Gatt Communications, Inc. v. PMC Associates, L.L.C. , 711 F.3d 68 ( 2013 )


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  • 11-1111-cv
    Gatt Commc’ns, Inc. v. PMC Associates, L.L.C.
    United States Court of Appeals
    FOR THE SECOND CIRCUIT
    August Term, 2011
    (Argued: February 6, 2012               Decided: February 14, 2013)
    Docket No. 11-1111-cv
    GATT COMMUNICATIONS, INC.,
    Plaintiff-Appellant,
    –v.–
    PMC ASSOCIATES, L.L.C., DBA PMC ASSOCIATES,
    PMC ASSOCIATES, INC., DBA PMC ASSOCIATES,
    PHILLIP M. CASCIANO ASSOCIATES, INC., DBA PMC ASSOCIATES,
    PHILLIP M. CASCIANO, BRYAN CASCIANO,
    THOMAS WINELAND, VESEL RADIVIC,
    Defendants-Appellees,
    JOHN DOE, HENRY HOE, RICHARD ROE,
    Defendants.
    Before:
    WESLEY, CARNEY, Circuit Judges, and CEDARBAUM, District Judge.*
    Appeal from a final judgment of the United States District Court for the
    Southern District of New York (Deborah A. Batts, Judge), granting Defendants-
    Appellees’ motions to dismiss the amended complaint. We conclude that Plaintiff-
    Appellant Gatt Communications, Inc., lacks antitrust standing to bring its claims
    *
    The Honorable Miriam Goldman Cedarbaum, United States District Judge for the Southern
    District of New York, sitting by designation.
    under the Sherman Act and the Donnelly Act. We also hold that Gatt’s common law
    claims were properly dismissed as a matter of law.
    AFFIRMED.
    KAREN F. NEUWIRTH, Law Office of Martin S. Rapaport, New York, New
    York, for Plaintiff-Appellant Gatt Communications, Inc.
    MICHAEL J. HAHN (Kristin A. Muir, on the brief), Lowenstein Sandler
    PC, New York, New York, for Defendants-Appellees Philip M.
    Casciano Associates, Inc. DBA PMC Associates, Philip Casciano,
    Bryan Casciano, and Vesel Ramovic.1
    DANIEL E. LAYTIN, Kirkland & Ellis LLP, Chicago, Illinois (Jay P.
    Lefkowitz, Lauren O. Casazza, Kirkland & Ellis LLP, Jay B.
    Spievack, Kara L. Gorycki, Cohen Tauber Spievack & Wagner
    P.C., New York, New York, on the brief), for Defendant-Appellee
    Thomas Wineland.
    SUSAN L. CARNEY, Circuit Judge:
    This case involves an alleged bid-rigging scheme that sought to defraud
    various New York State and City government agencies in connection with the
    purchase by those agencies of a particular brand of mobile radio. Plaintiff-Appellant
    Gatt Communications, Inc. (“Gatt”), an admitted past participant in the purported
    scheme, seeks to recover damages from alleged co-conspirators for losses arising
    from the termination of Gatt’s at-will distribution contract for those radios. Gatt’s
    federal and state antitrust claims arise under the Sherman Act, 
    15 U.S.C. § 1
    , and
    the Donnelly Act, 
    N.Y. Gen. Bus. Law § 340
    ; its other claims sound in New York
    1
    In the text of our opinion, we use spellings of these defendants' names that appear from
    their filings to be correct. In the caption of our opinion, however, in accordance with Fed. R. App. P.
    12(a), we use spellings that conform to those appearing in the title of the district court action.
    2
    common law. The district court (Deborah A. Batts, Judge) dismissed the complaint
    for failure to state a claim. Gatt Commc’ns, Inc. v. PMC Assocs., L.L.C., No. 10 Civ.
    8, 
    2011 WL 1044898
     (S.D.N.Y. Mar. 10, 2011). We conclude that Gatt lacks
    antitrust standing to pursue its antitrust claims and that its common law claims
    were properly dismissed as a matter of law. We therefore AFFIRM the district court’s
    dismissal of Gatt’s complaint.
    BACKGROUND
    As alleged in Gatt’s amended complaint and the affidavit of Pietro
    Gattini, Gatt’s owner and president, the relevant facts are as follows.2
    A.      Factual Background
    Gatt buys, markets, and sells commercial land mobile radios in New
    York State. Vertex Standard USA, Inc. (“Vertex”), which is not a party to this
    action, manufactures and distributes the radios that are the subject of this dispute,
    and from 2005 through 2008, Defendant-Appellee Thomas Wineland worked for
    Vertex as its Vice President of Sales and Marketing. Defendant-Appellee PMC
    Associates, Inc. (“PMC”) is both a dealer of Vertex products and Vertex’s sales
    2
    Gatt submitted the affidavit of Pietro Gattini as an attachment to its opposition to
    defendants’ motions to dismiss. The affidavit largely mirrored the factual assertions presented in the
    amended complaint, but also contained additional allegations. The district court treated the affidavit
    as outside the pleadings and excluded it from consideration on the motions to dismiss. See Fed. R.
    Civ. P. 12(d). Gatt argues that the court erred by failing to consider the Gattini affidavit. We
    express no opinion about whether the district court should have considered the affidavit. Instead, we
    treat the allegations as if they had been included in a second amended complaint, and conclude for
    the reasons set forth in the text that even as so amplified, Gatt has failed to state a claim upon which
    relief can be granted.
    3
    representative in New York State.3
    In May 2002, Gatt and Vertex entered into an agreement (the “Dealer
    Agreement” or the “Agreement”) pursuant to which Gatt became a licensed dealer of
    Vertex radios and equipment. The Dealer Agreement was subject to termination by
    either party without cause on thirty days’ written notice.4 In connection with the
    Agreement, Vertex advised Gatt that PMC, as Vertex’s sales representative in New
    York, would orchestrate and support Gatt’s efforts to sell Vertex products. Vertex
    instructed Gatt to follow PMC’s directions and “to keep PMC closely informed of all
    of Gatt’s sales efforts and progress in contacting, cultivating, developing and . . .
    selling Vertex branded radios” to potential customers. Am. Compl. ¶¶ 36-37. Vertex
    explicitly warned Gatt that failure to cooperate with PMC could result in
    termination of the Dealer Agreement.
    Between 2002 and 2007, various New York City and State government
    agencies purchased significant quantities of Vertex radios for security and other
    communication purposes. These agencies often made their purchases by soliciting
    3
    Our references to “PMC” include, collectively, corporate defendants-appellees PMC
    Associates, Inc., PMC Associates, LLC, Philip M. Casciano Associates, Inc., and individual
    defendants-appellees Philip M. Casciano, Bryan Casciano, and Vesel Ramovic. Gatt alleges that
    Philip and Bryan Casciano are principals and senior officers of PMC and Vesel Ramovic is an
    employee of PMC.
    4
    Although the record does not contain the entire Dealer Agreement, Vertex’s October 22,
    2007 notice of termination quotes language from the Dealer Agreement authorizing “without cause”
    termination by either party. Ex. 15 to Gattini Aff. Because the amended complaint refers to this
    termination letter, see Am. Compl. ¶ 139, we may consider the letter in reviewing the district court’s
    dismissal of this action, see Rothman v. Gregor, 
    220 F.3d 81
    , 88 (2d Cir. 2000). The pertinent terms
    of the Dealer Agreement are undisputed: Gatt concedes that the Dealer Agreement authorized Vertex
    to terminate Gatt’s license at any time without cause. Appellant’s Br. at 24, 45.
    4
    bids from Vertex dealers. In December 2006, PMC and New York State’s
    Procurement Services Group entered into a contract (the “New York Catalog
    Contract”) that “set the price at which any [New York government] agency could buy
    each particular Vertex radio model if such agency did not want to conduct a bidding
    process.” Am. Compl. ¶ 49-50. The New York Catalog Contract thus set a maximum
    price for Vertex products, but left state agencies free to solicit bids from Vertex
    dealers with the aim of securing a lower price. PMC, however, forbade Vertex
    dealers from selling to government agencies at prices below those listed in the New
    York Catalog Contract. At least six Vertex dealers in addition to Gatt and PMC had
    both Vertex’s contractual permission and the practical wherewithal to submit (and
    fulfill) bids in response to solicitations by local agencies.
    Gatt alleges that PMC and Wineland (acting for Vertex) orchestrated a
    “bid-rigging” or “bid rotation” scheme between at least 2005 and 2007. The plan
    called for PMC to determine in advance which Vertex dealer would submit the
    lowest (and, they reasonably expected, winning) bid for each government contract
    involving the purchase and sale of Vertex products. At PMC’s direction, the
    designated Vertex dealer would then submit a bid at a price set by PMC. The
    remaining dealers either would refrain from bidding or submit artificially inflated
    “dummy quotations” for the contract. The alleged scheme thus maintained the
    superficial appearance of a competitive bidding process, while ensuring the outcome
    desired by PMC and Vertex. If a Vertex dealer did not comply with the sham
    bidding process, however, PMC “could and would cause” Vertex to terminate that
    5
    dealer’s license. Id. ¶ 53. Gatt alleges that Vertex knew that PMC was “organizing,
    arranging and orchestrating quotations” and “supported and encouraged such
    unlawful activity.” Id. ¶¶ 156.
    Gatt admits that it participated in the scheme at least from September
    2005 to May 2007. On at least five occasions in that period, Gatt submitted
    artificially-inflated bids to various New York government agencies at PMC’s request,
    thereby helping to steer contracts to the predetermined bid-winning Vertex dealer,
    which—as it happened—was usually PMC itself. In addition, in April 2007, PMC
    convinced Gatt to refrain from bidding on a particular government contract by
    promising that once the contract had been awarded to PMC, PMC would hire Gatt as
    the principal subcontractor on the project. Gatt alleges that it went along with the
    scheme out of fear that its Vertex dealership license would otherwise be terminated.
    Gatt profited from the scheme. Indeed, Gatt estimates that it was “one
    of the most productive Vertex dealers in the United States” by volume of sales. Id.
    ¶ 35. It acknowledges obtaining more than one hundred contracts because of the
    collusive bidding scheme. Gattini Aff. ¶ 28. For instance, Gatt often responded to
    bid solicitations from the New York City Department of Education, which required a
    minimum of three bidders before it would award a contract. Each time Gatt
    intended to bid on a Department of Education contract, it first faxed a copy of its bid
    to PMC, and PMC arranged for other Vertex dealers to submit sham, higher bids, all
    but guaranteeing that Gatt would be awarded the contract if the Department chose
    6
    to purchase Vertex radios.5
    Although Gatt actively participated in and benefited from the scheme
    for at least two years, by the fall of 2007, it had begun to feel that PMC had “abused”
    its relationship with Gatt. Am. Compl. ¶ 123. Gatt had also become frustrated with
    the share of government contracts allocated to it under the scheme, especially by
    comparison with the higher-value contracts that PMC kept for itself. See Gattini
    Aff. ¶ 79 (“Gatt won some contracts under the [bid-rigging] scheme[, but] all the big
    contracts were being taken by PMC and [Gatt] wanted . . . to become a significant
    business.”). Accordingly, in August 2007, when the New York City Transit Authority
    requested bids for the purchase of 1,200 Vertex radios and related equipment—a
    contract worth in excess of $1 million in revenues to the successful bidder—Gatt
    broke ranks and independently set and submitted a quotation, despite PMC’s
    instruction to the contrary. In September 2007, the Transit Authority informed Gatt
    that it was the lowest bidder and likely would win the contract.
    When PMC learned of Gatt’s rogue bid, however, it reported to
    Wineland that Gatt was a “troublemaker” and recommended that Vertex terminate
    Gatt’s Dealer Agreement. Am. Compl. ¶ 128-129. PMC also offered Gatt $40,000 to
    withdraw its Transit Authority bid. When Gatt complained to Wineland about
    5
    Although Gatt has alleged that defendants engaged in anticompetitive acts in connection
    with the sale of Vertex radios, it has not alleged that Vertex is the sole manufacturer of commercial
    land mobile radios. Thus, consumers were presumably free to purchase other brands of radios. As
    the district court recognized, this observation alone could be fatal to Gatt’s claim if we were to reach
    the merits and apply a “rule of reason” analysis, because Gatt has failed to allege that competition
    was improperly restrained in the market for commercial land mobile radios generally. Gatt
    Commc’ns, 
    2011 WL 1044898
    , at *3. Because we conclude that Gatt lacks antitrust standing,
    however, we need not reach this issue.
    7
    PMC’s conduct, Wineland advised Gatt to accept PMC’s $40,000 offer, advice that
    Gatt rejected.
    Gatt soon received a letter from Wineland dated October 22, 2007,
    giving notice that Vertex had exercised its “option” to terminate Gatt’s Vertex
    dealership, effective thirty days later. On October 30, 2007, the Transit Authority
    sought new bids for the contract after realizing that its original bid request
    contained technical errors. No longer authorized to sell Vertex products, Gatt could
    not rebid. PMC eventually won the contract.
    B.     Procedural History
    In January 2010, Gatt filed this action against PMC and others (but not
    Vertex) in the United States District Court for the Southern District of New York.
    In its amended complaint, Gatt sought damages for defendants’ alleged violations,
    through the bid-rigging scheme, of the Sherman Act, 
    15 U.S.C. § 1
    ; the Donnelly Act,
    
    N.Y. Gen. Bus. Law § 340
    ; and the Racketeer Influenced and Corrupt Organizations
    Act (“RICO”), 
    18 U.S.C. §§ 1961
     et seq. The amended complaint also asserted New
    York common law claims for tortious interference with contract and tortious
    interference with prospective business relations.
    For each of its three antitrust causes of action, Gatt sought principally
    $1.2 million in damages, to be trebled; for each of its two state common law counts,
    Gatt sought $1.16 million, plus punitive damages in an unspecified amount. Its
    alleged injuries were based in part on commissions lost on two contracts it assertedly
    would have won in the absence of the scheme—the $1 million Transit Authority
    8
    contract and a $250,000 contract involving the 2007 sale of Vertex radios to the
    School Safety Division of the New York City Police Department.6 It also sought to
    recover for lost profits associated with unspecified future contracts for the sale of
    Vertex radios.
    Upon motions filed by PMC and Wineland, the district court dismissed
    the amended complaint and granted judgment for the defendants. Applying the rule
    of reason to Gatt’s antitrust claims, the district court concluded that those claims
    were insufficiently pleaded because Gatt had identified neither a relevant product
    market nor an adverse effect on competition in any market. With regard to Gatt’s
    state tort claims, the district court held that Gatt had failed to state a claim for
    tortious interference with contract or for tortious interference with prospective
    business relations. It reasoned principally that Gatt’s complaint alleged no breach of
    the Dealer Agreement and failed to allege facts sufficient to support a theory that
    PMC’s sole purpose in informing Vertex of Gatt’s bid on the Transit Authority
    contract was to harm Gatt.7 The court denied Gatt leave to replead, concluding that
    additional amendment of the complaint would be futile because Gatt could not
    “allege an injury to itself that corresponds to the rationale for finding a violation of
    the antitrust laws in the first place,” and because the facts pleaded in support of the
    6
    Gatt maintains that after it disclosed its proposed quotation for the Police Department
    contract to PMC, PMC wrongfully used that information to underbid Gatt. The Police Department
    awarded the contract to PMC in March 2007.
    7
    The court also held that Gatt lacked standing to pursue its RICO claims, a ruling that Gatt
    does not challenge on appeal. See Appellant’s Br. at 4 n.1.
    9
    common law claims were “incompatible” with Gatt’s legal theories. Gatt, 
    2011 WL 1044898
    , at *7-8 (internal quotation marks omitted).
    Gatt now appeals.
    DISCUSSION
    We review de novo a district court’s dismissal pursuant to Federal Rule
    of Civil Procedure 12(b)(6), “construing the complaint liberally, accepting all factual
    allegations in the complaint as true, and drawing all reasonable inferences in the
    plaintiff’s favor.” Chase Grp. Alliance LLC v. City of N.Y. Dep’t of Fin., 
    620 F.3d 146
    , 150 (2d Cir. 2010) (internal quotation marks omitted). To survive a motion to
    dismiss, a complaint “must contain sufficient factual matter, accepted as true, to
    ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 
    556 U.S. 662
    ,
    678 (2009) (quoting Bell Atl. Corp. v. Twombly, 
    550 U.S. 544
    , 570 (2007)). A claim
    has “facial plausibility when the plaintiff pleads factual content that allows the court
    to draw the reasonable inference that the defendant is liable for the misconduct
    alleged.” 
    Id.
    The district court’s dismissal of the antitrust claims was premised
    principally on the shortcomings in plaintiff’s § 1 allegations, and, on appeal, Gatt
    contends principally that the district court erred in applying a rule of reason
    analysis to Gatt’s antitrust claims, arguing that the bid-rigging alleged in the
    complaint is per se unlawful under § 1 of the Sherman Act.8 Denying leave to
    8
    The “rule of reason” is the standard used to assess whether restraints on trade that are not
    unlawful per se nonetheless violate § 1 of the Sherman Act. Leegin Creative Leather Prods., Inc. v.
    PSKS, Inc., 
    551 U.S. 877
    , 885-86 (2007). When applying the rule of reason, courts weigh all of the
    10
    replead, the district court questioned Gatt’s antitrust standing to pursue its claims
    in any event. On review, we focus on this threshold question of antitrust standing,
    because we may affirm, of course, “on any ground which finds support in the record,
    regardless of the ground upon which the trial court relied.” Beth Israel Med. Ctr. v.
    Horizon Blue Cross & Blue Shield of N.J., Inc., 
    448 F.3d 573
    , 580 (2d Cir. 2006)
    (internal quotation marks omitted).
    A.      Antitrust Standing
    Section 4 of the Clayton Act establishes a private right of action for
    violations of the federal antitrust laws, and entitles “[a]ny person who [is] injured in
    his business or property by reason of anything forbidden in the antitrust laws” to
    treble damages for those injuries. 
    15 U.S.C. § 15
    . As the Supreme Court explained
    in its seminal decision addressing § 4 actions, however, “Congress did not intend the
    antitrust laws to provide a remedy in damages for all injuries that might conceivably
    be traced to an antitrust violation.” Associated General Contractors of Cal., Inc. v.
    California State Council of Carpenters (“Associated General Contractors”), 
    459 U.S. 519
    , 534 (1983) (internal quotation marks omitted). Absent such boundaries, the
    potent private enforcement tool that is an action for treble damages could be invoked
    without service to—and potentially in disservice of—the purpose of the antitrust
    laws: to protect competition.
    circumstances surrounding the challenged acts to determine whether the alleged restraint is
    unreasonable, taking into account factors such as “specific information about the relevant business,”
    “the restraint’s history, nature, and effect,” and “[w]hether the businesses involved have market
    power.” 
    Id.
     (internal quotation marks omitted).
    11
    The right to pursue private actions for treble damages under § 4 has
    thus developed limiting contours over the thirty years since Associated General
    Contractors was handed down. Those contours are embodied in the concept of
    “antitrust standing.” Daniel v. American Bd. of Emergency Med., 
    428 F.3d 408
    , 436-
    38 (2d Cir. 2005). “[A]ntitrust standing is a threshold, pleading-stage inquiry and
    when a complaint by its terms fails to establish this requirement we must dismiss it
    as a matter of law.” NicSand, Inc. v. 3M Co., 
    507 F.3d 442
    , 450 (6th Cir. 2007) (en
    banc). See, e.g., Port Dock & Stone Corp. v. Oldcastle Ne., Inc., 
    507 F.3d 117
    , 121,
    126-27 (2d Cir. 2007) (dismissing § 4 claim for want of antitrust standing); Paycom
    Billing Servs., Inc. v. MasterCard Int’l, Inc., 
    467 F.3d 283
    , 290-95 (2d Cir. 2006)
    (same); Daniel, 428 F.3d at 438-41 (same). The doctrine of antitrust standing
    prevents private plaintiffs from “recover[ing] damages under § 4 . . . merely by
    showing injury causally linked to an illegal presence in the market.” Atlantic
    Richfield Co. v. USA Petroleum Co., 
    495 U.S. 328
    , 334 (1990) (internal quotation
    marks omitted).
    To determine whether a private plaintiff has antitrust standing, we
    consider the following factors, identified by the Supreme Court in Associated
    General Contractors: whether the plaintiff’s alleged injury “is of the type that the
    antitrust statute was intended to forestall,” 
    459 U.S. at 540
    ; “the directness or
    indirectness of the asserted injury,” id.; the extent to which the plaintiff’s asserted
    damages are speculative, 
    id. at 542
    ; “the potential for duplicative recovery or
    complex apportionment of damages,” 
    id. at 545
    ; and “the existence of more direct
    12
    victims of the alleged conspiracy,” 
    id.
     Applying Associated General Contractors, our
    Court has distilled these factors into two imperatives: we require a private antitrust
    plaintiff plausibly to allege (a) that it suffered “a special kind of ‘antitrust injury,’”
    and (b) that it is a suitable plaintiff to pursue the alleged antitrust violations and
    thus is an “efficient enforcer” of the antitrust laws. Port Dock, 507 F.3d at 121-22;
    see also Daniel, 428 F.3d at 436-38, 443-44. We discuss both below.
    1. Antitrust Injury
    The requirement that plaintiffs demonstrate antitrust injury when
    bringing a private antitrust action “ensures that the harm claimed by the plaintiff
    corresponds to the rationale for finding a violation of the antitrust laws in the first
    place.” Atlantic Richfield, 
    495 U.S. at 342
    .
    We employ a three-step process for determining whether a plaintiff has
    sufficiently alleged antitrust injury. First, the party asserting that it has been
    injured by an illegal anticompetitive practice must “identify[ ] the practice
    complained of and the reasons such a practice is or might be anticompetitive.” Port
    Dock, 
    507 F.3d at 122
    .9 Next, we identify the “actual injury the plaintiff alleges.”
    
    Id.
     This requires us to look to the ways in which the plaintiff claims it is in a “worse
    position” as a consequence of the defendant’s conduct. Brunswick Corp. v. Pueblo
    Bowl-O-Mat, Inc., 
    429 U.S. 477
    , 486 (1977). Finally, we “compar[e]” the
    9
    The conditional phrasing of this step of the analysis hints at its difficulty. When assessing
    antitrust injury, we assume that the practice at issue is a violation of the antitrust laws, see Daniel,
    428 F.3d at 437, and are, thus, in the difficult position of positing a rationale for the antitrust laws’
    prohibition of conduct that may, in fact, not be prohibited.
    13
    “anticompetitive effect of the specific practice at issue” to “the actual injury the
    plaintiff alleges.” Port Dock, 
    507 F.3d at 122
    . It is not enough for the actual injury
    to be “causally linked” to the asserted violation. Brunswick, 
    429 U.S. at 489
    .
    Rather, in order to establish antitrust injury, the plaintiff must demonstrate that its
    injury is “of the type the antitrust laws were intended to prevent and that flows from
    that which makes [or might make] defendants’ acts unlawful.” Daniel, 428 F.3d at
    438 (internal quotation marks omitted).
    Because Gatt’s dealership agreement with Vertex was terminable
    without cause, Gatt cannot assert that the mere termination of its dealership,
    without more, constitutes an antitrust violation. Perhaps for that reason, Gatt
    alleges that PMC’s conduct in recommending that Vertex terminate its contract with
    Gatt, and Wineland’s involvement in that termination, violated the antitrust laws
    because that conduct was intended to perpetuate an illegal and anticompetitive bid-
    rigging scheme.10 In other words, the illegal “practice” Gatt alleges is the carrying
    out of an illegal bid-rigging scheme, and Gatt’s alleged injury is the harm it suffered
    as a consequence of its inability to continue selling Vertex products. This harm only
    supports antitrust injury, however, if it flows from that which makes the bid-rigging
    scheme unlawful.
    10
    We note preliminarily that Vertex is nowhere to be seen on the stage of this litigation other
    than through the cameo appearance of defendant Vineland. Vertex’s absence as a defendant–despite
    its ostensibly key role in manipulating the bid-rigging process–signals at least faintly that a purpose
    other than vindication of competition in an open market may be the true goal of this litigation. Even
    without assigning any substantive meaning to Vertex’s absence, however, we easily find an absence
    of antitrust injury sufficient to permit Gatt to claim standing in this suit.
    14
    As an initial matter, it is not clear that the underlying bid-rigging
    arrangement alleged here is prohibited by the antitrust laws. Gatt has alleged a
    conspiracy involving only one brand of commercial land mobile radios and has not
    pleaded that the brand constitutes a stand-alone market. Although intra-brand bid-
    rigging such as Gatt alleges may well violate New York State procurement law—a
    subject on which we express no opinion here—inhibitions on intrabrand competition
    actuated by dealership terminations lie far from the core § 1 violations that are
    likely to give rise to antitrust injury. As we explained in K.M.B. Warehouse
    Distributors, Inc. v. Walker Manufacturing Co., 
    61 F.3d 123
    , 127-28 (2d Cir. 1995),
    “[r]estrictions on intrabrand competition can actually enhance market-wide
    competition by fostering vertical efficiency and maintaining the desired quality of a
    product.” See 
    id. at 128
     (“The only clear effect of defendants’ alleged conspiracy was
    to prevent [the plaintiff] from carrying products . . . [of one of the defendants].”).
    But even assuming that the alleged bid-rigging scheme is unlawful, it is
    so only because of the harm it may cause—increased prices—to purchasers of Vertex
    products. See Balaklaw v. Lovell, 
    14 F.3d 793
    , 797 (2d Cir. 1994). Gatt’s lost
    revenue resulting from the Vertex termination, however, is not an injury that flows
    from that which makes bid-rigging unlawful. Gatt has not been forced to pay higher
    prices for a product, as customers who are victimized by price-fixing schemes might.
    Instead, Gatt’s injuries flow from its participation and then exclusion from a
    distribution network that, allegedly, featured intra-brand price-fixing, and in which
    it had no right ab initio to participate. Even if the antitrust laws seek to prevent
    15
    Vertex and PMC’s alleged activities because of resulting harms to competition, these
    laws are not concerned with injuries to competitors such as Gatt resulting from their
    participation in or exile from such schemes. See Atlantic Richfield, 
    495 U.S. at 338
    .
    Gatt points to no persuasive authority to support its argument that it
    has suffered antitrust injury. Leegin Creative Leather Products, Inc. v. PSKS, Inc.,
    
    551 U.S. 877
     (2007), cited by Gatt, does not turn on or even discuss antitrust
    standing, and Jack Kahn Music Co. v. Baldwin Piano & Organ Co., No. 78 Civ. 3295,
    
    1978 WL 1449
     (S.D.N.Y. Dec. 6, 1978), also relied on by Gatt, was reversed by our
    court, 
    604 F.2d 755
     (2d Cir. 1979). Eiberger v. Sony Corp. of America, 
    622 F.2d 1068
    (2d Cir. 1980), involved a suit by a former dealer against a manufacturer who was
    alleged both to have engaged in anti-competitive practices and to have terminated
    the plaintiff’s dealership for failure to comply with those practices. On appeal after
    trial, we did not address antitrust standing. The decision simply does not establish
    that Gatt has suffered antitrust injury under the circumstances presented here.
    In sum, Gatt’s allegations fail to demonstrate injury “of the type the
    antitrust laws were intended to prevent and that flows from that which makes [the]
    defendants’ acts unlawful.” Brunswick, 
    429 U.S. at 489
    . Therefore, Gatt does not
    have antitrust standing to pursue these claims.
    2. The “efficient enforcer” component of antitrust standing
    Even were we to conclude that Gatt had demonstrated antitrust injury,
    however, it is plain that Gatt is not an “efficient enforcer” of the antitrust laws and
    therefore lacks antitrust standing on that basis as well. See, e.g., Daniel, 
    428 F.3d 16
    at 443 (“A showing of antitrust injury is necessary, but not always sufficient, to
    establish [antitrust] standing.” (internal quotation marks omitted)).
    To determine whether a putative antitrust plaintiff is an “efficient
    enforcer” of the antitrust laws, we examine primarily the following factors:
    (1) the directness or indirectness of the asserted injury;
    (2) the existence of an identifiable class of persons whose
    self-interest would normally motivate them to vindicate
    the public interest in antitrust enforcement; (3) the
    speculativeness of the alleged injury; and (4) the difficulty
    of identifying damages and apportioning them among
    direct and indirect victims so as to avoid duplicative
    recoveries.
    Paycom, 467 F.3d at 290-91 (internal quotation marks omitted). The importance
    assigned to these factors “will necessarily vary with the circumstances of particular
    cases.” Daniel, 428 F.3d at 443. Reviewing those factors here, we conclude that Gatt
    fails utterly to show that it is an “efficient enforcer”: the injuries that it alleges are
    only indirectly related to the primary violation asserted; other potential plaintiffs are
    in a better position to vindicate the public interest at issue; Gatt’s damages are
    speculative at best; and were Gatt permitted to pursue this action, we can expect that
    other participants in (and allegedly, “victims” of) the scheme would likewise seek
    treble damages for contracts and commissions that they speculate they, too, might
    have lost pursuant to the alleged bid-rigging scheme.
    i. Indirect injury
    Gatt’s purported injuries are at best an indirect result of the primary
    asserted antitrust violation: price-fixing through bid-rigging, as perpetuated by
    17
    termination of the Dealer Agreement. “Directness in the antitrust context means
    close in the chain of causation.” International Bus. Machs. Corp. v. Platform
    Solutions, Inc., 
    658 F. Supp. 2d 603
    , 611 (S.D.N.Y. 2009) (internal quotation marks
    omitted); see also Associated General Contractors, 
    459 U.S. at 540-41
    . Although
    defendants’ alleged conduct may have harmed Gatt by denying Gatt commissions it
    might otherwise have earned had its Dealer Agreement remained in force, the
    amount and number of those lost commissions are far more remote and conjectural
    than the losses suffered by the government agencies. Gatt was only incidentally
    harmed by the conspiracy, as noted above. It did not pay higher prices by virtue of
    the conspiracy; it merely lost the right to sell one brand of radio. If there are direct
    victims of the alleged conspiracy, they are the state agencies, not Gatt.
    ii. There are other potential plaintiffs
    As a consequence of their direct injury, the State agencies are potential
    plaintiffs. They constitute “an identifiable class . . . whose self-interest would
    normally motivate them to vindicate the public interest in antitrust enforcement.”
    Associated General Contractors, 
    459 U.S. at 542
    . We see no reason to expect the
    State agencies to lack the incentive or the ability to seek relief, for example, through
    the courts, or through administrative proceedings.
    That no agency has brought suit to date “does not support recognizing
    [Gatt’s] standing.” Daniel, 428 F.3d at 444. Instead, it suggests that either the
    agencies have been unaware of the collusive bidding or, perhaps, that the facts were
    other than as alleged by plaintiff. See Associated General Contractors, 
    459 U.S. at
    18
    542 n.47 (“[I]f there is substance to [the plaintiff’s] claim, it is difficult to understand
    why the[ ] direct victims of the conspiracy have not asserted any claim in their own
    right.”); cf. Phillip Areeda & Herbert Hovenkamp, Fundamentals of Antitrust Law,
    § 3.01c, at 3-9 to 3-10 (4th ed. 2011) (“If the ‘superior’ plaintiff has not sued, one may
    doubt the existence of any antitrust violation at all.”).
    iii. Speculative injury
    In addition, the bulk of Gatt’s alleged damages are highly speculative.
    As previously discussed, Gatt contends that had it been able to submit independent,
    competitive bids in 2007, it would have won both the Police Department and the
    Transit Authority contracts. But Gatt has not plausibly alleged that in the absence of
    the alleged scheme, its bids—rather than the bids of some other party—would have
    prevailed. Presumably, PMC, Vertex, and at least six other eligible Vertex dealers
    could also have submitted competitive bids. Distributors of other manufacturers’
    products, too, might have submitted bids. Gatt offers no reason why it would have
    been more certain than these entities to win the contracts.
    Gatt’s purported damages resulting from the termination of its Dealer
    Agreement are even more uncertain. Gatt alleges that its revenues from Vertex-
    related sales and servicing fell from $784,000 (in 2007) to $30,000 (in 2008), after
    termination, representing a $325,000 decline in its profits. Gatt asserts that, had its
    license not been revoked at the end of 2007, it would have continued to see $325,000 a
    year in profits from Vertex sales. But the profits Gatt earned under a bid-rigging
    scheme shed little light on how much Gatt would earn in a competitive bidding
    19
    environment. Moreover, Vertex had no obligation to authorize Gatt to sell Vertex
    products in the first place. It is thus entirely uncertain whether, absent the scheme,
    Vertex would have entered into the Dealer Agreement with Gatt at all.
    iv. Potential for duplicative recoveries
    Finally, and relatedly, the risk of multiple and duplicative recoveries,
    while perhaps not of primary concern here, provides additional support for rejecting
    Gatt as an efficient enforcer. As we have observed, other Vertex dealers could
    assert—just as plausibly as Gatt has asserted in this case—that, had the bidding
    been independent, they would have bid on and won the Police Department and the
    Transit Authority contracts. We recognize that other Vertex dealers may not file
    suit, and that future actions may well be time-barred. See 15 U.S.C. § 15b
    (establishing four-year statute of limitations for private antitrust suits under 
    15 U.S.C. § 15
    ). Regardless, this factor too works against Gatt.
    *       *      *
    More generally, insofar as the doctrine of antitrust standing also reflects
    a concern about whether the putative plaintiff is a proper party to “perform the office
    of a private attorney general” and thereby “vindicate the public interest in antitrust
    enforcement,” Associated General Contractors, 
    459 U.S. at 542
    , Gatt hardly satisfies
    that concern. Gatt freely admits that as part of the alleged scheme, it submitted
    numerous sham bids to government agencies in an effort to steer business to its co-
    conspirators and obtain business for itself. It acknowledges obtaining over one
    hundred contracts as a direct result of the bid-rigging of which it now complains. In
    20
    addition, the Gattini Affidavit strongly suggests that Gatt ceased participating in the
    scheme only out of its own economic self-interest—not because it recognized the error
    of its ways. Thus, Gatt’s own behavior seriously undercuts its claim to be a suitable
    plaintiff for § 4 standing purposes. In sum, because Gatt has not suffered antitrust
    injury and has failed to satisfy any of the “efficient enforcer” factors, it lacks antitrust
    standing to pursue damages for the violations it alleges occurred in this case. We
    thus affirm the district court’s dismissal of Gatt’s Sherman Act § 1 claims.
    3. In pari delicto
    Defendants, and our concurring colleague, have argued that we should
    deploy the equitable doctrine of in pari delicto (“in equal fault”) to erect a complete
    and simple bar to Gatt’s claims, and there is some appeal to that approach. Indeed,
    elements of the efficient enforcer analysis that we have discussed above do overlap
    with the standard in pari delicto analysis, and Gatt’s participation in the scheme
    would make it a particularly dubious recipient of treble damages for its belated and
    questionable enforcement efforts.
    The Supreme Court has cautioned, however, against broad-brush
    application of the in pari delicto defense in private civil antitrust cases, reasoning
    that antitrust interests “are best served by insuring that the private action will be an
    ever-present threat to deter anyone contemplating [illegal] behavior.” Perma Life
    Mufflers, Inc. v. Int’l Parts Corp., 
    392 U.S. 134
    , 139 (1968), overruled on other
    grounds by Copperweld Corp. v. Independence Tube Corp., 
    467 U.S. 752
    , 765, 777
    (1984). Caution seems warranted in developing contours for the application of such a
    21
    defense in this context, where private actions play a significant role in the
    enforcement scheme, as evidenced by Congress’s authorization of treble damages
    awards to prevailing plaintiffs. This is particularly so on an appeal from the grant of
    a motion to dismiss, where the factual record is undeveloped.
    Our Court has not to date applied the in pari delicto defense in private
    antitrust litigation. To the contrary, we have recognized that “a plaintiff’s own
    anticompetitive conduct generally cannot be raised as a defense to liability in an
    antitrust action.” See United States Football League v. Nat’l Football League, 
    842 F.2d 1335
    , 1369 (2d Cir. 1988). In that case, where in pari delicto was not raised by
    the defendant, we suggested in dicta that a plaintiff’s anticompetitive behavior “may”
    be an available defense in an antitrust case if “the plaintiff was present at the
    creation and had a complete and continuing involvement in the monopolization
    scheme.” 
    Id.
     And, although several of our sister circuits have recognized an in pari
    delicto defense in civil antitrust litigation, they have generally done so on appeal
    from summary judgment or after trial, when the extent and circumstances of the
    culpable plaintiff’s involvement have been factually developed, and the possibility
    that the plaintiff’s behavior was motivated by economic duress—a factor that could
    relieve the plaintiff of an in pari delicto bar—has been examined. See Javelin Corp.
    v. Uniroyal, Inc., 
    546 F.2d 276
    , 279 (9th Cir. 1976) (summary judgment); Sullivan v.
    Nat’l Football League, 
    34 F.3d 1091
    , 1107 (1st Cir. 1994) (trial); General Leaseways,
    Inc. v. Nat’l Truck Leasing Ass’n, 
    830 F.2d 716
    , 720-24 (7th Cir. 1987) (trial);
    Columbia Nitrogen Corp. v. Royster Co., 
    451 F.2d 3
    , 15-16 (4th Cir. 1971) (trial). Cf.
    22
    Bateman Eichler, Hill Richards, Inc. v. Berner, 
    472 U.S. 299
    , 311 n.21 (1985)
    (describing as “inappropriate[ ]” the undertaking to “resolve[ ] the question of [the
    plaintiffs’] fault solely on the basis of the allegations set forth in the complaint”).11
    In short, because we conclude that Gatt lacks antitrust standing to
    pursue its antitrust claims, and the factual record is undeveloped, we do not reach
    the question whether some form of the doctrine of in pari delicto should be adopted in
    our Circuit for application in § 4 actions, and, if so, whether it would bar Gatt’s
    claims.
    B.      Donnelly Act Claim
    New York’s Donnelly Act prohibits “[e]very contract, agreement,
    arrangement or combination whereby . . . competition . . . may be restrained.” 
    N.Y. Gen. Bus. Law § 340
    (1). The New York Court of Appeals has held that the Donnelly
    Act, which was modeled on the Sherman Act, “should generally be construed in light
    of Federal precedent and given a different interpretation only where State policy,
    differences in the statutory language or the legislative history justify such a result.”
    X.L.O. Concrete Corp. v. Rivergate Corp., 
    83 N.Y.2d 513
    , 518 (1994) (internal
    quotation marks omitted). The Sherman Act provides a cause of action for “any
    person who shall be injured in his business or property by reason of anything
    11
    Varying formulations of the in pari delicto defense have been articulated and applied;
    which of them would be most appropriate in the antitrust context would bear careful examination.
    Cf. Bateman Eichler, 
    472 U.S. at 310-11
     (declining to adopt wholesale in pari delicto rule in securities
    law context and holding that “a private action for damages . . . may be barred on the grounds of the
    plaintiff’s own culpability only where (1) as a direct result of his own actions, the plaintiff bears at
    least substantially equal responsibility for the violations he seeks to redress, and (2) preclusion of
    suit would not significantly interfere with the effective enforcement of the securities laws and
    protection of the investing public”).
    23
    forbidden in the antitrust laws,” 
    15 U.S.C. § 15
    (a), while the Donnelly Act similarly
    permits suit by “any person who shall sustain damages by reason of any violation of
    this section,” 
    N.Y. Gen. Bus. Law § 340
    (5). We see no reason—nor has Gatt provided
    any—to interpret the Donnelly Act differently than the Sherman Act with regard to
    antitrust standing. Cf. Continental Guest Servs. Corp. v. Int’l Bus Servs., Inc., 
    939 N.Y.S. 2d 30
    , 33-34 (1st Dep’t 2012) (stating that Donnelly Act claims should have
    been dismissed for lack of antitrust standing because plaintiff was neither consumer
    nor competitor in relevant market and antitrust violations could be vindicated by
    other potential plaintiffs with more direct injuries (citing Associated General
    Contractors, 
    459 U.S. at 542
    )). Therefore, for the reasons previously discussed with
    respect to Gatt’s want of antitrust standing to pursue its Sherman Act claims, we also
    affirm the dismissal of Gatt’s Donnelly Act claims.
    C.     State Common Law Tort Claims
    Finally, we affirm the district court’s dismissal of Gatt’s state common
    law claims substantially for the reasons stated by the district court in its thorough
    consideration of these claims and as briefly summarized above. Gatt, 
    2011 WL 1044898
    , at *6-7.
    CONCLUSION
    We have considered Gatt’s remaining arguments and find them to be
    without merit. For the reasons stated above, the decision of the district court is
    AFFIRMED.
    24
    Wesley, J., concurring:
    I concur in the excellent reasoning of Judge Carney and
    her conclusion that Gatt lacks standing to bring federal or
    state antitrust claims and that its tort claims are without
    merit.     I write separately because, although the anti-trust
    standing issue can serve as a basis for dismissal,      I
    believe this is a paradigmatic case for dismissal under the
    doctrine of in pari delicto.1
    The facts in this case are extraordinary and
    exceptionally troubling.     As noted by the Majority, Gatt
    admits that it knowingly participated in the bid-rigging
    scheme by either entering dummy bids or not submitting bids
    at PMC’s direction.     Gatt also readily admits that “[o]n
    over 100 occasions,” it benefited from the scheme by
    receiving contracts from various New York City public
    schools.     Gattini Aff. ¶ 28.   Indeed, Pietro Gattini, Gatt’s
    1
    We are not compelled to determine whether Gatt has
    antitrust standing before addressing the doctrine of in pari
    delicto. Antitrust standing involves an analysis of prudential
    considerations aimed at “avoid[ing] counter-productive use of
    antitrust laws in ways that could harm competition rather than
    protecting it.” Port Dock & Stone Corp. v. Oldcastle Ne., Inc.,
    
    507 F.3d 117
    , 121 (2d Cir. 2007). In this vein, it is distinct
    from Article III standing, which must be assessed before reaching
    the in pari delicto defense. Cf. In re Senior Cottages of Am.,
    LLC, 
    482 F.3d 997
    , 1002-03 (8th Cir. 2007); see also Kirschner v.
    KPMG LLP, 
    15 N.Y.3d 446
    , 459 n.3 (2010).
    owner and president,2 recounts in detail Gatt’s
    understanding of, and willing participation in, the
    bid-rigging scheme:
    27. From about 2003 to 2007, when Gatt would be
    told that two other bids would be needed besides
    Gatt's bid to get a school to buy, [I] would
    telephone PMC and speak to either Vesel Ramovic or
    Phillip Casciano about the request and was told:
    "Just fax us a copy of Gatt’s bid, and we will take
    care of arranging the other bids so Gatt will get
    the sale."   Vesel Ramovic and/or Phillip Casciano
    had previously explained to me that whatever Gatt
    was bidding, the bids obtained by PMC would be
    higher but would be sent in as if they were
    independent because PMC had arranged with other
    Vertex dealers to supply these bids just as Gatt was
    expected to put in a bid dictated by PMC when
    requested to do so.
    28. Thereafter, in more than one hundred
    instances, Gatt regularly obtained requests to put
    in a bid from individual schools for Vertex radios,
    mailed, faxed or emailed in bids in response, sent
    faxed, emailed or mailed copies of each bid to PMC,
    at PMC's direction other Vertex dealers and/or PMC
    would prepare and either mail, fax or email in their
    2
    I agree with the Majority that we may consider the Gattini
    Affidavit. Generally, the harm to the plaintiff when a court
    considers material extraneous to a complaint without converting
    the claim into one for summary judgment is the lack of notice
    that the material may be considered. But “[w]here plaintiff has
    actual notice of all the information . . . and has relied upon
    [the] documents in framing the complaint the necessity of
    translating a Rule 12(b)(6) motion into one under Rule 56 is
    largely dissipated." Cortec Indus., Inc. v. Sum Holding L.P.,
    
    949 F.2d 42
    , 48 (2d Cir. 1991). Gatt relied on the Gattini
    affidavit in its briefs to the district court and on appeal, as
    well as during oral argument. The information and documents
    contained therein are known by Gatt and were employed by it in
    framing the complaint. There is no reason we should not consider
    it on appeal.
    2
    "independent" bids, and Gatt would thereafter
    receive mailed or faxed purchase orders from the New
    York City Department of Education for the Vertex
    radios being offered by Gatt.          It is [my]
    understanding that the "dummy bids" arranged or
    produced by PMC in aid of all of these school sales
    were framed high so that Gatt's bid would be the
    lowest. . . . That is to say, the bids were
    orchestrated and fixed by PMC in a manner calculated
    to deceive each school requesting the bids.      The
    effect of this practice was to deprive each school
    of the advantage or benefit or price discount which
    might have been obtained if there had been bona fide
    competitive bidding.
    Gattini Aff.
    Given Gatt’s unabashed participation in the bid-rigging
    scheme, its claims should be barred under the doctrine of in
    pari delicto.   This common law defense provides that “a
    plaintiff who has participated in wrongdoing may not recover
    damages resulting from the wrongdoing.”    Black's Law
    Dictionary 794 (9th ed. 2009).    It “derives from the Latin,
    in pari delicto potior est conditio defendentis: ‘In a case
    of equal or mutual fault . . . the position of the
    [defending] party . . . is the better one.’”    Bateman
    Eichler, Hill Richards, Inc. v. Berner, 
    472 U.S. 299
    , 306
    (1985) (citations omitted).   The doctrine is based on the
    policy that “courts should not lend their good offices to
    mediating disputes among wrongdoers” and “denying judicial
    3
    relief to an admitted wrongdoer is an effective means of
    deterring illegality.”   
    Id.
         Courts employ the doctrine in a
    wide variety of contexts.      See, e.g., Pinter v. Dahl, 
    486 U.S. 622
    , 633-34 (1988); see also BrandAid Mktg. Corp. v.
    Biss, 
    462 F.3d 216
    , 218-19 (2d Cir. 2006) (applying the in
    pari delicto analysis to a claim for tortious interference
    with contract but finding that plaintiffs’ wrongdoing was
    insufficient for the defense to merit dismissal).
    The Supreme Court has considered the application of the
    in pari delicto doctrine in the enforcement of antitrust and
    securities laws.   Bateman Eichler, 
    472 U.S. at 299
    ; Perma
    Life Mufflers, Inc. v. Int'l Parts Corp., 
    392 U.S. 134
    (1968), overruled on other grounds by Copperweld Corp. v.
    Independence Tube Corp., 
    467 U.S. 752
     (1984).      Although in
    both instances the Court declined to apply the doctrine, the
    Court explained that the doctrine would be appropriate where
    the plaintiff was substantially involved in the unlawful
    activity and preclusion of suit would not interfere with the
    policy goals of the federal statute.
    In Perma Life, the Court declined to employ in pari
    delicto where “a private suit serves important public
    purposes.”   Perma Life Mufflers, Inc., 
    392 U.S. at 138
    .        The
    4
    Court did indicate that “the doctrine of in pari delicto
    . . . is not to be recognized as a defense to an antitrust
    action.”   
    Id. at 140
    .   But the basis for that decision was
    that the opponents entangled in the illegal scheme were of
    decidedly unequal strength.    The plaintiffs, the Court
    noted, “participated to the extent of utilizing illegal
    arrangements formulated and carried out by others . . .
    [but] their participation was not voluntary in any
    meaningful sense.”   
    Id. at 139
    .
    Recognizing that the scheme had been thrust upon
    plaintiffs, the Court reserved the question of whether a
    plaintiff who engaged in “truly complete involvement and
    participation in a monopolistic scheme”—one who
    “aggressively support[ed] and further[ed] the monopolistic
    scheme as a necessary part and parcel of it”—could be barred
    from pursuing a damages action.    
    Id. at 140
    .   In
    concurrences, five members of the Perma Life Court favored
    barring suit by antitrust plaintiffs who were substantially
    involved in the conspiracy.3
    3
    See Perma Life Mufflers, Inc., 
    392 U.S. at 146
     (White, J.,
    concurring) (“I would deny recovery where plaintiff and defendant
    bear substantially equal responsibility for injury resulting to
    one of [the co-conspirators] ....”); 
    id. at 147
     (Fortas, J.,
    concurring) (Suit should be barred when “the fault of the parties
    is reasonably within the same scale.”); 
    id. at 149
     (Marshall, J.,
    5
    The Court’s subsequent decision in Bateman Eichler
    reinforced this view.    In Bateman Eichler, the Court
    addressed whether in pari delicto is an available defense to
    a private action for damages brought under the federal
    securities laws.   Bateman Eichler, 
    472 U.S. at 301
    .     After
    noting that the “views expressed in Perma Life apply with
    full force to implied causes of action under the federal
    securities laws,” the Court held that a private action for
    damages under federal securities laws may be barred under
    the doctrine of in pari delicto where “(1) as a direct
    result of his own actions, the plaintiff bears at least
    substantially equal responsibility for the violations he
    seeks to redress, and (2) preclusion of suit would not
    significantly interfere with the effective enforcement of
    the securities laws and protection of the investing public.”
    
    Id. at 310-11
    .4
    concurring) (“I would hold that where a defendant in a private
    antitrust suit can show that the plaintiff actively participated
    in the formation and implementation of an illegal scheme, and is
    substantially equally at fault, the plaintiff should be barred
    from imposing liability on the defendant.”); id. at 153 (Harlan,
    J., concurring in part and dissenting in part) (Stewart, J.,
    joining) (“[P]roperly used[, in pari delicto] refers to a defense
    that should be permitted in antitrust cases.”).
    4
    I fail to see how this is “broad-brush application of the
    in pari delicto defense” as the Majority seems to imply.
    Majority Opinion at 22.
    6
    In light of the Court’s reasoning, every one of our
    sister circuits to consider the issue has held that
    antitrust plaintiffs who actively participate in the illegal
    scheme and who are substantially at fault are barred from
    suit.   See, e.g., Sullivan v. Nat’l Football League, 
    34 F.3d 1091
    , 1107 (1st Cir. 1994); Gen. Leaseways, Inc. v. Nat'l
    Truck Leasing Ass'n, 
    830 F.2d 716
    , 720-23 (7th Cir. 1987);
    Javelin Corp. v. Uniroyal, Inc., 
    546 F.2d 276
    , 279 (9th Cir.
    1976); Columbia Nitrogen Corp. v. Royster Co., 
    451 F.2d 3
    ,
    16 (4th Cir. 1971).   Although we have yet to address the
    issue, we have recognized that “[t]he [in pari delicto]
    defense may be available . . . when the plaintiff was
    present at the creation and had a complete and continuing
    involvement in the monopolization scheme.”   U.S. Football
    League v. Nat'l Football League, 
    842 F.2d 1335
    , 1369 (2d
    Cir. 1988).
    This case is certainly a good candidate for the view
    that a cause of action under the Sherman Act is barred where
    (1) the plaintiff is an active and willing participant in
    the illegal activity, and (2) dismissing the suit does not
    significantly interfere with the policy goals underlying the
    7
    act.5
    The record is plain that Gatt was an active and willing
    participant in the bid-rigging scheme.       Gatt readily, and
    repeatedly, admits to its participation in, and benefit
    from, the coordinated effort to defraud various New York
    State and City governmental agencies.       Gatt admits that
    there were numerous instances in which it sought the
    assistance of PMC to coordinate sham bids to enrich Gatt
    from government contracts.       Indeed, Gatt’s president and
    owner discusses at length how Gatt engaged in bid-rigging
    “in more than one hundred instances” and reaped the benefits
    therefrom. Gattini Aff. ¶ 28.
    The Majority is reluctant to apply the doctrine of in
    pari delicto because, in its view, the factual record is not
    developed and warns that other circuits have considered the
    application of in pari delicto following a trial or summary
    judgment.       While that word of caution does make general
    sense it ignores the rather unusual circumstance of this
    case.       Gatt’s complaint, its appellate brief, and the
    5
    As the Majority notes there are other potential plaintiffs
    (the state agencies that purchased equipment as a result of the
    bid rigging scheme) whose own interests would surely motivate
    them to vindicate the public interest in antitrust enforcement.
    Majority at 19.
    8
    Gattini affidavit make clear that Gatt coordinated with PMC
    to make sham bids to rig the bidding process to its benefit.
    From Gatt’s own hand there can be no doubt that there was no
    coercion here.    Gatt participated in the scheme for several
    years and was motivated by its own self interest.        Gattini
    Aff. ¶¶ 27-28.    And its participation in the scheme paid
    off.    According to Gatt, its business grew rapidly from 2002
    to 2007, and it became “one of the most productive Vertex
    dealers in the United States.”     Am. Compl. ¶ 35.
    Furthermore, application of the in pari delicto
    doctrine will not interfere with the policy goals underlying
    the Sherman Act, as suggested by the Majority.        Indeed,
    Gatt’s recovery under the Sherman Act could not further the
    act’s essential purpose: “safeguarding consumer welfare.”
    Hamilton Chapter of Alpha Delta Phi, Inc. v. Hamilton Coll.,
    
    128 F.3d 59
    , 63 (2d Cir. 1997).     Instead, it would have the
    perverse effect of redistributing ill-gotten gains among
    similarly situated conspirators.     To entertain a dispute
    under these circumstances would be a waste of valuable
    judicial resources and offend the public interest.
    For the foregoing reasons, I would dismiss on the basis
    of in pari delicto.
    9
    

Document Info

Docket Number: Docket 11-1111-cv

Citation Numbers: 711 F.3d 68, 2013 WL 535751, 2013 U.S. App. LEXIS 3186

Judges: Wesley, Carney, Cedarbaum

Filed Date: 2/14/2013

Precedential Status: Precedential

Modified Date: 11/5/2024

Authorities (26)

Leegin Creative Leather Products, Inc. v. PSKS, Inc. , 127 S. Ct. 2705 ( 2007 )

united-states-football-league-arizona-outlaws-baltimore-stars-football , 842 F.2d 1335 ( 1988 )

kmb-warehouse-distributors-inc-and-kmbct-inc , 61 F.3d 123 ( 1995 )

lee-a-balaklaw-v-robert-m-lovell-wessley-d-stisser-donald-ames-joseph , 14 F.3d 793 ( 1994 )

Pinter v. Dahl , 108 S. Ct. 2063 ( 1988 )

Associated General Contractors of California, Inc. v. ... , 103 S. Ct. 897 ( 1983 )

Port Dock & Stone Corp. v. Oldcastle Northeast, Inc. , 507 F.3d 117 ( 2007 )

brandaid-marketing-corporation , 462 F.3d 216 ( 2006 )

hamilton-chapter-of-alpha-delta-phi-inc-alumni-association-of-psi , 128 F.3d 59 ( 1997 )

joel-rothman-individually-and-on-behalf-of-all-others-similarly-situated , 220 F.3d 81 ( 2000 )

Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc. , 97 S. Ct. 690 ( 1977 )

Bell Atlantic Corp. v. Twombly , 127 S. Ct. 1955 ( 2007 )

Ashcroft v. Iqbal , 129 S. Ct. 1937 ( 2009 )

International Business MacHines Corp. v. Platform Solutions,... , 658 F. Supp. 2d 603 ( 2009 )

Kirschner v. KPMG LLP , 15 N.Y.3d 446 ( 2010 )

William H. Sullivan II v. National Football League, & ... , 34 F.3d 1091 ( 1994 )

Jack Kahn Music Co., Inc. v. Baldwin Piano & Organ Company , 604 F.2d 755 ( 1979 )

Horst A. Eiberger, D/B/A Atlanta Dictating and Business ... , 622 F.2d 1068 ( 1980 )

Columbia Nitrogen Corporation v. Royster Company , 451 F.2d 3 ( 1971 )

cortec-industries-inc-and-cortec-holdings-inc-v-sum-holding-lp , 949 F.2d 42 ( 1991 )

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