Bankruptcy – Antitrust Claim

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7^th Circuit Court of Appeals

Case Name: McGarry & McGarry, LLC, v. Bankruptcy Management Solutions, Inc.,

Case No.: 18-2619

Officials: ROVNER, SYKES, and BARRETT, Circuit Judges.

Focus: Bankruptcy – Antitrust Claim

McGarry & McGarry, LLC, a creditor in a closed Chapter 7 bankruptcy case, tried three times to bring a price-fixing claim against Bankruptcy Management Solutions, Inc. (“BMS”), the trustee’s software-services provider. In the first suit, McGarry alleged claims under the Sherman Act and the Illinois Antitrust Act. Because McGarry is not a direct purchaser of bankruptcy software services, the district court dismissed the Sherman Act claim, see Ill. Brick Co. v. Illinois, 431 U.S. 720 (1977), and relinquished jurisdiction over the state-law claim.

McGarry tried a different tack and moved to reopen the bankruptcy proceedings. The bankruptcy court denied that request because the case had been closed for more than three years. Undeterred, McGarry filed a new lawsuit in state court alleging a stand-alone claim under the Illinois Antitrust Act. The state statute has an “Illinois Brick repealer” provision that permits indirect purchasers to sue. BMS removed the case to federal court and moved to dismiss. The district judge granted the motion because McGarry is not even an indirect purchaser of bankruptcy software services; it does not purchase these services at all. McGarry appealed.

We affirm. McGarry is a one-time creditor in a closed Chapter 7 bankruptcy case. It does not participate in the market for bankruptcy software services in any way that would make it a proper plaintiff to bring an antitrust claim against a firm that provides those services to bankruptcy trustees.

Affirmed

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Derek A Hawkins is trademark corporate counsel for Harley-Davidson. Hawkins oversees the prosecution and maintenance of the Harley-Davidson’s international trademark portfolio in emerging markets.