June 18, 2013

Pool Owners’ State Antitrust Claims Remain Afloat

A Louisiana federal judge has denied motions to dismiss pool owners’ indirect purchaser claims brought under state antitrust laws against Pool Corporation, the nation’s largest distributor of pool products, and pool manufacturers.

Judge Sarah Vance of the U.S. District Court for the Eastern District of Louisiana limited indirect purchasers’ state antitrust claims in In re Pool Products Distribution Market Antitrust Litigation to essentially mirror the federal claims of the direct purchaser plaintiffs.  Both groups of plaintiffs allege that Pool Corporation acquired competitors and entered into exclusive agreements with the defendant manufacturers in order to block competition from other pool distributors.

In their motions to dismiss, defendants argued that the indirect purchaser plaintiffs lack standing to bring state antitrust claims just as they lack standing to bring federal antitrust claims under the authority of Illinois Brick Co. v. Illinois, which bars indirect purchasers from suing under federal antitrust laws.

Judge Vance found that indirect purchasers have standing to bring state antitrust claims under the laws of California, Arizona, and Florida.  While the court found that Missouri antitrust laws follow the Illinois Brick prohibition on indirect purchaser suits, it also found that there was no such ban against the indirect purchasers’ claims for violation of the Missouri consumer protection statute, the Missouri Merchandising Practices Act (the “MMPA”).   Judge Vance noted that “the state legislature has expressed no intent to incorporate federal antitrust standing limits into the MMPA,” and that courts have previously held that indirect purchasers could bring claims under the MMPA.

While the court denied the motions to dismiss the state antitrust claims, it granted the motions to dismiss state claims based on fraud and misrepresentation, finding that plaintiffs failed to meet the heightened pleading requirements for claims of fraud.

Judge Vance previously granted motions to dismiss monopolization, group boycott, and fraud claims asserted by the direct purchaser plaintiffs, who are pool stores and maintenance companies that directly purchased supplies from Pool Corporation.  The court denied the motions to dismiss the direct purchasers’ attempted monopolization claim under Section 2 of the Sherman Act and their rule of reason claims under Section 1.

Categories: Antitrust Law and Monopolies, Antitrust Litigation

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