Gerlinger v. amazon.com ( 2008 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
GARY GERLINGER, individually and 
on behalf of all others similarly
situated, No. 05-17328
Plaintiff-Appellant,
v.  D.C. No.
CV-02-05238-MHP
AMAZON.COM INC.; BORDERS GROUP, OPINION
INC.,
Defendants-Appellees.

Appeal from the United States District Court
for the Northern District of California
Marilyn H. Patel, District Judge, Presiding
Argued and Submitted
November 8, 2007—San Francisco, California
Filed May 27, 2008
Before: Mary M. Schroeder, Jay S. Bybee, Circuit Judges,
and George H. Wu,* District Judge.
Opinion by Judge Schroeder
*The Honorable George H. Wu, United States District Judge for the
Central District of California, sitting by designation.
6027
GERLINGER v. AMAZON.COM INC. 6029
COUNSEL
Roy A. Katriel, Washington, D.C., for the plaintiff-appellant.
Joel Sanders, San Francisco, California, for defendant-
appellee Amazon.com.
Reginald Steer, San Francisco, California, for defendant-
appellee Borders Group.
OPINION
SCHROEDER, Circuit Judge:
The plaintiff, Gary Gerlinger, like so many of us, purchases
books and related items online. He filed this antitrust action
to challenge a marketing agreement between Amazon.com
Inc., an online bookseller, and Borders Group, Inc., a brick-
and-mortar bookseller. He appeals the district court’s dis-
missal for lack of standing. We agree with the district court
that the plaintiff lacks standing because he did not show that
he ever purchased an item for a higher price than he would
have paid had there been no marketing agreement and thus
has suffered no injury-in-fact.
6030 GERLINGER v. AMAZON.COM INC.
The district court published an earlier opinion discussing
the nature of the suit. See Gerlinger v. Amazon.com, Inc., 311
F. Supp. 2d 838 (N.D. Cal 2004). We therefore do not belabor
the facts.
Gerlinger is a customer of Amazon.com. The agreement he
challenges was entered into on April 10, 2001, between Ama-
zon and Borders. Borders had previously, and unsuccessfully,
attempted to operate its own website. Under the agreement,
Borders’ website address directs shoppers to what is known
as a mirror website, a site hosted by Amazon. The books pur-
chased through the mirror site are sold and shipped by Ama-
zon, and Borders receives a commission for each book sold.
The agreement enables Borders to tap the online market and
Amazon to expand its customer base to include customers
loyal to the Borders brand.
As part of the agreement, Borders abandoned its direct par-
ticipation in the online market and agreed that it would not
reenter the market during the term of the agreement. Gerlinger
challenges this aspect of the agreement as per se market allo-
cation in violation of Section 1 of the Sherman Act, 15 U.S.C.
§ 1. The defendants moved for summary judgment or in the
alternative for summary adjudication, and plaintiff moved for
judgment on the pleadings. The defendants’ motion was sup-
ported by the declaration of Steven Kessel, an Amazon Vice
President, showing that the prices for books on the Amazon
website actually declined after the defendants entered into the
agreement. The Kessel declaration identified five specific
instances in which Amazon lowered its pricing after it entered
into the agreement with Borders. Upon reviewing this evi-
dence, the district court ordered the parties to file supplemen-
tal briefs addressing Gerlinger’s standing. Gerlinger, 311 F.
Supp. 2d at 857.
The defendants filed additional declarations of Amazon
employees, which showed that the prices Gerlinger paid for
books purchased from Amazon after the agreement became
GERLINGER v. AMAZON.COM INC. 6031
effective were the same, or even lower, than the prices listed
before the defendants entered into the agreement. These dec-
larations listed the prices at which Gerlinger purchased the
books and the prices for which those same books sold before
the defendants signed the agreement.
Gerlinger sought leave to depose Steven Kessel. In
response, the district court issued an order inviting him to file
a 5-page brief explaining how Kessel’s testimony would show
that Gerlinger had suffered an injury. Gerlinger declined to
file this brief. Instead, he asserted that prices would have been
even lower if there had been no agreement, submitted aca-
demic articles, and rested on his pleadings, arguing that the
court could not determine whether he had suffered an injury
until it reached the damages stage. The district court dis-
missed Gerlinger’s antitrust claims with prejudice.
[1] The issue is one of Article III standing, which is a juris-
dictional prerequisite to the consideration of any federal
claim. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-
61 (1992); Datagate, Inc. v. Hewlett-Packard Co., 60 F.3d
1421, 1425 (9th Cir. 1995). Article III standing requires proof
of injury-in-fact, causation, and redressability. Allen v.
Wright, 468 U.S. 737, 750 (1984). For Article III purposes, an
antitrust plaintiff establishes injury-in-fact when he “has suf-
fered an injury which bears a causal connection to the alleged
antitrust violation.” Amarel v. Connell, 102 F.3d 1494, 1507
(9th Cir. 1996); accord Kochert v. Greater Lafayette Health
Servs., 463 F.3d 710, 714-15 (7th Cir. 2006).
[2] Here, in their summary judgment motion, the defen-
dants submitted evidence that the plaintiff suffered no injury-
in-fact. In response to a summary judgment motion or a trial
court’s post-pleading stage order to establish Article III stand-
ing, a plaintiff can no longer rest on “mere allegations” but
must set forth by affidavit or other admissible evidence “spe-
cific facts” as delineated in Federal Rule of Civil Procedure
56(e) as to the existence of such standing. Lujan, 506 U.S. at
6032 GERLINGER v. AMAZON.COM INC.
561. In his complaint, Gerlinger alleged that as a result of the
marketing agreement, he was “forced to pay supra-
competitive prices for [his] purchases.” The defendants’ evi-
dence showed this was not the case. In the face of that evi-
dence, Gerlinger needed to show some injury. It became
Gerlinger’s burden, in order to defeat the motion, to “set out
specific facts showing a genuine issue for trial.” Fed. R. Civ.
P. 56(e). Gerlinger failed to satisfy his burden to establish a
genuine issue as to whether he suffered an injury-in-fact.
Although Gerlinger asked for supplemental discovery to
depose Kessel, Gerlinger did not respond to the district
court’s invitation to explain why he needed the discovery. The
academic articles he submitted did not establish that Gerlinger
personally paid a higher price for a book as a result of the
agreement. Nor did he show or even allege that he himself
experienced any reduced selection of titles, poorer service or
any other potentially conceivable form of injury. He therefore
lacks standing to maintain an antitrust claim for alleged mar-
ket allocation.
In addition to providing that Borders would not sell books
online, the agreement also specified that Amazon would not
charge customers of the mirror site higher prices than Ama-
zon charged to customers of its own site. The plaintiff attacks
this provision as per se price fixing, also in violation of Sec-
tion 1 of the Sherman Act. On the merits, the district court
observed that this was not a per se violation, see Gerlinger,
311 F. Supp. 2d at 848, and indeed it looks very much like a
lawful joint venture or a licensing agreement to share brand
names. We do not reach the merits, however, because the
plaintiff has not shown any injury-in-fact caused by the agree-
ment, and he therefore lacks Article III standing to bring this
claim as well. He has not shown that he paid higher prices
after the agreement than he would have paid otherwise. The
district court properly dismissed the claim because plaintiff
lacked Article III standing to pursue a claim of price fixing.
The district court went on to discuss antitrust standing,
which limits the availability of antitrust damages to those
GERLINGER v. AMAZON.COM INC. 6033
plaintiffs who suffered the type of harm resulting from the
kind of conduct Congress intended to eliminate when it
passed § 4 of the Clayton Act. Associated Gen. Contractors
of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S.
519, 538 (1983). Antitrust standing is distinct from Article III
standing. Am. Ad Mgmt., Inc. v. Gen. Tel. Co. of Cal., 190
F.3d 1051, 1054 (9th Cir. 1999). Article III standing is
required to establish a justiciable case or controversy within
the jurisdiction of the federal courts. Antitrust standing is a
requirement for treble damages under Section 4 of the Clay-
ton Act, 15 U.S.C. § 15. See Associated Gen. Contractors,
459 U.S. at 535 & n. 31. Lack of antitrust standing affects a
plaintiff’s ability to recover, but does not implicate the subject
matter jurisdiction of the court. Datagate, Inc., 60 F.3d at1425 n.1. Accordingly, because Gerlinger failed to establish
Article III standing, it is neither necessary nor appropriate for
us to reach any questions of antitrust standing.
The district court’s judgment dismissing the action for a
lack of Article III standing is AFFIRMED.