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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
`
`In re: Refrigerant Compressors
`Antitrust Litigation
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`___________________________/
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`Case No. 2:09-md-02042
`
`Honorable Sean F. Cox
`United States District Court
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`OPINION & ORDER
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`This Multi District Litigation matter involves putative class action claims asserted against
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`multiple corporate Defendants by: 1) Direct Purchaser (“DP”) Plaintiffs (who assert federal
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`antitrust claims); and 2) Indirect Purchaser (“IP”) Plaintiffs (who assert state-law antitrust,
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`consumer protection act, and unjust enrichment claims). This Court has already ruled with
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`respect to Motions to Dismiss as to the DP Plaintiffs’ claims.
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`The matter is now before the Court with respect to remaining challenges to the claims
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`asserted by the IP Plaintiffs. For the reasons that follow, with respect to the IP Plaintiffs’ state-
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`law antitrust claims, this Court shall rule:
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`1)
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`2)
`
`3)
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`consistent with its rulings as to the DP Plaintiffs’ claims, that the IP Plaintiffs’
`current complaint now alleges plausible antitrust claims under Twombly;
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`that the AGC test should be used to determine whether antitrust standing
`exists under the laws of most of the states at issue and, under that test, the
`IP Plaintiffs lack antitrust standing; and
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`that the IP Plaintiffs have failed to allege a substantial effect on intrastate
`commerce and therefore cannot proceed with an antitrust claim under
`Tennessee’s antitrust statute.
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`Thus, the only antitrust claims that will remain in this action are the IP Plaintiffs’ claims under
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`the antitrust statutes of North Carolina and Minnesota.
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`With respect to the IP Plaintiffs’ state-law consumer protection act claims, this Court
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`shall:
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`1)
`
`2)
`
`3)
`
`4)
`
`5)
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`dismiss claims brought under the consumer protection acts of New
`Hampshire and North Carolina, for lack of intrastate commerce
`allegations;
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`dismiss claims brought under the consumer protection act of Florida, for
`failure to plead such claims with particularity;
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`dismiss claims brought under the consumer protection act of Wisconsin
`because, except with respect to limited circumstances that are not alleged
`here, there is no private right of action under the section at issue;
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`dismiss claims brought under the consumer protection act of the District of
`Columbia because the sole named D.C. IP Plaintiff does not, and could
`not, assert that it purchased primarily for personal, household, or family
`uses, as required by the act; and
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`deny all other challenges to the consumer protection act claims without
`prejudice.
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`Thus, the only consumer protection act claims that will remain in this action are the claims under
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`the consumer protection acts of California, Massachusetts, New Mexico, and Rhode Island.
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`With respect to the IP Plaintiffs’ unspecified unjust enrichment count, this Court shall
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`dismiss that count with prejudice.
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`This Court declines to rule on the statute of limitations challenges at this time, because
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`those issues would be more appropriately addressed in a motion for summary judgment
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`following discovery.
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`The Court also declines to address the Foreign Trade Antitrust Improvements Act
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`challenges as this stage of the litigation. Defendants can renew these arguments, if they choose
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`to do so, after discovery.
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`BACKGROUND
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`Beginning in February 2009, the DP Plaintiffs and IP Plaintiffs filed complaints in
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`various jurisdictions asserting claims against Defendants. Those actions were consolidated for
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`pretrial proceedings by the United States Judicial Panel on Multi district Litigation.
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`Case Management Order No. 1
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`The Court issued Case Management Order No. 1 (the “CMO”) on May 26, 2010. (D.E.
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`No. 152). Among other things, the CMO provides that the DP & IP Plaintiffs shall separately
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`file Master Amended Complaints including each Defendant no later than June 30, 2012. (Id. at
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`8). It also provides that Defendants may thereafter file motions to dismiss the master amended
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`complaints. (Id. at 9-10). In addition, the CMO provides that within thirty days of any transfer
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`to this Court of a “tag-along” action, Defendants may file or renew motions to dismiss. (Id. at
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`10).
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`The IP Plaintiffs’ First Two Consolidated Amended Complaints
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`The IP Plaintiffs filed their Consolidated Amended Complaint on June 30, 2010. (D.E.
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`No. 154).
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`On September 21, 2010, the IP Plaintiffs filed their Second Consolidated Amended
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`Complaint (“SCAC”). (D.E. No. 174). In it, they seek certification of a nationwide class, and
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`assert state-law antitrust claims, consumer protection / unfair competition claims, and unjust
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`enrichment claims against Defendants.
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`The SCAC describes the nature of the case as follows. This case arises from “a long-
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`running, world-wide conspiracy” among Defendants “to fix, raise, maintain, and/or stabilize the
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`prices of, and to allocate customers and markets for, Hermetic Compressors,” thus artificially
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`raising the prices for Hermetic Compressors and products containing Hermetic Compressors.”
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`(SCAC at ¶ 1). The IP Plaintiffs allege that the conspiracy was effective and that “end-payor
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`purchasers of Hermetic Compressor Products were among its many victims.” (SCAC at ¶ 2).
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`“The Hermetic Compressor is the critical engine in refrigeration products.” (SCAC at ¶ 3).
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`“Defendants sold Hermetic Compressors through a number of channels, including in the
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`refrigerator and freezer channel (the ‘R&F’ channel or ‘R&F Market’), which is dominated by a
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`few large Original Equipment Manufacturers (‘OEMs’), including Electrolux and General
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`Electric.” (SCAC at ¶ 4). “Sales of Hermetic Compressors in the R&F channel involve a yearly
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`bidding process by which the OEMs invite Defendants to compete for each OEM’s yearly
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`compressor needs. The OEMs invite all the manufacturers of Hermetic Compressor to
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`participate in the bidding at a location and time of the OEM’s choosing. These negotiations are
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`critical for buyers and sellers alike as the prices at which Hermetic Compressors are sold to the
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`OEMs for the entire year are determined in the course of a few days. All five Defendants
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`actively participated in these meetings.” (SCAC at ¶ 5). “Defendants, however, created a sham
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`bidding system, secretly meeting before the annual contract negotiations, sharing bids with one
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`another and agreeing upon prices. In addition, Defendants allocated among each other respective
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`shares of the OEM market.” (SCAC at ¶ 6). As a result, “prices between 1996 and 2009 were
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`artificially inflated. This overcharge was then passed on to end payors in the form of inflated
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`prices for Hermetic Compressors and products containing them, such as refrigerators and
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`freezers.” (SCAC at ¶ 7).
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`The SCAC asserts the following counts: 1) “Violation of State Antitrust Statutes” (Count
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`I), which asserts antitrust claims under the laws of twenty-five different states; 2) “Violation of
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`State Consumer Protection and Unfair Competition Statutes” (Count II), which asserts claims
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`under the consumer protection acts of eleven different states; and 3) “Unjust Enrichment” (Count
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`III).
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`There are seventeen named IP Plaintiffs in the SCAC (see SCAC at ¶¶ 20-36), which
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`consist of four corporate entities and thirteen individuals who reside in various states.
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`The proposed class in the SCAC consists of “[a]ll persons and entities that purchased
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`Hermetic compressors (“Hermetic Compressors”) or products that contained Hermetic
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`Compressors as an end payor, and not for resale, in the” specified states, “at any time from
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`January 1, 1996 through December 31, 2009 from any Defendant or any current or former
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`subsidiary or affiliate thereof, or any co-conspirator.” (SCAC at ¶ 130).
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`The SCAC alleges that, during the class period, the named IP Plaintiffs “purchased
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`Hermetic Compressor Products as end payors, and not for resale, manufactured by one or more
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`Defendants. As a result of the conspiracy alleged, Plaintiffs suffered pecuniary injury.” (SCAC
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`at ¶ 19). Notably, with the exception of one named IP Plaintiff (Royal W. Leith), the SCAC does
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`not allege where the named IP Plaintiffs made any of their alleged. purchases. As to Leith, the
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`SCAC alleges that he resides in Massachusetts and that he made his purchase in Massachusetts.
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`(SCAC at ¶ 31). With respect to the other named IP Plaintiffs, the SCAC contains allegations
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`regarding each one’s state of residence or principal place of business, but contains no allegations
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`as to where each one purchased Compressor Products or where it claims to have been injured.
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`The SCAC does not identify who manufactured any of the compressor products that they
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`purchased. (SCAC at ¶ 19 & ¶¶ 20-36).
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`Motions to Dismiss The IP Plaintiffs’ Claims
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`As permitted by the CMO, Defendants filed a joint Motion to Dismiss the IP Plaintiffs’
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`claims (D.E. No. 162), and that motion asserts numerous challenges.
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`In addition, two separate motions challenging the IP Plaintiffs’ complaints were also filed
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`by: 1) the Tecumseh Defendants (D.E. No. 166); and 2) Appliances Components Companies
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`S.p.A. (Docket Entry No. 218).1
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`Tag-Along Actions and Additional Motions to Dismiss The Claims Raised in Those Actions
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`Two “tag-along” actions, one from Rhode Island and one from Maine, were transferred to
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`this Court on March 16, 2011 – after the IP Plaintiffs had filed their SCAC. (D.E. No. 227).
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`Thus, the claims of these two named IP Plaintiffs were not in the IP Plaintiffs’ SCAC.
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`Defendants filed a joint “Motion to Dismiss the Gaffet and Strong Electric Indirect
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`Purchaser Plaintiffs’ Tag-Along Complaints” (D.E. No. 239) on May 6, 2011. In this motion,
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`Defendants challenge the claims in this action on the same grounds raised in their Joint Motion
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`to Dismiss the IP Plaintiffs’ operative complaint.
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`In addition, the Tecumseh Defendants filed their own “Motion to Dismiss the Gaffet and
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`Strong Electric Tag-Along Indirect Purchaser Actions.” on May 6, 2011. (D.E. No. 240). That
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`motion contains the same or very similar challenges.
`
`The Strong Electric and Gaffet IP Plaintiffs filed a combined response that responds to
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`both motions to dismiss their claims.
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`Whirlpool Corporation also filed its own motion challenging both the DP and IP
`1
`Plaintiffs’ claims against it, but it has been dismissed from this action.
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`This Court’s Ruling On Defendants’ Twombly Challenge And The IP Plaintiffs’ Request To
`File Another Consolidated Amended Complaint
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`On June 7, 2009, this Court heard oral argument on the “Twombly challenge” set forth in
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`Defendants’ Joint “Motion to Dismiss the Indirect Purchaser Plaintiffs’ Consolidated Amended
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`Complaint” (D.E. No. 162). After that hearing, the Court ruled that “the Indirect Purchaser
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`Plaintiffs’ current operative complaint, the ‘Second Consolidated Amended Complaint’, fails to
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`state a claim under Twombly, except as to the claims asserted against Defendants Panasonic
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`Corporation and Embraco North America, Inc., for the approximately three-year period set forth
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`in the respective plea agreements.” (D.E. No. 294). On June 11, 2012, this Court also issued a
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`Memorandum Opinion, setting forth the basis for that ruling. (D.E. No. 300).
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`On June 21, 2012, the IP Plaintiffs filed a “Motion to Amend or Clarify the Court’s June
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`7, 2012 Order and for Leave to File a Third Consolidated Amended Complaint” (D.E. No. 307).
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`In that motion, the IP Plaintiffs asked the Court to clarify that the Court’s June 7, 2009 Order did
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`not foreclose the IP Plaintiffs from seeking leave to file another amended complaint.
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`The parties were scheduled to appear before this Court on June 29, 2012, at 2:30 p.m.,
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`for the continuation of the hearing on the motions challenging the IP Plaintiffs’ claims. (See
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`6/20/12 Docket Entry).
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`On the morning of June 29, 2012, the IP Plaintiffs filed two separate submissions titled
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`“Indirect Purchaser Plaintiffs’ Supplemental Motion to Amend or Clarify the Court’s June 7,
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`2012 Order and for Leave to File a Third Consolidated Amended Complaint” (D.E. Nos. 311 &
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`312). Those submissions attached proposed Third Consolidated Amended Complaints.
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`On the afternoon of June 29, 2012, the Court did not continue the motion hearing.
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`Rather, the Court held a Status Conference with the parties to discuss the IP Plaintiffs’ recent
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`filings and the most efficient manner with proceeding. During the Status Conference, the parties
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`were able to resolve certain issues. Specifically, “[a]s stated on the record on June 29, 2012,
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`Defendants and the IP Plaintiffs agreed” as follows:
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`1.
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`2.
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`3.
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`4.
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`Defendants do not oppose the IP Plaintiffs’ requests to file an amended
`complaint, as requested in Docket Entry Nos. 307, 311 and 312.
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`Defendants reserve all issues raised in their pending Motions to Dismiss.
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`The IP Plaintiffs will enter into a stipulation and order with Defendant
`Whirlpool Corporation (similar to Docket Entry No. 310) that dismisses
`their claims against Whirlpool Corporation with prejudice.
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`On or before July 6, 2012, the IP Plaintiffs shall file their Revised Third
`Consolidated Amended Complaint. The amended pleading shall be the
`same pleading attached to the IP Plaintiffs’ Motion to Amend or Clarify
`the Court’s June 7, 2012 Order and for Leave to File a Third Consolidated
`Amended Complaint (Docket Entry No. 307-2), with only the following
`additions or changes:
`
`a.
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`b.
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`c.
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`The two named IP Plaintiffs in the “Tag-Along” Gaffett and Strong
`Electric actions (i.e., Nat Gaffet and Strong Electric) shall be
`included as named IP Plaintiffs in the Revised Third Consolidated
`Amended Complaint.2
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`The two additional named IP Plaintiffs identified in Docket Entry
`Nos. 311 & 312 (i.e., Peter Jacobus and Steve Larson) may be
`included as named IP Plaintiffs in the Revised Third Consolidated
`Amended Complaint.
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`The IP Plaintiff may correct any “scrivener’s errors” regarding the
`allegations specific to the existing named IP Plaintiffs in Docket
`Entry No. 307-2.
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`2
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`As such, the Motions to Dismiss directed to the tag-along Defendants were terminated.
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`5.
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`6.
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`d.
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`The IP Plaintiffs may delete Whirlpool Corporation as a
`Defendant.
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`Barring a very exceptional circumstance, no further amendments shall be
`permitted.
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`Following the filing of the IP Plaintiffs’ Revised Third Amended
`Complaint, the briefing schedule for supplemental briefs addressing the
`pending motions to dismiss shall be as follows:
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`a.
`
`b.
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`c.
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`No later than July 20, 2012, Defendants may file brief addressing
`the IP Plaintiffs’ Revised Third Amended Complaint.
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`No later than August 3, 2012, the IP Plaintiffs may file responses
`to those briefs.
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`No later than August 10, 2012, Defendants may file reply briefs.
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`(D.E. No. 313).
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`The IP Plaintiff’s Third Consolidated Amended Complaint
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`On July 6, 2012, the IP Plaintiffs filed their revised Third Consolidated Amended
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`Complaint (“TCAC”). (D.E. No. 314). This is now the operative complaint for purposes of the
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`remaining challenges in the pending motions. Notably, in the TCAC, the IP Plaintiffs: 1) added
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`the more specific factual allegations regarding the conspiracy that were contained in the DP
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`Plaintiffs’ consolidated complaint; 2) revised the proposed class definition such that it asserts
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`claims for a reduced time period; 3) added the named IP Plaintiffs from the Gaffet and Strong
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`Electric “tag-a-long” actions; 4) added two entirely new IP Plaintiffs (Peter Jacobus and Steve
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`Larson); 5) added allegations as to where the named IP Plaintiffs made their respective
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`purchases; and 6) added Danfoss Flensburg GmbH, formerly Danfoss Compressors GmbH as a
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`named Defendant.
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`On July 10, 2012, the IP Plaintiffs dismissed all claims against Defendant Whirlpool
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`Corporation with prejudice, subject to terms set forth in a Stipulated Order. (D.E. No. 317).3
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`This Court’s Ruling Regarding Constitutional Standing
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`On July 10, 2012, the Court held a hearing regarding Defendants’ argument that the
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`named IP Plaintiffs lack constitutional standing to bring claims under the laws of states/territories
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`where no named IP Plaintiff claims to reside or have been injured. Following the hearing, the
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`Court ruled that based upon the allegations in the IP Plaintiffs’ TCAC: 1) there is at least one
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`named IP Plaintiff with constitutional standing to assert claims under the laws of the following
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`states/territories: Arizona; California; District of Columbia; Kansas; New Hampshire; New
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`Mexico; New York; North Carolina; Michigan; West Virginia; Wisconsin; Rhode Island; Maine;
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`Nebraska; Minnesota; Florida; Tennessee; and Massachusetts; and 2) the named IP Plaintiffs lack
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`constitutional standing to bring claims under the laws of states/territories where no named IP
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`Plaintiff claims to reside or have been injured. The Court therefore dismissed the IP Plaintiffs’
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`claims asserted under the laws of the following states/territories: Arkansas; Hawaii; Iowa;
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`Louisiana; Mississippi; Nevada; North Dakota; Puerto Rico; South Dakota; Utah; and Vermont.
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`(See D.E. Nos. 318 & 319).
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`Thereafter, the IP Plaintiffs and Defendants filed supplemental briefs regarding the
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`remaining issues raised in the Defendants’ Motions to Dismiss. Thus, the motions have been
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`exhaustively briefed by the parties. The Court finds that additional oral argument would not
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`significantly aid the decisional process. See Local Rule 7.1(f)(2), U.S. District Court, Eastern
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`As such, Whirlpool Corporation’s Motion to Dismiss as to the IP Plaintiffs was
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`terminated.
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`District of Michigan. The Court therefore orders that the remaining issues will be decided upon
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`the briefs.
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`LEGAL STANDARD
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`Where subject matter jurisdiction is challenged pursuant to FED. R. CIV. P. 12(b)(1), the
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`plaintiff has the burden of proving jurisdiction in order to survive the motion. Moir v. Greater
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`Cleveland Regional Transit Authority, 895 F.2d 266, 269 (6th Cir. 1990).
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`When ruling on a motion to dismiss pursuant to FED. R. CIV. P. 12(b)(6), the court must
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`construe the complaint in a light most favorable to the plaintiff and accept all the well-pleaded
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`factual allegations as true. Evans-Marshall v. Board of Educ., 428 F.3d 223, 228 (6th Cir. 2005).
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`However, “the tenet that a court must accept as true all of the allegations contained in a
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`complaint is inapplicable to legal conclusions.” Ashcroft v. Iqbal, __ U.S. __, 129 S.Ct. 1937,
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`1948 (2009). Although a heightened fact pleading of specifics is not required, the plaintiff must
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`bring forth “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v.
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`Twombly, 550 U.S. 544, 570 (2007).
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`In determining whether to grant a Rule 12(b)(6) motion, the court primarily considers the
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`allegations in the complaint, although matters of public record, orders, items appearing in the
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`record of the case and exhibits attached to the complaint may also be taken into account. Amini
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`v. Oberlin College, 259 F.3d 493, 502 (6th Cir. 2001) (citing Nieman v. NLO, Inc., 108 F.3d
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`1546, 1554 (6th Cir. 1997)).
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`ANALYSIS
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`The following pending Motions to Dismiss challenge claims asserted by the IP Plaintiffs:
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`1) Defendants’ Joint Motion to Dismiss (Docket Entry No. 162); 2) the Tecumseh
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`Defendants’ Motion to Dismiss (Docket Entry No. 166); and 3) Appliances Components
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`Companies S.p.A.’s Motion to Dismiss (Docket Entry No. 218). This Court has already ruled on
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`the constitutional standing arguments raised in Defendants’ motions. The Court shall now
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`address the remaining challenges contained in those motions.
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`I.
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`Should The IP Plaintiffs’ Current Complaint Be Dismissed For Failure To Allege
`Plausible Antitrust Claims Under Twombly?
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`Because Defendants wish to preserve their argument on this challenge, they included a
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`reference to it in their supplemental briefs. But given the Court’s rulings on the Motions seeking
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`to dismiss the federal antitrust claims against the Direct Purchaser (“DP”) Plaintiffs (see D.E.
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`No. 245 at 18-21), and the fact that the IP Plaintiffs’ operative complaint now contains the very
`
`same factual allegations as are contained in the DP Plaintiffs’ complaint, the Court concludes
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`that the IP Plaintiff’s current complaint now alleges plausible antitrust claims under Twombly.
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`II.
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`Do The IP Plaintiffs Lack Antitrust Standing To Assert Claims As “End Payers” Of
`Products Containing Compressors Under Associated General Contractors?
`
`The pending motions assert that the IP Plaintiffs lack antitrust standing to assert claims as
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`“end payors” of products containing compressors, under Associated General Contractors of
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`California v. California State Council of Carpenters, 459 U.S. 519 (1983) (“AGC”) and its
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`progeny.
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`A.
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`Does AGC Govern Whether Plaintiffs Have Antitrust Standing Under The
`State Statutes At Issue?
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`In Count I of the IP Plaintiffs’ TCAC, they assert claims under the state antitrust statutes
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`of the following states: 1) Arizona; 2) California; 3) District of Columbia; 4) Kansas;
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`5) Maine; 6) Michigan; 7) Minnesota; 8) Nebraska; 9) New Hampshire; 10) New Mexico; 11)
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`New York; 12) North Carolina; 13) Tennessee; 14) West Virginia; and 15) Wisconsin. (See
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`TCAC at 47-50).4
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`The first issue the Court must decide is which states apply AGC in determining whether
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`an antitrust plaintiff has standing under its state antitrust laws.
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`The IP Plaintiffs concede that the AGC test must be applied to their antitrust claims
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`asserted under Nebraska law. (See D.E. No. 328 at 3; Kanne v. Visa U.S.A., Inc.,723 N.W.2d
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`293 (Neb. 2006)). 5
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`Defendants contend that the following states also follow the AGC test to claims brought
`6
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`under their antitrust statutes: 1) Arizona; 2) California; 3) District of Columbia; 4) Kansas; 5)
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`Maine; 6) Michigan; 7) New Hampshire; 8) New Mexico; 9) New York; 10) West Virginia; and
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`11) Wisconsin. (D.E. No. 325 at 2 and Ex. 1 to D.E. No. 325).
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`Defendants contend that the IP Plaintiffs lack standing to assert state antitrust claims
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`based on purchases of refrigeration products. They note that, under Illinois Brick Co. v. Illinois,
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`431 U.S. 720, 746 (1977), only direct purchasers of an allegedly price-fixed product may pursue
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`private actions for monetary damages under federal antitrust laws. They assert that several states
`
`responded to Illinois Brick by “repealing,” either statutorily or judicially, the categorical bar
`
`The TCAC also asserted claims under additional states, but the Court has since
`4
`dismissed those claims due to lack of constitutional standing.
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`In fact, under Kanne, the AGC test must also be applied to the IP Plaintiff’s claims under
`5
`Nebraska’s consumer protection act. Id. at 301.
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`Defendants’ motions also asserted that the AGC test applied to any antitrust claims
`6
`asserted under the laws of additional states, such as Florida and Massachusetts. But the IP
`Plaintiffs’ TCAC does not assert antitrust claims asserted under the laws of those states.
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`against indirect purchaser lawsuits under their own respective state antitrust laws. They assert
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`that even in such “repealer” jurisdictions, however, the mere fact that a plaintiff claims to be an
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`indirect purchaser does not mean that plaintiff has antitrust standing. They contend that while
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`such repealer states removed the automatic bar, an indirect plaintiff must still establish antitrust
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`standing requirements. Although the test was developed in the context of federal antitrust
`
`claims, Defendants content that in order to decide if indirect purchasers have standing, the AGC
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`Test should be applied. Under that test, the evaluating court weighs five factors. Defendants
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`contend that most states expressly prohibit indirect purchaser claims by plaintiffs who fail to
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`satisfy the AGC standing requirements. They also contend that other jurisdictions have
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`“harmonization provisions” that require their respective antitrust laws to be construed in
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`accordance with federal law, and thus the AGC standing requirements apply to those state-law
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`claims.
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`In response, the IP Plaintiffs first assert that it makes no sense to apply AGC to repealer
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`states’ antitrust laws. (D.E. No. 189 at 9). They assert that “[a]pplying AGC factors to determine
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`standing under the laws of states that have deliberately repealed Illinois Brick would revive
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`precisely the barriers to recovery that the pertinent states deliberately rejected by ‘repealing’
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`Illinois Brick.” (Id. at 10). They also assert that federal courts have refused to apply AGC to
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`state antitrust laws absent a clear directive from a state. The IP Plaintiffs acknowledge that the
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`AGC test must be applied to their antitrust claims asserted under the laws of Iowa and Nebraska
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`because the supreme courts of those two states have so held. (D.E. No. 189 at 11). As to the
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`remaining states, they contend that decisions cited by Defendants are from state trial or appellate
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`courts and therefore do not provide the “‘clear directive’ necessary for indicating a wholesale
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`adoption of AGC.” (Id.).
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`The IP Plaintiffs argue that in looking at whether a given state applies AGC to its antitrust
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`laws this Court should only consider decisions by a state’s supreme court. They assert that some
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`federal courts looking at this issue have found lower state-court decisions to be insufficient. IP
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`Plaintiffs direct the Court to In re Graphics Processing Units Antitrust Litig., 540 F.Supp.2d
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`1085, 1097 (N.D. Cal. 2007) and D.R. Ward Constr. Co. v. Rohm and Haas Co., 470 F.Supp.2d
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`485, 496 (E.D. Pa. 2006).
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`Defendants, on the other hand, contend that numerous federal courts have applied AGC to
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`the state antitrust laws at issue. They direct the Court to In re Dynamic Random Access Memory
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`(DRAM) Antitrust Litig., 516 F.Supp.2d 1072, 1085-96 (N.D. Cal. 2007); In re Dynamic Random
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`Access Memory (DRAM) Antitrust Litig., 536 F.Supp.2d 1129, 1135 & n.2 (N.D. Cal. 2008); In
`
`re Intel Corp. Microprocessor Antitrust Litig., 496 F.Supp.2d 404, 408-09 (D. Del. 2007); and
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`Sahagian v. Genera Corp. (In re Aftermarket Auto. Lighting Prods. Antitrust Litig.), No. 08-
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`7613, slip op. at p.7 (C.D. Cal. July 6, 2009).
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`This is a complex issue and, although it has repeatedly arisen in both state and federal
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`courts, it has “resulted in a number of splintered opinions.” Determining Antitrust Standing
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`Under State Law, 3 J. Bus. Entrepreneurship & L. 255 (2010).
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`In this Court’s view, the most persuasive of the decisions relied on by the parties is In re
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`Dynamic Random Access Memory (DRAM) Antitrust Litig., 516 F.Supp.2d 1072, 1085-96 (N.D.
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`Cal. 2007) (“DRAM I”). In that case, the district court looked at thirteen states. With respect to
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`eight of the states, it concluded that they would support application of the AGC test in assessing
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`antitrust standing. Id. at 1093-94. Specifically, it found that with respect to eight states, the state
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`courts in each had “concluded not only that antitrust standing is distinct from the issue of indirect
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`purchaser standing, but that application of the AGC factors is a proper means of determining
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`antitrust standing.” Id. at 1094. It then cited numerous trial and appellate courts from those
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`states. Id. The district court explained:
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`The court finds these authorities persuasive, and has relied on them as helpful
`guidance in concluding that application of the AGC factors to the instant case is
`appropriate. While the cases do not emanate from the states’ highest courts, they
`do emanate from courts with jurisdictional authority over the individual states in
`question, which courts are called upon to interpret the individual state laws at
`issue with more frequency and regularity than this court. Moreover, plaintiffs
`have failed to come forward with any contrary authority from the states in
`question.
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`Id. at 1094-95.
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`This Court chooses to follow the approach taken by the district court in In re Dynamic
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`Random Access Memory (DRAM) Antitrust Litig., 516 F.Supp.2d at 1085-96. That approach
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`entails: 1) considering whether the states at issue have adopted the AGC test; and 2) then
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`applying the AGC test for those states that have adopted it.
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`There are only three states whose supreme courts have ruled on this issue: 1) Iowa, which
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`ruled that AGC test is to be applied (Southard v. Visa U.S.A., Inc., 734 N.W.2d 192, 198 (Iowa
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`2007)); 2) Nebraska, which also applies the AGC test (Kanne v. Visa U.S.A., Inc., 272 Neb. 489,
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`723 N.W.2d 293 (2006)); and 3) Minnesota, which ruled that the AGC test does not provide the
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`benchmark for antitrust standing in Minnesota (Lorix v. Crompton Corp., 736 N.W.2d 619
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`(2007)). Only two of those states (Nebraska and Minnesota) are relevant here.
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`As to the remaining states that are at issue in this case, there are only trial court and
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`appellate court decisions on the issue.
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`“Under Erie R.R. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), a federal
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`court deciding a diversity case under state law must apply the law of the state’s highest court. If,
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`however, the state’s highest court has not decided the applicable law, then the federal court must
`
`ascertain the state law from ‘all relevant data.’” Anderson Dev. Co. v. Travelers Indem. Co., 49
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`F.3d 1128, 1131 (6th Cir. 1995) (quoting Bailey v. V. & O Press Co., 770 F.2d 601, 604 (6th Cir.
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`1985)). The “sources of data which may guide” such an inquiry include the decisional law of
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`state appellate and trial courts which “are accorded weight,” although “a federal court is not
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`bound by lower determinations if convinced by other data that the state’s highest court would
`
`determine otherwise.” Bailey, 770 F.2d at 604. In addition, “consideration may be given to”
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`positions expressed in restatements of law, law review commentaries, “and decisions from other
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`jurisdictions or the ‘majority rule.’” Id.
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`Defendants have identified the following decisions in support of their position that these
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`states apply AGC: Luscher v. Bayer AG, No. 2004-01485, slip. op. at 2-3 (Arizona Super. Ct.
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`Sept. 14, 2005); Vinci v. Waste Mgmt., Inc., 43 Cal. Rptr.2d 337, 338-40 (Cal. App. 1995); In re
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`Wholesale Elec. Antitrust Cases I & II, 147 Cal.App.4th 1293, 1309 (2007); Peterson v. Visa
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`U.S.A., Inc., No. 03-8080, 2005 D.C. Super. LEXIS 17, at *12 (D.C. Super. Ct. 2005); Wrobel v.
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`Avery Dennison Corp., No. 05-1296, slip. op. at 6-7 (Kan. Dist. Ct. Feb. 1, 2006); Orr v.
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`Beamon, 77 F.Supp.2d 1208, 1211-12 (D. Kan. 1999); DRAM, 516 F.Supp.2d at 1094; Knowles
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`v. Visa U.S.A., Inc., No. 03-707, 2004 Me. Super LEXIS 227, at *13 (Me. Super. Ct. Oct. 20,
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`2004); Stark v. Visa U.S.A., Inc., 2004 WL 1879003 (Mich. Cir. Ct. Jul. 23, 2004); Ho v. Visa
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`U.S.A., Inc., 787 N.Y.S.2d 677 (N.Y. Sup. Ct. 2004), aff’d 793 N.Y.S.2d 8 (N.Y. App. Div.
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`2005); and Strang v. Visa U.S.A., Inc., No. 03-011323, 2005 WL 1403769, at *3 (Wis. Cir. Feb.
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`8, 2005). (See D.E. No. 162 at 15 and Appendix 2; D.E. No. 166 at 5; see also D.E. No. 325 at 2
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`and Ex. 1 to D.E. No. 325).
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`In response, the only contrary authority as to these states that the IP Plaintiffs provide is
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`as to California. (See D.E. No. 189 at 12). That is, IP Plaintiffs do not offer any contrary
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`authority (i.e., authority showing that these states do not apply the AGC test) as to Arizona,
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`District of Columbia,