City of Homestead, Florida v. General Chemical Corporation et al

REPLY BRIEF to Opposition to Motion

D.N.J.March 8, 2017

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY IN RE: LIQUID ALUMINUM SULFATE ANTITRUST LITIGATION This Document Relates to: 16-md-2687 (JLL) (JAD) (MDL 2687) 16-cv-2873 (JLL) (JAD) Civil Action No. 16-md-2687 (JLL) (JAD) (MDL No. 2687) Return Date: March 20, 2017 (Document Filed Electronically) Oral Argument Requested JOINT REPLY MEMORANDUM OF LAW IN SUPPORT OF THE DEFENDANTS' MOTION TO DISMISS UNDER FED. R. CIV. P. 12(b)(6) ’ Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 1 of 39 PageID: 1120 TABLE OF CONTENTS Page INTRODUCTION 1 LEGAL ARGUMENT 1 I. PLAINTIFFS LACK CONSTITUTIONAL STANDING 1 A. McGuire Governs This Dispute 1 B. McGuire Is Consistent With Supreme Court Precedent 4 C. McGuire Is Consistent With Other Decisions In The Third Circuit, Including This Court's Previous Decisions. 5 II. PLAINTIFFS CANNOT PLEAD ANTITRUST STANDING 7 III. PLAINTIFFS FAIL TO PLEAD VARIOUS STATE LAW CLAIMS 11 A. Plaintiffs Lack Standing To Assert Antitrust Claims Under Oregon, Rhode Island, Utah, Illinois, Puerto Rico and New Hampshire Law 11 B. Plaintiffs Cannot Maintain A Class Action On Their Illinois, Alabama And South Carolina Claims 13 C. Plaintiffs Fail To Plead A Sufficient Nexus To 17 States 15 D. Plaintiffs Fail To Plead A Claim Under the Arkansas Deceptive Trade Practices Act ("ADTPA") 17 E. Plaintiffs Fail To Plead A Claim Under The Colorado Consumer Protection Act ("CCPA") 18 F. Plaintiffs Fail To Plead A Claim Under The District Of Columbia Consumer Protection Act ("DCCPPA") 19 G. Plaintiffs Fail To Plead A Claim Under The Florida Deceptive and Unfair Trade Practices Claim ("FDUTPA") 19 H. Plaintiffs Fail To Plead A Claim Under Hawaii Antitrust Law 20 I. Plaintiffs Fail To Plead A Claim Under The New Mexico Unfair Practices Act ("NMUPA") 21 J. Plaintiffs Fail To Plead A Claim Under The Oregon Unfair Trade Practices Act ("OU7'PA") 21 K. Plaintiffs Do Not Have A Claim Under The Rhode Island Deceptive Trade Practices Act ("RIDTPA") 22 i ................................................................................................... ............................................................................................. ............................. ........................................................... ...................... t’ ........................... ..................... ....... .................................................................................. ................................................ ................. “ ” ......................................................... “ ” ................................................................... “ ” ........................... “ ” ............................... ......... “ ” .................................................................. “ T ” ........................................................ “ ” ...................................... Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 2 of 39 PageID: 1121 TABLE OF CONTENTS (continued) Page IV. PLAINTIFFS' UNJUST ENRICHMENT CLAIMS SHOULD BE DISMISSED 22 A. The Claims Fail Basic Pleading Standards 22 B. Unjust Enrichment Claims Under the Laws of States That Do Not Permit Indirect Purchaser Suits Should Be Dismissed 23 C. The Unjust Enrichment Claims Fail State Law Requirements 24 ii ’ ................................................................................................. ........................................ ............... .......... Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 3 of 39 PageID: 1122 TABLE OF AUTHORITIES Page(s) CASES Adam A. Weschler & Son, Inc. v. Klank, 561 A.2d 1003, 1004-05 (D.C. 1989) 19 In re Aggrenox Antitrust Litig., 2016 WL 4204478 (D. Conn. Aug. 9, 2016) 11 In re Aggrenox Antitrust Litig., 94 F. Supp. 3d 224 (D. Conn. 2015) , motion to certifi, appeal granted, 2015 WL 4459607 (D. Conn. July 21, 2015) 13, 16, 17 Amchem Products, Inc. v. Windsor, 521 U.S. 591 (1997) 2, 4, 5 In re Auto. Parts Antitrust Litig., 2014 WL 2993753 (E.D. Mich. 2014) 16 In re Auto. Parts Antitrust Litig., 29 F. Supp. 3d 982 (E.D. Mich. 2014) 14 In re Auto. Parts Antitrust Litig., 50 F. Supp. 3d 836 (E.D. Mich. 2014) 13, 16 Black v. Arizala, 48 P.3d 843 (Or. Ct. App. 2002) 12 In re Brand Name Prescription Drugs Antitrust Litig., 123 F.3d 599 (7th Cir. 1997) 15 BMW of N Am., Inc. v. Gore, 517 U.S. 559 (1996) 3 In re Cardizem CD Antitrust Litig., 105 F. Supp. 2d 618 (E.D. Mich. 2000) 25 In re Cathode Ray Tube (CRT) Antitrust Litig., 2013 WL 4505701 (N.D. Cal. Aug. 21, 2013) 24 iii ................................................................. ...................................................... y ......................................... ...................................................................................... ................................................................ ............................................................... ......................................................... ......................................................................... .............................................................................. . .............................................................................................. ............................................................. ................................................... Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 4 of 39 PageID: 1123 In re Chocolate Confectionary Antitrust Litig., 749 F. Supp. 2d 224 (M.D. Pa. 2010) 20 Cole v. Chevron USA, Inc., 554 F. Supp. 2d 655 (S.D. Miss. 2007) 24 In re Dairy Farmers of Am., Inc. Cheese Antitrust Litig., 2015 WL 3988488 (N.D. Ill. June 29, 2015) 7, 8, 10 Deerman v. Fed. Home Loan Mortg. Corp., 955 F. Supp. 1393 (N.D. Ala. 1997) 14 Depriest v. Astrazeneca Pharmaceuticals L.P., 2008 WL 3243562 (Ark. Cir. Ct. July 31, 2008) 17 In re Digital Music Antitrust Litig., 812 F. Supp. 2d 390 (S.D.N.Y. 2011) 14, 15 In re Ductile Iron Pipe Fittings (DIPF) Indirect Purchaser Antitrust Litig., 2013 WL 5503308 (D.N.J. Oct. 2, 2013) 9, 22 In re Dynamic Random Access Memory (DRAM) Antitrust Litig. ("DRAW), 516 F. Supp. 2d 1072 (N.D. Cal. 2007) 7, 8 ERI Max Entm't, Inc. v. Streisand, 690 A.2d 1351 (R.I. 1997) 22 In re Flash Memory Antitrust Litig., 643 F. Supp. 2d 1133 (N.D. Cal. 2009) 20, 21, 22 In re Flonase Antitrust Litig., 692 F. Supp. 2d 524 (E.D. Pa. 2010) 12, 16 In re Gerber Probiotic Sales Practices Litigation, 2014 WL 1310038 (D.N.J. Mar. 31, 2014) (Linares, J.) 5, 6 In re Graphics Processing Units Antitrust Litig., 527 F. Supp. 2d 1011 (N.D. Cal. 2007) 17 In re Graphics Processing Units Antitrust Litig., 540 F. Supp. 2d 1085 (N.D. Cal. 2007) 21 iv ................................................................. .............................................................. .............................................. ................................................................... ................................................ .......................................................... ....................................................... “ RAM I” ...................................... ’ .................................................................................. .................................................. ............................................................ .................................. .............................................................. .............................................................. Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 5 of 39 PageID: 1124 Harris v. Sand Canyon Corp., 274 F.R.D. 556 (D.S.C. 2010) 14 Hill v. Roll Intl Corp., 128 Cal. Rptr. 3d 109 (Cal. Ct. App. 2011) 24 In re Hypodermic Prods. Antitrust Litig., 2007 WL 1959225 (D.N.J. June 29, 2007) (Linares, J.) 6, 23 Knowles v. Visa U.S.A., Inc., 2004 WL 2475284 (Sup. Ct. Me. Oct. 20, 2004) 8 Lexmark International, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377 (2014) 4 In re Lidoderm Antitrust Litig., 103 F. Supp. 3d 1155 (N.D. Cal. 2015) 11 In re Magnesium Oxide Antitrust Litig., 2011 WL 5008090 (D.N.J. Oct. 20, 2011) 3, 8 Martis v. Grinnell Mut. Reinsurance Co., 905 N.E.2d 920 (Ill. App. Ct. 2009) 24 McCarthy v. Recordex Serv., 80 F.3d 842 (3d Cir. 1996) 7 McGuire v. BMW of North America, LLC, 2014 WL 2566132 (D.N.J. June 6, 2014) passim McKenna v. Pac. Rail Serv., 32 F.3d 820 (3d Cir. 1994) 9 In re MI Windows & Doors, Inc. Prod. Liab. Litig., 2012 WL 5408563 (D.S.C. Nov. 6, 2012) 14 Neale v. Volvo Cars of North America, 794 F.3d 353 (3d Cir. 2015) 5 In re Opana ER Antitrust Litig., 162 F.Supp 3d 704 (N.D. Ill. 2016) 23 v ............................................................................ t’ ........................................................ ................................ ................................................. .......................................................................................... .............................................................. ....................................................... ................................................................... ................................................................................... .................................................... ................................................................................... .......................................................... ................................................................................. .................................................................... Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 6 of 39 PageID: 1125 In re Opana Er Antritrust Litig., 2016 WL 4245516 (N.D. Ill. Aug. 11, 2016) 12 Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999) 2, 4, 5, 6 In re Polyurethane Foam Antitrust Litigation., 799 F. Supp. 2d 777 (N.D. Ohio 2011) 21 In re Processed Egg Products Antitrust Litig., 851 F. Supp. 2d 867 (E.D. Pa. 2012) 25 In re Refrigerant Compressors Antitrust Litig., 2013 WL 1431756 (E.D. Mich. Apr. 9, 2013) 8, 22 Rhino Linings USA, Inc. v. Rocky Mountain Rhino Lining, Inc., 62 P.3d 142 (Colo. 2003) 18 Rivera-Muniz v. Horizon Lines Inc., 737 F. Supp. 2d 57 (D.P.R. 2010) 13 Rolick v. Collins Pine Co., 925 F.2d 661 (3d Cir. 1991) 9, 10 Shady Grove Orthopedic Associates, P.A. v. Allstate Insurance Co., 559 U.S. 393 (2010) 13, 14 Sheet Metal Workers Local 441 Health & Welfare Plan v. GlaxoSmithKline, PLC, 737 F. Supp. 2d 380 (E.D. Pa. 2010) 18 In re Silk, 937 A.2d 900 (N.H. 2007) 13 In re Solodyn (Minocycline Hydrochloride) Antitrust Litig., 2015 WL 5458570 (D. Mass. Sept. 16, 2015) 13, 16, 23 Southland v. Visa U.S.A. Inc., 734 N.W.2d 192 (Iowa 2007) 7 Steel Co. v. Citizens for a Better Env 't, 523 U.S. 83 (1998) 4 vi ..................................................... .................................................................................. .............................................................. .................................................................................................... ............................................... .................................................................................... ...................................................................... ........................................................................... ...................................................................................... ........................................................ .................................................................................. ........................................ ............................................................................... ’ ................................................................................................ Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 7 of 39 PageID: 1126 In re Suboxone Antitrust Litig., 64 F. Supp. 3d 665 (E.D. Pa. 2014) 16 Supreme Auto Transport LLC v. Arcelor Mittal, No. 08 CV 5468, Dkt. No. 204, at *7-8 (N.D. Ill. Mar. 3, 2017) 8 In re TFT-LCD (Flat Panel) Antitrust Litig., 586 F. Supp. 2d 1109 (N.D. Cal. 2008) 17 Todd v. Exxon Corp., 275 F.3d 191 (2d Cir. 2001) 20 Wallis v. Ford Motor Co., 208 S.W.3d 153 (Ark. 2005) 18 Warma Witter Kreisler, Inc. v. Samsung Elecs. Am., Inc., 2009 WL 4730187 (D.N.J. Dec. 3, 2009) (Linares, J.) 6 Wrestlereunion, LLC v. LiveNation Television Holdings, Inc., 2008 WL 3048859 (M.D. Fla. Aug. 4, 2009) 19, 20 Wrobel v. Avery Dennison Corp., 2006 WL 7130617 (Kan. Dist. Ct. Feb. 1, 2006) 7, 8 STATUTES Ala. Code § 8-19-10 14 Ala. Code 1975 § 8-19-10(e) 14 Ark. Code. Ann. § 4-88-113(f) 18 D.C. Code Ann. § 28-3901 19 Haw. Rev. Stat. § 480-13.3 20 740 Ill. Comp. Stat. Ann. 10/7 14 740 Ill. Comp. Stat. Ann. 10/7(2) 8, 12 N.M. Rev. Stat. § 57-12-2(E) 21 N.M. Stat. Ann. § 57-1-3(C) 8 vii .................................................................... ......................... .............................................................. ............................................................................... .............................................................................. ........................................ ............................................... ............................................. ................................................................................................. ................................................................................... ................................................................................ ...................................................................................... ...................................................................................... ................................................................................. ........................................................................ ................................................................................... ...................................................................................... Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 8 of 39 PageID: 1127 N.Y. Gen. Bus. Law § 340(6) 8 Or. Rev. Stat. Ann. § 646.775(1)(b)(A) 8 R.I. Gen. Laws §§ 6-13.1-1(6)(i)-(xx) 22 R.I. Gen. Laws § 6-36-12(a)(1) 8 S.C. Code Ann. § 39-5-140 14 S.D. Codified Laws § 37-1-33 8 Vt. Stat. Ann. Title 9, § 2465(b) 8 RULES Fed. R. Civ. P. 9(b) 19, 20 Fed. R. Civ. P. 23 5, 6, 14 viii .................................................................................... ..................................................................... ..................................................................... ................................................................................. ...................................................................................... ................................................................................... ................................................................................ ............................................................................................ ............................................................................................. Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 9 of 39 PageID: 1128 INTRODUCTION Plaintiffs cannot plead facts sufficient to support the various antitrust, unfair competition and consumer protection claims they try to allege in 33 jurisdictions. The claims fail even the most basic requirements of constitutional and antitrust standing. Indeed, while Plaintiffs allege claims in 33 jurisdictions on behalf of themselves and a putative class, they have not identified a single injured party in 31 of those jurisdictions. They urge the Court to find antitrust standing despite the attenuated nature of their claims. In addition, Plaintiffs fail to allege the facts necessary to plead the claims required under the various state laws. All of these deficiencies exist despite the fact that, before filing their complaint, Plaintiffs had the extraordinary benefit of over 2.5 million pages of advance discovery. Accordingly, the Court should grant Defendants' Motion to Dismiss.1 LEGAL ARGUMENT I. PLAINTIFFS LACK CONSTITUTIONAL STANDING A. McGuire Governs This Dispute. Third Circuit law requires that named plaintiffs reside in the state under whose laws they bring suit. That is what this Court held in McGuire v. BMW of North America, LLC, 2014 WL 2566132 (D.N.J. June 6, 2014). Although 1 Unless otherwise noted, capitalized terms are as defined in the Joint Memorandum of Law in Support of the Defendants' Motion to Dismiss Under Fed. R. Civ. P. 12(b)(6) [ECF 306-1] ("Joint Mem." or "Joint Memorandum"). 1 t ’ 1 1 t ’ “ ” “ ” Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 10 of 39 PageID: 1129 Plaintiffs claim that Defendants ignore relevant precedent, the cases to which they point are all irrelevant, distinguishable, or mischaracterized in their Opposition. The vast majority of cases on which Plaintiffs rely are outside the Third Circuit and not binding here. Indeed, this Court noted such "disagreement among district courts" in McGuire, id. at *5-6, but found the argument in favor of deferring the standing issue until after class certification "unpersuasive," Id. at *7. After "carefully considering these differing approaches," id. at *6, this Court rejected the argument that Plaintiffs now advance. This Court should reach the same result here. As noted in McGuire, Article III standing is a threshold issue. See id. at *7 ("` [A] plaintiff must demonstrate standing for each claim he seeks to press,' and Supreme Court precedent, namely [Amchem and Ortiz], does not permit a court to defer such analysis when standing issues do not revolve around absent class members but rather around the named plaintiff himself."). The standing inquiry centers on the named plaintiff, not the absent class members, and thus, the Court "must initially 'review the standing of actual, not proposed plaintiffs.'" Id. at *6. Accordingly, there is no reason to defer this issue to the class certification stage, which has no impact on whether a class representative has standing. As in McGuire, the named plaintiffs here have not alleged injury to themselves outside of Iowa and Florida. They therefore lack standing to bring claims under other 2 “ ” “ ” “ ” “‘ ,’ ” “ ‘ tiffs.’” Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 11 of 39 PageID: 1130 states' laws and it does not matter whether any unnamed, absent putative class members might have such standing.2 Moreover, Plaintiffs' lack of standing to assert claims under the laws of non-resident states deprives the Court of jurisdiction over such claims regardless of whether a class is certified. The considerations that merited early resolution of the standing issue in McGuire compel the same conclusion here. Plaintiffs seek expensive and burdensome discovery, and resolution of the standing question would significantly reduce this burden by limiting the scope of the information that would be relevant. See 2014 WL 2566132, at *6 ("`[T]he alternative would allow named plaintiffs in a proposed class action, with no injuries in relation to the laws of certain states referenced in their complaint, to embark on lengthy class discovery with respect to injuries in potentially every state in the Union.") (quoting In re Magnesium Oxide Antitrust Litig., 2011 WL 5008090, at *8 (D.N.J. Oct. 20, 2011)). Further, this Court's concern in McGuire was not limited to the burden of discovery, but the overall impropriety and unfairness of subjecting defendants to a lawsuit where plaintiffs lack standing to claim injury. 2 Plaintiffs incorrectly argue that the state laws under which they bring suit specifically authorize suits by non-resident plaintiffs. The Supreme Court has made clear that a fundamental tenet of federalism is that states may not legislate outside their borders, and no state statute may confer Article III jurisdiction on a court that otherwise would not have it. See BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 573 (1996). 3 ’ or ’ “‘ i n.’” t’ 2 Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 12 of 39 PageID: 1131 B. McGuire Is Consistent With Supreme Court Precedent. Two Supreme Court cases upon which Plaintiffs rely to argue that the Court should defer the standing issue until after class certification in fact stand for the opposite proposition.3 Amchem Products, Inc. v. Windsor, 521 U.S. 591 (1997), and Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999), involved settlement-only putative classes. In those cases, if the classes were not certified, no issues would have remained for the Court to decide. Because the class certification issues were dispositive of the entire cases, they were therefore "logically antecedent" to the standing issues. See Amchem Prods., 521 U.S. at 608 (noting 'the jurisdictional issues in this case would not exist but for the [class-action] certification.'"); Ortiz, 527 U.S. at 831 ("Ordinarily, of course, this or any other Article III court must be sure of its own jurisdiction before getting to the merits.") (citing Steel Co. v. Citizens for a Better Env 't, 523 U.S. 83, 88-89 (1998)) (emphasis added). Only on that basis did the Court hold that it was proper to determine class certification before standing. Plaintiffs ignore that in McGuire this Court rejected the very argument that Plaintiffs make here. There, this Court distinguished Amchem and Ortiz, noting 3 Lexmark International, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377 (2014), on which Plaintiffs rely heavily to claim, inaccurately, that a named plaintiff's standing is not an Article III issue, has no bearing on this issue. Lexmark addresses statutory standing in the context of considering whether the Lanham Act contemplates a cause of action by a particular plaintiff. Id. at 1385, 1387. It is not relevant. 4 3 A c “ ” “‘the ti .’” “ ” ’ 3 i f’ Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 13 of 39 PageID: 1132 that they are the "exception rather than the rule": "Supreme Court precedent, namely [Amchem and Ortiz], does not permit a court to defer such analysis when standing issues do not revolve around absent class members but rather around the named plaintiff himself." McGuire, 2014 WL 2566132, at *4, 7. C. McGuire Is Consistent With Other Decisions In The Third Circuit, Including This Court's Previous Decisions. The other cases on which Plaintiffs rely are wholly consistent with McGuire. For example, Neale v. Volvo Cars of North America, 794 F.3d 353 (3d Cir. 2015), states that "considerations under Rule 23 are themselves procedural rules, and thus rarely can be antecedent to the question of whether a federal court has jurisdiction to hear a claim at all." Id. at 360. Neale examined whether it was necessary to show that absent class members had standing on a motion to certify a class, not whether named class representatives had to do so. Id. at 361-62. Neale answers our question in the affirmative. See id. ("We now squarely hold that unnamed, putative class members need not establish Article III standing."); cf. McGuire, 2014 WL 2566132, at *7 ("Supreme Court precedent . . . does not permit a court to defer such analysis when standing issues do not revolve around absent class members but rather around the named plaintiff himself.") (emphasis added). In In re Gerber Probiotic Sales Practices Litigation, 2014 WL 1310038 (D.N.J. Mar. 31, 2014) (Linares, J.), this Court began with the "threshold 5 “ ” “ ” ’ “ ” “ ” “ ” “ Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 14 of 39 PageID: 1133 jurisdictional question" of plaintiffs' Article III standing, id. at *4, and in dismissing, explained: In Ortiz, the Supreme Court observed that in cases where class certification issues are logically antecedent to Article III concerns and themselves pertain to statutory standing, then the issue of Rule 23 certification should be treated before standing. This is an exception to the usual rule that standing is a threshold question that must be decided prior to class certification issues. The Ortiz exception, however, does not apply if the standing issue would exist regardless of whether the named plaintifffiled his claim alone or as part of a class. Id. at *6 (emphasis added). This is exactly why the Ortiz exception does not apply here—the standing issue will exist regardless of whether a class is certified because Plaintiffs bring their claims on behalf of themselves and the putative class. Thus, even if a class is not certified, the named plaintiffs' individual claims will remain. Finally, McGuire is not an aberration. The cases that Plaintiffs cite to suggest otherwise are inapposite. Cf. In re Hypodermic Prods. Antitrust Litig., 2007 WL 1959225, at *15 & n.34 (D.N.J. June 29, 2007) (Linares, J.) (this Court held that a plaintiff cannot "acquire standing" by asserting claims on behalf of absent putative class members, and addressed class certification first only because it was "logically antecedent," in accordance with the Ortiz exception); Warma Witter Kreisler, Inc. v. Samsung Elecs. Am., Inc., 2009 WL 4730187, at *2 (D.N.J. Dec. 3, 2009) (Linares, J.) ("To the extent the proposed class is not certified, such claims and arguments related thereto, may be moot."). 6 ” ’ ff f ’ “ ” “ ” “ ” Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 15 of 39 PageID: 1134 II. PLAINTIFFS CANNOT PLEAD ANTITRUST STANDING Plaintiffs miss the mark on the applicability of the AGC factors to their state law claims, and ignore precedent applying the test to identical claims. Opp. 46-49, 54-56. At the core of their argument is a flawed understanding of the law: the AGC factors are not a run-around of a state's decision to repeal the Illinois Brick rule. The two are separate and distinct, and Plaintiffs' argument has been roundly rejected. See, e.g., McCarthy v. Recordex Serv., 80 F.3d 842, 850 n.14 (3d Cir. 1996) ("AGC and Illinois Brick address two analytically distinct aspects of antitrust standing."); In re Dairy Farmers of Am., Inc. Cheese Antitrust Litig., 2015 WL 3988488, at *6 (N.D. Ill. June 29, 2015) (although there is some overlap between the Illinois Brick rule and the AGC factors, "they remain separate and distinct tests").4 Indeed, many state and federal courts have applied the AGC factors to deny standing to assert antitrust claims despite the existence of Illinois Brick repealer statutes.5 Plaintiffs' attempt to rely on each state's Illinois Brick repealer 4 "The fact that so many states took action in response to Illinois Brick shows that states are quite capable of rejecting federal antitrust law when they see fit to do so" and "state legislatures have had ample time to pass equivalent 'repealer statutes' regarding AGC." In re Dairy Farmers, 2015 WL 3988488, at *6. 5 See, e.g., Wrobel v. Avery Dennison Corp., 2006 WL 7130617, at *3 (Kan. Dist. Ct. Feb. 1, 2006) (applying AGC "even though the KRTA specifically contemplates indirect purchaser suits"); Southland v. Visa U.S.A. Inc., 734 N.W.2d 192, 198-99 (Iowa 2007) (adopting AGC despite Iowa's repealer statute); In re Dynamic Random Access Memory (DRAM) Antitrust Litig. ("DRAM I"), 516 F. Supp. 2d 1072, 1093-96 (N.D. Cal. 2007) (applying AGC to deny standing of 7 ’ ’ “ ” “ ” 4 Ind 5 Plai ’ ’ 4 “ ” “ ‘ ’ ” 5 “ ” ’ “ ” Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 16 of 39 PageID: 1135 statute to circumvent the standing requirement falls flat. A state's repeal of Illinois Brick's categorical prohibition against indirect purchaser antitrust claims does not "implicitly grant standing to every antitrust plaintiff who characterizes himself as an 'indirect purchaser."' 6 Wrobel, 2006 WL 7130617, at *3; see also Knowles v. indirect purchaser claims under Arizona, California, Kansas, Maine, Michigan, Mississippi, Nebraska, New Mexico, North Carolina, North Dakota, South Dakota, and Wisconsin law); In re Refrigerant Compressors Antitrust Litig., 2013 WL 1431756, at *840 (E.D. Mich. Apr. 9, 2013) (same, Arizona, California, District of Columbia, Kansas, Maine, Michigan, Nebraska, New Hampshire, New Mexico, New York, West Virginia, Wisconsin); Supreme Auto Transport LLC v. Arcelor Mittal, No. 08 CV 5468, Dkt. No. 204, at *7-8 & nn.4-5 (N.D. Ill. Mar. 3, 2017) (Exhibit 1) (same, Arizona, California, Iowa, Kansas, Michigan, New York, North Carolina, South Dakota, Tennessee, District of Columbia, Maine, Minnesota, Mississippi, Nebraska, Nevada, New Mexico, North Dakota, Vermont, Wisconsin, West Virginia, Utah); In re Dairy Farmers, 2015 WL 3988488 (same, California, Kansas, Michigan, New York, North Carolina); In re Magnesium Oxide Antitrust Litig., 2011 WL 5008090, at *7 n.9 (dismissing all indirect purchasers' state law antitrust claims because "those claims are construed in accordance with federal antitrust principles"). Although Plaintiffs contend that certain of the state lower court opinions applying AGC did not involve indirect purchasers, Opp. 53-54, the federal courts cited in this footnote relied on many of those same state court opinions to apply AGC to indirect purchaser claims. See, e.g., DRAM I, 516 F. Supp. 2d at 1088 (citing California decision applying AGC, and noting that while the case was distinguishable because plaintiff in the state court case was not an indirect purchaser, "the relevant point is that the state court applied the broader antitrust standing test under AGC to the Cartwright Act"). 6 Even certain of the states' Illinois Brick repealer statutes contemplate limits on indirect purchaser lawsuits that are in line with AGC factors—empowering courts to "take any steps necessary to avoid duplicative recovery," S.D. Codified Laws § 37-1-33; see also 740 Ill. Comp. Stat. Ann. 10/7(2); N.Y. Gen. Bus. Law § 340(6); N.M. Stat. Ann. § 57-1-3(C); Vt. Stat. Ann. Tit. 9, § 2465(b), or even going so far as to "exclude from the amount of monetary relief awarded . . . any monetary relief [t]hat duplicates amounts that have been awarded for the same injury," R.I. Gen. Laws § 6-36-12(a)(1); see also Or. Rev. Stat. Ann. § 646.775(1)(b)(A). 8 ’ ’ “ ‘i r.’” 6 r -1 ’ “ ” “ ” ’ “ ,” “ ” Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 17 of 39 PageID: 1136 Visa U.S.A., Inc., 2004 WL 2475284, at *5 (Sup. Ct. Me. Oct. 20, 2004) ("[AGC] has remained the template for determining standing under the federal antitrust law for the past 20 years."). Plaintiffs argue, dubiously, that if the highest court of a state has not applied the AGC factors to determine antitrust standing, then this Court must ignore precedent from lower court opinions in those states or federal courts applying those states' laws. Opp. 51-54. But Circuit law is clear that "[i]n the absence of guidance from the state's highest court, we are to consider decisions of the state's intermediate appellate courts for assistance in predicting how the state's highest court would rule." McKenna v. Pac. Rail Serv., 32 F.3d 820, 825 (3d Cir. 1994); In re Ductile Iron Pipe Fittings (DIPF) Indirect Purchaser Antitrust Litig., 2013 WL 5503308, at *14 (D.N.J. Oct. 2, 2013).7 In DIPF, Judge Thompson of this Court followed this precedent to determine that AGC applies to indirect purchaser claims under Michigan's antitrust law—despite its Illinois Brick repealer statute— following the rulings of its appellate courts. DIPF, 2013 WL 5503308, at *15 (also applying AGC factors to indirect purchaser claims under Nebraska's antitrust law under the holding of its highest court). Accordingly, lower state court decisions favoring application of AGC should be considered given the lack of See also Rolick v. Collins Pine Co., 925 F.2d 661, 664 (3d Cir. 1991) ("An intermediate appellate state court . . . is datum for ascertaining state law which is not to be disregarded by a federal court unless it is convinced by other persuasive data that the highest court of the state would decide otherwise."). 9 “ ” ’ “ ’ ’ ’ ” 7 I ’ ’ 7 “ ” Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 18 of 39 PageID: 1137 "persuasive data that the highest court of the state would decide otherwise." Rolick, 925 F.2d at 664. Plaintiffs have cited no such persuasive data.8 For the reasons set forth in the Joint Memorandum, Plaintiffs' allegations fail to establish antitrust standing under either AGC or similar state-law remoteness principles (Joint Mem. 10-13), and Plaintiffs do little to show otherwise. Their alleged injuries are indirect and speculative, and their claims would require an unreasonably complex apportionment of damages, and are duplicative. Plaintiffs merely allege a conspiracy to fix prices and try to punt the issues of causation and the extent of their injury. Opp. 49-51, 56-58. Plaintiffs again fail to satisfy basic pleading requirements, including sufficient facts to establish standing. Plaintiffs claim that they have sufficiently alleged that their injuries are directly traceable to the alleged conspiracy merely because "Plaintiffs purchased [Liquid Alum] in unaltered form." Opp. 57. That single allegation provides no information as to causation or the manner in which Plaintiffs were allegedly 8 Finally, Plaintiffs assert without citation that state antitrust harmonization statutes should not be considered in determining whether to apply AGC to those states' claims. Opp. 47-48. But many courts have held that a harmonization statute alone provides sufficient support for applying the AGC factors to state antitrust law. See In re Dairy Farmers, 2015 WL 3988488, at *3-4 (agreeing that "the presence of a statutory harmonization provision (either statutory or common law), absent any countervailing statutory law or case law from a state appellate court, is sufficient to permit a district court to apply federal antitrust standing law—including AGC— to claims brought under that state's antitrust law"). Of course, where Defendants have cited both a harmonization statute and lower court opinions applying AGC, precedent clearly weighs in favor of applying AGC. 10 “ ” 8 ’ “ .” ’ I “ r i fro ’ ” Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 19 of 39 PageID: 1138 harmed. By failing to allege facts regarding the distribution chain, Plaintiffs have not alleged that their injuries are direct.9 Just as Plaintiffs fail to sufficiently allege a conspiracy, they similarly fail to allege the basic standing requirements recognized in each state in which they assert claims. III. PLAINTIFFS FAIL TO PLEAD VARIOUS STATE LAW CLAIMS As shown in the Joint Memorandum, Plaintiffs fail to adequately plead numerous state law claims. They attempt to avoid the dismissal of these claims by arguing that Defendants' arguments are premature. See Opp. 58-59. To the contrary, these issues are ripe for review and this Court should dismiss Plaintiffs' state law claims. A. Plaintiffs Lack Standing To Assert Antitrust Claims Under Oregon, Rhode Island, Utah, Illinois, Puerto Rico and New Hampshire Law. Plaintiffs have no support for their argument that the Illinois Brick repealer statutes in Oregon and Rhode Island should be applied retroactively. See Opp. 70- 71. Plaintiffs ignore that numerous courts have ruled that statutes are not applied retroactively. See, e.g., In re Aggrenox Antitrust Litig., 2016 WL 4204478, at *4 (D. Conn. Aug. 9, 2016) (dismissing claims under the Rhode Island antitrust statute alleging overcharges before the July 15, 2013 effective date); In re Lidoderm Antitrust Litig., 103 F. Supp. 3d 1155, 1162 (N.D. Cal. 2015) 9 See also supra note 6, regarding the concern of duplicative recovery, which would be unavoidable in the present litigation. 11 9 J t ’ ’ 9 Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 20 of 39 PageID: 1139 ("[B]ecause the antitrust conduct identified by [Plaintiffs] occurred before the Rhode Island legislature passed the law allowing for indirect purchaser actions, [Plaintiffs'] claims under Rhode Island's antitrust law are barred."); Black v. Arizala, 48 P.3d 843, 851 (Or. Ct. App. 2002) (holding that "a statutory change that affects legal rights and obligations arising out of past acts is not retroactive, but one that affects the remedies that a party may receive for a violation of its legal rights is retroactive"). Further, Plaintiffs concede that they cannot recover damages for the period prior to the effective date of Utah's Illinois Brick repealer statute, that is, May 1, 2006. Opp. 67. Accordingly, Plaintiffs' Oregon, Rhode Island, and Utah antitrust claims should be dismissed for conduct occurring prior to the effective date of their Illinois Brick repealer statutes. Plaintiffs erroneously argue that the antitrust statutes of Puerto Rico and Illinois expressly permit their claims. Opp. 59-62. First, the Illinois Antitrust Act provides that "no person shall be authorized to maintain a class action in any court of this State for indirect purchasers asserting claims under this Act, with the sole exception of this State's Attorney General." 740 Ill. Comp. Stat. 10/7(2); see also In re Opana Er Antritrust Litig., 2016 WL 4245516, at *2 (N.D. Ill. Aug. 11, 2016) ("[T]he legislature of Illinois has adopted a clear policy prohibiting indirect purchaser antitrust claims."); In re Flonase Antitrust Litig., 692 F. Supp. 2d 524, 544-45 (E.D. Pa. 2010) (Illinois's antitrust statute is consistent with Illinois Brick); 12 “ f ’ ’ ” “ ” ’ ’ “ ’ ” “ ” i ’ Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 21 of 39 PageID: 1140 In re Solodyn (Minocycline Hydrochloride) Antitrust Litig., 2015 WL 5458570, at *17 (D. Mass. Sept. 16, 2015) (same). Second, Plaintiffs are wrong to characterize Puerto Rico's antitrust statute as an Illinois Brick repealer statute when numerous federal courts have concluded that Puerto Rico follows Illinois Brick. See, e.g., In re Solodyn (Minocycline Hydrochloride) Antitrust Litig., 2015 WL 5458570, at *15; In re Aggrenox Antitrust Litig., 94 F. Supp. 3d 224, 252 (D. Conn. 2015). While Plaintiffs acknowledge that Puerto Rico's courts have not addressed the issue directly, the single case Plaintiffs cite, Rivera-Muniz v. Horizon Lines Inc., 737 F. Supp. 2d 57, 61 (D.P.R. 2010), has been cited as misconstruing Puerto Rico precedent. In re Aggrenox Antitrust Litig., 94 F. Supp. 3d at 252. Accordingly, class action indirect purchaser lawsuits are not actionable under the Illinois or Puerto Rico statutes.1° B. Plaintiffs Cannot Maintain A Class Action On Their Illinois, Alabama And South Carolina Claims. Ignoring substantial contrary authority, Plaintiffs suggest that Shady Grove Orthopedic Associates, P.A. v. Allstate Insurance Co., 559 U.S. 393 (2010), permits them to avoid statutory prohibitions to class actions under the South 10 New Hampshire passed an Illinois Brick repealer effective on January 1, 2008. Plaintiffs have no basis for contending that it applies retroactively. See Opp. 62; In re Silk, 937 A.2d 900, 904 (N.H. 2007) (statutes are presumed to apply only prospectively absent clear legislative intent). At least one federal court has limited indirect purchaser antitrust claims to those based on conduct occurring after the repealer statute's effective date. In re Auto. Parts Antitrust Litig., 50 F. Supp. 3d 836, 856 (E.D. Mich. 2014). Plaintiffs' claims should also be so limited. 13 ’ ’ 10 ’ ’ Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 22 of 39 PageID: 1141 Carolina Unfair Trade Practices Act ("SCUTPA"), the Illinois Antitrust Act, and the Alabama Deceptive Trade Practices Act. S.C. Code Ann. § 39-5-140; 740 Ill. Comp. Stat. Ann. 10/7; Ala. Code § 8-19-10." But many interpreting Shady Grove have ruled that the prohibition of state class actions are substantive and not preempted by the Federal Rules of Civil Procedure. See, e.g., In re MI Windows & Doors, Inc. Prod. Liab. Litig., 2012 WL 5408563, at *5 n.3 (D.S.C. Nov. 6, 2012) (rejecting class action under SCUTPA because "following the Shady Grove decision, at least one court in this district has affirmed that 'class action suits are forbidden under [SCUTPA], and the South Carolina Supreme Court has held as such') (quoting Harris v. Sand Canyon Corp., 274 F.R.D. 556, 565 (D.S.C. 2010)); In re Digital Music Antitrust Litig., 812 F. Supp. 2d 390, 416 (S.D.N.Y. 2011) ("Because the indirect purchaser restrictions of the [Illinois law] IAA are `intertwined' with the underlying substantive right, application of Rule 23 would `abridge, enlarge or modify' Illinois' substantive rights, and therefore Illinois' restrictions on indirect purchaser actions must be applied in federal court"); In re Auto. Parts Antitrust Litig., 29 F. Supp. 3d 982, 1007-08 (E.D. Mich. 2014) 11 Plaintifs' ADPTA claim also fails because Plaintiffs have not made a written demand on Defendants for relief at least fifteen days before filing their Complaint. See ALA. CODE 1975 § 8-19-10(e) (requiring plaintiff to make "written demand for relief' on defendant "at least 15 days prior to the filing of any action under this section"); Deerman v. Fed. Home Loan Mortg. Corp., 955 F. Supp. 1393, 1399- 1400 (N.D. Ala. 1997) (dismissing ADTPA claim for failure to comply with 15- day pre-suit notice requirement). 14 “ ” - 0.11 “ ‘ ch’” “ ‘ i ’ ‘ ’ i ’ ’ rt.” 11 ’ “ lief” “ ” Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 23 of 39 PageID: 1142 (following In re Digital Music Antitrust Litig.). Thus, Plaintiffs cannot maintain a class action under these state laws. C. Plaintiffs Fail To Plead A Sufficient Nexus To 17 States. Plaintiffs contend that three allegations in the complaint somehow satisfy the nexus requirements of various state antitrust and consumer fraud claims. See Opp. 71 (citing CCAC ¶¶ 5, 11, 177). These allegations generally state that: (i) Defendants engaged in a conspiracy by "maintain[ing] the price of [Liquid Alum] sold to direct purchasers and distributors in the United States," (ii) the conspiracy violated the antitrust and/or consumer protection and unfair and deceptive trade practices statutes in a variety of jurisdictions, and (iii) "Defendants' conduct either occurred, or its effects were felt, in each of the States whose antitrust, consumer protection or unjust enrichment laws are being asserted herein." See id. Plaintiffs do not adequately allege connections to the 17 jurisdictions identified in the Joint Memorandum. Even the cases Plaintiffs cite demonstrate how much more detailed well-pled claims are. See In re Digital Music Antitrust Litig., 812 F. Supp. 2d at 407-08 (nexus requirement satisfied where plaintiff alleged that defendants produced, licensed, distributed and/or sold "Internet Music" in the listed states); In re Brand Name Prescription Drugs Antitrust Litig., 123 F.3d 599, 613 (7th Cir. 1997) (while allegations under Alabama law need not be "wholly intrastate," if the "Alabama suit challenges sales from plants or offices 15 “ ” “ t ’ ” “ ” “ ” “ Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 24 of 39 PageID: 1143 in other states to pharmacies in other states, it exceeds the constitutional scope of the Alabama antitrust law").12 Citing In re Auto. Parts Antitrust Litig., 2014 WL 2993753, at *17 (E.D. Mich. 2014), Plaintiffs contend that once Liquid Alum entered a state's commerce and was purchased by Plaintiffs, an antitrust injury occurred, thus satisfying any state intrastate commerce requirement. Plaintiffs, however, do not allege Liquid Alum sold by Defendants entered the 17 states at issue, or that they were purchased by Plaintiffs in those states. Thus, the nexus requirements of those 17 jurisdictions have not been satisfied and the claims should be dismissed.13 12 See also In re Solodyn (Minocycline Hydrochloride) Antitrust Litig., 2015 WL 5458570, at *16 (intrastate conduct alleged by stating that antitrust violations increased prices paid by the end payors in each listed state and that retailers within each listed state were foreclosed from offering less expensive versions of the product to end payors within those states); In re Suboxone Antitrust Litig., 64 F. Supp. 3d 665, 698-99, 702 (E.D. Pa. 2014) (sufficient nexus alleged by stating "anticompetitive conduct occurred in part in trade and commerce within the states set forth herein, and also had substantial intrastate effects in that, inter alia, retailers within each state were foreclosed from offering cheaper generic Suboxone to end-payors inside each respective state. The foreclosure of generic Suboxone directly impacted and disrupted commerce for end-payors within each state, who were forced to pay supracompetitive prices"); In re Auto. Parts Antitrust Litig., 50 F. Supp. 3d 869, 888, 891, 901 (E.D. Mich. 2014) (sustaining claims under the laws of various states where complaint alleged antitrust agreement was entered in a particular state, and the product was purchased and received in such state); In re Flonase Antitrust Litig., 692 F. Supp. 2d at 540-41 (nexus sufficient where defendants maintained facilities in North Carolina and sold the product within the state to plaintiffs). 13 The Auto Parts court did not analyze whether there was a nexus to Nebraska and Vermont as Plaintiffs contend. Plaintiffs cite inapplicable cases. In In re 16 ” 12 ’ 13 “ ” 13 Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 25 of 39 PageID: 1144 D. Plaintiffs Fail To Plead A Claim Under the Arkansas Deceptive Trade Practices Act ("ADTPA"). Plaintiffs' ADTPA claim fails because price-fixing claims are not actionable under the ADTPA. Plaintiffs do not respond to Defendants' point: if the Arkansas legislature had intended the ADTPA to apply to price-fixing claims, it would have included a specific prohibition as it did in the Unfair Practices Act ("A UPA"). Joint Mem. 21-22; In re Graphics Processing Units Antitrust Litig., 527 F. Supp. 2d 1011, 1030 (N.D. Cal. 2007); In re TFT-LCD (Flat Panel) Antitrust Litig., 586 F. Supp. 2d 1109, 1125 (N.D. Cal. 2008). Plaintiffs' attempt to distinguish Depriest v. Astrazeneca Pharmaceuticals L.P., 2008 WL 3243562 (Ark. Cir. Ct. July 31, 2008), fails. Depriest involved a price-fixing claim under the AUPA, not the ADTPA. It shows that had the Arkansas legislature intended to create a private right of action for price-fixing, it would have done so under the AUPA, which expressly prohibits price-fixing. Id. Even under Plaintiffs' theory, they failed to plead a private cause of action under Aggrenox Antitrust Litig., 94 F. Supp. 3d at 253, motion to certify appeal granted, 2015 WL 4459607 (D. Conn. July 21, 2015), defendants argued that the antitrust laws of Mississippi, New York, Tennessee, Wisconsin, and the District of Columbia "require that the challenged conduct take place, or that its effects occur, purely or primarily within the state." Id. The court held "[n]one of the cited statutes contains so categorical a limitation by its plain text," and that because nothing further had been briefed about the general intrastate impacts of the conduct, it would not dismiss the claims. Id. Defendants do not argue that Plaintiffs failed to allege intrastate conduct but rather that Plaintiffs do not allege a sufficient "nexus" with certain states. 17 “ ” ’ t ’ “ ” ’ ’ “ ” “ ” “ ” Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 26 of 39 PageID: 1145 the ADTPA which requires an "actual damage or injury" beyond overpayment. Ark. Code. Ann. §4-88-113(f). Compare Wallis v. Ford Motor Co., 208 S.W.3d 153, 161 (Ark. 2005) ("Where the only alleged injury is the diminution in value of the product, a private cause of action is not cognizable under the ADTPA."), with CCAC ¶ 207 (alleging that Plaintiffs "pa[id] supra-competitive prices for [Liquid Alum]"). Accordingly, the Court should dismiss the ADTPA claim. E. Plaintiffs Fail To Plead A Claim Under The Colorado Consumer Protection Act ("CCPA"). Plaintiffs admit that the Colorado Antitrust Act prohibits indirect purchaser claims, but attempt to avoid this by bringing the same claim under the CCPA. Opp. 75. But the CCPA requires a showing of an injury in fact to a legally protected interest. Rhino Linings USA, Inc. v. Rocky Mountain Rhino Lining, Inc., 62 P.3d 142, 146-47 (Colo. 2003). Given that indirect purchasers do not have a legally protected antitrust claim in Colorado, they do not have an antitrust claim under the CCPA. See Sheet Metal Workers Local 441 Health & Welfare Plan v. GlaxoSmithKline, PLC, 737 F. Supp. 2d 380, 406-08 (E.D. Pa. 2010) (finding Rhino Linings establishes that allegations of anti-competitive behavior are insufficient to state a claim under CCPA). The CCPA claim should be dismissed. 18 “ ” “ ” “ ” “ ” Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 27 of 39 PageID: 1146 F. Plaintiffs Fail To Plead A Claim Under The District Of Columbia Consumer Protection Act ("DCCPPA"). Plaintiffs are not consumers who received "goods and services" as required by the DCCPA. Although the DCCPA defines "consumer" as "a person who, other than for purposes of resale, does or would purchase, lease (as lessee), or receive consumer goods or services," D.C. Code Ann. § 28-3901, Plaintiffs ignore that "consumer goods" are defined as goods that "[a] person does or would purchase, lease (as lessee), or receive and normally use for personal, household, or family purposes," id. (emphasis added). Plaintiffs have not alleged (nor could they) that they use Liquid Alum for "personal, household or family purposes." See CCAC ¶ 19 (Homestead purchased for wastewater treatment), ¶ 20 (no explanation for City of Creston).14 Accordingly, the DCCPA claim should be dismissed. G. Plaintiffs Fail To Plead A Claim Under The Florida Deceptive and Unfair Trade Practices Claim ("FDUTPA"). Plaintiffs' FDUTPA claim fails because it is not pled with the requisite specificity. Contrary to Plaintiffs' assertion, Defendants do not "attempt to impose" the Fed. R. Civ. P. 9(b) pleading standard to the FDUTPA. Rather, Florida requires it. Joint Mem. 24-25; Wrestlereunion, LLC v. LiveNation Television Holdings, Inc., 2008 WL 3048859 (M.D. Fla. Aug. 4, 2009). Plaintiffs' 14 Adam A. Weschler & Son, Inc. v. Klank, 561 A.2d 1003, 1004-05, (D.C. 1989), cited by Plaintiffs, is inapplicable, because the court was unable to determine from the complaint whether the antique chest at issue had been purchased for personal use. Here, there is no question that Plaintiffs did not purchase for personal use. 19 “ ” “ ” “ ” “ ” “ ” “ ” “ ” 14 Accor i “ ” ’ ’ “ ” ’ 14 Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 28 of 39 PageID: 1147 criticism of Wrestlereunion is unfounded. It makes no difference that antitrust claims were not at issue in Wrestlereunion, as the Court made clear that, "[m]ost courts construing claims alleging violations of the [FDUTPA] or its state counterparts have required the heightened pleading standard requirements of Rule 9(b). In light of this trend, claims arising under the FDUTPA must be pled with particularity." Id. at *3 (emphasis added). Plaintiffs' reliance on Todd v. Exxon Corp., 275 F.3d 191 (2d Cir. 2001), is misplaced because that case did not involve a FDUPTA claim. Id. at 198. Further, the case is not binding on this Court or Florida. Because Plaintiffs have not pled sufficient facts with respect to Florida conduct occurring in Florida, the Court should dismiss the FDUTPA claim. H. Plaintiffs Fail To Plead A Claim Under Hawaii Antitrust Law. Plaintiffs misstate that they have satisfied Hawaii's notice provision, relying on Exhibit C to their Opposition. Opp. 79. Exhibit C, a letter from the Deputy Attorney General of Hawaii, states that Plaintiffs "have not compl[ied]" with the notice provisions of Haw. Rev. Stat. § 480-13.3. Id. (emphasis added). Section 480-13.3 requires full compliance with the statute "not later than seven days after filing of the complaint," id. § 480-13.3(a)(1), which has long passed. Thus, the claim should be dismissed. See In re Flash Memory Antitrust Litig., 643 F. Supp. 2d 1133, 1158 (N.D. Cal. 2009) (dismissing indirect purchasers' claim under § 480-13.3 where they failed to properly serve attorney general); In re Chocolate 20 “ ” ’ ii’ “ ” “ ” ’ Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 29 of 39 PageID: 1148 Confectionary Antitrust Litig., 749 F. Supp. 2d 224, 232-33 (M.D. Pa. 2010) (same). I. Plaintiffs Fail To Plead A Claim Under The New Mexico Unfair Practices Act ("NMUPA"). Asserting that Plaintiffs paid higher prices is insufficient to establish "unconscionable conduct" under the NMUPA. See Opp. 26. Under the NMUPA, an unconscionable trade practice is "an act or practice . . . which to a person's detriment: (1) takes advantage of the lack of knowledge, ability, experience or capacity of a person to a grossly unfair degree; or (2) results in a gross disparity between the value received by a person and the price paid." In re Flash Memory Antitrust Litig., 643 F. Supp. 2d at 1159-60 (citing N.M. Rev. Stat. § 57-12-2(E)). Failure to disclose anticompetitive conduct is not, in itself, a deceptive act. See In re Graphics Processing Units Antitrust Litig. (GPU II), 540 F. Supp. 2d 1085, 1100-01 (N.D. Cal. 2007) (dismissing consumer protection claims for failure to plead deceptive practice apart from anticompetitive conduct). Plaintiffs have not alleged a "gross disparity" or pled a deceptive practice apart from the alleged anticompetitive conduct. Thus, the claim should be dismissed. J. Plaintiffs Fail To Plead A Claim Under The Oregon Unfair Trade Practices Act ("OUTPA"). Plaintiffs cite to one case in support of their OUTPA claims, In re Polyurethane Foam Antitrust Litigation., 799 F. Supp. 2d 777, 786 (N.D. Ohio 21 “ ” “ ” “ ’ ” “ ” “ ” Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 30 of 39 PageID: 1149 2011), a case that did not analyze the statute. Plaintiffs do not cite a case holding that anti-competitive price-fixing claims are actionable under OUTPA, nor do they address the cases finding such claims to be nonactionable. See Joint Mem. 26-27. Plaintiffs' attempt to argue that the Amended Complaint alleges "false and misleading representations of fact" is unavailing; the alleged misrepresentations to which Plaintiffs refer are failure to disclose the alleged conspiracy, i.e., mirror images of their price-fixing claims. Their OUTPA claim should be dismissed. K. Plaintiffs Do Not Have A Claim Under The Rhode Island Deceptive Trade Practices Act ("RIDTPA"). Plaintiffs cannot repackage their antitrust claims as "consumer protection" claims under RIDTPA. Numerous courts have held that price fixing is not within the ambit of RIDTPA. See, e.g., In re Flash Memory Antitrust Litig., 643 F. Supp. 2d at 1161; ERI Max Entm't, Inc. v. Streisand, 690 A.2d 1351, 1353-54 (R.I. 1997). Indeed, the statute defines "unfair methods of competition and unfair or deceptive acts or practices" to consist of 20 separately enumerated practices, none which are price fixing. R.I. Gen. Laws §§ 6-13.1-1(6)(i)-(xx). IV. PLAINTIFFS' UNJUST ENRICHMENT CLAIMS SHOULD BE DISMISSED A. The Claims Fail Basic Pleading Standards. Plaintiffs cannot simply list the name of each state without pleading the elements of each state's unjust enrichment laws. See Joint Mem. 31-32; DIPF, 2013 WL 5503308, at *8; In re Refrigerant Compressors Antitrust Litig., 2013 WL 22 ’ “ ” “ ” “ ” ’ “ ” ’ ’ Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 31 of 39 PageID: 1150 1431756, at *23-24 (dismissing undifferentiated unjust enrichment claims pled in language practically identical to claims here)." Plaintiffs again cite to In re Hypodermic Products Antitrust Litigation. Opp. 90-91. But, as they admit, the Court did not address the substance of the unjust enrichment claims and did not analyze whether those claims were properly pled. 2007 WL 1959225, at *16. B. Unjust Enrichment Claims Under The Laws Of States That Do Not Permit Indirect Purchaser Suits Should Be Dismissed. The weight of authority precludes Plaintiffs from avoiding Illinois Brick by labeling antitrust claims as unjust enrichment claims. Joint Mem. 34-35; In re Solodyn (Minocycline Hydrochloride) Antitrust Litig., 2015 WL 5458570, at *18 ("[T]he vast majority of courts have held that indirect purchasers may not bring state claims for unjust enrichment if they otherwise would be barred from bringing a claim under that state's antitrust and consumer protection statutes, absent a showing that the common law of the state in question expressly allows for such recovery."). Thus, the unjust enrichment claims under the laws of following states should be dismissed: Arkansas, Colorado, Florida, Illinois, Massachusetts, Oregon, Puerto Rico, Rhode Island, and South Carolina. 15 Contrary to the Plaintiffs' assertion, their state law claims do not mimic the claims in In re Opana ER Antitrust Litig., 162 F.Supp 3d 704, 726 (N.D. Ill. 2016). 23 ).15 “ ’ ” 15 ’ Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 32 of 39 PageID: 1151 C. The Unjust Enrichment Claims Fail State Law Requirements. Plaintiffs' unjust enrichment claims under various state laws fail due to the state law requirements. See Joint Mem. 36-43. Plaintiffs' attempt to refute these assertions misses the mark. They cite no law from the states at issue, and instead cite a few federal court decisions, while ignoring more persuasive authorities. First, Plaintiffs incorrectly argue that California, Illinois, and Mississippi recognize unjust enrichment as a separate cause of action. Opp. 89. Tellingly, they cite no case law from any Mississippi court, or any Illinois or California state court. These courts routinely hold that unjust enrichment claims are not separate causes of action under Illinois, Mississippi, and California law.16 Multiple federal courts have applied California, Illinois, and Mississippi law to dismiss independent unjust enrichment claims. See, e.g., In re Cathode Ray Tube (CRT) Antitrust Litig., 2013 WL 4505701, at *1244 (N.D. Cal. Aug. 21, 2013). Second, Arizona, Florida, Hawaii, Massachusetts, Minnesota, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, North Dakota, and South Carolina allow plaintiffs to pursue an unjust enrichment claim only if there is no other adequate remedy at law. Defendants cited extensive law from each state, demonstrating that this is an important jurisdictional element. Joint 16 See Hill v. Roll Int'l Corp., 128 Cal. Rptr. 3d 109, 118 (Cal. Ct. App. 2011) (California law); Martis v. Grinnell Mut. Reinsurance Co., 905 N.E.2d 920, 928 (Ill. App. Ct. 2009) (Illinois law); Cole v. Chevron USA, Inc., 554 F. Supp. 2d 655, 671 (S.D. Miss. 2007) (Mississippi law). 24 ’ f ’ 16 ulti -1 16 ’ Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 33 of 39 PageID: 1152 Mem. 40-41. Plaintiffs argue they are "entitled" to plead in the alternative. Opp. 88. They ignore these states' courts, which treat the lack of an adequate remedy as a substantive and jurisdictional requirement, which Plaintiffs cannot satisfy. Finally, Plaintiffs do not dispute that the vast majority of courts have found that any benefit conferred by indirect purchasers is too attenuated to sustain an unjust enrichment claim. Joint Mem. 39-40. Defendants provided several pages of authority in support of each state at issue. Id. Plaintiffs offer no answer to this authority—and do not cite a single state law case challenging it— but instead identify a handful of federal cases in which courts allowed indirect purchasers to pursue unjust enrichment claims. These cases do not address all of the states at issue, some rely on incomplete briefing, and others directly contradict the majority of federal and state case law.17 Accordingly, the claims should be dismissed. 17 For example, the only relevant states in In re Processed Egg Products Antitrust Litigation were Florida, New York, North Carolina, and Utah. 851 F. Supp. 2d 867, 927-36 (E.D. Pa 2012). The court did not dismiss the other unjust enrichment claims because the issues were not fully briefed. Id. at 935-36. In re Cardizem CD Antitrust Litigation contained little reasoning, citing only one Alabama case to support its holding. 105 F. Supp. 2d 618, 671 (E.D. Mich. 2000). 25 “ ” ’ 17 Accor i 17 Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 34 of 39 PageID: 1153 Dated: March 8, 2017 Respectfully submitted, s/ Richard H. Epstein Richard H. Epstein SILLS CUMMIS & GROSS P.C. One Riverfront Plaza Newark, NJ 07102 Phone: (973) 643-7000 Fax: (973) 643-6500 repstein@sillscummis.com Steven A. Reiss (admitted pro hac vice) Adam C. Hemlock (admitted pro hac vice) WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, NY 10153-0119 Phone: (212) 310-8000 Fax: (212) 310-8007 steven.reiss@weil.com adam.hemlock@weil.com Counsel for Defendants General Chemical Corporation, General Chemical Performance Products, LLC, General Chemical LLC, GenTek Inc., Chemtrade Logistics Income Fund, Chemtrade Logistics Inc., Chemtrade Chemicals Corporation, Chemtrade Chemicals US LLC, and Chemtrade Solutions LLC s/ John D. Dalbey John D. Dalbey CHILIVIS, COCHRAN, LARKINS & BEVER, LLP 3127 Maple Drive, NE Atlanta, GA 30305 Phone: (404) 233-4171 Fax: (404) 261-2842 jdd@cclblaw.com Counsel for Defendant C&S Chemicals, Inc. 26 Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 35 of 39 PageID: 1154 s/ James H. Mutchnik James H. Mutchnik Sydney L. Schneider KIRKLAND & ELLIS LLP 300 N. LaSalle Street Chicago, IL 60654 Phone: (312) 862-2000 Fax: (312) 862-2200 james.mutchnik@kirkland.com sydney.schneider@kirkland.com Cormac T. Connor KIRKLAND & ELLIS LLP 655 15th Street, N.W., Ste. 1200 Washington, DC 20005 Phone: (202) 879-5000 Fax: (202) 879-5200 cormac.connor@kirkland.com Robert F. Ware Mark R. Butscha, Jr. THOMPSON HINE LLP 3900 Key Center 127 Public Square Cleveland, OH 44114 Phone: (216) 566-5500 Fax: (216) 566-5800 rob.ware@thompsonhine.com mark.butscha@thompsonhine.com Counsel for Defendant GEO Specialty Chemicals, Inc. 27 Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 36 of 39 PageID: 1155 s/ William F. Ryan, Jr. William F. Ryan, Jr. Aaron L. Casagrande WHITEFORD, TAYLOR & PRESTON L.L.P. Seven Saint Paul Street Baltimore, MD 21202 Phone: (410) 347-8741 Fax: (410) 223-4161 Counsel for Defendant USALCO, LLC s/ Jeffrey S. Cashdan Jeffrey S. Cashdan (admitted pro hac vice) Emily S. Newton (admitted pro hac vice) Danielle Chattin (admitted pro hac vice) KING & SPALDING LLP 1180 Peachtree Street, NE Atlanta, GA 30309 Phone: (404) 572-4600 Fax: (404) 572-5100 jcashdan@kslaw.com enewton@kslaw.com dchattin@kslaw.com Counsel for Defendant Kemira Chemicals, Inc. 28 Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 37 of 39 PageID: 1156 s/ John S. Mairo John S. Mairo Robert Ferri Rachel A. Parisi PORZIO, BROMBERG & NEWMAN, P.C. 100 Southgate Parkway P.O. Box 1997 Morristown, NJ 07962 Phone: (973) 538-4006 Fax: (973) 538-5146 jsmairo@pbnlaw.corn rferri@pbnlaw.com raparisi@pbnlaw. corn Attorneys for Defendants Southern Ionics, Inc. and Milton Sundbeck s/ Michael B. Himmel Michael B. Himmel Michael A. Kaplan LOWENSTEIN SANDLER LLP 65 Livingston Avenue Roseland, NJ 07068 Phone: (973) 597-2500 Fax: (973) 597-2400 mhimmel@lowenstein. corn mkaplan@lowenstein.com Counsel for Defendant Frank A. Reichl s/ Dennis T. Smith Dennis T. Smith (NJ Bar No. 026931988) PASHMAN STEIN WALDER HAYDEN A Professional Corporation Court Plaza South 21 Main Street — Suite 200 Hackensack, NJ 07601 Phone: (201) 488-8200 Counsel for Defendant Alex Avraamides 29 m m m – Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 38 of 39 PageID: 1157 s/ Michael Feldberg Michael Feldberg ALLEN & OVERY LLP 1221 Avenue of the Americas New York, NY 10020 Phone: (212) 610-3200 michael.feldberg@allenovery.corn Counsel for Defendant Amita Gupta s/ Nicholas C. Theodorou Nicholas C. Theodorou, pro hac vice Mark Finsterwald, pro hac vice Theresa Roosevelt, pro hac vice FOLEY HOAG LLP Seaport West 155 Seaport Boulevard Boston, MA 02210 Phone: (617) 832-1000 Fax: (617) 832-7000 ntheodorou@foleyhoag.com mfinsterwald@foleyhoag.corn troosevelt@foleyhoag.com Attorneys for Defendant Kenneth A. Ghazey 30 m m Case 2:16-cv-02873-JLL-JAD Document 73 Filed 03/08/17 Page 39 of 39 PageID: 1158 EXHIBIT 1 Case 2:16-cv-02873-JLL-JAD Document 73-1 Filed 03/08/17 Page 1 of 23 PageID: 1159 Case: 1:08-cv-05468 Document #: 204 Filed: 03/03/17 Page 1 of 22 PagelD #:955 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION SUPREME AUTO TRANSPORT LLC, et al., Plaintiffs, v. ARCELOR MITTAL, et al., Defendants. No. 08 CV 5468 Judge Manish S. Shah MEMORANDUM OPINION AND ORDER Plaintiffs allege that domestic steel manufacturers reduced steel production in a concerted effort to drive up the price of steel. Direct purchasers of steel then passed on the higher prices to downstream customers like the plaintiffs, who bought consumer products made with steel as well as other materials. Plaintiffs filed suit against the defendants, the steel manufacturers, for the indirect harm allegedly caused by the illegal reduction in supply. Defendants move to dismiss the amended class action complaint. [1751.1 For the following reasons, defendants' motion is granted. I. Legal Standard A motion to dismiss under Fed. R. Civ. P. 12(b)(6) does not test the merits of a claim, but rather the sufficiency of the complaint. Fed. R. Civ. P. 12(b)(6); Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). In deciding a 12(b)(6) motion, a court accepts all well-pleaded facts as true and draws all reasonable 1 Bracketed numbers refer to entries on the district court docket. I I I I if I I t i l ] 1 Fo i ’ l i 1 ICase 2:16-cv-02873-JLL-JAD Document 73-1 Filed 03/08/17 Page 2 of 23 PageID: 1160 Case: 1:08-cv-05468 Document #: 204 Filed: 03/03/17 Page 2 of 22 PagelD #:956 inferences in favor of the plaintiff. Id. at 1521. To survive a 12(b)(6) motion, "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In addition to the complaint, a court may also consider documents attached to or referenced in the complaint. Levenstein v. Salafsky, 164 F.3d 345, 347 (7th Cir. 1998) (quoting Wright v. Associated Ins. Cos., Inc., 29 F.3d 1244, 1249 (7th Cir.1994)). "A complaint should not be dismissed for failure to state [a] claim unless it appears beyond doubt that the plaintiff is unable to prove any set of facts which would entitle the plaintiff to relief." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 546 (2007). II. Facts Plaintiff Supreme Auto Transport LLC, based in Michigan, and fifteen individual plaintiffs from ten states represent a purported class of indirect purchasers of steel products. In 2008, Supreme Auto filed suit as the sole plaintiff representing a purported class. The original complaint alleged that defendants orchestrated a scheme to artificially increase the price of steel through coordinated production cuts between January 2005 and September 2008. Plaintiffs filed an amended complaint adding the fifteen individual plaintiffs in April 2016. Plaintiffs allege that defendants, who are among the largest producers of steel in the U.S. market, instituted a plan to improve "industry discipline" and increase both prices and profit in the United States steel market. At the forefront of this plan was Mittal Steel USA, the predecessor of defendant ArcelorMittal USA, 2 if “ l ” l l “ l i ” i i l i t if r i l “ ” r it ICase 2:16-cv-02873-JLL-JAD Document 73-1 Filed 03/08/17 Page 3 of 23 PageID: 1161 Case: 1:08-cv-05468 Document #: 204 Filed: 03/03/17 Page 3 of 22 PagelD #:957 who allegedly orchestrated a concerted cutback in steel production with the other defendants. As a result of this illegal market restraint, the price of steel was substantially higher than defendants' cost of production, the domestic demand for steel was well in excess of defendants' production, and there was a shortage of steel on the U.S. market. Consequently, plaintiffs allege that the price of steel was artificially inflated and this additional cost was passed along from the direct purchasers of steel to the purchasers of a panoply of consumer products containing steel, including refrigerators, dishwashers, ovens, automobiles, air conditioner units, lawn mowers, and farm and construction equipment. The first amended complaint contains three counts: (1) violation of state antitrust laws, (2) violation of state consumer protection and unfair competition laws, and (3) unjust enrichment claims under the common law of "each of the fifty states, excluding Ohio and Indiana, and including the District of Columbia." Defendants now move to dismiss each of the counts. III. Analysis A. Article III Standing To bring a claim in federal court, a plaintiff must suffer an injury in fact that is fairly traceable to the alleged conduct of the defendant and likely to be redressed by a favorable judicial decision. See Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016), as revised (May 24, 2016). The burden is on the plaintiff to establish all of these elements of Article III standing. Id. Defendants argue that plaintiffs have not established Article III standing in any states except those in which they reside, and 3 t ’ ’ if t l t “ l ” i ICase 2:16-cv-02873-JLL-JAD Document 73-1 Filed 03/08/17 Page 4 of 23 PageID: 1162 Case: 1:08-cv-05468 Document #: 204 Filed: 03/03/17 Page 4 of 22 PagelD #:958 they urge this court to address plaintiffs' standing before addressing issues of class certification. Plaintiffs argue that the standing inquiry should be postponed until after matters of class certification have been decided. Plaintiffs have met their individual Article III standing requirements. They properly alleged an injury in fact (payment of "supracompetitive" prices) that could be fairly traced to defendants' alleged scheme and that would be redressed by a favorable judicial decision. Whether Article III poses an obstacle to adjudicating this case as a class action should be evaluated later.2 In Payton v. County of Kane, 308 F.3d 673 (7th Cir. 2002), the Seventh Circuit said that "once a class is properly certified, statutory and Article III standing requirements must be assessed with reference to the class as a whole, not simply with reference to the individual named plaintiffs." Payton, 308 F.3d at 680 (emphasis added). In Arreola v. Godinez, the court addressed the question of standing before it addressed class certification; however, in that case it was the standing of the individual named plaintiff that was being addressed—no inquiry was being made into the named plaintiffs ability to serve as a class representative at that time. Arreola v. Godinez, 546 F.3d 788, 794- 95 (7th Cir. 2008). For now, whether named plaintiffs can bring claims under the laws of other states and whether plaintiffs are adequate class representatives do not pose Article III barriers to subject-matter jurisdiction. See Morrison v. YTB Int'l, Inc., 649 F.3d 533, 536 (7th Cir. 2011). 2 Or not at all, if the complaint otherwise fails to state a claim as discussed below. 4 ’ “ ” ’ 2 “ if ” f’ – t t ’ 2 l ICase 2:16-cv-02873-JLL-JAD Document 73-1 Filed 03/08/17 Page 5 of 23 PageID: 1163 Case: 1:08-cv-05468 Document #: 204 Filed: 03/03/17 Page 5 of 22 PagelD #:959 B. Antitrust Standing In addition to Article III standing, an antitrust plaintiff must demonstrate antitrust standing at the pleading stage. Although general "harm" to the plaintiff is sufficient to satisfy the constitutional standing requirement, "the court must make a further determination whether the plaintiff is a proper party to bring a private antitrust action." In re Aluminum Warehousing Antitrust Litig., 833 F.3d 151, 157 (2d Cir. 2016) (citing Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 535 n.31 (1983)). A range of doctrines attempt to spell out "the circumstances under which a particular party may recover from an antitrust violator." Loeb Indus., Inc. v. Sumitomo Corp., 306 F.3d 469, 480 (7th Cir. 2002). These "antitrust standing" doctrines have arisen primarily under federal law. In Illinois Brick Co. v. Illinois, 431 U.S. 720, 735 (1977), for example, the Supreme Court created a "direct purchaser" doctrine limiting treble damage actions under § 4 of the Clayton Act to direct purchasers, and in Associated Gen. Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 536-45 (1983) ("AGM, the Court created a multi-factor "direct injury" doctrine to measure the link between the defendants' conduct and the plaintiffs' injury in a federal antitrust action. Those factors include "(1) the causal connection between the violation and the harm; (2) the presence of improper motive; (3) the type of injury and whether it was one Congress sought to redress; (4) the directness of the injury; (5) the speculative nature of the damages; and (6) the risk of duplicate recovery or complex damage apportionment." Loeb, 306 F.3d at 484 (citing AGC, 459 U.S. at 5 st “ ” i t “ i ” i t “ ” “ ” t “ ” t – “ GC”) “ ” t ’ ’ “ ” i ICase 2:16-cv-02873-JLL-JAD Document 73-1 Filed 03/08/17 Page 6 of 23 PageID: 1164 Case: 1:08-cv-05468 Document #: 204 Filed: 03/03/17 Page 6 of 22 PagelD #:960 537-45). The Illinois Brick direct-purchaser doctrine and the AGC direct-injury doctrine "are analytically distinct." Int'l Bhd. of Teamsters, Local 734 Health & Welfare Trust Fund v. Philip Morris Inc., 196 F.3d 818, 828 (7th Cir. 1999) (citing Blue Shield of Virginia v. McCready, 457 U.S. 465, 476, 102 S.Ct. 2540, 73 L.Ed.2d 149 (1982)). The parties here focus their debate on (1) whether AGC is the governing test for each of the state-law antitrust claims and (2) if so, whether the first amended complaint in this case meets the multi-factor test laid out in AGC. I agree with defendants that AGC is the appropriate test in each of the states for which resident plaintiffs assert antitrust claims and that the complaint does not meet the AGC test. 1. State Applications of the AGC Test Plaintiffs point out that the Supreme Court did not address whether the AGC factors should govern questions of antitrust standing when plaintiffs bring state antitrust claims to federal court. Plaintiffs cite a different Supreme Court case, California v. ARC America Corp., 490 U.S. 93 (1989), for the proposition that "standing to sue under state antitrust law is determined solely with reference to state law." Plaintiffs' Response, [188] at 13 (emphasis in original). This is an overstatement. Federal antitrust laws do not "expressly pre-empt state laws permitting indirect purchaser recovery" and federal antitrust laws serve "to supplement, not displace, state antitrust remedies." ARC America, 490 U.S. at 101- 02. But the Supreme Court left open the possibility that states could choose to 6 – t t “ ” ’ i r - l l “ ” i ’ r “ ” “ ” – ICase 2:16-cv-02873-JLL-JAD Document 73-1 Filed 03/08/17 Page 7 of 23 PageID: 1165 Case: 1:08-cv-05468 Document #: 204 Filed: 03/03/17 Page 7 of 22 PagelD #:961 follow AGC specifically or federal law generally, and defendants argue that the states at issue in this case have done so. I agree. Plaintiffs assert state antitrust violations in twenty-one states.3 Named plaintiffs reside in nine of the twenty-one states. In eight4 of the nine named- plaintiff states, the state courts have adopted the AGC test or a modified version of it to determine antitrust standing. See Defendants' Appendix 4, [176-1] at 54-56. The remaining named-plaintiff state, Tennessee, has not said outright that it would apply AGC or something similar, but at least one Tennessee appellate court has suggested that it might do so. See Tenn. Med. Ass'n v. BlueCross BlueShield of Tenn., Inc., 229 S.W.3d 304,311 (Tenn. Ct. App. 2007). Likewise, courts in tens of the twelve states where no named plaintiffs reside apply the AGC test in antitrust standing cases. See Defendants' Appendix 4, [176-1] at 57-58. Without mentioning the AGC standard by name, Utah and West Virginia have also established that their courts shall look to federal law when interpreting antitrust statutes. Utah Code Ann. § 76-10-3118 (when construing the state's antitrust laws, Utah state courts "will be guided by interpretations given by the federal courts to comparable federal antitrust statutes and by other state courts to comparable state antitrust statutes"); W. Va. Code § 47-18-16 (state antitrust laws 3 Arizona, California, the District of Columbia, Iowa, Kansas, Maine, Michigan, Minnesota, Mississippi, Nebraska, Nevada, New Mexico, New York, North Carolina, North Dakota, South Dakota, Tennessee, Utah, Vermont, West Virginia, and Wisconsin. 4 Arizona, California, Iowa, Kansas, Michigan, New York, North Carolina, and South Dakota. 5 The District of Columbia, Maine, Minnesota, Mississippi, Nebraska, Nevada, New Mexico, North Dakota, Vermont, and Wisconsin. 7 3 Na 4 o i r ’ – ’ , r 5 ’ – i t ’ “ i r tes” 3 l 4 A i 5 l ICase 2:16-cv-02873-JLL-JAD Document 73-1 Filed 03/08/17 Page 8 of 23 PageID: 1166 Case: 1:08-cv-05468 Document #: 204 Filed: 03/03/17 Page 8 of 22 PagelD #:962 "shall be construed liberally and in harmony with ruling judicial interpretations of comparable federal antitrust statutes"); Princeton Ins. Agency, Inc. v. Erie Ins. Co., 690 S.E.2d 587, 592 (W. Va. 2009) ("The Legislature has directed that where our state antitrust provisions track the Sherman Act's provisions, federal decisional law should be followed."). Thus it is appropriate to apply the AGC analysis to each of the state anti- trust claims, as all of the states at issue either formally apply AGC in their own state courts or have indicated that they would follow federal law on this point. 2. Applying the AGC Test to the First Amended Complaint The complaint alleges that "[s]teel products competition was restrained, suppressed, and eliminated" in violation of state antitrust laws; "[s]teel products prices were raised, fixed, maintained and stabilized at artificially high levels"; defendants "intended and knew that their combination, collusion, and conspiracy affected indirect purchasers of steel as well as direct purchasers"; plaintiffs were "deprived of free and open competitions"; and plaintiffs "paid supra-competitive, artificially inflated prices for Steel products" because price increases in raw steel are often passed on to indirect purchasers, who may bear the brunt of such a scheme. Plaintiffs argue that these allegations describe an injury that is "inextricably intertwined" with defendants' alleged restriction of the steel market. Plaintiffs also contend that their injury is not speculative, as it can be calculated by tracking the illegal overcharges that were passed on through the distribution line to the customer. 8 “ tes” “ isl ’ ” l “ ” “ if ” “ i ” “ ” “ - if ” “ ” ’ i ICase 2:16-cv-02873-JLL-JAD Document 73-1 Filed 03/08/17 Page 9 of 23 PageID: 1167 Case: 1:08-cv-05468 Document #: 204 Filed: 03/03/17 Page 9 of 22 PagelD #:963 This narrative is deficient. Most notably, AGC factors 1 (causal connection), 4 (directness of the injury), and 5 (non-speculative damages), all point toward no applicable injury here. Although plaintiffs make conclusory assertions about causal connections and the directness of the injury, the complaint does not acknowledge the role of interceding parties who purchased and distributed the raw steel from defendants or manufactured and sold the steel-containing consumer products that plaintiffs eventually purchased. Nor does the complaint provide any basis to infer a link between specific products and individual steel mills. It does not even identify whether the steel in these products came from defendants' steel mills at all. Plaintiffs' assertion that the steel is "identifiable" through the supply chain does not answer the question of whether, having isolated which parts of a product are made of steel, that steel can then be traced to a defendant's mill. Plaintiffs do assert improper motive (AGC factor 2), arguing that defendants "intended and knew that their combination, collusion, and conspiracy affected indirect purchasers of steel as well as direct purchasers." Yet it is implausible to claim that defendants' motive was to inflate the price of steel-containing products they do not sell and from which they do not profit. lqbal, 556 U.S. at 678 ("To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face."). Finally, while plaintiffs do not have to provide a full account of damages in their complaint, see Fed. R. Civ. P. 54(c) (relief need not be demanded in the pleadings), the facts in the complaint and the various letters from suppliers and manufacturers which are 9 i i l l t l ’ ’ “ ” ’ “ i ” ’ t I “ l ‘ ’” l l t ICase 2:16-cv- 2873-JLL-JAD Document 73-1 Filed 08/17 Page 10 of 23 PageID: 1168 Case: 1:08-cv-05468 Document #: 204 Filed: 03/03/17 Page 10 of 22 PagelD #:964 referenced in the complaint suggest that calculating damages for these plaintiffs would be a highly speculative task. The products that plaintiffs purchased contained a wide variety of materials, each of which influences the retail price and cannot easily be segregated and priced after the fact. See Loeb, 306 F.3d at 486 ("The fact that the [plaintiffs] here are further down the chain of copper users than others also will increase the economic complexity of apportioning damages."). Two cases are especially instructive here. In Aluminum Warehousing, the court found that indirect purchasers of aluminum products had not plausibly established antitrust standing because the plaintiffs (consumers of aluminum- containing products such as beverages sold in aluminum cans) were not participants in the restrained aluminum market. Aluminum Warehousing, 833 F.3d at 161 ("[T]o suffer antitrust injury, the putative plaintiff must be a participant in [the defendant's] market . . . but sometimes the defendant will corrupt a separate market . . . in which case the injury suffered can be said to be 'inextricably intertwined' with the injury of the ultimate target."). Though the indirect purchasers argued that they participated in the aluminum market by creating a demand for aluminum, the court rejected the contention that this attenuated relationship met the "inextricably intertwined" exception. Id. at 161-62. Additionally, the indirect aluminum purchasers' injuries were not "a necessary step" in carrying out the alleged anti-competitive conspiracy, but rather a "purely incidental byproduct of the alleged scheme." Id. at 162. The court noted that plaintiffs' approach "would limitlessly increase the universe of potential plaintiffs" 10 l “ i .” s t “ ’ r ‘ ’ .” “ ” – ’ “ ” i- “ ” ’ “ t if ” ICase 2:16-cv-02873-JLL-JAD Document 73-1 Filed 03/08/17 Page 11 of 23 PageID: 1169 Case: 1:08-cv-05468 Document #: 204 Filed: 03/03/17 Page 11 of 22 PagelD #:965 by imposing a simple but-for test to show proximate cause in antitrust standing cases. Id. Here, too, plaintiffs' participation in the steel market is remote at best and stretches the "inextricably intertwined" exception too far. Though they may have paid inflated prices for steel-containing products, the alleged scheme would have been just as effective from defendants' point of view if direct purchasers of steel paid supracompetitive prices for raw steel and never passed that cost on to consumers. The Seventh Circuit took a similar approach in Loeb, which dealt with purchasers of scrap copper suing trading corporations for allegedly fixing the price of copper at artificially high levels. The court found that the scrap purchasers failed to meet the AGC factors, including the questions of causation and remoteness. Loeb, 306 F.3d 469. In part, this was because there were "more immediate victims . . . in a better position to maintain a treble damages action," which "diminishes the justification for allowing a more remote party . . . to perform the office of a private attorney general." Id. at 484 (citing AGC, 459 U.S. at 542). This is true to an even greater extent in this case. Whereas the Loeb plaintiffs did purchase raw copper, albeit scrap copper left over from the refining process, the indirect purchasers here are even further down the line, having purchased the steel only as a component part of complex, mixed material products like appliances and construction equipment. Cf. In re Dairy Farmers of America, Inc. Cheese Antitrust Litigation, 2013 WL 4506000, at *14 (N.D. Ill. Aug. 23, 2013). 11 ’ i “ ” t ’ r if “ ” “ ” i ICase 2:16-cv-02873-JLL-JAD Document 73-1 Filed 03/08/17 Page 12 of 23 PageID: 1170 Case: 1:08-cv-05468 Document #: 204 Filed: 03/03/17 Page 12 of 22 PagelD #:966 Because plaintiffs' injury is too remote from the alleged misconduct, their damages too speculative, and defendants' improper conduct not likely to be targeted toward downstream purchasers of mixed material retail products, I find that plaintiffs have not satisfied the AGC factors necessary to demonstrate antitrust standing. Plaintiffs' state antitrust claims are dismissed. C. Other State-Law Claims Plaintiffs' remaining claims, pleading violations of state consumer fraud statutes and common law unjust enrichment, require a showing of proximate cause or damages legally caused by the defendants' conduct. In the case of the state consumer fraud claims, each of the states requires that a consumer fraud action demonstrate proximate cause—if not explicitly, then by implication by requiring plaintiffs to be injured as a result of defendants' wrongful conduct.6 Plaintiffs cite no 6 AS § 45.50.535 (authorizing anyone who has been injured as a result of a violation of AS § 45.50.471 to bring an action for damages); A.C.A. § 4-88-113 (authorizing Arkansas courts to restore unlawfully acquired money or real or personal property to consumers who were harmed by violators of this act); Cal. Bus. & Prof. Code § 17207 (directing courts to calculate civil penalties for violation of this act based on various aspects of the defendant's conduct); Colo. Rev. Stat. § 6-2-111 (authorizing any party injured by a violator of the act to recover damages); Del. Code Ann. 6 § 2524 (permitting "any person who has suffered damages as a result of the use or employment of any such unlawful acts or practices and submits proof to the satisfaction of the Court that that person has in fact been damaged" to seek remedies); District of Columbia Code § 28-3905 (requiring the Office of Adjudication to order redress or restitution from violators of the trade practices law to consumers injured by those unlawful trade practices); Florida Stat. § 501.207 (empowering courts to reimburse consumers found to have been damaged by violators of Florida's Deceptive and Unfair Trade Practices Act); Idaho Code § 48-607 (empowering courts to award damages or restitution to consumers harmed by violators of Idaho's Consumer Protection Act); Me. Rev. Stat. Ann. 5 §§ 213 (permitting the award of damages to any person who "suffers any loss of money or property, real or personal, as a result of the use or employment by another person of a method, act or practice declared unlawful" by Maine's Unfair Trade Practices Act); Mass. Gen. Laws Ann. 93A § 9 (authorizing any person injured as a result of a violation of Massachusetts' Regulation of Business Practices for Consumers Protection Act to bring an action for damages); Mich. Comp. Laws § 445.911(3) (authorizing damages actions by 12 ’ ’ t st ’ - ’ l ’ st ’ 6 6 l l ’ “ i ” l i l i l ’ i l ’ “ ” ’ t ’ ICase 2:16-cv-02873-JLL-JAD Document 73-1 Filed 03/08/17 Page 13 of 23 PageID: 1171 Case: 1:08-cv-05468 Document #: 204 Filed: 03/03/17 Page 13 of 22 PagelD #:967 authority from these states to suggest that a plaintiff can pursue a claim without suffering legal injury, and proximate cause is how one identifies cognizable injuries. See CSX Transp., Inc. v. McBride, 564 U.S. 685, 692 (2011) ("The term 'proximate cause' is shorthand for a concept: Injuries have countless causes, and not all should give rise to legal liability."); Holmes v. Securities Investor Protection Corp., 503 U.S. 258, 268 (1992) (citing AGC in support of the concept that "proximate cause" broadly refers to "the judicial tools used to limit a person's responsibility for the consequences of that person's own acts"). The reasons behind plaintiffs' failure to meet the AGC factors equally apply to a proximate cause analysis. In particular, the presence of many intermediate parties along the supply chain, the commingling of steel with other materials during the manufacturing process, and the absence of plausible evidence of any link between specific products and defendants' steel mills means that the defendants did not legally cause the harm allegedly suffered. persons injured "as a result of a violation of the Michigan Consumer Protection Act); Montana Code § 30-14-133 (permitting "a consumer who suffers any ascertainable loss of money or property, real or personal, as a result of a violation of Montana's Consumer Protection Act to recover damages); Nebraska's Uniform Deceptive Trade Practices Act (Neb. Rev. Stat. § 87-303) does not provide a private right of action for damages at all, Reinbrecht v. Walgreen Co., 16 Neb. App. 108, 742 N.W.2d 243 (2007), and because the First Amended Complaint only seeks damages, which plaintiffs are not entitled to, the claim under Neb. Rev. Stat. § 87-303 fails to state a claim; Nevada Rev. Stat. Ann. § 598.0999 (empowering courts to award damages to victims of violators of Nevada's Deceptive Trade Practices Act); N.H. Rev. Stat. §§ 358-A:10 and 358-A:10-a (authorizing any person or class injured by a violation of New Hampshire's Regulation of Business Practices for Consumer Protection Act to bring an action for actual damages); New York Gen. Bus. Law § 349 (authorizing "any person who has been injured by reason of any violation of this act to seek damages); North Carolina Gen. Stat. § 75-1.1, et seq. (authorizing any person who has been injured as a result of a violation of this act to seek damages); Vermont Stat. Ann. 9 § 2465 (authorizing anyone "who sustains damages or injury as a result of any violation of State antitrust laws, including section 2453 of this title" to sue for damages); and Wisconsin Stat. Ann. § 425.301, et seq. (authorizing any person who has been injured as a result of a violation of this act to seek damages). 13 i “ ‘ ’ .” it “ i ” “ ’ ’ ” ’ ’ “ f” t “ f” t ’ ’ l l ’ ’ “ f” “ ” ICase 2:16-cv-02873-JLL-JAD Document 73-1 Filed 03/08/17 Page 14 of 23 PageID: 1172 Case: 1:08-cv-05468 Document #: 204 Filed: 03/03/17 Page 14 of 22 PagelD #:968 Plaintiffs' primary counterargument is a conclusory statement that supracompetitive prices were a direct and proximate result of defendants' unlawful acts. This is a legal conclusion and, without more, cannot survive a motion to dismiss. Plaintiffs also argue that there is no "single case authority requiring an independent showing of 'proximate cause' where . . . all AGC factors are satisfied," but as discussed above, the AGC factors have not been satisfied. The consumer protection claim is dismissed. In the context of unjust enrichment claims7, the benefit conferred from plaintiff to defendant is the causal link between plaintiffs harm and defendant's misconduct. Here, plaintiffs argue that they paid inflated prices to retailers for steel products, generating profits that ultimately accrued to defendants. As discussed above, the intervening chain of manufacturing and distribution renders plaintiffs' injury too remote from defendants' alleged price-fixing scheme. Plaintiffs' inflated payments are not appropriately cognizable as benefits conferred upon the defendants—defendants' material benefits from the plaintiffs' purchases are too speculative. The unjust enrichment claims are also dismissed. D. Tolling of the Statutes of Limitations Defendants argue that the claims by each of the new named plaintiffs are time barred. All fifteen new named plaintiffs first filed their claims on April 26, 2016, asserting violations of antitrust laws of eight states, consumer protection laws of six states, and common law of unjust enrichment in nine states. The statute of 7 Plaintiffs allege violations of unjust enrichment statutes in all fifty states excluding Ohio and Indiana and including the District of Columbia. 14 ’ t l ’ “ ‘ ’ i f ” i f 7 f’ ’ ’ ’ ’ fe ’ ’ i l 7 i l ICase 2:16-cv-02873-JLL-JAD Document 73-1 Filed 03/08/17 Page 15 of 23 PageID: 1173 Case: 1:08-cv-05468 Document #: 204 Filed: 03/03/17 Page 15 of 22 PagelD #:969 limitations for these claims range from two to six years,8 but plaintiffs' claims unquestionably accrued no later than September 24, 2008, when Supreme Auto's counsel filed the original complaint. Because the fifteen new named plaintiffs filed their claims more than seven years after the latest possible accrual date, their claims are barred unless they can show that they were properly tolled. Plaintiffs argue that their new claims should be tolled under American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974), which says that a statute of limitations is tolled for purported class members when "class action status has been denied solely because of failure to demonstrate that 'the class is so numerous that joinder of all members is impracticable."' American Pipe, 414 U.S. at 552-53. The parties' key dispute here is whether the new named plaintiffs were purported class members at the time of the original complaint. See In re Dairy Farmers of America, Inc. Cheese Antitrust Litigation, 2015 WL 3988488, at *24 (N.D. Ill. June 29, 2015) 8 Ariz. Rev. Stat. Ann. § 44-1410(A) (antitrust statute of limitations ("SOL") period of 4 years); Cal. Bus & Prof. Code § 16750.1 (same); Iowa Code § 553.16 (same); Kan. Stat. Ann. § 60-512(2) (antitrust SOL of 3 years); Mich. Comp. Laws § 445.781 (antitrust SOL of 4 years); N.Y. Gen. Bus. Law § 340(5) (antitrust SOL of 4 years); N.C. Gen. Stat. § 75-16.2 (same); S.D. Codified Laws § 37-1-14.4 (same); Tenn. Code Ann. § 28-3-105(3) (same); Cal. Bus & Prof. Code § 16750.1 (consumer protection SOL of 4 years); Fla. Stat. § 95.11(3)(f) (same); Mich. Comp. Laws § 445.911(7) (consumer protection SOL of 6 years); Mont. Code Ann. § 27-2-211 (consumer protection SOL of 2 years); N.Y. C.P.L.R. 214(2) (consumer protection SOL of 3 years); N.C. Gen. Stat. § 75-16.2 (consumer protection SOL of 4 years); Ariz. Rev. Stat. Ann. § 12-550 (unjust enrichment SOL of 4 years); Fla. Stat. § 95.11(3)(k) (same); Iowa Code § 614.1(4) (unjust enrichment SOL of 5 years); Kan. Stat. Ann. § 60-512 (unjust enrichment SOL of 3 years); Mich. Comp. Laws § 600.5813 (unjust enrichment SOL of 6 years); Mont. Code Ann. § 27-2-202 (unjust enrichment SOL of 3 years); N.Y. C.P.L.R. 214(3) (same); N.C. Gen. Stat. § 1-52(1) (same); S.D. Codified Laws 15-2-13 (unjust enrichment SOL of 6 years); Tenn. Code Ann. § 28-3-105(3) (unjust enrichment SOL of 3 years). 15 8 b ’ ’ l i “ l st ‘ i ’” – ’ l 8 “ ” ICase 2:16-cv-02873-JLL-JAD Document 73-1 Filed 03/08/17 Page 16 of 23 PageID: 1174 Case: 1:08-cv-05468 Document #: 204 Filed: 03/03/17 Page 16 of 22 PagelD #:970 (citing Crown, Cork & Seal Co. v. Parker, 462 U.S. 345 (1983) (a class action lawsuit tolls the statute of limitations only for "all putative class members.")). Plaintiffs argue that they were included in the original alleged class, citing the unchanged class definition in both the original and amended complaints ("All persons and entities residing in the United States who, from January 1, 2005 to September 17, 2008, indirectly purchased steel products in the United States for their own use and not for resale." Compl., [1] at ¶ 26, Am. Compl., [152] at ¶ 33.). Yet the first amended complaint redefined "steel products" so completely that "purchasers of steel products" now describes an entirely different universe of plaintiffs. The original complaint defined "steel products" to mean: any consumer steel product including but not limited to produced flat steel sheets and coils; galvanized steel products; tin mill products; steel plates; steel beams, rails and other structural shapes; steel bars and rods; steel wire and wire rod; steel pipes and other tubular products; and a variety of other products derived from raw steel. Compl., [1] at ¶ 3. By contrast, the first amended complaint redefined the same term to mean: any consumer steel product for end use and not for resale, including clothes washers, clothes dryers, refrigerators, freezers, dishwashers, microwave ovens, regular ovens, automobiles, semi-tractor trailers, farm and construction equipment, room air conditioner units, hot water heaters, snow blowers, barbeque grills, lawn mowers, and reinforcing bars used in patios, driveways, swimming pools and sidewalks. Am. Compl., [152] at ¶ 3. 16 i “ i .” l i “ ” l “ ” “ ” i l “ ” t l t t ICase 2:16-cv-02873-JLL-JAD Document 73-1 Filed 03/08/17 Page 17 of 23 PageID: 1175 Case: 1:08-cv-05468 Document #: 204 Filed: 03/03/17 Page 17 of 22 PagelD #:971 The amended definition implicates a new and broader set of putative class members than the original definition. Relatively few people purchase raw steel products in the industrial form described in the original complaint. The much larger number of individuals who have purchased one or more of the consumer products in the first amended complaint greatly expands the pool of putative class members and deprives defendants of their right to notice. American Pipe, 414 U.S. at 554 ("The theory is that even if one has a just claim it is unjust not to put the adversary on notice to defend within the period of limitation and that the right to be free of stale claims in time comes to prevail over the right to prosecute them.") (citation omitted). Plaintiffs argue that the downstream consumer products enumerated in the first amended complaint are "simply a subset" of the "variety of other products derived from raw steel" from the original complaint. In their reading, the putative class always included retail purchasers because this vague, all- encompassing phrase could be construed to include any product with steel parts deriving from defendants' steel mills. But the original complaint says nothing about products like refrigerators, farm equipment, and air conditioner units, which are "derived from raw steel" only in the loosest sense of the term. These are products in which steel is only one of many component materials, and the chain of manufacturing and distribution may be much longer and more complex than it would be with steel bars, rods, and pipes. Rather than a subset of the "variety of other products derived from raw steel," these newly added claims 17 l l “ .” it l “ ” “ ” l i ’ l “ ” “ ” ICase 2:16-cv-02873-JLL-JAD Document 73-1 Filed 03/08/17 Page 18 of 23 PageID: 1176 Case: 1:08-cv-05468 Document #: 204 Filed: 03/03/17 Page 18 of 22 PagelD #:972 belong to a separate category of steel-containing retail products that are much less closely linked and less easily traceable to defendants' steel mills. If the phrase "a variety of other products derived from raw steel" could be construed as broadly as plaintiffs claim, the original complaint would have given defendants the task of preserving evidence and accumulating witnesses from a nearly unbounded universe of steel-containing products. Moreover, since the only named steel products in the original complaint are industrial tools that scarcely resemble the complex, mixed-material consumer products in the amended complaint, it seems especially unlikely that this definition of "other products" is a consistent reading of the original complaint. Plaintiffs point out that the amended claims need only be "substantially similar" to the original claims, not identical, in order to merit tolling. See In re Linerboard Antitrust Litig., 223 F.R.D. 335, 351 (E. D. Pa. 2004). But even by this standard, tolling is not appropriate. In this case, nearly eight years after filing the initial complaint, defendants would be forced to incorporate new and previously unidentified witnesses and evidence into their defense plan, including an entirely new crop of manufacturers, distributors and retailers across the country. Given this, the fifteen new plaintiffs' claims do not share even a "substantially similar" factual basis and legal nexus, and defendants would be unduly prejudiced by tolling. The amended claim of Supreme Auto—the original plaintiff—was also not tolled by its original claim. During discovery based on the original complaint, 18 t ’ “ ” l t l i - t l “ t ” i t l “ ” l r ’ “ ” iff l ICase 2:16-cv-02873-JLL-JAD Document 73-1 Filed 03/08/17 Page 19 of 23 PageID: 1177 Case: 1:08-cv-05468 Document #: 204 Filed: 03/03/17 Page 19 of 22 PagelD #:973 Supreme Auto represented to defendants that its claim was based solely on its purchase of $171.64 worth of steel tubing. Nearly six years later, after filing the amended complaint, Supreme Auto provided a supplementary interrogatory informing defendants for the first time that their claim is based on the purchase of two semi-trucks, each costing over $100,000, and noted that the steel tubing was no longer relevant because the "class definition no longer includes steel tubing." Aside from serving as evidence of how significantly the class definition has changed, this maneuver has left Supreme Auto in the same position as its co- plaintiffs. Michigan's four-year statute of limitations, which governs Supreme Auto's claims, has now expired on anything other than the initial steel tubing allegations. See Mich. Comp. Laws § 445.781. Like the fifteen new named plaintiffs, Supreme Auto's amended allegations do not warrant tolling and are thus untimely. E. Relation Back of Amendments Rule 15(c)(1)(B) provides that an amended pleading relates back to the original where "the amendment asserts a claim or defense that arose out of the conduct, transaction, or occurrence set out—or attempted to be set out—in the original pleading." Fed. R. Civ. P. 15(c). The touchstone of whether an amendment relates back is whether the original complaint "gave the defendant enough notice of the nature and scope of the plaintiffs claim that he shouldn't have been surprised by the amplification of the allegations of the original complaint in the amended one." Santamarina v. Sears, Roebuck & Co., 466 F.3d 570, 573 (7th Cir. 2006) 19 r l “ l ” i ’ r ’ i ’ “ i ” l “ f’ ’ l ” ICase 2:16-cv-02873-JLL-JAD Document 73-1 Filed 03/08/17 Page 20 of 23 PageID: 1178 Case: 1:08-cv-05468 Document #: 204 Filed: 03/03/17 Page 20 of 22 PagelD #:974 (citing Tiller v. Atlantic Coast Line R. Co., 323 U.S. 574, 581 (1945)). Relation back is appropriate where the "two complaints refer to the same general set of facts" even though the amended one alleges "a different cause of action and legal theory from the original complaint." Id. The amendment does not arise from the same conduct, transaction, or occurrence as the original pleading. Although the allegations of defendants' plot to reduce supply remain largely the same, the transactions at issue in the original complaint involved products made at defendants' steel mills, while those in the first amended complaint involved consumer products that are not manufactured or distributed by defendants. The transactions in the amended complaint were purchased in different states and with wholly different chains of production and distribution than the more limited transactions in the original complaint. Plaintiffs argue that the changed product definition is insignificant, citing Schorsch v. Hewlett-Packard Co., 417 F.3d 748 (7th Cir. 2005), which notes that "[i]dentity of the consumable is a detail." Schorsch, 417 F.3d at 750. But the consumables at issue in Schorsch were fundamentally unchanged except in terms of their function. Where the original complaint dealt with EEPROM chips in Hewlett-Packard toner or ink cartridges, the amended complaint substituted EEPROM chips in Hewlett-Packard drum kits. From the outset, the suit always involved EEPROM chips in Hewlett- Packard manufactured printers. The identity of the consumable was deemed insignificant in that context because the proposed change was so slight and did not fundamentally alter the product category at issue. Here, the change in product 20 i “ l i ” “ l ” c i ’ l ’ l l l “ t ” l l t i l l t ICase 2:16-cv-02873-JLL-JAD Document 73-1 Filed 03/08/17 Page 21 of 23 PageID: 1179 Case: 1:08-cv-05468 Document #: 204 Filed: 03/03/17 Page 21 of 22 PagelD #:975 definition was much more meaningful, as it abandoned entire categories from the old definition while introducing new ones and implicating a host of new witnesses and potential evidence. Unlike in Schorsch, the amendment in this case made extensive additions and substitutions to the consumable definition, vastly expanded the universe of potential plaintiffs, and would radically alter the scope and focus of discovery. Allowing these amendments would deprive defendants of fair notice and create undue prejudice. Plaintiffs claim that defendants face no prejudice because the discovery process has just begun. But defendants had no reason to assume in 2008 that they should preserve or obtain discovery relating to the consumer products now at issue. Meanwhile, in the intervening years, evidence may have been destroyed or lost and witnesses' memories may have faded. Defendants also have an interest in certainty and finality that would not be served if an entirely new pool of plaintiffs were permitted to attach their claims to a nearly eight-year-old complaint. "At some point, defendants should have notice of who their adversaries are." Leachman v. Beech Aircraft Corp., 694 F.2d 1301, 1309 (D.C. Cir. 1982). Because none of plaintiffs' newly added claims relate back to the original complaint or qualify for American Pipe tolling, they are untimely and are dismissed. 21 t t ’ l “ ” ’ l ICase 2:16-cv-02873-JLL-JAD Document 73-1 Filed 03/08/17 Page 22 of 23 PageID: 1180 Case: 1:08-cv-05468 Document #: 204 Filed: 03/03/17 Page 22 of 22 PagelD #:976 N. Conclusion For the foregoing reasons, defendants' motion to dismiss [175] is granted. ENTER: itaA V C?LeC,,r‘z Manish S. Shah United States District Judge Date: 3/3/2017 22 IV ’ ___________________________ ICase 2:16-cv-02873-JLL-JAD Document 73-1 Filed 03/08/17 Page 23 of 23 PageID: 1181 SILLS CUMMIS & GROSS P.C. Richard H. Epstein One Riverfront Plaza Newark, NJ 07102 Phone: (973) 643-7000 Fax: (973) 643-6500 WEIL, GOTSHAL & MANGES LLP Steven A. Reiss (admitted pro hac vice) Adam C. Hemlock (admitted pro hac vice) 767 Fifth Avenue New York, NY 10153-0119 Phone: (212) 310-8000 Fax: (212) 310-8007 Attorneys for Defendants General Chemical Corporation, General Chemical Performance Products, LLC, General Chemical LLC, GenTek, Inc., Chemtrade Logistics Income Fund, Chemtrade Logistics Inc., Chemtrade Chemicals Corporation, Chemtrade Chemicals US LLC, and Chemtrade Solutions LLC UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY IN RE: LIQUID ALUMINUM SULFATE ANTITRUST LITIGATION This Document Relates to: 16-md-2687 (JLL) (JAD) (MDL 2687) 16-cv-2873 (JLL) (JAD) Civil Action No. 16-md-2687 (JLL)(JAD) (MDL No. 2687) CERTIFICATE OF SERVICE RICHARD H. EPSTEIN, of full age, certifies as follows: 1. I am a member of the law firm of Sills Cummis & Gross P.C., which, together with Weil, Gotshal & Manges LLP, represents Defendants General Chemical Corporation, General Chemical Performance Products, LLC, General Chemical LLC, GenTek, Inc., Chemtrade Logistics Income Fund, Chemtrade Logistics Inc., Chemtrade Chemicals Corporation, Chemtrade Chemicals US LLC, and Chemtrade Solutions LLC in the above- captioned matter. 1 Case 2:16-cv-02873-JLL-JAD Document 73-2 Filed 03/08/17 Page 1 of 2 PageID: 1182 2. On March 8, 2017, I caused the following documents to be served upon all counsel of record in the above-captioned matter via the Court's CM/ECF system: • Joint Reply Memorandum of Law in Support of the Defendants' Motion to Dismiss Under Fed. R. Civ. P. 12(b)(6), with Exhibit 1 thereto; and • This Certificate of Service. I certify that the foregoing statements made by me are true and correct. I am aware that if any of the foregoing statements made by me are willfully false, I am subject to punishment. s/Richard H. Epstein Richard H. Epstein Dated: March 8, 2017 2 t’ t ’ Case 2:16-cv-02873-JLL-JAD Document 73-2 Filed 03/08/17 Page 2 of 2 PageID: 1183