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California v. ARC America Corp.

Supreme Court of the United States

February 27, 1989, Argued ; April 18, 1989, Decided

No. 87-1862

Opinion

 [*96]  [***91]  [**1663]    JUSTICE WHITE delivered the opinion of the Court.

In Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977), the State of Illinois  [***92]  brought suit on its own behalf and on behalf  [*97]  of a number of local governmental entities seeking treble damages under § 4 of the Clayton Act, 38 Stat. 731, as amended, 15 U. S. C. § 15(a), 2 for an alleged conspiracy to fix the price of concrete block in violation of § 1 of the Sherman Act, 26 Stat. 209, as amended, 15 U. S. C. § 1. The State and the local governments were all indirect purchasers of concrete block -- that is, they did not purchase concrete block directly from the price-fixing defendants but rather purchased products or contracted for construction into which the concrete block was incorporated by a prior purchaser. The Court held that, with limited exceptions, 3 only overcharged direct purchasers, and not subsequent [****8]  indirect purchasers, were persons "injured in [their] business or property" within the meaning of § 4, and that therefore the State of Illinois was not entitled to recover under federal law for the portion of the overcharge passed on to it.

 [****9]  Appellants in the present case, the States of Alabama, Arizona, California, and Minnesota, brought suit in the appropriate federal courts on their own behalf and on behalf of classes of all governmental entities within each State, excluding the Federal Government, seeking treble damages under § 4 of the Clayton Act for an alleged nationwide conspiracy to fix prices of cement in violation of § 1 of the Sherman Act. Appellants are, at least in part, indirect purchasers of cement, and so under Illinois Brick, like the State of Illinois in that  [*98]  case, would not be entitled to recover on their indirect purchaser claims under § 4 unless those claims fell within one of the exceptions. In their complaints, however, appellants also alleged violations of their respective state antitrust laws under which, as a matter of state law, indirect purchasers arguably are allowed to recover for all overcharges passed on to them by direct purchasers. 4 The claims under  [***93]  these  [**1664]  state indirect purchaser statutes are the focus of this case.

 [****10]  Numerous similar actions were filed by other plaintiffs in various District Courts, and the actions were transferred to the United States District Court for the District of Arizona for coordinated pretrial proceedings. In re Cement and Concrete Antitrust Litigation, 437 F. Supp. 750 (JPML 1977). The District Court certified the actions as class actions and established a number of plaintiff classes. Between July 1979 and October 1981, several major defendants settled  [*99]  with the various classes, resulting in a settlement fund in excess of $ 32 million. The settlements left distribution of the fund for later resolution, subject to approval of the District Court.

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490 U.S. 93 *; 109 S. Ct. 1661 **; 104 L. Ed. 2d 86 ***; 1989 U.S. LEXIS 2024 ****; 57 U.S.L.W. 4425; 1989-1 Trade Cas. (CCH) P68,537

CALIFORNIA ET AL. v. ARC AMERICA CORP. ET AL.

Prior History:  [****1]  APPEAL FROM THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT.

Disposition:  817 F. 2d 1435, reversed.

CORE TERMS

indirect, antitrust, pre-empted, settlement, pre-emption, overcharge, concrete

Antitrust & Trade Law, Clayton Act, General Overview, Private Actions, Purchasers, Direct Purchasers, Regulated Practices, State Regulation, Indirect Purchasers, Standing, Sherman Act, Remedies, Damages, Claims, Constitutional Law, Supremacy Clause, Governments, Legislation, Statutory Remedies & Rights, Federal Government, US Congress, Civil Procedure, Jurisdiction, Jurisdictional Sources, Subject Matter Jurisdiction, Supplemental Jurisdiction