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October 20, 1981


The opinion of the court was delivered by: CONTI

This is an antitrust action arising out of the Bristol Bay, Alaska, salmon fishery. The plaintiffs are a class of fishermen who sell raw salmon to the defendants, a number of seafood processing companies. Each side alleges that the other committed a number of antitrust violations in furtherance of a conspiracy to fix the prices at which the raw salmon would be sold to the processors. Such price-fixing is, of course, a per se violation of section 1 of the Sherman Act, 15 U.S.C. § 1.

Some members of the plaintiff class *fn1" are fishermen who did not sell their fish exclusively to the defendants or to the defendants' alleged co-conspirators. Other plaintiffs did not deal with the defendants or alleged co-conspirators at all, *fn2" but sold fish only to other Bristol Bay processors. These fishermen are plaintiffs in the suit on the theory that the defendants are liable to them for having depressed fish prices throughout the market, thereby forcing the fishermen to sell their fish at unreasonably low prices to conspirators and nonconspirators alike.

 The matter is now before the court on the motion of the defendants to dismiss, for lack of standing, "those portions of the complaints not based on sales of salmon to alleged conspirators." Defendants' position is that even if a conspiracy were to be proved, they cannot be held liable for plaintiffs' sales of fish to processors who had no connection with the conspiracy. Plaintiffs' argument is that defendants are liable for the direct consequences of their conspiracy even though the defendants themselves might not have participated in, or profited from, some of the transactions in which the plaintiffs were injured.

 I-The Nature of the Motion.

 As a procedural matter, if the defendants were to prevail on this motion it would be proper to dismiss, for lack of standing to sue, those fishermen who sold no fish to conspirators. As to those fishermen who sold part of their catch to conspirators and part to non-conspirators, however, portions of their complaints would not be dismissed "for lack of standing," and the defendants are incorrect to style their motion in those terms. Standing is a concept which is applicable to parties, not to claims. Instead, the plaintiffs' claims, to the extent they exceed the scope of defendants' liability, would be dismissed for failure to state a claim upon which relief can be granted. Rule 12(b)(6), F.R.Civ.P. Although the following discussion is couched in terms of "standing" for purposes of convenience, the court will treat this motion as one under Rule 12(b)(6) to the extent that it involves claims rather than parties.

 II-Authority in Other Jurisdictions.

 The specific issue to be addressed, then, is whether conspirators who combine to fix prices and create a "price umbrella" affecting an entire market will be liable to plaintiffs who have dealt directly with non-conspirators, when the non-conspirators have altered their prices in response to the non-competitive situation created by the antitrust violations. *fn3" Neither the Supreme Court nor the Ninth Circuit has yet decided a case which presents that specific question, but other Federal Courts have done so. The result is that two conflicting rules have been propounded as to whether standing should be allowed in the instant situation.

 In Mid-West Paper Products Co. v. Continental Group, Inc., 596 F.2d 573 (3rd Cir. 1979), the United States Court of Appeals for the Third Circuit adopted a rule that denies standing to plaintiffs so situated. Using a multi-faceted analysis, a majority of that panel decided that standing should be limited to those who have dealt directly with conspirators. Among the reasons for the decision to deny standing were: the defendants had gained no benefit from the transactions in question, and there was the possibility of ruinous liability if the defendants were held responsible to a greater degree. The court also cited the tenuous connection between the acts of the defendants and the injury to the plaintiffs, and the difficulty of the economic inquiry in ascertaining the actual damage the plaintiffs had suffered.

 Other courts have followed the lead of Mid-West Paper and have adopted its reasoning and conclusions. E.g., In re Petroleum Products Antitrust Litigation, 497 F. Supp. 218 (C.D.Cal.1980), and In re Folding Carton Antitrust Litigation, 88 F.R.D. 211 (N.D.Ill.1980).

 In a well-reasoned dissent, Judge Higginbotham disagreed with the majority in Mid-West Paper and came to a contrary conclusion as to the desirability of permitting plaintiffs to sue under the given circumstances. The Fifth Circuit came to that same conclusion in In re Beef Industry Antitrust Litigation, 600 F.2d 1148 (5th Cir. 1979), cert. denied, 449 U.S. 905, 101 S. Ct. 280, 66 L. Ed. 2d 137, 101 S. Ct. 281 (1980), albeit without any attempt at an in-depth analysis.

 III-Illinois Brick.

 None of the foregoing decisions is binding upon this court. The reason that they merit attention here is that part of the dispute over the contradictory rules espoused in Mid-West Paper and In re Beef Industry is to what extent, if any, a denial of standing to plaintiffs who have dealt directly with non-conspirators is dictated by the United States Supreme Court's decision in Illinois Brick Co. v. Illinois, 431 U.S. 720, 97 S. Ct. 2061, 52 L. Ed. 2d 707 (1976). The three courts listed above which have denied standing have done so partly on the rationale that the inquiry in their cases was so similar to that in Illinois Brick that deference to the Supreme Court dictated their decision. And while there is indeed a superficial similarity in the two problems, it is this court's conclusion that the situation here and that presented in Illinois Brick are analytically distinct. Illinois Brick therefore provides no necessary indication as to the probable decision the Supreme Court would make were it to consider this particular issue.

 In Illinois Brick, the court considered whether an indirect purchaser could offensively use a "pass-on" theory of liability against a seller who had fixed prices. *fn4" The court refused to allow the indirect purchaser standing to sue, citing primarily the complexity involved in calculating damages when a product has passed through several levels of distribution where a number of independent pricing decisions have been made. The court also noted the risk of multiple liability to the defendant because both direct and indirect purchasers might sue and recover for the same violation. Finally, the court's decision was seen as creating a desirable symmetry with the rule in Hanover Shoe, Inc. v. United Shoe Machinery Corp., 392 U.S. 481, 88 S. Ct. 2224, 20 L. Ed. 2d 1231 (1968), where the court barred the defensive use of the "pass-on" theory and held that direct purchasers of overpriced products could recover for the full amount of the overcharge.

 None of those considerations is present in the instant situation. Since the sales by the fishermen to conspirators and non-conspirators were all direct, the computation of damages is no more complex for one than for the other. There are no levels of distribution to be dealt with; the measure is simply the difference between the price which would have obtained in the ...

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