“The district court certified a plaintiff class in an antitrust case in which half of the class members never purchased any products from the defendants.  By expanding ‘antitrust standing’ in this manner, courts are increasing the threat of crippling antitrust awards that could end up deterring pro-competitive activity.”
—Richard Samp, WLF Chief Counsel

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WASHINGTON, DC—Washington Legal Foundation (WLF) last evening asked the U.S. Court of Appeals for the First Circuit to impose limits on who can sue for damages for alleged antitrust violations.  In an amicus curiae brief urging the court to review a district court decision, WLF argued that antitrust standing should be limited to those who had direct financial dealings with an alleged antitrust violator.  WLF filed its brief on behalf of itself, the National Association of Manufacturers, and the Pharmaceutical Research and Manufacturers of America.

The defendants in this case are two pharmaceutical companies that had been involved in a dispute over patent rights.  They eventually settled the dispute. But then a group of customers alleged that the settlement was an improper restraint of trade that led to inflated prices, and they filed a class-action antitrust suit against the drug companies.

The question at issue is who has “antitrust standing” to be included in the plaintiff class.  The district court certified a class that includes customers that never purchased products from the defendants.  The district court reasoned that the defendants’ alleged misconduct might have induced other sellers, acting independently, to raise their prices as well.

WLF’s brief urged the First Circuit to review, and ultimately overturn, the district court’s class-certification decision.  WLF noted that antitrust law has traditionally limited “standing” to those who purchase directly from an alleged antitrust violator.  WLF argued that permitting others to sue would unduly complicate antitrust litigation when there is no direct causal link between alleged violations and a claimed injury.  WLF pointed out that expanding antitrust standing creates a threat of excessive antitrust liability that can deter pro-competitive activity.

Celebrating its 42nd year as America’s premier public-interest law firm and policy center, WLF’s mission is to preserve and defend America’s free-enterprise system by litigating, educating, and advocating for free-market principles, a limited and accountable government, individual and business civil liberties, and the rule of law.