In re New Motor Vehicles Canadian Export Antitrust

• Decision Date: 08 December 2004
• Docket Number: No. MDL DOCKET NO. 1532.,MDL DOCKET NO. 1532.
• Citation: In re New Motor Vehicles Canadian Export Antitrust, 350 F.Supp.2d 160 (D. Me. 2004)
• Parties: In Re NEW MOTOR VEHICLES CANADIAN EXPORT ANTITRUST LITIGATION
• Court: U.S. District Court — District of Maine

350 F.Supp.2d 160

In Re NEW MOTOR VEHICLES CANADIAN EXPORT ANTITRUST LITIGATION

No. MDL DOCKET NO. 1532.

United States District Court, D. Maine.

December 8, 2004.

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Robert S. Frank, Harvey & Frank, Portland, ME, for Plaintiffs.

William J. Kayatta, Jr., Pierce Atwood, Portland, ME, for Defendants.

ORDER ON DEFENDANTS' MOTION TO DISMISS CERTAIN CLAIMS IN PLAINTIFFS' SECOND AMENDED COMPLAINT

HORNBY, District Judge.

Buyers and lessees¹ of new motor vehicles have sued automobile companies and two national dealer associations. They claim that these defendants conspired among themselves and with unnamed dealers to prevent less-expensive Canadian vehicles from entering the American market. This conduct, they contend, foreclosed a discount distribution channel and caused new vehicle prices in the United States to rise to artificially high levels. I ruled previously that these consumers can seek injunctive relief under federal antitrust law. In re New Motor Vehicles Canadian Exp. Antitrust Litig., 307 F.Supp.2d 136, 144 (D.Me.2004). I also ruled that they cannot recover federal antitrust damages because of the Supreme Court's ruling in Illinois Brick Co. v. Illinois, 431 U.S. 720, 97 S.Ct. 2061, 52 L.Ed.2d 707 (1977), unless they join as named defendants the dealers from whom they bought and prove that those dealers joined the conspiracy. In re New Motor Vehicles, 307 F.Supp.2d at 141-43.

After that ruling, these consumers filed a Second Amended Complaint. They still do not name the dealers as defendants, although they do allege that the automobile companies and dealer associations engaged in concerted action with American and Canadian dealers. Second Am. Consolidated Class Action Compl. for Violations of the Sherman Antitrust Act ("Second Am. Compl.") (Docket Item 109). They continue to seek damages from the automobile companies and dealer associations, but this time for violations of state antitrust and consumer protection statutes and on the basis of common law restitution. They also still seek injunctive relief under federal antitrust law. All defendants move to dismiss a number of the state law claims pursuant to Fed.R.Civ.P. 12(b)(6). Defs.' Mot. to Dismiss Certain Claims in Pls.' Second Am. Compl. ("Defs.' Mot.") (Docket Item 122).

The motion to dismiss is GRANTED as to the Louisiana antitrust claim, but DENIED as to the antitrust claims for the District of Columbia, Michigan, Minnesota, Mississippi, Nevada, New Mexico, South Dakota, Tennessee, West Virginia and Wisconsin. The defendants did not move to dismiss the Arizona, California, Kansas, Maine, North Carolina, North Dakota and Vermont antitrust claims. Therefore, the antitrust claims remain for sixteen states and the District of Columbia.

The motion to dismiss is GRANTED as to the state consumer protection claims for Arizona, Colorado, Connecticut, Delaware, Georgia, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Dakota, Tennessee and Virginia. The plaintiffs have not opposed the motion to dismiss the Illinois, Oregon, Texas and Washington consumer protection claims and the motion to dismiss those claims is also GRANTED. The motion to dismiss is DENIED as to the consumer protection claims for Arkansas, Maine, Montana, New Hampshire, New Mexico and Vermont. The motion to dismiss the consumer protection claims for the District of Columbia, Idaho and Utah is GRANTED as to the dealer associations, but otherwise DENIED. The defendants did not move to dismiss the consumer protection claims for Alaska, California, Nebraska, Nevada, North Carolina and West Virginia. Therefore, consumer protection claims remain for fourteen states and the District of Columbia.

The motion to dismiss is GRANTED as to all restitution claims against the dealer associations. The motion to dismiss the restitution claims is DENIED as to the states where state antitrust or consumer protection claims remain, but otherwise GRANTED.

I. APPLICABLE STANDARDS

(A) Facts

In ruling on a 12(b)(6) motion, I "must accept as true the well-pleaded factual allegations of the complaint [and] draw all reasonable inferences therefrom in the plaintiff's favor." LaChapelle v. Berkshire Life Ins. Co., 142 F.3d 507, 508 (1st Cir.1998). A 12(b)(6) motion should be granted "only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Pena-Borrero v. Estremeda, 365 F.3d 7, 11 (1st Cir.2004). Certainly I would prefer to have seen factual allegations tied more directly to the new theories in the Second Amended Complaint; it would have made review of this 12(b)(6) motion much easier.² Nevertheless, if the plaintiffs satisfy the liberal pleading standards applicable to a 12(b)(6) motion, any factual inadequacies in their claims will be tested at trial or on summary judgment, not on a motion to dismiss.

(B) Law

In ruling on state law claims, I follow a decision of the highest state court "unless there are very persuasive grounds for believing that the state's highest court would no longer adhere to it." 19 Charles A. Wright, Arthur R. Miller and Edward H. Cooper, Federal Practice and Procedure § 4507, at 92 (1982); see also Johnson v. Fankell, 520 U.S. 911, 916, 117 S.Ct. 1800, 138 L.Ed.2d 108 (1997) ("Neither this Court nor any other federal tribunal has any authority to place a construction on a state statute different from the one rendered by the highest court of the State."). In the absence of a ruling by the state's highest court, I consider and may follow intermediate court rulings unless I am convinced that the state's highest court would decide otherwise. Hicks ex rel. Feiock v. Feiock, 485 U.S. 624, 630 n. 3, 108 S.Ct. 1423, 99 L.Ed.2d 721 (1988); 19 Wright, supra, § 4507, at 94-95. State trial court rulings provide guidance but are not controlling unless they are treated as precedents within the state itself. 19 Wright, supra, § 4507, at 96. State court dicta also provide "persuasive evidence of how the state court might decide the point." Id. at 97.

II. ANALYSIS

I deal with the claims that are new to the Second Amended Complaint in three categories: state antitrust claims, state consumer protection claims and restitution claims.

(A) State Antitrust Claims

The defendants urge me to dismiss eleven of the eighteen state antitrust claims primarily because of state bans on indirect purchaser lawsuits and what they say is the plaintiffs' failure to allege sufficient intrastate conduct.

District of Columbia, Michigan and Minnesota Antitrust Claims

For the District of Columbia, Michigan and Minnesota, the defendants move to dismiss on the ground that the plaintiffs "pleaded monopolization — a single actor offense — rather than a combination in restraint of trade." Defs.' Mot. at 6. The plaintiffs respond that an inadvertent typographical error caused this pleading mistake.³ Pls.' Opp'n to Defs.' Mot. to Dismiss Certain Claims in Pls.' Second Am. Compl. ("Pls.' Opp'n") at 2 n. 2 (Docket Item 135). The defendants do not pursue the issue in their Reply memorandum. I accept the plaintiffs' correction. I also note that the plaintiffs need not cite the correct statutory provision to state a claim for relief, because "[a] complaint sufficiently raises a claim even if it points to no legal theory or even if it points to the wrong legal theory as a basis for that claim, as long as relief is possible under any set of facts that could be established consistent with the allegations." Morales-Vallellanes v. Potter, 339 F.3d 9, 14 (1st Cir.2003) (citation omitted).

Louisiana Antitrust Claim

The defendants challenge the Louisiana antitrust claim on the basis that indirect purchasers cannot recover for antitrust injury in Louisiana. The parties do not cite, and I have not found, any Louisiana state court opinions on point. Accordingly, I follow the Fifth Circuit's holding in Free v. Abbott Laboratories, Inc., 176 F.3d 298, 299 (5th Cir.1999), that "Louisiana courts would follow the federal indirect purchaser rule." Accord FTC v. Mylan Labs., Inc., 99 F.Supp.2d 1, 6 (D.D.C.1999). The plaintiffs challenge this federal court interpretation of Louisiana law. They cite Louisiana Power & Light Co. v. United Gas Pipe Line Co., 493 So.2d 1149, 1154 (La.1986), for the proposition that "Louisiana's antitrust statute was `intended to be sweeping in its breadth.'"<sup>4</sup> Pls.' Opp'n at 3. In Louisiana Power, however, the Supreme Court of Louisiana was dealing with Louisiana Revised Statutes section 51:122, a sweeping provision that forbids "[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce in this state," La.Rev.Stat. § 51:122(A). Section 51:137, on the other hand, is Louisiana's antitrust remedy provision. It provides that "[a]ny person who is injured in his business or property by any person by reason of any act or thing forbidden by this Part may sue." Id. § 51:137. Although the term "any person" seems broad (as the plaintiffs contended at oral argument), the Fifth Circuit concluded in Free that the modifying language of this section limits recovery to "the extent of injury to `business or property' comprehended by the antitrust laws," a limitation that precludes recovery by indirect purchasers. 176 F.3d at 300 (citing Illinois Brick, 431 U.S. at 729, 97 S.Ct. 2061). I agree.⁵ I therefore GRANT the defendants' motion to dismiss the plaintiffs' Louisiana antitrust claim on the ground that the plaintiffs are indirect purchasers.

Mississippi Antitrust Claim

In support of their motion to dismiss the Mississippi antitrust claim, the defendants argue that the Mississippi antitrust statute is limited to intrastate conduct. To be...