Opening the umbrella: Why U.S. Competition Law should embrace umbrella damages in limited circumstances and protect victims of anti-competitive violations

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One of the twin purposes of antitrust law is to punish those bad actors who have taken impermissible advantage of the market and the consumers therein. The other purpose is to protect consumers who have been harmed by the anti-competitive behavior of cartels and to redress those harms. These two purposes are generally acting in harmony, but curious cases can create divergent interests. One specific example is the problems caused by “umbrella victims.” These are victims of cartels who have paid an excessive price for good purchased from a non-colluding competitor of the anti-competitive conspirators. Courts have generally hesitated to allow umbrella plaintiffs standing but have recognized that antitrust violations can cause ripples which impact a large number of people. The question is whether or not umbrella plaintiffs are so affected by these ripples that they should have standing to bring their case. In this article, I argue that umbrella plaintiffs are so close to the initial anti-competitive behavior that they are not simply caught in the wake but are splashed by the proverbial water caused by the anti-competitive behavior. These plaintiffs have been excluded from access to the courts on the grounds of “antitrust standing.” The article advocates for the adoption of standing for umbrella plaintiffs in limited circumstances. In Part I, this article breaks down the umbrella plaintiff standing analysis in Washington v. American Pipe and Construction Co. I argue that the analysis offered by that court falls short in addressing some of the policy concerns surrounding antitrust standing. In Part II, the article proposes an analytical framework to evaluate umbrella plaintiff standing. The framework modifies the analysis provided by the Washington v. American Pipe and Construction Co. while accounting for the policy considerations of antitrust law.