## Facts

- Multiple antitrust actions alleged a nationwide conspiracy by cement producers to fix cement prices.
- Direct purchasers and indirect purchasers, including several states suing in a representative capacity, pursued claims arising from the alleged overcharges.
- The states asserted both federal antitrust claims and state-law claims under statutes permitting indirect purchaser recovery (often called “Illinois Brick repealer” statutes).
- The actions were coordinated in federal court, and a settlement fund was created with certain defendants.
- The states sought distributions from the settlement fund based on their state-law indirect purchaser claims.
- Direct-purchaser class members objected, arguing that federal antitrust law, as interpreted in *Illinois Brick*, preempted the states’ indirect purchaser statutes.
- The district court held the state statutes preempted and barred payment on the states’ state-law indirect purchaser claims.
- The Ninth Circuit affirmed on conflict-preemption grounds, reasoning the state statutes interfered with policies associated with *Illinois Brick* and *Hanover Shoe* (litigation simplicity, incentives for direct purchasers to sue, and avoidance of multiple liability).

## Issues

1. Whether federal antitrust law preempts state antitrust statutes that permit indirect purchasers to recover damages for antitrust violations.
2. Whether state-law indirect purchaser remedies conflict with the federal remedial limitation recognized in *Illinois Brick* and the related rejection of pass-on defenses in *Hanover Shoe*.

## Decision

- The Supreme Court unanimously reversed.
- The Court held that federal antitrust law does not preempt state statutes allowing indirect purchasers to recover under state antitrust law.
- The Court rejected the view that *Illinois Brick* and *Hanover Shoe* created a federal policy that forbids broader state-law remedies.
- The Court concluded there was no express preemption, no field preemption, and no conflict preemption.
- The Court ruled that the states’ state-law indirect purchaser claims could proceed and could be considered for allocation from the settlement fund, subject to applicable state-law rules.

## Legal Principles

- *Illinois Brick* limits treble-damages recovery under § 4 of the Clayton Act for federal antitrust violations primarily to direct purchasers; it is a construction of federal remedial law, not a restriction on state remedial choices.
- Federal antitrust statutes do not occupy the field of antitrust enforcement; state antitrust laws may operate concurrently and may provide additional remedies.
- State laws permitting indirect purchaser recovery do not inherently “conflict” with federal law merely because federal law restricts recovery to direct purchasers in federal actions.
- Increased complexity or exposure to multiple liabilities from parallel state remedies, without more, does not establish conflict preemption absent a congressional directive requiring uniform federal remedial rules.

## Conclusion

The Court held that federal antitrust law does not preempt state statutes authorizing indirect purchaser damages actions; states may provide broader antitrust remedies than those available under federal law, and *Illinois Brick* does not bar state-law indirect purchaser recovery.


California v. ARC Am. Corp., 490 U.S. 93 (1989)