Minuteman, LLC v. Microsoft Corp.

• Citation: 147 N.H. 634,795 A.2d 833
• Decision Date: 19 April 2002
• Docket Number: No. 2001–010.,2001–010.
• Court: Supreme Court of New Hampshire
• Parties: MINUTEMAN, LLC and another v. MICROSOFT CORPORATION.

147 N.H. 634

795 A.2d 833

MINUTEMAN, LLC and another

v.MICROSOFT CORPORATION.

No. 2001–010.

Supreme Court of New Hampshire.

Argued Feb. 7, 2002.

Decided April 19, 2002.

Wiggin & Nourie, P.A., of Manchester (Richard B. McNamara and Mary Ann Dempsey on the brief, and Mr. McNamara orally), for the plaintiffs.

McLane, Graf, Raulerson & Middleton, P.A., of Manchester (Bruce W. Felmly and Jennifer L. Parent on the brief, and Mr. Felmly orally), and Sullivan & Cromwell, of New York, New York (David B. Tulchin & a. on the brief), for the defendant.

DALIANIS, J.

The plaintiffs, Minuteman, LLC and Ronald H. Proulx, appeal an order of the Superior Court (Lynn , J.) dismissing their claim against the defendant, Microsoft Corporation, for allegedly violating New Hampshire's antitrust statute. RSA ch. 356 (1995). We affirm.

The relevant facts follow. Plaintiff Proulx purchased a ‘Millenia Max 65133’ personal computer from J & B Diversified Associates in Manchester. The ‘Windows 98’ operating system software was included with the purchase and was installed by the store. Plaintiff Minuteman, LLC owned a computer in which it had been using the ‘Windows 95’ operating system. It purchased the ‘Windows 98’ operating system on a CD-rom disk at Staples Office Supply store in Concord. As a precondition to using ‘Windows 98,’ the plaintiffs were required to enter into an ‘End User Licensing Agreement’ (EULA) that had been included by the defendant with the software.

The plaintiffs brought suit against the defendant for damages under the State's antitrust statute. They seek treble damages under RSA 356:11, alleging that the defendant violated RSA chapter 356 by willfully acquiring monopoly power in the computer operating systems market in New Hampshire, and that it has used that power to set inflated prices for its ‘Windows 98’ operating system. They allege that the defendant's actions caused them to incur damages by having to pay unfair and unconscionable prices for ‘Windows 98’ operating systems.

The defendant moved to dismiss the plaintiffs' action on the grounds that it failed to state a claim under RSA chapter 356. The defendant argued that the court should be guided by federal antitrust law and rule that the plaintiffs could not sue because they did not purchase the ‘Windows 98’ operating system directly from the defendant. The superior court, relying upon Illinois Brick Co. v. Illinois , 431 U.S. 720, 97 S.Ct. 2061, 52 L.Ed.2d 707 (1977), granted the defendant's motion. This appeal followed.

In reviewing a motion to dismiss on appeal, we ask whether "the plaintiff's allegations are reasonably susceptible of a construction that would permit recovery." LaRoche, Adm'r v. Doe , 134 N.H. 562, 564, 594 A.2d 1297 (1991). For the purposes of review, we accept as true the plaintiffs' allegations of fact, and if the allegations constitute a basis for legal relief, we must hold that it was improper to grant the motion to dismiss. Id . However, we need not accept allegations in the writ that are merely conclusions of law. Jay Edwards, Inc. v. Baker, 130 N.H. 41, 45, 534 A.2d 706 (1987).

The plaintiffs first argue that the plain language of RSA 356:11 reveals that the legislature intended for them to recover under the antitrust statute.

This court, of course, is the final arbiter of the legislature's intent as expressed in the words of the statute considered as a whole. We interpret legislative intent from the statute as written, and therefore, we will not consider what the legislature might have said or add words that the legislature did not include. Furthermore, we interpret statutes in the context of the overall statutory scheme and not in isolation.

Appeal of Brady, 145 N.H. 308, 310, 761 A.2d 1072 (2000) (quotations and brackets omitted).

RSA 356:11 (1995) provides:

I. Any person threatened with injury or damage to his business or property by reason of a violation of this chapter may institute an action or proceeding for injunctive relief when and under the same conditions and principles as injunctive relief is granted in other cases.

II. Any person injured in his business or property by reason of a violation of this chapter may recover the actual damages sustained, and as determined by the court, the costs of the suit and reasonable attorney's fees. If the trier of facts finds that the violation is willful or flagrant, they [sic ] may increase damages to an amount not in excess of 3 times the actual damages sustained.

The plaintiffs assert that the use of the phrase ‘any person’ evidences the legislature's intent to allow indirect purchasers to bring an antitrust claim. We have not had the opportunity to address the scope of this provision. RSA 356:14 provides, however, that ‘[i]n any action or prosecution under this chapter, the courts may be guided by interpretations of the United States' antitrust laws.’

While judicial review of our antitrust law is sparse, both we and the United States District Court for the District of New Hampshire have looked to federal law when construing RSA chapter 356. See Kenneth E. Curran, Inc. v. Auclair Transp., Inc., 128 N.H. 743, 748, 519 A.2d 280 (1986) ; Donovan v. Digital Equipment Corp., 883 F.Supp. 775, 785 (D.N.H.1994). By including RSA 356:14 in the statute, the legislature expressly encouraged a uniform construction with federal antitrust law. See U.S. Healthcare, Inc. v. Healthsource, Inc., 986 F.2d 589, 599 (1st Cir.1993). It has long been the practice of this court to examine the interpretation of federal legislation that is similar to our State's law. See, e.g., In re 1994 Chevrolet Cavalier, 142 N.H. 705, 709, 708 A.2d 397 (1998) ; Petition of Dunlap, 134 N.H. 533, 539, 604 A.2d 945 (1991). ‘[T]he use of language so closely paralleling that of [a] federal act suggests [to this court] a purpose to carry with it the interpretation given to the language of that Act.’ Wiseman v. State, 98 N.H. 393, 397, 101 A.2d 472 (1953).

The federal counterpart to RSA 356:11 is section 4 of the Clayton Act, 15 U.S.C. § 15(a) (1994). Like RSA 356:11, it provides that ‘any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor ... and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney's fee.’ Given the similarities between these two laws, we see no reason to ignore federal guidance in this area.

We, therefore, turn to the seminal case for our consideration, Illinois Brick . In Illinois Brick , the petitioners manufactured and distributed concrete blocks to masonry contractors, who then submitted bids to general contractors for the masonry portions of construction projects. Illinois Brick, 431 U.S. at 726, 97 S.Ct. 2061. The respondents, the State of Illinois and other local government entities, were purchasers of buildings that were constructed partially out of concrete blocks manufactured by the petitioners and sold directly to the masonry contractors, thereby making the respondents indirect purchasers. Id. The respondents brought an antitrust action under section 4 of the Clayton Act for treble damages, alleging that the petitioners ‘engaged in a combination and conspiracy to fix the prices of concrete block,’ and that the costs were passed on to them. Id. at 727, 97 S.Ct. 2061.

The Supreme Court, relying upon its prior decision in Hanover Shoe Inc. v. United Shoe Machinery Corp. , 392 U.S. 481, 88 S.Ct. 2224, 20 L.Ed.2d 1231 (1968), rejected the respondents' claim, holding that the direct purchaser, ‘and not others in the chain of manufacture or distribution, is the party injured in his business or property within the meaning’ of section 4 of the Clayton Act. Illinois Brick, 431 U.S. at 729, 97 S.Ct. 2061 (quotation omitted). In Hanover Shoe , the Court had held that a defendant was generally precluded from asserting as a defense to an antitrust action that the direct purchaser has passed on the overcharge to an indirect purchaser and, therefore, suffered no damages. See Hanover Shoe, 392 U.S. at 494, 88 S.Ct. 2224. Thus, the Court, in Hanover Shoe , held that ‘except in limited circumstances, a direct purchaser suing for treble damages under § 4 of the Clayton Act is injured within the meaning of § 4 by the full amount of the overcharge paid by it and that the antitrust defendant is not permitted to introduce evidence that indirect purchasers were in fact injured by the illegal overcharge.’ Illinois Brick, 431 U.S. at 724–25, 97 S.Ct. 2061.

In support of its decision in Illinois Brick , the Court stated:

Permitting the use of pass-on theories under § 4 essentially would transform treble-damages actions into massive efforts to apportion the recovery among all potential plaintiffs that could have absorbed part of the overcharge—from direct purchasers to middlemen to ultimate consumers. However appealing this attempt to allocate the overcharge might seem in theory, it would add whole new dimensions of complexity to treble-damages suits and seriously undermine their effectiveness.

Id. at 737, 97 S.Ct. 2061. Of further concern to the Court was that allowing plaintiffs to pursue antitrust claims based upon pass-on theories would create the danger of subjecting defendants to multiple liability and result in multiple recoveries. See id. at 730, 97 S.Ct. 2061; see also Kansas v. UtiliCorp United Inc., 497 U.S. 199, 212, 110 S.Ct. 2807, 111 L.Ed.2d 169 (1990) (Illinois Brick rule serves to eliminate multiple recoveries.).

Contrary to the plaintiffs' position, the Court's decision in Illinois Brick was not based upon the construction of the phrase ‘any person.’ Rather, as the trial court correctly explained:

[T]he distinction between direct and indirect purchasers does not inhere in the any person language the plaintiffs cite, but rather in the language threatened with injury or damage to his business or property. Simply put, because plaintiffs are indirect purchasers, they face no threat of

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