Opinion ID: 6324834
Heading Depth: 3
Heading Rank: 2

Heading: Direct‐Purchaser Status

Text: In addition to satisfying Article III standing, the Providers must show that they have suffered an antitrust injury and that they are the proper parties to bring suit. We assume for pur‐ poses of this analysis that the Providers have suffered an an‐ titrust injury because they are allegedly paying higher prices for BD’s products than comparable products sold by compet‐ itors.10 The relevant question here is whether the Providers are the proper party to bring suit for that injury. 9 Furthermore, if the litigation were to proceed to the class certification stage, the Providers would not be adequate representatives of medical providers that purchase the Products from Cardinal. See Fed. R. Civ. P. 23(a)(4). 10 Cf. Chi. Studio Rental, Inc. v. Ill. Dep’t of Commerce, 940 F.3d 971, 978–79 (7th Cir. 2019) (concluding that plaintiff film studio “has pleaded an injury to itself, not an anticompetitive injury to the market”). 16 No. 21‐1513 To recap, in Illinois Brick, the Supreme Court held that a direct purchaser from an alleged monopolist or cartel mem‐ ber is the proper party to bring suit; by contrast, indirect pur‐ chasers further down the supply chain may not bring suit, even if they pay higher prices as a result of the defendant’s anticompetitive conduct. 431 U.S. at 729. This court has inter‐ preted Illinois Brick such that a direct purchaser may sue any member of an alleged antitrust conspiracy, so long as the plaintiff is a direct purchaser from at least one member of the conspiracy. See Paper Sys., 281 F.3d at 631–32; Marion I, 952 F.3d at 839. The Providers are direct purchasers from McKesson, which is allegedly in a vertical conspiracy with BD. The prob‐ lem here is that the Providers amended their complaint such that they are no longer alleging a horizontal conspiracy be‐ tween the Distributors. Instead, they now allege two independ‐ ent vertical conspiracies between BD and McKesson, on the one hand, and BD and Cardinal, on the other. Given these al‐ legations, the Providers cannot sue Cardinal under Illinois Brick because the SAC makes clear that they do not purchase BD Products from Cardinal. The Providers claim that they “pay supracompetitive prices for Becton Products whether they buy from Cardinal, McKesson, another distributor, or Becton itself.” But the SAC does not allege that all distributors are in the same conspiracy; rather, the allegations are limited to Cardinal and McKesson, just two of at least four major distributors. This discrepancy is significant because the Providers do not allege that either Car‐ dinal or McKesson has market power in the distribution mar‐ ket. Without market power, it is hard to understand how Car‐ dinal or McKesson would be able to raise prices on BD’s No. 21‐1513 17 products without losing business to other distributors. As this court made clear when ruling on the sufficiency of the FAC, “the first buyer from a conspirator is the right party to sue.” Marion I, 952 F.3d at 836 (quoting Paper Sys., 281 F.3d at 631). Because the Providers are no longer alleging a horizontal con‐ spiracy among the Distributors, the so‐called conspirator ex‐ ception outlined in Paper Systems is inapplicable. Our conclusion aligns with the general principal that anti‐ trust conspiracy liability is joint and several. See Paper Sys., 281 F.3d at 631–32. If Cardinal is not part of the BD‐McKesson conspiracy, and Plaintiffs are not purchasing the Products from Cardinal, then it does not make sense to hold Cardinal liable, either for the BD‐McKesson conspiracy or for the BD‐ Cardinal conspiracy.