Antitrust and Consumer Protection
Competition: Fall 2015, Vol 24, No. 2
Content
- A Tale of Two Statutes: Cipro, Edwards, and the Rule of Reason
- Antitrust Treatment of State Licensing Boards In the Wake of North Carolina State Board of Dental Examiners V.F.T.C.
- Breaking a Monopoly: Vigilante Justice or the Sort of Innovative Approach We Celebrate?
- Capitalizing On Judicial Antitrust Experience
- Chair's Column
- Editor's Note
- Health Care Merger Analysis In the Era of Payment Reform
- Masthead
- Mobile Apps: Redefining the Virtual California Economy and the Laws That Govern It
- Off-label Use of the Cartwright Act: Will Cipro Require State Courts To Assess Federal Patent Validity In Pay-for-delay Cases?
- Pleading An Antitrust Conspiracy In a Post-twombly World
- Promoting Antitrust Compliance the Antitrust Division's Subtle Shift Regarding Corporate Compliance: a Step Toward Incentivizing More Robust Antitrust Compliance Efforts
- Putting Cipro Meat On Actavis Bones: a Case Study In Filling In the Legal Gaps
- Table of Contents
- The Antitrust and Unfair Competition Law Section
- The Magna Carta and the Sherman Act
- What You See Isn't What You Get: How the Colgate Doctrine May Apply To the Disposable Contact Lens Antitrust Litigation
- The Northern District of California Opens Its Doors To the World's Civil Antitrust Disputes
THE NORTHERN DISTRICT OF CALIFORNIA OPENS ITS DOORS TO THE WORLD’S CIVIL ANTITRUST DISPUTES
By Lee F. Berger and Sophie J. Sung1
I. INTRODUCTION
Policy choices dominate antitrust law. The U.S. Supreme Court made a policy choice, enshrined in its Illinois Brick decision, that under federal antitrust law, only direct purchasers have standing to bring claims, and that under Hanover Shoe, those direct purchasers may recover for 100% of the overcharge—empowering the direct purchasers to enforce the antitrust laws and avoid the complexities of pass-on calculations. The U.S. Congress made another policy choice, enshrined in the Foreign Trade Antitrust Improvements Act ("FTAIA"), that U.S. antitrust law would be applied within the United States, and only reach outside the United States when activity in foreign commerce had a direct effect on U.S. commerce.
Each of these two doctrines is meant to be read narrowly, with few and strict exceptions. Yet in the last two years, these two doctrines have been expanded beyond their intended ranges under Northern District of California precedent. As to the bar on indirect purchasers, the Ninth Circuit recognized an exception permitting indirect purchasers to sue when they purchased their product from an innocent direct purchaser which is owned or controlled by a conspirator. The Northern District of California recently doubled that exception, extending it to instances in which the ownership or control relationship exists in the opposite direction, that is, the innocent direct purchaser owns or controls the conspirator. As to the bar on extraterritorial application, the Northern District of California has improperly expanded the "import commerce" exception to the FTAIA to include instances in which the conspiracy occurred in some part in import commerce, even if the plaintiff did not purchase the product in import commerce.