The opinion of the court was delivered by: Sand, District Judge.
These cases arise out of an alleged bid rigging/market
allocation scheme in the New York City market for
reinforced-concrete superstructure construction work. The State
of New York seeks to amend its complaint to include claims for
damages under New York's antitrust statute on behalf of
government entities which were apparently indirect purchasers
of the concrete work.
In Illinois Brick Co. v. Illinois, 431 U.S. 720, 97 S.Ct.
2061, 52 L.Ed.2d 707 (1977), the United States Supreme Court
held that "indirect purchasers," downstream buyers who allege
that they absorbed at least part of the "cost" of an antitrust
violation, could not recover from the alleged violator under §
4 of the Clayton Act, 15 U.S.C. § 15. The Court described its
decision as one of "statutory construction," id. at 736, 97
S.Ct. at 2070, and found that:
the legislative purpose in creating a group of "`private
attorneys general'" to enforce the antitrust laws under § 4
. . . is better served by holding direct purchasers to be
injured to the full extent of the overcharge paid by them than
by attempting to apportion the overcharge among all that may
have absorbed a part of it.
Id. at 746, 97 S.Ct. at 2075 (citation omitted).
Plaintiff, the State of New York, commenced these actions on
March 20, 1985 and October 22, 1986 respectively, against more
than thirty named defendants, all alleged participants in a
continuing collusive bid rigging and market allocation scheme
directed at the New York City market for "major
reinforced-concrete superstructure construction work." Cedar
Park Amended Complaint, Preliminary Statement. Although
plaintiff sought treble damages under section 4 of the Clayton
Act, 15 U.S.C. § 15, and sections 340 and 342-b of the New York
General Business Law (the "Donnelly Act") for injuries
allegedly sustained by the State and its political
subdivisions, the only state subdivision actually named by
plaintiff in its initial complaint was the New York Convention
Center Development Corporation, a subsidiary of the New York
State Urban Development Corporation ("UDC"). Plaintiff also
sought an injunction against further violations and the
imposition of civil penalties under the Donnelly Act.
In 1987, various of the defendants moved to dismiss all or
portions of the complaints. In State of N.Y. v. Cedar Park
Concrete Corp., 665 F. Supp. 238 (S.D.N.Y. 1987), this Court
In view of the need early in the litigation to identify
State-affiliated purchasers, we believe the complaints should
be dismissed insofar as they purport to state treble damages
claims on behalf of unidentified state subdivisions.
Accordingly, we hold that insofar as the complaints allege
federal and state antitrust damages claims on behalf of State
subdivisions other than the UDC, they are dismissed
without prejudice to repleading within 60 days.
Id. at 242. Having dismissed plaintiff's claims to the extent
they asserted damages claims on behalf of State entities other
than the State itself and the UDC, we turned our attention to
the implications of Illinois Brick, which we described as
stating a "principle of federal antitrust law." Id. We found
that the treble damages claims asserted by the State and the
UDC could withstand the motions to dismiss because the
complaints contained "the required allegations of direct injury
to both the State of New York and the UDC." Id. Pursuant to
our opinion, the State later notified the Court and all parties
that it would not assert any additional damage claims. See
Letters of September 15 and September 22, 1987 from Alice
McInerney, Assistant Attorney General.*fn1
In California v. ARC America Corp., ___ U.S. ___, 109 S.Ct.
1661, 104 L.Ed.2d 86 (1989), the Supreme Court held in a
unanimous opinion joined in by seven justices that claims by
indirect purchasers under state antitrust provisions providing
such purchasers with a cause of action for damages were not
pre-empted by § 4 of the Clayton Act. The Court stressed that
it had "made clear" in Illinois Brick that the issue in that
case was "strictly a question of statutory interpretation" and
observed that nothing in that case "suggest[ed] that it would
be contrary to congressional purposes for States to allow
indirect purchasers to recover under their own antitrust laws."
Id. 109 S.Ct. at 1666.
On October 3, 1989, plaintiff moved for "[a]n order
reconsidering the Court's earlier decision . . . and granting
plaintiff the right to pursue its indirect purchaser damage
claims under state antitrust law against defendants." Notice of
Motion dated October 2, 1989. Plaintiff described this Court's
earlier decision as "holding that it was a settled principle of
antitrust law that `only one who directly purchases products
from an alleged antitrust violator may sue for treble damages'"
and "effectively barr[ing] repleading state affiliated
downstream purchasers" on the basis of Illinois Brick.
Plaintiff's Memorandum in Support of Motion to Reconsider at 3.
At oral argument, we denied plaintiff's motion without
prejudice to the filing of a motion for leave to file an
Amended Complaint. Transcript of Oral Argument dated November
16, 1989 at 29.
On December 19, 1989, plaintiff moved for an order granting it
leave to file an amended complaint seeking damages on behalf of
five government entities which were apparently indirect
purchasers of major reinforced concrete superstructure work for
eight construction projects. Plaintiff continued to argue that
this Court had, "relying on Illinois Brick, effectively
dismissed plaintiff's indirect damage claims, including claims
based on state antitrust law." Plaintiff's Memorandum in
Support of Motion to Amend Complaints at 2. At oral argument,
we noted that we were having ...