Class Action Claims Filing: Direct & Indirect Antitrust Actions

Before moving on to address the claims process, it would be helpful to explain the two distinct categories of antitrust class actions, which are direct purchaser and indirect purchaser class actions.

Direct Purchaser: A direct purchase means that the product or service at issue in the action was purchased directly from one or more of the defendants; their co-conspirators, if any are identified; or their affiliates or subsidiaries, rather than from an intermediary, such as a retail store or a wholesaler or distributor. As a result, it is not unusual for the defendants to provide the claims administrator with the names and addresses of at least a substantial number of the class members, and, in many instances, also with purchase information that may be used to pre-populate the claims forms to be disseminated to those class members.

Indirect Purchaser: An indirect purchase means that the product or service at issue in the action was purchased from someone other than a defendant or an alleged co-conspirator. For example, an indirect purchaser will have purchased the product or service at issue in the action from an intermediary, such as a retail store or a wholesaler or distributor. As a result, the identities and purchase histories of class members are not known, and, therefore, there is no direct mailing to them. Also, usually, but not always, the class definition for indirect purchaser actions excludes resellers (i.e., those persons or entities that purchased directly but who or which purchased the relevant products or services for the purpose of reselling them to someone else); for a purchase to be eligible under such definitions, therefore, it must have been made for the class member’s own use.

For the sake of completeness, it is important to note that, with respect to any product or service that is the subject of both a direct action and an indirect action – which is not unusual – a person or entity may be a class member in both actions if some of the relevant products or services were purchased directly from one or more of the defendants, and additional relevant products or services were purchased from an intermediary.

Direct purchaser antitrust actions may be prosecuted on behalf of purchasers anywhere in the U.S.; that is, nationally. The jurisdictional reach of indirect purchaser antirust actions, however, is limited by the U.S. Supreme Court’s holding in Illinois Brick v. Illinois, 431 U.S. 720, 735 (1977), that only direct purchasers could recover damages for price-fixing under Section 4 of the Clayton Act. In response to the Illinois Brick decision, many states passed so-called “Illinois Brick repealer statutes,” that provided to indirect purchasers the right to sue when analogous state antitrust laws are violated. Those states commonly are referred to a “repealer states”; the states that have not enacted such repealer statutes commonly are referred to as “non-repealer states.” Accordingly, indirect purchaser antitrust class actions are limited to the District of Columbia and the following 24 repealer states:

Arizona

California

Florida

Hawaii

Iowa

Wisconsin

Kansas

Massachusetts

Maine

Michigan

Minnesota

Mississippi

Missouri

Nebraska

Nevada

New Hampshire

New Mexico

New York

North Carolina

North Dakota

South Dakota

Tennessee

Vermont

West Virginia

Jurisdiction is further limited in each indirect purchaser antitrust class action only to those repealer states for which a class representative is certified by the court.

The attorneys general in non-repealer states sometimes pursue under their own state antitrust laws parens patriae actions on behalf of their own state residents.
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Next Installment:
Having discussed the players in the class action settlement claims process, as well as some basic matters related to those actions, the next installment will address the claims administration process itself.

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