Langer Helps Persuade CT Supreme Court to Adopt Indirect Purchaser Rule in Landmark Antitrust and CUTPA Case

April 13, 2002

Noted antitrust specialist and CUTPA authority Robert M. Langer significantly contributed to a recent Connecticut Supreme Court decision, Vacco v. Microsoft Corp., concerning the application of the indirect purchaser rule of Illinois Brick v. Illinois, 431 U.S. 720 (1977), to the Connecticut Antitrust Act and CUTPA. The Supreme Court’s landmark decision served to protect Connecticut businesses from being exposed to multiple lawsuits and substantial financial risk that would have had a detrimental effect on the state’s overall business and industry.

In Illinois Brick, the United States Supreme Court created a prudential rule that only direct purchasers of a product can state a claim for alleged violations of federal antitrust law. In Vacco v. Microsoft Corp., the plaintiff sued Microsoft to recover for alleged overcharges on Microsoft’s Windows 98 computer operating system. Plaintiff’s claim arose out of his purchase of a computer, which had been pre-installed with the Windows 98 program, from a local retail store. The trial court dismissed the plaintiff’s complaint for failure to state a claim, holding that, because the plaintiff did not purchase the Windows 98 program directly from Microsoft, his lawsuit was not permitted under the Illinois Brick indirect purchaser rule. Plaintiff appealed the trial court’s dismissal of his lawsuit, claiming that the federal indirect purchaser rule did not apply to his action, brought not under federal law, but under the Connecticut Antitrust Act and CUTPA.

On behalf of the Connecticut Business & Industry Association, the Association for Competitive Technology, and the New England Legal Foundation, Wiggin & Dana partner Robert M. Langer, aided by litigation associate Erika L. Amarante, filed an amicus curiae brief in support of affirming the trial court’s decision. The Supreme Court unanimously affirmed the trial court in an opinion to be officially released on April 16, 2002.

In its opinion, the Supreme Court adopted a number of the arguments presented in the amicus curiae brief, most notably the contention that the General Assembly’s repeated failure to adopt an "Illinois Brick repealer" bill—despite being presented with such bills on numerous occasions—evidenced legislative intent that the indirect purchaser rule apply under the Connecticut Antitrust Act.

With respect to the CUTPA claim, the Court held that, under the principle of proximate cause, the chain of events from Microsoft’s alleged overcharge to plaintiff’s purchase of his computer had too many intervening steps to permit the CUTPA action to lie in this case. Interestingly, instead of drawing a bright-line rule that no indirect purchasers can recover for antitrust violations, as the United States Supreme Court did in Illinois Brick, the Vacco Court relied on a fact-based proximate cause analysis.

To see the decision Click Here.