The Ninth Circuit recently affirmed the dismissal of the claims of an antitrust plaintiff on the ground that he lacked the injury-in-fact required for Article III standing.  Gerlinger v. Inc. and Borders Group, Inc., 526 F.3d 1253 (9th Cir. 2008).  Plaintiff failed to create an issue of fact in response to defendants’ showing on summary judgment that plaintiff had not paid more for books as he claimed in his complaint.

Plaintiff, an individual purchaser of books online, challenged an agreement between, an online seller, and Borders Group, Inc., a brick-and-mortar seller.   Borders had previously failed at operating a competitive website.

Under the agreement, the Borders website address directed shoppers to a “mirror” website hosted by Amazon.  Borders received a commission for each resulting sale.  Borders also agreed to abandon its direct participation in the online market, and agreed that it would not reenter that market during the term of the agreement.

Plaintiff alleged that this part of the agreement constituted horizontal market allocation in violation of Section 1.  In his complaint he alleged that, as a result of the agreement, he was forced to pay supracompetitive prices for his books.

Defendants moved for summary judgment or summary adjudication, supported by the declaration of an Amazon vice president showing that prices for books on the Amazon site declined after defendants entered into the challenged agreement.  The district court then ordered the parties to file supplemental papers addressing plaintiff’s standing.

Defendants’ response included additional declarations showing that the prices for books paid by plaintiff after the agreement became effective were the same or lower than the prices listed by defendants for those books before the agreement.  Defendants listed the prices that plaintiff had paid and compared those prices to prices predating the agreement.

Plaintiff sought leave to depose the Amazon vice president who had provided the original declaration.  District Court Judge Patel responded by inviting plaintiff to file a five-page brief explaining how the vice president’s testimony would show that plaintiff had suffered an injury.  Plaintiff did not file such a brief.

Instead, plaintiff filed supplemental papers in which he asserted that prices would have been still lower absent the agreement; submitted academic articles; and rested on his pleadings, arguing that his injury could not be addressed until the damages phase of the case.

The district court dismissed plaintiff’s antitrust claims with prejudice.

The Ninth Circuit Court of Appeals affirmed, stating that standing requires, inter alia, proof of an injury-in-fact, which requires that plaintiff suffered an injury that bore a causal connection to the alleged antitrust violation.  Because defendants had submitted evidence that plaintiff suffered no injury-in-fact, plaintiff could no longer rest on the allegations of his complaint.  He was required by Fed.R.Civ.P. 56(e) to provide admissible evidence of specific facts supporting his standing.  Gerlinger, 526 F.3d at 1255-56, citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992).  Plaintiff did not provide such evidence, and so failed to create an issue of fact.  He did not show that he had paid a higher price, received poorer service or suffered any other form of injury.  The court of appeals held, therefore, that the district court had properly granted summary judgment and dismissed the claim because plaintiff lacked Article III standing.

Plaintiff also attacked a provision in the Amazon-Borders agreement stating that Amazon would not charge higher prices to customers of the mirror site than Amazon charged to customers on its own site.  Plaintiff alleged that this was per se price fixing.  The Ninth Circuit noted that the arrangement “looks very much like a lawful joint venture or a licensing agreement to share brand names,” but declined to reach the merits of the claim or the issue of antitrust injury.  Gerlinger, 526 F.3d at 1256.  The court affirmed the district court’s dismissal of this claim for lack of any injury-in-fact.

Authored by:

Thomas D. Nevins

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