Case: 3:17-cv-00595-jdp Document #: 106 Filed: 04/24/20 Page 1 of 22
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF WISCONSIN
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`MOUNTAIN CREST SRL, LLC,
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`Plaintiff,
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`v.
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`ANHEUSER-BUSCH InBEV SA/NV,
`individually and as successor to InBev SA/NV and
`Interbrew S.A. and MOLSON COORS BREWING
`COMPANY, individually and as successor to Molson
`Canada Inc.,
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`Defendants.
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`OPINION and ORDER
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`17-cv-595-jdp
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`Plaintiff Mountain Crest SRL, LLC, which owns and operates Minhas Brewery in
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`Monroe, Wisconsin, is suing defendants Anheuser-Busch InBev SA/NV (ABI) and Molson
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`Coors Brewing Company (Molson Coors) for alleged anticompetitive behavior in Ontario,
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`Canada. The case is now on remand after the Court of Appeals for the Seventh Circuit affirmed
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`in part and reversed in part the judgment dismissing all of Mountain Crest’s claims. See
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`Mountain Crest SRL, LLC v. Anheuser-Busch InBev SA/NV, 937 F.3d 1067 (7th Cir. 2019).
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`This court dismissed the case under the act of state doctrine, which prohibits federal
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`courts from invalidating the public acts of a foreign government. The court understood
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`Mountain Crest’s challenge to be limited to the so-called “six-pack rule,” which prohibits some
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`Ontario liquor stores from selling larger packs of beer or offering discounts for buying multiple
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`six-packs.1 Because the six-pack rule is embodied in Ontario law, Liquor Control Act, R.S.O.
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`1990, c. L.18, § 10(3) (Can.), the act of state doctrine required dismissal.
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`1 See Dkt. 60, at 10 n.3 (“[B]oth sides have assumed in their briefing that Mountain Crest’s
`claims under the Sherman Act are limited to restrictions on selling larger packs of beer and
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`The court of appeals agreed that the act of state doctrine required dismissal of Mountain
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`Crest’s challenge to the six-pack rule. But the court concluded that Mountain Crest was also
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`challenging other conduct not implicated by the act of state doctrine. The court did not
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`determine whether the other challenges should proceed but instead directed “the district court
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`[to] address these claims in due course.” Id. at 1086.
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`Now defendants have filed a new motion to dismiss all of the claims remanded by the
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`court of appeals. Dkt. 75. For its part, Mountain Crest moves for reconsideration of the
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`decision that its challenge to the six-pack rule is barred by the act of state doctrine, contending
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`that a new bill by the Ontario legislature undermines that decision. Dkt. 73.
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`The court isn’t persuaded that the bill cited by Mountain Crest requires reconsideration
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`of the holding regarding the six-pack rule, so the court will deny Mountain Crest’s motion. As
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`for defendants’ motion to dismiss, the court concludes that Mountain Crest hasn’t stated a
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`claim upon which relief may be granted. Some of Mountain Crest’s claims arise out of injuries
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`caused by the Ontario government’s conduct, not defendants’ conduct. And the remaining
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`claims relate to conduct by an Ontario cooperative that is not a party to this case. Although
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`Mountain Crest includes conclusory allegations in its complaint that defendants were involved
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`in a conspiracy to control the cooperative to harm American beer exporters, conclusory
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`allegations are not enough to state a claim, especially in a complex lawsuit involving alleged
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`antitrust violations. So the court will grant defendants’ motion to dismiss.
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`pack-up pricing, so the court has made the same assumption.”).
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`2
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`BACKGROUND
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`A full summary of Mountain Crest’s allegations may be found in the court of appeals’s
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`decision, Mountain Crest, 937 F.3d at 1069–77, and in this court’s decision granting
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`defendants’ original motion to dismiss, Dkt. 60, at 2–9, so only a brief overview of factual and
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`regulatory background is provided here.
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`Under Ontario law, there are only two places that an individual may purchase beer for
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`off-site consumption in Ontario: (1) stores operated by the Liquor Control Board of Ontario
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`(LCBO); and (2) The Beer Store, which is operated by Brewers Retail Inc. (BRI). The LCBO
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`is a government agency that regulates liquor sales. BRI is a cooperative of Ontario brewers. The
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`primary members of BRI are Labatt Breweries of Canada and Molson Inc. (Canada), which
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`each own 49 percent of the cooperative. Labatt is a subsidiary of defendant ABI and Molson
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`is a subsidiary of defendant Molson Coors.
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`The LCBO controls the sale and delivery of beer at BRI stores and establishes specific
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`terms and conditions related to the operation of such stores. When the Beer Store and an
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`LCBO store are in the same community, their inventories differ. LCBO “ordinary” stores sell
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`wine and spirits as well as beer in packages of six or fewer; the Beer Store may sell larger
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`packages of beer. This arrangement was reflected in a 2000 agreement between BRI and LCBO
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`and is now codified in a 2015 Ontario law.
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`Mountain Crest entered the Ontario beer market in 2009. Since then, Mountain Crest
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`alleges that its ability to sell its beer in Ontario has been unfairly restricted, both at LCBO
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`stores and at the Beer Store. As for the LCBO, Mountain Crest says that the six-pack rule is
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`harmful, especially to a “value beer” such as Mountain Crest, because it prevents Mountain
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`Crest from offering discounts on purchases for larger quantities of beer. Mountain Crest says
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`that defendants are responsible for the six-pack rule because they pressured the LCBO into
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`adopting the rule, using tactics that are prohibited under antitrust law. As for the Beer Store,
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`Mountain Crest says that the stores are stocked and laid out in a way that discriminates against
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`Mountain Crest and other American brands not owned by defendants.
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`MOTION FOR RECONSIDERATION
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`Mountain Crest seeks reconsideration of the portion of this court’s decision that was
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`affirmed by the court of appeals. Dkt. 73. Specifically, Mountain Crest says that the act of
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`state doctrine has no application to this case in light of a bill passed by the Ontario legislature
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`in June 2019.
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`The parties disagree about whether Mountain Crest is entitled to a consideration of the
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`merits of its motion. Mountain Crest cites footnote 78 of the court of appeals’s decision, in
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`which the court declined to consider any effect that the bill might have, stating instead that
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`“the most expeditious manner of evaluating this development is to permit the district court to
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`address it on remand.” Mountain Crest, 937 F.3d at 1085. Defendants don’t directly address
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`footnote 78, but they contend that Mountain Crest must still meet the requirements of either
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`Rule 59 or Rule 60 of the Federal Rules of Civil Procedure if it wants to disturb the judgment.
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`Rule 59 motions must be brought within 28 days of entering judgment, and Rule 60 motions
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`must be brought within one year or “within a reasonable time,” depending on which provision
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`is at issue. Defendants contend that Mountain Crest has failed to meet any of those deadlines.
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`Rule 59 and Rule 60 apply only to final judgments. After the court of appeals remanded
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`the case, “the earlier final judgment became interlocutory. What had been a judgment on all
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`claims in the case became a judgment on only some claims. And without a Rule 54 certification,
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`that judgment was not final.” Carmody v. Bd. of Trustees of Univ. of Illinois, 893 F.3d 397, 408
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`(7th Cir. 2018). So the court need not determine whether Mountain Crest’s motion complied
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`with the time limits in Rule 59 or Rule 60. Rather, the more appropriate question is whether
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`reconsideration is permitted by the mandate rule and the law of the case doctrine, which
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`“prohibit a district court from revisiting on remand any issues expressly or impliedly decided
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`on appeal.” United States v. Fox, 783 F. App’x 630, 632 (7th Cir. 2019). In this case, the court
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`of appeals did decide that the act of state doctrine precluded some of Mountain Crest’s claims.
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`But footnote 78 appears to give this court permission to consider the June 2019 bill, so that is
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`what the court will do. See also Carmody, 893 F.3d at 408 (“[T]he law-of-the-case doctrine may
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`yield if an intervening change in the law, or some other special circumstance, warrants
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`reexamining the claim.” (internal quotation marks omitted)).
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`Mountain Crest attached a copy of the bill to its motion. Dkt. 73-1. The bill “enacted
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`an amendment to the Liquor Control Act terminating the 2015 Agreement,” but “[t]he
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`effective date of the termination is to be announced by the province’s Lieutenant Governor”
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`and “this date has not yet been announced.” Mountain Crest, 937 F.3d at 1077.
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`The court is not persuaded that a bill that has not been given legal effect is enough to
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`require a different result in this case. The court of appeals described the act of state doctrine
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`as “a judicial rule that generally forbids an American court to question the act of a foreign
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`sovereign that is lawful under that sovereign’s laws.” Id. at 1080 (internal quotation marks
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`omitted). The court articulated a two-part test for determining whether the doctrine applied in
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`this case: (1) “whether the six-pack rule is attributable to the government of Ontario for the
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`purposes of the act of state doctrine”; and (2) “whether a decision in Mountain Crest’s favor
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`would invalidate those acts.” Id. at 1083. The court concluded that the answer to both
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`questions was “yes.”
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`The June 2019 bill, even once it takes effect, does not change the answer to either
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`question. The six-pack rule is still attributable to the government of Ontario and a decision in
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`Mountain Crest’s favor would still invalidate acts of the Ontario government. Mountain Crest
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`doesn’t argue otherwise, and it doesn’t point to any portion of the court of appeals’s decision
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`that is undermined by the bill. The court will deny Mountain Crest’s motion for
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`reconsideration.
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`MOTION TO DISMISS
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`Mountain Crest is raising claims under Section 1 and Section 2 of the Sherman Act as
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`well as a claim for unjust enrichment under Wisconsin common law. Section 1 applies to
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`conspiracies in restraint of trade. 15 U.S.C. § 1. Section 2 applies to monopolies. 15 U.S.C.
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`§ 2. Although § 1 and § 2 are criminal laws, “any person . . . injured in his business or property”
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`because of a violation of those laws may bring a civil action. 15 U.S.C. § 15(a).
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`The court of appeals identified two types of conduct alleged in the complaint that are
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`not barred by the act of state doctrine: (1) “antecedent and allegedly deliberate acts to bring
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`about the six-pack rule”; and (2) “a pattern of other marketing and distribution practices that
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`. . . disfavor[ed] American products, including Mountain Crest’s product.” Mountain Crest, 937
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`F.3d at 1086. Defendants’ motion to dismiss challenges Mountain’s Crest’s claims based on
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`both types of conduct.2
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`2 In addition to challenging the merits of Mountain Crest’s claims, defendants raise secondary
`and relatively brief arguments about whether the United States is the proper forum for this
`case under the doctrines of comity and forum non conveniens. But defendants’ comity
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`A. Acts leading up to the six-pack rule
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`The court of appeals identified three acts discussed in the complaint related to alleged
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`attempts to promote the six-pack rule. First, Labatt Breweries of Canada and Molson Inc.
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`(Canada) pressured the LCBO through a group boycott, restricting the supply of beer to the
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`LCBO. Second, Anheuser-Busch and Molson Coors threatened to sue the LCBO under the
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`North American Free Trade Agreement. Third, BRI offered small ownership stakes to all
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`Ontario-based brewers to dissuade them from opposing the six-pack rule. Although defendants
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`seek dismissal of all three claims, Mountain Crest discusses only the group boycott in its
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`opposition brief, so the court will assume that Mountain Crest has abandoned any challenges
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`based on defendants’ threat to sue or offer of ownership stakes.3
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`The court of appeals described the alleged boycott as follows: “Labatt and Molson
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`refused to supply additional six packs of beer beyond what the LCBO already had, to provide
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`packages of their beer in cases larger than a six pack, or to provide any beer in cans.” Mountain
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`Crest, 937 F.3d at 1073. Defendants’ arguments for dismissing the group boycott claim focus
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`on the LCBO’s involvement: the boycott doesn’t give rise to an antitrust claim against
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`argument rests entirely on a test that neither the Supreme Court nor the Court of Appeals for
`the Seventh Circuit has adopted. See In re Vitamin C Antitrust Litig., 837 F.3d 175, 183 (2d Cir.
`2016), vacated and remanded sub nom. Animal Sci. Prod., Inc. v. Hebei Welcome Pharm. Co., 138 S.
`Ct. 1865 (2018). And defendants’ forum non conveniens argument is not well developed. So
`the court concludes that defendants have not satisfied their “heavy burden” to show that
`Mountain Crest should have filed this case in Canada rather than in Mountain Crest’s home
`district. See In re Factor VIII or IX Concentrate Blood Products Litigation, 484 F.3d 951, 955–56
`(7th Cir. 2007) (“[W]hen the plaintiff has sued in his or her home forum, there is a strong
`presumption in favor of that choice. Under those circumstances, a defendant invoking forum
`non conveniens bears a heavy burden in opposing the plaintiff’s chosen forum.” (internal
`quotation marks, citations, and alterations omitted)).
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`3 Even if Mountain Crest hadn’t abandoned those aspects of its claim, the court would conclude
`that they fail for the same reasons as the challenge to the group boycott.
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`defendants because the boycott did not harm Mountain Crest, and the only alleged indirect
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`harm—the six-pack rule—was imposed by the LCBO and the Ontario government, not
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`defendants. Defendants rely on several related doctrines to make this argument.
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`1. Noerr-Pennington doctrine
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`Defendants invoke the Noerr-Pennington doctrine, which “extends absolute immunity
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`under the antitrust laws to businesses and other associations when they join together to
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`petition legislative bodies, administrative agencies, or courts for action that may have
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`anticompetitive effects.” Mercatus Grp., LLC v. Lake Forest Hosp., 641 F.3d 834, 841 (7th Cir.
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`2011) (internal quotation marks and citations omitted).4 Because Mountain Crest is alleging
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`that defendants were using the boycott to influence the LCBO, defendants say that they are
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`entitled to immunity under Noerr-Pennington.
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`Mountain Crest says that Noerr-Pennington doesn’t apply when a defendant’s conduct is
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`a group boycott, citing Federal Trade Commission. v. Superior Court Trial Lawyers Association, 493
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`U.S. 411 (1990) (SCTLA). Mountain Crest is right, but only to a point.
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`In SCTLA, an association of criminal defense lawyers refused to represent any more
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`clients for the District of Columbia until the district enacted legislation that increased the
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`lawyers’ compensation. The federal government sued, contending that the association’s
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`conduct was a group boycott that qualified as a restraint of trade. The Supreme Court agreed
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`and rejected the association’s assertion of immunity under Noerr-Pennington. The Court
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`explained that Noerr-Pennington applies when “the alleged restraint of trade was the intended
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`4 The doctrine gets its name from two Supreme Court cases that applied it, Eastern R.R.
`Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127 (1961), and United Mine Workers
`v. Pennington, 381 U.S. 657 (1965).
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`consequence of public action;” it does not apply when a “boycott was the means by which [the
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`defendants] sought to obtain favorable legislation.” Id. at 424–25. Applying that principle to
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`the case before it, the Court observed that “[t]he restraint of trade that was implemented while
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`the boycott lasted would have had precisely the same anticompetitive consequences during that
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`period even if no legislation had been enacted.” Id. at 425.
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`SCTLA makes it clear that defendants aren’t entitled to immunity for a claim based on
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`harm caused by the alleged boycott itself. The Court of Appeals for the First Circuit has stated
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`the rule succinctly: “private actors who conduct an economic boycott violate the Sherman Act
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`and may be held responsible for direct marketplace injury caused by the boycott, even if the
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`boycotters’ ultimate goal is to obtain favorable state action.” Sandy River Nursing Care v. Aetna
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`Cas., 985 F.2d 1138, 1142 (1st Cir. 1993). So if Mountain Crest could point to an injury
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`caused by the boycott, it could seek damages for the boycott. But Mountain Crest hasn’t done
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`that. After all, the alleged boycott wasn’t against Mountain Crest, it was against the LCBO.
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`And the boycott involved defendants withholding their own products from the LCBO, not
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`Mountain Crest’s products. Mountain Crest identifies no way it suffered as a result of that
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`alleged conduct. If anything, limiting the supply of defendants’ beer would give Mountain Crest
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`an opportunity to sell more beer to the LCBO.
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`As the court of appeals recognized, Mountain Crest’s challenge to the boycott “raise[s]
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`significant questions of causality.” Mountain Crest, 937 F.3d at 1086. Mountain Crest’s theory
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`is not that it was harmed directly by the boycott but that the boycott induced the LCBO to
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`enact the six-pack rule, which limited Mountain Crest’s sales by preventing it from providing
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`discounts for higher-volume sales. But Mountain Crest can’t challenge the six-pack rule directly
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`because of the act of state doctrine. So the question is whether Mountain Crest can maintain
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`an antitrust claim based on an alleged group boycott that caused it no direct harm but that
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`Mountain Crest says set off a chain of events that hurt Mountain Crest’s sales in Ontario.
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`SCTLA provides little guidance in answering that question because there were no issues
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`of causation in that case. The plaintiff was representing the interests of the District of
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`Columbia, which was directly harmed by the group boycott. Other cases more similar to this
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`one suggest that a private defendant cannot be held liable for an alleged antitrust violation
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`when the harm was caused directly by the government, even if the defendant “improperly”
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`influenced the government. In that situation, the government’s conduct is a supervening cause
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`that breaks the link between the defendant and any injury the plaintiff suffered. See Associated
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`Bodywork & Massage Professionals v. Am. Massage Therapy Ass’n, 897 F. Supp. 1116, 1120 (N.D.
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`Ill. 1995) (“Although Defendant may have encouraged the legislatures’ actions, the choice to
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`enact massage therapy regulations constituted an independent governmental choice,
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`comprising a supervening ‘cause,’ and breaking the link between Defendant’s actions and any
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`injury Plaintiff may have suffered.”); 1A Phillip E. Areeda & Herbert Hovenkamp, Antitrust
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`Law § 202c (4th ed. 2015).
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`Sandy River Nursing Care is a good example. In that case, the plaintiffs alleged that a
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`group of insurance companies used a group boycott to coerce the state legislature into allowing
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`them to charge higher rates for workers’ compensation insurance. When a group of employers
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`sued the insurers for antitrust violations, the court concluded that the boycott was a restraint
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`of trade and that Noerr-Pennington did not provide immunity for the boycott. But, as in this
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`case, the plaintiffs in Sandy River Nursing Care weren’t claiming damages for the boycott itself.
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`985 F.2d at 1143. Rather, they contended that the boycott coerced the state legislature into
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`allowing higher rates, which the defendants then imposed. The court rejected that claim,
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`holding that the legislation was an act of the legislature, not the insurers. The court also rejected
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`the argument that the higher rates could be attributed to the insurers because they used
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`“unlawful activity to coerce the favorable legislation,” reasoning that the legislature’s motive
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`was irrelevant. Id. at 1144.
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`Sandy River Nursing Care is not identical to this case because the court relied on the
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`principle that the “Sherman Act d[oes] not apply to anticompetitive restraints imposed by the
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`States ‘as an act of government.’” Id. (quoting City of Columbia v. Omni Outdoor Advertising, Inc.,
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`499 U.S. 365 (1991)). But that principle, which is called “state action immunity,” is similar to
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`the act of state doctrine. Both doctrines rest on the principle that the Sherman Act doesn’t
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`reach conduct of a sovereign, whether domestic or foreign. The important point is the same:
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`there is no liability under the Sherman Act when the “only anticompetitive injuries that [the
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`plaintiff] complains of are the direct result of governmental action.” Sessions Tank Liners, Inc. v.
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`Joor Mfg., Inc., 17 F.3d 295, 300–01 (9th Cir. 1994).
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`This is not simply an issue of immunity. Rather, it is a basic question of causation. See
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`Arreda & Hovenkamp ¶201a (“Setting aside the Constitution and the substantive meaning of
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`the statute, when the anticompetitive harm results from the government action . . . then the
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`government itself becomes the ‘cause’ of action.”). The court in Sessions Tank recognized this.
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`Allowing parties to assert antitrust claims for private conduct alleged to have caused the
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`government to impose a restraint of trade “would entail deconstructing the decision-making
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`process to ascertain what factors prompted the various governmental bodies to erect the
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`anticompetitive barriers at issue.” Id. at 301.
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`In this case, the deconstruction process would be complicated by an additional factor.
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`Specifically, when Mountain Crest entered the Ontario market in 2009, it had already been
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`nine years since the LCBO had officially adopted the six-pack rule in the 2000 agreement.5
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`And Mountain Crest doesn’t contend that defendants can be held liable for anything that
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`happened before 2000. So this is not a situation in which the plaintiff is alleging that a group
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`boycott caused the government to adopt an anticompetitive policy. In other words, Mountain
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`Crest’s theory is not that defendants’ alleged group boycott caused any change in government
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`policy; rather, Mountain Crest’s theory is that the boycott persuaded the Ontario government
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`to retain a policy that had already been in place for nearly a decade, if not longer. See Hughes
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`v. Liquor Control Bd. of Ontario, 2018 CarswellOnt 3969, para. 157 (Can. Ont. S.C.J.) (WL)
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`(“The LCBO would have needed the Provincial Government’s approval to change this status
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`quo, and the Government refused to grant such approval.”). This makes the alleged causal
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`connection between defendants’ conduct and Mountain Crest’s harm even more attenuated
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`than in other cases involving the Noerr-Pennington doctrine.
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`So Mountain Crest is correct that the Noerr-Pennington doctrine does not provide
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`unequivocal support to defendants because, under SCTLA, a group boycott against the
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`government is not entitled to immunity. But, as the other cases and authorities cited above
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`demonstrate, Noerr-Pennington is about more than simply immunizing protected conduct. It is
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`also a recognition of both the evidentiary and policy-based reasons for limiting antitrust
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`liability when anticompetitive harm is the direct result of government action. Applying those
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`5 In fact, as noted in one of the attachments to Mountain Crest’s complaint, even in 2000, the
`LCBO recognized that the six-pack rule was “[c]onsistent with historical practice.” Dkt. 49-14.
`See also Hughes v. Liquor Control Bd. of Ontario, 2018 CarswellOnt 3969, para. 157 (Can. Ont.
`S.C.J.) (WL) aff’d 145 O.R.3d 401 (Can. Ont. C.A.). (“The 2000 Beer Framework Agreement
`did not change much in the way that the LCBO and Brewers Retail each operated. . . . Both
`before and after the Agreement was adopted, government policy precluded the LCBO from
`selling 12-packs and 24-packs at Ordinary Stores.”).
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`reasons to the facts of this case supports a conclusion that Mountain Crest cannot maintain an
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`antitrust claim against defendants based on the group boycott. But the court need not rest its
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`decision on Noerr-Pennington because there are other causation doctrines that point to the same
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`result.
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`2. Other causation doctrines
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`Apart from their reliance on Noerr-Pennington, defendants say that there are three other
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`causation-related problems for any antitrust claim based on the group boycott: (1) Mountain
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`Crest’s injury is not “fairly traceable” to defendants’ conduct, as required by Article III of the
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`Constitution; (2) Mountain Crest has not satisfied the requirements for an “antitrust injury,”
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`as required for its claims under both § 1 and § 2 of the Sherman Act; and (3) Mountain Crest
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`has not satisfied the requirement in the Foreign Trade Antitrust Improvements Act of 1982
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`(FTAIA), 15 U.S.C. § 6a, to allege a “direct” injury on domestic export commerce.
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`Defendants’ first argument is about constitutional standing, which requires the litigant
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`to show that he has suffered a concrete and particularized injury that is fairly traceable to the
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`defendants’ conduct and is likely to be redressed by a favorable judicial decision. Lujan v.
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`Defenders of Wildlife, 504 U.S. 555, 560–61 (1992). Defendants rely on the proposition that
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`the plaintiff’s injury is not fairly traceable to the defendant if the injury is “the result of the
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`independent action of some third party not before the court.” Id. (internal quotation marks
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`and alterations omitted). Defendants say that Mountain Crest’s injury is the result of the
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`LCBO, not defendants, so Mountain Crest doesn’t have standing. Mountain Crest doesn’t
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`respond to this argument in its opposition brief; it doesn’t address constitutional standing at
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`all. That could be reason enough to dismiss this claim. Kirksey v. R.J. Reynolds Tobacco Co., 168
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`F.3d 1039, 1041 (7th Cir. 1999) (“If [courts] are given plausible reasons for dismissing a
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`complaint, they are not going to do the plaintiff’s research and try to discover whether there
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`might be something to say against the defendants’ reasoning.”).
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`Having said that, the causation requirement for standing is fairly liberal; it doesn’t
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`require a showing of proximate cause. See Bennett v. Spear, 520 U.S. 154, 169 (1997) (“While
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`. . . it does not suffice if the injury complained of is the result of the independent action of
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`some third party not before the court, that does not exclude injury produced by determinative
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`or coercive effect upon the action of someone else.” (internal quotation marks and alterations
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`omitted)). But even if the court assumes that Mountain Crest has standing to sue, that doesn’t
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`mean it meets the requirements to sue under the Sherman Act. See McGarry & McGarry, LLC
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`v. Bankr. Mgmt. Sols., Inc., 937 F.3d 1056, 1063 (7th Cir. 2019) (concluding that plaintiffs had
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`standing but failed to prove causation under the Sherman Act).
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`Two causation requirements for antitrust claims are relevant to this analysis. First,
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`“Congress did not intend to allow every person tangentially affected by an antitrust violation
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`to maintain an action,” so courts have required “the plaintiff [to] demonstrate[] [a] direct link
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`between the alleged antitrust violation and the claimed antitrust injury.” Id. at 1064 (internal
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`quotation marks omitted). For example, in McGarry and McGarry, the court held that the
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`plaintiff could not bring a claim under the Sherman Act because its alleged injury was “entirely
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`derivative” of the injury of a third party, who the court said was “a more appropriate person to
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`pursue the claim.” Defendants make the same argument in this case, contending that Mountain
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`Crest’s injury is derivative of the injury to the LCBO, so the LCBO, as the target of the alleged
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`group boycott, is the proper plaintiff, if any.
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`Second, the FTAIA imposes additional limits on Sherman Act claims that are based on
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`anticompetitive conduct in a foreign country. For the purpose of this case, Mountain Crest
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`Case: 3:17-cv-00595-jdp Document #: 106 Filed: 04/24/20 Page 15 of 22
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`must show that the group boycott had a “direct, substantial, and reasonably foreseeable effect”
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`on exports from the United States. 15 U.S.C. § 6a(1)(b). “Direct” in this context means
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`“proximate cause.” Minn-Chem, Inc. v. Agrium, Inc., 683 F.3d 845, 856–57 (7th Cir. 2012). “Just
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`as tort law cuts off recovery for those whose injuries are too remote from the cause of an injury,
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`so does the FTAIA exclude from the Sherman Act foreign activities that are too remote from
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`the ultimate effects on U.S. domestic or import commerce.” Id. at 857. Defendants contend
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`that the LCBO’s six-pack rule, not the group boycott, was the proximate cause of the harm
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`alleged by Mountain Crest in this case.
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`Again, Mountain Crest doesn’t meaningfully respond to defendants’ arguments on
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`causation. It says that defendants committed “myriad” antitrust violations that were
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`“independent of Ontario’s regulatory scheme,” Dkt. 85, at 23, but it doesn’t explain how the
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`group boycott harmed it other than as a barrier to removing the six-pack rule.
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`Mountain Crest also relies on United States v. Sisal Sales Corp., 274 U.S. 268 (1927), for
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`the proposition that defendants are not “absolve[d]” simply because “they were assisted by an
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`act of state.” Dkt. 85, at 23. But Mountain Crest is conflating issues. The court of appeals
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`relied on Sisal Sales to hold that the act of state doctrine does not “bar an antitrust complaint
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`where defendants took deliberate acts to bring about forbidden results simply because the
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`anticompetitive conspiracy was aided by discriminatory legislation.” Mountain Crest, 937 F.3d
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`at 1085–86 (internal quotation marks and alterations omitted). This principle would allow
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`Mountain Crest to bring a claim for an antitrust injury caused by the alleged group boycott.
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`But Sisal Sales isn’t about causation, and the facts of that case aren’t helpful for Mountain
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`Crest. The alleged harm in that case was a monopoly controlled by the defendant; the
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`Case: 3:17-cv-00595-jdp Document #: 106 Filed: 04/24/20 Page 16 of 22
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`“discriminatory legislation” facilitated defendants’ conduct but was not a direct cause of the
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`harm.
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`Mountain Crest’s only discussion in its brief of a “direct effect” is a reference to past
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`litigation by Miller Brewing Company against Molson Coors, but Mountain Crest doesn’t
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`explain how that litigation is connected to the group boycott or to its own injuries.
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`The bottom line is that Mountain Crest hasn’t pointed to any direct harm it suffered
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`as the result of the group boycott. So the court will dismiss this claim with prejudice.
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`B. Marketing and distribution practices
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`Neither Mountain Crest’s brief nor its complaint enumerates the marketing and
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`distribution practices it is challenging. But it doesn’t take issue with the list provided by
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`defendants: (1) BRI’s failure to stock Mountain Crest’s beer in sufficient quantities; (2) BRI’s
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`decision to give the store’s top selling beers a more prominent display; (3) BRI’s decision to
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`discontinue its practice of allowing brewers to pay for in-store advertisements; (4) the layout
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`of BRI’s stores; and (5) fees charged to brewers by BRI. The court understands Mountain Crest
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`to be challenging these practices under both § 1 and § 2 of the Sherman Act as restraint