Court Opinion

ID: 9377927
Source: CourtListenerOpinion
Date Created: 2023-03-09 01:00:31.214587+00
Date Added: 2024-06-11T17:17:17.923181
License: Public Domain

Case: 22-60329         Document: 00516669840            Page: 1      Date Filed: 03/08/2023

              United States Court of Appeals
                   for the Fifth Circuit
                                                                                 United States Court of Appeals
                                                                                          Fifth Circuit

                                                                                        FILED
                                                                                      March 8, 2023
                                        No. 22-60329                                  Lyle W. Cayce
                                                                                           Clerk

   New England Construction, L.L.C.,

                                                                    Plaintiff—Appellant,

                                             versus

   Weyerhaeuser Company; West Fraser, Incorporated;
   Canfor Company; GP Wood Products, L.L.C.; Sierra
   Pacific Industries; Interfor Company; Idaho Forest
   Group; PotlatchDeltic Land ; Lumber, L.L.C.; RSG
   Forest Products; John Does 1-5; John Doe Companies 1-5;
   Hampton Tree Farms, L.L.C.; Canfor Corporation,

                                                                 Defendants—Appellees.

                      Appeal from the United States District Court
                        for the Southern District of Mississippi
                                USDC No. 3:21-CV-309

   Before Clement, Oldham, and Wilson, Circuit Judges.
   Per Curiam:*
          Two Mississippi construction companies sued the ten largest lumber
   manufacturers in the United States for artificially inflating the price of wood

          *
              This opinion is not designated for publication. See 5th Cir. R. 47.5.
Case: 22-60329        Document: 00516669840              Page: 2       Date Filed: 03/08/2023

                                         No. 22-60329

   products during the COVID-19 pandemic. Because the Plaintiffs lack
   standing, we AFFIRM.
                                                I
           David B. Turner Builders LLC and New England Construction
   LLC—two Mississippi companies—sued a group of ten lumber
   manufacturers that operate in the United States. The Plaintiffs allege that the
   Defendants, using their “dominant position[s] in the lumber industry,”
   collectively “conspired with each other to increase lumber prices over 100
   percent during the COVID-19 pandemic . . . . ” For support, the Plaintiffs
   contend “that there is no set of facts that could show Defendants randomly
   selecting the same exorbitant prices for lumber at the same time” but for a
   conspiratorial agreement. Because of the Defendants’ “[c]onspiracy to
   monopolize in the lumber market,” the Plaintiffs were forced to pay
   “extremely high and unreasonable prices.” Consequently, the Plaintiffs sued
   the Defendants for violating several antitrust laws including the Sherman
   Antitrust Act, the Robinson-Patman Act, the Clayton Antitrust Act, the
   Hart-Scott-Rodino Act, as well as various state laws.
           After the Defendants filed a Rule 12(b)(6) motion, the district court
   dismissed the Plaintiffs’ suit for three reasons. 1 First, the district court found
   that the Plaintiffs’ “federal antitrust claims” are “barred” because the
   Plaintiffs are “indirect purchasers.” The district court noted that the
   “Plaintiffs have not made any direct purchases from any Defendant.”
   Second, under the Sherman Act, the Plaintiffs “fail[ed] to allege sufficient
   facts to establish the existence of an agreement or conspiracy between [the]

           1
             The district court previously considered a Rule 12(b)(6) motion filed against the
   Plaintiffs’ original complaint, but gave the Plaintiffs leave to amend because they asserted
   “no more than conclusory allegations that Defendants violated the federal antitrust laws.”

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Case: 22-60329         Document: 00516669840               Page: 3      Date Filed: 03/08/2023

                                          No. 22-60329

   Defendants.” Instead, the Plaintiffs rely on a theory of “parallel conduct,”
   or alleging that each Defendant “raised prices on general lumber products at
   the same time.” Finally, the Plaintiffs failed to show that the Defendants
   have “monopoly power in [the relevant] market,” namely certain towns in
   Mississippi. The Plaintiffs, according to the district court, only offer evidence
   that the Defendants are players in the national lumber market, not necessarily
   those towns in Mississippi. 2 Following the dismissal, New England
   Construction alone appealed.
           On appeal, New England Construction raises three issues. First, New
   England Construction maintains that the district court applied the wrong
   “standard of review for a motion to dismiss under the Sherman [Act].”
   Specifically, New England Construction argues that its “factually backed”
   claims shouldn’t have been dismissed without an “opportunity” to engage
   in discovery. Second, New England Construction argues that the district
   court erroneously found the Plaintiffs are “third party” purchasers because
   several “exhibits show[] the [Defendants’] name[s] on the product[s]
   purchased” by New England Construction. Third, New England
   Construction contends that it “met the probability requirements to state a
   claim under § 1983 Conspiracy of the Sherman [Act].”

           2
             Notably, the district court dismissed the Plaintiffs’ remaining claims on various
   grounds, including the failure to identify an anticompetitive merger, the non-existence of
   price discrimination, and the lack of involvement from state actors. The district court also
   dismissed the Plaintiffs’ state law claims for failure to provide “notice of the ‘grounds upon
   which the claims rest.’”

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Case: 22-60329       Document: 00516669840             Page: 4      Date Filed: 03/08/2023

                                        No. 22-60329

                                             II
          As an initial matter, New England Construction only challenges the
   district court’s disposition of its Sherman Antitrust Act claims. 3 Therefore,
   the remainder of the Plaintiffs’ appellate arguments are forfeited. See Rollins
   v. Home Depot USA, 8 F.4th 393, 397 (5th Cir. 2021).
          Section 1 of the Sherman Act “prohibits all agreements that restrain
   trade.” Marucci Sports, L.L.C. v. Nat’l Collegiate Athletic Ass’n, 751 F.3d 368,
   373 (5th Cir. 2014). Section 2 of the Sherman Act bars any “conspiracy to
   monopolize” a trade. Stewart Glass & Mirror, Inc. v. U.S. Auto Glass Disc.
   Ctrs., Inc., 200 F.3d 307, 316 (5th Cir. 2000). But, to bring a claim under the
   Sherman Act, a plaintiff must be a “direct purchaser.” Illinois Brick Co. v.
   Illinois, 431 U.S. 720, 746 (1977). Indirect purchasers—or persons who are
   “not the immediate buyers from the alleged antitrust violators”—lack
   standing to sue in antitrust. Kansas v. UtiliCorp United, Inc., 497 U.S. 199,
   207–08 (1990); Summit Off. Park, Inc. v. U.S. Steel Corp., 639 F.2d 1278, 1282
   (5th Cir. 1981) (finding “an indirect purchaser of materials had no standing
   to assert a claim” under the Sherman Act).
          New England Construction maintains that it is a “direct purchaser”
   because it bought the Defendants’ “specific named brand wrapped lumber
   product[s].” For support, New England Construction relies on receipts
   for—and photos of—the Defendants’ products at several national and local
   retailers, admitting that it “purchased [its] lumber at these stores.” Those
   stores include Lowes, Home Depot, Barnett Phillips Lumber & Home Center
   (a “building supply store”), and Prassel Lumber Company, Inc. (a “retail

          3
              New England Construction also appeals the dismissal of its 42 U.S.C. § 1983
   claim. Because New England Construction didn’t allege the presence of a state actor, its
   claim fails outright. See Priester v. Lowndes Cty., 354 F.3d 414, 420 (5th Cir. 2004).

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                                     No. 22-60329

   store”) in Mississippi. None of those entities are named defendants in this
   case. Because the “Plaintiffs have not made any direct purchases from any
   Defendant,” the district court dismissed New England Construction’s
   Sherman Act claims.
          In response to the district court, New England Construction avers that
   “[w]here the named product was purchased is of no consequence . . . under
   the case of Illinois [B]rick.” We disagree. The parties to the transaction—
   including their location—is the pinnacle consideration for the direct
   purchaser rule established in Illinois Brick, 431 U.S. at 746. For example, the
   plaintiffs in UtiliCorp “bought their gas from the utilities, not from the
   suppliers said to have conspired to fix the price of the gas.” 497 U.S. at 207.
   Considering the “direct purchaser rule established in” Illinois Brick, the
   Supreme Court found that “any antitrust claim against the defendants [was]
   not for [the plaintiffs], but for the utilities to assert.” Id. Here, New England
   Construction didn’t buy its lumber products directly from any of the
   Defendants, but instead through retail stores. So, there was an “intermediary
   in the distribution chain between the [manufacturer] and the consumer.”
   Apple Inc. v. Pepper, 139 S. Ct. 1514, 1521 (2019). Consequently, New England
   Construction is an indirect purchaser and, as a result, lacks standing to sue
   the Defendants under the Sherman Act.
          The district court’s decision is AFFIRMED

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