Judge Ends Indirect Purchaser Plaintiffs’ Case in Refrigerant Compressors

By on April 16, 2014

Last week, on April 8, 2014, the District Court for the Eastern District of Michigan dismissed the remaining claims of indirect purchaser plaintiffs (IPPs) in the ongoing Refrigerant Compressors litigation.  In re: Refrigerant Compressors, Case No. 2:09-md-02042 (E.D. Mich. April 8, 2014).  Almost exactly one year ago, the court dismissed most of the IPPs’ claims, mainly on the basis that the IPPs lacked antitrust standing to bring them.  In re: Refrigerant Compressors, Case No. 2:09-md-02042, Doc. 343  (E.D. Mich. April 9, 2013).  As a result of that decision, the IPPs’ case was limited to claims based on only two state statutes seeking damages against manufacturers of fractional compressors used in refrigeration devices, based on sales that occurred in only those two states.  The court’s decision dismissing the last two state claims was brief and resulted from a stipulation among the IPPs and those particular manufacturers to dismiss the claims.  The parties have not filed their agreement with the court, and it is not publicly available.   

Significantly, the court dismissed the IPPs’ claims with prejudice, eliminating these IPPs’ ability to refile their claims.  This order now ends the indirect purchaser litigation with respect to these IPPs in the refrigerant compressors litigation five years after the IPPs filed their initial complaint, but before the parties reached discovery.  It is unclear whether this agreement will bar any future claims by other potential indirect purchasers.  Typically, when a class plaintiff settles a litigation prior to the actual certification of a class, the parties seek to certify a settlement class.  By certifying a settlement class, the settlement becomes binding on all of the absent class members who do not opt out.  Accordingly, a settlement with a class of plaintiffs will bar any future litigation by members of that same class.  Here, there is no certification of a settlement class.  Therefore, it is possible that other indirect purchasers may be able to bring claims against these defendants in the future.

The court also ordered each party to bear its own costs and legal fees.  The court explicitly noted no one should consider its order and stipulation as an admission of liability against any defendant.  Such an order and stipulation likely means that the parties agreed to a settlement.  It is unclear whether the settlement involves some small payment to the IPPs or whether there was no payment, which is possible if the parties felt that the costs to all parties of litigating the case vastly exceeded the plaintiffs’ potential damages.

This settlement shows that if a defendant can eliminate a significant number of indirect purchasers’ state claims, the indirect purchaser plaintiffs may be more likely to settle prior to engaging in expensive discovery.  However, defendants should still consider moving the court to certify a settlement class in order to bar any future claims from all indirect purchasers.

Lisa A. Peterson
Lisa A. Peterson focuses her practice on antitrust, regulatory and litigation matters. She assists clients across a variety of industries and has represented numerous clients in the health care, pharmaceutical, and biotechnology industries. Lisa advises clients on mergers and acquisitions, including obtaining clearance from the Federal Trade Commission (FTC) and Department of Justice (DOJ), as well as counsels clients on issues regarding antitrust compliance, pricing, and distribution. She also counsels clients on cartel prosecutions and defenses, including government investigations and the initiation and defense of civil class action litigation. Read Lisa Peterson's full bio.

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