Free v. Abbott Laboratories

Summary

        The U.S.C.A. 5th has held that Louisiana antitrust law does not grant standing to indirect purchasers of consumer products.

        Robin and Renee Free, retail purchasers of infant formula, brought a class action lawsuit against various manufacturers of infant formula. The Frees alleged that the manufacturers conspired to raise the prices of infant formula in violation of the Louisiana antitrust statute and other state laws. The manufacturers removed the case from state court to district court, alleging diversity and federal question jurisdiction. The Frees moved for remand, arguing that neither their claims nor the claims of unnamed class members satisfied the $50,000 amount-in-controversy requirement for diversity jurisdiction. The district court ruled that there was no federal question jurisdiction or diversity jurisdiction and remanded the case back to state court. The manufacturers appealed the remand order. The 5th U.S. Circuit Court of Appeals reversed and remanded. After the case was returned to the district court, the manufactures moved to dismiss. The district court dismissed the case.

        The U.S.C.A. 5th affirmed. Louisiana antitrust law permits any person who is injured in his business or property by any person by reason of any act or thing forbidden by law to sue and recover damages sustained by him, the costs of suit, and reasonable attorney fees. No Louisiana case directly addressed the issue of standing of indirect purchasers in lawsuits brought under the state's antirust law. However, the U.S. Supreme Court in Illinois Brick Co. v. Illinois held that indirect purchasers lacked standing to sue for antitrust violations. The Illinois Brick rule promoted a coherent state antitrust law that placed the incentive to sue on the party best situated to recover.Here, the Frees, as retail purchasers, lacked standing to sue the manufacturers.

        

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