The “Co-Conspirator Exception” to Illinois Brick: Mandatory Joinder of Direct Purchaser Co-Conspirators

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Nikki Chavez BrownFollow

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Abstract

Illinois Brick was intended to be a bright-line rule prohibiting indirect purchasers from recovering damages against an upstream antitrust violator under § 4 of the Clayton Act for overcharges passed-on by direct purchasers. In reality, the Illinois Brick decision has resulted in a patchwork of incongruent jurisprudence governing antitrust standing in private enforcement cases. In a seemingly endless struggle to satisfy long-recognized antitrust principles of compensation and deterrence through private enforcement, courts have employed an inconsistent array of rationales and “exceptions” to Illinois Brick. The so-called “co-conspirator exception” to Illinois Brick is intended to provide the first purchaser from outside a vertical antitrust conspiracy a right of action. While circuits recognizing the exception agree on its basic purpose, they differ on what the scope and reach of the exception should be. Much of the disagreement is arguably the result of over-application of Illinois Brick in a manner that broadly precludes indirect purchaser suits, even when no pass-through allegations are involved.

As a result of disagreement among circuits as to the applicability of Illinois Brick to various types of indirect purchaser litigation, the circuits recognizing the co-conspirator exception have developed inconsistent characterizations of the exception with varying procedural requirements for its invocation. One such varying procedural requirement is the joinder of direct purchaser co-conspirators. Circuits holding that Illinois Brick is inapplicable where indirect purchaser plaintiffs make no pass-through allegations tend not to require plaintiffs to join direct purchaser coconspirators in order to invoke the co-conspirator exception. Conversely, circuits holding that Illinois Brick is applicable to most indirect purchaser litigation have largely implemented a mandatory joinder rule, requiring indirect purchaser plaintiffs to join essentially all direct purchaser co-conspirators in order to invoke the co-conspirator exception.

This Comment evaluates the policy considerations underlying antitrust law and, specifically, Illinois Brick to determine an appropriate approach to joinder of direct purchaser co-conspirators as a prerequisite to invoking the co-conspirator exception. I conclude that the joinder requirement should differ depending on whether the plaintiffs have alleged a pass-through theory of damages. If so, then mandatory joinder is appropriate. However, the rule should function as a rebuttable presumption that the plaintiffs may overcome by showing that the risk of duplicative liability is minimized or that joinder is overly burdensome. If no pass-through theories are alleged, then mandatory joinder would be an unnecessary impairment on private enforcement, deterrence, compensation, and efficiency.

Recommended Citation

Brown, Nikki Chavez (2025) "The “Co-Conspirator Exception” to Illinois Brick: Mandatory Joinder of Direct Purchaser Co-Conspirators," The University of Chicago Business Law Review: Vol. 4: No. 1, Article 5.
Available at: https://chicagounbound.uchicago.edu/ucblr/vol4/iss1/5