## Facts

- Purchasers of EA’s Madden NFL video games brought a putative nationwide class action, alleging EA monopolized a market for interactive football video games using major U.S. football league intellectual property (NFL, NCAA, AFL).
- Plaintiffs alleged EA obtained a series of exclusive licenses, including an NFL exclusive license after the 2004–05 season, which allegedly eliminated meaningful competition, including Take-Two’s NFL 2K series.
- Plaintiffs claimed consumers demand realistic games featuring real teams and players, making non-licensed football games unreasonable substitutes.
- Plaintiffs alleged the exclusive licensing foreclosure enabled EA to charge supracompetitive prices for Madden NFL.
- Claims included federal monopolization/attempted monopolization under Sherman Act § 2, California Cartwright Act, California UCL, unjust enrichment, and alternative claims under other states’ antitrust and consumer-protection laws.
- EA moved to dismiss under Rule 12(b)(6), asserting, among other arguments, Illinois Brick indirect-purchaser limits, failure to plead a relevant market and exclusionary conduct, and lack of standing to sue under other states’ laws.

## Issues

1. Whether Illinois Brick’s indirect-purchaser doctrine barred the Sherman Act § 2 claim where plaintiffs purchased through retailers rather than directly from EA.
2. Whether the complaint plausibly alleged a cognizable relevant product market and exclusionary conduct sufficient to plead monopolization or attempted monopolization.
3. Whether exclusive licensing arrangements between EA and leagues could support liability under the California Cartwright Act.
4. Whether named plaintiffs who purchased only in California and the District of Columbia had standing to assert claims under the laws of other states.

## Decision

- The motion to dismiss was granted in part and denied in part.
- The court denied dismissal of the Sherman Act § 2 claim because Illinois Brick limits damages claims by indirect purchasers, but does not bar suits seeking injunctive or other equitable relief.
- The court held the alleged market for realistic, league-licensed interactive football games was plausibly pled at the pleading stage, including allegations of limited interchangeability and the elimination of a significant rival.
- The court denied dismissal of the Cartwright Act claim, holding that exclusive licensing/vertical arrangements may be actionable when alleged to substantially foreclose competition.
- The court allowed California UCL and unjust enrichment claims to proceed as narrowed to the jurisdictions tied to the named plaintiffs’ purchases.
- The court dismissed claims asserted under the laws of states where no named plaintiff purchased the product for lack of standing.

## Legal Principles

- Illinois Brick’s indirect-purchaser rule restricts recovery of antitrust damages by indirect purchasers, but does not categorically bar injunctive or equitable relief claims.
- At the motion-to-dismiss stage, a relevant product market is sufficiently pled when the complaint plausibly alleges lack of reasonable interchangeability and facts suggesting market power and competitive harm.
- Exclusive dealing or exclusive licensing is not per se lawful; it may violate antitrust law when it plausibly threatens substantial foreclosure of competition in a properly defined market.
- California Cartwright Act claims may proceed on allegations that vertical arrangements unreasonably restrain trade, including by foreclosing competition.
- Named plaintiffs generally lack standing to pursue state-law claims under jurisdictions where they did not suffer their own purchase-related injury.

## Conclusion

The court permitted the core federal and California antitrust-based claims challenging EA’s exclusive football-league licenses to proceed, while narrowing the case by dismissing claims based on the laws of states where the named plaintiffs made no purchases.


Pecover v. Elec. Arts Inc., 633 F. Supp. 2d 976 (N.D. Cal. 2009)