Undoing the Otherwise Perfect Crime: Applying Unjust Enrichment to Consumer Price-Fixing Claims

Posted by Social Science Research Network

Undoing the Otherwise Perfect Crime: Applying Unjust Enrichment to Consumer Price-Fixing Claims – Daniel Richard Karon (Independent)

ABSTRACT: Price-fixing agreements violate federal and state antitrust statutes as well as certain states’ consumer-protection statutes. When price fixing occurs, the price-fixed products’ direct purchasers have standing to pursue claims for their overcharges under the federal antitrust statutes in federal court, but consumers are permitted to allege price-fixing claims only under certain states’ antitrust or consumer-protection statutes. Where state statutory remedies don’t necessarily exist, unjust enrichment is a viable yet commonly misunderstood and oftentimes overlooked remedy that consumers can invoke. But when consumers allege unjust enrichment, price fixers invariably argue its misapplication — claiming that unjust enrichment requires a “direct relationship” or “direct benefit” between the parties. Despite price fixers’ contrary insistence, I describe the antitrust bar, judiciary, consumers, and price fixers’ conventional misunderstandings about unjust enrichment’s application and intended purpose. My article then explains that unjust enrichment’s state-by-state similarity and historical roots actually encourage and support unjust enrichment’s application to consumer price-fixing claims. In this manner, I argue that — through unjust enrichment — all states’ consumers have a powerful tool with which to help stem price fixing and with which to ensure that they derive the privileges and benefits of a free, open, and competitive marketplace.