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Indirect purchaser class actions

Under the Supreme Court's Illinois Brick doctrine, only direct purchasers can recover federal antitrust damages. Many states permit indirect purchaser suits, however, and many plaintiffs file class actions in state courts seeking recovery under state law that wouldn't be possible under federal law. Now, under the Class Action Fairness Act, many of these cases will end up in federal court.

The National Law Journal pejoratively refers to this shift in jurisdiction as a "flood." (Pamela A. MacLean, "Federal Courts May Face Flood of Price-Fixing Actions", Sep. 21). Why twenty cases filed in twenty state courts that can come to inconsistent results is less of a flood than the addition of plaintiff classes to a single consolidated federal case already present in the federal courts remains unspoken. The article quotes an attorney protesting that federal courts don't have a lot of experience construing state antitrust laws—but neither do state courts, many of which expressly defer to federal precedent. I don't have data to confirm this, but I suspect there are very few state-court judges with indirect-purchaser class action experience under their belts, whereas most federal judges on the bench for any length of time have antitrust experience.



Rafael Mangual
Project Manager,
Legal Policy

Katherine Lazarski
Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.