IN RE PORK ANTITRUST LITIGATION
MEMORANDUM OPINION AND ORDER denying (433) Motion to Dismiss; granting in part and denying in part (436) Motion to Dismiss; denying (440) Motion to Dismiss; denying (442) Motion to Dismiss; granting (445) Motion to Dismiss; denying (448) Motion to Dismiss; denying (450) Motion to Dismiss; denying (453) Motion to Dismiss; denying (456) Motion to Dismiss; denying (458) Motion to Dismiss; denying (460) Motion to Dismiss in case 0:18-cv-01776-JRT-HB; denying (99) Motion to Dismis s; denying (102) Motion to Dismiss; denying (105) Motion to Dismiss; granting (108) Motion to Dismiss; denying (111) Motion to Dismiss; denying (114) Motion to Dismiss; denying (117) Motion to Dismiss; denying (120) Motion to Dismiss; denying (122) Motion to Dismiss; denying (125) Motion to Dismiss in case 0:19-cv-01578-JRT-HB; granting in part and denying in part (57) Motion to Dismiss; denying (60) Motion to Dismiss; denying (63) Motion to Dismiss; granting (66) Motion to Dismiss; denying (69) Motion to Dismiss; denying (75) Motion to Dismiss; denying (76) Motion to Dismiss; denying (79) Motion to Dismiss; denying (81) Motion to Dismiss; denying (84) Motion to Dismiss; granting in part and denying in part (105) Motion to Dismiss in case 0:19-cv-02723-JRT-HB (Written Opinion) Signed by Chief Judge John R. Tunheim on 10/16/2020. Associated Cases: 0:18-cv-01776-JRT-HB, 0:19-cv-01578-JRT-HB, 0:19-cv-02723-JRT-HB(HAZ)
CASE 0:18-cv-01776-JRT-HB Doc. 519 Filed 10/16/20 Page 1 of 87
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
IN RE PORK ANTITRUST LITIGATION
This Document Relates To:
Civil Nos. 18-1776, 19-1578, and
MEMORANDUM OPINION AND
Brian D. Clark and W. Joseph Bruckner, LOCKRIDGE GRINDAL NAUEN PLLP,
100 Washington Avenue South, Suite 2200, Minneapolis, Minnesota 55401;
Bobby Pouya, PEARSON SIMON & WARSHAW, LLP, 15165 Ventura
Boulevard, Suite 400, Sherman Oaks, California 91403, for the Direct
Daniel C. Hedlund, GUSTAFSON GLUEK PLLC, 120 South Sixth Street, Suite
2600, Minneapolis, Minnesota 55402; Shana Scarlett, HAGENS BERMAN
SOBOL SHAPIRO LLP, 715 Hearst Avenue, Suite 202, Berkeley, California
94710; Steve W. Berman, HAGENS BERMAN SOBOL SHAPIRO LLP, 1301 2nd
Avenue, Suite 2000, Seattle, Washington 98101, for the Consumer Indirect
Alec Blaine Finley, CUNEO GILBERT & LADUCA, LLP, 4725 Wisconsin Avenue
N.W., Suite 200, Washington, District of Columbia 20016; Shawn M. Raiter,
LARSON KING, LLP, 2800 Wells Fargo Place, 30 East Seventh Street, Saint
Paul, Minnesota 55101; for the Commercial Indirect Plaintiffs.
Christa C. Cottrell and Christina Henk Briesacher, KIRKLAND & ELLIS LLP, 300
North LaSalle Drive, Chicago, Illinois 60654, for Defendants Clemens Food
Group, LLC and The Clemens Family Corporation.
Richard A. Duncan, FAEGRE DRINKER BIDDLE & REATH LLP, 90 South
Seventh Street, Suite 2200, Minneapolis, Minnesota 55402, for Defendants
Hormel Foods Corporation and Hormel Foods, LLC.
Jaime Stilson, DORSEY & WHITNEY LLP, 50 South Sixth Street, Suite 1500,
Minneapolis, Minnesota 55402; Britt M. Miller, MAYER BROWN LLP, 71
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South Wacker Drive, Chicago, Illinois 60606, for Defendant Indiana Packers
Donald G. Heeman, SPENCER FANE LLP, 100 South Fifth Street, Suite 2500,
Minneapolis, Minnesota 55402; Sami H. Rashid, QUINN EMANUEL
URQUHART & SULLIVAN LLP, 51 Madison Avenue, New York, New York
10010; Stephen R. Neuwirth, QUINN EMANUEL URQUHART & SULLIVAN,
LLP, 123 Overlook Road, New Rochelle, New York, 10804, for Defendant JBS
USA Food Company.
William L. Greene and Peter J. Schwingler, STINSON LLP, 50 South Sixth
Street, Suite 2600, Minneapolis, Minnesota 55402, for Defendants
Seaboard Foods LLC and Seaboard Corporation.
Brian Edward Robison, GIBSON, DUNN & CRUTCHER, LLP, 2100 McKinney
Avenue, Suite 1100, Dallas, Texas 75201; Richard G. Parker, GIBSON, DUNN
& CRUTCHER, LLP, 1050 Connecticut Avenue, N.W. Washington, District of
Columbia 20036, for Defendant Smithfield Foods, Inc.
Vollis Gene Summerlin Jr., HUSCH BLACKWELL LLP, 13330 California Street,
Suite 200, Omaha, Nebraska 68154, for Defendant Triumph Foods, LLC.
Tiffany Rider Rohrbaugh, AXINN, VELTROP & HARKRIDER LLP, 950 F Street
N.W., Washington, District of Columbia 20004, for Defendants Tyson Foods,
Inc., Tyson Prepared Foods, Inc., and Tyson Fresh Meats, Inc.
William Leitzsey Monts III and Justin Bernick, HOGAN LOVELLS US LLP, 555
Thirteenth Street N.W., Washington, District of Columbia 20004, for
Defendant Agri Stats, Inc.
Three putative classes of Plaintiffs allege that Defendants, among America’s largest
pork producers and integrators, conspired to limit the supply of pork and thereby fix
prices in violation of federal and state antitrust laws. Defendants move to dismiss the
claims against them. Because Plaintiffs’ amended complaints adequately plead parallel
conduct, and because Plaintiffs adequately plead a continuing violation such that the
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claims are not time barred, the Court will deny Defendants’ joint Motion to Dismiss.
However, because Plaintiffs fail to adequately plead participation in the parallel conduct
by Defendant Indiana Packers, the Court will grant Indiana Packers’ individual Motion to
Dismiss. In a related case brought by two individual businesses, the Court will deny
Defendants’ joint Motion to Dismiss and will grant Indiana Packers’ individual Motion to
Dismiss, for the same reasons.
Additionally, the Court will dismiss the following state-law claims brought by the
Indirect Plaintiff class: (1) the state antitrust claims arising before Rhode Island enacted
its Illinois Brick repealer and the claims from Mississippi; (2) the consumer-protection
claims from Massachusetts, Michigan, Minnesota, New Hampshire, New York, South
Dakota, Utah and Virginia; and (3) the unjust enrichment claims from Arizona, Florida,
North Dakota, and Utah.
Finally, the Court has determined that the Commonwealth of Puerto Rico has a
statutory grant of parens patriae standing. However, the Court concludes that the
Commonwealth has failed to adequately plead a claim for conspiracy to monopolize and
will therefore grant Defendants’ Motion to Dismiss the Commonwealth’s claim under P.R.
Laws Ann. tit. 10 § 260.
This case represents the consolidation of thirteen separately filed putative class
actions. There are three categories of class-action Plaintiffs who purchased, either
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directly or indirectly, pork products from one of the Defendants 1: Direct Purchaser
Plaintiffs (“DPPs”), Indirect Purchaser Plaintiffs (“IPPs”), and Commercial and Institutional
Indirect Purchaser Plaintiffs (“CIPs”). All three allege that Defendants engaged in a pricefixing conspiracy to artificially constrict the supply of pork products in the domestic
market of the United States, a per se violation of § 1 of the Sherman Act, 15. U.S.C. § 1.
DPPs bring a claim for treble damages under § 4 of the Clayton Act, 15 U.S.C.
§ 15(a); IPPs and CIPs (together, the “Indirect Plaintiffs”) bring a claim for injunctive relief
under § 16 of the Clayton Act, 15 U.S.C. § 26. 2 Indirect Plaintiffs also bring claims for
Agri Stats, Inc. (“Agri Stats”); Clemens Food Group, LLC and The Clemens Family
Corporation (together and separately, “Clemens”); Hormel Foods Corporation and
Hormel Foods, LLC (together and separately, “Hormel”); Indiana Packers Corporation
(“Indiana Packers”); JBS USA Food Company (“JBS”); Seaboard Foods LLC and Seaboard
Corporation (together and separately, “Seaboard”); Smithfield Foods, Inc. (“Smithfield”);
Triumph Foods, LLC (“Triumph”); and Tyson Foods, Inc., Tyson Fresh Meats, Inc. and Tyson
Prepared Foods, Inc. (together and separately, “Tyson”).
Concluding that allowing otherwise “would transform treble-damages actions into
massive efforts to apportion the recovery among all potential plaintiffs that could have
absorbed part of the overcharge,” the Supreme Court has held that only direct purchasers
may sue for damages in Sherman Act price-fixing cases. Ill. Brick Co. v. Illinois, 431 U.S.
720, 737 (1977). However, “the [Illinois Brick] direct-purchaser doctrine does not
foreclose equitable relief.” U.S. Gypsum Co. v. Ind. Gas Co., 350 F.3d 623, 627 (7th Cir.
CASE 0:18-cv-01776-JRT-HB Doc. 519 Filed 10/16/20 Page 5 of 87
damages under (1) the antitrust laws of 27 jurisdictions; 3 (2) the consumer-protection
laws of 24 jurisdictions; 4 and (3) the unjust-enrichment law of 32 jurisdictions. 5
The Court first considered a joint Motion to Dismiss brought by Defendants against
the three class complaints last year. After concluding that “Plaintiffs ha[d] not adequately
pleaded parallel conduct, an essential element in showing that Defendants engaged in an
agreement to limit the supply of pork,” the Court granted the joint Motion without
prejudice and gave Plaintiffs 90 days to refile their amended complaints. In re Pork
Antitrust Cases, No. 18-1776, 2019 WL 3752497, at *9, 10 (D. Minn. Aug. 8, 2019).
Plaintiffs timely refiled their amended complaints, 6 and Defendants now bring two joint
Arizona, California, the District of Columbia, Illinois, Iowa, Kansas, Maine, Michigan,
Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Mexico, New
York, North Carolina, North Dakota, Oregon, Rhode Island, South Dakota, Tennessee,
Utah, Vermont, Virginia, West Virginia, and Wisconsin.
Arkansas, California, the District of Columbia, Florida, Hawaii, Illinois, Massachusetts,
Michigan, Minnesota, Nebraska, Nevada, New Hampshire, New Mexico, New York, North
Carolina, North Dakota, Rhode Island, South Carolina, South Dakota, Utah, Vermont,
Virginia, West Virginia, and Wisconsin
Arizona, Arkansas, California, the District of Columbia, Florida, Hawaii, Iowa, Kansas,
Maine, Massachusetts, Maine, Michigan, Minnesota, Mississippi, Missouri, Nebraska,
Nevada, New Hampshire, New Mexico, New York, North Carolina, North Dakota, Oregon,
Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia, West
Virginia, and Wisconsin.
The DPP amended complaint can be found at Docket No. 431 (“DPP Compl.”); the CIP
amended complaint can be found at Docket No. 432 (“CIP Compl.”); and the IPP amended
complaint (“IPP Compl.”) can be found at Docket No. 392. Due to the nearly identical
allegations in the three complaints, the Court will generally discuss them interchangeably
unless it is necessary to do otherwise. Because of the length of and significant details
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12(b)(6) motions—one for the federal claims in all three complaints and one for the statelaw claim in Indirect Plaintiffs’ Amended Complaints—as well as individual-defendant
Motions to Dismiss.
Two related cases have been also been subsequently combined with this action:
Winn-Dixie Stores, Inc. et al. v. Agri Stats, Inc. et al. (“Winn-Dixie”), Civil No. 19-1578, and
Puerto Rico v. Agri Stats, Inc. et al, Civil No. 19-2723 (“Puerto Rico”). The former is brought
by two direct-purchaser grocery chains, Winn-Dixie and Bi-Lo; the latter is brought by the
Commonwealth of Puerto Rico on behalf of itself and as parens patriae on behalf of the
people of Puerto Rico. 7
The Alleged Conspiracy
Together, the Defendants control over 80 percent of the wholesale pork
integration market. (DPP Compl. ¶ 1.) Plaintiffs allege that, from at least 2009 and
continuing to the present day, Defendants began to conspire to “fix, raise, maintain, and
stabilize the price of pork.” (Id. ¶ 2.) Plaintiffs allege that this was accomplished
within the Complaints, the Court will provide a general background here and discuss
relevant facts in each analysis section.
The amended complaint in Winn-Dixie can be found at 19-cv-1578, Docket No. 94; the
amended complaint in Puerto Rico can be found at 19-cv-2723, Docket No. 103. The
Winn-Dixie complaint is nearly identical to the DPP class-action complaint; the Puerto Rico
complaint is substantially similar to the three class-action complaints. The Court will
generally discuss them all interchangeably unless it is necessary to do otherwise.
CASE 0:18-cv-01776-JRT-HB Doc. 519 Filed 10/16/20 Page 7 of 87
principally “by coordinating output and limiting production with the intent and expected
result of increasing pork prices in the United States.” (Id.)
Defendants were able to carry out this conspiracy in two ways. First, “Defendants
exchanged detailed, competitively sensitive, and closely guarded non-public information
about prices, capacity, sales volume, and demand through their co-conspirator,
Defendant Agri Stats.” (Id.) Agri Stats is a company that each of the Defendants worked
with; it gathered detailed financial information from the Defendants, which it then
standardized and made accessible to each Defendant. (Id. ¶ 3.) “Agri Stats collected the
pork integrators’ competitively sensitive supply and pricing data and intentionally shared
that information through detailed reports it provided to the pork integrators.” (Id.)
Through the “benchmarking” reports generated by Agri Stats, Defendants were able to
decipher which data belonged to which Defendant, thereby allowing them to monitor one
another’s pork production “and hence control supply and price[.]” (Id.) The Agri Stats
information was not publicly available. (Id. ¶ 4.)
Second, Plaintiffs allege that Defendants were able to carry out the conspiracy
through public statements, aimed at one another, regarding the need to cut production.
(Id. ¶ 5.) These statements served a signaling purpose and emphasized to one another
that solidarity existed.
Defendants then furthered the conspiracy by taking
individual action to cut supply or limit supply increases that would have otherwise
occurred in an unmanipulated market. (Id.)
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Defendants’ conspiracy was successful, and as production either declined or
increased at a smaller rate than expected, pork prices increased. (Id. ¶ 7.) As a result,
Plaintiffs allege that they paid artificially inflated prices. (Id.)
STANDARD OF REVIEW
When reviewing a motion to dismiss brought under Rule 12(b)(6), the Court
considers all facts alleged in the complaint as true to determine if the complaint states a
claim for “relief that is plausible on its face.” Braden v. Wal-Mart Stores, Inc., 588 F.3d
585, 594 (8th Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). “A claim has
facial plausibility when the plaintiff pleads factual content that allows the court to draw
the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal,
556 U.S. at 678. Although the Court accepts the complaint’s factual allegations as true, it
is “not bound to accept as true a legal conclusion couched as a factual allegation.” Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
Courts differ on how this generally permissive standard applies when reviewing
antitrust claims. The Supreme Court has explicitly noted that “in antitrust cases, where
the proof is largely in the hands of the alleged conspirators, dismissals prior to giving the
plaintiff ample opportunity for discovery should be granted very sparingly.” Hosp. Bldg.
Co. v. Trs. of Rex Hosp., 425 U.S. 738, 746 (1976) (cleaned up); accord Double D Spotting
Serv., Inc. v. Supervalu, Inc., 136 F.3d 554, 560 (8th Cir. 1998) (noting that “courts are
CASE 0:18-cv-01776-JRT-HB Doc. 519 Filed 10/16/20 Page 9 of 87
hesitant to dismiss antitrust actions before the parties have had an opportunity for
discovery, because the proof of illegal conduct lies largely in the hands of the alleged
antitrust conspirators”). However, the Supreme Court appeared to implicitly move away
from that standard in Twombly, which was itself a Sherman Act case. The Eighth Circuit
has also recently taken a jaundiced view of the “very-sparingly” standard articulated in
Hospital Building Co.:
Given the unusually high cost of discovery in antitrust cases,
the limited success of judicial supervision in checking
discovery abuse, and the threat that discovery expense will
push cost-conscious defendants to settle even anemic cases[,]
the federal courts have been reasonably aggressive in
weeding out meritless antitrust claims at the pleading stage.
Insulate SB, Inc. v. Advanced Finishing Sys., Inc., 797 F.3d 538, 543 (8th Cir. 2015) (cleaned
THE SHERMAN ACT
Section 1 of the Sherman Act provides that “[e]very contract, combination in the
form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the
several States, or with foreign nations, is declared to be illegal.” 15 U.S.C. § 1. To establish
a claim under § 1 “a plaintiff must demonstrate ‘(1) that there was a contract,
combination, or conspiracy; (2) that the agreement unreasonably restrained trade under
either a per se rule of illegality or a rule of reason analysis; and (3) that the restraint
affected interstate commerce.’” Insignia Sys., Inc. v. News Am. Mktg. In-Store, Inc., 661 F.
Supp. 2d 1039, 1062 (D. Minn. 2009) (quoting Minn. Ass’n of Nurse Anesthetists v. Unity
CASE 0:18-cv-01776-JRT-HB Doc. 519 Filed 10/16/20 Page 10 of 87
Hosp., 5 F. Supp. 2d 694, 703 (D. Minn. 1998)). Because § 1 “does not prohibit all
unreasonable restraints of trade . . . but only restraints effected by a contract,
combination, or conspiracy, the crucial question is whether the challenged
anticompetitive conduct stems from independent decisions or from an agreement, tacit
or express.” Twombly, 550 U.S. at 553 (cleaned up).
“Certain agreements, such as horizontal price fixing . . . are thought so inherently
anticompetitive that each is illegal per se without inquiry into the harm it has actually
caused.” Copperweld Corp. v. Indep. Tube Corp., 467 U.S. 752, 768 (1984). Thus, where—
as here—plaintiffs allege horizontal price fixing or agreements between competing
retailers to limit output in order to increase price, the only allegation that must be made
at the motion-to-dismiss stage is that defendants acted collectively or with concerted
“[T]o satisfy the concerted action requirement, the plaintiff must demonstrate that
the defendants shared a unity of purpose or a common design and understanding, or a
meeting of the minds.” Insulate, 797 F.3d at 543 (quoting Impro Prods., Inc. v. Herrick,
715 F.2d 1267, 1273 (8th Cir. 1983)). This may be demonstrated through the presentation
of circumstantial evidence, including through a showing of parallel conduct among
defendants that demonstrates that their similar behavior “would probably not result from
chance, coincidence, independent
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interdependence unaided by an advance understanding among the parties.” Twombly,
550 U.S at 557, n.4 (cleaned up).
The Eighth Circuit has adopted a rule that, in addition to parallel conduct, to survive
a motion to dismiss, antitrust plaintiffs must also plead “factual enhancement,” often
referred to as “plus factors.” See, e.g., Blomkest Fertilizer, Inc. v. Potash Corp. of Sask.,
203 F.3d 1028, 1033 (8th Cir. 2000) (en banc) (“An agreement is properly inferred from
conscious parallelism only when certain ‘plus factors’ exist.”). These plus factors might
include (1) a shared motive to conspire; (2) action against self-interest; (3) market
concentration; and (4) a substantial amount of interfirm communication in conjunction
with the parallel conduct. See, e.g., In re Musical Instruments & Equip. Antitrust Litig.,
798 F.3d 1186, 1194–95 (9th Cir. 2015).
Thus, in order to survive a defendant’s 12(b)(6) motion, plaintiffs alleging a pricefixing conspiracy must plausibly allege both parallel conduct and at least one plus factor.
Because the Court dismissed the Complaints on the ground that Plaintiffs had not
adequately pleaded parallel conduct, the critical question is whether the Amended
Complaints sufficiently allege “how any of the individual Defendants acted” so that the
Court can “analyze which, how many, or when any of the individual Defendants may have
affirmatively acted to reduce the supply of pork.” In re Pork, 2019 WL 3752497, at *8.
CASE 0:18-cv-01776-JRT-HB Doc. 519 Filed 10/16/20 Page 12 of 87
The DPP Complaint contains new, specific allegations related to each Defendant at
Plaintiffs allege that Smithfield first indicated that it was “reducing the number of
pigs that come off sow farms” in 2008. (DPP Compl. ¶ 124.) In 2009, Smithfield
announced that it had reduced the size of its domestic supply by “two million market hogs
annually” and that it was immediately further reducing its herd by 3%. (Id.) Smithfield
followed this with a 5% reduction in 2010, and a further (unspecified) downsize in 2011.
(Id.) Although Plaintiffs allege that Smithfield also increased the share of its production
directed to exports, they fail to provide specifics beyond the opening of a plant in China
in 2015. (Id. ¶ 125.)
Tyson cut its sows by over 25% between 2008 and 2009. (Id. ¶ 126.) Plaintiffs also
allege that in 2010 and 2013 Tyson reported decreased sales volume of 3.3% and 3.6%,
combined with unspecified decreases in its “capacity utilization rate.” (Id.)
Between 2009 and 2011, JBS increased its pork export volume from 15% to 20% of
its total production. (Id. ¶ 127.) In 2015, JBS acquired Cargill’s pork business, combining
the third- and fourth-largest pork producers into the second-largest producer. (Id. ¶¶ 85–
86.) In 2016, Plaintiffs allege that JBS undertook an unspecified reduction in the number
of sows it produced “despite increased consumer demand.” (Id. ¶ 127.) JBS subsequently
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reported that “pork prices were 18% higher year on year at the end of 2016, on the back
of increased demand and output restrictions.” (Id.)
Plaintiffs allege that “Hormel’s production statistics show that it cut its number of
sows in 2008,” though they do not provide specifics, and that Hormel “maintained such
reduced production throughout the class period.” (Id. ¶ 128.) They also allege that
Hormel reported unspecified “tonnage reductions for its pork operations in its 2009
Annual Report.” (Id.) The only specific reduction alleged is that “Hormel reduced its
capacity at its Los Angeles plant by 500 head per day” in 2014. (Id.)
The DPP Complaint contains no specific allegations of reduced production against
Seaboard, only that it “reduced supply in 2013.” (Id. ¶ 129.) Seaboard increased its
export sales in 2010 and 2011 by “23%[,] to an all-time record . . . .” (Id. ¶ 129 n.49.)
A farm member of Triumph announced it was reducing its herd by 11,000 sows in
September 2008. (Id. ¶ 130.) In 2009, Triumph further reduced its herd by 6% (24,500
sows). (Id.) Plaintiffs allege that “Triumph focused its production on exports” but do not
provide specifics. (Id.)
A Clemens subsidiary reported a decrease in production of 1000 sows in 2011. (Id.
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8. Indiana Packers
Plaintiffs allege that Indiana Packers “indicated that it expected to reduce”
production in 2012 but provide no specifics. (Id. ¶ 132.)
The most specific allegations of herd-size reductions are against Smithfield, Tyson,
Those reductions all took place in 2008 and 2009, with Smithfield
continuing alone in 2010. There are smaller specific allegations of a herd reduction in
2011 (1000 sows, by a Clemens subsidiary) and production decreases in 2014 (500 head
per day, by Hormel at its plant in Los Angeles). There are direct allegations of herd
reduction—without specifics—against Hormel (2008/2009), Smithfield (2010), Seaboard
(2013), and JBS (2016); there are unspecific allegations of decreased capacity utilization
against Tyson in 2010 and 2013. There are specific allegations of increased exports
against JBS (5% increase, 2009–2011) and Seaboard (23% increase, 2009–2011); there are
unspecified allegations of export increases against Smithfield and Triumph. There are no
specific allegations against Indiana Packers.
The Court concludes that these allegations, when viewed as a whole, are sufficient
to plausibly plead parallel conduct against all Defendants, except Indiana Packers. The
new allegations give individualized content to what the original pleading showed: after
nearly a decade of sustained growth, pork supply decreased. The initial decrease comes
from three specific sources—sizeable reductions by Smithfield, Tyson, and Triumph, the
first, second, and sixth largest producers. (See DPP Compl. ¶¶ 85–86, 88, fig.4.) This
comports with the industry picture as a whole.
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Figure 7: U.S. Annual Commercial Hog Production by Weight, 2000–2017 8
In the same way, the specific allegations of increased exports between 2009–2011 fit the
industry as a whole.
Figure 8: U.S. Pork Exports as a Percent of Total Production, 2000–2017 9
These two patterns, plausibly caused by the alleged actions of the Defendants, then
allowed for a massively atypical jump in the price of pork.
DPP Compl. ¶ 120, fig. 7.
DPP Compl. ¶ 122, fig. 8.
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Figure 9: Average Hog Wholesale Prices in Cents per lb., 2000–2018 10
Given the inherent difficulty of obtaining solid information of an antitrust conspiracy—
especially one involving sophisticated commercial entities—the evidence that Plaintiffs
have marshalled is sufficient to survive the relatively low bar of the pleading stage. 11
The Plaintiffs have alleged parallel conduct among the Defendants sufficient to
survive a motion to dismiss. 12
DPP Compl. ¶ 165, fig. 9.
Indeed, even the individual-defendant allegations that lack numerical specificity are
enough to overcome a 12(b)(6) motion; “Plaintiffs ‘need not provide specific facts in
support of their allegations.’ Rather, they need only provide ‘sufficient factual
information to provide the “grounds” on which the claim rests[.]” In re Pre-Filled Propane
Tank Antitrust Litig. (“Propane I”), 860 F.3d 1059, 1070 (8th Cir. 2017) (en banc) (quoting
Schaaf v. Residential Funding Corp., 517 F.3d 544, 549 (8th Cir. 2008)).
Defendants argue that the alleged reductions in supply are not “proximate in time and
value,” a standard quoted in a see-also parenthetical of the Court’s August Order. In re
Pork, 2019 WL 3752497, at *8 (quoting In re Generic Pharm Pricing Antitrust Litig.,
388 F. Supp. 3d 404, 441 (E.D. Pa. 2018)). However, the Supreme Court noted more than
80 years ago that “simultaneous action is not a requirement to demonstrate parallel
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Statute of Limitations
Defendants next argue that the complaints are barred by the statute of limitations.
Because the statute of limitations is “typically an affirmative defense” and a defendant
“does not render a complaint defective by pleading an affirmative defense,” an argument
by a defendant that a claim is time barred “is not ordinarily a ground for Rule 12(b)(6)
dismissal unless the complaint itself establishes the defense.” Jessie v. Potter, 516 F.3d
709, 713 n.2 (8th Cir. 2008).
Section 4b of the Clayton Act states that any claim for damages under § 4 “shall be
forever barred unless commenced within four years after the cause of action accrued.” 13
conduct.” In re Broiler Chicken, 290 F. Supp. 3d 772, 791 (N.D. Ill. 2017) (citing Interstate
Circuit v. United States, 306 U.S. 208, 227 (1939).
Although the Eighth Circuit affirmed the dismissal of a Sherman Act claim for failure to
plead parallel conduct where defendants’ actions were separated by six months, the
termination of the plaintiff from the pharmacy benefit networks of CVS and Express
Scripts was also the “only allegation that hints at parallel conduct” in that case and the
panel specifically noted that it was not establishing a bright-line rule. Park Irmat Drug
Corp. v. Express Scripts Holding Co., 911 F.3d 505, 514–16 (8th Cir. 2018). This case, where
Plaintiffs allege that Defendants took several specific actions under very similar
circumstances, is distinguishable.
Claims for injunctive relief under § 16 of the Clayton Act are not subject to the fouryear time bar under § 4b. See 15 U.S.C. § 15b (stating that the statute of limitations
applies only to “any cause of action under section 15, 15a, or 15c of this title” and not to
15 U.S.C. § 26); see also Midwestern Machinery Co., Inc. v. Northwest Airlines, Inc., 392
F.3d 265, 276–77 (8th Cir. 2004) (analyzing a Clayton Act damages claim under the fouryear time bar and a Clayton Act injunctive-relief claim under the equitable doctrine of
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15 U.S.C. § 15b. The cause of action accrues from “the date on which the wrongdoer
commits an act that injures the business of another.” Varner v. Peterson Farms, 371 F.3d
1011, 1019 (8th Cir. 2004).
Regarding the § 4 treble-damages claims brought by the DPPs, both sides
acknowledge that because the DPP Complaint alleges that the antitrust conspiracy started
in at least 2009, the statute of limitations has run unless exceptions apply. DPPs argue
that two exceptions apply: they have alleged a continuing violation, or, in the alternative,
the statute of limitations should be equitably tolled due to the Defendants’ fraudulent
concealment of the conspiracy.
1. Fraudulent Concealment
To invoke fraudulent concealment, Plaintiffs must allege facts showing: “(1)
Defendants’ concealment of Plaintiffs’ cause of action, (2) failure by Plaintiffs to discover
the existence of their cause of action, and (3) due diligence by Plaintiffs in attempting to
discover the claim.” In re Milk Prod. Antitrust Litig., 84 F. Supp. 2d 1016, 1022 (D. Minn.
1997), aff'd, 195 F.3d 430 (8th Cir. 1999). To adequately allege fraudulent concealment,
Plaintiffs must meet Rule 9(b)’s heightened pleading standard, such that Plaintiffs must
plead “the who, what, when, where, and how.” Summerhill v. Terminix, Inc., 637 F.3d
Defendants do not argue that laches should bar Plaintiffs’ Clayton Act claims for injunctive
relief. Therefore, Plaintiffs’ claims for injunctive relief under 15 U.S.C. § 26 survives,
regardless of whether their damage claims under 15 U.S.C. § 15 are time barred
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877, 880 (8th Cir. 2011); In re Milk, 84 F. Supp. 2d at 1022 (discussing the application of
a. Defendant’s concealment of Plaintiffs’ cause of action
Plaintiffs argue that they have adequately pleaded the first element of fraudulent
concealment because (1) the conspiracy was “self-concealing” and (2) even if not selfconcealing, they have otherwise pleaded the concealment.
The self-concealing doctrine essentially posits that a conspiracy may itself suffice
to show fraudulent concealment where the conspiracy would not have been effective if
it had been disclosed. Thus, the fact that the conspiracy was carried out at all may prove
fraudulent concealment for tolling purposes. In re Monosodium Glutamate Antitrust
Litig., No. CIV. 00MDL1328PAM, 2003 WL 297287, at *2 (D. Minn. Feb. 6, 2003)
(explaining that the self-concealing doctrine “allows a plaintiff to proceed with a
fraudulent concealment claim merely on proof of a self-concealing antitrust violation.”)
The Eighth Circuit has not decided whether the self-concealing doctrine applies in
cases such as this, but the Court concludes that it does not. Nearly every circuit to
consider the question has held that, for tolling purposes, defendants must have in some
way acted to conceal their conspiracy. See, e.g., In re Scrap Metal Antitrust Litig., 527 F.3d
517, 538 (6th Cir. 2008); see also In re Fasteners Antitrust Litig., Civil No. 08-md-1912,
2011 WL 3563989, at *3 (E.D. Pa. Aug. 12, 2011) (collecting cases and noting only the
Second Circuit has adopted the self-concealing doctrine). To hold that fraudulent
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concealment can be met by claiming a conspiracy is self-concealing would mean allowing
fraudulent concealment to apply to nearly every conspiracy. Likewise, even if the Court
were to accept the self-concealing doctrine, it seems illogical to apply it to a case like this,
where the Plaintiffs made public statements an essential part of their conspiracy
Of course, the Plaintiffs also argue that Defendants did indeed take affirmative
actions to fraudulently conceal their antitrust violations. In the complaints, Plaintiffs
claim broadly that Defendants were able to conceal the conspiracy using:
[V]arious means and methods, including but not limited to
secret meetings, surreptitious communications between
Defendants by the use of the telephone or in-person meetings
in order to prevent the existence of written records, limiting
any explicit reference to competitor pricing or supply restraint
competitively sensitive data to one another through Agri
Stats—a “proprietary, privileged, and confidential” system
that kept both the content and participants in the system
secret, and concealing the existence and nature of their
competitor supply restraint and price discussions from nonconspirators.
(DPP Compl. ¶ 182).
To buttress these vague allegations, Plaintiffs argue that (1) Agri Stats has
described itself as a quiet company that does not advertise what it does; and (2) some
defendants gave pretextual (non-conspiracy) reasons to explain why production was
slowing. In further support, Plaintiffs cite a few out-of-circuit cases which state something
like “[a]ttributing the anti-competitive effects of a conspiracy to some cause other than
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the collusive conduct can be an affirmative act of fraudulent concealment.” In re
Animation Workers Antitrust Litig., 123 F. Supp. 3d 1175, 1200 (N.D. Cal. 2015).
None of the alleged acts of concealment meet Rule 9(b)’s heightened pleading
standard. Plaintiffs do not provide any information regarding the “who, what, when,
where, and how” that could lead the Court to plausibly assume that the Defendants
engaged in a fraudulent concealment campaign. Further, the heart of the complaint is
that this conspiracy was agreed to and conducted in part via public statements between
the Defendants. It is difficult to reconcile the Plaintiffs belief that Defendants conducted
this conspiracy via public statements with its assertion that Defendants were also
concealing it. Therefore, the Court concludes that Plaintiffs have failed to adequately
allege Defendants’ concealment of Plaintiffs’ cause of action.
b. Failure by Plaintiffs to discover the existence of their cause of action
Plaintiffs adequately allege that they failed to discover the antitrust violations until
2017. (DPP Compl. ¶¶ 187–90.)
c. Due diligence by Plaintiffs in attempting to discover their claim
The parties dispute when Plaintiffs’ duty to conduct due diligence first arose. 14
Defendants argue that the Plaintiffs were on inquiry notice as early as the start of the
Indeed, the Court has previously noted that plaintiffs might not be required to plead
due diligence at all, given that it is an affirmative defense. TCF Nat. Bank v. Mkt.
Intelligence, Inc., Civ. No. 11-2717 JRT/AJB, 2013 WL 53837, at *3 (D. Minn. Jan. 3, 2013)
(explaining that there is a circuit split on this issue and that the Eighth Circuit has not yet
taken a position).
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conspiracy because the public statements, the increased price for pork, and the slowing
production were public knowledge. Plaintiffs argue that they were not on inquiry notice
until 2017, when an article on the role of Agri Stats in the broiler-chicken industry
appeared in Bloomberg News and a lawsuit was filed —In re Broiler Chicken Antitrust
Litigation, 290 F. Supp. 3d 772 (N.D. Ill. 2017)—alleging anticompetitive behavior in that
industry, which the plaintiffs alleged was facilitated by Agri Stats’ information sharing.
(See DPP Compl. ¶¶ 66, 188–89.) Only then would the reasonable person have had notice
by which to investigate.
When due diligence is to be exercised inherently contains a reasonableness
standard. See Great Rivers Coop. of Se. Iowa v. Farmland Indus., Inc., 120 F.3d 893, 897
(8th Cir. 1997) (“A victim must be aware of some suspicious circumstances, some ‘storm
warnings,’ to trigger the duty to investigate.” (quoting Davidson v. Wilson, 973 F.2d 1392,
1402 (8th Cir. 1992)). Although public statements made by the Defendants could have
tipped off a savvy consumer to the conspiracy, that does not mean that a reasonable
person must have discovered the conspiracy through the statements.
concludes that the most reasonable time for the duty to arise was in the wake of the
Broiler Chicken lawsuit and the Bloomberg article.
2. Continuing Violation
Plaintiffs also argue that Defendants are liable under a continuing-violation theory.
A continuing violation “restarts the statute of limitations period each time the defendant
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commits an overt act.” Propane I, 860 F.3d at 1063. “An overt act has two elements: (1)
it must be a new and independent act that is not merely a reaffirmation of a previous act,
and (2) it must inflict new and accumulating injury on the plaintiff.” Id. “In the case of a
continuing violation, say, a price-fixing conspiracy that brings about a series of unlawfully
high-priced sales over a period of years . . . each sale to the plaintiff . . . starts the statutory
period running again, regardless of the plaintiff's knowledge of the alleged illegality at
much earlier times.” Id. at 1064 (internal quotation omitted).
Therefore, to adequately allege that a continuing violation has occurred, “Plaintiffs
must allege: (1) a price-fixing conspiracy; (2) that brings about a series of unlawfully high
priced sales during the class period; and (3) sale[s] to the plaintiff[s] during the class
period. Id. (internal quotations omitted) (alterations in original).
Plaintiffs have successfully pleaded the first and third elements. To successfully
plead the second element, the Plaintiffs must adequately allege that the conspiracy
continued into the non-time-barred class period: June 28, 2014—that is, four years before
this action was filed—and beyond. The “question here is not whether the amended
complaint alleges other overt acts in addition to sales to the Plaintiffs; the issue is whether
the amended complaint alleges that the conspiracy continued when the sales took place.”
Id. at 1070.
It is true that many of the factual assertions regarding the conspiracy concern pre2014 conduct. Plaintiffs, however, assert that Defendants’ parallel conduct continued
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throughout the class period, citing factors that would not have occurred had the
Plaintiffs point out specific instances of behavior that indicate the Defendants were
still conspiring. First, they point out that defendant Clemens did not attempt to take
advantage of the 2014 PEDv epidemic by increasing market share, even though its hogs
were largely unaffected by the epidemic.
Plaintiffs argue that Clemens, if acting
rationally, should have increased production to increase its market share for that year.
Plaintiffs note that after JBS acquired Cargill’s pork enterprise, it opted to decrease
supply, despite increased consumer demand. And Plaintiffs cite to the decision by
Defendants Seaboard and Triumph to postpone an expansion of facilities in 2017, even
though it was publicly acknowledged that a growing demand and growth in the industry
would have supported expansion. Finally, Plaintiffs allege that each of the plus factors
were still present during the post-2013 period: high market concentration, the barriers to
entry of potential competitors, and the trade association meetings that occurred each
year and provided the Defendants with the continued opportunity to conspire.
Importantly, the Plaintiffs also allege that the Defendants continued to use Agri
Stats beyond 2013. Given that the Plaintiffs allege that Agri Stats is the vehicle by which
the Defendants were able to monitor each other’s production outputs, the fact that they
continued using the service makes plausible the allegation that the conspiracy continued.
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Therefore, the Court will deny Defendants’ Motion to Dismiss on statute-of-limitations
The Court will deny the Defendants’ joint Motion to Dismiss because Plaintiffs’
Amended Complaints sufficiently plead parallel conduct and a continuing violation to
state plausible Sherman Act claims. The Court will, however, grant Indiana Packers’
individual Motion to Dismiss because the Amended Complaints fail to adequately allege
Indiana Packers’ involvement in the conspiracy.
Defendants argue that the Indirect Plaintiffs lack standing to bring most of their
state-law claims because they do not have a representative plaintiff from those
jurisdictions. Ordinarily, the Court would address Defendants’ standing arguments before
reaching the merits because “standing is a jurisdictional prerequisite[.]” Turkish Coal. of
Am., Inc. v. Bruininks, 678 F.3d 617, 621 (8th Cir. 2012) (quoting City of Clarkson Valley v.
Mineta, 495 F.3d 567, 569 (8th Cir. 2007)). However, in the class action context, the Court
may defer the standing question until class certification is “‘logically antecedent’ to
standing.” See Hudock v. LG Elecs. U.S.A., Inc. (“Hudock I”), Civil No. 16-1222, 2017 WL
1157098, at *2 (D. Minn. Mar. 27, 2017) (citing Amchem Prods., Inc. v. Windsor, 521 U.S.
591 (1997), and Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999)).
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Here, the Court will exercise its discretion to defer consideration of the standing
issues until after class certification, which is “logically antecedent” to the question raised
by Defendants: whether CIP Plaintiffs can bring claims under the laws of states in which
no representative plaintiff currently resides. “If standing issues remain after class
certification, Defendants are free to make a motion at that time.” Id.
State Antitrust Claims
Defendants argue that Indirect Plaintiffs’ antitrust claims under the laws of Illinois,
Rhode Island, and Mississippi must be dismissed for various state-specific reasons.
Defendants argue that Illinois state law bars Indirect Plaintiffs from bringing a class
action. They point to the Illinois Antitrust Act (“IAA”), which reads “no person shall be
authorized to maintain a class action in any court of this State for indirect purchasers
asserting claims under this Act, with the sole exception of this State’s Attorney General,
who may maintain an action parens patriae.” 740 Ill. Comp. Stat. § 10/7(2). Indirect
Plaintiffs argue that they should still be permitted to bring class actions because Illinois
state law is superseded by Rule 23 of the Federal Rules of Civil Procedure.
Indirect Plaintiffs rely on Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co.,
where the Supreme Court held that a New York state law prohibiting class actions should
not bar a class action in New York federal court because it conflicted with Rule 23. Shady
Grove, 559 U.S. 393, 397–406 (2010). Although the case was decided 5–4, there was
disagreement among the Justices as to the reasoning. Justice Scalia authored an opinion
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for himself and three others; Justice Stevens authored an opinion concurring in part and
concurring in the judgment for himself. Id. at 395, 416.
Justice Scalia’s opinion stated that the test for preemption was (1) “whether the
federal and state rules can be reconciled” and (2) “if they cannot, determining whether
the Federal Rule runs afoul of [28 U.S.C.] § 2072(b),” the Rules Enabling Act. 15 Id. at 410.
This inquiry focuses on “what the rule itself regulates: If it governs only ‘the manner and
the means’ by which the litigants’ rights are ‘enforced,’ it is valid; if it alters ‘the rules of
decision by which [the] court will adjudicate [those] rights,’ it is not.” Id. at 407 (quoting
Miss. Publ’g Corp. v. Murphee, 326 U.S. 438, 446 (1946)).
Justice Stevens’ opinion agreed with the plurality regarding the first step, but
reasoned that the second could not merely be a mechanical application of the rule that
“courts sitting in diversity ‘apply state substantive law and federal procedural law.’” Id.
at 417 (quoting Hanna v. Plummer, 380 U.S. 450, 465 (1965)). “A federal rule . . . cannot
govern a particular case in which the rule would displace a state law that is procedural in
the ordinary use of the term but is so intertwined with a state right or remedy that it
functions to define the scope of the state-created right.” Id. at 423. The opinion went on
to concur in the judgment because “it seem[ed] obvious to [him] that [the Court] should
respect the plain textual reading of . . . a rule in New York’s procedural code about when
According to the Rules Enabling Act, the Federal Rules of Civil Procedure “shall not
abridge, enlarge or modify any substantive right.” 28 U.S.C. § 2072(b).
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to certify class actions brought under any source of law, and respect Congress’ decision
that Rule 23 governs class certification in federal courts.” Id. at 436.
Given the divided reasoning of the plurality and concurrence, the Shady Grove rule
is unclear. “When a fragmented [Supreme] Court decides a case and no single rationale
explaining the result enjoys the assent of five Justices, ‘the holding of the Court may be
viewed as that position taken by those Members who concurred in the judgments on the
narrowest grounds[.]’” Marks v. United States, 430 U.S. 188, 193 (1977) (quoting Gregg
v. Georgia, 428 U. S. 153, 169 n.15 (1976)). This so-called Marks rule is “more easily stated
than applied[.]” Grutter v. Bollinger, 539 U.S. 306, 235 (2003) (quoting Nichols v. United
States, 511 U.S. 738, 745–46 (1994)). “In the face of this confusion, two main approaches
have emerged: one focusing on the reasoning of the various opinions and the other on
the ultimate results.” United States v. Davis, 825 F.3d 1014, 1020 (9th Cir. 2016) (en banc).
The Eighth Circuit has not explicitly adopted either of these approaches, but it has
appeared to prefer former. See, e.g., Jones v. Jegley, 947 F.3d 1100, 1106 n.3 (8th Cir.
2020) (“Because Chief Justice Roberts’s plurality opinion is the narrowest in support of
the judgment, it is binding.”) Assuming that Justice Steven’s concurrence is the narrowest
result because some state procedural rules might still survive when in conflict with the
Federal Rules, the ultimate question here is whether the pertinent section of the IAA is
strictly procedural in nature or if it is sufficiently intertwined with substantive law to the
point that it would abridge, enlarge, or modify Illinois substantive law.
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Defendants claim that the IAA is “sufficiently intertwined” with substantive law
because it is located “in the same paragraph of the same statute that creates the
underlying substantive right” and because ruling otherwise would undermine the Illinois
Legislature’s policy considerations for writing the law. However, “the fact that a class
action bar is included within a consumer protection statute does not make it any more
substantive than if it were found instead among the state’s rules of procedure.” See
Smith-Brown v. Ulta Beauty, Inc., Civil No. 18-610, 2019 WL 932022, at *13 (N.D. Ill.
Feb. 26, 2019); see also 1 McLaughlin on Class Actions § 2:47 (15th ed.) (“Most courts
considering the question have determined that a legislature’s placement of a class action
prohibition within a specific state consumer protection act (as opposed to a free-standing
rule of procedure) does not necessarily mean that the prohibition is a substantive one.”).
Application of the Shady Grove test to the IAA was explored in Broiler Chicken, with
the court concluding that because the ability of plaintiffs to bring class actions is a purely
procedural question, Rule 23 superseded the IAA. In re Broiler Chicken, 290 F. Supp. 3d
at 818. Defendants attempt to downplay Broiler Chicken by noting that it cited few of the
cases decided in the the eight years since Shady Grove. The four post–Shady Grove cases
Defendants highlight generally conflict with Broiler Chicken. 16 Although these cases show
In re Opana ER Antritrust Litig., 162 F. Supp. 3d 704, 723 (N.D. Ill. 2016) (holding that
Illinois antitrust law cannot be superseded by Rule 23 because the state law is sufficiently
intertwined with Illinois substantive rights and remedies); ); In re Digital Music Antitrust
Litig., 812 F. Supp. 2d 390, 415–16 (S.D.N.Y. 2011) (same); In re Wellbutrin XL Antitrust
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some ambiguity, the Court is persuaded by Broiler Chicken and agrees that the issue is
purely a procedural one. Indeed, Justice Steven’s concurrence concluded that class
certification is a procedural question. 559 U.S. at 436 (“Although one can argue that class
certification would enlarge New York’s ‘limited’ damages remedy . . . [i]n order to displace
a federal rule, there must be more than just a possibility that the state rule is different
than it appears.” (citations omitted)). Because the Court concludes that the IAA rule is
purely procedural, it will deny the Motion to Dismiss as to the Illinois state-law claims. 17
2. Rhode Island
As noted in footnote two above, the Supreme Court held in Illinois Brick that
permitting indirect purchasers to sue for damages from over-charges “passed on” to them
by middlemen “would transform treble-damages actions into massive efforts to
apportion the recovery among all potential plaintiffs that could have absorbed part of the
overcharge.” 431 U.S. 720, 737 (1977). Such “dimensions of complexity” would “seriously
undermine [the] effectiveness” of lawsuits against price-fixing conspiracies. Id.
Litig., 756 F. Supp. 2d 670, 677 (E.D. Pa. 2010) (same); see also Whitlock v. FSL Mgmt.,
LLC, 843 F.3d 1084, 1092 (6th Cir. 2016) (assuming without deciding that a class-action
prohibition that appears in the same statutory provision that creates the cause of action
There is no doubt that Rule 23 would preempt the IAA under the reasoning of Justice
Scalia’s plurality opinion. Therefore, if the plurality opinion were the operative opinion
under the Marks rule, the Court would also deny the Motion to Dismiss.
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Although most state courts interpret their antitrust laws in accordance with federal
law, in California v. ARC America Corp., 490 U.S. 93 (1989), the Supreme Court held that
“nothing in Illinois Brick suggests that it would be contrary to congressional purposes for
States to allow indirect purchasers to recover under their own antitrust laws.” 490 U.S.
at 103. Therefore, whether by legislation or by state-court interpretation, states are free
to reject Illinois Brick via so-called “repealers.” See Broiler Chicken, 290 F. Supp. 3d at 811.
Effective July 15, 2013, Rhode Island repealed its ban on antitrust claims from
indirect purchasers. 6 R.I. Gen. Laws Ann. § 6-36-7(d). Although statutes “are presumed
to apply prospectively,” Hydro-Mfg., Inc. v. Kayser-Roth Corp., 640 A.2d 950, 954 (R.I.
1994), the General Assembly, by “strong, clear language or necessary implication[,]” may
evince a desire that the law applies retroactively. Lawrence v. Anheuser-Busch, Inc., 523
A.2d 864, 869 (R.I. 1987).
However, indirect Plaintiffs offer no evidence that the legislature intended for the
Illinois Brick repealer to be applied retroactively. The Court therefore finds that Rhode
Island law prohibits Indirect Plaintiffs from seeking damages from before the repealer
became effective on July 15, 2013.
Although not found in the text of the Mississippi Antitrust Act (“MAA”), Miss. Code
Ann. § 75-21-1, the Mississippi Supreme Court has held that “a material element to an
MAA claim is that the illegal objective of the trust ‘be accomplished in part at least by
transactions lying wholly within the state.’ State ex rel. Fitch v. Yazaki N. Am., Inc., 294
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So. 3d 1178, 1189 (Miss. 2020) (quoting Standard Oil Co. of Ky. v. State, 65 So. 468, 471
(Miss. 1914)). The question for the Court is what kind of transactions are “wholly
intrastate” under the MAA?
Vague, conclusory statements of intrastate transactions are not enough. See In re
Keurig Green Mountain Single-Serve Coffee Antitrust Litig., 383 F. Supp. 3d 187, 266–67
(S.D.N.Y. 2019) (holding that plaintiffs failed to allege wholly intrastate conduct because
the only allegation mentioning Mississippi alleged that Keurig had distributors “across the
Southeast region,” including Mississippi). The claims in Standard Oil, on the other hand,
were sufficient because they outlined specific instances where defendants resided and
conducted business in the same state where their product was delivered, though not
produced. Standard Oil Co. of Ky., 65 So. at 472; Hood ex rel. State v. BASF Corp., No.
56863, 2006 WL 308378, at *5 (Miss. Ch. Ct. Jan. 17, 2006). Once the petroleum was
brought to Mississippi, “it bec[a]me incorporated into the general mass of property
therein,” and “therefore constituted intrastate commerce . . . governed by the state’s
laws.” Standard Oil, 65 So. at 470. This implies that “wholly intrastate” does not mean
that a product must literally be procured, finished, and sold all within Mississippi by the
same entity. Therefore, plaintiffs must at least specifically allege that a product is
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distributed to, and then sold within, the Magnolia State under anticompetitive
The claims here are closer to the vague statements of Keurig than to the specific
transactions of Standard Oil. The IPPs merely allege that pork is sold indirectly via
distributors throughout Mississippi and that Defendants’ conduct had a substantial effect
Mississippi commerce because Mississippi consumers paid artificially high prices for pork;
CIP Plaintiffs fail even to do that. The wholly intrastate rule requires more than these
conclusory statements. Accordingly, the Court will grant Defendants’ Motion to Dismiss.
State Consumer-Protection Claims
1. Rule 9(b)
Under the heightened pleading standard of Federal Rule of Civil Procedure 9(b),
allegations of fraud must be “stated with particularity.” Fed. R. Civ. P. 9(b). This
requirement extends to claims “grounded in fraud.” Streambend Props. II, LLC v. Ivy
Tower Minneapolis, LLC, 781 F.3d 1003, 1010 (8th Cir. 2015). “Whether a state-law claim
sounds in fraud, and so triggers Rule 9(b)’s heightened standard, is a matter of substantive
Fitch is also instructive. The state supreme court concluded that Mississippi had failed
to allege wholly intrastate conduct by Japanese auto manufactures under the MAA—even
though the complaint mentioned that “both Nissan and Toyota had [original-equipment
manufacturers (“OEMs”)] in Mississippi”—because it “neither allege[d] [that] the
defendant sold [Automotive Wire Harness Systems (“AWHS”)] in Mississippi nor that the
OEMs, suppliers, or distributors that directly purchased AWHS from the defendants were
in Mississippi.” State ex rel. Fitch, 294 So. 3d at 1189–90.
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state law,” and “[a] claim may sound in fraud even though it is brought under a statute
that also prohibits non-fraudulent conduct.” Olin v. Dakota Access, LLC, 910 F.3d 1072,
1075 (8th Cir. 2018) (internal quotation omitted). The Eighth Circuit uses a “a pleadingspecific inquiry in which the focus is on the elements of the claims asserted[.]” Id. at 1076
(internal quotations omitted).
To determine whether a claim sounds in fraud, one can imagine a spectrum of how
central fraud is to a claim. On one end of the spectrum are claims that do not specifically
mention fraudulent behavior or specify that they are not based on fraud—such claims are
not subject to Rule 9(b). In re NationsMart Corp. Sec. Litig., 130 F.3d 309, 315 (8th Cir.
1997) (holding that claims are subject to the regular pleading standard because they
specifically disavowed any fraudulent behavior); Streambend Props. II, 781 F.3d at 1013
(holding that a claim was not sounding in fraud because it was “pleaded separately [from
other fraud claims], focused on different conduct and representations, and contained no
fraud averments”). On the other end are claims that center on fraud and are subject to
Rule 9(b). Olin, 910 F.3d at 1075–76 (holding that a claim did sound in fraud because
plaintiffs “repeatedly assert[ed]” that the defendant’s actions were fraudulent).
The consumer-protection claims here fall somewhere in the middle. The Amended
Complaints’ primary allegations involve anticompetitive behavior, not fraud. Defendants
point out that the Amended Complaints use the terms “deceptive,” “fraudulent,”
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“omissions,” and “misrepresentations.” Indirect Plaintiffs, in turn, accuse Defendants of
focusing on cherry-picked terms that are not essential to their allegations of price fixing.
To determine whether a complaint sounds in fraud, courts have also looked at
whether plaintiffs claim that they allege any reliance based on inducements by
defendants. If not, courts have concluded that the complaint does not sound in fraud.
See id at 1075–76 (holding a claim to 9(b) in part because plaintiffs alleged that they were
“induced” to sign misrepresented easement contracts).
Unlike Olin, the Amended Complaints do not allege inducement or reliance. Also,
unlike Olin, the Amended Complaints are not intertwined any explicit claims of fraud—
their allegations of anticompetitive practices stand on their own. Therefore, the Court
concludes that the consumer-protection claims are not subject to Rule 9(b) and will deny
Defendants’ Motion to Dismiss on the ground that the allegations are insufficiently
Defendants also argue that Indirect Plaintiffs’ consumer-protection claims from
nine jurisdictions—Arkansas, California, the District of Columbia, Michigan, New York,
North Dakota, Rhode Island, Virginia, and Wisconsin—should be dismissed because they
require either (1) deception or (2) reliance as elements of a consumer-protection claim,
Because the Court declines to find that the consumer-protection claims are subject to
Rule 9(b), it is unnecessary to determine whether the allegations are pleaded with
sufficient particularity to survive a Motion to Dismiss and the Court will decline to do so.
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and Indirect Plaintiffs have failed to allege either. Indirect Plaintiffs argue that neither
deception nor reliance are necessary elements of consumer-protection claims when
those claims are centered around unfair business practices or antitrust conduct.
The Arkansas Deceptive Trade Practices Act (“ADTPA”) prohibits “[e]ngaging in
any . . . unconscionable, false, or deceptive act or practice in business, commerce, or
trade[.]” Ark. Code § 4-88-107(a)(10). “[U]nconscionable acts” under the ADTPA include
behavior which violates “public policy or statute.” Baptist Health v. Murphy, 226 S.W.3d
800, 811 (Ark. 2006). That includes anticompetitive behavior. See Ark. Code § 4-75-302
(“A monopoly . . . is declared to be unlawful and against public policy[.]”), § 4-75-309
(banning price fixing).
Defendants point to Apex Oil Co., Inc. v. Jones Stephens Corp., which held that
reliance was a required element because the statute “provided a cause of action for ‘[a]ny
person who suffers actual damage or injury as a result of an offense or violation.’”
881 F.3d 658, 662 (8th Cir. 2018) (quoting Ark. Code. § 4-88-113(f) (2011)). 20 However,
there are factual differences between Apex and this case. The Eighth Circuit held that
reliance was necessary to the claim in Apex because “as a practical matter it is not possible
that the damages could be caused. . . without reliance[.]” Id. (citing In re St. Jude Med.,
In 2017, the statute was amended to require proof of reliance. See Ark. Code §§ 4-88113(f)(1)(A), (f)(2).
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Inc., 522 F.3d 836, 839 (8th Cir. 2008)). But in this case, Indirect Plaintiffs did not have to
rely on anything to suffer damages; they had only to pay allegedly inflated prices for pork.
Therefore, the Court will deny Defendants’ Motion.
Defendants misread two cases in attempt to demonstrate that reliance is a
requirement of the California Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code
§ 17200. In re Tobacco Cases held that reliance was necessary when a complaint was
brought under the fraud prong of the UCL. 207 P.3d 20, 39 (Cal. 2009) (“[T]his language
imposes an actual reliance requirement on plaintiffs prosecuting a private enforcement
action under the UCL’s fraud prong.”). It said nothing about the unlawful-businesspractices prong, on which the Amended Complaints rely. Likewise, Moore v. Apple, Inc.
concluded that reliance was a necessary element only when a complaint is predicated on
misrepresentation. 73 F. Supp. 3d 1191, 1200 (N.D. Cal. 2014) (“California courts have
held that when the ‘unfair competition’ underlying a plaintiff’s UCL claim consists of a
defendant’s misrepresentation, a plaintiff must have actually relied on the
Neither of these cases are comparable to the Amended
Complaints because they are not brought under the UCL’s fraud prong nor are the
allegations based on misrepresentation.
The unlawful-business-practices prong of the UCL has no reliance requirement.
See Cal-Tech Commc’ns., Inc. v. L.A. Cellular Tel. Co., 973 P.2d 527, 544 (Cal. 1999) (“When
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a plaintiff who claims to have suffered injury from . . . ‘unfair’ act[s] or practice[s] invokes
section 17200, the word ‘unfair’ in that section means conduct that threatens an incipient
violation of an antitrust law, or violates the policy or spirit of one of those laws[.]”).
Because reliance is not a required element under the portion of the UCL invoked in their
Amended Complaints, Indirect Plaintiffs’ UCL consumer-protection claims are adequately
pleaded. Therefore, the Court will deny Defendants’ Motion to Dismiss.
c. District of Columbia
Defendants argue that deception is a necessary element of the D.C. Consumer
Protection Procedure Act (“CPPA”), D.C. Code § 28-3904, citing Williams v. Purdue Pharm.
Co., 297 F. Supp. 2d 171 (D.D.C. 2003). In Williams, however, the court concluded that
plaintiffs lacked standing because they relied on a fraud-on-the-market theory to bring a
false advertising claim. Williams, 297 F. Supp. 2d at 177–78. The allegations in this case
are not about misleading advertising, they rest on anticompetitive behavior. Williams is
A plausible allegation that defendants violated federal antitrust law is sufficient to
bring a cause of action under the CPPA. Dist. Cablevision Ltd. P’ship v. Bassin, 828 A.2d
714, 723 (D.C. 2003) (“A main purpose of the CPPA is to assure that a just mechanism
exists to remedy all improper trade practices. . . . Trade practices that violate other laws,
including the common law, also fall within the purview of the CPPA.”); In re Packaged
Seafood Prods. Antitrust Litig., 242 F. Supp. 3d 1033, 1073 (S.D. Cal. 2017) (denying
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motion to dismiss because “Plaintiffs have plausibility alleged a violation of federal
antitrust law”). Because Indirect Plaintiffs have adequately alleged a federal antitrust
claim, their CPPA claim is adequately pleaded. Therefore, the Court will deny Defendants’
Motion to Dismiss.
Defendants argue that deception or reliance are required elements of a claim
under the Michigan Consumer Protection Act (“MCPA”), Mich. Comp. Laws § 445.903,
relying on Sheet Metal Workers Local 441 Health & Welfare Plan v. GlaxoSmithKline, Plc,
737 F. Supp. 2d 380, 413 (E.D. Pa. 2010). However, the plaintiffs in Sheet Metal were only
required to allege reliance because their complaint was based on misrepresentation.
737 F. Supp. 2d at 412. Indeed, that same opinion noted that the MCPA is larger in scope
than Defendants allege here. Id. (The MCPA “prohibits ‘not only deceptive business
practices but also those which are unfair and unconscionable’” (quoting Mayhall v. A.H.
Pond Co., Inc., 341 N.W.2d 268, 279 (Mich. App. 1983))).
Because the Amended
misrepresentation, Indirect Plaintiffs need not allege deception.
The MCPA prohibits “‘unfair, unconscionable, or deceptive methods, acts or
practices,’ including ‘charging the consumer a price that is grossly in excess of the price
at which similar property or services are sold.’” In re Solodyn (Minocycline Hydrochloride)
Antitrust Litig., No. 14-md-02503-DJC, 2015 WL 5458570, at *17 (D. Mass. Sept. 16, 2015).
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By the plain language of the MCPA, the anticompetitive behavior that Indirect Plaintiffs
allege here state a claim under the MCPA. Therefore, the Court will deny Defendants’
Motion to Dismiss.
e. New York
The New York Deceptive Practice Act (“DCPA”), N.Y. Gen. Bus. Law § 349, does not
include a prohibition on unfair competition or unfair business practices, nor does it have
any other language that “bespeaks a significantly broader reach.” Yong Ki Hong v. KBS
Am., Inc., 951 F. Supp. 2d 402, 420 (E.D.N.Y. 2013) (quoting In re Digital Music, 812 F.
Supp. 2d at 410). Because the DCPA conspicuously omits anticompetitive behavior as a
cause of action, the Eastern District of New York concluded that “anticompetitive conduct
that is not premised on consumer deception is not within the ambit of the statute.” Id.
at 420 (internal quotation omitted). More specifically, a DCPA claim requires “(1)
consumer-oriented conduct that is (2) materially misleading and that (3) [the] plaintiff
suffered injury as a result of the allegedly deceptive act or practice.” City of New York v.
Smokes-Spirits.Com, Inc., 911 N.E.2d 834, 838 (N.Y. 2009).
To satisfy the narrow
parameters of the DCPA, a complaint must allege that Defendants “materially misled”
Indirect Plaintiffs by engaging in their price-fixing scheme for Pork.
Courts have ruled that price-fixing complaints satisfy the “materially misleading”
requirement of the DCPA if they are “imbued with a degree of subterfuge.” In re Auto.
Parts Antitrust Litig., 50 F. Supp. 3d 836, 859 (E.D. Mich. 2014). Because the Court
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concluded that Indirect Plaintiffs did not sufficiently plead the concealment prong of
fraudulent concealment, it must also conclude that the Amended Complaints fail to meet
the “materially misleading” requirement of the DCPA. Therefore, the Court will grant
Defendants’ Motion to Dismiss as to the DCPA claim.
f. North Dakota
North Dakota’s consumer-protection statute declares unlawful “[t]he act, use, or
employment by any person of any deceptive act or practice, fraud, false pretense, false
promise, or misrepresentation, with the intent that others rely thereon in connection
with the sale or advertisement of any merchandise.” N.D. Cent. Code § 51-15-02.
There is very little case law interpreting whether North Dakota’s consumerprotection statute requires concealment as an element. Defendants point to a decision
which correctly notes that “the statute does not include the FTC Act’s prohibition on
unfair acts or unfair competition[.]” In re New Motor Vehicles Canadian Exp. Antitrust
Litig., 350 F. Supp. 2d 160, 197–98 (D. Me. 2004). That court held that complaints under
this statute are limited to allegations of deception, fraud, and misrepresentation. Id. at
198. However, the court relied on dicta from a North Dakota Supreme Court decision that
did not directly address the question of concealment as a required element of a
consumer-protection claim under state law. See State ex rel. Spaeth v. Eddy Furniture Co.,
386 N.W.2d 901, 905 (N.D. 1986) (upholding dismissal of a consumer-protection claim
only because it was not clearly erroneous). The court below had found that the
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defendant’s conduct was not fraudulent, misleading, or deceitful, but apparently said
nothing about whether those allegations were a necessary part of the complaint.
Neither Indirect Plaintiffs nor Defendants point to any other North Dakota law.
Instead, Indirect Plaintiffs reference one decision in which reliance was held not to be a
required element. In re Pharm. Indus. Average Wholesale Price Litig., 252 F.R.D. 83, 98
(D. Mass. 2008). However, in that case, the parties agreed that North Dakota was among
the states that “do not require the element of reliance[.]” Id. The court did not actually
analyze the question.
Despite the thin reed of precedent, the Court will adopt the one rule announced
by a North Dakota court and conclude that concealment is a required element. Therefore,
the Court will grant the Defendants’ Motion to Dismiss as to the North Dakota consumerprotection claim.
g. Rhode Island
The Rhode Island Deceptive Trade Practices Act (“RIDTPA”) prohibits “[u]nfair
methods of competition and unfair or deceptive acts or practices.” 6 R.I. Gen. Laws §§ 613.1-2, 6-13.1-3. The Rhode Island General Assembly “provided interpretive guidance by
declaring that ‘due consideration and great weight shall be given to the interpretations of
the federal trade commission and the federal courts relating to § 5(a) of the Federal Trade
Commission Act [(“FTCA”)].’” Long v. Dell, Inc., 93 A.3d 988, 1000 (R.I. 2014) (quoting
6 R.I. Gen. Laws § 6-13.1-3). Among the factors used by the Rhode Island Supreme Court
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to determine whether a trade practice is unfair is whether “the practice, without
necessarily having been previously considered unlawful, offends public policy as it has
been established by statutes, the common law, or otherwise[.]” Ames v. Oceanside
Welding & Towing Co., Inc., 767 A.2d 677, 681 (R.I. 2001) (quoting FTC v. Sperry &
Hutchinson Co., 405 U.S. 233, 244–45 n.5 (1972)). Several courts have interpreted Ames
to mean that deception is not a required element of a complaint under the RIDTPA. See
In re Dynamic Random Access Memory (DRAM) Antitrust Litig., 536 F. Supp. 2d 1129, 1145
(N.D. Cal. 2008); In re Packaged Seafood, 242 F. Supp. 3d at 1084. The Court is persuaded
by the reasoning of these cases and concludes that Indirect Plaintiffs’ RIDTPA claim is
adequately pleaded. 21
Defendants rely on In re Aftermarket Filters Antitrust Litigation, which concluded that
complaints under the RIDTPA must allege “that defendants’ conduct reasonably intended
to confuse and mislead the general public into purchasing defendants’ product when the
actual intent was to buy someone else’s product.” 2009 WL 3754041, at *11 (N.D. Ill.
Nov. 5, 2009). This case is unhelpful for two reasons. First, it relies on a line of decisions
based on Merlino v. Schmetz, 20 A.2d 266, 267 (R.I. 1941), which predates Ames by
decades and also predates the Federal Trade Commission definition of “unfair.” Second,
Aftermarket misquotes the cases on which it relies, which required that the unfair
conduct must “tend” to confuse, not “intend” to confuse. See ERI Max Entm’t, Inc. v.
Streisand, 690 A.2d 1351, 1353 (R.I. 1997). “Tend” in this context refers to behavior that
is likely to confuse consumers; intent is irrelevant. See Merlino, 20 A.2d at 267 (holding
that a defendant’s barber-shop window sign did not constitute unfair competition
because people were unlikely to be deceived into mistaking it for plaintiff’s sign).
Plaintiffs’ allegations describe behavior that likely misled consumers into buying pork at
artificially high prices.
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The Virginia Consumer Protection Act (“VCPA”) prohibits sellers from using
fraudulent or deceptive practices towards consumers. See Va. Code § 59.1-196. Claims
brought under the VCPA do not have to allege both fraud and deception; they can be
brought as distinct claims. Nigh v. Koons Buick Pontiac GMC, Inc., 143 F. Supp. 2d 535,
553 (E.D. Va. 2001). Furthermore, the misrepresentations necessary to a deception claim
“need not be pled with the same kind of particularity as common law fraud claims.” Id.
A deception claim under the VCPA also requires an allegation that plaintiff relied on the
deceptive conduct. Curtis v. Propel Prop. Tax Funding, LLC, 2018 WL 717006, at *3 (E.D.
Va. Feb. 5, 2018) (holding a VCPA claim insufficient because it failed to allege reliance.) In
sum, misrepresentation and reliance are both required elements of a deception claim
under the VCPA, although those claims do not have to be made with heightened
particularity. Because Indirect Plaintiffs have not alleged reliance, the Court will grant
Defendants’ Motion to Dismiss as to the VCPA claim.
Wisconsin’s Deceptive Trade Practices Act (“WDTPA”) prohibits “untrue, deceptive
or misleading” statements. Wisc. Stat. § 100.18. Allegations of artificial inflation have
been held to be sufficient to make a claim under the WDTPA. State v. Abbott Labs.,
829 N.W.2d 753, 761–62 (Wis. App. 2013).
Defendants appear to concede that the WDTPA violation is adequately pleaded on
these grounds. Instead, they ask for dismissal because (1) the complaint does not satisfy
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the heightened pleading standard of Rule 9(b); and (2) the complaint purportedly does
not identify who was injured by Defendants’ misrepresentation. Both arguments fall flat.
As discussed above, the heightened pleading standard of Rule 9(b) does not apply to the
state claims here. As for identification, the complaint identifies multiple vendors who
purchased pork at artificially inflated prices, such as the Erbert & Gerbert’s located in Eau
Claire, Wisconsin. The Court will deny Defendants’ Motion to Dismiss the WDTPA claim.
3. Antitrust Claims Not Actionable
Defendants claim that antitrust allegations are not actionable under the consumerprotection statutes of eight states: Arkansas, Illinois, Michigan, Minnesota, North Dakota,
Rhode Island, South Dakota, and Utah.
The ADTPA “makes illegal any trade practice which is unconscionable, which
includes conduct violative of public policy or statute.” Baptist Health, 226 S.W.3d at 811.
This includes price-fixing schemes. In re Auto. Parts Antitrust Litig., 50 F. Supp. 3d 836,
859 (E.D. Mich. 2014). Defendants point to State ex rel. Bryant v. R & A Investment Co.,
985 S.W.2d 299, 302 (Ark. 1999), arguing that high prices alone were held not enough to
constitute an unconscionable act. Defendants again misread the case. The Bryant
decision reaffirmed that the ADTPA has a “liberal construction” and is meant to
“protect . . . the consumer public” and that the “catch-all provision” of unconscionability
“was, no doubt, included because the General Assembly could not be expected to
envision every conceivable violation” of the statute. Id. at 302. Indirect Plaintiffs have
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plausibly alleged a price-fixing scheme and have therefore successfully plead an
unconscionable act under the ADTPA. Therefore, the Court will deny Defendants’ Motion
Defendants argue that the most recent Illinois decisions hold that antitrust
violations are not actionable under the Illinois Consumer Fraud Act (“ILCFA”). See Butler
v. Jimmy John’s Franchise, LLC, 331 F. Supp. 3d 786, 798 (S.D. Ill. 2018). However, Butler
merely concluded that a plaintiff cannot bring action under the ILCFA that would be
deficient under the Illinois Antitrust Act. Butler, 331 F. Supp. 3d at 798 (dismissing a ILCFA
claim because “the Illinois Supreme Court has instructed that plaintiffs cannot use the
[ILCFA] to get around the fact that their theory does not fly under the Illinois Antitrust
Act”). Illinois courts have not specifically ruled on the question of whether an ILCFA claim
based on antitrust violations is permissible when the complaint would also be sufficient
under the Illinois Antitrust Act. See Siegel v. Shell Oil Co., 480 F. Supp. 2d 1034, 1048, n.12
(N.D. Ill. 2007). Because the Court has, at this stage, denied the Motion to Dismiss as to
the Illinois Antitrust Act claim, the Court will also allow deny the Motion as to the ILCFA
As noted above, the MCPA prohibits “‘unfair, unconscionable, or deceptive
methods, acts or practices,’ including ‘charging the consumer a price that is grossly in
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excess of the price at which similar property or services are sold.’” In re Solodyn Antitrust
Litig., 2015 WL 5458570, at *17 (quoting Mich. Comp. Laws Ann. §445.903(1)). The MCPA
is narrower than other state consumer-protection statutes because it specifically defines
what constitutes unfair or unconscionable conduct.
Mich. Comp. Laws Ann. §
445.903(1)(a)–(kk). As other courts have noted, these definitions do not lend themselves
to antitrust allegations. In re Packaged Seafood Prods. Antitrust Litig., 242 F. Supp. 3d at
1076 (“Plaintiffs do not point to a specific provision of the MCPA definitional section
covering antitrust violations, and the Court is unable to find one.”) Because “the only
manner in which plaintiffs may assert a violation of the MCPA is through fraud,” id., and
because Indirect Plaintiffs do not allege fraud, the Court will grant Defendants’ Motion to
Dismiss as to the MCPA claim.
The Minnesota Consumer Fraud Act (“MCFA”), Minn. Stat. § 325F.69, prohibits
“fraud, false pretense, false promise, misrepresentation, misleading statement or
deceptive practice, with the intent that others rely thereon in connection with the sale of
any merchandise, whether or not any person has in fact been misled[.]” Minn. Stat.
§ 325F.69, subd. 1. In State v. Minnesota School of Business, the Minnesota Supreme
Court held that “ ‘proof of individual reliance’ is not needed to prevail under the MCFA,”
and concluded instead that plaintiffs need only “establish ‘a causal nexus between the
conduct alleged to violate the [MCFA] and the damages claimed.’” State v. Minn. Sch. of
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Bus., Inc., 935 N.W.2d 124, 134–35 (Minn. 2019) (emphasis in original) (quoting Grp.
Health Plan, Inc. v. Phillip Morris, Inc., 621 N.W.2d 2, 4 (Minn. 2001)). “This is particularly
true ‘where a defendant’s misrepresentations were directed at and affected a broad
group of consumers,’ and plaintiffs in such cases do not need to offer ‘proof of direct
individual reliance’ to establish that causal nexus. Hudock v. LG Elecs. U.S.A., Inc.
(“Hudock IV”), Civil No. 16-1220 (JRT/KMM), 2020 WL 1515233, at *13 (D. Minn. Mar. 30,
2020) (quoting Minn. Sch. of Bus., 935 N.W.2d at 135).
Reliance is also not required to bring a claim under the Minnesota Uniform
Deceptive Trade Practices Act (“MDTPA”), Minn. Stat. § 325D.44.
See Minn. Stat.
§ 325D.44 subd. 2 (“In order to prevail . . . a complainant need not prove . . . actual
confusion or misunderstanding.”). However, “[t]he relief provided by the [MDTPA] is
limited to those persons ‘likely to be damaged by a deceptive trade practice.’” Dennis
Simmons, D.D.S., P.A. v. Modern Aero, Inc., 603 N.W.2d 336, 339 (Minn. App. 1999)
(quoting Minn. Stat. § 325D.45, subd. 1). Therefore, the MDTPA “only provides injunctive
relief ‘from future damage, not past damage[.]’” Hudock I, 2017 WL 1157098, at *6
(quoting Gardner v. First Am. Title Ins. Co., 296 F. Supp. 2d 1011, 1020 (D. Minn. 2003)).
An MDTPA claim will fail, then, unless the plaintiff seeks an injunction and alleges a
likelihood of future harm. Id.
Although relaxed from the common-law fraud standard, Minnesota Supreme
Court has not adopted a fraud-on-the-market standard for pleading MCFA claims.
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Although the IPPs need not allege individual reliance for their MCFA claim, they fail to
adequately state a causal nexus because they lack any allegations of “defendants’
misrepresentations [that] were directed at . . . a broad group of consumers.” Minn. Sch.
of Bus., 935 N.W.2d at 135. Likewise, CIPs fail to allege any likelihood of future harm and
do not expressly seek injunctive relief. Therefore, the Court will grant Defendants’
Motion to Dismiss as to the MCFA and MDTPA claims.
e. North Dakota
Defendants, relying on Trade ‘N Post, L.L.C. v. World Duty Free Americas, Inc.,
628 N.W.2d 707, 714–16 (N.D. 2001), argue that the North Dakota Unlawful Sales or
Advertising Practices Statute, N.D. Cent. Code § 51-10, does not have a private right of
action. Defendants overstate the holding of Trade ‘N Post—the North Dakota Supreme
Court found only that there was no private right of action to damages. Id. at 715. Claims
under section 51-10 may still be brought for injunctive relief. Indirect Plaintiffs “seek all
relief available” under the N.D. Century Code. This includes injunctive relief. Therefore,
the Court will deny Defendants’ Motion to Dismiss as to the North Dakota consumerprotection claim in so far as it seeks injunctive relief.
f. Rhode Island
The RIDTPA “provides that ‘unfair or deceptive acts or practices in the conduct of
any trade or commerce are declared unlawful.’” Long, 93 A.3d at 1000 (quoting 6 R.I.
Gen. Laws § 6-13.1-2). “It is clear that in enacting the DTPA, the Legislature intended to
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declare unlawful a broad variety of activities that are unfair or deceptive[.]” Id. (quoting
Park v. Ford Motor Co., 844 A.2d 687, 692 (R.I. 2004)). Thus, “a plaintiff must establish
that he or she is a consumer, and that defendant is committing or has committed an unfair
or deceptive act while engaged in a business of trade or commerce.” Id. (quoting Kelley
v. Cowesett Hills Assocs., 768 A.2d 425, 431 (R.I. 2001)).
Defendants rely on Long to argue that “affirmative misrepresentation” is a
required element of a claim under the RIDTPA. See id. at 1004. However, the Rhode
Island Supreme Court’s conclusion to which Defendants’ point was made only under the
deceptive-act prong. As the Court noted above when discussing whether reliance is
required under the RIDTPA, Rhode Island has several factors it uses to determine whether
a trade practice is unfair, including, inter alia, “whether it is immoral, unethical,
oppressive, or unscrupulous” and “whether it causes substantial injury to consumers (or
competitors or other businessmen.” Id. at 1000. The alleged price-fixing scheme
undoubtedly fits within both of those factors. See FTC v. Cement Inst., 333 U.S. 683, 690
(1948) (concluding that conduct that “constitutes a violation of the Sherman Act . . . may
also be an unfair method of competition and hence constitute a violation of [§] 5 of the
Federal Trade Commission Act”). As such, the Court will deny Defendants’ Motion to
g. South Dakota
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South Dakota’s deceptive trade-practices act (“SDDTPA”) defines what constitutes
a “deceptive act or practice” under statute. S.D. Codified Laws § 37-24-6. This includes
“[k]nowingly act, use, or employ any deceptive act or practice, fraud, false pretense, false
promises, or misrepresentation or to conceal, suppress, or omit any material fact in
connection with the sale or advertisement of any merchandise[.]” Id. § 37-24-6(1).
Because the Court concludes that Plaintiffs have not adequately pleaded fraudulent
concealment, there are no allegations of false promises or misrepresentations on which
to base an SDDTPA claim. Therefore, the Court will grant Defendants’ Motion to Dismiss
as to the SDDTPA claim.
The Utah Consumer Sales Practices Act (“UCSPA”) prohibits deceptive and
unconscionable acts. Utah Code Ann. §§ 13-11-4, 13-11-5. Although the UCSPA was
modeled on the FTCA, see Utah Code Ann. § 13-11-2(4), it lacks an analogue to § 5, which
prohibits “unfair competition.” Because § 5 is the exclusive means by which the United
States Supreme Court has allowed Sherman Act price-fixing claims to also fall within the
ambit of the FTCA, see Cement Inst., 333 U.S. at 690, this omission is fatal to Indirect
Plaintiffs’ UCSPA claim and the Court will grant Defendants’ Motion to Dismiss.
4. Intrastate Activity
Defendants argue that Indirect Plaintiffs fail to allege specific intrastate conduct as
required by consumer-protection laws in six states: Florida, Massachusetts, New
Hampshire, New York, North Carolina, and Wisconsin.
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The Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”) makes declares
unlawful any “[u]nfair methods of competition, unconscionable acts or practices, and
unfair or deceptive acts or practices in the conduct of any trade or commerce[.]” Fla. Stat.
§ 501.204. Although it does not contain any language creating a geographic limitation,
some Florida courts have held that FDUTPA precludes claims by out-of-state consumers.
See In re Flonase Antitrust Litig., 692 F. Supp. 2d 524, 537 (E.D. Pa. 2010) (collecting cases).
The Florida Supreme Court has not addressed this intrastate case-law split. Id.
“When there is no state supreme court case directly on point,” the role of a federal
court sitting in diversity jurisdiction “is to predict how the state supreme court would rule
if faced with the same issue[.]” N. Oil & Gas, Inc. v. EOG Res., Inc., ___ F.3d ___, ___, 2020
WL 4280953, at *2 (8th Cir. 2020) (quoting Blankenship v. USA Truck, Inc., 601 F.3d 852,
856 (8th Cir. 2010)). The Court is persuaded that the so-called Erie guess made by the
court in In re Flonase is the right one. See 692 F. Supp. 2d at 537. Florida statute provides
that the FDUTPA “shall be construed liberally . . . [t]o protect the consuming public.” Fla.
Stat. § 501.202. Given this command and the generally remedial nature of the FDUTPA,
“[t]here is no reason to read restrictions into the statute that the legislature has failed to
include.” In re Flonase, 692 F. Supp. 2d at 537.
The federal case on which Defendants rely, Five for Entm’t, S.A. v. Rodriguez, 877 F.
Supp. 2d 1321 (S.D. Fla. 2012), does not contradict this conclusion. In that case, the court
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concluded there were no allegations of any relation to Florida consumers and dismissed
the claim because the “FDUTPA applies only to actions that occurred within the state of
Florida.” Five for Entm’t, 877 F. Supp. 2d at 1330. The court did not conclude, as some
have, that the statute applies to actions that occurred wholly within Florida. Here,
Indirect Plaintiffs have alleged purchases within Florida. The Court predicts that this is all
the Florida Supreme Court would require. Therefore, the Court will deny Defendants’
Motion to Dismiss.
“No action shall be brought or maintained under [the Massachusetts unfair tradepractices act] unless the actions and transactions constituting the alleged unfair method
of competition or the unfair or deceptive act or practice occurred primarily and
substantially within the commonwealth.” Mass. Gen. Laws ch. 93A § 11. “Whether the
actions and transactions constituting the § 11 claim occurred primarily and substantially
within the commonwealth is not a determination that can be reduced to any precise
formula.” Kuwaiti Danish Comp. Co. v. Digital Equip. Corp., 781 N.E.2d 787, 798 (Mass.
2003) (cleaned up). Instead, courts must “determine whether the center of gravity of the
circumstances that give rise to the claim is primarily and substantially within the
Commonwealth.” Id. at 799.
The nature of such a center-of-gravity test means that there is a small likelihood of
the Massachusetts Supreme Judicial Court deciding the precise issue before the Court and
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thus requiring another Erie guess. The Court is persuaded by the reasoning of the First
Circuit on the issue of primacy: “[w]here wrongdoing is not focused on Massachusetts but
has relevant and substantial impact across the country, the ‘primarily’ requirement of
section 11 cannot be satisfied.” Fishman Transducers, Inc. v. Paul, 684 F.3d 187, 197 (1st
Cir. 2012). None of the CIP Plaintiffs are residents of Massachusetts. 22 Cf. In re Microsoft
Corp. Antitrust Litig., 127 F. Supp. 2d 702, 726 (D. Md. 2001) (noting that plaintiffs rely
heavily on their Massachusetts residency to make their section 11 case). None of the
Defendants are residents of Massachusetts.
The allegations are of a nationwide
conspiracy. Wherever the center of gravity of these claims may be located, it is far from
the Bay State. Because CIP Plaintiffs fail to allege unfair or deceptive acts that occurred
substantially within the Commonwealth of Massachusetts, they have not sufficiently
pleaded a claim under section 11 and the Court will grant Defendants’ Motion to Dismiss.
c. New Hampshire
The New Hampshire Consumer Protection Act (“NHCPA”) bars the use of “any
unfair method of competition or any unfair or deceptive act or practice in the conduct of
any trade or commerce within this state.” N.H. Rev. Stat. Ann. §358-A:2. Although the
New Hampshire Supreme Court has not squarely addressed the issue of the territoriality
The IPPs do not bring a claim under section 11.
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clause, 23 “numerous federal district courts seated within and without New Hampshire
have acknowledged that the [NHCPA] requires the proscribed conduct to occur within the
state; merely selling a good in New Hampshire is not enough when the proscribed conduct
occurs elsewhere.” In re Lithium Ion Batteries Antitrust Litig., No. 13-MD-2420 YGR,
2014 WL 4955377, at *22 (N.D. Cal. Oct. 2, 2014) (collecting cases); but see In re Chocolate
Confectionary Antitrust Litig., 749 F. Supp. 2d 224, 234–35 (M.D. Pa. 2010) (denying a
motion to dismiss when New Hampshire allegations related only to product sale). The
Court is persuaded by the weight of authority concluding that the territoriality clause
requires more than mere sale of a product the price of which has been illicitly inflated by
an alleged price-fixing scheme. The Court will therefore grant Defendants’ Motion to
Dismiss the NHCPA claim.
d. New York
“General Business Law § 349 provides that ‘[d]eceptive acts or practices in the
conduct of any business, trade or commerce or in the furnishing of any service in this state
are hereby declared unlawful[.]’” Goshen v. Mut. Life Ins. Co. of N.Y., 774 N.E.2d 1190,
1195 (2002) (quoting N.Y. Gen. Bus. Law § 349[a]). The New York Court of Appeals has
Indirect Plaintiffs’ reliance on LaChance v. U.S. Smokeless Tobacco Co., 931 A.2d 571
(N.H. 2007) is misplaced. In LaChance, he New Hampshire Supreme Court was answering
an Illinois Brick question: did the court’s rule that indirect purchasers may not bring claims
under the Granite State antitrust statute, announced in Minuteman, LLC v. Microsoft
Corp., 795 A.2d 833 (N.H. 2002), apply to claims under the NHCPA as well. The court
concluded that it did not. LaChance, 931 A.2d at 575–81. However, the Illinois
Brick/Minuteman issue has no bearing on the territoriality question.
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held that the territoriality clause means that “to qualify as a prohibited act under the
statute, the deception of a consumer must occur in New York.” Id.
“The Second Circuit [has] recognized a split of authority following Goshen as to
whether the test asked where the plaintiff was deceived, or where the transaction
following the deceptive act occurred.” In re Fyre Festival Litig., 399 F. Supp. 3d 203, 223
(S.D.N.Y. 2019) (citing Cruz v. FXDirectDealer, LLC, 720 F.3d 115, 122 (2nd Cir. 2013)).
Although CIP Plaintiffs would likely fail the place-of-deception test, their Amended
Complaint alleges that they purchased pork in New York, the price for which had been
illicitly inflated by the alleged price-fixing scheme—meaning they satisfy the transactionbased test. Cf. In re Fyre Fest., 399 F. Supp. 3d. at 223–24. Therefore, the CIP Plaintiffs
have sufficiently pleaded a claim under section 349 and the Court will deny Defendants’
Motion to Dismiss.
e. North Carolina
The North Carolina Unfair Trade Practices Act (“NCUDTPA”), N.C. Gen. Stat. § 751.1, provides that “unfair methods of competition in or affecting commerce, and unfair
or deceptive acts or practices in or affecting commerce, are declared unlawful.” Before
1977, the NCUDTPA was specifically limited to acts “within th[e] state.” The ‘In’ Porters,
S.A. v. Hanes Printables, Inc., 663 F. Supp. 494, 501 (M.D.N.C. 1987) (quoting Am.
Rockwool, Inc. v. Owens-Corning Fiberglas, 640 F. Supp. 1411, 1427 (E.D.N.C. 1980)). The
North Carolina General Assembly “deleted th[e] geographical limitation in 1977, and the
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courts have determined that the General Assembly sought thereby to expand the
coverage” of the NCUDTPA to the limits of the North Carolina long-arm statute. Id.
Defendants argue that the NCUDTPA claim must be dismissed because the ‘In’
Porters case and those that follow it require that only conduct that has a “substantial
effect” on “in-state operations” is actionable—despite the absence of such a requirement
in the text of the statute. See id. at 501–02. The Court is unpersuaded. The state
legislature specifically removed a geographic limitation from the NCUDTPA more than 40
years ago. The IPPs include a representative from North Carolina who alleges an in-state
injury; they also allege that Defendants’ products were being sold in the state. See In re
Lidoderm Antitrust Litig., 103 F. Supp. 3d 1155, 1173–74 (N.D. Cal. 2015) (“Here, [plaintiff]
has alleged in-state injury and that defendants’ products were being sold in North
Carolina. . . . That is sufficient at this juncture to state a claim under the NCUDTPA.”); cf
‘In’ Porters, 663 F. Supp. at 502 (dismissing NCUDTPA claim where the plaintiff “admit[ed]
that its business operations are restricted to France and that it d[id] not have any business
operations in North Carolina). Therefore, the Court will deny Defendants’ Motion to
It is unlawful in Wisconsin for any person seeking to sell merchandise to the public
to make “in this state . . . any assertion, representation or statement of fact which is
untrue, deceptive or misleading.” Wis. Stat. § 100.18. The statute “may be violated so
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long as the allegedly deceptive or misleading representation was made, published,
disseminated, circulated, or placed before the public, in Wisconsin[.]” Demitropoulos v.
Bank One Milwaukee, N.A., 915 F. Supp. 1399, 1415 (N.D. Ill. 1996) (cleaned up). One of
the representative plaintiffs for the CIP Plaintiffs is a Wisconsin-resident business, the
Erbert & Gerbert’s, Inc. sandwich shop in Eau Claire. CIP Plaintiffs have therefore
sufficiently alleged an in-state violation of section 100.18 and the Court will deny
Defendants’ Motion to Dismiss.
5. Statutory Bars
As the Court discussed above when discussing the statutory bar on class actions in
the Illinois Antitrust Act, application of the Shady Grove test to the statutory bars on class
actions found in the consumer-protection statutes of Arkansas, South Carolina, and Utah
leads to the same conclusion: Rule 23 supplants the state procedural rules. The Court will
therefore deny Defendants’ Motion to Dismiss.
State Unjust-Enrichment Claims
Defendants argue that Indirect Plaintiffs’ unjust-enrichment claims should be
dismissed because they fail to plead elements required by various state statutes and
because four states do not allow unjust-enrichment claims as a standalone claim.
1. Required Elements
Defendants argue that all Indirect Plaintiffs’ unjust-enrichment claims should be
dismissed because they lump their state claims together, rather than individually pleading
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each element for every state. Defendants rely on Cruz v. Lawson Software, Inc., which
found material conflicts between the law of unjust enrichment in Minnesota and other
states, specifically their statute-of-limitations rules and whether unjust enrichment can
be brought as an independent cause of action. Cruz, Civil No. 08-5900 (MJD/JSM),
2010 WL 890038, at *6 (D. Minn. Jan. 5, 2010). The Court also recently concluded, when
deciding a choice-of-law question in a class-certification motion, that material differences
exist between the states’ unjust-enrichment regimes. Hudock IV, 2020 WL 1515233, at
*8. However, both Cruz and Hudock IV were determining whether, for the purposes of
class certification under Rule 23, common questions predominate under the various
state-law claims. That is a different question than is being asked here, on a Motion to
Dismiss, where the Court’s inquiry is focused on whether Plaintiffs have set out a plausible
claim for relief.
Unjust enrichment occurs when the defendant receives a benefit that is
inequitable to retain. Klass v. Twin City Fed. Sav. & Loan Ass’n, 190 N.W. 2d 493, 494–95
(Minn. 1971). Unjust-enrichment claims often turn on individualized facts. Daigle v. Ford
Motor Co., Civ. No. 09-3214, 2012 WL 3113854, at *4 (D. Minn. July 31, 2012). Indirect
Plaintiffs have successfully made a plausible claim for unjust enrichment. The Amended
Complaints allege that Defendants unlawfully overcharged Plaintiffs for their pork by
conducting inequitable, traceable acts that enriched themselves, and that they do not
deserve to keep the benefits of their enrichment. Altogether, these are sufficient factual
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allegations to make a plausible case for relief. If Defendants, in the future, bring a motion
for summary judgment, then the Court can consider whether Plaintiffs’ case fails, as a
matter of law, to meet the elements of a given state’s unjust-enrichment regime.
2. Independent Cause of Action
Defendants argue for the dismissal of unjust-enrichment claims as they pertain to
California, Mississippi, Illinois, and New Hampshire because those four states purportedly
do not allow unjust enrichment as an independent cause of action.
Unjust enrichment has been held to be an independent cause of action in California
courts. See Ghirardo v. Antonioli, 924 P.2d 996, 1002–03 (Cal. 1996) (holding that a
vendor could recover from a debtor without statutory claims for relief because California
had incorporated the common-law concept of unjust enrichment); First Nationwide Sav.
v. Perry, 11 Cal. App. 4th 1657, 1662 (Cal. App. 1992) (affirming that, under California law,
restitution is due if an individual is “unjustly enriched” by another). There is some
evidence of an intrastate split on this issue. In re Graphics Processing Units Antitrust Litig.,
527 F. Supp. 2d 1011, 1029 (N.D. Cal. 2007). Given the California State Supreme Court’s
ruling in Ghirardo, the Court concludes that such claims are not expressly disallowed
under state law and will deny Defendants’ Motion to Dismiss as to the California unjustenrichment claims.
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Illinois likewise recognizes unjust enrichment as an independent claim. Cleary v.
Philip Morris Inc., 656 F.3d 511, 516 (7th Cir. 2011) (“The Illinois Supreme Court appears
to recognize unjust enrichment as an independent cause of action.”). Defendants argue
that if Illinois unjust-enrichment claims rest on the same improper conduct alleged in
another claim, they will stand or fall with the related claim. Because the Court will deny
Defendants’ Motion to Dismiss as to the antitrust claims, so too will it deny the Motion as
to the Illinois unjust-enrichment claim.
Unjust enrichment has also been found to be an independent cause of action in
Mississippi. Owens Corning v. R.J. Reynolds Tobacco Co., 868 So. 2d 331, 342 (Miss. 2004)
(“Mississippi law provides that, in an action for unjust enrichment, the plaintiff need only
allege and show that the defendant holds money which in equity and good conscience
belongs to the plaintiff.” (quoting Fordice Construction Co. v. Central States Dredging Co.,
631 F. Supp. 1536, 1538–39 (S.D. Miss. 1986))); but see Mosley v. GEICO Ins. Co., No.
3:13CV161-LG-JCG, 2014 WL 7882149 (S.D. Miss. Dec. 16, 2014), at *5 (“[T]his Court has
recognized that unjust enrichment is considered to be a remedy, rather than an
independent theory of recovery.”) Therefore, the Court will deny Defendants’ Motion to
Dismiss as to the Mississippi unjust-enrichment claim.
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d. New Hampshire
New Hampshire case law is friendlier to Defendants’ argument that unjust
enrichment is a remedy and not an independent cause of action.
Infrastructure & Tech. Grp., Inc. v. Gilbane Bldg. Co., No. 05–CV–01–PB, 2005 WL
2978901, at *1 (D.N.H. Nov. 7, 2005) (“Unjust enrichment is an equitable remedy that
ordinarily is unavailable if legal remedies are adequate under the circumstances.”); In re
Chocolate Confectionary Antitrust Litig., 749 F. Supp. 2d 224, 240 (M.D. Pa. 2010)
(concluding that an unjust-enrichment claim was sufficiently pleaded because it
amounted to “simply pleading [an] alternative remed[y]” for a consumer-protection
claim). However, courts have allowed indirect purchasers to bring parasitic unjustenrichment claims based on defendants’ violations of New Hampshire's consumerprotection statute. In re Niaspan Antitrust Litig., 42 F. Supp. 3d 735, 767 (E.D. Pa. 2014)
Because the Court will deny Defendants’ Motion to Dismiss as to the New Hampshire
consumer-protection claim, it will also deny the Motion as to the New Hampshire unjustenrichment claim.
3. Direct Benefit
Defendants further argue for the dismissal of unjust-enrichment claims for ten
states—Arizona, Florida, Kansas, Maine, Massachusetts, Michigan, North Carolina, North
Dakota, Utah, and West Virginia—because Indirect Plaintiffs fail to allege that they
directly conferred a benefit to Defendants.
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“Unjust enrichment is a means of restitution, which is a ‘flexible, equitable remedy’
that looks to ‘the ties of natural justice and equity’ to make compensation for the benefits
received.” Span v. Maricopa Cty. Treasurer, 437 P.3d 881, 886 (Ariz. App. 2019) (quoting
State v. Ariz. Pension Planning, 739 P.2d 1373, 1375 (Ariz. 1987)). Under Arizona law, “[t]o
make a claim for unjust enrichment, a plaintiff must show (1) an enrichment, (2) an
impoverishment, (3) a connection between the enrichment and impoverishment, (4) the
absence of justification for the enrichment and impoverishment, and (5) the absence of a
remedy at law.” Id.
Defendants, pointing to the third element and relying on Brown v. Pinnacle
Restoration LLC, No. 1 Ca-CV 12-0440, 2013 WL 3148654, at *2 (Ariz. App. June 18, 2013),
argue that a degree of directness is required. This overstates the holding of Brown, which
concluded that the payment of a premium to an insurer who then paid a contractor was
a sufficient connection between the enrichment and impoverishment. Id. The mere fact
that there are necessarily intermediaries between Defendants and Indirect Plaintiffs does
not therefore defeat their claim under Arizona law.
However, the Court must still dismiss the claim because Indirect Plaintiffs have
failed to plead even that indirect connection. See id. at *1 (describing allegations); Yee v.
Nat’l Gypsum Co., No. CV–09–8189–PHX–DGC, 2010 WL 2572976, at *4 (D. Ariz. June 22,
2010) (“Plaintiff purchased the drywall from Lowe’s. The complaint alleges that National
Gypsum manufactured the drywall but contains no allegation that Plaintiff conferred a
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benefit on National Gypsum. This omission requires dismissal[.]” (cleaned up)). Because
Indirect Plaintiffs have not alleged the connection between their purchases and the
(admittedly mediated) transaction with Defendants, the Court will dismiss the claim.
There had previously been conflicting lines of cases in Florida regarding whether a
showing of a direct benefit was required to maintain an unjust-enrichment claim. See In
re Processed Egg Prod. Antitrust Litig., 851 F. Supp. 2d 867, 928–29 (E.D. Pa. 2012)
(describing the split and collecting cases). However, in 2017, the Florida Supreme Court
adopted the rule “that to prevail on an unjust enrichment claim, the plaintiff must directly
confer a benefit to the defendant.” Kopel v. Kopel, 229 So. 3d 812, 818 (Fla. 2017).
Plaintiffs point only to cases decided before the Kopel rule. Because the Florida Supreme
Court has spoken directly on the issue, the Court is bound by its decision and therefore
will grant Defendants’ Motion to Dismiss the claim.
Unjust enrichment has three elements in Kansas: “(1) a benefit conferred upon the
defendant by the plaintiff; (2) an appreciation or knowledge of the benefit by the
defendant; and (3) the acceptance or retention by the defendant of the benefit under
such circumstances as to make it inequitable for the defendant to retain the benefit
without payment of its value.” Haz-Mat Response, Inc. v. Certified Waste Servs. Ltd.,
910 P.2d 839, 847 (Kan. 1996) (quoting J.W. Thompson Co. v. Welles Prods. Corp., 758 P.2d
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738, 745 (Kan. 1988)). Although there are exceptions, such as between a subcontractor
and the owner of a property, unjust-enrichment claims “do not depend on privity” in
Kansas. Id. Thus, indirect purchasers could potentially recover restitution under Kansas
Defendants argue otherwise, pointing to an unpublished Kansas Court of Appeals
case, JA-DEL, Inc. v. Winkler, No. 118,441, 2019 WL 166936 (Kan. App. Jan. 11, 2019). In
Winkler, the court concluded that a catering company could bring an unjust-enrichment
claim against the groom of a wedding when his bride, who had signed the catering
contract, failed to pay. Id. at *4. In response to the groom’s argument “that a judgment
against him would, by extension, allow [plaintiff] . . . to sue the guests at the wedding
reception,” the court reasoned that such a claim would not be valid because “[t]he guests
would not be receiving a benefit directly from the caterer” and “would not expect to be
asked to pay later for gratuitously furnished food or beverages because the host stiffed
the supplier.” Id. at *5. Defendants’ reliance on this glib response to a silly argument
borders on frivolousness; nothing in Winkler suggests that the Kansas Supreme Court’s
rule in Haz-Mat would not apply here. Therefore, the Court will deny Defendants’ Motion
“To prevail on a claim for unjust enrichment, the complaining party must show that
‘(1) it conferred a benefit on the other party; (2) the other party had appreciation or
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knowledge of the benefit; and (3) the acceptance or retention of the benefit was under
such circumstances as to make it inequitable for it to retain the benefit without payment
of its value.’” Knope v. Green Tree Servicing, LLC, 161 A.3d 696, 699 (Me. 2017) (quoting
Maine Eye Care Assocs., P.A. v. Gorman, 942 A.2d 707, 712 (Me 2008)). As in Kansas, the
Supreme Judicial Court of Maine has held that “lack of privity . . . do[es] not bar an action
for unjust enrichment.” Aladdin Elec. Assocs. V. Town of Old Orchard Beach, 645 A.2d
1142, 1144 (Me. 1994) (internal quotation omitted).
Defendants point to an unpublished case from the Northern District of Illinois, In
re Aftermarket Filters Antitrust Litig., No. 08 C 4883, 2010 WL 1416259, at *2 (N.D. Ill. Apr.
1, 2010), in which the court merely included in a string cite a single case from the Maine
Superior Court, Rivers v. Amato, No. CIV. A. CV-00-131, 2001 WL 1736498, at *4 (Me.
Super. June 22, 2001). In that case, Rivers contracted to buy beachfront property from
Amato for $3,000,000; two weeks later Amato told Rivers that he was backing out of the
deal, would develop the land himself, and would sell it to Rivers for $4,800,000. Rivers,
2001 WL 1736489, at *1. Rivers subsequently cancelled the purchase and sale agreement
and his earnest money was returned. Id. A month later, Amato sold the property to a
local developer, Hollis, for $3,000,000 and an agreement to pay a sewer lien of $41,000.
Id. Rivers sued for breach of contract and unjust enrichment. Id. at *2. The Superior
Court dismissed the unjust-enrichment claim because “Rivers d[id] not allege that he (at
least directly), conferred a benefit on Defendants. Rather, Rivers’ unjust-enrichment
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claim is based on an indirect (and speculative) theory that through his efforts, Hollis
conferred a benefit on Amato.” Id. at *4. The facts of Rivers are plainly distinguishable
from this case, where Indirect Plaintiffs undoubtedly actually purchased pork, from
intermediaries, processed by Defendants. Rivers never actually bought anything—he
merely alleged that he was a pawn in driving up the price from another buyer. Because
nothing in Rivers undermines Maine’s no-privity rule, the Court will deny Defendants’
Motion to Dismiss.
“A plaintiff asserting a claim for unjust enrichment must establish not only that the
defendant received a benefit, but also that such a benefit was unjust[.]” Metro. Life Ins.
Co. v. Cotter, 984 N.E.2d 835, 850 (Mass. 2013). “The injustice of the enrichment . . .
equates with the defeat of someone’s reasonable expectations.” Id. (internal quotation
omitted). The Massachusetts Supreme Judicial Court has allowed for unjust-enrichment
claims in a variety of circumstances, including “‘business torts[,]’ such as unfair
competition[.]” Id. at 851. Federal courts in Massachusetts, applying Massachusetts law,
have concluded that “[u]njust enrichment does not require that a defendant receive
direct payments from a plaintiff.” Massachusetts v. Mylan Labs., 357 F. Supp. 2d 314, 323
(D. Mass. 2005) (citing Greewald v. Chase Manhattan Mortg. Corp., 241 F.3d 76, 81 (1st
Cir. 2001)). Although the issue has not been definitely resolved by the Massachusetts
Supreme Judicial Court, the statutory requirement that a plaintiff show only that
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“defendant received a benefit,” though not from whom, persuades the Court that the
District of Massachusetts got it right in Mylan Labs.
The case on which Defendants rely, Estate of Johnson v. Melvin Rose, Inc.,
No. WOCV200400622, 2007 WL 1832029, (Mass. Super. May 9, 2007), fails to convince
the Court otherwise. In the first place, the court is applying Connecticut law. Johnson,
2007 WL 1832029, at *28, 35. Second, as authority for the assertion that “[i]n the
absence of a measurable benefit directly conferred on the defendant, there can be no
liability in restitution,” Id. at *39, the court points to Zeigler v. Sony Corp. of Am., 849 A.2d
19 (Conn. Super. 2004). But Zeigler says just the opposite: “[some] courts have concluded
that the parties must have a direct relationship (as opposed to dealing with others
through an intermediary seller) and a course of dealing with each other. That, however,
is to engraft a requirement not imposed by our higher courts.” 849 A.2d at 25 (footnote
omitted). The Court will therefore deny Defendants’ Motion to Dismiss.
“A claim of unjust enrichment can arise when a party ‘has and retains money or
benefits which in justice and equity belong to another.’” Wright v. Genesee Cty.,
934 N.W.2d 805, 809 (Mich. 2019) (quoting McCreary v. Shields, 52 N.W.2d 853, 855
(Mich. 1952)). “Unjust enrichment, by contrast, doesn’t seek to compensate for an injury
but to correct against one party’s retention of a benefit at another’s expense.” Id. at 810.
The doctrine “serves a unique legal purpose: it corrects for a benefit received by the
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defendant rather than compensating for the defendant’s wrongful behavior.” Id. at 811.
Although this does not answer the specific question of whether plaintiffs must confer a
benefit directly, the language used by the Michigan Supreme Court in Wright suggests
that the focus is on the benefit, rather than on how that benefit was transferred.
Defendants’ point to A&M Supply v. Microsoft Corp., Docket No. 274164, 2008 WL
540883 (Mich. App. Feb. 28, 2008). In that case, the Michigan Court of Appeals affirmed
the district court’s denial, on futility grounds, of a motion to amend to include an unjustenrichment claim by indirect purchasers. A&M Supply, 2008 WL 540883, at *2 (citing Bell
Isle Grill Corp. v. Detroit, 666 N.W.2d 271, 280 (Mich. App. 2003)). Bell Isle relies on a line
of cases stemming from Dumas v. Auto Clubs Ins. Ass’n, 473 N.W.2d 652 (Mich. 1991), but
that decision merely quoted the elements of unjust enrichment used by the decision
below—which the Michigan Supreme Court reversed—and the elements themselves
were not germane to the holding. Dumas, 473, N.W.2d at 663 (“[S]ince we have
determined that defendant had the right to impose a new compensation plan, we find
that defendant, as a matter of law, was not unjustly enriched . . . [and] the statute of
frauds does not bar the assertion of an unjust enrichment claim.”).
The Court will rely on the Michigan Supreme Court’s recent decision in Wright, in
which the Chief Justice wrote extensively on the principles and history of unjust
enrichment, to conclude that a plaintiff need not confer a benefit on a defendant directly
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in order to bring an unjust-enrichment claim. Therefore, the Court will deny Defendants’
Motion to Dismiss.
g. North Carolina
“The law of unjust enrichment in North Carolina proceeds from the general
principle that ‘[a] person who has been unjustly enriched at the expense of another is
required to make restitution to the other.’” Metric Constructors, Inc. v. Bank of TokyoMitsubishi, Ltd., 72 F. App’x 916, 920 (4th Cir. 2003) (quoting Booe v. Shadrick, 369 S.E.2d
554, 555–56 (N.C 1988)). “In order to prevail on a claim for unjust enrichment, a plaintiff
must prove that (1) it conferred a benefit on the defendant, (2) the benefit was not
conferred officiously or gratuitously, (3) the benefit is measurable, and (4) the defendant
consciously accepted the benefit.” Id. (quoting Booe, 369 S.E.2d at 556).
The line of cases on which Defendants rely are based on Effler v. Pyles, 380 S.E.2d
149 (N.C. App. 1989), in which the North Carolina Court of Appeals affirmed summary
judgment against a plaintiff because she had not satisfied her “burden of showing that
she conferred a benefit directly on defendant[.]” Effler, 380 S.E.2d at 152.
“Although Effler has not been expressly overruled, cases decided after Effler have
held that an indirect benefit can support an unjust enrichment claim.” Lau v. Constable,
16 CVS 4393, 2017 WL 536361, at *5 (N.C. Super. Feb. 7, 2017); see, e.g., New Prime, Inc.
v. Harris Trans. Co., 2012 WL 3192718, at *4–5 (N.C. App. Aug. 12, 2012) (“Our holding . . .
is in line with the Restatement and other states. Many jurisdictions do not require that
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the plaintiff confer a direct benefit on the defendant in order to recover under a theory
of unjust enrichment.”); see also Metric Constructors, 72 F. App’x at 921; In re Processed
Eggs, 851 F. Supp. 2d at 934.
Given the silence of the North Carolina Supreme Court on the question and the
trend away from the Effler rule, the Court concludes that North Carolina law does not
require a direct benefit to maintain an unjust-enrichment claim and, therefore, will deny
Defendants’ Motion to Dismiss.
h. North Dakota
Under North Dakota law, “[f]ive elements must be established to prove unjust
enrichment: 1) an enrichment, 2) an impoverishment, 3) a connection between the
enrichment and impoverishment, 4) absence of a justification for the enrichment and
impoverishment, and 5) an absence of a remedy provided by law.” Markgraf v. Welker,
873 N.W.2d 26, 34 (N.D. 2015) (quoting Schroeder v. Buchholz, 622 N.W.2d 202, 207 (N.D.
2001)). “The essential element in recovering under a theory of unjust enrichment is the
receipt of a benefit by the defendant from the plaintiff which would be inequitable to
retain without paying for its value.” Zuger v. N.D. Ins. Guar. Ass'n, 494 N.W.2d 135, 138
(N.D. 1992). These elements, like those used in Arizona, require only a “connection”
between the enrichment and the loss.
The only mention of a direct benefit has been as a baseline: “[f]or a complainant
to recover, it is sufficient if another ‘has, without justification, obtained a benefit at the
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direct expense of the [complainant], who then has no legal means of retrieving it.’”
Apache Corp. v. MDU Res. Grp., Inc., 603 N.W.2d 891, 895 (N.D. 1999) (quoting Midland
Diesel Svc. & Engine Co. v. Siverston, 307 N.W.2d 555, 557 (N.D. 1974)). The quote in
Sivertson was intended to demonstrate that “[a] complainant need not show fraud or
other misconduct on the part of the recipient to recover. It is sufficient if the latter has,
without justification, obtained a benefit at the direct expense of the former, who then
has no legal means of retrieving it.” 24 Sivertson, 307 N.W. 2d at 557 (citation omitted).
The Court concludes that North Dakota does not require a direct conferral of a
benefit in order to bring a claim for unjust enrichment and will not, therefore, dismiss on
that ground. However, as with the Arizona claim, Indirect Plaintiffs have failed to allege
even the bare “connection” required under North Dakota law. Therefore, the Court will
grant Defendants’ Motion to Dismiss the North Dakota unjust-enrichment claim.
“A defendant is liable under the unjust enrichment prong of quantum meruit only
if he or she received a direct benefit from the plaintiff.” Jones v. Mackey Price Thompson
& Ostler, 355 P.3d 1000, 1018 (Utah 2015). The Court will therefore grant the Defendants’
Motion to Dismiss.
j. West Virginia
Indeed, when one looks to the citation used by the court in Sivertson in support of the
it-is-sufficient rule, A&A Metal Buildings v. I-S, Inc., 274 N.W.2d 183, 189 (N.D. 1978), one
sees it is merely a recitation of the five elements of a claim for unjust enrichment.
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“[I]f benefits have been received and retained under such circumstance that it
would be inequitable and unconscionable to permit the party receiving them to avoid
payment therefor, the law requires the party receiving the benefits to pay their
reasonable value.” Realmark Devs., Inc. v. Ranson, 542 S.E.2d 880, 884–85 (W. Va. 2000).
“Recovery of damages based upon the theories of quasi contract or unjust enrichment
does not necessitate a finding of privity of contract between the parties.” Dunlap v.
Hinkle, 317 S.E.2d 508, 512 n.2 (W. Va. 1984). West Virginia law does not require the
conferral of a direct benefit. 25 Therefore, the Court will deny Defendants’ Motion to
According to Defendants, unjust-enrichment law in both Illinois and South Carolina
require the presence of a special duty owed by defendant to plaintiff. Defendants
therefore move to dismiss these unjust-enrichment claims because Indirect Plaintiffs
failed to allege any such duty.
In Illinois, “there is no duty or privity requirement when bringing a claim for unjust
enrichment.” Sobel v. Franks, 633 N.E.2d 820, 829 (Ill. App. 1994). Defendants argue
Defendants’ reliance on Johnson v. Ross, 419 Fed. App’x 357 (4th Cir. 2011), is misplaced.
The Fourth Circuit concluded that the West Virginia Court of Appeals had not yet decided
the direct-benefit question and expressly “decline[d] [the] invitation to settle this statelaw question . . . because doing so [was] unnecessary to reach [their] disposition.”
Johnson, 419 Fed. App’x at 362.
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otherwise. See Phila. Indem. Ins. Co. v. Pace Suburban Bus Serv., 67 N.E.3d 556, 570 (Ill.
App. 2016) (“For a cause of action based on a theory of unjust enrichment to exist, there
must be an independent basis that establishes a duty on the part of the defendant to act
and the defendant must have failed to abide by that duty.” (citing Martis v. Grinnell Mut.
Reinsur. Co., 905 N.E.2d 920, 928 (Ill. App. 2009)). The line of cases supporting this
statement begins with Board of Education of City of Chicago v. AC&S, Inc., in which
plaintiff brought a claim of unjust enrichment against defendant manufacturers and
distributors of asbestos-containing materials (ACMs) that had been installed in plaintiff’s
schools. Bd. of Educ. of Chi. v. AC&S, Inc., 546 N.E.2d 580 (Ill. 1989). That claim was
dismissed in part because there was no duty on defendant’s part to remove the ACMs.
Id. at 598. However, this duty requirement only pertained to a narrow subset of unjustenrichment claims specifically dealing with dereliction of one’s duty to the public. Id. at
597. (noting that plaintiff’s claim rests on Restatement of Restitution § 115 “Performance
of Another’s Duty to the Public”). This holding was overstated by Martis, which has been
called “not an accurate statement of the law on the equitable claim for unjust
enrichment.” Nat’l Union Fire Ins. Co. of Pittsburgh v. DiMucci, 34 N.E.3d 1023, 1042–43
(Ill. App. 2015). Because this case has nothing to do with this narrow, public-health related
holding, Philadelphia Indemnity Insurance Co. is an unpersuasive counter to the Sobel
rule. Therefore, the Court will deny Defendants’ Motion to Dismiss as to the Illinois
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b. South Carolina
The basic requirements for an unjust-enrichment claim under South Carolina law
are “(1) a benefit conferred upon the defendant by the plaintiff; (2) realization of that
benefit by the defendant; and (3) retention by defendant of the benefit under conditions
that make it inequitable for him to retain it without paying its value.” Ellis v. Smith
Grading & Paving, Inc., 366 S.E.2d 12, 15 (S.C. App. 1988).
Defendants claim that Ellis dismissed an unjust enrichment action because there
was no breach of duty. This is inaccurate. The Ellis claim was dismissed because the
plaintiff conferred no actual benefit and because the defendant was not actually
enriched. Id. (“[W]e hold it was error for the Master to order restitution in this case for
two reasons: (1) Smith was not unjustly enriched by its failure to pay the IRS; and (2) Ellis
has conferred no benefit upon Smith for which she may demand restitution.”) It is true
that Ellis refers to a “duty” owed by defendant, but that duty is quasi-contractual,
meaning it exists if the plaintiff is “substantially and personally harmed” by a defendant’s
failure to pay for a benefit conferred. Id. In other words, the duty exists whenever the
basic requirements for an unjust-enrichment claim are met; it does not add another
The other two cases cited by Defendants hold that duty is a requirement, but they
come to that conclusion by misreading the holding from Myrtle Beach Hospital, Inc. v. City
of Myrtle Beach, 532 S.E.2d 868, 873 (S.C. 2000). See In re Microsoft Corp. Antitrust Litig.,
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401 F. Supp. 2d 461, 464–65 (D. Md. 2005); Pitts v. Jackson Nat’l Life Ins. Co., 574 S.E.2d
502 (S.C. App. 2002). In Myrtle Beach Hospital, the plaintiff hospital failed to show unjust
enrichment because the defendant did not actually benefit from the medical care that
plaintiffs provided to pretrial detainees. Myrtle Beach Hosp., 532 S.E.2d at 873. The City
could not have been unjustly enriched because it was not enriched at all. The Supreme
Court of South Carolina’s holding did not conclude that duty was a required element of
unjust-enrichment claims, and in fact echoed the three elements listed in Ellis—none of
which requires a duty. For this reason, the Court will deny Defendants’ Motion to Dismiss
as to the South Carolina unjust-enrichment claim.
5. Alternative Remedies
Defendants additionally argue that Plaintiffs’ unjust-enrichment claims for ten
states should be dismissed because unjust enrichment can only be pleaded if there is no
other adequate remedy at law. According to Defendants, because Plaintiffs also make
legal claims and because they fail to show why these legal remedies may be inadequate,
they have failed to show that there are no other adequate remedies.
Contrary to Defendants’ assertion, courts have affirmed plaintiff’s right to plead
unjust enrichment as an alternative to other legal remedies. See, e.g., In re Generic
Pharm. Pricing Antitrust Litig., 368 F. Supp. 3d at 851 (refusing to dismiss plaintiff’s unjustenrichment claim because it failed to specifically allege a lack of legal remedy, citing Rule
8(d)(2)’s “permissiveness” of pleading in the alternative). Some courts emphasize that
such claims should especially be allowed at the pleading stage. See, e.g., United States v.
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R.J. Zavoral & Sons, Inc., 894 F. Supp. 2d 1118, 1127 (D. Minn. 2012) (maintaining that the
government can pursue an unjust-enrichment claim in the alternative to other remedies
Indirect Plaintiffs and Defendants rely on United States v. Bame, 721 F.3d 1025 (8th
Cir. 2013), but come to opposite conclusions. However, both fail to acknowledge that the
Eighth Circuit specifically declined to resolve the question. Id. at 1029 (“[The existence of
other legal remedies] presents a serious question that we need not resolve at this
time[.]”). Bame is helpful in one respect, however: it suggests that the Court should be
less skeptical of unjust-enrichment claims at the pleading stage. Id. at 1031 (noting that
the courts that had allowed plaintiffs to plead both unjust-enrichment claims and legal
claims did so at the pleading stage). At this stage, when it is still unclear whether Indirect
Plaintiffs’ other legal remedies will prevail, it is unnecessary to dismiss unjust-enrichment
claims because they are pleaded in the alternative.
Parens Patriae Standing
The parens patriae, or “parent of the country,” action is rooted in the English
common-law concept of royal prerogative, which included the power of the king to act
“as guardian of persons under legal disabilities to act for themselves.” Hawaii v. Standard
Oil Co., 405 U.S. 251, 257 (1972). After the formation of the United States, the parens
patriae power passed to the states and the scope of parens patriae suits has expanded
CASE 0:18-cv-01776-JRT-HB Doc. 519 Filed 10/16/20 Page 78 of 87
beyond what existed in England. Id. Puerto Rico and Defendants agree that an express
statutory grant of authority may confer parens patriae standing. A state will also have
standing to sue as parens patriae where it can pass the so-called Snapp test; to do so it
must “articulate an interest apart from the interests of particular private parties” and
“express a quasi-sovereign interest.” Alfred L. Snapp & Son, Inc. v. Puerto Rico ex rel.
Barez, 458 U.S. 592, 607 (1982). A state, for example, “has a quasi-sovereign interest in
the health and well-being—both physical and economic—of its residents in general.” Id.
To decide whether a state’s interest pertains to “its residents in general” as opposed to
an “identifiable group of individual residents,” a court will consider the direct and indirect
effects of the alleged injury. Id. An “alleged injury to the health and welfare of its citizens
suffices to give the State standing to sue as parens patriae [if] the injury is one that the
State, if it could, would likely attempt to address through its sovereign lawmaking
powers.” Id. Although the American concept of parens patriae is broad, it “does not
involve the States stepping in to represent the interests of particular citizens who, for
whatever reason, cannot represent themselves.” Id. at 600. If that is the case, “i.e., if the
State is only a nominal party without a real interest of its own—then it will not have
standing under the parens patriae doctrine.” Id.
Puerto Rico asserts that it has an express statutory grant of parens patriae
authority under Title 32, § 3342 of the Laws of Puerto Rico, which states: “There is
recognized the right to merchants, to consumers of goods and services and to the
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Commonwealth of Puerto Rico to file a class suit on behalf of said merchants or
consumers based on the Antitrust Act of the Commonwealth, §§ 2̀57–274 of Title 10.”
P.R. Laws Ann. tit. 32, § 3342.
Defendants argue that because Puerto Rico has not brought a class action under
Fed. R. Civ. P. 23, it has not brought “a class suit” within the meaning of section 3342 and
therefore cannot avail itself of the statutory authority. Defendants cite no authority in
support of that assertion. Puerto Rico counters by citing In re Cardizem CD Antitrust
Litigation, which concluded, inter alia, that “the Commonwealth of Puerto Rico . . . ha[s]
expressly conferred parens patriae authority upon [its] Attorney General,” citing P.R.
Laws Ann. tit. 32, §§ 3341–44. 218 F.R.D. 508, 521 (E.D. Mich. 2003).
Although the language is not a model of clarity, the Court agrees with Puerto Rico
and concludes that section 3342 confers parens patriae authority. As the Seventh Circuit
noted in LG Display Co. v. Madigan:
A class action must be brought by a ‘representative person.’
This case was brought by the [Illinois] Attorney General, not
by a representative of a class. A class action must be brought
as a class action. This case was brought as a parens patriae
suit under the [Illinois Antitrust Act], which does not impose
any of the familiar Rule 23 constraints.
665 F.3d 768, 772 (7th Cir. 2011). Puerto Rico, as a sovereign, cannot be a “representative
person.” Because the Court concludes that there is an explicit statutory grant of parens
patriae standing under section 3342, it need not consider whether Puerto Rico’s claims
here satisfy the Snapp test.
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Puerto Rico brings three statutory claims under the Puerto Rico Antitrust Act
(“PRAA”), P.R. Laws. Ann. tit. 10 §§ 257–276: (1) conspiracy in restraint of trade, id. § 258;
(2) unfair or deceptive acts in trade, id. § 259; and monopolization, id. § 260. The first
claim is the PRAA analogue to § 1 of the Sherman Act; the third claim is the PRAA analogue
to § 2 of the Sherman Act.
1. Section 258
Because section 258 is the Commonwealth’s equivalent of a § 1 claim under the
Sherman Act, it survives in tandem with the Court’s conclusion that Plaintiffs have
adequately pleaded parallel conduct. 26 See Shell Co. (Puerto Rico) Ltd. v. Los Frailes Serv.
In its Amended Complaint, the Commonwealth alleges that it “directly and indirectly
purchased pork from Defendants[.]” (P.R. Compl. ¶ 184C.) Defendants argue that this
“conclusory sentence is not enough to establish the Commonwealth” as a direct
purchaser. (Defs.’ Mot. to Dismiss Memo. at 3 n.1, Jan. 28, 2020, 19-2723 Docket No.
107.) However, the allegation is similar to that used in the DPP Complaint itself. (See DPP
The Amended Complaint also states that the Commonwealth brought this action “on
behalf of itself [that is, an allegedly direct and indirect purchaser] and as parens patriae
on behalf of the population of Puerto Rico.” (P.R. Compl. at 1.) States, as well as the
District of Columbia and Puerto Rico, are explicitly given the authority to bring a parens
patriae claims for violations of the Sherman Act. See 15 U.S.C. §§ 15c (authorizing state
attorneys general to bring parens patriae claims); 15g(2) (defining state to include the
District of Columbia and Puerto Rico). Such claims must be on behalf of direct-purchaser
residents. See Kansas v. UtiliCorp United, Inc., 497 U.S. 199, 218–19 (1990). However,
the Commonwealth appears not to have pleaded—even with a simple “conclusory
sentence” like the one in which it asserts its own status as a direct purchaser—that any
of its residents are, in fact, direct purchasers.
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Station, Inc., 551 F. Supp. 2d 127, 135 (D.P.R. 2007), aff’d, 605 F.3d 10 (1st Cir. 2010)
(“Puerto Rico courts generally follow federal antitrust law when interpreting local
Additionally, the Court agrees with the U.S. District Court for the District of Puerto
Rico, which has twice concluded that the Supreme Court of Puerto Rico has rejected
Illinois Brick and allows indirect purchasers to sue for damages under the PRAA. RiveraMuniz v. Horizon Lines, Inc., 737 F. Supp. 2d 57, 61 (D.P.R. 2010) (citing Pressure Vessels
of P.R., Inc. v. Empire Gas de P.R., 137 D.P.R. 497, 509–18 (1994)); Rivera-Muniz v. Horizon
Lines, Inc., Civil No. 09-2081 (GAG), 2010 WL 3703737, at *2 (D.P.R. Sept. 13, 2010)
(denying defendants’ motion to certify a question to the Puerto Rico Supreme Court
asking whether indirect purchasers may bring claims under the PRAA because, “[w]ithout
citing Illinois Brick explicitly, the Puerto Rico Supreme Court rejected such limitations on
standing for the purpose of private antitrust actions under PRAA”). Therefore, the Court
will deny Defendants’ Motion to Dismiss as to Puerto Rico’s claims under section 258.
2. Section 259
Section 259 of the PRAA does not include a private right of action. See P.R. Laws
Ann. tit. 10 § 268(a). Because it may only bring an action for violation of the PRAA “for
the recovery of damages in the same manner . . . as in the case of a private entity,” id.
Therefore, the Court will consider Puerto Rico’s claims on its own behalf as both direct
and indirect claims but will consider its parens patriae claims as only being indirect.
CASE 0:18-cv-01776-JRT-HB Doc. 519 Filed 10/16/20 Page 82 of 87
§268(b), the Commonwealth also cannot bring a damages claim for violation of section
259. However, section 269 does authorize the Commonwealth to seek injunctive relief
for violations of the PRAA. Id. § 269. Therefore, this claim for injunctive relief, which is
based on the same allegations as the Sherman Act claim, survives in tandem with the
Court’s conclusion that Plaintiffs have adequately pleaded parallel conduct. Therefore,
the Court will deny Defendants’ Motion to Dismiss as to Puerto Rico’s claims under
3. Section 260
Like section 258, section 260 claims are analyzed in the same way as its federal
analogue. Coastal Fuels of Puerto Rico, Inc. v. Caribbean Petrol. Corp., 79 F.3d 182, 195
(1st Cir. 1996).
The Amended Complaint only states a claim because Defendants
“monopolized or attempted to monopolize trade or commerce of pork.” (P.R. Compl.
¶ 190.) It does not contain the conspiracy language found in section 260. See P.R. Laws
Ann. tit. 10 § 260 (“Every person who shall monopolize, or attempt to monopolize, or
combine or conspire . . . to monopolize . . . shall be guilty of a misdemeanor.”)
Defendants argue that because the pleadings do not make a claim for conspiring to
monopolize, and because the Commonwealth fails to allege facts showing
monopolization or attempt to monopolize, that the Commonwealth’s claim fails. This
would be a hypertechnical application of the plausibility standard; however, this is the
Commonwealth’s third amended complaint.
CASE 0:18-cv-01776-JRT-HB Doc. 519 Filed 10/16/20 Page 83 of 87
Looking past this drafting error, the Commonwealth still has failed to adequately
plead a claim for conspiracy to monopolize. A “claim for conspiracy to monopolize . . .
generally does not require proof of a relevant market, at least not in the manner required
in actual and attempted monopolization cases. This is because the essential elements of
a Section 2 conspiracy claim are concerted action and specific intent to monopolize[.]”
Alexander v. Nat'l Farmers Org., 687 F.2d 1173, 1181–82 (8th Cir. 1982) (citation omitted).
There are no allegations that any Defendants sought to monopolize—that is, “eliminating
or restraining competition.” Id. at 1183. Indeed, the alleged price-fixing scheme would
likely have benefited non-conspiring competitors. Cf. Matsushita Elec. Indus. Co. v. Zenith
Radio, 475 U.S. 574, 582 (1986) (noting that plaintiffs, American TV manufacturers, would
not have a Sherman Act claim against a price-fixing conspiracy by Japanese TV
manufactures to raise the price of TVs told in the United States, because they “stand to
gain from any conspiracy to raise the market price”). Therefore, the Court will grant
Defendants’ Motion to Dismiss as to Puerto Rico’s claims under section 260.
Based on the foregoing, and all the files, records, and proceedings herein, IT IS
HEREBY ORDERED that:
Defendants’ Joint Motion to Dismiss the Federal Law Claims [Civil No. 18-
1776, Docket No. 433] is DENIED;
CASE 0:18-cv-01776-JRT-HB Doc. 519 Filed 10/16/20 Page 84 of 87
Defendants’ Joint Motion to Dismiss the State Law Claims [Civil No. 18-1776,
Docket No. 436] is GRANTED IN PART:
a. State antitrust claims:
i. Rhode Island: IPP Complaint [Civil No. 18-1776, Docket No. 392]
Count 21, ¶¶ 405–10 (6 R.I. Gen. Laws § 6-36-11) is DISMISSED
with prejudice as to claims arising before July 15, 2013; and
ii. Mississippi: IPP Complaint [Civil No. 18-1776, Docket No. 392]
Count 12, ¶¶ 345–53 (Miss. Code Ann. § 75-21-1) and CIP
Complaint [Civil No. 18-1776, Docket No. 432] Count 3, ¶ 237
(Miss. Code Ann. § 75-21-1) are DISMISSED with prejudice;
b. State consumer-protection claims:
i. Massachusetts: IPP Complaint [Civil No. 18-1776, Docket No. 392]
Count 30, ¶¶ 478–79 (Mass. Gen. Laws ch. 93A § 1) and CIP
Complaint [Civil No. 18-1776, Docket No. 432] Count 3, ¶ 258
(Mass. Gen. Laws ch. 93A § 1) are DISMISSED with prejudice;
ii. Michigan: IPP Complaint [Civil No. 18-1776, Docket No. 392]
Count 31, ¶¶ 480–89 (Mich. Comp. Laws Ann. § 445.901) is
DISMISSED with prejudice;
iii. Minnesota: IPP Complaint [Civil No. 18-1776, Docket No. 392]
Count 32, ¶¶ 490–99 (Minn. Stat. § 325F.68) and CIP Complaint
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[Civil No. 18-1776, Docket No. 432] Count 3, ¶ 259 (Minn. Stat.
§ 325D.43) are DISMISSED with prejudice;
iv. New Hampshire: IPP Complaint [Civil No. 18-1776, Docket No.
392] Count 35, ¶¶ 520–30 (N.H. Rev. Stat. Ann. § 358-A:2) and CIP
Complaint [Civil No. 18-1776, Docket No. 432] Count 3, ¶ 261
(N.H. Rev. Stat. Ann. § 358-A:2) are DISMISSED with prejudice;
v. New York: CIP Complaint [Civil No. 18-1776, Docket No. 432]
Count 3, ¶ 263 (N.Y. Gen. Bus. Law § 349) is DISMISSED with
vi. South Dakota: CIP Complaint [Civil No. 18-1776, Docket No. 432]
Count 3, ¶ 267 (S.D. Codified Laws § 37-24-1) is DISMISSED with
vii. Utah: IPP Complaint [Civil No. 18-1776, Docket No. 392] Counts
41 and 42, ¶¶ 584–603 (Utah Code Ann. §§ 13-11-1, 13-5-1) are
DISMISSED with prejudice; and
viii. Virginia: IPP Complaint [Civil No. 18-1776, Docket No. 392]
Count 43, ¶¶ 604–611 (Va. Code Ann. § 59.1–196) is DISMISSED
CASE 0:18-cv-01776-JRT-HB Doc. 519 Filed 10/16/20 Page 86 of 87
c. IPP Complaint [Civil No. 18-1776, Docket No. 392] Count 44 (Unjust
Enrichment), ¶ 614 is DISMISSED with prejudice as to the claims under
the state laws of:
iii. North Dakota; and
Defendant Indiana Packers’ Motion to Dismiss [Civil No. 18-1776, Docket
No. 445] is GRANTED;
Defendants’ other individual Motions to Dismiss [Civil No. 18-1776, Docket
Nos. 440, 442, 448, 450, 453, 456, 458, and 460] are DENIED;
Defendants’ Joint Motions to Dismiss against the Commonwealth of Puerto
Rico [Civil No. 19-2723, Docket Nos. 57 and 105] are GRANTED IN PART:
a. Puerto Rico Complaint [Civil No. 19-2723, Docket No. 103] Count 2,
¶¶ 189–91 is DISMISSED with prejudice as to P.R. Laws Ann. tit. 10
Defendant Indiana Packers’ Motion to Dismiss [Civil No. 19-2723, Docket
No. 66] is GRANTED;
Defendants’ other individual Motions to Dismiss [Civil No. 19-2723, Docket
Nos. 60, 63, 69, 75, 76, 79, 81 and 84] are DENIED;
CASE 0:18-cv-01776-JRT-HB Doc. 519 Filed 10/16/20 Page 87 of 87
Defendants’ Joint Motion to Dismiss against Winn-Dixie Stores, Inc. et al.
[Civil No 19-1578, Docket No. 99] is DENIED;
Defendant Indiana Packers’ Motion to Dismiss [Civil No. 19-1578, Docket
No. 108] is GRANTED and the action is dismissed with prejudice;
Defendants’ other individual Motions to Dismiss [Civil No. 19-1578, Docket
Nos. 102, 105, 111, 114, 117, 120, 122, and 125] are DENIED.
DATED: October 16, 2020
at Minneapolis, Minnesota.
JOHN R. TUNHEIM
United States District Court
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