621 F.Supp.3d 878
N.D. Ill.2022Background
- Nine named plaintiffs (students) sued 17 elite private universities, alleging a price‑fixing conspiracy under Section 1 of the Sherman Act that used the 568 Presidents Group and its Consensus Methodology (CM) to suppress financial‑aid competition and inflate net prices.
- Defendants are consistently top‑25 U.S. News–ranked private universities; plaintiffs seek class certification, an injunction prohibiting concerted pricing/financial‑aid policies, and damages or restitution.
- Plaintiffs allege 568 Group members adopted CM to standardize need assessment; plaintiffs contend many defendants are not truly "need‑blind" and thus not covered by the statutory 568 exemption to antitrust law.
- Defendants moved to dismiss on several grounds: applicability of the 568 exemption, failure to state a Sherman Act claim, lack of antitrust injury/standing, statute‑of‑limitations bars, and for some defendants, lack of membership/withdrawal from the alleged conspiracy or nonuse of the CM.
- The district court denied the motions: it found plaintiffs plausibly alleged non‑need‑blind practices (defeating the exemption), pleaded a plausible relevant market and Section 1 claim under Rule of Reason (reserving framework issues), adequately alleged antitrust injury/standing, and showed that affirmative defenses (limitations, withdrawal) could not be resolved on a Rule 12(b)(6) record.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicability of 568 Exemption / meaning of "need‑blind" | Plaintiffs: many defendants consider applicants' financial circumstances (waitlist, transfers, donor preferences, enrollment management), so defendants are not "need‑blind." | Defs: "need‑blind" should be read narrowly to mean only not considering formal aid‑need information; exemption protects members; burden on plaintiffs to plead exemption elements. | Court: Plaintiffs plausibly allege defendants are not need‑blind even under defendants' narrower definition; 568 Exemption therefore does not bar the suit. |
| Section 1 antitrust claim / relevant market | Plaintiffs: alleged market is elite private universities (average top‑25 U.S. News ranking); CM reduced competition in aid awards. | Defs: market definition implausible (single ranking source; excludes publics/liberal arts; arbitrary cutoff); Rule of Reason should apply, not per se. | Court: Plaintiffs plausibly alleged a relevant market and a Section 1 claim under Rule of Reason; dismissal denied (choice of framework deferred). |
| Antitrust injury and standing | Plaintiffs: conspiracy caused uniform aid awards and higher net prices; plaintiffs are injured customers of that market. | Defs: causal link speculative; plaintiffs' allegations rely on implausible inferences. | Court: Allegations are sufficiently concrete and plausible to plead antitrust injury and standing. |
| Statute of limitations / tolling doctrines | Plaintiffs: discovery rule, fraudulent concealment, and continuing violation conceivably apply; limitations cannot be resolved on pleadings. | Defs: claims pre‑date limitations period; no fraudulent concealment pleaded with specificity; discovery rule abrogated by recent precedent. | Court: Defendants failed to show no conceivable facts could toll limitations; discovery rule and fraudulent concealment/continuing violation may apply; dismissal denied. |
| Membership, withdrawal, and successor liability (Brown, Emory, Chicago, Johns Hopkins, Yale) | Plaintiffs: defendants' asserted withdrawals are disputed; new joiners (Johns Hopkins, Yale) can be liable for prior acts if they joined with knowledge and intent. | Defs: some schools withdrew years earlier (time‑bar), Johns Hopkins joined late and cannot be liable for prior acts, Yale stopped using CM. | Court: Burden to prove withdrawal rests with defendants; complaint does not establish withdrawal; Johns Hopkins plausibly knew of prior conduct; Yale's alleged nonuse of CM does not establish dismissal. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (12(b)(6) plausibility standard)
- NLRB v. Ky. River Cmty. Care, Inc., 532 U.S. 706 (2001) (burden to prove statutory exemption generally on party claiming it)
- Sebelius v. Cloer, 569 U.S. 369 (2013) (limits of absurdity doctrine in statutory interpretation)
- Fed. Mar. Comm'n v. Seatrain Lines, Inc., 411 U.S. 726 (1973) (Sherman Act exemptions construed narrowly)
- California Dental Ass'n v. FTC, 526 U.S. 756 (1999) (Quick Look standard for manifestly anticompetitive restraints)
- Wilk v. Am. Med. Ass'n, 895 F.2d 352 (7th Cir. 1990) (Rule of Reason / per se framework discussion)
- Agnew v. Nat'l Collegiate Athletic Ass'n, 683 F.3d 328 (7th Cir. 2012) (plaintiff burden to define relevant product/geographic market)
- Sharif Pharmacy, Inc. v. Prime Therapeutics, LLC, 950 F.3d 911 (7th Cir. 2020) (market definition and monopoly power pleading)
- Klehr v. A.O. Smith Corp., 521 U.S. 179 (1997) (fraudulent concealment tolling principles)
- Rotkiske v. Klemm, 140 S. Ct. 355 (2019) (distinguishing statutes that expressly start limitations at occurrence from those that do not)
- Marion Healthcare, LLC v. Becton, Dickinson & Co., 952 F.3d 832 (7th Cir. 2020) (conscious commitment requirement for conspiracy allegations)
- Havoco of Am., Ltd. v. Shell Oil Co., 626 F.2d 549 (7th Cir. 1980) (co‑conspirator liability for prior acts when joining with knowledge)
- Vasquez v. Ind. Univ. Health, Inc., 40 F.4th 582 (7th Cir. 2022) (application of discovery rule in antitrust context)