Lead Opinion
{¶ 1} The plaintiff-appellant, Maria Johnson, appeals from the order of the trial court dismissing her amended complaint against the defendant-appellee, Microsoft Corporation, under Civ.R. 12(B)(6). The amended complaint contained three counts: (1) a common-law claim for restitution alleging that Microsoft had charged a monopoly price for its Windows operating system; (2) a claim that Microsoft had violated Ohio’s version of the Valentine Act, R.C. 1331.01; and (3) a claim that Microsoft had violated two provisions of the Ohio Consumer Sales Practices Act, R.C. 1345.02 and 1345.03, by engaging in “unfair оr deceptive” and “unconscionable acts” relating to a consumer sale. Johnson brought her claims as part of a putative class consisting of all those who had purchased a license to use any version of the Windows operating system within four years of her filing the complaint.
{¶ 2} In her single assignment of error, Johnson argues that she successfully stated claims under Ohio common law, the Valentine Act, and the Ohio Consumer Sales Practices Act. For the reasons that follow, we affirm the judgment of the trial court.
*629 Background
{¶ 3} Johnson alleged that she had purchased a personal computer (“PC”) from a retail merchant, Gateway, and that the PC was loaded with the Windows 98 operating system. She further alleged that the Windows system on her new PC remained inoperable until it was out of the box and in her home, and that she used the PC to indicate her acceptance of an on-screen licensing agreement drafted by Microsoft and entitled “Microsoft End User License Agreement” (“EULA”). When she provided the obligatory acceptance, she alleged, she entered into a separate transaction with Microsoft.
{¶ 4} Johnson further alleged that Microsoft had obtained a monоpoly in the market of PC operating systems. She alleged that Microsoft had used its superior position in the market to control price “free of the normal restraints faced in a competitive market.” She alleged that the price charged by Microsoft for the Windows operating system was a “monopoly price, far above the price that would be paid in a competitive market.”
{¶ 5} Johnson further alleged that Microsoft had erected barriers to competition. Her allegations focused primarily on Microsoft’s efforts to thwart competition from Navigаtor, a browser program introduced by Netscape Communications. She cited the action of the federal government and several states, including Ohio, in
United States v. Microsoft
(C.A.D.C.2001),
The Valentine Act
{¶ 6} Microsoft successfully argued in its motion to dismiss that the United States Supreme Court’s decision in
Illinois Brick Co. v. Illinois
(1977),
{¶ 7} Initially, we note that the weight of authority in this state is that the Valentine Act be interpreted consistently with federal antitrust law. The Ohio Supreme Court in
C.K. & J.K, Inc. v. Fairview Shopping Ctr. Corp.
(1980),
{¶ 8} Prior to the United States Supreme Court’s decision in
Illinois Brick,
and at the time that Ohio’s version of the Valentine Act was enacted, there was no direct-purchaser requirement for standing to bring a claim under the Valentine Act.
4
However, in 1977, the United States Supreme Court decided
Illinois
*631
Brick
and imposed such a requirement. The court’s holding was a corollary of its earlier holding in
Hanover Shoe v. United Shoe Mach. Corp.
(1968),
{¶ 9} After
Illinois Brick,
the court in
California v. ARC Am. Corp.
(1989),
{¶ 10} Of equal significance, although some 26 states and the District of Columbia do allow for some form of indirect-purchaser actions, 23 of these jurisdictions do so only because of Illinois Brick repealer statutes passed by their respective legislatures. Many of these repealer statutes, in turn, limit indirect-purchase actions to the state attorney general as parens patriae. 7
{¶ 11} Ohio is not among the states that have passed an
Illinois Brick
repealer statute. Still, Johnson argues that, despite the weight of authority to the contrary,
Illinois Brick’s
direct-purchaser requirement should not be applied to Ohio’s Valentine Act. The reason, Johnson argues, is that the Ohio legislature never manifested an intent that the Act would be subject to evolving federal antitrust law. To support this argument, Johnson isolates the following language in
List v. Burley Tobacco Growers’ Co-op. Assn.
(1926),
{¶ 12} We disagree with Johnson in several respects. First, it is an exaggeration to suggest that a policy of parallel construction somehow grants the federal courts the power to make Ohio law. Obviously, the Ohio legislature can at any time pass legislation that effectively repeals
Illinois Brick’s
direct-purchaser requirement, as 23 states have already done, and the Ohio Supreme Court can decide at any time that the requirement is not what the legislature intended in the first place. We are convinced, however, that the court in
C.K
established the principle that Ohio’s Valentine Act should be interpreted by Ohio lower courts in a manner consistent with federal interpretation of the Sherman Act. Furthermore, we arе not persuaded to the contrary by the language in
List
quoted by Johnson.
List
was decided in 1926,
C.K
in 1980. In
C.K,
the court relied upon the
Standard Oil Co. of New Jersey v. United States
(1911),
{¶ 13} Guided by the principle of stare decisis, we believe that this court has аlready adopted and applied an ongoing parallel federal-state construction of the Valentine Act. The rules of the game were established, we believe, in C.K. To hold otherwise now would not be consistent with our own precedent in Acme Wrecking. Furthermore, eschewing the direct-purchaser requirement would place this court outside what is clearly the weight of authority among state courts that have considered the same issue. 8 In our view, as evidenced by the legislative action taken by 23 of the 27 jurisdictions that have elected to allow indirect-purchaser actions, the decision is one involving public policy and thus should be made by the legislative rather than the judicial branch.
*634
{¶ 14} Finally, we note that we find nothing in the language of the Ohio statute that would dictate a different result. Ohio’s version of the Valentine Act provides that “the person injured in the person’s business or property by another person by reason of anything forbidden or declared to be unlawful [under the Act], may sue therefor * * *.” R.C. 1331.08. Although at first blush this language may seem broad enough to infer an intent by the legislature to part company with
Illinois Brick
and allow for suits by indirect purchasers, it is essentially the same language that аppears in the Clayton Act, and has therefore been rejected as a basis for diverging from the direct-purchaser requirement in jurisdictions such as Ohio that follow the federal paradigm. See
Major,
supra,
{¶ 15} Johnson argues, alternatively, that even if the direct-purchaser requirement is held to be applicable under Ohio law, the licensing agreement that she entered into with Microsoft was sufficiently direct to satisfy the requirement. Johnson argues that the agreement was directly between Microsoft, the licensor, and herself, as licensee, and had nothing to do with the retailer, Gateway, as middleman. She advocates that we view the license agreement as, in essence, Microsoft’s product that she “purchased” by using her computer to manifest her agreement to the terms of the license.
{¶ 16} As Microsoft correctly argues, the United States Supreme Court has rejected an industry-specific approach to
Illinois Brick,
in other words, different rules for different industries.
Kansas v. UtiliCorp United Inc.
(1990),
{¶ 17} Because we hold that the direct-purchaser requirement deprived Johnson of standing 10 to pursue a claim under the Valentine Act, we need not reach the other issues raised by the parties concerning the allegation of sufficient intrastate activity and the necessity of alleging “a combination, contract, or agreement.” Even if we were to agree with Johnson on both these issues, the fact remains that she lacked standing to assert a damаge claim under the Act 11 because she did not purchase her PC with its preloaded software from Microsoft.
Restitution
{¶ 18} Johnson argues that even if she lacked standing under the Valentine Act, her restitution claim, on behalf of the putative class, still stated a viable claim for relief. In this regard, she argues that she alleged all the necessary elements to support claims of equitable restitution and unjust enrichment—to wit, that she and members of the putative class had conferred a benefit upon Microsoft and that it would be unjust or unfair to allow Microsoft to retain the benefit given its alleged monopolistic and anticompetitive activities.
{¶ 19} A restitution claim is designed to force the defendant to disgorge benefits that it has wrongfully or unjustly obtained. Dobbs, Remedies (1973), Section 4.1, at 224. Microsoft responds correctly, in our view, that the only direct benefit Johnson or members of the putative class conferred was the money that they paid to the retailers who sold them their individual computers or software. A promissory click to the Microsoft licensing agreement, following a purchase of the computer, was an indirect or incidental benefit to Microsoft, and as such it was insufficient under Ohio law to support a claim of restitution. Cf.
Norton v.
*636
Gallon
(1989),
Ohio Consumer Sales Practices Act
{¶ 20} Johnson argues, finally, with respect to her remaining claim on behalf of the class under the Ohio Consumer Sales Practice Act, that the trial court applied an overly strict pleading requirement. She argues that the court required her to plead with a higher degree of specificity than that called for under the general rule that such claims be plеaded with only “reasonable specificity.” See
Amato v. Gen. Motors Corp.
(1982),
{¶ 21} As Microsoft points out, the Ohio Consumer Sales Practices Act has specific rules permitting a class action. Under R.C. 1345.09(B), a class action is permitted under the Act if the plaintiff alleges that the substantive provisions of the Act have been violated, and (1) a specific rule or regulation has been promulgated under R.C. 1345.05 that specifically characterizes the challenged practice as unfair or deceptive, or (2) an Ohio state court has found the specific practice either unconscionable оr deceptive in a decision open to public inspection. As Microsoft points out, Johnson pleaded neither of these elements despite the fact that she brought her claim as part of a class action.
{¶ 22} Furthermore, we find persuasive Microsoft’s argument that it is questionable whether the Ohio Consumer Sales Practices Act can even be said to apply to monopolistic and anticompetitive behavior, which is more correctly described as a manipulation of market forces than as a sales practice. The Consumer Sales Practices Act is targeted toward “suppliers” who are “engaged in the business of effecting or soliciting consumer transactions * * (Emphasis supplied.) R.C. 1345.01(C). Under R.C. 1345.02, unfair or deceptive sales practices are those that are likely to induce in the consumer a false state of mind concerning the product itself. R.C. 1345.03 sets forth certain circumstances to be used in determining whether a sales act or practice is unconscionable, and these indicate that unconscionability is directed toward some inherent unfairness in the *637 act of sale, such as overcharging, price gouging, unreasоnable refusal to refund, and selling to those unable to pay. None of these stated practices provides support for a claim based upon alleged antitrust violations that affect competitive forces in the marketplace, which we believe that the legislature intended to exclusively address under the Valentine Act.
{¶ 23} A similar issue arose in
Sherwood,
supra, a case in which the Tennessee appeals court held that the state antitrust statute
did
provide for indirect-purchaser actions based upon certain unique language in the Tennessee statute. The
Sherwood
plaintiffs had also sought rеcovery under the Tennessee Consumer Protection Act, Tenn.Code Ann. 47-18-101-1808, upon the basis that the same arrangement in restraint of trade also constituted a violation of the TCPA. The
Shenvood
court rejected, however, the proposition that the same anticompetitive conduct actionable under the antitrust statute was actionable under the consumer protection statute, despite the statutory admonition that the TCPA was to be liberally construed to “protect consumers and legitimate business enterprises from those who engage in unfair or deceptive acts or practices in the conduct of any trade or commerce * * Tenn.Code Ann. 47-18-102(2). Tracing the history of the Tennessee statute back to the development of the Uniform Trade Practices Act and Consumer Protection Law developed in the 1960s, the court noted that, as these and other uniform acts
12
evolved, state legislatures were faced with the choice of adopting either a version that mirrored the Federal Trade Commission Act, Section 45(a)(1), Title 15, U.S.Code, prohibiting both unfair methods of competition and unfair or deceptive acts or practices (referred to as the “little FTC Act” version), or another version that elected only to prohibit unfair and deceptive acts and practices without including language targeting unfair methods of competition.
Sherwood,
supra, at * 32,
{¶ 24} We find the same logic persuasive here. Indeed, it would have been a small matter for the General Assembly to include language in the Ohio Consumer Sales Practices Act prohibiting unfair methods of competition if it had wished to do so. By comparing and contrasting the two statutes, we find it to be quite *638 clear that the Valentine Act was meant to be the legal remedy in Ohio for the type of conduct for which Johnson has sought recourse. Unfortunately for her and the putative members of her сlass, the direct-purchaser requirement of Illinois Brick forecloses the type of action she wishes to bring until the legislature or the Ohio Supreme Court repeals or rejects it. 13
{¶ 25} In sum, we hold that Johnson’s amended complaint failed to state claims under Ohio common law, the Valentine Act, or the Ohio Consumer Sales Practice Act. Accordingly, the trial court did not err when it granted Microsoft’s motion to dismiss for failure to state a claim under Civ.R. 12(B)(6). The judgment of the trial court is affirmed.
Judgment affirmed.
Notes
. Before
Illinois Brick,
six of seven federal circuit courts ruling on the issue had held that indirect purchasers could sue for damages caused by a violation of the federal antitrust laws.
Illinois v. Ampress Brick Co.
(C.A.7, 1976),
. It should be pointed out that our use of the term "parallel construction” is not meant to imply a lockstep approach, but one in which federal guidance is generally followed for the sake of uniformity.
. The antitrust-injury requirement, like the direct-purchaser standing requirement, was the product of judicial construction.
See Atlantic Richfield Co. v. USA Petroleum Co.
(1990),
. See fn. 1.
. Some courts have concluded that the holding in
Illinois Brick
did not preclude injunctive relief for the indirect purchaser. See, e.g.,
Mid-West Paper Prod. Co. v. Continental Group
(C.A.3, 1979),
. For courts reaching the opposite result, see
Bunker’s Glass Co. v. Pilkington
(2003),
. Alabama, Ala.Code 6-5-4(d); California, Cal.Bus. and Prof.Code 16750(a); Colorado, Colo. Rev.Stat. 6-4-111(2) (authorizing the state attorney general to bring suit for indirect injury to any government or public entity); District of Columbia, D.C.Code Ann. 28-4509; Hawaii, Hawaii Rev.Stat. 480-3, 480-13, and 480-14 (allowing the state attorney general to file class-action suit on behalf of indirect purchasers); Idaho, Idaho Code 48-108(2) (permitting the state attorney general as parens patriae to bring suit); Illinоis, 740 Ill. Comp. Stat. 10/7(2); Kansas, Kan.Stat.Ann. 50-161(b): Maine, Me.Rev.Stat.Ann., Title 10, Section 1104(1); Maryland, Md.Code Ann., Com. Law II, Section 11—209(b)(2)(ii) (allowing the state and its subdivisions to bring indirect-purchaser suits); Michigan, Mich.Comp.Laws 445.778(2); Minnesota, Minn.Stat. 325D.57; Mississippi, Miss.Code Ann. 75-21-9; Nebraska, Neb.Rev. Stat. 59-821; Nevada, Nev. Rev.Stat. 598A.210(2); New Mexico, N.M.Stat.Ann. 57-l-3(A); New York, N.Y. Gen.Bus.Law 340(6); North Dakota, N.D.Cent.Code 51-08.1-08(3); Oregon, Ore.Rev.Stat. 646.775 (allowing attorney general to sue on behalf of indirect purchasers); Rhode Island, R.I. Gen. Laws 6-36-12 (same); South Dakota, S.D.Codified Laws 37-1-33; Vermont, Vt.Stat.Ann. Title. 9, Section 2465(b); Wisconsin, Wis.Stat. 133.18(l)(a).
. We also note that the Uniform State Antitrust Act encourages the same type of federal-statе uniformity. See Uniform State Antitrust Act Prefatory Note, 7C U.L.A. at 352.
. As we note infra in fn. 10, the holding of Illinois Brick is at its core a definition of who can be said to have suffered injury under federal antitrust law, and, therefore, by applying Illinois Brick to R.C. 1331.08, it must be said that an indirect purchaser is not "the person injured.”
. Although we have couched the issue as one of standing, it should be noted that there is some debate in the cases whether
Illinois Brick
is concerned with standing or the definition of injury. As the court in
Illinois Brick
noted, the questions of who has standing and which persons have sustained injury are "analytically distinct," and its precise holding was that the direct purchaser, not the indirect purchaser, was the one injured for the purposes of federal antitrust law.
Illinois Brick,
supra,
. See fn. 2, supra. As the court noted in Mid-West Paper Products, it is arguable that injunctive relief may still be available to an indirect purchaser even after Illinois Brick since such equitable nonmonetary relief would not be complicated by pass-on theories as would a claim for treble damages.
. Other uniform acts included the Uniform Deсeptive Trade Practices Act, 7 U.L.A. 35 (1978), and the Uniform Consumer Sales Practices Act, 7A U.L.A. 1 (1978).
. We are not persuaded to the contrary by Johnson's observation that in
Shaver v. Std. Oil Co.
(1993),
Dissenting Opinion
dissenting.
{¶ 26} As the majority correctly points out, there was no direct-purchaser requirement for standing to bring a Valentine Act claim prior to Illinois Brick.
{¶ 27} The weight of the authority does indeed provide that the Ohio Valentine Act is to be interpreted consistently with federal antitrust law. But that does not mean that we must follow the federal courts blindly when interpreting Ohio law. Illinois Brick interpreted the federal antitrust laws as precluding any claims by indirect purchasers. And the federal antitrust laws were intended to supplement, not displace, state antitrust remedies. 14
{¶ 28} After Illinois Brick, which drastically changed federal antitrust law, many states reenacted their own laws to specifically reject the Illinois Brick doctrine. Ohio did not—but reading much of anything into legislative inaction is dangerous. When our Valentine Act was passed, indirect purchasers had stand *639 ing to sue. Why a federal interpretation of a federal law should change Ohio law escapes me.
{¶ 29} Twenty-seven other jurisdictions do allow for some indirect-purchaser actions. And Arizona, Iowa, North Carolina, and Tennessee courts have all upheld indirect-purchaser actions despite their legislatures’ failure to enact repealer statutes. 15 Ohio should follow their lead.
{¶ 30} The Valentine Act was adopted long before Illinois Brick. It allowed for indirect-purchaser actions. Now, the majority notes that Ohio can pass legislation to repeal the direct-purchaser requirement. But Ohio should not have to enact a new statute every time a federal court rules on a new antitrust case. Wfhat was the law prior to Illinois Brick should continue to be the law. Ohio should allow indirect-purchaser actions under the Valentine Act.
{¶ 31} The language of the Valentine Act is broad in granting standing to anyone “injured in the person’s business or property by another person by reason of anything forbidden or declared to be unlawful * * 16 The Valentine Act prohibits a trust from fixing prices “to the public or consumer” in any manner. 17 Trusts also cannot contract to fix prices to preclude unrestricted competition “among themselves, purchasers, or consumers * * 18 And no person shall enter into a combination, contract, or agreement with the intent to fix the price or lessen the production or sale “of an article or service of commеrce, use, or consumption * * 19 This language shows a clear intent to allow consumers to proceed under Valentine. And consumers are usually indirect purchasers.
{¶ 32} The four jurisdictions without repealer statutes that have found indirect-purchaser claims to be valid have based their decisions on similar statutory language. 20 The similarity to the Clayton Act did not give them pause other than *640 to assert their judicial rights to interpret their own state statutes. We, too, should not stumble on similarities in the language.
{¶ 33} Illinois Brick dramatically changed the landscape of federal antitrust litigation. It effectively eliminаted a remedy for the one party who was most likely to be injured by antitrust violations—the consumer. 21 To suggest that Ohio should continue to apply an ongoing parallel federal-state construction here undermines Ohio courts’ authority and robs consumers of their day in court.
{¶ 34} I am also not convinced of Illinois Brick’s rejection of the industry-specific approach, which the majority now adopts. The EULAs are contracts between Microsoft and the end user—no more, no less. There may not be a direct exchange of money, but the license is the product. Allowing Microsoft to escape antitrust liability simply becausе it has figured out a way to insert a buffer of retailers, OEMs, and EULAs between it and its consumers creates an industry-specific exception to justice.
{¶ 35} Microsoft is in direct privity with its end users. Perhaps if Microsoft were willing to forgo any and all suits arising out of these EULAs, then the end users would simply be indirect purchasers. But Microsoft uses the OEMs or retailers to get PCs into the users’ homes and businesses. It then uses that direct contact with all consumers to force an EULA on all end users before they can use the computers that they purchased from somebody other than Microsoft. And Microsoft accomplishes all of this without suffering any of the ordinary legal consequences. Standard Oil never had it so easy.
{¶ 36} Therefore, I respectfully dissent.
.
California v. ARC Am. Corp.
(1989),
.
Bunker’s Glass Co. v. Pilkington
(2003),
. R.C. 1331.08.
. R.C. 1331.01(B)(4).
. R.C. 1331.01(B)(5).
. R.C. 1331.02.
. See
Bunker’s Glass Co. v. Pilkington
(2003),
. See id.
