Teague v. Bayer AG, 2007 NCBC 12 (N.C. Super. Ct. May 7, 2007)(Tennille)

The Court, again, considered the issue of indirect purchaser standing. It reiterated the factors it looks to in determining whether there is such standing, as articulated in its opinion in Crouch v. Crompton Corp.

Crouch had involved one product, tires, but this case involved ethylene propylene diene monomer, which the Court observed might be used in hundreds of products. The recovery to individual consumers would therefore be miniscule, and the Court observed that "[t]he funds from these settlements are destined to end up in the hands of the lawyers, a handful of named plaintiffs, and a small number of charities selected by the approving court pursuant to the cy pres doctrine."

The Court considered the relevant market (it determined that plaintiff was a participant in a collateral market, a factor working against standing), the directness of impact (what the court termed a complex issue involving multiple distribution chains, which weighed against standing), that other indirect purchasers were likely to have been more heavily impacted (having absorbed some or all of the price increase without passing it on to plaintiff), and the daunting and complex nature of the calculation of damages (which the Court found even more complex than the calculation necessary in Crouch).

After a full analysis, the Court found that the plaintiffs lacked standing. Other defendants in the case had settled class action claims against them in other states before the Court's ruling. Plaintiffs moved for the dismissal of these defendants. The Court reviewed the terms of those settlements and ultimately determined, reluctantly, that it would approve the settlements.

The case makes clear the frustration of the Court about multi-state class actions being settled in other states where the benefits of the settlement do not flow in an appropriate way to the injured residents of this State.

Full Opinion

Brief in Support of Motion to Dismiss

Reply Brief in Support of Motion to Dismiss

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