March 7, 2005
Senator Thomas McLain Middleton
Chairman, Senate Finance Committee
James Senate Office Building
Annapolis, MD 21401-1991
RE: Support for SB 413 and HB 829
Dear Senator Middleton;
I am writing in support of SB 413 and HB 829, legislation that would enable Maryland citizens who have been overcharged by cartels to recover from the cartel even if the consumers purchased from a middleman. I respectfully submit my views as a resident of Maryland who is the Venable Professor of Law at the University Of Baltimore Law School. I am also conveying these views on behalf of the American Antitrust Institute, a non-profit organization dedicated to improving the role of competition in the United States economy. See www.antitrustinstitute.org
As you know, currently consumers can sue cartels only if they directly purchase from these cartels. Typically, however, consumers purchase from a retailer or other middleman. The only way to compensate consumers victimized by antitrust violations is to pass legislation enabling them to sue successfully even if they are indirect purchasers of the types of products covered by this legislation.
Even though the direct purchasers can in theory sue cartels for overcharges, this rarely is done. These suits are relatively infrequent in part because the middlemen usually pass the overcharges on to the next level in the distribution chain, so they often are unharmed by price fixing. Moreover, the middlemen normally have to deal with these same price fixers in the future, so often do not want to risk angering them by filing a lawsuit against them.
This proposed legislation would not permit duplicative recoveries. Although the majority of the States have enacted indirect purchaser legislation, there has never been even a single cartel against which there has been both a verdict for direct purchasers and also a verdict for indirect purchasers. Out of caution, however, these Bills contain a provision, Section (2) that would prevent duplicative recoveries.
Nor would this legislation be overly complex. The antitrust profession has developed sophisticated tools that assist the Courts to calculate accurately how a cartel’s overcharge is passed on in the distribution chain. No antitrust damages case is simple, but the history of litigation under the indirect purchaser laws passed by other States shows that the objective ascertainment of damages in these types of cases is typical of the complexity involved in other antitrust damage suits.
These are subjects I have written and spoken about for many years, beginning with an article in the Ohio State Law Journal in 1993. More recently, I have given presentations on indirect purchaser damages issues at the annual meeting of the American Bar Association Antitrust Section and before several other organizations. I also was the Reporter for a Task Force established by the National Association of Attorneys’ General that examined the remedies that should be open to indirect purchasers under the antitrust laws.
I have specialized in antitrust since 1978, at the Federal Trade Commission, at Jones, Day, Reavis and Pogue, and since 1987 at the University Of Baltimore Law School. I have authored or co-authored more than 50 U.S. and nine foreign publications in the antitrust field, seven of which have been re-published in books or collections of articles. I have been quoted hundreds of times in a wide variety of publications and have appeared on TV in the United States, France, the United Kingdom and China. I have testified before the U.S. House of Representatives Judiciary Committee and the U.S. Senate Commerce Committee. I am a member of the American Law Institute and have held many positions in the ABA Antitrust Section. A complete list of my publications and presentations can be found at http://home.ubalt.edu/ntlaland/
Please let me know if I can elaborate on any of these issues.
Robert H. Lande Venable Professor of Law