Opinion ID: 2672780
Heading Depth: 2
Heading Rank: 2

Heading: Antitrust claim

Text: Taxpayers contend School Corporation and Foundation violated a provision of Indiana’s antitrust statute “[b]y working together to evade the public bidding laws on their transaction.” Br. of Appellant at 35. In light of its conclusions that the Public Work Statute did not apply to this transaction and that each of the six contracts the parties executed to effectuate the transaction were “entirely legal and authorized by statutes,” App. at 26 (Conclusion of Law 11), the trial court determined that Taxpayers’ “Anti[t]rust violation claims cannot succeed” and granted Defendants summary judgment on that issue. App. at 29. Reversing the trial court on this issue, the Court of Appeals remanded this cause to the trial court apparently for, among other things, consideration of Taxpayers’ antitrust violation claims. Taxpayers expressed at oral argument before this Court that the antitrust issue can be decided on the record before us. See Oral Arg. Tr. at 15:29. 5 We agree; and having determined that the Court of Appeals correctly reversed the trial court and found a violation of the Public Work Statute, we now address Taxpayers’ argument that by violating the Public Work Statute, the Defendants’ arrangement to renovate Building necessarily constitutes an antitrust violation. Taxpayers’ antitrust claim is grounded in two sections of the Antitrust Act. Indiana Code section 24-1-2-3 provides: “A person who engages in any scheme, contract, or combination to restrain or restrict bidding for the letting of any contract for private or public work, or restricts free competition for the letting of any contract for private or public work, commits a Class A misdemeanor.” Indiana Code section 24-1-2-7(a), in turn, provides a private right of action allowing an award of treble damages, costs, and attorney’s fees to “[a]ny person whose business or property is injured by a violation of this chapter.” In order to establish a violation of the Antitrust Act a private claimant must “prove three essential elements: 1) a violation of the statute, 2) injury to a person’s business or property proximately caused by the violation, and 3) actual damages.” Thompson v. Vigo Cnty. Bd. of Cnty. Comm’rs, 876 N.E.2d 1150, 1155 (Ind. Ct. App. 2007), trans. denied. Taxpayers assert they have proven the statutory violation by demonstrating facts showing “the School [Corporation] and Foundation . . . reached an agreement for a specific contractor to do the work on the project without any public bidding in 5 Taxpayers also raised and briefed the antitrust issue in the Court of Appeals. See Br. of Appellants at 35-37. Thus, upon our grant of transfer we obtained jurisdiction over all issues raised below. See Ind. Appellate Rule 58(A)(2). 7 violation of Indiana Code [section] 24-1-2-3.” They further aver they were injured—as taxpayers—“because the price for the project was higher than it would have been if it had been bid,” and—as potential competitive bidders—by not being awarded the construction contract. Finally, Taxpayers claim they have incurred two sets of damages: first, as taxpayers they indirectly paid “the difference between the $6.5 million that [ICI] was awarded and what the lowest bidding contractor would have been awarded,” and second, as potential bidding contractors they “lost the profits they would have earned had they been awarded the contract for the project.” Br. of Appellants at 36, 37. Defendants make three arguments in response, one of which we find dispositive. That is, Defendants contend Taxpayers have provided no evidence they have been injured as contemplated in section 7. 6 We agree. Taxpayers bring this suit under the statutory section providing a cause of action to “[a]ny person whose business or property is injured by a violation of this chapter.” I.C. § 24-1-2-7(a). To prevail a private plaintiff must demonstrate among other things “injury to a person’s business . . . proximately caused by the violation.” Thompson, 876 N.E.2d at 1155. As our courts have long recognized, the Antitrust Act’s purpose is to “prevent fraud and collusion in the letting of contracts and to protect trade and commerce against unlawful restraints and monopolies.” City of Auburn v. Mavis, 468 N.E.2d 584, 586 (Ind. Ct. App. 1984) (quoting Royer v. State ex rel. Brown, 112 N.E. 122, 124 (Ind. Ct. App. 1916)). And thus the required injury under section 7 is: [I]njury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants’ acts unlawful. The injury should reflect the anticompetitive effect either of the violation or of anticompetitive acts made possible by the violation. It should, in short, be the type of loss that the claimed violations . . . would be likely to cause. Id. (quoting Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977) (internal quotation omitted)). 6 Because this contention is dispositive we do not address Defendants’ contentions that (1) the language of Indiana Code section 24-1-2-1 exempts them from the reach of the Antitrust Act because each of the six contracts the parties executed here was lawful in isolation; and (2) because School Corporation cannot as a matter of law violate Indiana Code section 24-1-2-3, Foundation cannot have “engaged” with School Corporation to violate the statute. 8 Taxpayers contend their injuries consist of: (1) the supposed higher price for the Building renovation than it would have been if the project had been publicly bid, and (2) the loss of a contract which would have ultimately been awarded to one of them. But Taxpayers designate no evidence to support a conclusion that these injuries in fact occurred. They provide no estimate of what the project would have cost if bid publicly, and they provide no evidence from which we can infer that any one of them would have provided the “winning” bid. To the extent Taxpayers allege the elimination of public bidding constituted a generalized injury to competition, their reliance on the U.S. Supreme Court’s opinion in National Society of Professional Engineers v. United States is misplaced. In that case the Supreme Court determined that an agreement restricting competitive bidding constituted a violation of the Sherman Antitrust Act because of its clearly anticompetitive character. See 435 U.S. 679, 692-93 (1978). But in that case no determination of specific injury or damages was made or required; the relief sought by the government was an injunction prohibiting enforcement of the agreement. Further, Indiana precedent reflects that when an antitrust action is brought privately actual injury to the plaintiff must be demonstrated. Compare, e.g., Thompson, 876 N.E.2d at 1155 (affirming trial court’s motion to dismiss a claim brought under section 24-1-2-7 where plaintiff failed to demonstrate that but for the antitrust violation he would have received the contract) with Royer, 112 N.E. at 125 (affirming injunction prohibiting enforcement of contract obtained after collusion among bidders where action was brought by the State on relation of a taxpayer pursuant to what is now section 24-1-2-5 and remedy was granted not for injury to “the private rights or interest of such taxpayer” but to “secure or protect the interests of the public”). We agree with Taxpayers it is hornbook antitrust law that under an “agreement eliminating competitive bidding . . . a seller will be able to charge a higher price than under conditions of perfect competition.” Appellant’s Br. at 36 (quoting XII Philip Areeda, et al., Antitrust Law § 2022e (2d ed. 2005) (emphasis added)). But Taxpayers provide no evidence that is what happened here. And without evidence of injury, Taxpayers are not entitled to relief. Cf. Thompson, 876 N.E.2d at 1156 (affirming dismissal where plaintiff could not prove one of the three essential elements of his claim under section 24-1-2-7). 9