Jul

08

The First Circuit Holds that Illinois Brick Bars Recovery by Auto Leasing Customers

Posted by : Matthew Wild | On : July 8, 2008

On June 30, 2008, the First Circuit held that leasees of motor vehicles could not recover under Section 4 of the Clayton Act because they were indirect purchasers of the vehicles. In re New Motor Vehicles Canadian Export Antitrust Litig., No. 07-1990, 2008 WL 2568457 (1st Cir. June 30, 2008). In Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977), the Supreme Court held that only plaintiffs that purchased a product directly from a co-conspirator can recover treble damages under Section 4 of the Clayton Act for a violation of the antitrust laws. In an action brought by leasees of motor vehicles who claimed that the motor vehicle manufacturers had conspired to prevent the sale of motor vehicles in Canada to U.S. consumers for export into the U.S., the First Circuit held that the dealers and not the leasing companies or leasees were the direct purchasers under Illinois Brick. The Court held that because the dealers negotiate the terms of the sale in response to rates set by the leasing companies, the dealers were the direct victims of an antitrust violation by the manufacturers. An interesting question is whether consumers in this case have remedies under state antitrust laws if their claims are based on purchases in Canada. Followers of this litigation are directed to the April 14, 2008 Post discussing the First Circuit’s treatment of class certification.

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