A PRACTITIONER’S PERSPECTIVE: WHY THE SUPREME COURT SHOULD NOT OVERTURN ILLINOIS BRICK IN APPLE V. PEPPER¹

By Steven N. Williams²

I. INTRODUCTION

During the course of oral argument in Apple v. Pepper, counsel for plaintiff was asked several times why the plaintiffs’ bar did not support calls for the Supreme Court to overrule Illinois Brick Co. v. Illinois.³ This article reviews the issues raised in Pepper, and provides this lawyer’s response to the question of why Illinois Brick should not be disturbed.

The plaintiffs in Pepper purchased apps for their iPhones, iPads and other Apple devices from Apple’s App Store. These apps can only be sold and purchased through Apple’s App Store.⁴ This model is unique to Apple. The transactions in which the plaintiffs purchase apps are solely between the plaintiffs and Apple. Apple does not mandate the prices that app developers may charge for their products when sold through the App Store. Many are free. If they are not free, their price must end in .99. iPhone users pay Apple when they buy an app from the App Store. Apple retains 30% of the purchase price paid for an app, and remits the remaining 70% to the app developer.

No one has pointed to any other sales model that operates like Apple’s App Store. Apps which operate on different devices and operating systems other than Apple’s iOS are widely available through Google Play, the Microsoft Store, the Amazon App Store and other places. Apple’s total control over the means of distribution for both the developers who sell apps and the customers who purchase apps is unique. These features led to the characterization of the App Store as a "closed loop" during oral argument before the Supreme Court.

Plaintiffs alleged that Apple had created and exploited a monopoly over the retail aftermarket for iPhone apps and sued under the Sherman and Clayton Act for antitrust damages. After a series of motions directed at the adequacy of the complaint and amendments by the plaintiffs, the district court dismissed the fourth amended complaint with prejudice on the ground that the plaintiffs’ claims necessarily implicated the pricing decisions of non-party app developers and thus were barred by Illinois Brick.

[Page 127]

II. BACKGROUND

A. Antitrust Principles

These antitrust principles frame the analysis of Pepper and Illinois Brick:

Antitrust laws are essential to the well-being of our country, and the well-being of consumers.

The Sherman Act was designed to be a comprehensive charter of economic liberty aimed at preserving free and unfettered competition as the rule of trade. It rests on the premise that the unrestrained interaction of competitive forces will yield the best allocation of our economic resources, the lowest prices, the highest quality and the greatest material progress, while at the same time providing an environment conducive to the preservation of our democratic and social institutions. But even were that premise open to question, the policy unequivocally laid down by the Act is competition.⁵

Private enforcement of antitrust laws is an essential element of the antitrust laws.

When Congress enacted the Clayton Act in 1914, it "extend[ed] the remedy under Section 7 of the Sherman Act" to persons injured by virtue of any antitrust violation. H.R. Rep. No. 627, 63d Cong., 2d Sess., 14 (1914). The initial House debates concerning provisions relating to private damage actions reveal that these actions were conceived primarily as "open[ing] the door of justice to every man, whenever he may be injured by those who violate the antitrust laws, and giv[ing] the injured party ample damages for the wrong suffered." 51 Cong. Rec. 9073 (1914) (remarks of Rep. Webb); see, e.g., id., at 9079 (Rep. Volstead), 9270 (Rep. Carlin), 9414-9417, 9466-9467, 9487-9495. The House debates following the conference committee report, however, indicate that the sponsors of the bill also saw treble-damages suits as an important means of enforcing the law. Id., at 16274-16275 (Rep. Webb), 16317-16319 (Rep. Floyd).⁶

[Page 128]

State antitrust laws existed before federal antitrust laws, have provided a parallel enforcement system, and have developed meaningful differences from federal law.⁷

From the beginning, judicial interpretation provided important interpretations of the antitrust laws. The Sherman Act was written in extraordinarily broad terms which required judicial construction.⁸ Milestone judicial interpretations have addressed issues of standing and antitrust injury. These include Hanover Shoe, Inc. v. United Shoe Machinery Corp.⁹ and Illinois Brick, as well as Associated General Contractors v. Cal. State Council of Carpenters.¹⁰

Hanover Shoe held that an antitrust defendant could not assert as a defense that the plaintiff passed on overcharges to its customers. Illinois Brick held that because Hanover Shoe prevented a defendant from asserting a "pass on" defense, a plaintiff who did not purchase directly from a defendant could not sue that defendant for damages under federal law. AGC established a multi-part test to evaluate antitrust standing.

Since Illinois Brick, 34 states and the District of Columbia have provided remedies to victims of antitrust violations who did not deal directly with a defendant, either through statutory changes or through judicial interpretation. These states are typically referred to as "Repealer" states. The substantive laws of these states developed in parallel to federal law but have not been identical. By way of example, in contrast to Hanover Shoe, the California Supreme Court, in Clayworth, supra, refused to permit a pass on defense to a claim under the Cartwright Act, the California state antitrust law, unless necessary to avoid duplicative damages because multiple levels in the same chain of distribution were present in the same action.¹¹ ARC America held that these state laws were not preempted even if they imposed penalties on antitrust violators that were cumulative of remedies provided to direct purchasers under federal law.

[Page 129]

The Class Action Fairness Act of 2005¹² ("CAFA") was the product of "tort reformers" seeking to curb what they called class action lawsuit abuse. At the signing ceremony for CAFA, President Bush referenced a newspaper editorial referring to "the class action system as an extortion racket"¹³ and stated that he hoped CAFA would begin to remedy that situation.

Nothing about the signing remarks for CAFA indicate that any proponent of CAFA was thinking of antitrust cases. As a (perhaps unintended) consequence of CAFA, antitrust actions on behalf of all plaintiffs, whether asserting claims under federal law or under state law, are now typically presided over by a single federal judge appointed by the Judicial Panel on Multidistrict Litigation ("JPML"). Frequently this includes (1) class claims under federal law by direct purchasers, (2) class claims under state law by indirect purchasers, (3) individual "direct actions" by non-class plaintiffs, and (4) actions by state attorneys general. Cases like these are often coordinated with parallel federal criminal or civil actions.

Centralization of these actions before a single federal judge has mitigated costs of discovery by eliminating duplication, led to consistency in rulings, and provided predictability to all parties. While the task of managing such complex litigation may seem daunting, in this author’s experience, federal judges have shown great skill in managing such actions successfully. Since 2006, common procedures have been established and implemented to manage private civil antitrust litigation throughout the United States. Among the mechanisms used by courts and litigants are the early appointment of lead and liaison counsel for various plaintiff and defense groups, protective orders, protocols on the production and use of electronically stored information, protocols governing expert discovery, protocols governing the taking and coordination of depositions, protocols providing for the coordination of discovery among actions, and orders governing the conduct of trials involving multiple levels of claimants.¹⁴

B. Pepper v. Apple—the District Court Proceedings

The Pepper plaintiffs sued Apple for damages under federal antitrust law, alleging that:

1. Apple had monopolized and attempted to monopolize the market for iPhone apps;
2. the apps were manufactured by app developers and were only sold through Apple’s App Store;
3. for every third-party app sold through the App Store, Apple received 30% of the revenue and the developer received the remaining 70%;
4. payment was made directly to the App Store;
5. Apple prohibited developers from selling iPhone apps through any means other than the App Store; and
6. if an iPhone user purchases and installs an app on an iPhone from a source other than the App Store, Apple will void the warranty for that iPhone.

[Page 130]

The district court dismissed plaintiffs’ complaint with prejudice after the fourth amended complaint, ruling that plaintiffs’ damage claim necessarily required an inquiry into the pricing decisions of non-party app developers, and therefore was barred by Illinois Brick.¹⁵

C. The Ninth Circuit’s Opinion

The Ninth Circuit held that the indirect-purchaser rule of Illinois Brick did not bar antitrust claims against Apple by plaintiffs who purchased apps made by app developers from Apple’s App Store.¹⁶ In its analysis, the Ninth Circuit described the key issue and precedents as follows:

The transactions in Hanover Shoe and Illinois Brick have the same structure. In both cases, a monopolizing or price-fixing manufacturer sold or leased a product to an intermediate manufacturer at a supracompetitive price. The intermediate manufacturer (in Illinois Brick, two intermediate manufacturers) then used that product to create another product, which was ultimately sold to the consumer. The details in [Kansas v. Utilicorp United, Inc., 497 U.S. 199 (1990)] are different but the basic structure is the same. In Utilicorp, a monopolizing producer sold a product to a distributor at an allegedly supracompetitive price. The distributor then sold the product to a consumer. In all three cases, the consumer was an indirect purchaser from the manufacturer or producer who sold or leased the product to the intermediary. The consumer was a direct purchaser from the intermediate manufacturer (Hanover Shoe and Illinois Brick) or from the distributor (Utilicorp).

846 F.3d at 322. The consumer did not have standing to sue the intermediary, wether the intermediate manufacturer or the distributor. With the question framed that way, the Ninth Circuit simplified the question at issue because it did not turn on any inquiry about non-parties’ pricing decisions:

The question before us is whether Plaintiffs purchased their iPhone apps directly from the app developers, or directly from Apple. Stated otherwise, the question is whether Apple is a manufacturer or producer or whether it is a distributor. Under Hanover Shoe, Illinois Brick, and Utilicorp, if Apple is a manufacturer or producer from whom Plaintiffs purchased indirectly, Plaintiffs do not have standing. But if Apple is a distributor from whom Plaintiffs purchased directly, Plaintiffs do have standing.

Id.

[Page 131]

The Ninth Circuit’s analysis of this question turned on its application of Delaware Valley Surgical Supply, Inc. v. Johnson & Johnson, 523 F.3d 1116 (9th Cir. 2008). In that case, the plaintiffs alleged that Johnson & Johnson was a monopolist, but they had not purchased from Johnson & Johnson. Instead, they purchased through a distributor which had purchased from Johnson & Johnson. The court held that plaintiff was an indirect purchaser from Johnson & Johnson, and a direct purchaser from the distributor. As a result, it could not bring a damage claim against Johnson & Johnson. The key logical step in the Ninth Circuit’s analysis in Delaware Valley, which it extended in Pepper, is:

Applying the "straightforward," "bright line" rule of Illinois Brick, we held in Delaware Valley that [plaintiff] was an indirect purchaser from J & J, the manufacturer, and a direct purchaser from [ ] the distributor. That [plaintiff] and J & J had a contract setting the wholesale price of the products, and that the price plaintiff paid [the distributor] was "set, in part, by an agreement negotiated . . . on behalf of [plaintiff]" with J & J were not determinative. The determinative fact was that [the distributor] sold the products directly to [plaintiff]. Because [plaintiff] bought directly from [ ] the distributor, it lacked standing to sue J & J, the manufacturer. The necessary corollary of Delaware Valley is that [plaintiff] would have had standing to sue [ ] the distributor.

846 F.3d at 323.

By analyzing the issue this way, the Ninth Circuit was able to conclude that the Plaintiffs could assert their federal damage claim against Apple because Apple was a distributor. Id. at 324. The logic of this analysis may be strained, though the conclusion is right. In Delaware Valley, the distributor was not alleged to have done anything wrong. As such, the "corollary" that the plaintiff would have standing to sue the distributor provides an illusory benefit because there was no claim against the distributor to be made.

While the application of this framework to Apple in the Pepper case based upon its self-professed role as a distributor results in finding standing for the plaintiffs, a simpler way to get to that result would be to look at the identity of the alleged antitrust violator and violation, and the relationship of those two things to the plaintiffs. In Pepper, the violator was Apple and Apple had a direct relationship with the plaintiffs. This analysis, like the "distributor" analysis, avoids the need to look at non-party pricing decisions or the existence of "antecedent transactions"¹⁷ such as those identified by the district court when it dismissed the plaintiffs’ claims against Apple.

III. PEPPER AT THE SUPREME COURT

Apple petitioned for certiorari on August 2, 2017. On October 10, 2017, the Supreme Court invited the Solicitor General to file a brief expressing the views of the United States. On May 8, 2018, the United States Department of Justice filed an amicus brief. It was not surprising that this amicus brief supported Apple’s position; the following part of the brief, however, caught the attention of many:

[Page 132]

That regime of parallel federal and state antitrust litigation has proved to be complex and inefficient. See AMC Report 269-272.¹⁸ Inter alia, suits by direct and indirect purchasers seeking to recover the same overcharge create a risk of inconsistent results or duplicative awards. Id. at 271-272. In addition, some commentators have concluded, based on the courts’ experience with state-law indirect purchaser claims, that the evidentiary complexities associated with pass-on analysis are not as great as this Court believed them to be when it decided Hanover Shoe and Illinois Brick. See, e.g., id. at 277; 2A Phillip E. Areeda et al., Antitrust Law: An Analysis of Antitrust Principles and Their Application ¶ 346k, at 219-227 (4th ed. 2014). The parties have litigated this case within the framework established by Hanover Shoe and Illinois Brick, however, and have not asked this Court to revisit those decisions.¹⁹

While nothing in the case or in Apple’s petition for certiorari challenged the Illinois Brick precedent—indeed, Apple relied upon it for its defense—the U.S. appeared to be injecting the issue into the Court’s review based on a twenty-year old study, despite the fact that none of the parties had asked the Court to consider the viability of Illinois Brick and Hanover Shoe. The citation to the findings of the AMC were an anachronism. The AMC report was completed just before CAFA became effective. The conclusions of the AMC report were questionable when issued, and CAFA rendered them nugatory.

The AMC report proposed revisions to the antitrust laws which included the elimination of Illinois Brick. Among the bases for this recommendation were the assertions that the regime of parallel federal and state antitrust claims had proved to be "complex and inefficient" and that there was a risk of inconsistent or duplicative awards. Because CAFA led to the centralization of most civil antitrust claims before a single federal judge, the concerns about complexity, inefficiency, and inconsistent results have fallen by the wayside. And the assertion of "duplicative awards" is an illusion. Scholars have repeatedly shown that there has been no reported instance in which an antitrust violator has been subject to duplicative damages,²⁰ and advocates for this argument have never rebutted those showings. Further, it is almost certain that there is underdeterrence in antitrust because many violations are never discovered and, due to statutes of limitations, even when such violations are discovered violators are frequently subject to less than the total damages that they might otherwise be subject to due to time bars.²¹

[Page 133]

The Court granted the petition for certiorari, with the question presented being:

Whether consumers may sue for antitrust damages anyone who delivers goods to them, even where they seek damages based on prices set by third parties who would be the immediate victim of the alleged offense.

This question accepted in its entirety Apple’s theory of the case. The question is not consistent with the actual claim presented by plaintiffs. Under no interpretation could Apple—which created, owns, and controls everything about the App Store—be deemed merely "anyone who delivers goods", as if it were an innocent bystander to the transactions. Nor, as set forth above, do the plaintiffs’ claims require an analysis of "damages based on prices set by third parties." Finally, while the App developers may or may not be "immediate victim[s]" of Apple’s conduct, they are not necessarily immediate victims of the alleged offense asserted by the plaintiffs.

On October 1, 2008, Texas, Iowa, and 29 other states filed an amici curiae brief in support of respondents.²² This brief argued for affirmance on a different ground. The attorneys general argued that Illinois Brick should be overruled.²³

Apple’s arguments in response to the claims in Pepper substituted one of many policy reasons supporting the Illinois Brick decision for the holding itself. This was clearly shown by Apple’s oral argument before the Supreme Court, which began with the proposition that the Ninth Circuit should be reversed because plaintiffs’ damages theory "is rooted in a 30 percent commission that Apple charges app developers and which allegedly causes those developers to increase app prices to consumers," and that therefore Illinois Brick bars the plaintiffs’ claims because "the developers’ pricing decisions are necessarily in the causal chain that links the commission to any consumer damages." ²⁴ This focus on pricing decisions by non-parties or antecedent transactions as in Campos case fails to account for the critical issue of who the wrongdoer is and what the wrongful conduct was.

The bright-line rule of Illinois Brick is that only those who deal directly with an antitrust violator may bring a damage claim under federal law. In Pepper, only Apple was alleged to have violated the antitrust laws. Early in the argument, Justice Breyer focused on this point when he said:

IfJoe Smith buys from Bill, who bought from the monopolist, then we have something indirect. But, if Joe Smith bought from the monopolist, it is direct. That’s a simple theory.
Now I can’t find in reason or in case law or in anything I’ve learned in antitrust anything that would conflict with that.²⁵

[Page 134]

Justice Kagan also focused on this point, noting that Illinois Brick involved a vertical supply chain as distinguished from a monopoly.

JUSTICE KAGAN: . . . the questions that are being put to you by my colleagues are really, what was Illinois Brick about? Was it about a vertical supply chain or, instead, was it about a pass-through theory?
Now, in the facts of Illinois Brick, and, indeed, in the facts of all the Illinois Brick cases that we’ve discussed, you had both. So you didn’t have to separate the two.
And now, here, you don’t have both, because this is not a vertical supply chain, but there still is a pass-through mechanism. So then the question is, does Illinois Brick apply to that or not?
And I think what Justice Breyer was suggesting to you, that as long as it’s not that vertical supply chain where the person is not buying from the monopolist itself, here the person is transacting with the monopolist itself, that that’s what separates this case from Illinois Brick and makes it entirely different, notwithstanding that there’s some kind of pass-through mechanism involved.²⁶

Justice Alito raised the policy reasons underlying Illinois Brick, and was the first of the justices to raise a question about its continued validity:

JUSTICE ALITO: Mr. Wall, could I ask you about what troubles me about your position, and—and it is this: Illinois Brick was not about economic theory. It was about the court’s—the court’s—the basis for the decision was not economic theory, as I read the case. It’s the court’s calculation of what makes for an effective and efficient litigation scheme.
And maybe your answer to this question is that the validity of Illinois Brick is not before us. But I really wonder whether, in light of what has happened since then, the court’s evaluation stands up.²⁷

Justice Alito’s comments are particularly noteworthy for recognizing that Illinois Brick was about much more than economic theory or the calculation of damages in a particular case. Like many interpretations of the antitrust laws, it had many underpinnings all of which tied back to the Court’s determination of what would permit an effective and efficient private enforcement system. In Hanover Shoe, it was the decision to limit federal damage claims to direct purchasers. This was deemed most likely to benefit private enforcement. The bright-line rule of Illinois Brick was a corollary to that rule and again was intended to provide for the continuing vibrancy of private enforcement under federal law.

[Page 135]

The development of Repealer law among the states not only is consistent with the states’ long history of economic regulation, see ARC America, supra, but it is also consistent with the ideals of federalism. And importantly to the resolution of Pepper, Justice Alito’s comments demonstrate that the focus on a non-parties’ pricing decisions was not the core of Illinois Brick, but just one part of the rationales that supported that decision.

IV. CONCLUSION

A. The Resolution of Pepper

It is likely that Pepper will be decided before this article is published. Nonetheless, my opinion is that a majority of the Court will affirm the Ninth Circuit on different grounds, ruling that Illinois Brick is a bright-line rule, that plaintiffs dealt directly with Apple and therefore are direct purchasers, and that considerations of how damage claims might be proven are not a basis on which to find that the claims are barred by Illinois Brick.

B. The Benefits of Illinois Brick

" . . . [Y]ou still haven’t explained to me why the plaintiffs’ bar isn’t asking to overturn Illinois Brick when 31 states are. . . ."²⁸

The answer is because (1) the present system works, and (2) disrupting parts of the private enforcement system without a thoughtful, comprehensive approach would cause chaos and disruption in the civil justice system, in violation of Federal Rule of Civil Procedure 1, and would discourage private enforcement in violation of the goals of the drafters of federal and state antitrust laws.

The combination of Hanover Shoe, Illinois Brick, ARC America, CAFA and the MDL process have resulted in a regime that mitigates costs, avoids duplicative discovery and inconsistent legal rulings, and centralizes cases involving all claimants before a single federal judge. Federal district court judges and counsel for parties have fashioned a system within this construct that provides consistency and predictability, all in satisfaction of Rule 1. Though not by design, this system has tended to eliminate every issue of concern raised by the AMC report, whether real or imagined.

Further, the need for private antitrust enforcement has not lessened. It has become more critical than ever. Many believe that the automotive parts antitrust conspiracy, which lasted from at least 2001 through 2011, was the largest antitrust conspiracy ever uncovered. The Hon. Marianne Battani of the Eastern District of Michigan presided over an enormously complex case with great skill and efficiency, and a group of accomplished lawyers representing direct purchasers, multiple levels of indirect purchasers, opt out plaintiffs, state attorney generals and defendants have brought that case close to its conclusion. The more recent Generic Drugs antitrust litigation now pending before the Hon. Cynthia M. Rufe in the Eastern District of Pennsylvania may prove to be even larger than the automotive parts case. The point is that antitrust conduct is not abating; rather, it is continuing and its impact is felt throughout our economy and usually with consumers.

[Page 136]

Overruling Illinois Brick without consideration of the other substantive legal principles that are part of federal antitrust law—most particularly, those set forth in Hanover Shoe, AGC, and ARC America—would render the private enforcement system confusing and illogical, at least until enough private litigation had proceeded at district court level to establish new rules and procedures. No one has identified any need for this, and the disruption to private enforcement that would follow if Illinois Brick were overruled would be profound. At each step of litigation, district courts would be faced with new and unsettled questions about who in any group of plaintiffs is permitted to assert claims, how classes would be certified, and whether antitrust damages need be allocated amongst different claimant groups. Because district courts did this after CAFA, and created a system that works, there is no need to create chaos in the private enforcement system by overruling Illinois Brick.

Our present system of private antitrust enforcement is the most effective, efficient, and predictable system that we have had and should be maintained. Overruling Illinois Brick would impair the effectiveness of private civil antitrust enforcement, a cornerstone of our nation’s antitrust and economic policy.

[Page 137]

——–

Notes:

^1. United States Supreme Court docket no. 17-204. Much information about the certiorari petition, briefing, and argument in Apple v. Pepper are available for download at https://www.scotusblog.com/case-files/cases/apple-v-pepper/. The transcript of oral argument is available at https://www.supremecourt.gov/oral_arguments/argument_transcripts/2018/17-204_32q3.pdf. The audio of the oral argument is available at https://www.oyez.org/cases/2018/17-204. The Pepper case has been discussed in many forums, including the article, "Applying Illinois Brick to E-Commerce: Who is theDirect Purchaser from an App Store?", Sandrock, Competition, Fall 2018.

^2. Steve Williams is a partner at the Joseph Saveri Law Firm. The firm practices antitrust, competition and complex litigation throughout the world. The views expressed herein are the author’s, and not necessarily those of his firm, clients, or any association of which he is a member.

^3. 431 U.S. 720 (1977) ("Illinois Brick").

^4. The App Store is a digital distribution platform, developed and maintained by Apple Inc., for mobile apps on its iOS operating system. As of June 2016, the store featured over 2 million apps. See Golson, Jordan, "Apple’s App Store now has over 2 million apps". The Verge. Vox Media (June 13, 2016), available at: https://www.theverge.com/2016/6/13/11922926/apple-apps-2-million-wwdc-2016.

^5. Northern Pacific Railway v. United States, 356 U.S. 1, 4-5 (1958). See also Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 486 n. 10 (1977) (Sherman Act was conceived "’primarily as a remedy for ‘[t]he people of the United States as individuals,’ especially consumers" (quoting 21 Cong. Rec. 1767-1768 (1890) (remarks of Sen. George)); United States v. Aluminum Co. of America, 148 F.2d 416, 428 (2 Cir. 1945) ("In the debates in Congress Senator Sherman himself . . . showed that among the purposes of Congress in 1890 was a desire to put an end to great aggregations of capital because of the helplessness of the individual before them."); see also Tim Wu, Be Afraid of Economic ‘Bigness.’ Be Very Afraid, The New York Times, November 10, 2018, available at https://www.nytimes.com/2018/11/10/opinion/sunday/fascism-economy-monopoly.html ("antitrust law had more than an economic goal,[ ] it was meant fundamentally as a kind of constitutional safeguard, a check against the political dangers of unaccountable private power").

^6. Brunswick Corp, supra; see also Hawaii v. Standard Oil Co., 405 U.S. 251, 262 (1972) ("[B]y offering potential litigants the prospect of a recovery in three times the amount of their damages, Congress encouraged these persons to serve as ‘private attorneys general.’")

^7. See California v. ARC America Corp., 490 U.S. 93, 101 n. 4 (1989) ("Arc America") (noting that "it is plain that" regulation of monopolies and unfair business practices "is an area traditionally regulated by the States", and that "[a]t the time of enactment of the Sherman Act, 21 States had already adopted their own antitrust laws."); Clayworth v. Pfizer, 49 Cal.4th 758, 770-775 (2010) ("Clayworth") (describing early history of Cartwright Act and related state laws); see also In re Coordinated Pretrial Proceedings in Petroleum Products Antitrust Litigation, 691 F.2d 1335 ( 9th Cir. 1982) (federal law generally does not permit "umbrella" damages in antitrust cases); County of San Mateo v. CSL Ltd., 2014 U.S. Dist. LEXIS 116342 (N.D. Cal. Aug. 20, 2014) (umbrella damages permissible in action under California’s Cartwright Act).

^8. See, e.g., Standard Oil Co. v. United States, 221 U.S. 1 (1910); American Tobacco Co. v. United States, 221 U.S. 106 (1911).

^9. 392 U.S. 481 (1968) ("Hanover Shoe").

^10. 459 U.S. 519 (1983) ("AGC").

^11. 49 Cal.4th at 787.

^12. Pub. L. No. 109-2, 119 Stat. 4 (codified in scattered sections of 28 U.S.C.).

^13. The signing statement for CAFA can be found here: https://georgewbush-whitehouse.archives.gov/news/releases/2005/02/20050218-11.html.

^14. See, e.g., In re Korean Ramen Antitrust Litigation, No. 3:13-cv-04115 (N.D. Cal. Feb. 2, 2018) (order Following January 26, 2018 Pretrial Conference).

^15. In re Apple iPhone Antitrust Litig., 2013 U.S. Dist. LEXIS 169836, * 21-22 (N.D. Cal. Dec. 2, 2013).

^16. Pepper v. Apple, 846 F.3d 313 (9th Cir. 2017).

^17. See Campos v. Ticketmaster Corp., 140 F.3d 1166, 1169 (8th Cir. 1988) ("Campos") (rejecting ticket buyers’ antitrust claim against Ticketmaster because it turned on whether "an antecedent transaction between the monopolist and another, independent purchaser" had resulted in the independent purchaser absorbing or passing on all or part of the monopoly overcharge). Campos was relied upon by Apple in Pepper.

^18. This is a reference to the Antitrust Modernization Comm’n ("AMC"), Report and Recommendations (2007), available at http://ovinfo.library.unt.edu/amc/report_recommendation/amc_final_report.pdf.

^19. Brief of the United States as Amicus Curiae, Apple, Inc. v. Pepper, No. 17-204, pp. 12-13. https://www.supremecourt.gov/DocketPDF/17/17-204/46060/20180508135603183_17-204%20Apple%20v.%20Pepper%20%20-%20AC%20Pet.pdf.

^20. See, e.g., O’Connor & Lande, Not Treble Damages: Cartel Recoveries are Mostly Less than Single Damages, 100 Iowa L. Rev. 1997 (2015). As a consequence, monetary sanctions paid by cartelists are typically only 9 to 21% of what they should be to provide optimal deterrence of antitrust violations. O’Connor and Lande, Cartels as Rational Business Strategy: Crime Pays, 34 Cardozo L. Rev. 437 (2012).

^21. See, e.g., Lande, Class Warfare: Why Antitrust Class Actions are Essential for Compensation and Deterrence, Antitrust, Vol. 30, No. 2, Spring 2016.

^22. Brief for Texas, Iowa, and 29 Other States as Amici Curiae in Support of Respondents, No. 17-204, https://www.supremecourt.gov/DocketPDF/17/17-204/65335/20181001143715665_17-204%20Amici%20Brief.pdf.

^23. Id. at 2 ("This brief solely urges the Court to overrule Illinois Brick!’).

^24. Transcript of argument at 3:11-15.

^25. Transcript of argument at 8:22-9:5.

^26. Transcript of argument at 13:5-14:2.

^27. Transcript of argument at 14:25-15:13.

^28. Comment of Justice Neil Gorsuch, transcript of argument in Apple v. Pepper, at 48:17-20.