In Re Microsoft Corp. Antitrust Litigation

401 F. Supp. 2d 461, 2005 U.S. Dist. LEXIS 26572, 2005 WL 2897191
CourtDistrict Court, D. Maryland
DecidedNovember 2, 2005
DocketMDL No. 1332, Civ. No. JFM-05-1608
StatusPublished
Cited by6 cases

This text of 401 F. Supp. 2d 461 (In Re Microsoft Corp. Antitrust Litigation) is published on Counsel Stack Legal Research, covering District Court, D. Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Microsoft Corp. Antitrust Litigation, 401 F. Supp. 2d 461, 2005 U.S. Dist. LEXIS 26572, 2005 WL 2897191 (D. Md. 2005).

Opinion

*462 MEMORANDUM

MOTZ, District Judge.

On February 18, 2005, Plaintiff Michael I. Mark filed this lawsuit in the Court of Common Pleas of Beaufort County, South Carolina on behalf of himself and a class of indirect purchasers of Microsoft Windows and Internet Explorer in South Carolina. The complaint alleges that Defendant Microsoft Corp. engaged in illegal restraints of trade and thereby was unjustly enriched at the expense of the class.

This case is one of many filed by private plaintiffs against Microsoft since Judge Jackson’s finding that the company engaged in anticompetitive behavior. See United States v. Microsoft Corp., 84 F.Supp.2d 9 (D.D.C.1999). Plaintiffs claim arises out of his purchase of an “Intel-based computer with a Windows 98 operating system.” Compl. ¶ 8. He claims that Microsoft’s wrongdoing caused class members to pay inflated prices for Microsoft’s software and that it “would be unjust *463 for Microsoft to be permitted to retain the profits gained from its unfair and deceptive practices.” Compl. ¶ 58-59. Plaintiff requests that Microsoft be disgorged of all money acquired through its “illegal and inequitable conduct.” Compl. ¶ 59.

Microsoft removed the case to the United States District Court for the District of South Carolina. The Judicial Panel on Multidistrict Litigation transferred the case to this court for consolidation with other federal and state law actions against Microsoft for anticompetitive behavior. Pending before this court is Microsoft’s motion to dismiss. For the reasons stated below, the motion will be granted.

I.

The United State Supreme Court has held that indirect purchasers cannot recover under federal antitrust laws. Illinois Brick Co. v. Illinois, 431 U.S. 720, 729, 97 S.Ct. 2061, 52 L.Ed.2d 707 (1977). The Court recognized that allowing suits by indirect purchasers would permit “potential plaintiffs at each level in the distribution chain ... to assert conflicting claims to a common fund — the amount of the alleged overcharge — by contending that the entire overcharge was absorbed at that particular level in the chain.” Id. at 737, 97 S.Ct. 2061. Indirect purchaser claims would “greatly complicate and reduce the effectiveness of already protracted treble-damages proceedings.” Id. at 732, 97 S.Ct. 2061. In addition to the difficulty of apportioning recovery among so many plaintiffs, such claims “would create a serious risk of multiple liability for defendants.” Id. at 730, 97 S.Ct. 2061.

South Carolina courts follow federal law in antitrust matters. See Drs. Steuer & Latham, P.A. v. Nat’l Med. Enters., 672 F.Supp. 1489, 1521 (D.S.C.1987) (“South Carolina has long adhered to a policy of following federal precedents in matters relating to state trade,regulation enforcement.”); In re Wiring Device Antitrust Litig., 498 F.Supp. 79, 87 (E.D.N.Y.1980) (noting “South Carolina policy that state antitrust laws be interpreted consistently with federal antitrust precedent”); S.C. Cotton Growers’ Co-op. Ass’n v. English, 135 S.C. 19, 133 S.E. 542, 543 (1926) (using federal precedent to construe South Carolina antitrust statute). More specifically, a court has found that South Carolina adopts the rule of Illinois Brick that indirect purchasers cannot recover under state antitrust laws. See In re Wiring Device, 498 F.Supp. at 88 (“Pursuant to South Carolina law, this court must, under Erie, follow the rule of Illinois Brick limiting recovery under the South Carolina antitrust statute to direct purchasers.”)

Plaintiff .argues- that the district court’s decision in In re Wiring Device that South Carolina adopts the rule of Illinois Brick is “non-binding ... dictum.” Pl.’s Opp’n at 6. While the decision may not be binding, this court has no reason to disagree with it. The district court cited numerous sources to show the “South Carolina policy that state antitrust laws be interpreted consistently with federal antitrust precedent” and correctly noted that “[failure to apply Illinois Brick in this action would create the same problems the Supreme Court sought to avoid when it rendered the. decision.” See In re Wiring Device, 498 F.Supp. at 87. Moreover, Plaintiff fails to cite a single decision, state or federal, contradicting the decision in In re Wiring Device or holding that indirect purchasers may in fact recover under South Carolina law. Instead, Plaintiff argues that the phrase “[a]ny person” in § 39-3-30 of the South Carolina antitrust statute can only reasonably be construed to include indirect purchasers. This assertion is contradicted by the fact that the identical phrase is used in the relevant *464 federal statute, which was held not to include indirect purchasers. See Illinois Brick, 431 U.S. at 724 n. 1, 97 S.Ct. 2061.

II.

A.

Plaintiff attempts to circumvent South Carolina’s rule that indirect purchasers may not recover under state antitrust laws by recasting his claim as a common law claim for “unjust enrichment.” Plaintiff makes reference to other states that adopt the rule of Illinois Brick but nonetheless permit such unjust enrichment claims under state statutes. See, e.g., Ciardi v. Hoffmann-LaRoche, Ltd., 436 Mass. 53, 762 N.E.2d 303, 308 (2002) (finding that indirect purchasers of vitamin products had standing to sue for anticompetitive conduct under Massachusetts consumer protection statutes even though they had no standing to bring such claims under' the Massachusetts Antitrust Act). Plaintiffs claim, however, does not arise under a South Carolina statute. It is a common-law claim for unjust enrichment. Thus, the specific bar on indirect purchaser recovery incorporated into South Carolina’s antitrust statutes prohibits Plaintiffs general common-law claim. See Nat’l Adver. Co. v. Mount Pleasant Bd. of Adjustment, 312 S.C. 397, 440 S.E.2d 875 (1994) (“Where conflicting provisions exist, the last in point of time or order of1 arrangement prevails.... Specific laws prevail over general laws:”); see also In re Microsoft Corp. Antitrust Litig., 241 F.Supp.2d 563, 565 (D.Md.2003) (holding that Kentucky’s statutory bar on indirect-purchaser recovery also prohibits common law unjust enrichment claims under Kentucky law); Berghausen v. Microsoft Corp., 765 N.E.2d 592, 596 n. 4 (Ind.App.2002) (finding no common law claim under Indiana law for indirect purchasers in view of statutory prohibition against indirect-purchaser recovery). Furthermore, to allow Plaintiffs claim on behalf of indirect purchasers would be to invite the same problems of multiple liability and duplica-tive recovery that the Supreme Court sought to avoid in Illinois Brick.

B.

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401 F. Supp. 2d 461, 2005 U.S. Dist. LEXIS 26572, 2005 WL 2897191, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-microsoft-corp-antitrust-litigation-mdd-2005.