Class Action

Class Action Defense Removal Cases–Gerlinger v. Amazon.com: Ninth Circuit Affirms Dismissal Of Antitrust Class Action Because Plaintiff Lacked Standing To Pursue Class Action

By Michael J. Hassen

Antitrust Class Action Properly Dismissed with Prejudice because Plaintiff Failed to Establish Injury-in-Fact Required for Article III Standing to Prosecute Class Action Ninth Circuit Holds

Plaintiff filed a putative class action against Amazon.com and book-seller Borders Group alleging antitrust violations; the class action complaint alleged that, following unsuccessful attempts to operate its own online website, Borders entered into an agreement with Amazon to “direct[] shoppers to what is known as a mirror website, a site hosted by Amazon.” Gerlinger v. Amazon.com Inc., ___ F.3d ___ (9th Cir. May 27, 2008) [Slip Opn., at 6029-30]. The class action alleged that Amazon would sell and ship the books, but Borders would receive a commission for each book sold. Id., at 6030. The class action complaint alleged further that Borders agreed to abandon “direct participation in the online market” during the life of its agreement with Amazon. Id. Plaintiff’s theory was that this agreement constituted a “per se market allocation” agreement in violation of the Sherman Act. Id. Defense attorneys moved for summary judgment; in part, the defense motion was supported by a declaration establishing that book prices on Amazon’s website declined following the agreement between Amazon and Borders. Id. The district court sought supplemental briefing as to whether plaintiff had standing to prosecute the class action complaint, and ultimately dismissed the class action on the ground that plaintiff had suffered no injury. Id., at 6030-31. The Ninth Circuit affirmed.

The governing law is simple and well-settled: “Article III standing…is a jurisdictional prerequisite to the consideration of any federal claim,” and “Article III standing requires proof of injury-in-fact, causation, and redressibility.” Gerlinger, at 6031 (citations omitted). Defense attorneys established that plaintiff had not suffered any injury. On the contrary, defense declarations established that “the prices [plaintiff] paid for books purchased from Amazon after the agreement became effective were the same, or even lower, than the prices listed before the defendants entered into the agreement.” Id., at 6030-31. Plaintiff, by contrast, presented no evidence in support of his claim that “prices would have been even lower if there had been no agreement.” Id., at 6031. The Circuit Court concluded that, based on the evidence presented, plaintiff was obligated to “show some injury,” id., at 6032. He failed to do so. Id. Accordingly, the district court properly dismissed the antitrust class action with prejudice for lack of Article III standing, id., at 6033.

Full post as published by Class Action Defense Blog on May 29, 2008 (boomark / email).