Michael R. Gray, M.D. v. Philip Morris Usa

SUPREME COURT OF ARIZONA
En Banc
BUNKER’S GLASS COMPANY, an ) Arizona Supreme Court
Arizona corporation, on Behalf ) No. CV-02-0140-PR
of Themselves and All Others )
Similarly Situated, ) Court of Appeals
) Division One
Plaintiff-Appellant/) No. 1 CA-CV 01-0046
Respondent,)
) Maricopa County
v. ) Superior Court
) No. CV 2000-002282
PILKINGTON plc, a foreign )
corporation, PILKINGTON LIBBEY- )
OWENS-FORD CO. INC., a foreign )
corporation, PPG INDUSTRIES, )
INC., a foreign corporation, )
FORD MOTOR CO., a foreign ) (CONSOLIDATED WITH)
corporation, GUARDIAN INDUSTRIES )
CORPORATION, a foreign )
corporation, and AFG INDUSTRIES, )
INC., a foreign corporation, )
)
Defendants-Appellees/)
Petitioners.)
) Arizona Supreme Court
) No. CV-02-0175-PR
MICHAEL R. GRAY, M.D., on Behalf )
of Himself and All Others ) Court of Appeals
Similarly Situated, ) Division Two
) No. 2 CA-CV 01-0121
Plaintiff-Appellant/)
Respondent,) Pima County
) Superior Court
v. ) No. C 20000781
)
PHILIP MORRIS USA INC., R.J. )
REYNOLDS TOBACCO CO., BROWN & )
WILLIAMSON TOBACCO CORP., )
LORILLARD TOBACCO CO., LIGGETT ) O P I N I O N
GROUP, INC., and BROOKE GROUP, )
LTD., )
)
Defendants-Appellees/)
Petitioners.)
)
Appeal from the Superior Court in Maricopa County
The Honorable Gary E. Donahoe, Judge
VACATED AND REMANDED
Opinion of the Court of Appeals, Division One
202 Ariz. 481, 47 P.3d 1119 (App. 2002)
AFFIRMED
Appeal from the Superior Court in Pima County
The Honorable Theodore B. Borek, Judge
VACATED AND REMANDED
Court of Appeals, Division Two
Memorandum Decision, filed May 7, 2002
AFFIRMED
DAVIS, McKEE & FORSHEY, P.C. Phoenix, AZ
by Jeffrey A. McKee
and
LAW OFFICES OF GEORGE A. BARTON, P.C. Kansas City, MO
by George A. Barton
and
LAW OFFICES OF THOMAS H. BRILL Leawood, KS
by Thomas H. Brill
and
SHUGHART, THOMSON, KILROY, GOODWIN, RAUP, P.C. Phoenix, AZ
by Marty Harper
and Kelly J. Flood
Attorneys for Plaintiff-Appellant/Respondent
Bunker’s Glass Company
LAW OFFICES OF GORDON BALL Knoxville, TN
by W. Gordon Ball
and
LAW OFFICE OF SHELDON LAZAROW Tucson, AZ
by Sheldon Lazarow
and
THE CUNEO LAW GROUP, P.C. Washington, DC
by Jonathan Cuneo
and Daniel Cohen
Attorneys for Plaintiff-Appellant/Respondent
Michael R. Gray, M.D.
-2-
KARP, HEURLIN & WEISS, P.C. Tucson, AZ
by Bruce R. Heurlin
and
PEPPER HAMILTON, L.L.P. Philadelphia, PA
by Laurence Z. Shiekman
Attorneys for Defendants-Appellees/Petitioners
Pilkington plc
Pilkington Libbey-Owens-Ford Co., Inc., fka
Pilkington North America
BRYAN CAVE L.L.P. Phoenix, AZ
by Lawrence G. Scarborough
and Kelly A. O’Connor
and
CRAVATH, SWAINE & MOORE New York, NY
by Paul M. Dodyk
Attorneys for Defendants-Appellees/Petitioners
PPG Industries, Inc.
SNELL & WILMER, L.L.P. Phoenix, AZ
by Daniel J. McAuliffe
and
O’MELVENY & MYERS, L.L.P. Washington, DC
by John H. Beisner
and Neil K. Gilman
Attorneys for Defendant-Appellee/Petitioner
Ford Motor Co.
KARP, HEURLIN & WEISS, P.C. Tucson, AZ
by Bruce R. Heurlin
and
ARNOLD & PORTER Washington, DC
by Alexander E. Bennett
and Amy Ralph Mudge
Attorneys for Defendant-Appellee/Petitioner
Guardian Industries Corporation
SQUIRE, SANDERS & DEMPSEY, L.L.P. Phoenix, AZ
by Donald A. Wall
and
SQUIRE, SANDERS & DEMPSEY, L.L.P. Washington, DC
by Edward A. Geltman
and James V. Dick
Attorneys for Defendant-Appellee/Petitioner
AFG Industries
-3-
OSBORN MALEDON, P.A. Phoenix, AZ
by William J. Maledon
and Andrew D. Hurwitz
and
HELLER, EHRMAN, WHITE & McAULIFFE, L.L.P. Los Angeles, CA
by Darryl L. Snider
and Carlos Solis
and Michael T. Williams
and
HELLER, EHRMAN, WHITE & McAULIFFE, L.L.P. Washington, DC
by Kenneth L. Chernof
and
BOIES, SCHILLER and FLEXNER, L.L.P. Armonk, NY
by David Boies
and Sherab Posel
and
BOIES, SCHILLER and FLEXNER, L.L.P. Washington, DC
by Donald Flexner
and Amy Mauser
Attorneys for Defendant-Appellee/Petitioner
Philip Morris USA Inc.
SHUGHART, THOMSON, KILROY, GOODWIN, RAUP, P.C. Phoenix, AZ
by Brian Michael Goodwin
and Lori V. Berke
and
JONES, DAY, REAVIS & POGUE Washington, DC
by Thomas F. Cullen, Jr.
and William V. O’Reilly
and Edwin L. Fountain
Attorneys for Defendant-Appellee/Petitioner
R. J. Reynolds Tobacco, Co.
BROWN & BAIN, P.A. Phoenix, AZ
by Howard Ross Cabot
and
KIRKLAND & ELLIS Washington, DC
by Colin R. Kass
KIRKLAND & ELLIS Chicago, IL
by Stephen Patton
and Andrew R. McGaan
and Barack S. Echols
Attorneys for Defendant-Appellee/Petitioner
Brown & Williamson Tobacco Corp.
-4-
GREENBERG TRAURIG, L.L.P. Phoenix, AZ
by Pamela M. Overton
and Jennifer M. Dubay
and
WEIL, GOTSHAL & MANGES, L.L.P. Washington, DC
by Peter D. Isakoff
and Holly E. Loiseau
and
WEIL, GOTSHAL & MANGES, L.L.P. New York, NY
by Irving Scher
Attorneys for Defendant-Appellee/Petitioner
Lorillard Tobacco, Co.
CASEBOLT, GERMAINE & DRIGGS, P.L.C. Phoenix, AZ
by Sanford J. Germaine
and
KASOWITZ, BENSON, TORRES and FRIEDMAN, L.L.P. New York, NY
by Aaron H. Marks
Attorneys for Defendants-Appellees/Petitioners
Liggett Group, Inc. and Brooke Group, Ltd.
JANET A. NAPOLITANO, Former ARIZONA
ATTORNEY GENERAL Phoenix, AZ
TERRY GODDARD, ARIZONA ATTORNEY GENERAL
by Timothy A. Nelson, Special Assistant
Attorney General
and David D. Weinzweig, Assistant Attorney General
and Paula S. Bickett, Chief Counsel,
Civil Appeals Section
Attorneys for Amicus Curiae
State of Arizona
HAGENS, BERMAN & MITCHELL, L.L.C. Phoenix, AZ
by Christopher A. O’Hara
and
SULLIVAN & CROMWELL New York, NY
by David B. Tulchin
and Joseph E. Neuhaus
and Jeremy T. Kamras
and
HELLER, EHRMAN, WHITE & McAULIFFE, L.L.P. San Francisco, CA
by Robert A. Rosenfeld
and
-5-
MICROSOFT CORPORATION Redmond, WA
by Richard Wallis
and Thomas W. Burt
and Steven J. Aeschbacher
Attorneys for Amicus Curiae
Microsoft Corporation
IRVINE VAN RIPER, P.A. Phoenix, AZ
by Thomas K. Irvine
and
AMERICAN ANTITRUST INSTITUTE Washington, DC
by Warren S. Grimes
and Albert Foer
Attorneys for Amicus Curiae
American Antitrust Institute
B E R C H, Justice
¶1 The Arizona Antitrust Act provides that “[a] person . . .
injured in his business or property by a violation of this article
may bring an action for . . . damages sustained.” Ariz. Rev. Stat.
(“A.R.S.”) § 44-1408(B) (2003). The Defendants in these
consolidated cases ask us to hold that an indirect purchaser who is
able to prove injury to business or property from an antitrust
violation does not fall within the scope of this provision. We
conclude that Defendants’ interpretation contravenes the language
of the statute, the goals of antitrust regulation expressed in the
Arizona Constitution, and sound policy.
PROCEDURAL HISTORY OF THE CASE
¶2 Plaintiffs in these consolidated cases filed separate
class action suits against various flat glass and tobacco
manufacturers for alleged violations of the Arizona Antitrust Act.
-6-
See A.R.S. §§ 44-1401 to -1416 (2003). The respective trial courts
granted Defendants’ motions to dismiss for failure to state a claim
for relief, precluding Plaintiffs from pursuing a civil antitrust
claim under A.R.S. § 44-1408. The court of appeals in each case
reversed. Gray v. Philip Morris Inc., 2 CA-CV 2001-0121 (Ariz.
App. May 7, 2002) (mem. decision); Bunker’s Glass Co. v. Pilkington
plc (Bunker’s I), 202 Ariz. 481, 47 P.3d 1119 (App. 2002). We
granted Defendants’ petitions for review to resolve whether
indirect purchasers may sue under the Arizona Antitrust Act.
DISCUSSION
¶3 This case continues the debate over whether indirect
purchasers should be allowed to sue for injury resulting from
antitrust violations, or whether such suits should be restricted to
direct purchasers of goods. One goal of antitrust law is to
prevent entities that possess monopoly power from using that power
to illegally overcharge purchasers. Presumably this goal has force
whether the purchasers buy directly from the manufacturer, and
hence are direct purchasers, or whether they purchase farther down
the distribution line from retailers, and hence are indirect
purchasers. A purchaser who buys directly from the manufacturer
may be injured by manufacturer overcharges. In some cases,
however, a direct purchaser who resells the goods may pass on the
overcharge from the manufacturer to later (indirect) purchasers by
raising the price of the item. The question presented in this case
-7-
is whether indirect purchasers so injured should be allowed to make
their case to recover the overcharges they have paid.
¶4 This case turns upon the interpretation of a provision of
the Arizona Antitrust Act that permits a “person” to sue to redress
an antitrust injury. A.R.S. § 44-1408(B). Generally, the best
indicator of the meaning of a statute is its plain language.
Powers v. Carpenter, 203 Ariz. 116, 118, ¶ 9, 51 P.3d 338, 340
(2002). The Act defines “person” as including “an individual,
corporation, . . . or any other legal entity.” A.R.S. § 44-1401.
Nothing in this language restricts the right of action to direct
purchasers injured by violations of the Arizona Antitrust Act or
precludes indirect purchasers from suing. Indeed the Court of
Appeals reasoned, and we agree, that by defining the term “person”
to include an “individual,” the legislature signaled its intent to
allow indirect purchasers to sue, because individuals are rarely
direct purchasers. Bunker’s I, 202 Ariz. at 485, ¶ 12, 47 P.3d at
1123.
¶5 The Defendants’ main argument, however, does not rely on
the plain language of A.R.S. § 44-1408, but on the judicial
construction of a federal antitrust provision, § 4 of the Clayton
Act, 15 U.S.C. § 15(a) (2000), which is phrased almost identically
to A.R.S. § 44-1408. In Illinois Brick Co. v. Illinois, 431 U.S.
720, 728-29, 97 S. Ct. 2061, 2066 (1977), the United States Supreme
Court held that only a direct purchaser may bring an action under
-8-
§ 4 of the Clayton Act. The Defendants contend that by enacting
A.R.S. § 44-1412, the legislature expressed its desire that Arizona
courts apply Illinois Brick and similarly preclude indirect
purchasers from suing under the Arizona statute. We disagree.
¶6 As the court of appeals observed in Gray, the “limitation
[to direct purchasers] was imposed by Illinois Brick based more on
policy considerations than on an interpretation of the actual words
of the federal statute.” Gray, 2 CA-CV 2001-0121, slip op. at 6,
¶ 10. We consider those policy matters later in this opinion. For
now, we simply note that nothing in the plain language of A.R.S.
§ 44-1408 prohibits indirect purchasers who suffer injury from
illegal anti-competitive conduct from suing.
¶7 Our current antitrust statutes were adopted from the
Uniform State Antitrust Act in 1974, three years before Illinois
Brick was decided. See 1974 Ariz. Sess. Laws, ch. 26, § 1.
Section 44-1412 contains a sentence from the Uniform Act and a
sentence added by the Arizona legislature. The first sentence
states: “This article shall be applied and construed to effectuate
its general purpose to make uniform the law with respect to the
subject of this article among those states that enact it.” Id. To
this “uniformity clause” the legislature added a sentence that we
shall call the “federal guidance clause”: “It is the intent of the
legislature that in construing this article, the courts may use as
a guide interpretations given by the federal courts to comparable
-9-
federal antitrust statutes.” Id.; Unif. State Antitrust Act § 12,
7C U.L.A. 369 (2000). The Defendants argue that the federal
guidance clause directs the court to follow the Supreme Court’s
holding in Illinois Brick and precludes indirect purchasers from
asserting a private right of action. We find that argument
unpersuasive for several reasons.
¶8 First, we do not read the federal guidance clause as
manifesting a legislative intent to rigidly follow federal
precedent on every issue of antitrust law regardless of whether
differing concerns and interests exist in the state and federal
systems, and irrespective of whether uniformity among the states or
between the states and the federal system could be achieved by
doing so.
¶9 Second, by using the word “may” in drafting the statute,
the legislature made the application of A.R.S. § 44-1412 permissive
rather than mandatory. Bunker’s I, 202 Ariz. at 488-89, ¶ 29, 47
P.3d at 1126-27 (concluding that the legislature’s use of the word
“may” in § 44-1412 describes permissive conduct); see also Outdoor
Sys., Inc. v. City of Mesa, 169 Ariz. 301, 307, 819 P.2d 44, 50
(1991). If this court simply declined to follow Illinois Brick’s
guidance, the plain language of § 44-1408 would allow an indirect
purchaser suit.
¶10 We find it instructive that two states with similar
right-of-action provisions but no federal guidance clauses have
-10-
also rejected judicial attempts to constrict the range of persons
injured by illegal activity who may maintain a state-law-based
antitrust cause of action in state court. See Hyde v. Abbott
Labs., Inc., 473 S.E.2d 680, 684 (N.C. App. 1996) (concluding that
statutory language “any person” encompasses indirect purchasers);
see also Blake v. Abbott Labs., Inc., 1996-1 Trade Cas. (CCH)
¶ 71,369, at 76,856, available at 1996 WL 134947 at *3 (Tenn. Ct.
App. 1996) (finding it “abundantly clear from the unambiguous
provisions” of the Tennessee Act “that there is an individual
right, under the laws of this state, to maintain an action against
any person or entity guilty of violating the provisions of [the
Tennessee Act], whether the individual is a direct purchaser or
indirect purchaser”). In doing so, each court relied upon the
plain language of its state’s act.
¶11 Third, § 44-1412 evinces no specific legislative intent
to prohibit indirect purchaser actions because the guidance clause
was enacted before Illinois Brick was decided. If the legislature
had any specific case law regarding indirect purchasers in mind
when it included the guidance clause, it would have been the
holding of Western Liquid Asphalt, a case in which the State of
Arizona participated as an indirect-purchaser plaintiff. In
Western Liquid Asphalt, the Ninth Circuit permitted indirect
purchasers to sue for antitrust injury. See In re W. Liquid
Asphalt Cases, 487 F.2d 191, 200 (9th Cir. 1973). The Ninth
-11-
Circuit’s holding in Western Liquid Asphalt was the law of the
circuit when the Arizona legislature adopted the current antitrust
statutes, and we assume that the legislature would have looked to
the Ninth Circuit’s interpretation of the Clayton Act as a guide.
Indeed, permitting indirect purchaser suits was the prevailing rule
nationwide before the Court decided Illinois Brick.1
¶12 Fourth, § 44-1408 has consistently been interpreted as
allowing indirect purchaser claims. The Arizona Attorney General
has brought several actions on behalf of the state and its agencies
for harm incurred as an indirect purchaser, e.g., California v. ARC
Am. Corp., 490 U.S. 93, 97-98, 109 S. Ct. 1661, 1663 (1989) (suing
under Arizona law as an indirect purchaser), and, as required by
statute, has notified the legislature of antitrust settlements.
See A.R.S. §§ 41-191.01 to -.02(B) (1999). Yet despite having been
notified repeatedly of antitrust settlements on behalf of indirect
purchasers, the legislature has not acted to modify § 44-1408 since
1
Before Illinois Brick, six of the seven federal circuit
courts ruling on the issue held that indirect purchasers could sue
for damages caused by violations of the federal antitrust laws.
Illinois v. Ampress Brick Co., 536 F.2d 1163 (7th Cir. 1976), rev’d
sub nom. Illinois Brick Co. v. Illinois, 431 U.S. 720, 97 S. Ct.
2061 (1977); Yoder Bros., Inc. v. Cal.-Fla. Plant Corp., 537 F.2d
1347 (5th Cir. 1976); In re W. Liquid Asphalt Cases, 487 F.2d 191
(9th Cir. 1973); Illinois v. Bristol-Myers Co., 470 F.2d 1276 (D.C.
Cir. 1972); West Virginia v. Chas. Pfizer & Co., 440 F.2d 1079 (2d
Cir. 1971); Mangano v. Am. Radiator & Standard Sanitary Corp., 438
F.2d 1187 (3d Cir. 1971) (upholding dismissal of indirect purchaser
claim); S.C. Council of Milk Producers, Inc. v. Newton, 360 F.2d
414 (4th Cir. 1966).
-12-
the Illinois Brick decision. Moreover, in order to protect Arizona
taxpayers who are the indirect purchasers of goods and services
through public procurement contracts, those bidding on public
contracts must assign to the state claims for overcharges resulting
from antitrust violations. See http://sporas.ad.state.az.us/
PoliciesDocuments/terms/UTCv7.pdf (setting forth Uniform Terms and
Conditions for State Contracts § 6.5 (“Third Party Antitrust
Violations”)). These actions reflect the state policy of accepting
the benefits of indirect purchaser lawsuits and protecting Arizona
taxpayers in their role as indirect purchasers.
¶13 Fifth, construing the guidance clause to mandate
following Illinois Brick would result in a construction that
thwarts the legislative intent. As mentioned earlier, A.R.S. § 44-
1412 consists of two sentences. The heading of the section is
“Uniformity,” and the first sentence expresses the legislative
desire that the law be uniform with respect to the subject of the
article “among those states that enact it.” Id. In analyzing the
uniformity clause, we must begin with its plain language, which
urges uniformity among the states that enact the Uniform State
Antitrust Act. But counting Arizona, only four states have adopted
the Uniform Act. As an initial matter, that only four states
adopted the Uniform Act negates any possibility of securing
national uniformity through adoption of the Act. A brief review of
the law in the three other states that did pass the Uniform Act
-13-
further confirms the impossibility of fulfilling the legislature’s
desire of uniformity even among those few states.
¶14 Although Delaware is listed in Uniform Laws Annotated as
having adopted the Uniform Act, its legislature changed it
significantly from the uniform provision. The section allowing a
private right of action was omitted altogether, and the attorney
general was authorized to sue on behalf of Delaware citizens
injured by illegal conduct. Del. Code Ann. tit. 6, § 2108 (1999).
The Michigan and North Dakota acts follow the Uniform Act more
closely, but add to the private right of action provision express
legislation rejecting Illinois Brick and clarifying that indirect
purchasers may sue. Mich. Comp. Laws § 445.778(2) (2001); N.D.
Cent. Code § 51-08.1-08(3) (1999). Thus there is no uniformity
even among the four states enacting versions of the Uniform Act.
¶15 If the legislature’s goal in enacting the uniformity
clause was to foster national uniformity in antitrust laws, the
picture becomes even more idiosyncratic. Twelve states have no
rule regarding indirect purchasers.2 Twenty-five states and the
District of Columbia allow some form of indirect purchaser
2
Alaska, Arkansas, Delaware, Georgia, Montana, Ohio,
Pennsylvania, South Carolina, Utah, Virginia, West Virginia, and
Wyoming. As recently as 1999, the attorneys general of Arkansas,
Ohio, South Carolina, Utah, and West Virginia filed suit seeking
damages under each respective state’s antitrust laws on behalf of
indirect purchasers. See FTC v. Mylan Labs., Inc., 62 F. Supp. 2d
25, 44-54 (D.D.C. 1999).
-14-
actions,3 twenty-three of them by Illinois Brick repealer statutes4
and three by judicial construction of the right-of-action statute.5
The courts in twelve states have interpreted their antitrust
3
For purposes of this analysis, we do not distinguish
between the forms of indirect purchaser suits allowed. For
example, some jurisdictions allow individual indirect purchaser
actions, while others limit the right to sue to the attorney
general as parens patriae. See supra n.4. Both are counted as
allowing indirect purchaser suits. Any allowance for indirect
purchaser suits demonstrates that the jurisdiction does not believe
that allowing these suits will unduly complicate antitrust
litigation.
4
Alabama, Ala. Code § 6-5-60(a) (1993); California, Cal.
Bus. & Prof. Code § 16750(a) (West 1997); Colorado, Colo. Rev.
Stat. § 6-4-111(2) (2002) (authorizing the state attorney general
to bring suit for indirect injury to any government or public
entity); District of Columbia, D.C. Code Ann. § 28-4509 (2001);
Hawaii, Haw. Rev. Stat. §§ 480-3, -13, -14 (1993 & Supp. 2001)
(allowing the state attorney general to file class action suit on
behalf of indirect purchasers); Idaho, Idaho Code § 48-108(2)
(Michie 2003) (permitting the state attorney general as parens
patriae to bring suit); Illinois, 740 Ill. Comp. Stat. 10/7(2)
(2002); Kansas, Kan. Stat. Ann. § 50-161(b) (Supp. 2002); Maine,
Me. Rev. Stat. Ann. tit. 10 § 1104(1) (West 1997); Maryland, Md.
Code Ann., Com. Law II § 11-209(b)(2)(ii) (2000) (allowing the
state and its subdivisions to bring indirect purchaser suits);
Michigan, Mich. Comp. Laws § 445.778(2) (2001); Minnesota, Minn.
Stat. § 325D.57 (1995); Mississippi, Miss. Code Ann. § 75-21-9
(2000); Nebraska, Neb. Rev. Stat. § 59-821 (Supp. 2002); Nevada,
Nev. Rev. Stat. 598A.210(2) (Supp. 2001); New Mexico, N.M. Stat.
Ann. § 57-1-3(A) (Michie 2000); New York, N.Y. Gen. Bus. Law
§ 340(6) (McKinney Supp. 2003); North Dakota, N.D. Cent. Code
§ 51-08.1-08(3) (1999); Oregon, Or. Rev. Stat. § 646.775 (2001)
(allowing attorney general to sue on behalf of indirect
purchasers); Rhode Island, R.I. Gen. Laws § 6-36-12 (2001) (same);
South Dakota, S.D. Codified Laws § 37-1-33 (2000); Vermont, Vt.
Stat. Ann. tit. 9, § 2465(b) (Supp. 2002); Wisconsin, Wis. Stat.
§ 133.18(1)(a) (2001).
5
Iowa, Comes v. Microsoft Corp., 646 N.W.2d 440, 451 (Iowa
2002); North Carolina, Hyde v. Abbot Labs., Inc., 473 S.E.2d 680,
684 (N.C. Ct. App. 1996); Tennessee, Blake, 1996-1 Trade Cas. (CCH)
at 76,854, available at 1996 WL 134947.
-15-
statutes as requiring them to follow Illinois Brick and to reject
standing for indirect purchasers.6 It is significant, though, that
six of the twelve states that have followed Illinois Brick have
mandatory guidance statutes requiring that the state acts “shall”
be construed in harmony with federal law.7 Of the twelve, only New
Hampshire’s guidance statute is phrased permissively (“may”), as is
Arizona’s. See Minuteman, LLC v. Microsoft Corp., 795 A.2d 833,
836 (N.H. 2002).
6
Connecticut, Vacco v. Microsoft Corp., 793 A.2d 1048
(Conn. 2002); Florida, Mack v. Bristol-Myers Squibb Co., 673 So. 2d
100 (Fla. Dist. Ct. App. 1996) (holding that indirect purchasers
may sue under Florida’s Deceptive Trade Practices Act, but not
under the state antitrust act); Indiana, Berghausen v. Microsoft
Corp., 765 N.E.2d 592, 596 (Ind. Ct. App. 2002); Kentucky, Arnold
v. Microsoft Corp., No. 00-CI-00123, 2001 WL 193765 at *3 (Ky. Cir.
Ct. July 21, 2000); Louisiana, Free v. Abbott Labs., Inc., 176 F.3d
298, 301 (5th Cir. 1999) (interpreting Louisiana law), aff’d, 529
U.S. 333, 120 S. Ct. 1578 (mem. 2000); Massachusetts, Ciardi v. F.
Hoffmann-La Roche, Ltd., 762 N.E.2d 303, 312 & n.18 (Mass. 2002);
Missouri, Ireland v. Microsoft Corp., 2001-1 Trade Cas. (CCH)
¶ 73,180, available at 2001 WL 1868946 (Mo. Cir. 2001); New
Hampshire, Minuteman, LLC v. Microsoft Corp., 795 A.2d 833, 839-40
(N.H. 2002); New Jersey, Kieffer v. Mylan Labs., Inc., 1999-2 Trade
Cas. (CCH) ¶ 72,673, available at 1999 WL 1567726 (N.J. Super. Ct.
Law Div. 1999); Oklahoma, Major v. Microsoft Corp., 60 P.3d 511,
513, ¶¶ 8-9 (Okla. Ct. App. 2002); Texas, Abbott Labs., Inc. v.
Segura, 907 S.W.2d 503 (Tex. 1995); Washington, Blewett v. Abbott
Labs., Inc., 938 P.2d 842, 846 (Wash. Ct. App. 1997).
7
Connecticut, Massachusetts, Missouri, New Jersey,
Oklahoma, and Texas. In addition, the Washington statute provides
that Washington courts shall “be guided by” federal law. Wash.
Rev. Code § 19.86.920 (2003). The Washington Court of Appeals has
interpreted that language to mean that, while the court is not
irrevocably bound to follow federal law, it should do so unless
some reason rooted in law dictates a different result. Because it
found no state-law-based reason to deviate from federal law, the
court elected to follow Illinois Brick. Blewett, 938 P.2d at 846.
-16-
¶16 Thus, the quest for uniformity is a fruitless endeavor
and Arizona’s ruling one way or the other neither fosters nor
hinders national uniformity. The court cannot, by any holding in
this case, contribute significantly to national uniformity on this
issue.
¶17 Sixth, it is debatable whether the legislature’s desire
for uniformity applies to this particular issue. The Prefatory
Note to the Uniform Act discusses uniformity. Unif. State
Antitrust Act Prefatory Note, 7C U.L.A. at 352. As the Defendants
have vociferously argued, consistency with federal law is part of
the uniformity encouraged. But nothing in the Uniform Act suggests
that the uniformity sought relates to the issue of standing to sue
in state court on a state-law-based right of action.8
¶18 Instead, the Prefatory Note to the Uniform Act suggests
8
The dissent argues that the issue is not one of standing,
but rather one of injury. See Dissent ¶¶ 52-53. We import our
terminology from the academic literature, which speaks of the
problem in terms of standing, and view the question as deciding who
may sue. See Joseph P. Bauer, The Stealth Assault on Antitrust
Enforcement: Raising the Barriers for Antitrust Injury and
Standing, 62 U. Pitt. L. Rev. 437 (2001); Roger D. Blair & Jeffrey
L. Harrison, Reexamining the Role of Illinois Brick in Modern
Antitrust Standing Analysis, 68 Geo. Wash. L. Rev. 1 (1999);
William M. Landes & Richard A. Posner, Should Indirect Purchasers
Have Standing to Sue Under the Antitrust Laws? An Economic
Analysis of the Rule of Illinois Brick, 46 U. Chi. L. Rev. 602
(1979). While the Supreme Court describes the question as deciding
who has been injured, 431 U.S. at 729, the Court does not allow
indirect purchasers ever to show how or whether they have suffered
an antitrust injury, but rather cuts off their right to sue. We
therefore think the standing terminology fairly describes the
issue.
-17-
that the uniformity sought relates to standards by which to
determine anti-competitive conduct, and, in turn, the methods for
enforcing compliance with the Uniform Act: “If state antitrust
legislation is to form an integral part of our overall antitrust
policy, the burden of compliance with the antitrust laws of the
several states must be abated by the adoption of a uniform state
antitrust act.” Unif. State Antitrust Act Prefatory Note, 7C
U.L.A. at 352. The phrase “the burden of compliance” is
significant because it implies compliance with substantive
provisions of antitrust law.
¶19 The intent of the Uniform Act to create nationwide
substantive standards for the enforcement of antitrust law becomes
more clear in this passage from the Prefatory Note:
Since the Act parallels the federal antitrust
structure in its basic prohibitions, the
following of federal antitrust precedent
should be encouraged. Of course, the
judiciary at either level must remain
independent, free to avoid the misjudgments of
the other, for this is one of the advantages
of federalism. Given this [U]niform Act
paralleling substantive federal antitrust
[law,] compliance with federal law will be
tantamount to compliance with all antitrust
law.
Id. (emphasis added).
¶20 Thus the goal of the Uniform Act appears to be uniformity
in the standard of conduct required, not necessarily in procedural
matters such as who may bring an action for injuries caused by
violations of the standard of conduct. This is the precise
-18-
approach to uniformity taken by the Iowa Supreme Court:
The purpose behind both state and federal
antitrust law is to apply a uniform standard
of conduct so that businesses will know what
is acceptable conduct and what is not
acceptable conduct. To achieve this
uniformity or predictability, we are not
required to define who may sue in our state
courts in the same way federal courts have
defined who may maintain an action in federal
court. Rather, our guiding principle in
interpreting the Iowa Competition Law is to do
so in such a way as to prohibit “restraints of
economic activity and monopolistic conduct.”
Harmonizing our construction and
interpretation of state law as to what conduct
is governed by the law satisfies the
harmonization provision.
Comes v. Microsoft Corp., 646 N.W.2d 440, 446 (Iowa 2002) (quoting
Iowa Code § 553.2 (1997)).
¶21 The Supreme Court has also considered uniformity in the
type of plaintiff who has a private right of action and found it
unnecessary. The Court explained that Illinois Brick does not
preclude states from allowing indirect purchaser suits:
It is one thing to consider the
congressional policies identified in Illinois
Brick and Hanover Shoe in defining what sort
of recovery federal antitrust law authorizes;
it is something altogether different, and in
our view inappropriate, to consider them as
defining what federal law allows States to do
under their own antitrust law. . . . We
construed § 4 as not authorizing indirect
purchasers to recover under federal law
because that would be contrary to the purposes
of Congress. But nothing in Illinois Brick
suggests that it would be contrary to
-19-
congressional purposes for States to allow
indirect purchasers to recover under their own
antitrust laws.
ARC Am. Corp., 490 U.S. at 103, 109 S. Ct. at 1666 (emphasis
added). The Court elaborated that allowing state laws to protect
indirect purchasers would not interfere with the federal antitrust
policy examined in Illinois Brick, which focuses on large-scale,
potentially nationwide anti-competitive conduct. Id.
¶22 Defendant Flat Glass Manufacturers asserts that
“Arizona’s appellate courts have, to date, consistently regarded
federal interpretations of the Sherman and Clayton Acts as
dispositive in interpreting the Arizona Antitrust Act.” In
support, they cite three cases extolling the importance of
following federal interpretation. Their statement is correct, but
incomplete. What is omitted are the holdings of the cases. In
each case, the Arizona court followed federal law in determining
the standard of conduct required by antitrust law. See All Am.
Sch. Supply Co. v. Slavens, 128 Ariz. 261, 262, 625 P.2d 324, 325
(1981) (relying on federal cases to judge whether the defendant’s
conduct violated the antitrust law); Pasco Indus., Inc. v. Talco
Recycling, Inc., 195 Ariz. 50, 57, ¶ 25, 985 P.2d 535, 542 (App.
1998) (looking to federal law for the standard to determine whether
an antitrust defendant possessed monopoly powers); Wedgewood Inv.
Corp. v. Int’l Harvester Co., 126 Ariz. 157, 160, 613 P.2d 620, 623
(App. 1979) (looking to federal law for guidance on the type of
-20-
conduct that would violate antitrust law). In none of the cases
did Arizona courts look to the federal courts for guidance on the
threshold issue of who may bring a state-law-based claim in a state
court.
¶23 In a further attempt to persuade this court to follow
Illinois Brick, the Defendants point out that most of the states
allowing indirect purchaser actions have done so by Illinois Brick
repealer statutes. They suggest that to now allow indirect
purchaser suits would involve the court in “judicial activism.”
However, we do not view our rejection of Illinois Brick as judicial
activism because the legislature granted the right of action to
indirect purchasers in § 44-1408. We simply reject the judicial
interpretation of the parallel federal act that would prohibit
suits by indirect purchasers despite the statutory language
granting such a right of action.
¶24 The Arizona statute broadly grants a right of action to
any “person” injured in business or property by the anti-
competitive acts of another. A.R.S. § 44-1408(B). The Plaintiffs
certainly fall within the definition of persons. The complaints,
which must be taken as true for purposes of a motion to dismiss,
Donnelly Constr. Co. v. Oberg/Hunt/Gilleland, 139 Ariz. 184, 186,
677 P.2d 1292, 1294 (1984), allege that the Defendants’ illegal
activity injured them in their business or property. So why do the
Plaintiffs not have a right of action according to Defendants?
-21-
Because the Supreme Court in Illinois Brick judicially limited the
comparable federal statute. In the absence of the federal guidance
clause, Arizona’s statutory language would plainly include indirect
purchasers. Viewed against this background, Illinois Brick
repealer statutes do not expand the right-of-action statutes, they
simply reject a judicially imposed limitation on the right to sue
originally granted by statute. By refusing to construe the federal
guidance clause as requiring that Arizona courts follow Illinois
Brick’s limitation on the scope of the right of action granted by
the legislature, the court is simply choosing to follow the
expressed legislative intent that persons injured in their business
or property by anti-competitive activity have a right of action.
The court defers to the legislature, not the federal courts, to
create exceptions to the rule.
¶25 The Defendants also use the Illinois Brick repealer
statutes as the standard for uniformity, asserting that uniformity
mandates that the court leave it to the legislature to depart from
federal law. This argument elevates form over substance. The law
in most of the states that have considered the issue provides that
indirect purchasers may bring a private action. The importance of
uniformity lies in the rule of law, not in how that law came into
effect.
¶26 The question remains whether any sound reasons justify
following Illinois Brick and limiting the range of plaintiffs who
-22-
may sue to remedy state antitrust violations. We find none
compelling.
¶27 A principal reason motivating the Supreme Court to
disallow indirect purchaser suits was the complexity of proof of
damages in such cases. Ill. Brick, 431 U.S. at 737, 97 S. Ct. at
2070 (noting problems of proof and apportionment between direct and
indirect purchasers). The Court reasoned that indirect purchasers
would attempt to prove damages by showing that the direct purchaser
passed-on overcharges from the manufacturer. Id. The Court had
previously disallowed a pass-on defense in Hanover Shoe, Inc. v.
United Shoe Machinery Corp., 392 U.S. 481, 494, 88 S. Ct. 2224,
2232 (1968), decided just nine years before Illinois Brick. See
Ill. Brick, 431 U.S. at 730, 97 S. Ct. at 2067 (explaining that
“allowing offensive but not defensive use of pass-on would create
a serious risk of multiple liability for defendants”). The Court
believed that to allow indirect purchaser actions, it would have to
overrule Hanover Shoe, a path the Supreme Court was unwilling to
take. Id. at 736-37, 97 S. Ct. at 2070. This court is under no
such constraint.
¶28 In Illinois Brick, the Court determined that use of pass-
on evidence by indirect purchasers against defendants who could not
present that same evidence in their defense against direct
purchasers created a risk of multiple liability, increased the
complexity of proving damages, and undercut direct purchasers’
-23-
incentive to bring antitrust actions. Id. at 745, 97 S. Ct. at
2074. The Defendants in these cases assert all these reasons to
convince the court to follow Illinois Brick.
¶29 Defendants maintain that, as the Supreme Court did in
Illinois Brick, the Arizona Court of Appeals also precluded a
defendant from employing a pass-on defense to a suit by an indirect
purchaser of liquid petroleum gas. N. Ariz. Gas Serv., Inc. v.
Petrolane Transp., Inc., 145 Ariz. 467, 702 P.2d 696 (App. 1984).
Petrolane, however, was a contract action for alleged overcharges,
not an antitrust action. Id. at 470, 702 P.2d at 699. Because the
ultimate consumers of the gas lacked privity to the supply
contract, the court held that they could not sue to recover the
overcharges. Id. at 476, 702 P.2d at 705. The court of appeals
precluded Petrolane from using a pass-on defense because that
defense would have prevented the only party who could recover the
overcharges, Northern Arizona Gas, from doing so. Id. (“If
Petrolane were permitted to assert this [pass-on] defense . . . ,
it would be able to retain its overcharges with impunity.”). The
cases today present a different scenario from that presented in
Petrolane. In these antitrust cases, the ultimate consumers need
no privity and may bring suit for damages.
¶30 The risk of multiple liability for Defendants – that is,
being subject to a direct purchaser action and also an indirect
purchaser state case – is a legitimate and important concern. It
-24-
is not, however, a problem that our trial courts are incompetent to
handle. Indeed, most of the Illinois Brick repealer statutes leave
the solution to the double-recovery problem to the courts. E.g.,
740 Ill. Comp. Stat. 10/7(2) (“[I]n any case in which claims are
asserted against a defendant by both direct and indirect
purchasers, the court shall take all steps necessary to avoid
duplicate liability for the same injury including transfer and
consolidation of all actions.”); N.M. Stat. Ann. § 57-1-3(C) (“In
any action under this section, any defendant, as a partial or
complete defense against a damage claim, may, in order to avoid
duplicative liability, be entitled to prove that the plaintiff
purchaser or seller in the chain of manufacture, production, or
distribution who paid any overcharge or received any underpayment,
passed on all or any part of such overcharge or underpayment to
another purchaser or seller in such chain.”); S.D. Codified Laws
§ 37-1-33 (In any subsequent action for the same conduct, “the
court may take any steps necessary to avoid duplicative
recovery.”).
¶31 The complexity of proving damages through multiple levels
of sales is a daunting task, but one to which our courts are equal.
The plaintiffs bear the burden of proving the damages caused by a
defendant’s wrongful conduct. If the plaintiffs cannot present
admissible and convincing proof, they cannot recover. For the
purposes of these cases, in which we are compelled to accept the
-25-
allegations of the complaints as true, see Donnelly Constr. Co.,
139 Ariz. at 186, 677 P.2d at 1294, we assume that these Plaintiffs
can present sufficient evidence of injury caused by illegal
conduct. Unlike the Supreme Court, we are unwilling to foreclose
their opportunity to attempt to prove their injury.
¶32 The Defendants have correctly pointed out that in other
contexts Arizona courts have found damages to be too speculative or
too tenuously connected to the alleged wrongdoing to be
recoverable. However, we cannot say, based on the state of this
record, that damages to indirect purchasers are too speculative
because they are difficult to measure and prove. See Edmund H.
Mantell, Denial of a Forum to Indirect-Purchaser Victims of Price
Fixing Conspiracies: A Legal and Economic Analysis of Illinois
Brick, 2 Pace L. Rev. 153, 204-10 (1982) (presenting a formula for
calculating damages and arguing that the suggested difficulties for
such calculations are exaggerated); Robert G. Harris & Lawrence A.
Sullivan, Passing on the Monopoly Overcharge: A Comprehensive
Policy Analysis, 128 U. Pa. L. Rev. 269, 315 (1979) (suggesting
that “reasonable estimation of passing on which will closely
approximate the truth in the majority of cases requires no mystical
powers or elaborate, extensive economic analysis”). Commenting on
another form of antitrust treble damages claims, the Supreme Court
has acknowledged that reasonable estimates of damages may suffice:
[E]ven where the defendant by his own wrong
has prevented a more precise computation, the
-26-
jury may not render a verdict based on
speculation or guesswork. But the jury may
make a just and reasonable estimate of the
damage based on relevant data, and render its
verdict accordingly. In such circumstances
“juries are allowed to act on probable and
inferential as well as [upon] direct and
positive proof.” [Citations omitted.] Any
other rule would enable the wrongdoer to
profit by his wrongdoing at the expense of his
victim. It would be an inducement to make
wrongdoing so effective and complete in every
case as to preclude any recovery, by rendering
the measure of damages uncertain.
Bigelow v. RKO Radio Pictures, 327 U.S. 251, 264, 66 S. Ct. 574,
579-80 (1946) (alteration in original).
¶33 In the years that have passed since the Illinois Brick
decision, experience has shown that the courts can manage the
complexity of indirect purchaser recovery in antitrust cases.
Defendants raise the concern regarding the difficulty of the proof
of damages, but fail to provide examples of cases of unresolvable
complexity. Our research has similarly revealed none. In
contrast, recent developments in multistate litigation show that
plaintiffs may be able to produce satisfactory proof of damages.
Cf. In re S.D. Microsoft Antitrust Litig., 657 N.W.2d 668, 679
(S.D. 2003) (noting that seven of nine courts reviewing the issue
in that case upheld class certification of indirect purchaser
plaintiffs based on their proffered testimony regarding proof of
pass-on damages). We think our courts can resolve the complex
damages issues that may arise.
-27-
Response to the Dissent
¶34 Our dissenting colleague urges that we must follow
Illinois Brick to ensure uniformity. On that point, we note that
the legislature’s “general purpose” was to make uniform the law
among the states that adopted the Uniform Act. A.R.S. § 44-1412.
But only if we allow indirect purchaser suits to proceed will there
be such uniformity, for two of the three other uniform act
jurisdictions allow indirect purchaser suits by Illinois Brick
repealer statutes, see Mich. Comp. Laws § 445.778(2); N.D. Cent.
Code § 51-08.1-08, and one by modification of the act to allow the
state to bring such suits on behalf of its citizens. See Del. Code
Ann. tit. 6, § 2108(b). See supra ¶ 14. By allowing indirect
purchaser suits in Arizona, we now make the law “uniform” among
the four states that have enacted the Uniform Act.
¶35 There is, however, no uniformity whatsoever between the
governing law of the four “Uniform Act” jurisdictions and the
federal law. Despite language in the Uniform Act suggesting
allegiance to federal law, all four uniform act states permit
indirect purchasers to sue, rejecting the federal rule prohibiting
such suits. Thus, there is no uniformity between the four Uniform
Act states and the federal law on this point, although the Uniform
Act, according to the dissent “clearly” requires such uniformity.
¶36 The dissent also urges following the federal law absent
compelling reasons not to do so. We believe, however, that the
-28-
guidance of the framers of Arizona’s Constitution provides
sufficient reason to depart from the federal path. The framers,
keenly aware of the harmful effects of monopoly power, enjoined the
legislature to enact laws to protect Arizona citizens from anti-
competitive practices such as price fixing and manipulating supply
and demand. Ariz. Const. art. 14, § 15. In providing that a
“person . . . injured . . . by [an antitrust violation] may bring
an action for . . . damages sustained,” see A.R.S. § 44-1412, the
legislature has fulfilled that constitutional command. The
legislative protection from antitrust injury can only be fully
enjoyed, however, if Arizona citizens, whether direct or indirect
purchasers of goods, may sue to enforce that right.
¶37 The concerns that motivate the federal government at
times differ from those that motivate state legislatures. While
the Supreme Court may have wished to protect federal courts from
the burden of resolving nationwide class actions potentially
involving hundreds of thousands of indirect purchaser plaintiffs,
this court is confident that Arizona’s courts are up to the task of
ascertaining damages and protecting Arizona citizens.9
9
The Supreme Court also reasoned that antitrust suits were
more apt to be brought if damages were concentrated in direct
purchasers. Illinois Brick, 431 U.S. at 745-46, 97 S. Ct. at 2074.
We are not convinced that this is so. An auto dealer who relies on
the manufacturer for delivery of popular models of cars does not
strike us as likely to sour the relationship with the manufacturer
by suing over a price increase, especially if it can pass along
overcharges to purchasers. In such a case, the indirect purchaser
is the truly injured party, and likely the only party with impetus
-29-
¶38 Our dissenting colleague also disagrees that whether
indirect purchasers can sue is an issue of standing, and argues
that whether plaintiffs have suffered an antitrust injury is an
issue of substantive law. The fact is, however, that we cannot
know whether Plaintiffs have suffered such an injury, as they were
barred at the courthouse door from attempting to show how and
whether they have been injured by Defendants’ allegedly anti-
competitive activity. This makes the issue one akin to standing,
not one of substantive antitrust law. See supra n.8.
¶39 Regarding the dissent’s iteration of the Supreme Court’s
comments on standing, we urge caution. The Court observed that the
question “which persons have been injured by an illegal overcharge”
differs from the question “which persons have sustained injuries
too remote to give them standing to sue for damages under § 4.”
Illinois Brick, 431 U.S. at 728 n.7. And we agree that this is
true. In federal court, a plaintiff must be able to prove actual
or threatened injury that is not remote. See Lewis v. Casey, 518
U.S. 343, 349-50, 116 S. Ct. 2174, 2179 (1996) (analyzing actual
injury in § 1983 context); Warth v. Seldin, 422 U.S. 490, 498-501,
95 S. Ct. 2197, 2205-06 (1975) (zoning). But rather than wrestle
with the difficulty of ascertaining damages on a case-by-case
basis, the Supreme Court has chosen to draw a bright line barring
all potentially injured indirect purchaser plaintiffs from
to sue to redress the antitrust injury.
-30-
attempting to prove that they suffered antitrust injuries. That is
a choice that the Supreme Court is free to make on behalf of the
federal courts. We choose to follow the command of our
constitution and afford greater protection to Arizona citizens by
allowing them to attempt to prove their cases under Arizona law in
Arizona courts.
¶40 The fears expressed by the Supreme Court in Illinois
Brick and those arguing for extension of that rule to the states
are not new to us. We do not minimize the difficulties of
ascertaining damages, but as this court has stated before in
another context: “We acknowledge that the system will not handle
each case perfectly, but we think it better to adopt a rule which
will permit courts to attempt to achieve justice in all cases than
to continue to rely on one which guarantees injustice in many
cases.” Brannigan v. Raybuck, 136 Ariz. 513, 519, 667 P.2d 213,
219 (1983) (discussing difficulties in ascertaining causation).
Allowing the courts to attempt to achieve justice in the antitrust
realm comports with the longstanding policy of this state to
protect consumers and deter anti-competitive behavior. See Ariz.
Const. art. 14, § 15.
-31-
CONCLUSION
¶41 The court of appeals’ decisions are affirmed. The cases
are remanded for proceedings consistent with this opinion.
Rebecca White Berch, Justice
CONCURRING:
Charles E. Jones, Chief Justice
Michael D. Ryan, Justice
Wallace R. Hoggatt, Judge*
*Pursuant to Article 6, Section 3 of the Arizona Constitution, the
Honorable Wallace R. Hoggatt, Judge of the Cochise County Superior
Court, was designated to sit on this case.
M c G R E G O R, Vice Chief Justice, dissenting
¶42 I respectfully dissent. I depart from the majority
opinion on two central points. First, I would follow the
legislature’s expressed intent in adopting the Arizona Antitrust
Act and interpret Arizona Revised Statutes (A.R.S.) section 44-
1408.B consistently with comparable federal law. Second, I
disagree with the majority’s characterization of the question
whether the plaintiffs can bring their actions as involving simply
-32-
a procedural question of standing. I regard the question as one of
substantive law: Did the plaintiffs suffer an antitrust injury as
defined by the Arizona Antitrust Act? I believe they did not.
A.
¶43 When we construe a statute, our goal is to interpret it
in a manner that effectuates the legislature’s intent in adopting
the statute. Hohokam Irrigation & Drainage Dist. v. Ariz. Pub.
Serv. Co., 204 Ariz. 394, 398 ¶ 15, 64 P.3d 836, 840 (2003).
Often, deciphering legislative intent presents a considerable
challenge. In this instance, however, the legislature made our
task of discerning its goal simpler by including an express
statement of intent. When the Arizona Legislature adopted the
Arizona Antitrust Act, it could scarcely have more clearly
announced that it valued uniformity in antitrust law, both among
states and between state and federal governments. The legislature
revealed its preference for uniformity first by patterning its
legislation after the Uniform State Antitrust Act, 7C U.L.A. 351
(2000) (Uniform Act). The drafters of section 8 of the Uniform
Act, which Arizona codified at A.R.S. section 44-1408.B, intended
to adopt “[t]he private right of action for injury to business or
property by reason of a violation of the Act found in section 4 of
the Clayton Act . . . .” Unif. State Antitrust Act § 8 cmt., 7C
U.L.A. 366 (2000). The drafters of the Uniform Act further
emphasized the importance of uniformity between federal and state
-33-
antitrust law by stating that “[s]ince the [Uniform] Act parallels
the federal antitrust structure in its basic prohibitions, the
following of federal antitrust precedent should be encouraged.”
Id. at 352. Hence, Arizona’s decision to adopt the Uniform Act, in
itself, revealed an intent that Arizona develop a body of antitrust
law consistent with federal precedent.
¶44 But the legislature did not stop with that step. To
emphasize the importance the legislature placed upon uniformity,
and presumably to make certain that the courts understood the
legislative intent to achieve uniformity, the legislature adopted
section 44-1412, which states:
This article shall be applied and construed to effectuate
its general purpose to make uniform the law with respect
to the subject of this article among those states that
enact it. It is the intent of the legislature that in
construing this article, the courts may use as a guide
interpretations given by the federal courts to comparable
federal antitrust statutes.
¶45 The first sentence of section 44-1412 establishes a goal
of uniformity among those states that adopted the Uniform Act.
That goal proved impossible to meet. Since its publication in
1973, only three other states have adopted the Uniform Act:
Delaware, Michigan and North Dakota. While these three
jurisdictions are referred to as “Uniform Act states”, none of them
adhere to the original Uniform Act civil cause of action language.
Delaware substantially amended the section and allows only the
state to bring an action for anti-competitive conduct. Del. Code
-34-
Ann. tit. 6, § 2108(b) (1999). The legislatures in both Michigan
and North Dakota enacted so-called Illinois Brick repealer statutes
that broadened the scope of antitrust injury to include indirect
purchasers. Mich. Comp. Laws § 445.778(2) (2001); N.D. Cent. Code
§ 51-08.1-08(3) (1999). Because so few states adopted the Uniform
Act and even those that did modified it, the legislature’s goal of
uniformity became impossible to meet by looking to other Uniform
Act jurisdictions.
¶46 The legislature, however, enhanced Arizona’s opportunity
to achieve uniformity in the field of antitrust law by adding a
federal guidance clause as the second sentence to A.R.S. section
44-1412. The majority discounts the importance of the guidance
clause, largely relying upon the fact that the legislature used
permissive rather than mandatory language. Op. ¶ 9. I think the
legislative language deserves greater deference: I regard the
clause as directive language that we should follow absent
compelling arguments to the contrary. The majority’s approach,
which rejects federal law, gives no deference to the legislature’s
direction and thus deprives the guidance clause of effect. Quite
obviously, this court can look to federal law for guidance without
obtaining permission from the legislature. See, e.g., Higdon v.
Evergreen Int’l Airlines, Inc., 138 Ariz. 163, 165 n.3, 166, 673
P.2d 907, 909 n.3, 910 (1983) (applying a federal court
interpretation of a Title VII exemption to construe a similar
-35-
provision in the Arizona Civil Rights Act and the Equal Pay Act);
Beaman v. Westward Ho Hotel Co., 89 Ariz. 1, 5-6, 357 P.2d 327,
329-30 (1960) (applying a federal court interpretation defining
“wages” under the Federal Unemployment Tax Act to define the same
term under Arizona law). When the legislature added the guidance
clause, therefore, it must have meant something more. I understand
the “something more” to involve an expression of the legislature’s
preference for uniformity, and therefore predictability, in the
area of antitrust law.
¶47 Were we to follow the guidance clause and look to federal
law for guidance in this instance, the plaintiffs could not
proceed; federal law clearly bars their claims. The federal courts
have interpreted a comparable federal antitrust statute. The
language of section 44-1408.B is almost identical to its federal
counterpart, section 4 of the Clayton Act. Section 4 provides, as
does section 44-1408, that “any person who shall be injured in his
business or property by reason of anything forbidden in the
antitrust laws may sue therefor in any district court of the United
States . . . .” 15 U.S.C. § 15(a) (2000). In Illinois Brick Co.
v. Illinois, the Supreme Court held that, for purposes of section
4 of the Clayton Act, an indirect purchaser of goods is not a
person injured by a manufacturer’s anti-competitive conduct, even
though that conduct leads to goods being purchased by the indirect
purchaser at a higher price than would exist but for the antitrust
-36-
violation. 431 U.S. 720, 729 (1977). “[T]he overcharged direct
purchaser, and not others in the chain of manufacture or
distribution, is the party ‘injured in his business or property.’”
Id. (emphasis added).
¶48 In this instance, then, we can fulfill the legislature’s
desire for a uniform approach in cases involving alleged antitrust
injury by drawing from the federal experience. Instead, the
majority has adopted an approach that ensures non-uniformity
between state and federal law, without defining any compelling
reason for doing so.
¶49 The majority does not explain why we should now depart
from our prior practice of interpreting Arizona’s antitrust
statutes consistently with comparable federal statutes. See All
Am. Sch. Supply Co. v. Slavens, 128 Ariz. 261, 262, 625 P.2d 324-25
(1981) (adopting federal courts’ interpretation of antitrust
violation and describing federal decisions as dispositive); Pasco
Indus., Inc. v. Talco Recycling, Inc., 195 Ariz. 50, 57 ¶ 25, 985
P.2d 535, 542 (App. 1998) (adopting a federal court interpretation
of “monopoly power” as used in section 2 of the Sherman Act);
Wedgewood Inv. Corp. v. Int’l Harvester Co., 126 Ariz. 157, 160,
613 P.2d 620, 623 (App. 1979) (“The Arizona legislature clearly
intended to strive for uniformity between federal and state
antitrust laws.”). Indeed, today’s decision becomes the first
Arizona Antitrust Act case in which we do not look to federal law
-37-
to resolve a question of the appropriate interpretation of a state
antitrust statute.
¶50 The impact of today’s departure from our long-standing
practice remains unclear. Apparently we now will interpret some
provisions of the Arizona Antitrust Act consistently with federal
law and, in other instances, disregard federal law, as we do today.
The majority does not tell businesses, litigants, or courts how to
discern which rule applies to any particular antitrust issue, a
result that creates unnecessary and harmful uncertainty.10
¶51 The majority relies, in part, on the Supreme Court’s
decision in California v. ARC America Corp., 490 U.S. 93 (1989), to
justify its decision to ignore the federal guidance clause. Op.
¶ 21. In that case, the Court held that federal antitrust law and
Illinois Brick do not preempt state antitrust law. Id. at 106.
Accordingly, a state can permit indirect purchaser suits without
concern for federal antitrust policy.11 ARC America, however, does
10
The majority also concludes that, if the federal guidance
clause signals that the legislature intended that we follow federal
law at all, it could only have intended to follow the law as it
existed when Arizona adopted the Arizona Antitrust Act. Op. ¶ 11.
I discern no basis for concluding that the legislature intended to
adopt an antitrust law frozen in time as of 1974. I think it more
likely that the legislature intended that the federal guidance
clause act as a fluid provision to keep Arizona law consistent with
developing federal antitrust law.
11
The Court pointed out that Arizona’s statutory cause of
action “generally follows” mirrored section 4 of the Clayton Act
and that the language could be construed as either permitting or
prohibiting indirect purchaser suits. ARC America, 490 U.S. at 98
n.3.
-38-
not address the question at issue. I agree that a state can decide
to permit indirect purchaser actions even though federal law does
not. The question for us is whether the Arizona Legislature
intended to permit actions not allowed under comparable federal
antitrust law. ARC America, therefore, provides no guidance in
this action.
B.
¶52 My second area of disagreement with today’s opinion
results from the majority’s decision to characterize the issue
whether an indirect purchaser can bring an action under section 44-
1408.B as raising simply a question of standing. Op. ¶¶ 17-22.
According to the majority, the federal guidance clause
distinguishes between substantive and procedural matters of federal
law, and indicates only that the legislature prefers uniformity
among the former but not among the latter. Id. ¶ 20. Leaving
aside the question whether the legislature intended to make any
such distinction, I disagree that the legal issue before us is
whether section 44-1408.B confers “standing” to sue upon an
indirect purchaser. The question, rather, is whether an indirect
purchaser has suffered an antitrust injury for the purposes of
section 44-1408.B. That issue presents a question of substantive
law.
¶53 In Illinois Brick, the Supreme Court explicitly described
the distinction between those questions that the majority fails to
-39-
recognize: “[T]he question of which persons have been injured by
an illegal overcharge for purposes of § 4 [of the Clayton Act] is
analytically distinct from the question of which persons have
sustained injuries too remote to give them standing to sue for
damages under § 4.”12 431 U.S. at 728 n.7. The central question
for us, which the Court answered in Illinois Brick, is not whether
the plaintiffs have “standing,” but whether they suffered an injury
contemplated by antitrust law. See Associated Gen. Contractors of
Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 535
n.31, 545 (1983) (holding that a labor union could not pursue an
antitrust claim against the association defendant because it did
not suffer an antitrust injury under section 4 of the Clayton Act).
Therefore, even if, as the majority avers, the guidance clause
reflects a legislative intent to develop Arizona’s substantive
antitrust law in a manner consistent with federal law, we should
conclude that these indirect purchaser actions cannot proceed
because the plaintiffs did not suffer an antitrust injury under the
Arizona Antitrust Act.
12
The Court reaffirmed this principle in Blue Shield of Va.
v. McCready, in which the Court proceeded with a standing analysis
only after holding that a health care plan subscriber suffered an
antitrust injury at the hands of her insurance company. 457 U.S.
465, 483-84 (1982) (holding that insurer’s practice of reimbursing
members for psychiatrist treatment but not psychologist treatment
constituted an antitrust violation in which members were directly
injured because they were unable to obtain their treatment of
choice).
-40-
C.
¶54 The majority further justifies its decision to depart
from our past practice of following federal antitrust law by
concluding that permitting indirect purchaser actions furthers
sound public policy. The majority may be right, but that decision
is one that should be made by the legislature, rather than by this
court. As the majority notes, twenty-three of the twenty-five
states that opted to permit indirect purchaser actions did so by
enacting statutes, see Op. ¶ 15 n.4, presumably after legislative
debate and hearings. As a result of their deliberations, some of
those states limited the circumstances under which indirect
purchaser actions may proceed. For instance, not all states permit
private party actions; several permit only the state to bring an
action on behalf of indirect purchasers. Id. Today, without
public hearings or debate, Arizona joins the tiny minority of
states that have judicially interpreted antitrust statutes similar
to section 44-1408.B as permitting indirect purchaser actions,
thereby foreclosing consideration as to the parameters of indirect
purchaser actions.
¶55 Nearly three decades have passed since the Illinois Brick
decision. During all those years, the legislature took no action
to expand the scope of section 44-1408.B to permit indirect
purchaser actions or to indicate that this court should ignore its
federal guidance clause. I fully concur with the majority that the
-41-
question decided here involves important questions of public
policy. I would leave this matter of public policy to the
legislature.
Ruth V. McGregor, Vice Chief Justice
-42-