First, it affirmed the district court’s decision that the plaintiff lacked standing to sue Cardinal. The Seventh Circuit affirmed the second dismissal. The distributors were not parties to the BD contracts and those contracts were negotiated before the distributors became involved in the transactions. The plaintiffs’ allegations, including that the distributors received bonuses and incentives from BD, regularly communicated with BD, and ‘enforced’ BD’s contracts that excluded rival distributors, fell short of the ‘conscious commitment’ or ‘quid pro quo’ required to establish an anticompetitive conspiracy. The court concluded that (1) the plaintiffs lacked standing to sue Cardinal Health, one of the distributor defendants, because they had not purchased from Cardinal or any member of that alleged, independent conspiracy, and (2) the plaintiffs’ allegations fell short of establishing plausible vertical conspiracies between BD and its distributors. The district court dismissed the second amended complaint with prejudice. They alleged separate vertical conspiracies between BD and two of the original distributor defendants, abandoning their original hub-and-spoke theory. On remand, the plaintiffs pursued a different theory. The Court of Appeals remanded the case for further consideration of the pleadings, including allowing the plaintiffs to amend the complaint. The acts the plaintiffs alleged amounted to no more than abiding by the contract the providers’ GPOs had negotiated. The complaint did not allege that distributors engaged in parallel conduct or coordinated their actions. The Seventh Circuit held that the complaint failed in this regard. The plaintiffs asserted a hub-and-spoke conspiracy, which required a coordinating party at the hub (BD), participants at the rim (distributors) and an allegation that the rim coordinated with the hub and would not have attempted to inflate prices without assurances that members at the rim were abiding by the agreement and behaving in the same way. To allege an antitrust conspiracy, the plaintiffs must show that all members of the conspiracy ‘had a conscious commitment to a common scheme designed to achieve an unlawful objective’. If the distributors were not part of the conspiracy, then the plaintiffs’ case ‘falls apart: no conspiracy, no direct purchaser status, no right to recover’. The court focused on the role of the distributors. After finding the Illinois Brick doctrine did not apply (see discussion in the Defenses section, below), the court found that the plaintiffs had not adequately alleged an antitrust conspiracy. The district court ruled that the providers were indirect purchasers and dismissed. Initially, the plaintiffs alleged that Becton Dickinson (BD), a manufacturer of medical devices, several GPOs and several distributors were part of a multi-level conspiracy. If the provider chooses to purchase on the terms a GPO has negotiated, it may choose a distributor that obtains the product from the manufacturer and resells it to the provider at the terms negotiated by the GPO. Providers join group purchasing organizations (GPOs) that negotiate contract terms with manufacturers on behalf of their members. Marion involved a dispute between healthcare providers and the suppliers from which they purchase devices. (In the first appeal, the court also addressed the application of direct purchaser requirement of Illinois Brick to an alleged multi-level conspiracy, which we address below (see Defenses section.) The first time, the court remanded the case to permit the plaintiffs to try to state a claim the second time, it affirmed dismissal of the case with prejudice. In Marion Healthcare v Becton Dickinson ( Marion), the Seventh Circuit twice held that the conspiracy the plaintiffs alleged was insufficient. Section 1 liability Marion Healthcare, LLC v Becton Dickinson & Co
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