut or ys t andi ng under t he co- cons pi r at orexce pt i on t o pur s ue an act i on forover char ge damages ( i ncl udi ng fordr op s hi pped t eeth) cause d byt he al l eged r etai l pr i ce- fi xi ng cons pi r acy , al t hough notfort he a lle g e d e x c lu s iv e -d e a lin g c o n s p ir a c y .7 Backg r ound Pl ai nt i ffs al l ege t he f

o l l ow i ng i n one or bot h of t he com plai nts
. (1 ) M a n u f

a c tu r e r s o f

a rtific ial te e th n e e d to d istrib u te t hr ough deal er s i n or der t o compet e eff ect i vel y . D eal er s ar e the p rim a ryso u rc e o f d istrib u tio n to d e n tal la b s, w h ich u se th e tee th t o pr oduce de ntur es . D ent spl yus es a netw or k of author i zed d e a le rs . (2 ) P lain tiff

s h a v e p u rc h a se d D e n tsp ly ’s te e th b o th i ndi r ect l y t hr ough D ent s pl y ’ s deal er s and di r ect l yt hr ough “dr op s hi ppi n g. ” D r op s hi ppi ng occur s w hen a de al erdoes nothave c e r t a i n t e e t h i n s t o c k o rc a n n o tf u l f i l l a l a b ’ s o r d e rf

o rs o me ot herr eas on and as ks D ent s pl yt o s hi p t he t eeth di r ect l y t o a l ab. W h e n t e e t h a r e d r o p s h i p p e d , t h e d e a l e rn e v e rh a s phy s i cal cus t odyof them, buti td o es bi l l the l ab fort he t eeth, col l ect p a ym e n ts f

ro m th e la b , a n d p a yD e n ts p ly. (3 ) D e n tsp lyh a s f

o r e c lo se d its c o m p e tit o rs’ a c c e ss to d e a ler s b ye x p licitlya g re e in g w it h so m e d e a ler s th a t th e yw ill not carr y cert ai n compet i ng br ands of t eeth and b y i nduci ng ot herdeal er s nott o carr yt hos e compet i ng br ands of t eeth. Pur s uantt o i t s w r i t t en pol i cycal l ed “D eal er C r i t er i on N um ber 6 , ” D en tsplythrea tens to term inate, an d d o es term inate, de alers t hat add t o thei r i nv entoryt eet h m ade b yD e nt s ply ’s com peti t ors. Th u s , u n l e s s Den t s p l y ’ s d e a l e r s wer e a l r e a d ys e l l i n g anot her8 m anufa ctur er ’ s t eeth before D ent s pl yi m pos ed i t s excl us i vedeali ng po l i ci es, i t s deal ers cann ot s e ll ot her m anu fact urer s’ tee th u n les s th e yg iv e u p th e o p p o rtu n ityto c o n tin u e to se ll D ent s pl y ’ s t eeth. N o r at i onal deal erw oul d be l i kel yt o m ake su c h a sw itch b e c a u se , g iv e n D e n tsp ly ’s m o n o p o lyp o sitio n (it h a s a 7 5 -8 0 % m a rk e t sh a re o n a re v e n u e b a sis ), lo sin g th e a b ili ty t o s e l l Den t s p l y ’ s t e e t h wou l d h u r ta d e a l e rmor e t h a n g a i n i ng t he abi l i t yt o sel l D ent s pl y ’ s compet i t or s ’ t eeth w oul d hel p a d e a ler . B ye x p licitlya g re e in g w ith so m e d e a ler s th a t th e yw ill notcarr ycert ai n compet i ng br ands of t eeth and byenac t i ng D eal er C ri t eri on N um ber 6 , D ents plyhas fo recl osured i t s r i vals ’ acc es s t o adequa t e cha nnel s of di s tr i but i on, and com pet i t i on has b e e n re stric ted . T h is h a s c a u se d D e n tsp ly ’s m a rk e t sh a re to in c re a se , th e p ric e o f

D e n tsp ly ’s a n d o th e r m a n u f a c tu re rs’ tee th to in c re a s e , a n d th e a v a ila b ility o f ri v a l te e th to d e c re a s e . (4 ) F u rth e rm o re , b y a g r e e m e n t am o n g D e n tsp lya n d its dealer s, D ents ply set s t he deal ers ’ res al e pri ces. Itdis t ri bu t es a l i stof “su gg est ed” p ri ces f o r i t s deal ers t o ch arge den t al l abs. B efor e a deal er can char ge a l ow er pr i ce, D ent s pl ym us tappr ove th is “ p ric e d e v iatio n .” P ric e d e v iatio n s h a v e b e e n g ra n ted o n ly w h e n a l a b h a s b e e n b u y in g , o r i s th in k in g o f b u y in g , a com peti t or’ s t eet h b ecause they are being s old for l ess than t ho se of D ent s pl y . I n t hos e i ns t ance s , D ent s pl ynegot i at es w i t h t he l ab t o all ow i tt o buyt eeth fr om t he dea l erata pr i ce be l ow D ent s pl y ’ s s ugges t ed pr i ce. T he dea l ert hen agr ees t o t he pr i ce n e g o t i a t e d b y D e n t s p l y.9 (5 ) D e n tsp ly ’s f

o re c lo sin g o f

its c o m p e tit o rs’ a c c e ss to deal er s and s et t i ng o f the deal er s ’ r es al e pr i ces have c aus ed Pl ai nt i ffs t o pur chas e D ent s pl y ’ s t eeth at ar t i fi ci al l y hi gh pr i ces and l ose profits f

ro m u n re a lize d sa les o f

D e n tsp ly ’s c o m p e tit o rs’ te e th

. P roce dural H i s t ory I n 1999, Pl ai nt i ffs fi l ed the Hess su it a g a in s t D e n tsp ly al l egi ng cons pi r acyt o m onopol i ze, att empt t o m onopol i ze, and m ai nt enanc e of monopol yi n vi ol at i on of Sec t i on 2 of the Sher m an A ct , 1 5 U

. S

. C

. § 2, and r es t r ai ntof tr ade i n vi ol at i on of Sect i on 3 of t he C l ayt on A ct , 15 U

. S. C

. § 14. Pl ai nt i ffs as ked forboth damages and an i nj unct i on. D en tspl ym oved for s u m m aryj udgm ent , cl ai m i ng t hatPl ai nt i ffs l acke d s t andi ng u n d er I l l i nois B r i ck

. T h e D istri ct C o u rtg ran ted D en tsply ’s m o tio n o n P lain tiff

s’ d a m a g e s c laim s. T h e C o u rt re a so n e d th a t: ( 1) a co- cons pi r at orexce pt i on t o I l l i nois B r i ck d id n o t ap p ly beca us e Pl ai nt iffs had notj oi ned D ent s pl y ’ s deal er s as codefen dant s ; ( 2) t he contr ol exce pt i on t o I l l i nois B r i ck di d not appl y beca us e D ent s pl y does not ow n i t s deal er s ; ( 3) Pl ai nt i ffs coul d n o t recoveron a non- over char ge theoryof damages beca use t heyhad notar t i cul at ed anys uch theory ; and ( 4) Pl ai nt i ffs coul d notr ecove r for dr op s hi pm ent s beca us e theyhad s peci fi cal l yal l eged thatt heyw er e notdi r ect p ur chas er s , and ev en if t h ey h ad all eg ed theyw ere d ir ec t pu rch ase rs, theyw ere in d ir e c t p u rc h a s e rs o f

d ro p s h ip m e n ts
.10 I n 2001, Pl ai nt i ffs fi l ed the J e rs e y D e n ta l s u i t , t h i s t i me nami ng as D ent s pl y ’ s co -defendant s t w enty - s i x of i t s t hen tw e n ty -e ig h t a u th o riz e d d e a ler s. P lain tiff s m a d e su b sta n tially t he s ame a l l egat i ons as t hey di d i n Hess w i t h one keyaddi t i on: t hey cl ai m ed theyw ere noton l yi nd i rectpu rchaser s but al so di r ectpur chas er s . A s i n Hess , Pl ai nt i ffs as ked forbot h damages a n d a n in ju n c tio n . D e n tsp lym o v e d u n d e r F e d e ra l R u le o f C iv il Pr ocedur e 12( b) ( 6) t o di s m i s s t he cl ai m s fordamages , ci t i ng I l l i nois B r i ck

. T h e D istri ct C o u rt g ran ted the m o ti o n . T h e C o u rt r eas oned t hat : ( 1) Pl ai nt i ffs coul d not r ecove r un d er a cocon s pi r at orexce pt i on t o I l l i nois B r i ck b e c a u se th e su it stil l i m pl i cat ed Il li n o is B rick’s pol i cyconce r ns ; ( 2) i n Hess i thad al r eadyr ej ect ed Pl ai nt i ffs ’ ar gum en t t hatt heycoul d r ecove r under the contr ol exce pt i on t o I l l i nois B r i ck ; ( 3 ) P lain tiff s c o u ld notr ecove rdamages forl os tp rof i t s beca us e thei rcompl ai nt so u g h t on ly o v erc h arg e d am ag es a n d b ec au se, as P lai n ti ff s w ere ind ir ec t pu rch ase rs , I

l l i nois B r i ck w ou ld b a r recoveryof lost pr ofi t s anyw ay ; and ( 4) i n Hess i thad al readyrej ect ed P l ai nti ffs’ ar gum entt hatt heycoul d r ecove rfordr op s hi pped t eeth.
P lain tiff s the n m o v e d f

o r le a v e to a m e n d th e ir c o m p lain t. A m ong t he pr opos ed addi t i ons t o t he compl ai ntw er e al l egat i ons th a t “ [ t]h e D e a ler D e f

e n d a n ts a g re e w iith D e n tsp lya n d a n d w ith ea ch ot her ” t o abi de bys ugges t ed r et ai l pr i ces and that“the pr i ces atw hi ch the D eal erD efe ndant s s el l t o dent al l abor at or i es ar e contr ol l ed byD ent s pl yand agr eed t o byt he D eal er D efen dan t s. ” T he D i stri ctC ou rtden i ed l eave t o am end becau se t he am end ed pleadi ng w ou l d no tw i t hst and a m oti on t o d i sm i ss.11 It re a so n e d th a t: (1 ) t h e c o -c o n sp ira to r e x c e p tio n to Illino is B r i ck d i d n o ta p p l y b e c a u s e t h e d e a l e r s c o u l d s t i l l s u e D e n t s p l y; (2 ) th e c o n tro l e x c e p tio n to I l l i nois B r i ck

did not applybecau se the d ea lers w ere n o t sub sid iari es o f D en tsply ; and (3) Illino is B r i ck barr ed r ecove r yof l os tpr ofi t s damages beca us e Pl ai nt i ffs w ere i nd i rectpu rchaser s. Plaint i ffs m oved pur s uantt o 28 U

. S. C

. § 1292( b) for cert i fi cat i on of appe al abi l it y of the or der s di s m i s s i ng t he damage cl ai m s i n Hess and Jer s ey D entaland the or derdeny i ng t hei rm ot i on for l eave t o amend i n Jer s ey D ental

. T he D i s t r i ct C our tgr ant ed thes e mot i ons and cer t i fi ed the fol l ow i ng ques t i on: W hether , undert he ci r cumst ance s her e, appl i cat i on of I

l l i nois B r i ck , 4 3 1 U

. S

. 7 2 0 (19 7 7 ), McC ar thy v. R ecor dex Ser vi ce, I nc. , 80 F. 3d 842 ( 3d C i r . 1996) , orothe rT hi r d C i r cui topi ni ons deal ing w i t h I

l l i nois B r i ck , pr event s Pl ai nt i ffs from being a ble t o recov er dam ages ag ai nst D ent s pl yI nt ernat i onal , I nc. P lain tiff s th e n p e tit io n e d o u r C o u rt f o r p e rm iss io n to a p p e a l, pur s uantt o 28 U

. S. C

. § 1292( b) , t he thr ee or der s cert i fi ed byt he D i s t r i ctC our t
. W e gra nt ed the pet i t i on and cons ol i dat ed the appea l s . I n a S ect i on 1292( b) appea l , our r evi ew i s notl i m i t ed t o t he s peci fi c ques t i on cert i fi ed by t he D i s t r i ctC our t
. W e may “cons i deral l gr ounds w hi ch mi ghtr equi r e a r ever s al of the or derW e not e thatt he G overnm enthas al s o s ued D ent s pl yfor 3 a lle g e d a n titr u s t v io la tio n s . S e e U n itedS ta tes v . D e n tsp ly I n t’l, I nc. , 399 F. 3d 18 1 (3d C i r . 2005)

. T her e w e r ever s ed the D i s t r i ctC our t ’ s j udgm enti n favorof D ent s ply an d gr ant ed i nj unct i ve r el i ef. I n s o doi ng, w e det erm i ned thatD ent s pl yhad m o n o p o lyp o w er ( i

. e. , t h e p o w ert o excl ude compet i t or s ) and t hati t s excl us i onarypr act i ce s, par t i cul ar l yD eal erC r i t er i on N u m b e r 6 , h a d a n a n tic o m p e titiv e e f f e c t. I d. at188- 97. 12 appea l ed fr om . ” Mer i can, I nc. v. C at er

pi l l arTrac t orC o. , 713 F. 2 d 9 5 8 , 9 6 2 n. 7 ( 3d C i r . 1983)

. W e “mayaddr es s anyi s s ue fai r l y i ncl uded w i t hi n t he ce r t i fi ed or derbeca us e i ti s t he or der t hati s appea l abl e, and nott he cont r ol l i ng ques t i on i dent i fi ed by t he [D ] i s t r i ct[C ] our t
. ” Y am aha Mot orC o r

p. , U

. S. A

. v. C alhoun , 5 1 6 U .S

. 1 9 9 , 2 0 5 (1 9 9 6 ) (e m p h a sis in o rig in a l) (i n terna l qu o tat ion m ark s o m itted). 3

St andard of R evi ew A s t he Hess or der par t i al l y gr ant ed D ent s pl y ’ s m ot i on for sum m aryj ud gm ent, ou r r eview i s de n o vo . M as s . Sch. of

Law a tAn d o v e r, I

n c . v . ABA , 1 0 7 F

. 3 d 1 0 2 6 , 1 0 3 2 (3 d C ir

. 1 9 9 7 ). T h e f irst J e rs e y D e n ta l o rd e r g ra n te d D e n tsp ly ’s m o tio n to dis m i ss forfai l ure t o st at e a cl ai m . R eview of this o rd e r al so m eri t s de novo re v ie w . W or ldcom , Inc

. v. G r aphnet , I nc. , 343 F. 3d 651, 653 ( 3d C i r . 2003)

. T he s econd J e rs e y D e n ta l or der deni ed Plai n ti ffs ’ m ot i on forl eave t o amend t he compl ai nton t he gr ound t hat“the pr opos ed amended compl ai ntw oul d not13 s u r v i v e a m o tio n to d is m is s u n d e r F e d . R . C iv . P . 1 2 (b )( 6 ).” D i s t
. C t
. M em. O r d. at 7 ( A ug. 27, 2002)

. W her e, as her e, “the [D ] i s t r i ct[C ] our t has bas ed i t s deci s i on t o denyl eave t o amend on a l egal concl u sion tha tt he amended pl eadi ng w oul d not w i t h s t a n d a mot i o n t o d i s mi s s , we r e v i e w s u c h a d e c i s i o n de novo . ” Z iegler v. IB P H o g M kt. , In c ., 2 4 9 F .3 d 5 0 9 , 5 1 8 (6 th C i r. 20 01 ). T hu s w e revi ew al l t hree orders de novo

. D i s cus s i on I l l i nois B r i ck l ay s m anyof the mar ker s forourdeci s i on. I n t hat cas e, t he S upr eme C our tes t abl i s hed the gene r al rul e that onl yd i r e c tp u r c h a s e r s f r o m a n t i t ru s tv i o l a t o r s ma yr e c o ver d a m a g e s in a n titru st s u its. T h e p lai n ti f f s a lleg e d th a t co n c re te bl ock manufactur er s cons pi r ed t o fi x t he pr ices atw hi ch co n cre te blo ck s w ere so ld to m aso n ry co n tr ac tors. T h eyin turn “pas s ed on” over char ges t o t he gene r al contr act or s , w ho t hen pas s ed th em on t o t he pl ai nt i ffs , w ho had pur chas ed bui l di ngs m ad e f ro m th e co n cre te blo ck

. T h e p lai n ti ff s, there fo re, w ere “i ndi r ectpur chas ers ” of c oncr et e bl ock, w hi ch “pa s s e[d] thro u g h tw o sep ara te lev els i n the c h ain o f d istri b u ti o n b ef o re re a c h in g ” th e m . 4 3 1 U .S . a t 7 2 6

. B efor e the C our tw as w hethert he i ndi r ectpur chas er p lain tiff s c o u ld u se th is p a ss -o n th e o ryto sta te a d a m a g e s c laim agai ns tt he al l eged a nt i t rust v iol at or s ups t r eam. I thad pr evi ous l yhel d t hatan ant i t rus t defe ndant coul d notar gue that a pl ai nt i ff w ho had pur ch ase d a pr oductdi r ect l yfr om t he14 defe ndantw as noti nj ured b eca us e i thad pas s ed on the i l l egal o v e rc h a rg e to its o w n c u s to m e rs . H anover Shoe, I

nc. v. U ni t ed Shoe M ach. C or p. , 3 9 2 U .S . 4 8 1 , 4 9 4 (1 9 6 8 ) . T o m a in tain cons i s t ency , t he C our thel d i n I l l i nois B r i ck

t hatdi r ect pur chas er s ar e the onl ypar t i es “i nj ur ed” i n a ma nnert hat perm i t s t hem t o r ecove rdamages

. 431 U

. S. at729, 735. T he i ndi r ectpur chas erpl ai nt i ffs w er e thus i nel i gi bl e t o r ecove r dam ages fo r the p assed- on ov ercharges.
T he C our tgave three p ol i cyr eas ons fori t s hol di ng: ( 1) a r is k o f d u p lica tiv e liab ili tyf

o r d e f e n d a n ts a n d p o ten tially in c o n sis ten t ad

ju d ic a tio n s c o u ld a rise if c o u rts p e rm itt e d b o th d i r e c ta n d i n d i r e c tp u r c h a s e r s t o s u e d e fe nd a n t s f o rt h e s a me over char ge; ( 2) t he evi dent i arycompl exi t i es and unc ert ai nt i es i nv o l v e d i n a s c e r t a i n i n g t h e p o r t i o n o f t h e o v e r c h a r g e t h a tt he di r ectpur chas er s had pas s ed on t o t he var i ous l evel s of i ndi r ect pur chas er s w oul d pl ace t oo gr eata bur den on t he cour t s ; and ( 3) perm i t t i ng d ir ectand i ndi r ectpur chas er s t o s ue onl yfort he amount of t he over char ge t hey t hemsel ves abs orbed and di d not pass on w ou ld c a use i neff i ci ent enforcem ent of t he an t i t rust l aw s bydi l ut i ng t he ul t i m at e r ecove r yand t hus decr eas i ng t he d ir e c t p u rc h a s e rs ’ i n c e n tiv e to s u e . I d. at730- 35 & n. 11, n. 12, 7 3 7 & n .1 8 , 7 4 0 -4 3 & n .2 3 , n .2 7 , 7 4 5

. I . M ay Pl ai nt i f

f s r e c ov e r damage s i n Hess ?15 a. M ay Pl ai nt i f

f s r e c ov e r damage s i n Hess u n d er a c o -co n sp irato r e x ce p ti o n to I l linois B r i ck ?
A lt h ough t he Hess co m p lai n t al lege d that D en tsply ’s deal er s cons pi r ed w i t h D ent s p lybyagr eei ng t o t he exc l us i ved ea li n g arran g em en ts, P lai n ti ff s d id no t n am e an yo f th e d ea lers as co- defe ndant s . W e have r ej ect ed att empt s t o i nvoke a c ocons pi r at orexce pt i on t o Il l i no is B rick’s baron i ndi r ect p u rch as ers t andi ng w hen pl ai nt i ffs have notnamed t he coc o n s p ir a to rs im m e d ia te ly u p s tr e a m a s d e f e n d a n ts
. See McC ar thy v. R ecor dex Se r v. , I nc. , 8 0 F .3 d 8 4 2 , 8 5 4 (3d C ir

. 1 9 9 6 ); Li nk v. Mer cede s - B enz , 7 8 8 F

. 2 d 9 1 8 , 9 3 3 (3d C ir

. 1 9 8 6 ).
I n Li nk , fo rexampl e, M er cede s carow ner s s ued M e rc e d e s-B e n z f

o r alleg e d ly re q u irin g d e a ler s to p u rc h a se p a rts excl us i vel yfr om i t
. 788 F. 2d at929. Pl ai nt i ffs had pur chas ed par t s fr om t he dea l er s , w hom t heynamed as co- cons pi r at or s but n o t as d e f

e n d a n ts. P lain tiff

s c laim e d th a t I

l l i nois B r i ck di d not bart hei rver t i cal cons pi r acycl ai m s beca us e “the i nt erveni ng par t i es i n t he di s t r i but i on pr oces s [w er e] co- cons pi r at or s . ” I d. at931.
W e concl uded t hat , unl es s t he deal er s w er e j oi n ed as par t i es , pl ai nt i ffs ’ s ui t i m pl i cat ed t he pol i cyconce r ns of Illino is B ri ck a n d was b a r r e d

. W e e x p l a i n e d t h a t i f a j u r y found t hat M erc ed es a n d it s d ea lers w ere c o -c o n sp ir ators, bu t th e d ea lers16 w er e notpar t i es t o t he s ui t , t hatdet erm i nat ion w oul d nothave anycol l at er al es t oppel eff ecti n a s ubs equents ui tbya deal er a g a in s t M e rc e d e s . I

d. at932. T her efor e, beca us e the de alers w e re n o t n a m e d a s d e f

e n d a n ts , the risk o f

d u p lica tiv e liab ili ty i dent i fi ed i n I

l l i nois B r i ck r emai ned. Si m i l ar l yi n Hess , becau se t he dea l er s m ay also s ue D ent s pl y , t he r i s k of dupl i cat i ve l i abil i t yl oo m s. Pl ai nti ffs at t empt t o di s t i ngui s h Hess f r o m Li nk by poi nt i ng t o s t i pul at i ons t h ey ent er ed i nt o w i t h m os tof D e n tsp ly ’s d e a ler s. A s p a rt o f P la in tiff s’ o p p o sitio n to D en tsply ’s m o ti o n fo r s um m aryj udgm enti n Hess , t heyexec ut ed s t i pul at i ons w i t h t w enty - t w o of D ent s pl y ’ s deal er s . I n eac h s t i pul at i on, t he dea l eragr ees “t o r el eas e [D ent s ply ] fr om any a n d a ll cla im s f

o r a n titru st v io latio n s” se t f o rth in th e c o m p lain ts i n Hess o r U

n ited S ta tes v . D e n tsp ly (th e G o v e rn m e n t’s s u it agai ns tD ent s pl y ) , and Pl ai nt i ffs agr ee t o “r efr ai n[] fr om fi l i ng s ui t ” aga i ns tt h at d ea lerfort he s ame ant i t rus tvi ol at i ons . T he p a rties to e a c h stip u latio n a g re e th a t “D e n tsp lyis a th ird p a rty benef i ci aryof thi s s t i pul at i on” and t hatt he s t i pul at i on “maybe s p e c if ic a lly e n f

o rc e d b yth e p a rt i e s h e re to o r b yD e n ts p ly.” Pl ai nt i ffs ’ expertcal cul ated t hatt he gr oup of dea l er s w ho exec ut ed thes e st i pul at i ons “r epr es ent s appr oxi m at el y95% of t he gr os s s al es ” of D ent s pl y ’ s ar t i fi ci al t eeth. Pl ai nt i ffs argue t hatt he s t i pul at i o n s g i ve D ent s pl ya s afe harborfr om deal er s u its , th u s e lim in a tin g th e ri s k o f d u p lic a tiv e lia b ility.
M a n yp ro b lem s a tten d P lain tiff s’ a rg u m e n t. F irst, w h ileE ven i f Pl ai nt i ffs had not s ued t he deal er s , D ent s pl ym ay 4 notbe abl e t o enfor ce the s t i p u la t i ons i n anyevent
. T he s t i pu l at i ons s t at e that“D ent s pl yi s a thi r d par t ybenef i ci aryof th is s tip u latio n ” a n d th a t th e stip u latio n s “ m a yb e sp e c if ica lly e n f o rc e d b yth e p a rties h e re to o r b yD e n tsp ly .” H o w e v e r, “o n ly inten d ed b en ef

ici aries o f a co n tr ac t m ad e b etw ee n tw o o r m o re ot herpar t i es have enfor cea bl e r i ght s undert he contr act
. ” 13 W ill isto n o n C o n tr a c ts § 3 7 :8 , at 6 7 (R ich a rd A . L o rd e d ., 4 th ed

. 2 0 0 0 ) (cit ing R estatem en t ( S ec o n d ) of C o n tr ac ts § 3 0 2 ). In t hi s cas e, t he contr act i ng par t i es ar guabl ydi d noti nt end that D e n tsp lyb e n e f

it fro m th e stip u latio n s, a s th e ir p u rp o s e w a s to a llo w P la in tif

f s to s u e D e n ts p ly.

17 i n t he s t i pul at i ons Pl ai nt i ffs expr es s l yagr ee nott o s ue the d e a l e r s , t h e y d id

s ue the dea l er s i n Jers ey D ental

. T hus , t he s t i p u l a t i o n s a r e l i k e l y u n e n f o r c e a b l e b y P l a i n t i f

f s o rD e n t s p l y. 4
Fur t herm or e, i n Kan s a s v . Ut i l i c o r p Uni t e d , I nc. , 497 U

. S. 199 ( 1990) , t he S upr eme C our t r ej ect ed t he as s er t i on t hat the a b sen ce o f a p arti cu lar I l l i nois B r i ck conce r n i n an i ndi vi dual c a se w o u ld re m o v e its bar on an i ndi r ect pur chas er cl ai m . 497 U

. S. at 217. “[E] ven ass um i ng t hat any economi c as s um pt i ons u n d erl y i ng t he I

l l i nois B r i ck ru l e mi g h t b e d i s p r o v e d i n a s peci fi c ca s e, w e thi nk i t an unw arr ant ed and c ount erpr oduct i ve exer ci s e t o l i t i gat e a s er i es of exc ept i ons . ” I d. T hus , Pl ai nt i ffs w o u ld n o t n e c e ss a rilyh a v e sta n d in g e v e n if th e stip u latio n s d id el i m i nat e Il l i no is B ri ck’s dupl i cat i ve l i abi l i t yconce r n. I n addi t i on, i n Mer ican t he i ndi r ectpur chas er s ar gued18 t hatt her e w as no dangerof dupl i cat i ve r eco v ery b eca us e the di r e c t p u r c h a s e r h a d e x e c u t e d a n a f f i d a v i t t h a t s a i d i t h a d not s uffe r ed i njury fro m t he pol i cyt hatw as al l eged t o vi ol at e the ant i t rus tl aw s . 713 F. 2d at968. W e neve r theles s hel d t hat pl ai nt i ffs w er e barr ed fr om s eeki ng damages under I lli n o is B r i ck , r ecogni zi ng t he r emai ni ng pot ent i al of a di r ectpur chas er s u it. I d. a t 9 6 8 -6 9 ; s ee al

s o D i cks on v. Mi cr os of tC or p. , 309 F. 3d 193, 215 ( 4t h C i r . 2002) ( appl y i ng I l l i nois B r i ck d e sp ite arg u m en t th at “the re is no d an g er o f d u p lic ati v e re co v ery b e c a u se th e [ d ire c t p u rc h a se rs] a p p a re n tlyh a v e e le c ted n o t to su e [ the d ef

en d an t]

. ” (intern al qu o tat ion m ark s o m itted)).
A s ourC our thas expr es sly ref u s ed t o adopta coco n spi r at orexce pt i on t o I l l i nois B r i ck a b s e n t t h e j o i n d e ras d e f e n d a n t s o f

th e a l l e g e d c o- c on s pi r a t or s i mm e di a t e l yup s t r e a m, Pl ai nt i ffs i n Hess lac k s ta n d ing to p u rsue claim s fo r m o n etary r el i ef. B efor e the appl i cabi l i t yof thatexce pt i on m aybe cons i der ed, t he dea l er s m us tbe j oi ned.

b. M ay Pl ai nt i f

f s r e c ov e r damage s i n Hess und er t he con trol except i on t o Illin o is B r i ck ?
T h e “ c o n tro l ex c e p tio n ” to I l l i nois B r i ck “ m ig h t” p e rm it an i ndi r ect p u rcha s ert o s ue an i ni t i al s el l erw hen the i ni t i al sell er “o w n [s] or con tr o l[s]” the d ir ec t pu rch ase r. I l l i nois B r i ck , 431 U

. S. at736 n. 16. I n Hess , P l a i n t i f f s a r g u e d t h a tt h e yc o me w i t hi n t hi s exce pt i on beca us e “D ent s pl yexert s vi r tual contr ol19 ov er it s . . . deal er s . ” D i s t
. C t
. M em. O p. at30 ( M ar ch 30, 2 0 0 1 ).
W e have appl i ed t h e contr ol exce pt i on onl yw hen the in itia l se lle r o w n e d th e d ir e c t p u rc h a s e r. See In re Su ga r I nd us. A nt i tr us tLi t ig. , 579 F. 2d 13, 18- 19 & n. 8 ( 3d C i r . 1978) ( hol di ng t hat , i n cert ai n ci r cumst ance s , t he “fi r s tnoncontr ol l ed p u r c h a s e r ” h a s s t a n d i n g t o s u e wh e n i th a s p u r c h a s e d f r o m a su b sidiary o f the v iolator); s e e a ls o Mid -W e s t- P a p e rP r o d s . C o ., v. C ont i nentalG r oup, I nc. , 596 F. 2d 573, 589 (3d C i r . 1979) ( i nd i cat i ng t hatcontr ol exce pt i on m ayappl y“w hen the par ent dom i nat es and contr ol s t he s ubs i di aryt o s uch an ext ent t hatt he s ubs i di aryi s d eem ed t o be an a gentof the par ent
. ”)

. B ut D e n ts p ly d o e s n o t o w n a n yin te re s t in its d e a le rs . C our t s t hathave ext ended the contr ol exce pt i on bey ond a par ent
- s ubs i di aryr el at i ons hi p s t i l l r equi r e “r el at ionshi ps i nvol vi ng s uch func t i onal economi c orot heruni t ybetw een the di r ectpur chas er a nd ei t hert he def endantort he i ndi r ect pur chas er t hatt her e ef

fec t i vel yhas been onl yone s al e. ” Jew ish H osp. A ss’ n v. Stew artMech. En t er. , 6 2 8 F

. 2 d 9 7 1 , 9 7 5 (6th C ir

. 1 9 8 0 ); s ee al

s o F is herv. W

at t l es , 639 F. Supp. 7, 9 ( M

. D

. Pa. 1985) ( t o fal l w i t hi n t he contr ol exce pt i on, pl ai nt i ffs m us ts how

“ su c h sig n if

ica n t co n tro l” th a t th e tw o c o m p a n ies a re “ v irtu a lly t he s ame ent i t y ”). M o des of contr ol t hatm i ghtqual i fyfort he c o n tro l ex c e p tio n in c lu d e “ in ter lo c k in g d ire c to ra tes , m in o rity s t ock ow ner s hi p, l oan agr eement s t hats ubj ectt he w hol esalers to th e m a n u f

a c tu re rs ’ o p e ra tin g c o n tr o l, [ o r] tru s t a g re e m e n ts .”20 I n r e B r and N

am e Pres cr i

pt i on D r ugs A nt i tr us tLi t ig. , 123 F. 3d 5 9 9 , 6 0 5 (7th C ir

. 1997) ( Posne r , J

. )

. Pl ai nt i ffs i n Hess , how ever , do not al l ege t hat D ent s pl yexert s anyof thes e modes o f c o n tr o l o v e r i ts d e a le rs . F u rth erm o re, ev en assu m ing that D en tsply d o es ex ert s o m e d e g re e o f

c o n tr o l o v e r i ts d e a le rs , Il l i no is B ri ck’s pol i cy rea so n s fo r de n y ing stan d ing rem ain. N o thing ab o u t D en tsply ’s “contr ol ” over i t s deal er s w oul d pr eventt he dea l er s fr om s ui ng D ent s pl y , t hus cr eat i ng a r i s k of dupl i cat i ve l i abi li tyfor D e n tsp lya n d p o ten tially in c o n sis ten t ju d g m e n ts. A lso , if P lain tiff s w a n ted to re c o v e r o v e rc h a rg e d a m a g e s, th e yw o u ld sti ll h av e to d em o n str ate the p o rt ion o f th e o v erc h arg e d ea lers h ad p asse d o n to the m , leav ing intact th e e v iden ti ary compl exi t i es and unce r t ai nt i es of conc ern i n I l l i nois B r i ck

. M o re o v e r, p e rm itt in g P la in tiff s to su e f

o r d a m a g e s w o u ld po t enti al l y l ead t o i neff i ci ent enforcem ent of t he an t i t rustl aw s, beca us e the ul t i m at e r ecove r yfort he dea l er s w oul d be di l ut ed (a ss u m in g th a t, rath e r th a n th e d e a ler s b e in g p e r m it ted to r ecove rt he ent i r e over char ge, i tw as appo r t i oned among t he deal er s and the l abs ) , t her ebydecr eas i ng t he dea l er s ’ i ncent i ve t o s ue. I n s um , Pl ai nt i ffs do notcome w i t hi n t he contr ol e x c e p tio n b e c a u se D e n tsp lyd o e s n o t o w n a n yin ter e st in its d e a l e r s a n d n o f

u n c t i o n a l u n i t y e x i s t s a m o n g t h e m a n d D e n t s p l y. N ot w i t hs t andi ng w hat e v e rl e s s e rd e g r e e o f c o n tr o l Dent s pl ym ay e x e rt o v e r i ts d e a le rs , Il l i no is B ri ck’s pol i cyr eas ons fordeny i ng21 s ta n d in g a p p ly.

c. M ay P l ai nt if

f s rec over non- overc harge damage s i n Hess ?
I n t hei roppos i t i on t o s um m aryj ud g m en t i n Hess , Pl ai nt i ffs ar gued that , even i f I l l i nois B r i ck barr ed them from pr ovi ng over char ge dam ages , t hey m i ght s t i l l be abl e t o pr es ent a n o n - o v e r c h a r g e t h e o r y o f d a m a g e s a f

t e rf u r t h e rd i s c o v e r y. T he D i stri ct C ou rt rej ect ed this cl ai m “[b]ecause th e H ess pl ai nt i ffs have f

ai l ed t o ar t i cul at e anyt heoryof damages t hat w oul d be anythi ng ot hert han over char ges . ” D i s t
. C t
. M em. O p. a t 3 1 (M a rc h 3 0 , 2 0 0 1 ). W e a g re e , an d th u s P lain tiff s’ c laim w a s p ro p e rl yd is m is s e d a t s u m m a ry ju d g m e n t.

d. M ay P l ai nt i f

f s rec over dam ages base d on dr op s hi pm e nt s i n Hess ? Pl ai nt i ffs i n Hess cl aim ed that , fort eeth dr op s hi pped d ir e c tl yfro m D en tsplyto the labs , theyw ere d ir ec t pu rch ase rs n ots ubj ectt o I

l l i nois B r i ck

. H ow ever , t he Hess c o mpl ai nt l i m i t ed the pl ai nt i ff cl as s t o “al l dent al l abor at or ypur chas er s of anyD ents plyprodu ct s w ho pu rchased such p roducts thr ough D ents ply D ealers .” (e m p h a sis a d d e d ). P lain tiff s ca n n o t a v o id I l l i nois B r i ck bycl ai m i ng t heyw er e di r ectpur chas er s of dr op sh ip m e n ts w h e n th e ir c o m p lain tspeci f ica llya lleg e s th a t th e yd id n o t d ir e c tly p u rc h a s e f

ro m D e n ts p ly.22 Fur t herm or e, t he fa ctt hats om e of the t eeth ar e dr op s hi pped di r ect l yfr om D ent s pl yt o Pl ai nt i ffs does notaff ectt he e c o n o m ic s u b sta n c e o f

th e tra n sa c tio n . T h a t is, the d e a ler s s til l m ake the sale to P la i nt i ffs and D ent s pl ym akes t he s al e t o t he d ea lers. P lai n ti ff

s p aythe d ea lers th eir usu al price , the d ea lers ta k e th e ir p ro f

it, a n d th e n th e d e a le rs p a yD e n ts p ly. See D ist. C t. M em. O p. at29 ( M ar ch 30, 2001)

. W hi l e i t is t rue thatt he d e a ler s d o n o t tak e p h y sic a l p o ss e ss io n o f th e tee th , this is n o th in g b u t a f

o rm a l d if

f e re n c e f ro m th e typ ic a l tr a n s a c tio n s . T hus , even a s t o t eeth dr op s hi pped di r ect l yfr om D ent s pl yt o t he la b s , P lain tiff

s a re in d ire c t p u rc h a se rs p o ten tiallysu b jec t to I l l i nois B r i ck

. I I . M ay Pl ai nt i ffs rec ove r damage s i n Jer s ey D ental ?

a . M a y P laintiff

s re co v er lost p ro fi ts d am ag es cau sed b y t he i r l ost o p p o r tu n ities to p u r c h a se a n d r e se ll D en ts p l y ’s com p eti tors’ p rod u cts ?
P lain tiff s a rg u e th a t, ev e n if

th e yd o n o t h a v e sta n d in g to r ecove rdamages forover char ges t heypai d t o deal er s for D e n tsp ly ’s te e th , the yh a v e s ta n d in g to re c o v e r lo st p ro f its d a m a g e s c a u se d b ytheir lo st o p p o rtu n iti e s to p u rc h a se a n d re se llIf D e n tsp ly ’s e x c lu sio n a ry c o n d u c t e n a b led it t o ra ise its 5 p ric e s, th e re b yre d u c in g (a t lea st in th e o ry ) th e d e m a n d f o r its o w n p ro d u c ts, P lain tiff s m ig h t als o h a v e c la im e d lo st p ro f its d a m a g e s c a u se d b yth e ir lo st o p p ortu n iti e s to p u rc h a se a n d re se ll D ent s pl y ’ s pr oduct s . H ow ever , w e w oul d r ej ects uch a c l ai m for th e sam e reas on s w e rej ectP l ai nti ffs’ cl ai m for l ostprofi ts d a m a g e s c a u se d b yth e ir lo sto p p o rtu n iti e s to p u rc h a se a n d re se ll D e n ts p ly’s c o m p e tito rs ’ p ro d u c ts
. M e m b e rs o f th e d istrib u tio n c h a in u su a llym iti g a te th is 6 harm bypas sin g o n som e of the ov ercharge t o thei r buy ers . H ow ever , m uch of thi s harm i s not actual l y avoi ded, butr ather t akes t he for m of t he sec ond t ype of har m

— l os t pr ofi t s fr om t he 23 produ ct s of D ents ply ’s com peti t ors. P l ai nti ffs al l ege that , as a 5 r es u l to f Den t s p l y ’ s e x c l u s i v e - d e al i ng, i t s compet i t or s ar e deni ed adequa t e acc es s t o a nece s s ary m eans of di s t r i but i on— t he deal er s . T hus D ent s pl y ’ s compet i t or s ’ pr oduct s ar e not avai l abl e. Pl ai nt i ffs ar e theor et i cal l y co rrectt hat , “butfor [D en tsply ’s] ex clus io n o f m o re e ff ici en t r ivals, p u rch ase rs w o u ld h a v e s h if

te d a t le a s t s o m e o f

th e irb u s in e s s to th e ri v a ls .” A B A S e c tio n o f A n titr u s t L a w , P rovi ngA nti trust D am ag es: L ega lan d E con om i c Is sues 1 9 4 (1 9 9 6 ).
W hen ant i t rus t vi ol at or s caus e pr i ces t o i ncr eas e thr ough m o n o p o li za ti o n , a price-f ixing co n sp ir ac y , o r ex clus ion ary c o n d u c t, th e h a rm th e y c a u se m e m b e rs o f th e d istrib u tio n c h a in c o m e s in tw o w a y s: (1 ) o v e rc h a rg e s p a id f o r g o o d s a c tu a lly pu rchased; and (2) l ostprofi t s r esul t i ng fro m t he lost

6l ostop po rtun i t yt o b uyand res el l a great er v o l um e of g oo ds. T hi s i s beca us e, as m ember s of the di s t r i but i on chai n pas s on t he over char ge ( i

. e. , r ai s e thei rpr i ces ) , t hei rvol um e of s al es th e o re tic a lly d e c re a s e s . L i ke t he sec ond t ype of har m , t he over char ge pai d m i nus t he o v erc har ge pas s ed on forgoods actual l ypur chas ed and r es ol d ar e a form of “l os tpr ofi t s . ” The over char ge pai d m i nus t he over char ge pas s ed on forgoo d s ac tual l ypur chas ed and r es ol d i s one component of the l os s an ant i t rus tvi ol at i on caus es t o t he bot t om l i ne ( i

. e. , t he pr ofi t s ) of m em b ers of the di s t r i but i on ch ain. H ow ever , beca us e I l l i nois B r i ck

pr ecl udes i nd i rectpu rcha sers fr om recoveri ng ov ercharge dam ages, Pl ai nt i ffs do nots eek i n t hei rl os tpr ofi t s cl ai m t he component of t hei r l os t pr ofi t s t hati ncl udes t he over char ge pai d m i nus t he over char ge pas s ed on for t eeth t heyactual l ypur chas ed and r es ol d. 24 oppor tuni t yt o buyand r es el l a gr eat ervol um e of goods

. J eff r ey L . H a rr is o n , The Lost P r of i t s Meas ur e of

D am ages i n P r i ce E nhancem ent

C as es , 64 M i n n . L. R ev. 751, 753, 770- 772 ( 1980) ( “[T] he gr os s overchar ge meas ur e [of damages ] i gnor es t he i m pac t t h a t t h e e n h a n c e d p r i c e h a s h a d o n t h e v o l u me o f t he f in a l g o o d e v e n tu a ll yp ro d u c e d .”); see al so A B A Sect i on of A n titr u s t L a w , supra , at195 ( “I ti s t he fu n dament al l aw of demand that as t he pr i ce of a pr oducti ncr eas es t he amount p u rc h a se d d e c re a se s. A c o llu siv e p ric e in c re a se , the re f o re , w ill re s u lt in a re d u c tio n o f

th e q u a n tity o f

th e g o o d p u rc h a s e d .” ).
T hus , as s om e s chol ar s s ee i t , w hen ant i t rus tpl ai nt i ffsW e not e t hat Pr ofes s orA r eeda , w ho gai ned r ecogni t i on 7 forhi s s chol ar l yw or k i n ant i t rus tl aw , i s dece as ed, and thatt he t r eat i s e i s now t he r es pons i bi l i t ypr i nci pal l yof Pr ofes s or H ovenkamp. 25 cl ai m t hatant i compet i ti ve beha vi orcaus ed pr i ces t o i ncr eas e, t w o m ea su r es of damages coul d t heor et i cal l ybe us ed: ( 1) t he over char ge ( i

. e. , t he di ffe r ence betw een t he pr i ce pai d forgoods a c tu a llyp u rc h a se d a n d th e p r ice th a t w o u ld h a v e b e e n p a id a b sentt he il l egal cond uct) , or ( 2) l ostprofi t s ( i

. e. , t he over char ge paid mi nus t he over char ge pas s ed on forgoods act uall ypu r c ha s e d a nd r e s ol d, pl us l os tpr of i t s fr om t he l ost o p p o rt u n ity to b u ya n d re s e ll a g re a te r v o lu m e o f g o o d s ). See P h il li p E

. A ree d a, H erb ert H o v en k am p & R o g er D

. B lai r, An t i tr u s tL a w ¶ 3 9 4 , at 52 1 (2d ed

. 2 0 0 0 ). 7
A cour tm i ghtpot ent i al l yus e a l o st p rof it s m eas ur e of damages , as “[t ] he Supr eme C our thas not expl i ci t l yhel d t hat a n yp a rt i c u la r m e a s u re o f d a m a g e s is re q u ir e d o r p re c lu d e d .” A B A S e c tio n o f

A n titr u s t L a w , supra , a t1 8 4 ( ci t i ng Thom s en v. C ays er , 2 4 3 U .S . 6 6 (1 9 1 7 )); s ee al s o I l l i nois B r i ck , 43 1 U. S. at 7 3 3 n . 1 3 , 7 4 3 n . 2 7 ( o b s e r v i n g t h a te v e n i f t h e “ p as s - on [def ens e] w er e perm i t t ed .

. . [and] t he def endants how [ed] t hat a s a re su lt o f

th e o v e rc h a rg e th e d ire c t p u rc h a se r in c re a se d its pr i ce by t he ful l amount of t he over char ge, t he di r ectpur chas er m [ ig h t] still cla im in

ju ryf ro m a re d u c tio n in th e v o lu m e o f its sales c au sed b yit s h igh er p ri ce s”).26 H o w e v e r, th e sta n d a rd m e th o d o f m e a su rin g d a m a g e s in p ri c e e n h a n c e m e n t c a s e s is o v e rc h a rg e , n o t lo s t p ro f its

. See A B A S e c tio n o f

A n titr u s t L a w , supra , at172 ( “Th e t ypi cal m eas ur e of da m ages i s t he di ffe r ence betw een the ac tual p ri ce a n d th e p re su m e d c o m p e tit iv e p ric e m u lti p lied b yth e q u a n tity p u rch ase d

. T h is w a s th e c alcu lat ion that the S u p rem e C o u rt appr oved i n C hat t anooga Foundr y [ & P ip e W

o rk s v . A tla n ta , 2 0 3 U .S . 3 9 0 , 3 9 6 (1 9 0 6 )].” ); i d. at 193- 94 ( W her e “a gr oup of s uppl i er s cons pi r es t o dr i ve a mor e e ff ici ent compet i t oroutof t he mar ketor , equi val ent l y , pr eventa more effici ents uppl i er fro m e n teri n g the m ark et, ” the ex clud ed su p p li er (co m p eti tor) “w ou l d h ave a c l ai m for anti t rust dam ages based o n lostprofi t s” and “pu rchaser s fr om t he con spi rat ors w ou l d als o h ave an t i t rust cl ai m s beca us e th ey p ayhi gherpr i ces as a r es ul tof the excl us i onarypr act i ce. ” T h e pur chas er s ’ damages w oul d be bas ed on t he over char ge t hey pai d m eas ur ed by “the di ffe r ence b e t wee n t h e p r i c e a c tu a l l y p a i d a n d t h e p r i c e t h a t woul d have b ee n p aid a b sen t co llu s ion , m u lt ipli ed b ythe q u an ti ty
. ”); A re e d a , supra , ¶ 394b, at 529 ( obs ervi ng t hat“[i ] n s pi t e of the ( ar guabl y ) t heor et i cal s uper i or i t yof l os tpr ofi t s as a meas ur e of d a m a g e s in a p ric e -e n h a n c e m e n t ca se , n e a rlya ll p lain tiff s c laim damages on t he bas i s of an ove r char ge ca l cul at i on”) ; H arr i s on, supra , at755- 56 ( “[W ] hen t he s peci fi c act i vi t y at i s s ue [i s ] pr i ce enhanc em en t, co u rt s co n sist en tl yall o w [] r ecove r i es bas ed on the g ross o v erc h arg e ins tead o f lo st pro fit s. ” (f o o tno te om itted)).
L o st pro f

its d am ag es a re d isfav o red , at l ea st i n p art beca us e theyar e more difficul tt o pr ove than over char ge27 d a m a g e s . See A B A S e c tio n o f A n titr u s t L a w , supra , at 171 ( “ Th e o v e r c h a r g e me a s u r e h a s t h e v i r tu e s o f c o n c e p t ual sim p licity

. . . a n d re lativ e e a se o f c a lcu latio n .”); R o g e r D . B lair & W illia m H . P a g e , “ S

p ec u lati ve ” A n ti trust D am ages , 70 W as h. L

. R ev . 4 2 3 , 4 3 3 -34 (19 9 5 ) (“O v erc h arg e da m ag es . . . w ere r ecogni zed byt he Supr eme C our t[i n C ha t t an oo ga Fou nd ry ] p rim a ri l y becau se of the di ffi culty of provi ng l ost profi t s in pr i ce- fix ing cas es . R athert han r equi r e the compl ex nett i ng a s s o c i a t e d w i t h l o s tp r o f i t s , a n d t h u s p r a c t i c a l l y d e n y r e c o v e r y, t he C our tperm i t t ed pl ai nt i ffs t o pr ove damages b ys how i ng a pr i ce enhanc ement
. ”) ; H arr i s on, supra , at756 ( “The advant age t o p l ai nti ffs of u si ng a gross ov ercharge m easure i s that i t i s l ess sp ec u lat ive a n d there fo re e asier to p rov e tha n lost pro fit s. ”).
F urtherm ore, ov erch a rge d am ages, un l i ke lostprofi t s, m a yin d u c e a n titru st p lain tiff s to m a k e a rg u m e n ts th a t w ill p ro te c t ra th e r th a n in

ju re c o n s u m e rs . See Fr ank H

. E as t erbr ook, T re b le W h a t? , 55 A nt i t rus tL

. J

. 95, 96- 97, 100- 01 ( 1986)

. J udge E ast erbr oo k argue s that the o vercharge t o co nsum ers , no tl ost pr ofi t s , “s houl d be the basi s of al l [ant i t rus t ] damages

. ” Id

. at 101. H e r eas ons t hat [ t ] h e l u r e o f

d a ma g e s f

o rl o s tp r o f

i t s i n d u c e s f

i r ms t o m ake arg u m ent s t hatw i l l i nj ur e r athert han pr ot ect cons um er s . Pr ofi t s get l os t pr i m ar i l yfr om har d compet i t i on orfr om t he el i m i nat i on of m o n o p o ly

. . . . T h e m o re c o m p e tit iv e th e m a rk e t, the m o re p rof

it s are ‘l o st. ’ .

. . [B ec au se] i t i s h ard28 t o t e l l c o mp e t i t i o n a p a r tf r o m e x c l u s i o n , [ ] we m us tbe w aryof r emedi es t hatgi ve the vi ct i m s of har d compet i t i on a s t r ong i ncent i ve t o s ue. I d. a t 1 0 0 -0 1

. B ut m os t i m po rt antl y , P l ai nti ffs m ayno trecover l ost pr ofi ts d amages beca us e theyar e i ndi r ectpur chas er s . T he D istri ct C o u rt co n clud ed that “[ t] h e i n term ed iat e de n tal d ea lers s uffe rt he di r ect harm fr om anyl os toppor tuni t yt o s el l a gr eat er vol um e of D ent s pl y pr oduct s ort o s el l compet i t i ve pr oductl i nes and pr ofi tt her efr om . A nyhar m s uffe r ed bypl ai nt i ffs r emai ns i n d i r e c t
. ” D i s t C t
. Me m . O p . a t 2 4 n . 9 ( D e c . 1 9 , 2 0 0 1 )

. We agr ee. E ven com m ent at or s w ho advoca t ef or i ndi r ectpur chas er sta n d in g a n d a lo st p ro f its m e a su re o f

d a m a g e s a d m it th a t th e ir p o s i t i o n i s c u r r e n t l y p r e c l u d e d b y S u p r e me Co u r tc a s e l a w. As Pr ofes s or H arr i s on conce des i n hi s ar t i cl e ar gui ng forindi r ect pur chas ers t andi ng and a l os t pr ofi t s m eas ur e of da m ages , “[t ] he I l l i nois B r i ck deci s i on s eems a bs ol ut el yt o for ecl os e the pos s i bi l i t yof i ndi r ect
- pur chas er s t andi ng i n pr i ce e nhance m ent su its,” e v e n if

th e in d ire c t p u rc h a se r p lain tiff s s e e k lo st p ro f

its a s o p p o s e d to o v e rc h a rg e d a m a g e s . See H arr i s on, supra , at777; s ee al s o I l l i nois B r i ck , 431 U

. S. at746 ( “[I ] n el ev at i ng di r ect pu rchaser s t o a p referred posi t i on as pri vate at t orney s general, [ourcas e l aw ] deni es r ecove r yt o t hos e i ndi r ect pur chas er s w ho m ayh av e b ee n ac tuallyinjured b yan ti tru st violati o n s. ”).29 H a rriso n a lso a c k n o w led g e s th a t the l egal pr ece dent s and pol i cyar gum ent s r el i ed on byt he [ H

anoverShoe ] C ou rt in r ej ect i ng t he pas s - on defe n se do not s uppor teven the th e o re tica l ap p ro p ria ten e ss o f th e lo st p ro f

its m eas ur e. I n addi t i on, t he C our thi nt ed thati tw as actual l yr ej ect i ng t he ver ynot i on t hatdamages s houl d be app o r t i oned among var i ous l ay er s of buy er s and s el l er s . . . . [T]o the exten t tha tt he appor t i onm entpr oces s h as been r ej ect ed byt he C ou r t , i twou l d b e i n a p p r o p r i a t e t o i n f e rt h a tt he lo st p ro f its m e a su re h a s re c e iv e d e v e n im p licit a p p ro v a l.
I d. at764- 65 ( footnot es om i t t ed) ( ci t i ng H anoverShoe , 39 2 U. S. at 489- 90 & n. 8, 494, 498)

. Si m i l ar l y , w hi l e Pr ofes s or s A r eeda , H o v e n k a m p a n d B lair a rg u e th a t “th e c o rre c t so lu tio n is to p e rm it d a m a g e s a c tio n s b a se d o n lo s t p r o f its to a ll i nt er m edi ar i es , ” theyconce de that t hei rpos i t i on “i s atvar i ance w ith th e c a s e la w .” A re e d a , supra , ¶ 3 4 6 a , a t3 5 9

- 6 0

. F i n a l l y, th e A B A ’s A n titru st S e c tio n re c o g n ize s th a t “if a c a rte l se lls to a n in ter m e d iate p u rc h a se r w h o re s e lls to a n o th e r, b o th p u rc h a s e rs a re lik e ly to lo s e p ro f its a s a re s u lt o f

th e p ri c e f

ix ,” butconce des t hat“[u] ndert he I l l i nois B r i ck rule, the s econd in ter m e d iate p u rc h a se r, o r th e in d ire c t p u rc h a se r f ro m th e c a rte l, c a n n o t r e c o v e r d a m a g e s . ” A B A S e c t i o n o f A n t i t ru s tL a w, supra , at183- 84.30 If w e w e re to h o ld th a t in d ire c t p u rc h a se r p lain tiff s c o u ld r ecove rl os tpr ofi t s fro m t hei rdecr eas ed vol um e of pur chas es and r es al es , w e w oul d be i m pl y i ng t hat(1) p ast i ndi r ect pur chas erpl ai nt i ffs w ho have be en d en i ed s t andi ng bas ed on I l l i nois B r i ck c o u ld h a v e re c o v e re d if o n lyth e yh a d f

ra m e d th e ir cl ai m as one f

or l ostprofi t s r at her than for ov ercharge dam ages, and ( 2) t hatt he I

l l i nois B r i ck C o u rt— w h ich w a s c o n c e rn e d w ith s i m pl i fy i ng and contr ol l i ng t he cos t s of a n ti t rus tl i t i gat i on and w i t h cons ervi ng j udi ci al r esou rce s

— r eal l ym eantt hati ndi r ect pur chas er s do have s t andi ng t o s ue, but for l os t p rof it s rather t han overch arge damages

. W e fi nd bot h of thes e pr opos i t i ons unt enabl e. For al l of thes e re asons , w e hol d t hatPl ai nt i ffs do not have st atut or ys t andi ng t o r ecove rl os tpr ofi t s damages caus ed b ytheir l o st op p o rtu n it ies t o p u rc h a s e a n d rese ll D en tsply ’s c o m p e tito rs ’ p ro d u c ts
.

b. M ay P l ai nt i f

f s rec over dam ages caus ed by t he al l e ge d r e t ai l p ri c e - f i xi ng c ons pi r ac y i n Jers ey D ental und er a c ocons pi rat or except i on t o I l linois B r i ck ?
I n Jer s ey D ental , P lain tiff

s c laim th a t th e yc o m e w ith in t he “co- cons pi r at orexce pt i on” t o I l l i n o is B r i ck

b e c a u se th e ir pur chas es fr om D ent s pl y ’ s deal er s w er e made fr om m ember s of a r et ai l pr i ce- fi xi ng cons pi r acy . O the rci r cui tcour t s have adopt ed a c o- cons pi r at orexce pt i on t o I l l i nois B r i ck t hatappl i es31 in re ta il p ri c e -f

ix in g c a s e s . See Ari

z ona v. Sham r ock Foods Co. , 7 2 9 F

. 2 d 1 2 0 8 , 1 2 1 1 -12 (9th C ir

. 1 9 8 4 ) (ho lding that p u rch ase rs fro m d o w n -st rea m co n sp ir ators m aysu e u p -strea m co n sp ir ators fordamages and no ti n g t hat“[n] um er ous ot hercour t s have found I l l i nois B r i ck inap p li ca b le t o claim s ag ains t r em o te sell ers w h e n th e p lain ti f

f s a lleg e th a t th e se llers c o n sp ire d w ith i nt er m edi at es i n t he di s t r i but i on chai n t o fi x t he pr i ce a tw hi ch the p la in tif

fs p u rch ase d ”); P aperSys

. I nc. v. Ni ppon P aper I ndus

. C o. , 281 F. 3d 629, 631- 32 ( 7t h C i r . 2002) ( E as t erbr ook, J.) (h o ld in g th a t I

l l i nois B r i ck does notbars ui t s fordamages by plai n ti ffs agai ns tan i ni t i al s el l erw hen i ti s al l eged t o have cons pi r ed i n vi ol at i on of th e ant i t rus tl aw s w i t h t he s el l er d ire c tlyu p stre a m f

ro m p lain tiff

s); P r es cr i

pt i on D r ugs , 123 F. 3d a t 6 0 4 (sa m e ); see al

so Fo n ta n a A v ia tio n , In c . v. C e ss n a A irc ra ft C o. , 617 F. 2d 478, 481 ( 7t h C i r . 1980) ( appr ovi ng co- conpi r at or e x c e p tio n in d icta ).
O urC our thas not ex p l i ci t l yadopt ed a c o- cons pi r at or exce pt i on t o I

l l i nois B r i ck

. In McC ar thy , w e nei t heradopt ed norr ej ect ed the exc ept i on beca us e i tw as i nappl i cable to t he cas e, but w e di d expl ai n i t s “natur e”: “I n or der t o fal l w i t hi n t he exce pt i on, pl ai nt i ffs here w o ul d have t o al l ege thatt he i n t e r me d i a r i e s i mme d i a t e l yu p s t r e a m . . . col l uded w i t h t he defe ndant s t o overchar ge pl ai nt i ffs

. . . . M or eover , pl ai nt i ffs w o u ld b e o b lig e d to jo in th e [ in te rm e d ia ri e s ] a s d e f e n d a n ts
. . .

. ” 80 F. 3d at855 ( emphasi s om i t t ed)

. I n ourcas e, Pl ai nt i ffs al l ege thatt heym ade pur chas es fr om D ent s pl y ’ s deal er s ( t he i nt er m edi ar i es i m m ed ia t el yups t r eam fr om Pl ai nt i ffs ) and thatP lai n tiff s m a yn o t re c o v e r f

ro m D e n tsp lyf

o r te e th 8 pur chas ed fr om t he tw o non- j oi ned dea l er s undera coc o n s p i r a t o r e x c e p t i o n t o Il l i nois B r i ck b e c a u se , as p re v io u sly m ent i oned, ourC our thas expr es s l yr efus ed t o adopta cocons pi r at orexce pt i on w h en the a ll eg ed co -co n sp ir ators i m m edi at el yups t r eam have notbeen j oi ned. 32 D e n tsp lya n d its d e a ler s a re c o -c o n sp ira to rs. In a d d iti o n , in Jer s ey D ental Pl ai nt i ffs s ued not onl yD ent s pl y , butal s o j oi ned as defe ndant s t w enty - s i x of D ent s pl y ’ s the n t w enty - ei ght au tho ri z e d d ea lers. T h u s, u n d er McC ar thy , Pl ai nt i ffs 8 p o te n tia lly q u a lif

yf o r t h e c o -c o n s p ir a to r e x c e p tio n . F u rth e rm o re , P ro f

e ss o rs A re e d a , H o v e n k a m p , an d B lair appr ove of the co- cons pi r at orexce pt i on. T heyexpl ai n t hat
I l l i nois B r i ck d o es n o t lim itsu it s b yco n su m ers agai ns ta manufactur erw h o i l l egal l ycontr act ed w ith its d e a le rs to s e t th e la tte r’ s re s a le p ri c e . . . . T her e i s no pr obl em of dupl i cat i on or a p p o rtio n m e n t, b e c a u se th e c o n su m e r is th e o n ly p artyw h o h as p aid an y o v erc h arg e. . . . T h e c o u rt s i m pl ycomput es t he re t ai l pr i ce thatw oul d have pr evai l ed ab sen tt he i l l egal contr actfi xi ng t he p ric e . F u rth e r e m p h a s iz in g th a t I l l i nois B r i ck d o e s n o t ap p lyis th a t a d e a ler c h a llen g in g re sa le pr i ce mai nt enanc e i m pos ed upon i t s el f w oul d not b a se i t s dam ages on an “ov ercharge” at al l

. Its“R es al e pr i ce m ai nt enanc e”— t he t erm us ed byA r eeda , 9 e t a l.

— i s s i m pl y another w ay of des cr i bi ng t he ver t i cal p ri ce fix ing in w h ic h P lai n ti ff s all eg e D en tsplyan d it s d ea lers engage d. I n r es al e pr i ce m ai nt enanc e, t he i ni t i al s el l erdi ct at es t he dea l er s ’ r es al e pr i ce. 33 a c tio n is n o t b a se d o n a h ig h e r p ro d u c t p ric e to itse lf , b u t ra th e r on th e c o n stra in t o n its re sa le p ric e ; its d a m a g e s w o u ld b e f o r lo st p ro f

its r e s u l t i n g f

r o m th e r e d u c e d v o l u me o f s a l e s . As t hat c a s e i l l u s t r a t e s , l o s tp r o f i t s d a ma g e s f

o rt he i nt er m edi aryand over char ge damages fort he co n su m er a re n o t in an y w ayd u p li ca ti v e; th eyare bot h l os s es caus ed byt he unl aw ful r es al e pr i ce m ai nt enanc e. A re e d a , supra , ¶ 346h, at369- 70.
I n fac t , a r ece nts uppl ementt o t hei rt r eat i s e ana l y zed Jer s ey D ental a n d c o n c lu d e d th a t th e D istric t C o u rt “ in c o rre c tly r efus [ed] t o appl y a co- cons pi r at or exce pt i on t o I l l i nois B r i ck

. . . .” A re e d a , supra , ¶ 346a, at 88 n. 1 ( 2003 Supp. )

. I tr eas oned t h a t , t o t h e e x t e n tt h a tDen t s p l yi mpo s e d r e s a l e p r i ce m a i n t e n a n c e o n i t s d e a l e r s , t h e y

9

m i ghthave thei row n damage act i on agai ns tt he sup p lier, buti f so, i tw ou l d b e an ac t i on for l ost p rof it s, n o t fo r an o v erc h arg e; th e d ea ler’s i n juryI n fac t , A r eeda i m pl i es t hat even t he al l eged e xcl us i ve- 10 deal ing co ul d nothave c aus ed the dea l er s t o be over char ged. A re e d a , supra , ¶ 3 4 6 a , at 8 8 n .1 (2 0 0 3 S u p p .). T h is a p p e a rs to be i ncorr ect , fori f the exc l us i ve- deal i ng l ed t o excl us i on of D e n tsp ly ’s c o m p e tit o rs, D e n tsp lym a y h a v e b e e n a b le to o v e rc h a rg e its d e a le rs . W e a re , o f c o u r s e , n o t sa y in g th a t th e d e a ler s c o u ld 11 pr evai l on anypar t i cul arcl ai m . R ather , w e mer el y poi nt outt hat i f the dea l er s pr oved thatD ent s pl yi m pos ed r es al e pri ce m ai nt enanc e on them, t hei rm eas ur e of da m ages w oul d be bas ed on t he l os tpr ofi t s fr om t hei r decr eas ed vol um e of pur chas es and 34 w ou l d accrue from th e p rofi t s l ostby

. . . l ost outputr es ul t i ng fr om bei ng r equi r ed t o s el l att he m a in tain e d p ric e ; as a re su lt, th e re w a s n o th in g to p a s s o n . . . . I d. 10
N o t o n lya re o v e rc h a rg e p a ss -o n c a lc u la ti o n s n o t a conce r n, t he othert w o I

l l i nois B r i ck po l i cyj ust i fi cat i on s ar e al so in a p p lica b le to P lain tiff s’ p ric e -f ix in g c o n sp ira c yc laim . F irst, t her e i s no r i s k of dupl i cat i ve l i abi l i t y or pot ent i al l yi ncons i s t ent j udgm ent s beca us e Pl ai nt i ffs and D ent s pl y ’ s deal er s w oul d not b e su in g f

o r th e s a m e in

ju ry . T o th e e x ten t th a t D e n tsp ly i mpos e d r e s a l e pr i c e mai nt e na nc e on t he de a l e r s , t he de a l e rs ’ cl ai m agai ns tD ent s pl yw oul d b e fo r l os tpr ofi t s , notforan o v e rc h a r g e . L o st p ro f its w o u ld b e c a u se d b ylo st o u tp u t, 11r es al es . T hi s l os tp rof it s har m i s di ffe r entfr om , and thus not dupl i cat i ve of, the o ver char ge harm t hatanyr es al e pr i ce m ai ntenance w ou l d h ave ca used P l ai nti ffs. 35 w h ich in tur n i s caus ed byr es al e pr i ce mai nt enanc e. A r eeda , supra , ¶ 346a, at88 n. 1 ( 2003 Su p p. )

. Second, perm i t t i ng Pl ai nt i ffs t o s ue w oul d notcaus e i neff i ci entenfor cementof the ant i t rus tl aw s by d il u ti ng t he ul t i m at e r ecove r yand thus d e c re a sin g d ire c t p u rc h a se r s ’ in c e n tiv e to su e . D e a ler s w o u ld still re c o v e r th e sa m e a m o u n t o n th e ir h yp o th e tica l lo st p ro f its cl ai m even i f Pl ai nt i ffs r ecove r ed on t hei rs epar at e pr i ce- fi xi ng c l a i m. Fi nal l y , w e have found n o p r ece denthol di ng t hat plai n ti ffs , w ho pur chas e fr om deal er s w ho ar e partof a pr i cefi xi ng cons pi r acy w i t h t he i ni t i al s el l er , m ayn o t r ecove r d am ag es f

rom the in it ial sell er. I n t hi s cont ext , w e hol d that Pl ai nt i ffs i n Jer s ey D ental h a v e sta tu to rysta n d in g to re c o v e r d a m a g e s f ro m D e n tsp lyf

o r its al l eged pri ce-fi xing con spi racyw i t h it s deal ers .

c. M ay P l ai nt i f

f s rec over dam ages caus ed by t he a l l e g e d e xc l u s i v e - de al i ng c ons pi r ac y i n Jers ey D ental und er a c ocons pi rat or except i on t o I l linois B r i ck ?
I n Jerse y D ental , P l a i n t i f

f s a l s o c l a i m th a tt h e yc o meW e r ecogni ze thatone m ightas k w hyw oul d i tnot 12 al w ay s be unprof

i t abl e for a di r ectpur chas ert o j oi n s uch a nonR PM co n sp ir acyand ef fec t i vel yagr ee t o be over char ged ( as i nputcos t s i ncr eas e, pr o fi t s decr eas e)

. Fur t her , i f ec onom i cs pr edi ct s t hats uch over char ge cons pi r aci es w i l l neverar i s e, 

### why c o n s i d e r a d o p t i n g ane x c e p t i o nf

o r th e m? As a n i n i t i a l ma t t e r , b e c a u s e J e rs e y D e n ta l i s att he Feder al R ul e of C i vi l Pr ocedur e 12( b) ( 6) s t age, w e mustt ake a s t rue Pl ai nt i ffs ’ al l egat i ons t hatD ent s pl yand i t s deal er s have cons pi r ed t o fi x, and have f i xed, t he pr i ces t hatdeal er s char ge Pl ai nt i ffs and that there w as an exc l us i ve- deal i ng cons pi r acy b etw ee n D en tsplyan d it s d ea lers t o ex clud e D en tsply ’s c o mp e t i t o r s . We ma yn o td i s mi s s P l a i n t i f f s ’ c l a i ms b e c a u s e we d eterm ine th e a ll eg ed fa cts l ikelyd id n o t occ u r. I n fac t , how ever , w e ca n i m agi ne how t he exc l us i ved e a l in g c o n s p ir a c y , i n com bi nat i on w i th the RPM cons pi r acy , c o u ld h a v e b e e n p ro f

ita b le to th e d e a le rs . 

### A s p rev io u sly m e nt i one d, i t

woul d pr e s um abl y

not have be e n pr ofi t ab l ef

or the deal er s to h ave joi n ed a conspira cy in wh ic h they

were ove r c harge d ( the e xc lus i ve - de a l i ng c ons pi r a c y)

. Howe ve r , the 36 w i t hi n t he “co- cons pi r at orexce pt i on” t o I l l i nois B r i ck

becau se t h e i rp u r c h a s e s f

r o m D e n t s p l y ’ s d e a l e r s wer e ma d e f r om m e m bers of an ex cl usi ve-deali ng con spi racy . T hu s, w e m ust deci de w het h er t her e i s

— i n addi t i on t o a co- cons pi r at or e x c e p t i o n f

o rR P M ( r e s a l e p r i c e m a in te n e n c e , i

. e. , ver t i cal pr i cefi xi ng ) c on s pi r a c i e s

— a c o- c on s pi r a t or e xc e pt i on fo rno n- RPM co n spi r aci es , s uch as excl us i ve- deal i ng orpr i ce- fi xi ng att he m an u fa cture r l ev e l (“the g en era l co-c o n sp ir ator e x ce p ti o n ”). 12

### deal er s might have jo ined such a conspira cy if they were co m p en satedinso m e f

a s h io n . P laintif

f s arg u e th at D entsp ly co n sp iredto f

ixth e p rices th at its d ea l e r s ch arg e. T h is is ef fectively a hor i zontal pri c e fi xi ngc on s pi r a c y

at thedeal er le vel (wh ic h cou ld pres um ably be prof it ableto the dea le rs ) t

hat i s pol i c e d by

De nt s pl y . Thus , the RPM c ons pi r a c y c oul d be the m ech an ism

b y wh ichD entsp ly

co mp e n s ates its d ealers in exchange for the deal er s’ agre emen t (1) n o t to d e a l w ith D ent s pl y ’ s compet i t or s and ( 2) t hus 

### t o be overch arg e d by D e nt s p l y. I n addi t i on, i n P r es cr i

pt i on D r ugs J udge Pos nerr ej ect ed a si m i l ar ar gu m ent th a t it w ou l d n ot have m ade sen se economi cal l yfort he w hol es al er s i n t hatcas e t o h ave j oi ned w hatw as ar guabl ya hor i zont al pr i ce- fi xi ng co n s pi r acyatt he m anufa ctur erl evel

. 123 F. 3d at 614. H e expl ai ned t hat“[t ] he t heo ryi s tha t th e w ho l esal ers w ere the m anu fact urer s’ cat spaw s . T her e i s not hi ng new aboutt he i dea that a cart el m i ght

‘ hi r e’ a cus t om er t o hel p pol i ce the ca r t el

. ” Id

. H e al s o i m pl i ed t hat , beca us e drug w hol es al er s appea red to be “an e ndanger ed comm er ci al s peci es ” and the manufactur er s coul d have c utt hem ou tal t og et her a nd sol d dir ect l yt o b uy i ng group s for pharm aci es, it w a s in th e w h o le s a le rs ’ se lf -i n te re s t to jo in th e c o n s p ir a c y . I d. F in a lly, 

### “s umm ar

y ju dg m ent fo r a defend ant is p ro per, ev enif th ere is so m e ev id en ce o f anantitru st v io latio n , if p laintif f’s th eo ry

o f v io latio nm ak es n o eco n o mi c sen se.” Pres c r i pti on Drugs , 123 F. 3d at

614 ( c i t i ng M

a tsu sh ita E lectric I ndus tr i al Co. v . Ze ni t

h Radi o Cor

p. , 475 U.S. 57 4, 58 7 (19 86 ); Ea st ma n K od ak Co

. v. Image Technical Serv ic es, I nc. , 504 U. S. 37

### 4 5 1 , 4 6 7 -6 9 (1 9 9 2 )). T h u s , th e re is a lre a d ya m e c h a n ism in p l a c e f o rc o u r t s t o d i s mi s s b e f o r e t r i a l c l a i ms o f

a c ons pi r acy t hatw oul d m ake no e conomi c s ens e. 38 W e h o ld th a t su c h a n e x c e p tio n w o u ld o n lye x ist in ci r cumst ance s w her e the mi ddl emen w oul d be barr ed fr om br i ngi ng a cl ai m agai ns tt hei rfor m erco-c ons pi r at or

— t he m anufa ctur er

— beca us e thei ri nvol vement i n t h e c o n s p i r acyw as
“ t ru l yc o mpl e t e” ( i

. e. , i f the mi ddl emen w oul d be barr ed fr om s ui ng byt he “c om pl et e i nvol vement defens e” of a m a n u f a c tu re r)

. S e e P e rm a L ife Mu ffl e rs , In c . v . I

n t’l P a rts C or p. , 3 9 2 U .S . 1 3 4 , 1 4 0 (1 9 6 8 ) ( e x p re s s ly “ n o t d e c id [ in g ]

. . . w hether

. . . t rul ycompl et e i nvol vem entand part i ci pat i on i n a m onopol i s t i c s cheme coul d everbe a ba s i s . . . fo r b arr i ng a p lai n ti ff ’s ca u se o f a cti o n ”).

1. W hy w e ado pt a “ l i m i t e d” ge ne r al c o- c ons pi r a t o r e xc e p t i o n. I f t h e r e i s a g e n e r a l c o - c o n s p i r a t o r e x c e p t i o n , wh y d o we li m it it ? T o b eg in, w e e x am ine w h ethe r Il l i no is B ri ck’s pol i cy j us t i fi cat i ons su g g estw e s houl d adopt( 1) a gene r al cocons pi r at orexce pt i on t hatw oul d per m i tindi r ectpur chas er stan d ing w h en the m idd lem en co n sp ir ed w ith the m an u fa cture rs e v e n if th e m id d le m e n w e re n o t b a rre d b yth e c o m p lete i nvol vement def

e n s e f r o m s u i n g t h e i r f o r me r cocons pi r at or— the m anufa ctur er( t he “unl i m i t ed exc ept i on”) , or ( 2) an exce pt i on t hatw oul d perm i ti ndi r ectpur chas ers t andi ngT h e S e v e n th C irc u it i s th e o n lyC o u rt o f A p p e a ls to 13 engage head- on t he gener al co- cons pi r at or exce pt i on, and i thas a d o p te d it. See P a

p e rS y s t e ms , 281 F. 3d at631- 32 ( 

### “ The r i ght t o s u e mi d d l e me n t h a tj o i n e d t h e c o n s p i r a c yi s s o me t i m es r efe r r ed t o as a co- cons pi r at or ‘ exce pt i on’ t o I l l i nois B r i ck , but it w o u ld b e b e tter to re c o g n ize th a t H anoverShoe and Illino is B r i ck al l ocat e t o t he fi rst non- cons pi r at ori n t he di s t r i but i on c h a i n t h e r i g h tt o c o l l e c t 1 0 0 % o f t h e d a m a g e s . ” ); Prescription Drugs ,1 23 F .3 d at 60 4; Fontana Aviation , 617 F.2d at 481. H owever, we do not dis ce rn an explanation by the Court why

it did so or an expli cit delineation of theexception ’s s cope ( i.e. , whe ther i t is unlimit ed or limited). 39 onl yi f the mi ddl emen w er e barr ed byt he compl et e i nvol vement d ef en se f rom su ing the manufactur er (the “ li m it ed ex ce p ti o n ”). 13
Il l i no is B ri ck’s fi r s tpol i cyconcern— t he r i s k of dupl i cat i ve l i abi l i t y

— cut s agai ns tt he unl i m i t ed exc ept i on, but i n favorof the l i m i t ed except i on. For exampl e, i m agi ne the deal er s had al r eadys ued and r ecove r ed over charg es fr om D ent s pl yfort he excl us i ve- deal i ng cons pi r acy . I f ther e w as an unl i m i t ed exc ept i on, pr es um ab l ynot hi ng w oul d s t op t he l abs fr om t hen s ui ng D ent s pl yt o r ecove rt he dupl i cati v e p o r t i on of t he over ch ar ge thatt he dea l er s had pas s ed on t o t hem. E ven undert he condi ti o n s o f thi s cas e ( w i t h t he l abs s ui ng fi r s tand t he dea l er s j oi ned) , dupl i cat i ve r ecove r y i s a pos s i bi l i t y . I f the l abs pr ove D ent s pl yengage d i n an exc l us i ve- deal i ng cons pi r acy w i t h t he deal er s , t he deal er s coul d pot ent i al l ys ue D ent s pl yfor d u p lic a tiv e d a m a g e s th e c o n s p ir a c yc a u s e d th e m . See Li nk , 788B ecaus e Sect i on 4 of the C l ayt on A ctpr ovi des for 14 d a m a g e s o f

tre b le th e a m o u n t a p lain tiff is in ju re d , p re su m a b ly i ndi r ectpur chas erpl ai nt i ffs w oul d onl ybe perm i t t ed t o r ecove r t r ebl e the amount of the manufactur er ’ s overch arge t hatt he 40 F .2 d a t 9 3 2 n .1 2 (a n a ly z in g a n a lleg e d c o n sp ira c ya n a lo g o u s to ourcas e and not i ng that, even i f the dea l er s w er e j oi ned and w er e co- cons pi r at or s , t heycoul d s t i l l pot ent i al l ys ue the m anufa ctur erforover char ges caus ed byt he ex cl us i ve- deal i ng cons pi r acy )

. H ow ever , undert he l i m i t ed exc ept i on, t he r i s k of d u p lica tiv e liab ili tyis a llev iate d b e c a u se th a t ex c e p tio n is o n ly a p p lic a b le if

th e m id d le m e n a re b a rr e d f ro m re c o v e ry. Il l i no is B ri ck’s s econd pol i cyconce r n— avoi di ng t he need t o as cert ai n t he por t i on of an ove r char ge thatw as pas s ed on— cut s agai ns t bot h exce pt i ons . U nl i ke vert i cal cons pi r aci es in v o lv in g R P M , o th e r v e rtica l co n sp ira c ies a re d e sig n e d to di s t or tt he w hol es al e m arket for a par t i cul ar good. For exampl e, as s um e thatD ent s pl yand i t s deal er s on ly engage d i n an excl us i ve- deal i ng cons pi r acy . T h e ef fec tof thatcons pi r acy w oul d be t o denyD ent s pl y ’ s compet i t or s acc es s t o i t s author i zed dealer s. T he absenc e of com peti t i on for t hese de al ers ’ busi ness w oul d al l ow D ent s pl y t o char ge i t s deal er s a s upr a- compet i t i ve pr i ce a tw hol es al e. T hi s over char ge w oul d t hen be pa s s ed on ( at l easti n p art ) t o the de a ler s’ c ust om ers , t he d ental l abo rat ori es. T h e d a m a g e s tha t th e lab o ra to rie s c o u ld re c o v e r f ro m D e n tsp ly w oul d t hus be the tr ebl e port i on of the over char ge thatt he d e a ler s p a ss e d o n to th e m . T h u s b o th e x c e p tio n s, w h ich a p p ly 14d ire c t p u rc h a s e rs p a ss e d o n to th e m a n d w o u ld n o t b e a b le to r ecove rt he por t i on of the manuf actur er ’ s over char ge thatt he d ir ec t pu rch ase rs ab so rbe d b ec au se th e ind ir ec t pu rch ase rs w o u ld n o t h a v e b e e n in ju re d b y t h a t p o rt io n . See 1 5 U. S

. C. § 15( a) ( Sect i on 4 of t he C l ayt on A ctpr ovi des t hat“anyper s on w ho s h a l l b e i n

j u r e d i n h i s b u s i n e s s o r p r o p e r t y b y r e a s on of any t hi n g f

o rb i d d e n i n t h e a n t i t ru s tl a ws . . . s h a l l r e c o v er t hreefold t he d am ages by hi m s us t ai ned

. ”) (em p h asis ad d ed ). B uts ee P a

p e rS y s t e ms , 281 F. 3d at631- 32 ( “The r i ghtt o s ue m id d lem e n th a t jo in e d th e c o n sp ira c yis s o m e tim e s re f e rre d to as a co- cons pi r at or“exc ept i on” t o I l l i nois B r i ck , buti tw oul d be b e tter to re c o g n ize th a t H anoverShoe and I

l l i nois B r i ck

a llo c a te to th e f irst n o n -c o n sp ira to r in th e d istrib u tio n c h a in th e rig h t to c o llec t 100% of

the dam ages .”) ( e m p h a sis a d d e d ); cf

. H anover Shoe , 3 9 2 U .S . at 4 9 4 (h o ld in g th a t an a n titru st d e f e n d a n t co u ld n o t ar g u e th a t a p lain tiff w h o h a d p u rc h a se d a p ro d u c t d ire c tly fr om t he defenda ntw as noti nj ur ed bec aus e i thad pas s ed on the i l l e g a l o v e r c h a r g e t o i t s o wn c u s t o me r s , t h u s c r e a t i n g a r e g i me underw hi ch pl ai nt i ffs can a r guabl yr ecover m ore t han “thr eef ol d t he damages byhi m s us t ai ned”)

. O f cour s e, i f under t he l i m i t ed exc ept i on ( w her e di r ect pur chas er s ar e barr ed fr om r e c o v e r i n g ) i ndi r ectpur chas erpl ai nt i ffs w er e al l ow ed t o r ecove r t he ent i r e over char ge thatt he manufactur ers im pos ed on the di r ectpur chas er s ( even though t he di r ectpu rch aser s abs orbed s om e of thatover char ge and di d notpas s on t hatabs orbed por t i on t o t he i ndi r ectpur chas ers) , t hen the por t i on of the over char ge t hat w as pas s ed on fr om t he di r ectpur chas er s t o t he i ndi r ectpur chas er s w oul d notneed t o be as cert ai ned and Illino is B ri ck’s se c o n d p o licyju stif ica tio n w o u ld c u t in fa v o r o f t he 41l i m i t ed exc ept i on. T e c h n ica llysp e a k in g , the re w o u ld b e n o n e e d to 15 “a p p o rt ion ” d am ag es b etw ee n d ir ec t and ind ir ec t pu rch ase rs under t he l i m i t ed exce pt i on. T hi s i s beca us e, as w e h ave expl ai ned, t he l i m i t ed ex cept i on w oul d onl yperm i ti ndi r ect pur chas ers t andi ng i n ci r cumst ance s w her e t he di r ectpur chas er w o u ld b e b arred fro m b ri n g in g su itag ains t th e m an u fa cture r. A s s u c h , the re w o u ld b e n o n e e d to a p p o rtio n a n yd a m a g e s to t he di r ectpur chas i ng m i ddl eman. N everthel ess, ev en u n d er the li m it ed ex ce p t i on, the fi nder of fa ctw oul d b e req ui r ed t o as cert ai n t he amountof the over char ge thathad bee n pas s ed on b y t he mi ddl eman. A ft er al l , an ant i t rus tpl ai nt i ff ( w hetherhe be a d ir ectoran i ndi r ect pu rchaser ) i s on l y enti t l ed t o r ecov er “t hreefold t he d am ages by hi m s us t ai ned

. ” 1 5 U

. S

. C

. § 1 5 (a) (em p h asis ad d ed ). T her efor e, t o t he ext ent t hat t he m i ddl eman r et ai ned ( i

. e. di d not pas s on t o t he i ndi r ectpur chas er ) a por t i on of anyover char ge i m pos ed upon him , the damages actual l ys us t ai ned byt he in d ire c t p u rc h a se r w o u ld b e re d u c e d b yth a t am o u n t. 42 to c o n sp ira c ies th a t atta c k th e w h o les a le m a rk e t, po ten tially cr eat e the pr obl ems of apport i onm entt hatunderl ie Illino is B r i ck

.

15
Il l i no is B ri ck’s t hi r d pol i cyconce r n— r i s k of i neff i ci ent en fo rce m en t of

the a n ti tru st l aw s b ec au se th e u lt im ate rec o v ery for t he d eal ers w ou l d b e dil uted, t hereby decreasi ng t he d eal ers ’ in c e n tiv e to su e

— c u ts a g a in st th e u n lim ited e x c e p tio n , b u t in43 favorof the l i m i t ed exc ept i on. U ndert he unl i m i t ed exc ept i on, w h en m idd lem en w ere n o t co m p let ely inv o lved , their reco v ery w o uld be dil uted and t heiri ncen t i ve to sue w ou l d d ecrease (a ss u m in g th a t, rath e r th a n th e m id d lem e n b e in g p e rm itt e d to r ecove r t he ent i r e over char ge, i t w as appor t i oned among the m i ddl emen and t he i ndi r ectpur chas er s )

. H ow ever , undert he lim ited e x c e p tio n , w h e n m id d lem e n w e re n o t co m p lete ly i nvol ved, t hei rr ecove r yw oul d notbe di l ut ed and thei ri ncent i ve t o s ue w oul d not decr eas e. A s t he i ndi r ectpur chas er s w oul d not h a v e sta n d in g in th is in sta n c e , n o re c o v e ryb yth e m c o u ld d ilu te th e m id d le m e n ’s re c o v e ry. T h u s , al l t hr ee of

t he I l l i nois B r i ck pol i cyj us t i fi cat i ons argue ag ai nstado pti ng t he u nli m i t ed ex cepti o n , w hil e t he fir st and the thi r d favor adopt i ng t he l i m i t ed except i on and onl yt he s econd ( t he des i r e t o avoi d asc ert ai ni ng t he por t i on of an o v e rc h a rg e th a t w a s p a ss e d o n ) c u ts a g a in st it. F u rth e r, w h ile it is tru e th a t ad o p tin g th e lim ited e x c e p ti o n c re a tes th e n e e d to a s c e r t a i n t h e p o r t i o n o f a n o v e r c h a r g e t h a twa s p a s s e d o n , we t hi nk t he al t ernat i ve, adopt i ng no gener al co-c ons pi r at or e x c e p tio n , is le s s d e s ir a b le

. 

### C f. In re L o w er L a ke Erie Iro n O re Anti trus t Li ti g. , 9 9 8 F .2 d 1 1 4 4 , 1 1 6 9 (3 d C ir. 1 9 9 3 ) (“[ W] h ile c om pl e x apport i onm e nt

pr obl e m s ar e i m

pl i c at e d he r e , we do not hol d that l i t i gat i on m

us t be avoi de d s ol e l y

be c aus e i t

mi ght be di ffi c ul t

t o a s ce rt a i n dam a ge s . I njur e d part i e s c annot be pe na l i z e d and l e ft

wi thout r e c our s e be c aus e m e a s ur e m e nt of th eir d am ag es is d if

f icu lt.”). T he Il li n ois B r i ck C our tw as concerned w i t h pr om ot i ng “the l ongs t andi ng pol i cyofT he C our texpl ai ned that“[a ] l t hough in p a ri d e licto 16 l i t er al l ym eans ‘ of equa l faul t , ’ t he doctr i ne has been a ppl i ed .

. . i n a w i de var i ety o f si tuat i ons i n w hi ch a pl ai nt i ff s eeki ng damages orequi t abl e r el i ef i s hi m s el f i nvol ved i n s om e of the s ame sor tof w r ong doi ng. ” P e rm a L ife , 392 U

. S. at138. 44 e n c o u ra g ing v igo rou s p ri v a te e n f o rc e m e n t o f

th e a n titr u s t la w s .” 4 3 1 U

. S

. at 74 5

. W e a re u n w il li n g to h o ld tha t i f in it ial sell ers and “c om pl et el yi nvol ved” di r ectpur chase r s cons pi r e, t hen no pl ai nt i ff out s i de the conspi r acym ays ue the i ni t i al s el l erfor d a m a g e s . 2 . Is th e r e a “ c o m p lete i nvol vem ent ” def

ens e?
W e h o ld th a t a g e n e ra l co -c o n sp ira to r e x c e p tio n w o u ld onl yexi s ti f the compl et e i n v o l vement defe ns e barr ed the m i ddl emen fr o m br i ngi ng a cl ai m agai ns tt hei rfor m ercocons pi r at or

— t he manufactu rer . H ow ever , ourC our thas not decided w here t he c o m plet e i nv olvem ent defense ev en ex i st s. W e thus exami ne thi s ques t i on. I n P e rm a L ife , t he S upr eme C our thel d t hat“the doctr i ne of i n par i del i ct o . . . i s nott o be r ecogni zed a s a def ens e t o an a n titru st a c tio n .” 3 9 2 U .S . at 1 4 0

. B u t as p re v io u sly 16 m e n tio n e d , th e C o u rt e x p re s s ly d id “ n o t d e c id e . . . w h e t h e r . . . tru ly c o m p lete in v o lv e m e n t a n d p a rticip a tio n in a m o n o p o listic schem e cou l d ev er be a basi s . . . for barr i ng a plai nti ff’s causeS e e P e rm a L ife , 39 2 U. S. at146 ( W hi t e, J

. , concurr i ng) 17 ( “I w ou l d denyr ecove r yw her e pl ai nt i ff a nd defe ndantbear s ubs t ant ial ly equal r es pons i bi l i t yfori nj uryr es ul t i ng t o one of [ th e c o -c o n sp ira to rs]

. . . . ” ); i d. at147 (F o rt as , J

. , concurr i ng) (S u it shou l d be barr ed w hen “t he faul t of the part i es is r e a s o n a b lyw ith in th e sa m e sc a le.” ); i d. a t 1 4 9 (M a rs h a ll, J ., c o n c u rrin g ) (“ I w o u ld h o ld th a t w h e re a d e f e n d a n t in a p riv a te a n titru st s u it ca n sh o w th a t th e p lain tiff a c tiv e ly p a rticip a ted in th e f o rm a tio n a n d im p lem e n tatio n o f a n ill e g a l s c h e m e , an d is s ubs t ant i al l yequal l yatfaul t , t he pl ai nt i ff s houl d be barr ed fr om im p o sin g liab ili tyo n th e d e f e n d a n t.”); i d. a t 1 5 3 ( H a rl a n , J ., concurr i ng i n par t and di s s ent i ng i n par t ) ( St ew ar t , J

. , joini ng) (“ [ P ]r o p e r l yu s e d [ , in p a ri d e licto ] r efe r s t o a def ens e that s h o u ld b e p e rm itte d in a n titr u s t c a s e s .” ). 45 of ac t i on. ” Id

. Fur t her , i n concurr ence s , fi ve mem ber s of the P er m a Li f e C our tfavor ed barr i ng s ui tbyant i t rus tpl ai nt i ffs w ho w e re in v o lv e d in a c o n sp ira c ya t a h ig h e n o u g h lev e l. 17
Fur t her , every C our t of A ppeal s t hat has deci ded the i s s ue has hel d t hatant i t rus tpl ai nt i ffs w ho w er e i nvol ved i n a c o n s p ir a c y a t a re q u is ite le v e l a re b a rr e d f ro m s u in g . See, e. g. , Sul l i va n v. Tagl i abue , 3 4 F

. 3 d 1 0 9 1 , 1 1 0 7 (1st C ir

. 1 9 9 4 ); C ol um bi a Ni tr ogen C or p. v. R oyster C o. , 4 5 1 F .2 d 3 , 1 6 (4 th C ir. 1 9 7 1 ); G en . L ea sew a ys, In c. v. N

a t’ l Tru ck

L ea singA ss’n , 8 3 0 F

. 2 d 7 1 6 , 7 2 0 -23 (7th C ir

. 1 9 8 7 ); J a v e lin C o rp . v. U

n iroy a l, I nc. , 5 4 6 F .2 d 2 7 6 , 2 7 9 (9 th C ir . 1 9 7 6 ). B utcf

. G r eene v. G en. Foods C or

p. , 5 1 7 F .2 d 6 3 5 , 6 4 6

- 4 7 (1 9 7 5 ) (“ se rio u sly ques t i on[i ng] ” w hetherant i t rus t pl ai nt i ffs s houl d ever be barr ed46 fr om s ui ng beca us e of their “ uncl ean ha nds ”)

. I n Li nk , our C o u rt re c o g n ize d th a t c o -c o n sp ira to rs w h o w e re c o m p lete ly i nvol ved i n a cons pi r acy m i ght be barr ed fr om s ui ng. 788 F. 2d a t9 3 2

. Ho wev e r , we d i d n o td e c i d e t h e i s s u e b e c a u s e we concl uded thatt he co- cons pi r at or s i n t hat c as e w er e not c o m p le te ly in v o lv e d in th e c o n s p ir a c y . Id

. W e r ecogni ze thatt he w ei ghtof author i t y favor s barr i ng s ui tbyant i t rus t pl ai nt i ffs w ho w er e i nvol ved i n a cons pi r acyat a hi gh enough l evel

. W e al s o r ecogni ze, how ever, t he s t r ong p o lic y arg u m en t i n fa v o r of all o w ing su it s b yco -co n sp ir ators even w hen thei ri nvol vement i n a consp ir ac y w as l ar ge. T he N int h C i r cui thas r ecogni zed that“[t ] he form ul at i on of the ‘c ompl e t e i nv ol ve ment ’ de fe ns e r e fl e c t s a s omewhatun easy bal ance betw een the compel l i ng pol i cyof enf or cementof the ant i t rus t l aw s and t he natur al des i r e of any cour t t o r ecogni ze the equi t i es as betw een pa r t i es . ” T H I- H aw aii, Inc. v. F i rst C om m er ce Fi n. C or

p. , 6 2 7 F .2 d 9 9 1 , 9 9 5 (9 th C ir. 1 9 8 0 ). It is not abl e, how ever , t hat , w hi l e the court s w ho have a dopt ed the compl et e i nvol vemen t d e fens e have s t r uck t he

“ e n f o r c e m e n t/ e q u i t i e s b a l a n c e ” i n f a v o ro f e q u i t i e s , t h e S u p r e me C our ti n t he hol di ngs of I l l i nois B r i ck and P e rm a L ife s t ruck the b a lan c e in f

a v o r o f e n f o rc e m e n t.
I n I l l i nois B r i ck , the C o u rt

c o n c lu d e [ d ] th a t th e leg isla tiv e p u rp o se in c re a tin g a g ro u p o f ‘p riv a te a tto rn e y s g e n e ra l’ toSeeA re e d a , supra , ¶ 346k, at378 ( “The obvi ous 18 di ffi cul t y w i t h deny i ng damages forcons um er s buy i ng fr om an i nt er m edi aryi s t hatt heyar e i njured, oft en more t han the interm ed iary , w h o m ay also b e inju red b u t fo r w h o m the e n ti re o v e r c h a r g e i s a wi n d f

a l l

. Th e i n d i r e c tp u r c h a s e rru l e aw ar ds g re a tly o v e rc o m p e n sa te in te r m e d ia rie s a n d g re a tly under compensa t e cons um ers i n t he name of ef fi ci encyi n t he ad m inistrati o n o f th e a n ti tru st l aw s. ”). 47 enfor ce the ant i t rus tl aw s under § 4 [of the C l ayt on A ct ] i s bet t ers erved byhol di ng di r ect pur chas er s t o be i nj ur ed t o t he full ext entof the o v e rc h a rg e p a id b yth e m th a n b y a ttem p tin g to appor t i on t he over char ge among al l t hatm ayhave a b so rb e d a p a rt o f

it.
431 U

. S. at746 ( ci t at i on and quot at i on m arks om i t t ed)

. T hus t he I l l i nois B r i ck C our tm ad e t he bal anci ng deci s i on t o deny (som e m igh t arg u e i n eq u it ab ly ) injured ind ir e c t p u rch ase rs 18 sta n d in g to re c o v e r w h ile g ra n tin g d ire c t p u rc h a se rs th e w in d f a ll of the ent i r e over char ge i n or dert o fur t her eff i ci ent ant i t rus tl aw e n f o rc e m e n t.
I n P e rm a L ife , t he C our tbel i eved thatal low i ng t he in p a r i d e l i c t o d efens e i n an ant i trus tact i on w oul d “thr eat en the eff ect i venes s of the pr i vat e ac t i on as a vi t al m eans forenfor ci ng

. . . ant i t rus tpol i cy . ” 392 U

. S. at136. I t not ed t hat i t had “of t en i ndi cat ed the i nappr opr i at enes s of i nvoki ng br oad comm on- l aw48 b a rrie rs to re lief

w h e re a p riv a te s u it se rv e s im p o rta n t p u b lic purpos es . ” I

d. at138. I tconcl uded that [ t]h e p lain tiff

w h o re a p s th e re w a rd o f tre b le damages m aybe n o les s m o ra lly r e p re h e n sib le th a n th e d e f

e n d a n t, bu t th e law e n c o u ra g e s h is s u it t o fur t hert he over r i di ng pubi c pol i cy i n favorof compet i t i on. A m or e fa s t i di ous r egar d fort he re lativ e m o ra l w o r th o f th e p a rties w o u ld o n ly r es ul t i n s er i ous l y underm i ni ng t he us eful nes s of t he p ri vate act i on as a bulw a rk of an t i t rust e n f o rc e m e n t.
I d. at139 ( emphase s added)

. T hus , t he C our tchos e t o al l ow t he i nequi t yof l et t i ng pl ai nt i ffs , t hough as “mora l l yr epr ehens i bl e” a s d e f e n d a n ts, s u e in o rd e r to f o ste r a n titru st law e n f

o rc e m e n t.
W e furt her pointou tt hat a rule pr oh i bit i ng anti t rust pl ai nt i ffs w ho w er e compl et el yi nvol ved i n a cons pi r acyt o s ue c o -c o n sp ira to r s n e e d n o t b e a b so lu te a n d c o u ld b e c ra f ted to m axim i ze a nt i t rus tenfor cementand ca r t el i ns t abi l i t y . For e x a m p le, th e law m ig h t al lo w th e f irst, b u t o n lyth e f

irst, compl et el yi nvol ved co- cons pi r at ort he r i ghtt o s u e i t s fel l ow coc o n sp ira to rs. T h is w o u ld g iv e e a c h c o -c o n sp ira to r in c e n tiv e to b e t h e f i r s tt o d e f

e c t f r o m a c a r t e l a n d e n f

o r c e t h e a n t i t ru s tl a ws beca us e ( 1) eac h w ould w antt o be the one a nd onl ycocons pi r at ort o gai n t he r i ghtt o r ecove rt r eble d amages and ( 2) eac h w oul d be af

r ai d t hat i f i t di d notdefe ct , anotherw oul d, and49 i tw oul d t hen be l i abl e fort r ebl e damages

. U n d er s uch a rul e, t he i ncent i ve t o defe ct and car t el i ns t abi l i t yw oul d i ncr eas e, and cart el br eakdow n and fa i l ur e s houl d become m or e comm on. Fur t her , i f pot ent i al co- cons pi r at or s knew t hei rpot ent i al cart el h a d a d e c re a se d c h a n c e o f su c c e e d in g , the yw o u ld b e les s lik e ly to f o rm a c a rt e l in th e f

ir s t p la c e . R egar dl es s , as w e w i l l expl ai n, i ttur ns outt hatw e nee d n o t re so lv e w h e th e r th e re is a c o m p lete in v o lv e m e n t d e f e n se to a n t i t ru s ta c t i o n s i n o r d e rt o d e t e r mi n e wh e t h e rP l a i n t i f f s c o me w ith in a g e n e ra l c o -c o n s p ir a to r e x c e p tio n .

3. C oul d Pl ai nt i f

f s c ome w i t hi n a general co- cons p i rat o r except i on? If th e re is a g e n e ra l co -c o n sp ira to r e x c e p tio n , itw o u ld o n lya p p lyif

th e m id d lem e n w e re b a rre d f ro m b rin g in g a c laim againsttheirform er co- con spi rat or— the m anu f a c turer

— becau se th e irin v o lv e m e n t in th e c o n s p ir a c yw a s “ tru ly co m p le te .” H ow ever , i n ourcas e, Pl ai nt i ffs coul d n o t q u ali fyfors uch an exce pt i on beca us e the D i s t r i ctC our tconcl uded, and Pl ai nt i ffs have c oncede d, t hatt he dea l er s ’ i nvol vement in the al l eged con spi racyw i t h D ents plyw as not“ tru l ycompl et e. ” The D i s t r i ct C o u rt c o n c lu d e d th a t th e re w a s “ n o w a yto c o n stru e th e f a c ts al l eged s uch thatthe dent al deal er s coul d be cons i der ed

‘ s ubs t ant i al l yequal ’ par t i ci pant s i n t he al l eged cons pi r acy . . . or t hatt hei rpar t i ci pat ion w as ‘ vol unt aryi n anym eani ngfulPl ai nt i ffs al s o al l ege i n Jer s ey D entalth a t— a s to tee th 19 D ent s pl ydr op s hi pped t o t hem— t hey w er e di r ect pur chas er s not s ubj ectt o I

l l i n o is B r i ck

. Fur t her , t he J e rs e y D e n ta l compl ai nt does no t ha ve the Hess c o m p lain t’s d e f e c t, as it sp e c if

ica lly al l eges t hatPl ai nt i ffs w er e di r ectpur chas er s . A s w e hol d t hat 50 s ens e. ’ ” D i s tC t
. M em. O p. at20- 21 ( D ec. 19, 2001) ( ci t at i on omi t t e d )

. Fu r t h e r , Pl a i n t i f f s a c k n o wl e d g e d i n t h e i rb r i e f t hat t hey “have not bas ed any par tof [thei r ] appea l on anyar gum ent th a t th e d e a ler s’ in v o lv e m e n t w a s ‘s u b sta n tiallye q u a l’ to D ent s pl y ’ s . ” A ppel l ant s ’ R epl y B r . at23 n. 16. T hus , Pl ai nt i ffs m aynotr ecove r damages caus ed byt he exc l us i ve- deal i ng cons pi r acyundera gene r al co- cons pi r at orexce pt i on t o Illino is B r i ck

. C oncl usi on W e th u s h o ld th a t P lain tiff s m a y n o t re c o v e r d a m a g e s in Hess ( a) undert he “c o- cons pi r at or ” exc ept i on t o I l l i nois B r i ck , ( b) undert he “c ont r ol ” exc ept i on t o I ll ino is B r i ck, (c) u n d er a n o n -o v e rc h a rg e th e o ry o f d a m a g e s , o r ( d ) f o r “ d ro p s h ip m e n ts .” I n Jersey D ental , how ever , w hi l e Pl ai nt i ffs m aynotr ecove r d a m a g e s u n d e r th e c o n tro l ex c e p tio n o r u n d e r a lo st p ro f its t heory , t hey do have s t atut or y s t andi ng undert he co- cons pi r at or exce pti o n to p u rsue an ac ti o n fo r ov erc h arg e d am ag es (i ncl udi ng fordr op s hi pped t eeth) caus ed byt he al l eged r et ai l pr i ce- fi xi ng cons pi r acy , al t hough notfort he a ll eged excl us i ve- deal i ng c o n s p i r a c y. 19t he J e rs e y D e n ta l Pl ai nt i ffs have s t andi n g to r ecove rdamages f ro m D e n tsp lyf

o r its a lleg e d p r ic e -f

ix in g c o n sp ira c yw ith its deal er s undert he co- cons pi r at orexce pt i on t o I l l i no is B ri ck , P lain tiff s m a yp o te n tiallyre c o v e r o n th e d ro p -sh ip p e d tee th u n d e rt h a tt h e o r y. Fi nal l y , as i n Hess , Pl ai nt i ffs i n J e rs e y D e n ta l do not come w i t hi n t he contr ol exce pt i on t o I l l i nois B r i ck beca us e, as al ready no t ed, D ents plydo es not ow n an yi nter esti n it s deal ers , t her e i s no funct i onal uni t yamong D ent s pl yand i t s deal er s , and al l of Il l i no is B ri ck’s p o l i c y r e a s o n s f o rd e n yi n g s t a n d i n g a p p l y.

51