Tuesday, August 18, 2009

Rejection of Thermostat Buyer’s Antitrust Claims Against Honeywell Upheld

This posting was written by Darius Sturmer, Editor of CCH Trade Regulation Reporter.

A consumer’s putative class action—alleging that Honeywell International, Inc. violated Maine’s antitrust statute by misrepresenting its trademark on circular thermostats and threatening rival manufacturers with litigation—was properly found to have been barred by the statute of limitations and to have failed to state cognizable injury, the Maine Supreme Judicial Court has ruled. Summary judgment in favor of Honeywell was affirmed.

Statute of Limitations

The consumer’s antitrust claims were based on his purchase of three Honeywell thermostats in Maine in approximately 1986 and his purchase of a single thermostat in New Hampshire in 2001. The cause of action based on the purchases in Maine accrued at the time of his injury—in 1986, 18 years before he filed suit. Therefore, the claim fell well outside of Maine’s six-year statute of limitations, the court determined.

Rejected were contentions that the statute of limitations should have been tolled under the continuing violation doctrine and the fraudulent concealment exception.

The consumer’s alleged purchase of a single thermostat in New Hampshire 15 years later did not serve to revive the cause of action, the court held. In addition, the consumer failed to present sufficient facts to prove fraudulent concealment, particularly given that many of the facts relevant to fraudulent concealment had been publicly available in the documents filed by Honeywell with the U.S. Patent and Trademark Office in 1968 and 1986.

Antitrust Standing, Injury

The consumer lacked standing to assert a claim based on the single thermostat purchase in New Hampshire in 2001 because his allegations were insufficient to demonstrate that he suffered injury from the alleged conduct, the court held. The consumer expressed uncertainty about the location of the store at which he bought the thermostat, the price he paid for it, and whether he received any discounts or rebates for the purchase.

He had no sales slip, invoice, or other evidence of what he paid. Without such evidence, the court noted, he could not prove that he had paid an inflated price, as opposed to the possibility that price increases were absorbed at the retail level.

Partial Dissent

An opinion filed by two justices, partially dissenting from the majority holding, contended that the consumer should have been entitled (1) to complete discovery with respect to the antitrust claim based on the 2001 purchase and (2) to have the issue of antitrust injury and damages addressed in a decision on his motion for class certification before the court ruled on Honeywell’s summary judgment motion.

The partially dissenting justices did agree with the majority that any claim based on the 1986 purchases was time-barred. However, they argued, that majority’s characterization of the claim based on the New Hampshire purchase in 2001 as speculative was premature.

If the consumer had been allowed to present his expert’s opinion that much of the injury and damages were common to the class—and if the expert could convince the trial court that common proof was sufficient—then the consumer’s lack of a receipt for the purchase might not have impeded his claim or his status as a class representative, the partial dissent argued.

The decision in McKinnon v. Honeywell International, Inc. appears here. It will be reported at 2009-2 Trade Cases ¶76,704.

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