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Lowell v. American Cyanamid Co.

United States Court of Appeals for the Eleventh Circuit

June 9, 1999, Decided

No. 98-6194.

Opinion

 [*1228]  EDMONDSON, Circuit Judge:

Plaintiffs, five Alabama farmers, have appealed a district court order dismissing an antitrust complaint for failure to join middlemen dealers as defendants pursuant to Illinois Brick Co. v. Illinois, 431 U.S. 720, 97 S. Ct. 2061, 52 L. Ed. 2d 707 (1977). We conclude that Illinois  [**2]   Brick has no application in a vertical conspiracy with no allegations of "pass-on." The district court decision is vacated, and the case is remanded.

Background

Between 1989 and 1995, the defendant, American Cyanamid Company ("American Cyanamid"), maintained two similar rebate programs for its independent retail dealers nationwide. Under the programs, American Cyanamid entered into written contracts with its dealers whereby American Cyanamid would give the dealer a rebate on each sale of designated crop-protection products but only if the dealer sold the product at or above American Cyanamid's suggested resale price; the programs allegedly established a minimum resale price. Under these contracts, the specified resale price was equal to the wholesale prices paid by the dealer. American Cyanamid's dealers overwhelmingly responded by selling the product at or above the specified minimum resale price. 2

 [**3]   [*1229]  In 1997, Plaintiffs filed a complaint, on behalf of themselves and all others similarly situated, alleging American Cyanamid had violated section one of the Sherman Act (15 U.S.C. § 1) and section four of the Clayton Act (15 U.S.C. § 15). Plaintiffs later amended their complaint, but at no time did they join any of the estimated 2,500 American Cyanamid distributors. American Cyanamid filed a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). The district court granted the motion with prejudice, holding that the independent dealers, as direct purchasers, must be parties to the action under the doctrine of Illinois Brick. Otherwise, Plaintiffs, according to the district court, lacked standing to maintain the suit. Plaintiffs appealed.

Discussion

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177 F.3d 1228 *; 1999 U.S. App. LEXIS 11859 **; 1999-1 Trade Cas. (CCH) P72,545; 12 Fla. L. Weekly Fed. C 919

Doug LOWELL, Mackey Nolte, et al., Plaintiffs-Appellants, v. AMERICAN CYANAMID COMPANY, a Corporation, Defendant-Appellee.

Prior History:  [**1]  Appeal from the United States District Court for the Southern District of Alabama. (No. 97-0581-BH-M). W.B. Hand, Judge.

Disposition: VACATED AND REMANDED.

CORE TERMS

conspiracy, dealers, vertical, pass-on, purchaser, district court, manufacturer, horizontal, antitrust, conspiring, overcharge, consumer, chain, join, Plaintiffs', patients, no allegation, resale price, indirect, non-Blue

Civil Procedure, Appeals, Standards of Review, De Novo Review, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Dismissal, Involuntary Dismissals, Failure to State Claims