Elkins v. Microsoft Corp.

Annotate this Case
Elkins v. Microsoft Corp. (2001-431); 174 Vt. 328; 817 A.2d 9

[Filed 01-Nov-2002]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.

                                No. 2001-431

  Richard L. Elkins	                         Supreme Court

                                                 On Appeal from
       v.	                                 Windham Superior Court

  Microsoft Corporation	                         September Term, 2002

  John P. Wesley, J.

  Kirsten A. Beske, David N. Dunn, and Potter Stewart, Jr. of Potter
    Stewart, Jr. Law Offices, P.C., Brattleboro, for Plaintiff-Appellant.

  Robert Luce of Downs Rachlin Martin, PLLC, Burlington, and David
    Tulchin of Sullivan & Cromwell (Of Counsel), New York, New York, 
    for Defendant-Appellee.

  William H. Sorrell, Attorney General, and Julie Brill and David B.
    Borsykowsky, Assistant Attorneys General, Montpelier, for Amicus 
    Curiae State of Vermont.

  PRESENT:  Amestoy, C.J., Dooley, Morse, Johnson and Skoglund, JJ.

       DOOLEY, J.   This is an appeal from the trial court's dismissal of a
  class action suit brought under the Vermont Consumer Fraud Act (VCFA or the
  Act), 9 V.S.A. § 2451-80g.  Plaintiff,  Richard Elkins, alleged that
  defendant Microsoft Corporation (Microsoft) used its monopoly power to
  overprice the Windows 98 operating system which plaintiff purchased
  pre-installed in a personal computer from a computer manufacturer (called
  original equipment manufacturer or OEM).  Based on the United States
  Supreme Court decision in Illinois Brick Co. v. Illinois, 431 U.S. 720


  the superior court dismissed the case because plaintiff was only an
  indirect purchaser of Windows 98, that is, he purchased it from the OEM
  rather than Microsoft.  Plaintiff appeals arguing that he does not have to
  be a direct purchaser to sue under the VCFA.  We agree and reverse and

       The facts of this case are not in dispute.  Microsoft is the leading
  supplier of operating system software for personal computers.  Microsoft
  distributed its Windows 98 operating system through OEM's, who
  pre-installed the software on personal computers they sold to consumers,
  and through retailers of CD-ROMs containing the software.  In February
  1999, plaintiff purchased a computer with a pre-installed Microsoft Windows
  98 operating system.  He subsequently brought suit under the VCFA, alleging
  that he and other similarly situated Vermont licensees of Windows 98 were
  injured by Microsoft's abuse of its monopoly power in charging consumers a
  price in excess of the price it would have been able to charge in a
  competitive market.

       Microsoft moved to dismiss the complaint on the grounds that an
  "indirect purchaser" such as plaintiff does not suffer cognizable damages
  in an unfair competition case and thus is barred from bringing a claim
  under the VCFA.  The trial court agreed and granted the motion.
       The issue on appeal is the same as before the trial court: whether,
  given the Illinois Brick decision and the statutory language of the VCFA,
  an indirect purchaser is barred from bringing an action for antitrust
  violations under the VCFA.  Plaintiff and amicus curiae State of Vermont
  argue that a suit by an indirect purchaser under the VCFA is not barred
  because (1) the VCFA provides a cause of action for indirect purchasers,
  and (2) the Illinois Brick indirect purchaser rule is not applicable
  because it construes the Clayton Antitrust Act, and not the VCFA, and our
  construction of the VCFA is not guided by federal Clayton Act decisions. 
  In response, Microsoft argues that (1) an indirect purchaser cause of
  action did not exist under the VCFA until the 2000 amendment, which 


  became effective after plaintiff acquired his copy of Windows 98, and (2)
  the indirect purchaser rule of Illinois Brick controls here because there
  is no express statutory provision in the VCFA providing indirect purchasers
  a cause of action and because the VCFA directs that construction of its
  terms be guided by federal law.

       A motion to dismiss for failure to state a claim should not be granted
  unless there exists no facts or circumstances that would entitle plaintiff
  to relief.  Richards v. Town of Norwich, 169 Vt. 44 , 48, 726 A.2d 81, 85
  (1999).  On review of the trial court's disposition of the motion to
  dismiss, this Court will assume the truth of all factual allegations
  pleaded in the complaint as well as all reasonable inferences that may be
  derived from the pleadings.  Id. at 48-49, 726 A.2d  at 85.  To the extent
  that our review of the trial court's decision involves questions of
  statutory construction, and thus questions of law, it is nondeferential and
  plenary.  State v. Koch, 169 Vt. 109, 112, 730 A.2d 577, 580 (1999).

       We begin with the applicable provisions of the VCFA and then consider
  the impact of Illinois Brick.

       As with any attempt at statutory construction, we begin with the plain
  meaning of the statutory language, because we presume that it reflects the
  Legislature's intent.  Dover Town Sch. Dist. v. Simon, 162 Vt. 630, 631,
  650 A.2d 514, 516 (1994) (mem.).

       The central provision of the VCFA is 9 V.S.A. § 2453(a) which

    (a) Unfair methods of competition in commerce, and unfair or
    deceptive acts or practices in commerce, are hereby declared

  The Act goes on to provide a private remedy for violations:

    Any consumer who . . . sustains damage or injury as a result of
    any false or fraudulent representations or practices prohibited by
    section 2453 of this title . . . may sue for appropriate equitable
    relief and may sue and recover from the seller, solicitor or other
    violator the amount of his damages . . . .

  Id. § 2461(b) (emphasis added).  "Consumer" is defined by the act as:

    [A]ny person who purchases, leases, contracts for, or otherwise
    agrees to pay consideration for goods or services not for resale
    in the ordinary course of his trade or business but for his use or
    benefit or the use or benefit of a member of his household or in
    connection with the operation of his household . . . .

  Id. § 2451a(a) (emphasis added).

       The statutory language contains no privity requirement, that is, no
  provision that the consumer can sue only the retailer and no one further up
  the supply chain.  In general, we will not read provisions into the statute
  that are not present unless it is necessary in order to make the statute
  effective.  State v. O'Neill, 165 Vt. 270, 275, 682 A.2d 943, 946 (1996). 
  The Act expressly states that any consumer, reinforced by the definition of
  consumer as "any person", who suffers injury may bring an action under the
  statute against a "seller, solicitor or other violator."  The language does
  not support the imposition of a privity requirement.
       The plain meaning of the language is supported by the express
  legislative intent behind the statute to "protect the public" against
  "unfair or deceptive acts or practices" and to "encourage fair and honest
  competition."  9 V.S.A. § 2451; see State v. Int'l Collection Serv., Inc.,
  156 Vt. 540, 543, 594 A.2d 426, 429 (1991); Gramatan Home Investors Corp.
  v. Starling, 143 Vt. 527, 536, 470 A.2d 1157, 1162 (1983) (purpose of VCFA
  includes "to encourage a commercial environment highlighted by integrity
  and fairness").  In light of this purpose, this Court has repeatedly held
  that the VCFA is "remedial in nature" and therefore must be construed
  "liberally so as to furnish all the remedy and 


  all the purposes intended."  State v. Custom Pools, 150 Vt. 533, 536, 556 A.2d 72, 74 (1988); see also Carter v. Gugliuzzi, 168 Vt. 48, 52, 716 A.2d 17, 21 (1998) (VCFA should be applied "liberally to accomplish its
  purposes"); State v. Therrien, 161 Vt. 26, 31, 633 A.2d 272, 275 (1993). 
  Of course, liberal construction does not allow us to stretch the language
  beyond legislative intent.  See Wilder v. Aetna Life & Casualty Ins. Co.,
  140 Vt. 16, 19, 433 A.2d 309, 310 (1981).

       The Legislature clearly intended the VCFA to have as broad a reach as
  possible in order to best protect consumers against unfair trade practices. 
  This intent underlies a private remedy section that allows suits by "any
  consumer" with no suggestion of a distinction between direct and indirect
  purchasers.  It also underlies a description of proper defendants including
  not only a seller or solicitor, but also an "other violator," a broad term
  that covers defendant in this case.  We think in this context that any
  restriction to impose a privity requirement, that is to allow only direct
  purchasers to sue, must be stated in clear terms.  See Int'l Collection
  Serv., Inc., 156 Vt. at 549-50, 594 A.2d  at 429 (in the absence of express
  language limiting Attorney General's enforcement power to personal consumer
  victims, plain meaning supports actions against defendants who engage in
  unfair and deceptive practices with respect to business consumers); Custom
  Pools, 150 Vt. at 536, 556 A.2d  at 74 (if Legislature intended that
  Attorney General cannot sue a finance company that benefitted from the
  consumer fraud of a seller, "it could have done so with clear language to
  that effect").
       Although we have never addressed the precise question before us, two
  of our decisions are instructive.  In Carter v. Gugliuzzi, we held that a
  home purchaser could sue a real estate broker under § 2461(b) as a "seller"
  even though the broker did not own the home when it was sold to the
  plaintiff.  Relying on the broad remedial purpose of the VCFA, the plain
  meaning of the term 


  "seller," and the lack of any explicit limitation on that term, we held
  that the broker could be sued under § 2461(b) for deceptive representations
  that induced the sale.  168 Vt. at 53, 716 A.2d  at 22.  Also relevant is
  Poulin v. Ford Motor Co., 147 Vt. 120, 513 A.2d 1168 (1986), where a
  purchaser of an automobile sued both the dealer and the manufacturer
  because a representative of the manufacturer misrepresented that the
  specific model purchased was produced in very limited numbers so that its
  value would increase.  We affirmed a jury verdict against both the dealer
  and manufacturer in response to various claims that plaintiff had failed to
  present the proof required by the statute, id. at 125-27, 513 A.2d  at
  1172-73, although we did not confront the precise claim made here.  Poulin
  is exactly the kind of case that demonstrates that a privity requirement
  would seriously undermine the utility of the Act.  Virtually all of the
  representations about the quality and features of a modern automobile are
  made by manufacturers, most through national and regional media
  advertisements.  If we enforced a privity requirement, the consumer could
  not reach the perpetrator of consumer fraud.

       Microsoft suggests that another decision, Wilder v. Aetna Life &
  Casualty Ins. Co., supports a privity requirement.  In Wilder, plaintiff
  had been in an automobile accident with defendant's insured and sued the
  insurer under VCFA claiming it had failed to pay plaintiff pursuant to a
  settlement agreement.  The main holding of Wilder is that the sale of an
  insurance policy is not a contract of "goods or services" under §§ 2461(b)
  and 2451a(a) (definition of "consumer").  140 Vt. at 18, 433 A.2d  at 310. 
  This Court added, however, that we were "not dealing with a contractual
  situation between buyer and seller" but instead being asked "to read into
  the Act a transaction one step removed."  Id. at 19, 433 A.2d  at 310. 
  Microsoft argues that this language precludes a suit by an indirect
  purchaser, who is "one step removed."

       Microsoft misreads the Wilder alternative holding.  The problem in
  Wilder was that the plaintiff was not a purchaser of the alleged good or
  service at all and, in that sense, was removed from the transaction that
  was needed to bring the transaction under § 2461(b).  Here, plaintiff
  indisputably contracted for goods that included the Windows 98 operating

       Microsoft also argues that the Legislature clearly intended that §
  2461(b) did not provide a remedy to indirect purchasers in antitrust
  actions as shown by Act 65, a 2000 amendment to the VCFA.  We consider this
  argument in the next section because it arises from Microsoft's central
  position that we should treat VCFA antitrust actions differently from VCFA
  consumer protection actions and require privity for the former even if we
  do not require it for the latter.  We turn now to the effect of federal
       Microsoft's argument is based on the United States Supreme Court
  decision in Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977).  In
  Illinois Brick, the State of Illinois, on its own behalf and on behalf of a
  number of local government entities, brought an action under § 4 of the
  Clayton Act alleging that defendants, manufacturers and distributors of
  concrete block, had conspired to fix the price of concrete block in
  violation of § 1 of the Sherman Act.  The State and the local governments
  were all indirect purchasers of concrete block because the block was sold
  by the manufacturers directly to contractors to construct buildings, which
  were later sold to state and governmental entities.  The United States
  Supreme Court, relying on the earlier case of Hanover Shoe, Inc. v. United
  Shoe Mach. Corp., 392 U.S. 481 (1968), held that "the overcharged direct
  purchaser, and not others in the chain of manufacture or distribution, is
  the party 'injured in his business or property' within the meaning of [§ 4
  of the Clayton Act]."  Illinois Brick, 431 U.S.  at 729.  Plaintiffs,
  therefore, were not entitled to recover the illegal overcharges that were
  passed on to them via the 


  contractors.  Id. at 735.  Illinois Brick announced what has become to be
  known as the "indirect-purchaser" rule: a party who does not purchase a
  product directly from an antitrust violator is barred from bringing a cause
  of action for overcharge against that violator under federal law.  See
  California v. ARC America Corp., 490 U.S. 93, 96-97 (1989); In re Microsoft
  Corp. Antitrust Litig., 127 F. Supp. 2d 702, 708 (D. Md. 2001).

       The critical decision in understanding the effect of Illinois Brick on
  this action is California v. ARC America Corp., in which defendants in
  state antitrust actions argued that allowing indirect purchasers to sue
  under state antitrust acts frustrated federal law so that such claims were
  preempted by federal law.  The Court rejected this claim:

         It is one thing to consider the congressional policies
    identified in Illinois Brick and Hanover Shoe in defining what
    sort of recovery federal antitrust law authorizes; it is something
    altogether different, and in our view inappropriate, to consider
    them as defining what federal law allows States to do under their
    own antitrust law.  As construed in Illinois Brick, § 4 of the
    Clayton Act authorizes only direct purchasers to recover monopoly
    overcharges under federal law.  We construed § 4 as not
    authorizing indirect purchasers to recover under federal law
    because that would be contrary to the purposes of Congress.  But
    nothing in Illinois Brick suggests that it would be contrary to
    congressional purposes for States to allow indirect purchasers to
    recover under their own antitrust laws.

  490 U.S.  at 103.  The Court later reiterated this theme: "When viewed
  properly, Illinois Brick was a decision construing the federal antitrust
  laws, not a decision defining the interrelationship between the federal and
  state antitrust laws."  Id. at 105.  Thus, under ARC America, states are
  free to determine how best to protect consumers against antitrust
  violations; in crafting or amending state antitrust law, states can decide
  whether to adopt the indirect purchaser rule of Illinois Brick.

       Microsoft contends that ARC America stands for the rule that express
  statutory language is required in order to permit indirect purchasers to
  recover under state antitrust law.  Microsoft bases its contention on the
  Court's statement of the issue before it: "whether this rule limiting
  recoveries under the Sherman Act also prevents indirect purchasers from
  recovering damages flowing from violations of state law, despite express
  state statutory provisions giving such purchasers a damages cause of
  action."  Id. at 100.  We read this language, which comes early in the
  opinion, as a description of the issue rather than a limitation on the
  holding.  That reading is reinforced by the fact that one of the state
  plaintiffs, Arizona, did not have an express provision in its statute
  allowing indirect purchaser suits, see Bunker's Glass Co. v. Pilkington,
  2002 WL 1461739, at  23 n.7 (Ariz. Ct. App. 2002), but the Court
  acknowledged that the statute "might be interpreted as a matter of state
  law as authorizing indirect purchasers to recover."  ARC America Corp., 490 U.S.  at 98 n.3.  More importantly, there is nothing in the rationale of ARC
  America to suggest that a state is not free to express its own policy in
  any way it desires.  We reject Microsoft's narrow reading of ARC America. 
  The issue before us is not whether the Vermont Legislature can allow
  indirect purchasers to sue; it is instead whether it has.

       We now reach Microsoft's central argument that the holding of Illinois
  Brick should be followed in Vermont because § 2453(b) directs that
  construction of the VCFA should be guided by federal law.  Section 2453(b)

       It is the intent of the legislature that in construing subsection
    (a) of this section, the courts of this state will be guided by
    the construction of similar terms contained in section 5(a)(1) of
    the Federal Trade Commission Act as from time to time amended by
    the Federal Trade Commission and the courts of the United States.


  The text of subsection (a) is set out earlier in this opinion and is taken
  from § 5(a)(1) of the Federal Trade Commission Act, 15 U.S.C. § 5(a)(1). 
  Microsoft construes the phrase "and the courts of the United States" in §
  2453(b) as encompassing federal court decisions interpreting all federal
  antitrust statutes, including the Clayton Act and the Sherman Act.  See
  also 9 V.S.A. § 2451 (the purpose of the VCFA is "to complement the
  enforcement of federal statutes and decisions governing unfair methods of
  competition . . . ").  It argues, therefore, that § 2453(b) requires this
  Court to follow the indirect purchaser rule of Illinois Brick and affirm
  the dismissal of Elkins's claim.  For a number of reasons, we cannot agree
  with this construction of the "harmonization" provision.

       First, Microsoft plainly misreads the language of § 2453(b).  The
  phrase "and the courts of the United States" is part of the larger phrase
  "by the construction of similar terms contained in section 5(a)(1) of the
  Federal Trade Commission Act as from time to time amended by the Federal
  Trade Commission and the courts of the United States," and must be so
  limited as to include only those federal decisions construing the Federal
  Trade Commission Act.  Microsoft's reading would have us divorce the phrase
  "in the courts of the United States" from its context and thus construe §
  2453(b) as stating in effect "the courts of this state will be guided by .
  . . the courts of the United States."  Not only is this reading
  implausible, it also produces a direction so broad as to be practically
  meaningless.  See State v. Yorkey, 163 Vt. 355, 358, 657 A.2d 1079, 1080
  (1995) ("[T]here is a presumption that the Legislature does not intend to
  enact meaningless legislation . . . [and], thus, when we construe a
  statute, we must do so in a manner that will not render it ineffective or
       Second, our interpretation of § 2453(b) is supported by other sections
  of the VCFA as well as by our previous decisions construing the Act. 
  Section 2453(c) specifically references the Federal 


  Trade Commission Act in instructing the Attorney General to ensure that
  rules and regulations enacted for the purposes of the Act "shall not be
  inconsistent with the rules, regulations and decisions of the Federal Trade
  Commission and the federal courts interpreting the Federal Trade Commission
  Act."  9 V.S.A. § 2453(c).  That subsection makes sense only if subsection
  (b) also means that we are guided by federal court decisions construing the
  Federal Trade Commission Act and not other federal antitrust laws.

       This Court has expressly interpreted § 2453(b) to mean that "[i]n
  construing the Act, we look to the interpretations accorded similar terms
  and provisions of the Federal Trade Commission Act . . . ."  Carter, 168
  Vt. at 52, 716 A.2d  at 21 (citing 9 V.S.A. § 2453(b)); see also Russell v.
  Atkins, 165 Vt. 176, 182, 679 A.2d 333, 336 (1996); Int'l Collection Serv.,
  Inc., 156 Vt. at 544-45, 594 A.2d  at 429; Poulin, 147 Vt. at 124-25, 513
  A.2d at 1171-72; Christie v. Dalmig, Inc., 136 Vt. 597, 600-01, 396 A.2d 1385, 1387-88 (1979).  Russell is particularly significant because it is an
  antitrust case.

       Third, the harmonization provision in § 2453(b) does not apply to the
  VCFA as a whole but only to § 2453(a), which sets out the practices
  prohibited under the Act.  Thus, § 2453(b) is not aimed at defining who can
  sue under the VCFA, but rather what conduct constitutes a violation of the
  Act.  Nowhere in the Act is there any requirement that the definition of
  who may sue under the Act must be consistent with the definition of who may
  sue under federal antitrust law, including under the FTCA.  This is logical
  because the Federal Trade Commission Act does not provide for a private
  cause of action, see Holloway v. Bristol-Myers Corp., 485 F.2d 986, 991
  (D.C. Cir. 1973), and thus has no bearing on our determination on who can
  sue under the VCFA.  As the Supreme Court of Iowa recently stated:


         The purpose behind both state and federal antitrust law is to
    apply a uniform standard of conduct so that businesses will know
    what is acceptable conduct and what is not acceptable conduct.  To
    achieve this uniformity or predictability, we are not required to
    define who may sue in our state courts in the same way federal
    courts have defined who may maintain an action in federal court.

  Comes v. Microsoft Corp., 646 N.W.2d 440, 446 (Iowa 2002).

       We are not persuaded by Microsoft's additional argument that the
  Legislature's 2000 creation of a specific remedy for indirect purchasers
  supports its position.  By Act 65 of 2000, the Legislature enacted a
  specific antitrust remedy provision, 9 V.S.A. § 2465, which allowed "any
  person" to sue for a violation of an antitrust act including VCFA, limited
  the damages available in a private action under the VCFA or other state
  antitrust act and explicitly authorized indirect purchaser antitrust
  actions based on a violation of § 2453.  According to Microsoft, prior to
  the passage of Act 65, an indirect purchaser such as Elkins must have been
  barred from bringing suit under the VCFA; otherwise the legislative
  authorization of such a suit was unnecessary.  It argues that allowing
  plaintiff's suit here would be an impermissible retroactive application of
  the amendment.

       The express legislative purpose behind the amendment instructs
  otherwise.  The amendment language states in relevant part:

         In any action for damages or injury sustained as a result of
    any violation of state antitrust laws, pursuant to section 2453 of
    this title, the fact that the state, any public agency, political
    subdivision or any other person has not dealt directly with a
    defendant shall not bar or otherwise limit recovery. . . .

  9 V. S.A. § 2465(b).  In its Statement of Intent, the Legislature expressed
  the purpose behind this amendment: "This act clarifies the right of a
  direct or indirect purchaser to obtain recovery for a violation of the
  state antitrust law as set forth in chapter 63 of Title 9."  1999, No. 65
  (Adj. Sess.), 


  § 1 (emphasis added).  Where the Legislature has amended a prior law and
  the circumstances clearly indicate clarification to be intended, this
  Court's construction of a statute must be governed by the disclosed intent
  of the Legislature.  See Town of Cambridge v. Town of Underhill, 124 Vt.
  237, 241, 204 A.2d 155, 158 (1964); see also In re Shantee Point, Inc., No.
  2000-474, slip. op. at 11 (Oct. 4, 2002) (where authorization issue is in
  litigation, amendment to provide the authorization "can be interpreted as
  clarifications adopted in light of . . . litigation, rather than
  substantive changes").  There is nothing to indicate that the Legislature's
  intended purpose behind the enactment of § 2465(b) was contrary to the
  statement that it was a clarification and not necessarily a substantive
  change in the preexisting law.  Therefore, based on the plain meaning of
  the statute, the expressly stated legislative intent, the remedial purposes
  of the Act, our previous decisions construing the VCFA, and the express
  legislative purpose behind the 2000 amendment, we find that Act 65 did not
  effectuate a change in Vermont law and that an indirect purchaser was
  entitled to bring a cause of action under the VCFA prior to the 2000
       We have saved until last the consideration of the myriad of decisions
  from federal and state courts considering the question before us under the
  law of the state involved.  By way of context, approximately 33 states and
  the District of Columbia have allowed indirect purchasers to sue for at
  least some damages, many by statutes equivalent to 9 V.S.A. § 2465 and
  others by decision.  See Note, Good "Brick" Walls Make Good Neighbors:
  Should a State Court Certify a Multistate or Nationwide Class of Indirect
  Purchasers?, 70 Fordham L. Rev. 2019, 2025-26 (2002); see generally Davis,
  Indirect Purchaser Litigation: ARC America's Chickens Come Home to Roost on
  the Illinois Brick Wall, 65 Antitrust L.J. 375 (1997).  In virtually every
  state in which there is no explicit statute 


  there has been litigation to resolve the issue.  Further, state antitrust
  claims are often raised in federal antitrust suits so there are some
  federal decisions.

       In support of its construction of § 2453(b) and its effect on the
  construction of the VCFA as a whole, Microsoft relies on two federal
  district court cases that involve Vermont law.  See State of Vermont v.
  Densmore Brick Co., Inc., 1980 WL 1846, at *1 (D.Vt. Apr. 10, 1980), and
  F.T.C. v. Mylan Labs., Inc., 99 F. Supp. 2d 1 (D.D.C. 1999).  In Densmore,
  the State of Vermont sued a woodburning stove distributor for violations of
  the Sherman Act and the VCFA.  In ruling on defendant's summary judgment
  motion, the court stated the general rule of Illinois Brick: that an
  antitrust plaintiff who was not a direct purchaser could not recover. 
  Densmore, 1980 WL 1846 at *4.  However, in denying the motion, the court
  ultimately found no reason to apply the indirect purchaser rule, as
  plaintiff had alleged a direct relationship.  Id.  Nowhere did the court
  address whether Illinois Brick was controlling law with respect to both
  federal and state law claims.

       The subsequent holding in Mylan Laboratories relied upon Densmore for
  the proposition that Vermont case law applied prohibited indirect purchaser
  suits under the VCFA.  99 F. Supp. 2d  at 10.  Not only did the Mylan court
  misinterpret Densmore, it failed to do its own independent analysis. We
  find more accurate the later District of Maryland decision in In re
  Microsoft Corp. Anitrust Litigation, 127 F.2d 702, 723, 725 (D. Md. 2001). 
  In this decision, the court found that it could not determine how this
  court would resolve the issue of whether an indirect purchaser could sue,
  labeling Microsoft's argument to the contrary as painting "with too broad a
  brush."  Id. at 723.  We agree with the court that the issue before us was
  entirely unresolved until this opinion.  We decline to follow Mylan
  Laboratories or hold that the Densmore is persuasive authority for
  Microsoft's position.


       As the experience of other states in the construction of their
  antitrust and consumer fraud statutes may offer guidance, see Int'l
  Collection Serv., Inc., 156 Vt. at 547-49, 594 A.2d  at 430-32 (Court looks
  to other state's jurisprudence for guidance in construing the VCFA), we
  turn to a brief examination of the cases from other states.  Because the
  statutory schemes vary markedly from state to state, it is helpful to place
  the decisions in three categories, as follows:

       1.  Those Based on State Antitrust Acts - Unlike Vermont, most states
  have specific state antitrust acts.  These statutes typically have federal
  harmonization provisions that require the court to look to federal court
  decisions interpreting any of the federal antitrust laws.  Unless there is
  a specific provision in the state antitrust act allowing indirect
  purchasers to sue - that is, explicit rejection of the Illinois Brick rule
  - most of the court decisions in these states hold that they are bound to
  follow Illinois Brick.  See Pomerantz v. Microsoft Corp., 50 P.3d 929, 932
  (Colo. Ct. App. 2002); Berghausen v. Microsoft Corp., 765 N.E.2d 592, 596
  (Ind. Ct. App. 2002); Duvall v. Silvers, 998 S.W.2d 821, 825 (Mo. Ct. App.
  1999); Minuteman, LLC v. Microsoft Corp., 795 A.2d 833, 838 (N.H. 2002);
  Siena v. Microsoft Corp., 796 A.2d 461, 464-65 (R.I. 2002).  Those that
  refuse to follow Illinois Brick note that the harmonization provision is
  not absolute.  See Bunker's Glass Co. v. Pilkington, 2002 WL 1461739, at 
  29; Comes v. Microsoft Corp., 646 N.W.2d 440, 446 (Iowa 2002); Hyde v.
  Abbott Labs., 473 S.E.2d 680, 686 (N.C. Ct. App. 1996) (federal law is
  considered "only as persuasive authority").
       2.  Those Based on Consumer Protection Acts, or Similar Legislation,
  in States that also Have Antitrust Acts - In most of the litigated cases,
  the plaintiff is precluded from suing under the state antitrust act because
  of the adoption of the Illinois Brick rule and sues instead under a
  consumer protection act, an unfair trade practices act or the like.  The
  decisions in this category go in both 


  directions depending upon the court's view of the need for consistency in
  the result under the applicable acts.  See Vacco v. Microsoft Corp., 793 A.2d 1048, 1058, 1066 (Conn. 2002) (because of broad harmonization
  provision, consumer cannot sue under state antitrust act; consumer also
  cannot sue under Connecticut Unfair Trade Practices Act); Mack v.
  Bristol-Myers Squibb Co., 673 So. 2d 100, 109 (Fla. Ct. App. 1996)
  (although indirect purchaser cannot sue under state antitrust act, she can
  sue under the Florida Deceptive and Unfair Trade Practices Act); Davidson
  v. Microsoft Corp., 792 A.2d 336, 344-45 (Md. Ct. Spec. App. 2002)
  (indirect purchaser who cannot sue under state antitrust act also cannot
  sue under Maryland Consumer Protection Act); Ciardi v. F. Hoffman-La Roche,
  Ltd., 762 N.E.2d 303, 314 (Mass. 2002) (indirect purchaser who cannot sue
  under state antitrust act can sue under Massachusetts consumer protection
  statutes); Abbott Labs., Inc. v. Segura, 907 S.W.2d 503, 507 (Tex. 1995)
  (indirect purchaser who cannot sue under state antitrust act also cannot
  sue under Texas Deceptive Trade Practices-Consumer Protection Act); see
  also Arnold v. Microsoft Corp., 2001 WL 1835377, at *4, *7 (Ky. Ct. App.
  2001) (indirect purchaser who cannot sue under "Kentucky's version of the
  Sherman Act" also cannot sue under unfair trade practices provision of the
  Kentucky Consumer Protection Act); Blake v. Abbott Labs., Inc., 1996 WL
  134947, at *5, *7 (Tenn. Ct. App. 1996) (indirect purchaser can sue under
  both Tennessee Unfair Trade Practices Act, the state antitrust act, and
  under the Tennessee Consumer Protection Act).  In most of these cases, the
  court does not find Illinois Brick to be a direct barrier to suit, or, put
  another way, it does not find that only direct purchasers can sue under the
  consumer protection act or similar legislation.  Illinois Brick is relevant
  to the outcome only because it may prevent a suit under the state antitrust


       3.  Those Based on a Consumer Protection Act in a State that Does Not
  Have an Antitrust Act - This category includes this case and one decision
  from another state.  In Blewett v. Abbott Laboratories, the Washington
  Court of Appeals ruled that an indirect purchaser could not bring an
  antitrust action under the Washington Consumer Protection Act because of
  the broad federal harmonization provision - "the courts [shall] be guided
  by final decisions of the federal courts . . . interpreting the various
  federal statutes dealing with the same or similar matters."  938 P.2d 842,
  845-46 (Wash. Ct. App. 1997).

       While there is language in many of the decisions that we might
  otherwise find helpful, in general the decisions give us little guidance
  because of the critical differences in their statutory schemes.  They
  involve either broad harmonization provisions that require the courts to be
  guided by federal court decisions interpreting any of the federal antitrust
  acts, including the Clayton Act that is interpreted in Illinois Brick, or
  they involve the interrelationship of a specific antitrust act, with a
  broad harmonization provision, and a more general consumer protection law. 
  None is persuasive authority for the outcome of this case.

       In summary, we find no reason to treat antitrust cases differently
  from other VCFA cases and prohibit indirect purchasers from bringing suit
  under § 2461(b).  Since we have concluded that consumers can generally sue
  under § 2461(b) even though they are indirect purchasers of a good or
  service from the defendant, we also hold that they can bring an antitrust
  case under § 2461(b).  The recent addition to the VCFA of § 2465(b),
  explicitly authorizing indirect purchaser antitrust suits, was not a change
  in the preexisting law.


       Reversed and remanded.

                                       FOR THE COURT:

                                       Associate Justice

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