Opinion ID: 2330622
Heading Depth: 1
Heading Rank: 14

Heading: Horizontal Price-fixing

Text: O'Brien has also contended that Brighton's ownership of stores that sell Brighton products qualifies it as a competitor to the retailers with which it entered into pricing agreements; this, in turn, would support a claim for horizontal price-fixing. Brighton has one retail store in Kansas and more than 100 such stores nationwide. Brighton has countered that its status as a dual-distributor, i.e., both a wholesale supplier and a retailer of its own products, does not support a horizontal price-fixing claim because dual-distribution systems are treated as vertical arrangements under federal law. On appeal, Brighton has asserted that O'Brien raised any challenge to the district judge's rejection of any horizontal price-fixing claim too late to preserve it for our review. Our review of the record and briefs in this matter indicates otherwise, and we therefore consider the merits of the challenge. The district judge concluded in a one-paragraph footnote to his Memorandum Decision on summary judgment that the claims made do not involve horizontal price-fixing. He reasoned that the Heart Store agreements at issue were between Brighton as the wholesale supplier of Brighton products and its retailers, and that the RPM policy set forth the relationship between Brighton as the wholesale supplier of Brighton products and its retailers. In other words, both had vertical rather than horizontal structure and impact. We have not previously evaluated a dual distribution price-fixing case. The governing KRTA provisions, K.S.A. 50-101 and K.S.A. 50-112, neither differentiate between vertical and horizontal price-fixing nor outline a particular approach to a dual-distribution situation. Rather, as fully discussed above, they forbid all price-fixing combinations or arrangements, regardless of the applicable label. Were this case in federal court, flawless labeling would have more bite, because horizontal price-fixing is still subject to a per se prohibition while vertical price-fixingheld to include dual-distribution situations by every circuit to examine the questionis analyzed under the rule of reason. See Leegin, 551 U.S. at 893, 127 S.Ct. 2705 (vertical price-fixing subject to rule of reason analysis); AT & T Corp. v. JMC Telecom, LLC, 470 F.3d 525, 531 (3d Cir.2006) (dual-distribution treated like vertical price-fixing); ECC v. Toshiba America Consumer Products, Inc., 129 F.3d 240, 243 (2d Cir.1997) (same); Smalley & Co. v. Emerson & Cuming, Inc., 13 F.3d 366, 368 (10th Cir.1993) (same); Illinois Corporate Travel v. American Airlines, 889 F.2d 751, 753 (7th Cir.1989) (same); International Logistics Group v. Chrysler Corp., 884 F.2d 904, 906 (6th Cir. 1989) (same); Ryko Mfg. Co. v. Eden Services, 823 F.2d 1215, 1230 (8th Cir.1987) (same); Donald B. Rice Tire Co. v. Michelin Tire Corp., 638 F.2d 15, 16 (4th Cir.1981) (same); compare Red Diamond Supply, Inc. v. Liquid Carbonic Corp., 637 F.2d 1001, 1004-1007 (5th Cir.1981) (same); Glacier Optical, Inc. v. Optique du Monde, 1995 WL 21565 (9th Cir.1995) (unpublished opinion) (same). Because this state court case arises under the KRTA rather than federal law, the rule of reason does not apply. To the extent O'Brien's horizontal price-fixing claim rests on conduct identical to that supporting her vertical price-fixing claim, horizontal price-fixing is an alternative theory of liability. Proof of an alternative theory does not entitle a plaintiff to additional damages, but it gives a factfinder another way to get to judgment in the plaintiff's favor. O'Brien, like any civil plaintiff, could pursue an alternative theory of liability if it is supported by evidence. The district judge erred in ruling that the class claims do not involve horizontal price-fixing. They do. Because the district judge did not, evidently, reach the next question of whether O'Brien has come forward with enough evidence to avoid summary judgment on horizontal price-fixing, we do not reach it either.