Illinois Brick Doctrine Law and Legal Definition
Illinois Brick Doctrine is a principle of antitrust law which gives standing to bring an antitrust action to a party who is not an immediate purchaser of a product. In short indirect purchasers of goods or services cannot recover antitrust damages from antitrust violators. For example, if a manufacturer sells a product to a retailer, but dictates the terms by which the retailer must sell the product to a consumer, a court will ignore the retailer and treat the consumer as the direct purchaser of the product. The standard was set in the Supreme Court case Ill. Brick Co. v. Ill., 431 U.S. 720 (U.S. 1977) and hence the name. The rationale for the doctrine was that multiple recovery of the overcharge might be collected if more than one entity in the chain of distribution of the product could recover for the same violation. However many state antitrust laws reject the Illinois Brick doctrine. For example, in California v. ARC America Corp., 490 U.S. 93 (U.S. 1989), four states, filed anti-trust actions involving cement and concrete under § 4 of the Clayton Act, 15 U.S.C.S. § 15(a) for violations of § 1 of the Sherman Act, 15 U.S.C.S. § 1, and under their respective state anti-trust statutes, seeking damages, since they were indirect purchasers of cement and concrete used in state projects. The court held that while federal law did not permit the appellants, as indirect purchasers, to receive payment, their respective state statutes did permit indirect purchasers to receive damages. Since federal anti-trust laws supplemented, but did not pre-empt, state anti-trust laws, and since the settlement resolved all claims, appellants were entitled to receive funds from that part of the settlement that settled the state claims.
