Case Name: Valerie Ciardi vs. F. Hoffmann-la Roche, Ltd., & others
Court: Massachusetts Supreme Judicial Court
Jurisdiction: Massachusetts
Decision Date: 2002-02-08
Citations: 436 Mass. 53
Docket Number: 
Parties: Valerie Ciardi vs. F. Hoffmann-la Roche, Ltd., & others.
Judges: 
Reporter: Massachusetts Reports
Volume: 436
Pages: 53–79

Head Matter:
Valerie Ciardi vs. F. Hoffmann-la Roche, Ltd., & others.
Middlesex.
October 4, 2001. -
February 8, 2002.
Present: Marshall, C.J., Greaney, Ireland, Spina, Cowin, Sosman, & Cordy, JJ.
Charles Fried (Michelle D. Miller with him) for F. Hoffman-La Roche, Ltd., & others.
Edward D. Rapacki (Fredric L. Ellis & Joseph M. Makalusky with him) for the plaintiff.
Joseph F. Ryan, for Lonza A.G. & another, was present but did not argue.
Neil P. Motenko, for Chinook Group, Inc., & another, was present but did not argue.
The following submitted briefs for amici curiae:
Paul E. Nemser, James C. Rehnquist, & Jaren D. Wilcoxson for Microsoft Corporation.
Loretta M. Smith for New England Legal Foundation.
Thomas F. Reilly, Attorney General, & Judith Whiting, Assistant Attorney General, for the Commonwealth.
Stuart T. Rossman for National Consumer Law Center.
Individually and on behalf of others similarly situated. The plaintiff’s claims were filed as a class action lawsuit pursuant to Mass. R. Civ. R 23, 365 Mass. 767 (1974). She purports to represent all Massachusetts consumers who purchased vitamin products supplied by any of the defendants from January 1, 1990, to the present.
Hoffmann-La Roche, Inc.; Roche Vitamins Inc.; BASF A.G.; BASF Corporation; Rhone-Poulenc, S.A.; Rhone-Poulenc Animal Nutrition, Inc.; Rhone-Poulenc, Inc.; Lonza A.G.; Lonza Inc.; Chinook Group, Ltd.; Chinook Group, Inc.; DCV, Inc.; and Ducoa L.P.

Opinion:
Spina, J.
The plaintiff, an indirect purchaser of vitamin products manufactured and distributed by the defendants, brought this action for injunctive relief and damages arising from a price-fixing conspiracy among the defendants. Her complaint alleged coercive civil conspiracy (count I) and unfair or deceptive acts or practices in violation of G. L. c. 93A (count II). Each defendant filed a motion to dismiss the plaintiff's complaint pursuant to Mass. R. Civ. R 12 (b) (6), 365 Mass. 754 (1974). A Superior Court judge granted the defendants' motions to dismiss count I of the complaint but denied their motions to dismiss count II of the complaint. The judge then reported the correctness of her order denying the defendants' motions to dismiss count II of the plaintiff's complaint to the Appeals Court pursuant to Mass. R. Civ. P. 64 (a), as amended, 423 Mass. 1403 (1996), and stayed all proceedings below. We granted the parties' applications for direct appellate review. The only issue before us is whether indirect purchasers can assert claims for price-fixing or other anticompetitive conduct under G. L. c. 93A, § 9, where they have no standing to bring such claims under the Massachusetts Antitrust Act (Antitrust Act), G. L. c. 93, § 1-14A. Because we conclude that indirect purchasers can assert such claims, we affirm the order of the Superior Court judge.
The sufficiency of the claims raised in the plaintiff's complaint is examined by accepting the allegations, and such reasonable inferences as may be drawn therefrom, as true. See Eyal v. Helen Broadcasting Corp., 411 Mass. 426, 429 (1991). A complaint is sufficient "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of [her] claim which would entitle [her] to relief." Nader v. Citron, 372 Mass. 96, 98 (1977), quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957).
The defendants, who dominate international markets for vitamin products, are foreign corporations doing business in the Commonwealth of Massachusetts. The plaintiff alleges that, beginning in January, 1990, the defendants conspired among themselves to restrain free trade of vitamin products by suppressing and eliminating competition. The conspiracy consisted of formal and informal collusion by the defendants to (1) fix, increase, and maintain prices for vitamin products; (2) coordinate price increases among themselves for the sale of vitamin products; (3) allocate among themselves the volume of sales and market shares of vitamin products; (4) allocate among themselves all or part of certain contracts to supply vitamin products to various customers; and (5) refrain from submitting bids, or submit collusive, noncompetitive, and rigged bids. The effect of the defendants' alleged conduct was to restrict competition in the sale of vitamin products in Massachusetts and to force consumers to pay prices for such products that were artificially inflated.
In considering the claims set forth in the plaintiff's complaint, alleging violations of G. L. c. 93A, the judge examined the relationship between that statutory scheme and the Antitrust Act. She concluded that, based on their respective language and history, G. L. c. 93A should not be interpreted to bar the plaintiff, as an indirect purchaser, from bringing an action for price-fixing or other forms of unfair competition against the defendants. Because the plaintiff had stated a claim on which relief could be granted, the defendants' motions to dismiss count II of her complaint were denied.
The defendants contend that the plaintiff's allegations of price-fixing fall within the limits of the Antitrust Act and that, in light of the precedent established in Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977), the plaintiff is precluded from bringing a claim under that Act because she is an indirect purchaser of vitamin products. The defendants argue that principles of statutory construction, as well as public policy concerns, mandate that G. L. c. 93A be construed harmoniously with related statutes, including the Antitrust Act. As such, indirect purchasers should be barred from bringing price-fixing claims under G. L. c. 93A. To conclude otherwise would be to allow indirect purchasers to circumvent the limitations on plaintiffs' remedies in the Antitrust Act by bringing their causes of action under G. L. c. 93A.
The purpose of the Antitrust Act, enacted in 1978, is "to encourage free and open competition in the interests of the general welfare and economy by prohibiting unreasonable restraints of trade and monopolistic practices in the commonwealth." G. L. c. 93, § 1. To that end, "[ejvery contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce in the commonwealth shall be unlawful." G. L. c. 93, § 4. "Any person who shall be injured in his business or property by reason of a violation of the provisions of [G. L. c. 93] may sue therefor and recover the actual damages sustained, together with the costs of suit, including reasonable attorney fees." G. L. c. 93, § 12. The Antitrust Act is to be "construed in harmony with judicial interpretations of comparable federal antitrust statutes insofar as practicable." G. L. c. 93, § 1.
"Federal courts consistently have held that an agreement among competitors to raise, depress, stabilize, or fix the price of goods in commerce is illegal per se." Commonwealth v. Mass. CRINC, 392 Mass. 79, 92 (1984). See Catalano, Inc. v. Target Sales, Inc., 446 U.S. 643, 647 (1980); United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 223 (1940). In analyzing § 4 of the Clayton Act, 15 U.S.C. § 15 (2000), the Supreme Court concluded that only the overcharged direct purchaser, and not others in the chain of manufacture or distribution (such as an indirect purchaser), was "injured in his business or property" for purposes of recovering damages for the violation of federal antitrust laws. See Illinois Brick Co. v. Illinois, supra at 729-736. See also Kansas v. UtiliCorp United Inc., 497 U.S. 199, 206-208 (1990). Because the Antitrust Act is to be construed in harmony with judicial interpretations of comparable Federal antitrust statutes, the rule of law established in Illinois Brick Co. v. Illinois, supra, would apply with equal force to preclude claims brought under G. L. c. 93 by indirect purchasers in Massachusetts. See Boos v. Abbott Labs., 925 F. Supp. 49, 51 (D. Mass. 1996). See also Commonwealth v. Mass. CRINC, supra at 89 n.9, 95 n.14 (recognizing economic harm suffered by indirect purchasers as result of defendants' price-fixing would not be capable of remediation in light of Supreme Court's Illinois Brick decision, but declining to consider whether defendants' activities would constitute a violation of G. L. c. 93A).
The plaintiff does not dispute that she is an indirect purchaser of the defendants' vitamin products within the meaning of Illinois Brick Co. v. Illinois, supra, and that she is therefore foreclosed from pursuing her cause of action under the Antitrust Act. Undoubtedly for that reason, the plaintiff has asserted her claim for relief under G. L. c. 93A. Federal antitrust laws do not expressly preempt States from enacting statutes allowing indirect purchasers to recover damages for their injuries. See California v. ARC Am. Corp., 490 U.S. 93, 101-102, 105 (1989) (rejecting claim that California's antitrust law, which specifically allowed indirect purchaser actions, was inconsistent with, and thus preempted by, Federal law). That is exactly what happened in Massachusetts with the enactment of G. L. c. 93A, "a statute of broad impact which creates new substantive rights and provides new procedural devices for the enforcement of those rights." Linthicum v. Archambault, 379 Mass. 381, 383 (1979), quoting Slaney v. Westwood Auto, Inc., 366 Mass. 688, 693 (1975).
General Laws c. 93A regulates trade and commerce "directly or indirectly affecting the people of this commonwealth" (emphasis added). G. L. c. 93A, § 1. The broad language of G. L. c. 93A, § 9 (1), provides that a cause of action may be brought by "[a]ny person, [other than a businessperson entitled to bring an action under § 11], who has been injured by another person's use or employment of any method, act or practice declared to be unlawful by section two" (emphasis added). General Laws c. 93A, § 2, states that "[ujnfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful."
In analyzing what constitutes unfair methods of competition and unfair or deceptive acts or practices, which are not defined in G. L. c. 93A, this court looks to interpretations by the Federal Trade Commission and Federal courts of § 5(a)(1) of the Federal Trade Commission Act (FTC Act), 15 U.S.C. § 45(a)(1) (2000). See G. L. c. 93A, § 2 (b). See also PMP Assocs., Inc. v. Globe Newspaper Co., 366 Mass. 593, 595-596 (1975). The Federal Trade Commission may, under § 5(a)(1) of the FTC Act, enforce the antitrust laws, including the Sherman Act and the Clayton Act, but it is not confined to their specific prohibitions. See Federal Trade Comm'n v. Motion Picture Advertising Serv. Co., 344 U.S. 392, 394-395 (1953); Federal Trade Comm'n v. Cement Inst., 333 U.S. 683, 692-695 (1948). It may bar incipient violations of those statutes, see Federal Trade Comm'n v. Brown Shoe Co., 384 U.S. 316, 321-322 (1966), and conduct that, although not a violation of the letter or spirit of the antitrust laws, is nevertheless either an unfair method of competition, or an unfair or deceptive act or practice, see Federal Trade Comm'n v. Sperry & Hutchinson Co., 405 U.S. 233, 239-244 (1972). See also E.I. Du Pont De Nemours & Co. v. Federal Trade Comm'n, 729 F.2d 128, 136-137 (2d Cir. 1984). To the extent that the same conduct may violate both the antitrust laws and the FTC Act, such conduct may be the subject of simultaneous parallel enforcement actions. See Federal Trade Comm'n v. Cement Inst., supra at 694-695.
Price-fixing constitutes an unfair method of competition in violation of the FTC Act. See Federal Trade Comm'n v. National Lead Co., 352 U.S. 419, 428-430 (1957). See also Sun Oil Co. v. Federal Trade Comm'n, 350 F.2d 624, 631, 636 (7th Cir. 1965), cert. denied, 382 U.S. 982 (1966); Keasbey & Mattison Co. v. Federal Trade Comm'n, 159 F.2d 940, 946 (6th Cir. 1947); Boos v. Abbott Labs., supra at 54. Therefore, the allegations in the plaintiff's complaint, which in essence state that the defendants engaged in price-fixing of vitamin products at artificially inflated levels to her detriment would, if proven, clearly state a violation of G. L. c. 93A.
The plain and unambiguous language of G. L. c. 93A reveals no legislative intent to limit lawsuits for price-fixing to direct purchasers. To the contrary, because the language of G. L. c. 93A, § 1, 9 (1), allows any person who has been injured by trade or commerce indirectly affecting the people of this Commonwealth to bring a cause of action, the plaintiff is the type of consumer the Legislature intended to protect. Significantly, there is no requirement of contractual privity between the plaintiff and the defendants under G. L. c. 93A, § 9. See Kattar v. Demoulas, 433 Mass. 1, 14-15 (2000) ("Parties need not be in privity for their actions to come within the reach of c. 93A"); Maillet v. ATF-Davidson Co., 407 Mass. 185, 191-192 (1990) (injured printing press operator could maintain suit against manufacturer); Burnham v. Mark IV Homes, Inc., 387 Mass. 575, 581 (1982) (buyer of modular home could sue manufacturer).
It is a canon of statutory construction that "the primary source of insight into the intent of the Legislature is the language of the statute." International Fid. Ins. Co. v. Wilson, 387 Mass. 841, 853 (1983). Where, as here, the language of a statute is clear and unambiguous, it is conclusive as to the intent of the Legislature. See Pyle v. School Comm. of S. Hadley, 423 Mass. 283, 285 (1996). "Where the ordinary meaning of the statutory terms yields a workable result, we need not resort to extrinsic aids of interpretation such as legislative history." Id. at 286.
The defendants assert that the Antitrust Act specifically governs contracts, combinations, or conspiracies in restraint of trade or commerce, see G. L. c. 93, § 4, which is the type of conduct that the plaintiff has alleged. They further assert that, in contrast, G. L. c. 93A, § 9, is a general remedy for consumers injured by any unfair method of competition and unfair or deceptive act or practice in the conduct of any trade or commerce. The defendants argue that, because the provisions of the specific statute must control, G. L. c. 93A must be construed consistently with the Antitrust Act to bar claims by indirect purchasers.
Federal antitrust statutes (such as the Clayton Act) and Federal consumer statutes (such as the FTC Act) were enacted to deal with closely related aspects of the same problem, namely the protection of free and fair competition. See United States v. American Bldg. Maintenance Indus., 422 U.S. 271, 277 (1975). Because the Antitrust Act and G. L. c. 93A are patterned after their Federal counterparts, we believe that they, too, in part, are related to the same purpose — the protection of free and fair competition.
Statutes addressing the same subject matter clearly are to be construed harmoniously so as to give full effect to all of their provisions and give rise to a consistent body of law. See Green v. Wyman-Gordon Co., 422 Mass. 551, 554 (1996); Marco v. Green, 415 Mass. 732, 736 (1993). However, the language of the Antitrust Act unambiguously states that it "shall have no effect upon the provisions of [c. 93A], except as explicitly provided in said [c. 93A]" (emphasis added). G. L. c. 93, § 14A. General Laws c. 93A, § 11, includes a specific provision that in any action brought under that section, the court shall be guided in its interpretation of unfair methods of competition by the provisions of the Antitrust Act. General Laws c. 93A, § 9, contains no such explicit provision. If the Legislature had intended actions brought under G. L. c. 93A, § 9, to be limited in this respect, it would have said so. See Commonwealth v. Galvin, 388 Mass. 326, 330 (1983) ("where the Legislature has employed specific language in one paragraph, but not in another, the language should not be implied where it is not present"). Therefore, we cannot conclude that the application of G. L. c. 93A, § 9, is to be guided by the provisions of the Antitrust Act, and by association, Illinois Brick Co. v. Illinois, supra, so as to preclude indirect purchasers, like the plaintiff, from bringing a cause of action under G. L. c. 93A, § 9.
The defendants' reliance on Reiter Oldsmobile, Inc. v. General Motors Corp., 378 Mass. 707 (1979), and Cabot Corp. v. Baddour, 394 Mass. 720 (1985), does not support a different result. In Reiter Oldsmobile, Inc. v. General Motors Corp., supra, this court held that only the remedies afforded by G. L. c. 93B, a detailed statute enacted after G. L. c. 93A specifically to govern the unfairness in the Massachusetts automotive industry, were applicable to the plaintiff's claims that the grant of a competitive motor vehicle franchise without the current franchisee's prior approval constituted an unfair method of competition and unfair or deceptive act or practice within the meaning of G. L. c. 93A, § 2. We pointed out that there was a careful limitation on the private remedies set forth in G. L. c. 93B, § 12, which excluded injunctive relief, a remedy available under G. L. c. 93A, § 9. See id. at 711. As such, while G. L. c. 93A and G. L. c. 93B might overlap in their coverage, in the case of a conflict, such as the remedies available to a plaintiff, the language of the specific statute, namely G. L. c. 93B, must govern. See id. Similarly, in Cabot Corp. v. Baddour, supra, this court held that G. L. c. 110A (Uniform Securities Act), a comprehensive regulatory scheme governing the registration and sale of securities in Massachusetts in coordination with Federal securities laws, was applicable to the plaintiff's claims of fraudulent securities transactions, rather than G. L. c. 93A. We pointed out that G. L. c. 110A differed from G. L. c. 93A in several critical respects, including its limitation on private rights of action and the nature and scope of available relief; more expansive rights of action and remedies were available under G. L. c. 93A. See id. at 725.
Unlike the particular statutes in Reiter Oldsmobile, Inc. v. General Motors Corp., supra, and Cabot Corp. v. Baddour, supra, neither the Antitrust Act nor G. L. c. 93A is a comprehensive statutory scheme enacted to govern all antitrust claims to the exclusion of the other. To the contrary, the Legislature intended that the Antitrust Act would not infringe on the scope of G. L. c. 93A, except as G. L. c. 93A might itself explicitly provide, see G. L. c. 93, § 14A, which negates the possibility for conflict among their provisions and in their application. Cf. Purity Supreme, Inc. v. Attorney Gen., 380 Mass. 762, 773-774 n.15 (1980) (noting Antitrust Act operates independently of G. L. c. 93A except to extent G. L. c. 93A, § 11, directs courts to consider decisions under Antitrust Act when interpreting "unfair methods of competition" in actions brought pursuant to G. L. c. 93A, § 11); Dodd v. Commercial Union Ins. Co., 373 Mass. 72, 76-78 (1977) ("Chapter 176D on its face does not exclude application of c. 93A to unfair and deceptive insurance practices . . . [t]he mere existence of one regulatory statute does not affect the applicability of a broader, nonconflicting statute, particularly when both statutes provide for concurrent coverage of their common subject matter"). Moreover, G. L. c. 93A and the Antitrust Act are not in conflict or inconsistent with each other merely because the former would allow indirect purchasers to sue for damages while the latter would not.
The defendants assert that, notwithstanding the Antitrust Act, the plaintiff has failed to allege a sufficiently close nexus between herself and the defendants to state a claim under G. L. c. 93A. The defendants point out that they are many levels removed in the chain of distribution from the plaintiff, a consumer of a wide range of products, many of which contain vitamin products as only a minor component. The defendants contend that the plaintiff would be hard pressed to show how a portion of an overcharge was passed on at each stage of the distribution chain and by which defendants.
The defendants' contentions essentially relate to whether the plaintiff can prove her claim under G. L. c. 93A, not whether she is entitled, as an indirect purchaser, to assert such a claim. In her complaint, the plaintiff alleged that she had purchased vitamin products manufactured, produced, distributed, and sold by the defendants and that, as the result of a price-fixing conspiracy among the defendants, she was forced to pay "supra-competitive prices" for those products. The plaintiff has a relatively light burden to carry to maintain her complaint, and doubt as to whether a particular claim can be proved is not a proper basis for dismissing a complaint under rule 12 (b) (6). See Gibbs Ford, Inc. v. United Truck Leasing Corp., 399 Mass. 8, 13 (1987); Wrightson v. Spaulding, 20 Mass. App. Ct. 70, 72 (1985). In fight of our conclusion that indirect purchasers can bring a cause of action under G. L. c. 93A, and accepting all of the allegations in the plaintiff's complaint as true, she has stated a claim on which relief can be granted. Whether the plaintiff can prove her claim is another matter entirely. Nonetheless, contrary to the defendants' assertions, the plaintiff has alleged a connection between herself and the defendants, albeit an indirect one, as parties to consumer transactions. Contrast John Boyd Co. v. Boston Gas Co., 775 F. Supp. 435, 440 (D. Mass. 1991) (plaintiffs failed to state cause of action under G. L. c. 93A, § 11, where there was no business connection between parties); Cash Energy, Inc. v. Weiner, 768 F. Supp. 892, 893-894 (D. Mass. 1991) (same). See also Nei v. Boston Survey Consultants, Inc., 388 Mass. 320, 324-325 (1983) (recognizing that while there was no requirement of contractual privity under G. L. c. 93A, plaintiffs had failed to state cause of action where they had no business relationship with defendants). The defendants are manufacturing and distributing vitamin products that are intended for use by persons exactly like the plaintiff, the ultimate consumer.
Finally, the defendants assert that strong public policy considerations dictate that indirect purchaser claims be barred under G. L. c. 93A. In precluding indirect purchaser claims under § 4 of the Clayton Act, 15 U.S.C. § 15, the Supreme Court's analysis in Illinois Brick Co. v. Illinois, supra, focused, in part, on the negative impact that such claims would have on Federal antitrust litigation, including the possibility of multiple liability for defendants, the difficulty faced by an indirect purchaser in proving damages, and the potential burden on the judicial system of long and complicated proceedings. However, in California v. ARC Am. Corp., 490 U.S. at 103-105, the Supreme Court recognized that it was inappropriate to consider the congressional policies identified in Illinois Brick Co. v. Illinois, supra, as defining what States should allow under their own antitrust laws. "[Njothing in Illinois Brick suggests that it would be contrary to congressional purposes for States to allow indirect purchasers to recover under their own antitrust laws." California v. ARC Am. Corp., supra at 103. To that end, it is the province of the Massachusetts Legislature to make its own policy decisions about whether to permit claims by indirect purchasers for antitrust violations under Massachusetts law. We read the language of G. L. c. 93A as a clear statement of legislative policy to protect Massachusetts consumers through the authorization of such indirect purchaser actions. Any disagreement with the statute should be directed to the Legislature.
Order denying the defendants' motions to dismiss count II of the complaint affirmed.
fridirect purchasers are persons who buy products not directly from their original source but from other parties further down the distribution chain. See Illinois Brick Co. v. Illinois, 431 U.S. 720, 726 (1977).
These vitamin products include (1) specific vitamins (vitamins A, B, B2, B3, B4, B5, C, E, and beta carotene); (2) vitamin premixes (a blend of several vitamins and other products in either dry or spray-on applications); and (3) products containing vitamins and vitamin premixes (vitamin supplements, milk, bread, cereal, juice, beverage powders, eggs, meat, fish, poultry, pork products, pasta, flour, rice, baby food, baby formula, pet food, and cosmetics).
This case is one small part of nationwide litigation against the defendants for price-fixing and other anticompetitive conduct. A class action lawsuit was filed on September 30, 1998, in the Superior Court of the District of Columbia and then in twenty-two other jurisdictions (not including Massachusetts), asserting claims on behalf of businesses and consumers who had indirectly purchased vitamin products manufactured by one or more of the defendants. Several of the defendants pleaded guilty to Federal antitrust charges, and they entered into a master settlement agreement to resolve all class and parens patriae litigation.
Several defendants sought to dismiss the plaintiff's complaint for lack of adequate notice pursuant to Mass. R. Civ. P. 8 (a) (1), 365 Mass. 749 (1974), and for failure to allege fraudulent concealment with sufficient particularity pursuant to Mass. R. Civ. P. 9 (b), 365 Mass. 751 (1974). The judge denied those motions, and the defendants have taken no further action on those claims. Several defendants also sought to dismiss the plaintiff's complaint for lack of personal jurisdiction pursuant to Mass. R. Civ. P. 12 (b) (2), 365 Mass. 754 (1974). These motions were not addressed by the judge pursuant to agreement by the parties.
We acknowledge the amicus briefs filed by Microsoft Corporation; the National Consumer Law Center; the New England Legal Foundation; and the Attorney General on behalf of the Commonwealth.
The defendants F. Hoffmann-La Roche, Ltd.; Hoffmann-La Roche, Inc.; and Roche Vitamins Inc., control approximately 40% of the relevant world vitamin market. The defendants BASF A.G. and BASF Corporation control approximately 20% of that market. The defendants Rhone-Poulenc, S.A.; Rhone-Poulenc Animal Nutrition, Inc.; and Rhone-Poulenc, Inc., control approximately 15% of the market.
Federal antitrust law includes (1) the Sherman Act, 15 U.S.C. § 1 (2000) (making illegal "[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations"); and (2) the Clayton Act, 15 U.S.C. § 15 (2000) (authorizing civil actions by any person "injured in his business or property by reason of anything forbidden in the antitrust laws").
In reaching this conclusion, the Supreme Court specifically declined to modify its prior decision in Hanover Shoe, Inc. v. United Shoe Mach. Corp., 392 U.S. 481 (1968). See Illinois Brick Co. v. Illinois, 431 U.S. 720, 736-747 (1977). In that case, the Supreme Court held that the victim of an overcharge was damaged within the meaning of § 4 of the Clayton Act, 15 U.S.C. § 15, and that the defendant could not introduce evidence that the purchaser had "passed on" the overcharge to its own customers, thereby sustaining no injury. Hanover Shoe, Inc. v. United Shoe Mach. Corp., supra at 488-494. In considering whether to allow the indirect purchasers to maintain a cause of action against the anticompetitive actors, the Supreme Court would have had to modify its holding in Hanover Shoe because to do otherwise would have permitted multiple recoveries of the same damages, once by the direct purchasers and again by the indirect purchasers. Illinois Brick Co. v. Illinois, supra at 728-735. The Supreme Court rejected a proposed modification of Hanover Shoe based on considerations of stare decisis and for reasons of public policy. Id. at 736-746.
In contrast, the Antitrust Act only regulates trade or commerce that "directly and substantially affects the people of the commonwealth" (emphasis added). See G. L. c. 93, § 2, 4.
Section 5(a)(1) of the Federal Trade Commission Act states: "Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful." 15 U.S.C. § 45(a)(1) (2000).
Several of these cases also include language stating that price-fixing constitutes an unfair practice in violation of the FTC Act. This is a distinction without a difference in the present case because G. L. c. 93A, § 2, prohibits both "[u]nfair methods of competition" and "unfair or deceptive acts or practices."
The broad scope of G. L. c. 93A is evidenced by the fact that it encompasses claims where a plaintiff's damages are de minimis. See Leardi v. Brown, 394 Mass. 151, 157-163 (1985) (tenants could bring action under G. L. c. 93A for inclusion of illegal term in lease, even where tenants suffered no actual harm, because mere invasion of legal right to habitable premises constituted injury). See also Clegg v. Butler, 424 Mass. 413, 418 (1997) (third-party claimants could bring actions against liability insurers who violated G. L. c. 93A by invading their legally protected interests).
Following the Supreme Court's decision in Illinois Brick Co. v. Illinois, supra, some States enacted so-called Illinois Brick repealer statutes to permit damages actions by or on behalf of indirect purchasers. See, e.g., Cal. Bus. & Prof. Code § 16750(a) (Deering 1992); Me. Rev. Stat. Ann. tit. 10, § 1104 (West 1997); N.Y. Gen. Bus. Law § 340(6) (McKinney Supp. 2002); R.I. Gen. Laws § 6-36-12(g) (2001); Vt. Stat. Ann. tit. 9, § 2465(b) (Supp. 2001). For a discussion on State responses to Illinois Brick Co. v. Illinois, supra, see K. O'Connor, Is the Illinois Brick Wall Crumbling?, 15 Antitrust 34, 35 (Summer 2001) (noting that thirty-six States and District of Columbia, representing over seventy per cent of the nation's population, now provide for some sort of right of action on behalf of some or all indirect purchasers). The defendants contend that the fact that the Legislature declined to enact such legislation in Massachusetts, as proposed on several occasions by the Attorney General, suggests an intent not to recognize causes of action by indirect purchasers. See 1985 Senate Doc. No. 1071; 1986 Senate Doc. No. 1033; 1987 House Doc. No. 4104; 1990 Senate Doc. No. 101; 1991 Senate Doc. No. 1579; 1992 Senate Doc. No. 1563; 1993 Senate Doc. No. 120; 1994 Senate Doc. No. 82. However, no inference is possible from this negative history. "The fallacy in th[e] argument is that no one knows why the legislature did not pass the proposed measure[]. . . . The practicalities of the legislative process furnish many reasons for the lack of success of a measure other than legislative dislike for the principle involved in the legislation." Franklin v. Albert, 381 Mass. 611, 615-616 (1980), quoting Berry v. Branner, 245 Or. 307, 311 (1966). One such reason is the "[b]elief that the matter should be left to be handled by the normal processes of judicial development of decisional law, including the overruling of outstanding decisions to the extent that the sound growth of the law requires." Franklin v. Albert, supra at 616, quoting H. Hart & A. Sacks, The Legal Process: Basic Problems in the Making and Application of Law 1395-1396 (tent. ed. 1958). Moreover, the proposed bills, if enacted, would have modified the Antitrust Act, not G. L. c. 93A.
While the plaintiff has alleged in her complaint that the defendants entered into a conspiracy in illegal restraint or monopoly of trade, she also alleged that the defendants' price-fixing conspiracy constituted "unfair and/or deceptive acts or practices within the meaning of G. L. c. 93A, § 2."
The premise of the dissent is that the court's interpretation of G. L. c. 93A, § 9, in relation to G. L. c. 93, results in contradictions and unreasonable consequences. There are no such contradictions or unreasonable consequences. The absence of any legislative enactment limiting the application of G. L. c. 93A, § 9, in claims involving antitrust allegations clearly signifies, under the mandate of G. L. c. 93, § 14A, that G. L. c. 93 has no effect on G. L. c. 93A, § 9. The dissent states that, "[w]hile inserting the word 'method' in § 9 (1), the Legislature conspicuously failed to add it to the class action provisions of § 9 (2). . . . If the Legislature intended to allow indirect purchaser consumers to bring claims for antitrust violations, it is anomalous in the extreme that the Legislature would exclude such claims from the class action mechanism of § 9 (2)." Post at 73. There are two responses. First, antitrust violations are actionable under G. L. c. 93A, § 9 (1), not only because they are unfair methods of competition, but also because they constitute unfair acts or practices, supra at note 13, and because the Legislature did not explicitly preclude antitrust activity as a violation of § 9 (1). Second, assuming that the omission of the word "method" from G. L. c. 93A, § 9 (2), precludes a class action thereunder, as the dissent suggests (the question is not before us: no class has yet been certified), it does not follow that an inability to bring a class action under § 9 (2) precludes an individual claim under § 9 (1). Nevertheless, a class action may be brought under G. L. c. 93A, § 9 (2), for unfair acts or practices, including antitrust violations. Additionally, § 9 (2), enacted in 1969, before the adoption of the Massachusetts Rules of Civil Procedure, does not preclude a class action for unfair methods of competition pursuant to the more burdensome provisions of Mass. R. Civ. R 23. See Fletcher v. Cape Cod Gas Co., 394 Mass. 595 (1985); Baldassari v. Public Fin. Trust, 369 Mass. 33, 40-41 (1975).
In light of our conclusion that G. L. c. 93A allows indirect purchasers to bring a cause of action for anticompetitive conduct that would be precluded under the Antitrust Act, the defendants' argument that the plaintiff could not be "injured" within the meaning of G. L. c. 93A, § 9, because she is not "injured" under the Antitrust Act is without merit. The court in Illinois Brick Co. v. Illinois, supra at 746-747, did not conclude that indirect purchasers were not injured by illegal overcharges passed on by direct purchasers. Rather, it concluded that indirect purchasers should not be permitted to pursue damages claims for such injuries because of the burdens that such lawsuits would place on the judicial system and because limiting recovery to direct purchasers was a more efficient means of making antitrust violators pay for their illegal acts given the small stakes of indirect purchasers in these lawsuits. Id. at 736-747.
The dissent suggests that it "makes no sense . to [permit both direct and indirect purchasers to bring suit] in the same State court system." Post at 77. We are not persuaded that permitting only direct purchasers to bring a cause of action and retain as damages the amount that they passed along to indirect purchasers, something that the dissent recognizes as a windfall at the expense of the true victims further down the distribution chain, is the correct result. Post at 76-77.
Some of the perceived difficulty in calculating and apportioning damages between direct and indirect purchasers was obviated by the Massachusetts Legislature when it included language in G. L. c. 93A, § 9 (3), allowing consumers who prevailed on claims of unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce to recover actual damages or twenty-five dollars, whichever was greater. To the extent that the plaintiff is able to prevail on the issue of liability but is unable to prove actual damages, the Legislature has decided that she is entitled to a specified remedy. See Whyte v. Connecticut Mut. Life Ins. Co., 818 F.2d 1005, 1012 (1st Cir. 1987); Leardi v. Brown, 394 Mass. 151, 160 (1985).
The Attorney General has both a common-law duty and a specific statutory mandate to protect the public interest and enforce public rights. See Commonwealth v. Mass. CRINC, 392 Mass. 79, 88 (1984). See also G. L. c. 93A, § 2,4, 5, 6, 7, 8. Nothing in this opinion should be construed as limiting the Attorney General's powers and remedies under G. L. c. 93A to seek redress for indirect purchasers for unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.