Company Buying Through a Middleman Can Sue Original Producer
The Tennessee Supreme Court recently held that a company that buys from a middleman can directly sue the original producer under two different legal theories. This is an important ruling because of a basic economic principle: if the cost to the middleman is inflated, then the cost to her customer (typically) goes up as well. If the buyer could not sue the producer for wrongfully inflating that price, then they are ultimately left paying for the producer's increased profits without any recourse.
The first legal theory is the Tennessee Trade Practices Act. The end purchaser can sue the original producer for antitrust violations such as price-fixing. The end purchaser can sue for the increased price that gets passed along to her (and no more than that amount). The Court left it up to trial courts to prevent letting both the middleman and the end purchaser sue.
The second legal theory that the Court analyzed was unjust enrichment. The Supreme Court ruled that the producer does not have to receive a direct benefit from the end purchaser to be unjustly enriched.
There's also a few more points of law in Freeman Indus., LLC v. Eastman Chem. Co. aside from the "indirect purchaser" rulings.
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