Colorado Expands Antitrust Protection
By William Reiss and Ellen Jalkut
August 21, 2023
On June 7, Colorado Governor Jared Polis signed into law the Colorado State Antitrust Act of 2023. Joining dozens of other states, Colorado now provides a private right of action for plaintiffs to recover damages for antitrust violations under Colorado law even if the plaintiff did not purchase directly from the defendant.
In 1977, the U.S. Supreme Court held in Illinois Brick Co. v. Illinois that only customers who bought directly from a defendant may claim damages under the federal antitrust laws. Since that time, so-called indirect purchasers – entities that purchased defendants’ products from suppliers further down the distribution chain -- have relied upon a growing number of states that have enacted “Illinois Brick repealer statutes” to recover damages for injury suffered as a result of anticompetitive conduct.
In addition to explicitly stating that any person indirectly injured may sue and recover damages, the bill removed language directing courts to harmonize the interpretation of Colorado’s antitrust law with interpretations of federal antitrust laws. Notably, the statute does not include language indicating whether its application to indirect purchasers may be applied retroactively or whether it is limited to conduct that takes place after its enactment.
The newly minted Colorado State Antitrust Act permits any purchaser to recover “actual damages” sustained by an antitrust violation and treble damages where the plaintiff alleges and proves a per se violation. Courts have interpreted the “actual damages” language in other state Illinois Brick repealer statutes as permitting defendants to raise a pass-on defense that may preclude multiple entities situated at different points in the chain of distribution from each recovering the full amount of the overcharge for the same purchase.
The Act also clarified the statute of limitations for antitrust actions brought under Colorado law. Claims must be brought within four years of discovery of “circumstances giving rise to the cause of action” or when they “should have been discovered in the exercise of reasonable diligence.” The statute further provides that where there are a “series of acts or practices” comprising the violation, the cause of action accrues on the date of the last in the series. Finally, the statue of limitations is tolled until one year after the culmination of a civil or criminal proceedings brought by the United States government.
By enacting its own Illinois Brick repealer statute, Colorado joins the majority of states that provide a private right of action for indirect purchasers to recover damages for injury suffered as a result of anticompetitive conduct, irrespective of whether the plaintiff purchased directly from the defendant.
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