                                           PRECEDENTIAL


          UNITED STATES COURT OF APPEALS
               FOR THE THIRD CIRCUIT
               ________________________

                       No. 16-3795
                ________________________

          IN RE: PROCESSED EGG PRODUCTS
               ANTITRUST LITIGATION

KRAFT FOODS GLOBAL, INC., KELLOGG COMPANY,
  GENERAL MILLS, INC., and NESTLÉ USA, INC.,
                           Appellants

                ________________________

        On Appeal from the United States District Court
              for the Eastern District of Pennsylvania
    (District Court Nos. 2-08-md-02002 and 2-12-cv-00088)
        District Judge: The Honorable Gene E.K. Pratter
                   ________________________

                    Argued July 11, 2017

Before: SMITH, Chief Judge, FUENTES, Circuit Judge, and
             STARK, † Chief District Judge


†
 Honorable Leonard P. Stark, Chief Judge of the United States
District Court for the District of Delaware, sitting by
designation.
             (Opinion Filed: January 22, 2018)

               ________________________



    Richard P. Campbell
    James T. Malysiak
    Michael T. Brody      [Argued]
    Jenner & Block LLP
    353 N. Clark Street
    Chicago, IL 60654

Counsel for Appellants

    Carrie C. Mahan       [Argued]
    Weil, Gotshal & Manges LLP
    1300 Eye Street, N.W.
    Washington, DC 20005

    William L. Greene
    Ruth S. Shnider
    Stinson Leonard Street LLP
    150 S. Fifth Street
    Minneapolis, MN 55402

    Brian E. Robison
    Gibson, Dunn & Crutcher LLP
    2100 McKinney Avenue, Suite 1100

                            2
Dallas, TX 75201

Christine C. Levin
Jennings F. Durand
Dechert LLP
2929 Arch Street
Philadelphia, PA 19104

Donald M. Barnes
Jay L. Levine
Porter Wright Morris & Arthur LLP
1900 K Street, N.W., Suite 1110
Washington, DC 20006

Molly S. Crabtree
Porter Wright Morris & Arthur LLP
41 South High Street
29th Floor
Columbus, OH 43215


Michael L. Scheier
Joseph M. Callow, Jr.
Keating Muething & Klekamp PLL
1 East Fourth Street, Suite 1400
Cincinnati, OH 45202

Jan P. Levine
Robin P. Sumner
Whitney R. Redding
Pepper Hamilton LLP

                         3
    3000 Two Logan Square
    Philadelphia, PA 19103

Counsel for Appellees


                 ________________________

                         OPINION
                 ________________________


STARK, Chief District Judge.

       In this antitrust case, suppliers of processed egg
products are accused of conspiring to reduce the supply of eggs
and, consequently, increasing the market price for egg
products. The District Court, relying on our decision in Mid-
West Paper Products Co. v. Continental Group, Inc., 596 F.2d
573 (3d Cir. 1979), as well as the bar on indirect purchaser
actions established in Illinois Brick Co. v. Illinois, 431 U.S. 720
(1977), concluded that the purchaser-plaintiffs lack antitrust
standing. We find that neither Mid-West Paper nor Illinois
Brick bars the price-fixing claims asserted here and reverse the
District Court’s grant of summary judgment.

                                I

       This is a case about eggs. After collection from laying
hens, most commercially-produced eggs proceed through one
of two principal distribution channels. The first path is for
“shell eggs,” which are supplied to grocery stores and other
                                4
distributors as whole eggs, packaged, for example, in crates by
the dozen. “‘Shell eggs’ [are] defined as eggs produced from
caged birds that are sold in the shell for consumption or for
breaking and further processing.” In re Processed Egg
Products Antitrust Litig., 312 F.R.D. 171, 177 n.4 (E.D. Pa.
2015).

        The second path involves what are referred to as “egg
products.” “‘Egg products’ [are] defined as the whole or any
part of shell eggs that have been removed from their shells and
then processed, with or without additives, into dried, frozen, or
liquid forms.” Id. at 177 n.5. Food manufacturers are the
primary purchasers of egg products, using them as ingredients
in goods ranging from frozen waffles to salad dressing to
mayonnaise.

       In a series of individual and class actions brought by
purchasers of shell eggs and egg products, certain egg suppliers
are accused of price-fixing in violation of the Sherman Act, 15
U.S.C. § 1. It is alleged that, between at least 1999 and 2008,
these producers conspired to reduce the population of egg-
laying hens, resulting in a reduced supply of eggs and, in light
of the inelasticity of demand in the relevant markets,
supracompetitive prices. 1


1
 “Demand for a product is inelastic if the price can rise without
a corresponding drop in demand.” A.D. Bedell Wholesale Co.
v. Philip Morris Inc., 263 F.3d 239, 246 (3d Cir. 2001). As
applied here, if “the demand for eggs is highly inelastic,” as
Appellants contend, then “a relatively small reduction in the
egg supply results in a large increase in egg prices.” (Opening
                               5
        Appellee United Egg Producers, Inc. (“UEP”), a trade
association, allegedly played an important role by coordinating
a certification program. Egg producers participating in the
certification program were required to increase their hens’ cage
sizes and refrain from replacing hens that died with another
laying hen (a practice known as “backfilling”). It is alleged
that the animal welfare rationale offered for these practices is
merely a pretext for the true goal of reducing egg supply to
drive up egg prices.

       Appellants – Kraft Foods Global, Inc., Kellogg
Company, General Mills, Inc., and Nestlé USA, Inc.
(hereinafter, “Plaintiffs” or “Purchasers”) – are food
manufacturers. They sued Appellees – UEP, as well as an
exporting entity under UEP’s control (United States Egg
Marketers, Inc. (“USEM”)), and five processed egg product
suppliers 2 who made sales directly to the Plaintiffs – in the U.S.
District Court for the Northern District of Illinois. The Judicial
Panel on Multidistrict Litigation transferred the case to the U.S.
District Court for the Eastern District of Pennsylvania,
consolidating it for pretrial purposes with other cases involving
similar antitrust claims (the “MDL”).



Brief of Plaintiffs-Appellants (“OB”) at 15)
2
  The five supplier Appellees are Rose Acre Farms, Inc., Ohio
Fresh Eggs, LLC, Michael Foods, Inc. (“Michael Foods”),
R.W. Sauder, Inc., and Cal-Maine Foods, Inc. (hereinafter
referred to, together with UEP and USEM, as “Defendants” or
“Suppliers”).
                                6
       Plaintiffs’ claims are based solely on purchases of egg
products; claims by purchasers of shell eggs are being litigated
in other cases within the MDL. Plaintiffs seek to recover
overcharges they paid in the market for egg products due to
“substantially increased” prices resulting from Defendants’
alleged participation in the supply-reduction conspiracy. (OB
at 10)

        More particularly, the Purchasers’ theory is that the
Suppliers conspired to reduce the supply of shell eggs, and to
inflate the price of shell eggs, with the intent and effect of also
artificially inflating the price of egg products. The Purchasers’
view, which they contend is supported by their expert, is that
the relevant market consists of shell eggs and egg products.
Therefore, according to the Purchasers, the prices they paid for
egg products – of which shell eggs are the main input – include
overcharges, just as the conspiring Suppliers intended. (See
generally JA416) (Plaintiffs’ counsel arguing during summary
judgment hearing, “[O]ur allegations and our proof are that the
output-reduction conspiracy at the henhouse level impacted in
the same way both shell eggs and egg products.”) 3


3
  In this Opinion we sometimes refer to shell eggs as the price-
fixed product. At other times we refer to shell eggs as a price-
fixed input into egg products, and describe egg products – the
principal component of which is shell eggs – as a price-fixed
good. For purposes of this Opinion, these descriptions are
interchangeable. Plaintiffs allege, and have an expert who
agrees, that Defendants intended to artificially inflate the prices
of shell eggs and egg products by restricting the supply of eggs.
(See OB at 10 (“The conspiracy was intended by defendants to
                                7
       The Suppliers are vertically integrated to varying
degrees. Thus, some proportion of the egg products purchased
by Plaintiffs was made using eggs obtained from non-party,
non-conspirator egg producers (“non-conspirator eggs”), with
much or all of the remainder made from eggs sourced
internally, from the Suppliers’ own laying hens (“internal
eggs”). 4 A slightly altered version of a diagram prepared by
the Purchasers depicts this arrangement:


raise market prices for both shell eggs and egg products.”);
JA248 (alleging that “Defendants agreed to control supply and
artificially maintain and increase the price of eggs [i.e., all
eggs]”); JA200 (specifying that term “‘eggs’ refers to both
‘shell eggs’ and ‘egg products’”); JA749 (“[E]conomic theory
and the documentary record indicate that firms that process egg
products affect shell egg prices by seeking opportunities to
divert eggs to the most profitable product, and vice versa. . . .
Thus, anticompetitive actions to reduce the overall production
of eggs will impact prices of all types of eggs analyzed in my
report.”)) While in some cases whether the price-fixed item is
the complete product purchased by the plaintiff, or is instead
merely a component of that product, may be relevant,
resolution of the issues presented here is not impacted by this
distinction. See generally Weiss v. York Hosp., 745 F.2d 786,
815 (3d Cir. 1984) (“Antitrust policy requires the courts to seek
the economic substance of an arrangement, not merely its
form.”).
4
 In addition, certain Defendants obtained shell eggs from other
conspirator-Defendants. These eggs are within the scope of
what this Opinion refers to as “internal” eggs, as they were
                               8
The dashed line in the left box indicates that internal eggs are
used as an input for the egg products purchased by Plaintiffs-
Purchasers from Defendants-Suppliers.          In addition, as
represented by the dotted line running from the right box into
the left box, those same egg products also contain some amount
of non-conspirator eggs that are first purchased by Defendants-
Suppliers from non-conspirator egg producers. Therefore, the
egg products Plaintiffs purchased from Defendants contain
some combination of internal eggs, supplied directly by
Defendants, and non-conspirator eggs, supplied indirectly by
non-conspirator egg producers.



produced within the conspiracy. For purposes of the issues
before us, it does not matter whether a Defendant’s “internal”
eggs came from a flock owned by that same Defendant or
instead from a flock that belonged to a fellow conspirator-
Defendant.
                               9
        During discovery, Plaintiffs’ damages expert opined
that (i) the relevant market included both shell eggs and egg
products; (ii) small reductions in flock size and egg supply
caused significant increases in egg prices, due to the market’s
high inelasticity of demand; and (iii) this increase also enabled
Defendants to overcharge Plaintiffs for their purchases of egg
products. Plaintiffs collectively claim aggregate damages in
excess of $111 million.

        Plaintiffs’ damages calculations make no distinction
between overcharges for egg products made using internal
eggs and those made from non-conspirator eggs. Plaintiffs’
expert testified at his deposition that the proportion of price-
fixed egg products derived from non-conspirator eggs is
irrelevant. In the view of Plaintiffs’ expert, Defendants’
conspiracy effected an increase in the market price of all shell
eggs, regardless of their source. (See JA596-97) (“As
documented . . . there are no close substitutes for eggs –
regardless of whether one considers shell, liquid, dried, or
frozen eggs. . . . A reduction in egg production means that
fewer eggs are available for making/processing shell eggs or
egg products.”) Consequently, and as Defendants allegedly
intended, Plaintiffs paid an overcharge on all of the egg
products they purchased from Defendants, even if those egg
products were made, in whole or in part, from non-conspirator
eggs. (See generally JA749-50) (“[A]nticompetitive actions to
reduce the overall production of eggs will impact prices of all
types of eggs analyzed in my report. . . . The primary
mechanism through which the alleged conspiracy impacted the
prices of shell eggs and egg products was through coordinated
efforts to reduce national flock size and the overall number of
eggs generally . . . .”)
                               10
       After discovery concluded, Defendants moved for
summary judgment. They argued that Plaintiffs’ inclusion in
their damages calculations of egg products made with non-
conspirator eggs violated Mid-West Paper’s prohibition on
“umbrella damages.” Defendants emphasized that none of
Plaintiffs’ allegations involves any wrongdoing undertaken at
the egg product production stage, but only concern the
production of shell eggs at the laying stage. They also
demonstrated that one defendant, Michael Foods, made the
“overwhelming majority” of relevant egg product sales, and
that most of the egg products sold by Michael Foods were
made with non-conspirator eggs. (Joint Response Brief of
Defendants-Appellees (“AB”) at 10) In other words, it is
undisputed that “a Michael Foods egg product most likely was
manufactured using egg supplied by a non-conspirator.” (Id.
at 11)

       Defendants also pointed to Plaintiffs’ expert’s
acknowledgment that, “as of 2004, producers not alleged to be
defendants or conspirators accounted for more than 45% of
[hen] flocks in the United States.” (AB at 12) (citing JA590)
Further, according to Defendants, Plaintiffs’ damages
calculations do not reveal “whether the allegedly higher prices
resulted from higher raw egg prices or higher processing
margins.” (AB at 14)

       The District Court entered summary judgment for
Defendants. It found that Plaintiffs lack antitrust standing
because they impermissibly seek to “link the raw egg prices of
non-conspirators to the conspiracy” in violation of Mid-West
Paper, and, alternatively, their allegations run afoul of Illinois
Brick’s bar on “recovery of pass through overcharges.” (JA9-
                               11
10) Plaintiffs ask us to reverse the District Court’s entry of
summary judgment and remand the case for trial.

                               II

        The District Court had jurisdiction under 28 U.S.C. §§
1331 and 1337. Plaintiffs filed a timely notice of appeal on
October 4, 2016. On October 6, 2016, we sought input from
the parties as to whether “[t]he order appealed from . . .
dismissed all claims as to all parties.” In response, both sides
agreed that, notwithstanding the pendency of other related
cases in the MDL, the District Court’s order that is the subject
of this appeal resolved all claims brought by Plaintiffs and,
therefore, was a final order immediately appealable under 28
U.S.C. § 1291. We agree. See Gelboim v. Bank of America
Corp., 135 S. Ct. 897, 904 (2015) (“Cases consolidated for
MDL pretrial proceedings ordinarily retain their separate
identities, so an order disposing of one of the discrete cases in
its entirety should qualify under § 1291 as an appealable final
decision.”). Therefore, we have appellate jurisdiction pursuant
to § 1291.

                              III

        We review the District Court’s order granting summary
judgment de novo. In doing so, we “apply the same test the
District Court should have used.” Howard Hess Dental Labs.
Inc. v. Dentsply Int’l, Inc., 602 F.3d 237, 246 (3d Cir. 2010).
Summary judgment is appropriate when “there is no genuine
dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a). We
evaluate the record “in the light most favorable to the
                               12
nonmoving party and draw all inferences in that party’s favor.”
Burns v. Pa. Dep’t of Corr., 642 F.3d 163, 170 (3d Cir. 2011)
(internal quotation marks omitted).

                              IV

       Section 4 of the Clayton Act allows one “injured in his
business or property by reason of anything forbidden in the
antitrust laws,” such as price-fixing prohibited by the Sherman
Act, to sue for treble damages. 15 U.S.C. § 15(a). Plaintiffs
contend that the District Court erred in finding that they lack
antitrust standing and their § 4 claims are barred by Mid-West
Paper and Illinois Brick. 5 We agree.

                               A

       The term “standing” as used in the antitrust context is
conceptually difficult and has not been delineated with
precision. See generally Associated Gen. Contractors of

5
  Plaintiffs also contend that the District Court abused its
discretion in “sua sponte rejecting [their] economic expert’s
opinions concerning the relevant product market and the
impact of the alleged output conspiracy on the prices that
[Plaintiffs] paid.” (OB at 5; see also id. at 51-56) Any flaw in
the District Court’s assessment of Plaintiffs’ expert’s opinions
stemmed from the District Court’s assessment of the relevant
case law. On remand, it will be for the District Court to
determine whether to permit Defendants to renew or restate a
challenge to Plaintiffs’ expert’s opinions and to decide the
merits of any such attack. (See infra Section VI.C)

                              13
California, Inc. v. California State Council of Carpenters, 459
U.S. 519, 536 (1983) (“AGC”) (“There is a similarity between
the struggle of common-law judges to articulate a precise
definition of the concept of ‘proximate cause,’ and the struggle
of federal judges to articulate a precise test to determine
whether a party injured by an antitrust violation may recover
treble damages.”). It is also something of a misnomer. For a
party to have “antitrust standing,” it must do more than satisfy
the familiar three-part test for standing – “injury in fact,
causation, and redressability,” see generally Steel Co. v.
Citizens for a Better Env’t, 523 U.S. 83, 103 (1998) – that
arises from the constitutional requirement of a “case or
controversy.” See AGC, 459 U.S. at 535 n.31. 6 “The doctrine
of antitrust standing requires a plaintiff to ‘prove more than
injury causally linked to an illegal presence in the market.’” In
re Modafinil Antitrust Litig., 837 F.3d 238, 263 (3d Cir. 2016)
(quoting Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429
U.S. 477, 489 (1977)). Even a showing of antitrust injury –
that is, “injury of the type the antitrust laws were intended to
prevent and that flows from that which makes defendants’ acts
unlawful,” Brunswick, 429 U.S. at 489 – is insufficient on its
own to show antitrust standing to sue for treble damages under
§ 4 of the Clayton Act. See, e.g., Cargill, Inc. v. Monfort of
Colorado, Inc., 479 U.S. 104, 110 (1986).



6
  There is no dispute that Plaintiffs have met their burden to
show constitutional standing. They allege they suffered an
injury in fact by having to pay overcharges, which were caused
by Defendants’ anticompetitive price-fixing, and which could
be redressed by a Court order awarding treble damages.
                               14
        Instead, noting the breadth of § 4, courts have concluded
that, rather than allowing “antitrust laws to provide a remedy
in damages for all injuries that might conceivably be traced to
an antitrust violation,” Hawaii v. Standard Oil Co. of Calif.,
405 U.S. 251, 262 n.14 (1972), the treble damages remedy
should be “confine[d] . . . to those individuals whose protection
is the fundamental purpose of the antitrust laws,” Cromar Co.
v. Nuclear Materials & Equip. Corp., 543 F.2d 501, 505 (3d
Cir. 1976) (internal quotation marks omitted). There is no
bright-line test. Instead, the Supreme Court has identified
factors to be considered in determining if a plaintiff is a party
entitled (under the particular circumstances of a specific case)
to the protections of the antitrust laws. Based on the Supreme
Court’s opinion in AGC, we have extracted the following five-
factor inquiry:

       (1) the causal connection between the antitrust
       violation and the harm to the plaintiff and the
       intent by the defendant to cause that harm, with
       neither factor alone conferring standing;

       (2) whether the plaintiff’s alleged injury is of the
       type for which the antitrust laws were intended
       to provide redress;

       (3) the directness of the injury, which addresses
       the concerns that liberal application of standing
       principles might produce speculative claims;

       (4) the existence of more direct victims of the
       alleged antitrust violations; and

                               15
       (5) the potential for duplicative recovery or
       complex apportionment of damages.

See Ethypharm S.A. France v. Abbott Labs., 707 F.3d 223, 232-
33 (3d Cir. 2013); see also Steamfitters Local Union No. 420
Welfare Fund v. Philip Morris, Inc., 171 F.3d 912, 924 (3d Cir.
1999) (characterizing AGC as setting out six-factor test).

       Therefore, determining whether Plaintiffs have antitrust
standing to pursue their claims requires application of the AGC
factors, based on an understanding of the most pertinent
antitrust precedents. It is to those opinions that we now turn. 7

                               B

       The District Court’s ruling turned on our Mid-West
Paper decision and the Supreme Court’s decision in Illinois
Brick, and we discuss both cases in some detail below. Other
cases must also be considered in order to place these two
principal cases in the proper context.

       In Hanover Shoe, Inc. v. United Shoe Machinery Corp.,
392 U.S. 481 (1968), the Supreme Court considered a § 4
action brought by a shoe maker against a manufacturer of
machinery that the shoe maker used in its operation. The
manufacturer argued that the shoe maker was not injured by
the manufacturer’s anticompetitive conduct because the shoe

7
  Although all the cases we discuss in the next section predate
AGC, they remain binding precedents, and their analyses of
many of the factors later discussed in AGC are highly
informative.
                               16
maker had passed on to its own customers any overcharge it
had paid to the manufacturer. The Supreme Court rejected this
“passing-on defense” on the basis that overcoming it would
impose on antitrust plaintiffs a requirement of making “a
convincing showing of . . . virtually unascertainable figures,”
resulting in the possibility that “those who violate the antitrust
laws by price fixing or monopolizing would retain the fruits of
their illegality because no one was available who would bring
suit against them.” Id. at 493-94. “Treble-damage actions
would often require additional long and complicated
proceedings involving massive evidence and complicated
theories,” which would unduly deter those suffering from
antitrust injury, and embolden those inclined to commit
antitrust violations. Id. at 493.

       A decade after Hanover Shoe, the Supreme Court
decided Illinois Brick, 431 U.S. 720. There, the State of Illinois
and local governments claimed that concrete block
manufacturers had engaged in a price-fixing conspiracy.
Observing that the plaintiffs were “indirect purchasers of
concrete block, which passes through two separate levels in the
chain of distribution before reaching” the plaintiffs, id. at 726,
the Supreme Court explained that Hanover Shoe’s prohibition
on a “pass-on theory as a defense in an action by direct
purchasers” likewise required a symmetrical ban on “offensive
use of a pass-on theory against an alleged violator.” Id. at 735.
In so holding, the Court aimed to protect defendants from the
“serious risk of multiple liability” that might result from
allowing an unascertainably large number of disparate, indirect
purchasers to bring antitrust claims. Id. at 730. Potential


                               17
liability would arise, instead, only from transactions
defendants had with their direct customers. See id. at 745-47. 8

       Further, just as Hanover Shoe wanted to avoid
burdening antitrust plaintiffs from nearly-impossible
evidentiary challenges, Illinois Brick reflected the Supreme
Court’s “perception of the uncertainties and difficulties in
analyzing price and out-put decisions in the real economic
world . . . and of the costs to the judicial system and the
efficient enforcement of the antitrust laws of attempting to
reconstruct those decisions in the courtroom.” Id. at 731-732
(internal quotation marks omitted). The Court was concerned
that allowing pass-on theories “would transform treble-
damages actions into massive efforts to apportion the recovery
among all potential plaintiffs that could have absorbed part of
the overcharge from direct purchasers to middlemen to
ultimate consumers.” Id. at 737.

       This Court was called upon to apply Illinois Brick’s
teachings in In re Sugar Industry Antitrust Litigation (Stotter
& Co., Inc. v. Amstar Corp.), 579 F.2d 13 (3d Cir. 1978)
(“Stotter”). In Stotter, a candy wholesaler sued sugar refiners
who allegedly conspired to fix sugar prices. The wholesaler
had purchased candy (made with the price-fixed sugar) directly
from one of the sugar refiners. The district court granted

8
  There are exceptions to Illinois Brick’s “indirect purchaser”
rule – for “pre-existing cost-plus contract[s]” or circumstances
where “the direct purchaser is owned or controlled by its
customer,” 431 U.S. at 736 & n.16 – but they are not relevant
to the issues before us.

                              18
summary judgment to the refiners, finding that the wholesaler-
plaintiff had not “pleaded or proved . . . that a conspiracy to fix
sugar prices by the major refiners extends to their own sugar-
containing products.” Id. at 16 (internal quotation marks
omitted). On appeal, the plaintiff argued – as the egg product
Purchasers do here – that “if it cannot sue for the overcharge
incorporated in candy brought about by the price-fixing of
sugar, then no one can,” and thus the refiner from whom it
purchased candy would “escape liability for fixing the price of
all the sugar it incorporated into candy.” Id. at 17.

        Judge Weis, in an eloquent and succinct opinion,
explained why the plaintiff did not “run into an (Illinois) brick
wall” and could, indeed, pursue its § 4 action. Id. at 15. While
it was true that the product at issue – that is, the wholesaler’s
candy – “competes not with sugar, but with other candy, and
more than one ingredient determines the price” of candy, this
could not “be allowed to obscure the fact that the plaintiff did
purchase directly from the alleged violator.” Id. at 17. We
distinguished Illinois Brick on the basis that the Supreme
Court’s concerns over complicated allocations of “overcharge
among a number of entities in the chain” were not present. Id.
at 18. “The difficulty in computation” in Stotter was “not in
parceling out damages among entities in the chain, but in
isolating the excessive cost of one ingredient which goes into
the product purchased by the plaintiff.” Id. This was a
tolerable level of complexity. See id. Judge Weis also
explained that denying recovery under the circumstances
presented in Stotter “would leave a gaping hole in the
administration of the antitrust laws” by allowing “the price-
fixer of a basic commodity to escape the reach of a treble-
damage penalty simply by incorporating the tainted element
                                19
into another product.” Id. This Court, therefore, reversed the
district court and permitted the wholesaler-plaintiff to proceed
with its claim. 9

       Shortly after deciding Stotter, we were again tasked
with applying Illinois Brick, this time in Mid-West Paper,
which involved allegations of price-fixing by manufacturers of
consumer bags. See 596 F.2d 573. One of the plaintiffs was a
grocery store (“Murray”) that used consumer bags to package
its own products. Even though Murray purchased these bags
from competitors of the price-fixing defendants – and not from
the price-fixing defendants themselves – Murray argued that it
had standing to pursue § 4 damages from the price-fixing
defendants because it was the defendants’ actions that allowed
Murray’s non-conspirator supplier to charge supracompetitive
prices. See id. at 580-81; see also id. at 578 (“[W]e are required
to assess whether Illinois Brick bars suits by purchasers from
competitors of the antitrust defendants who allege that
defendants’ anticompetitive activity made it possible for their



9
  We came to the same conclusion more recently in In re
Linerboard Antitrust Litigation, 305 F.3d 145 (3d Cir. 2002).
There, the putative class plaintiffs purchased “corrugated
sheets or boxes” directly from the defendants; these products
were made with “linerboard that was subject to an agreement
on output.” Id. at 159. We held that, under Stotter, the
plaintiffs – as direct purchasers from conspirators who had
unlawfully raised the price of an input into finished products
the conspirators themselves sold to plaintiffs – had antitrust
standing. See id at 159-60.
                               20
competitors to charge higher prices, thereby injuring
plaintiffs.”).

       We recognized that a “literal reading” of § 4’s broad
language might support Murray’s contention. See id. at 581.
However, we further observed that “§ 4 standing doctrine has
been forged so as to confine the availability of treble damages
to those individuals whose protection is the fundamental
purpose of the antitrust laws.” Id. (internal quotation marks
omitted). In evaluating Murray’s claim that it was harmed by
the conspirators’ creation of an “‘umbrella’ under which their
competitors were able to charge higher prices than otherwise,”
we concluded that only a “tenuous line of causation” existed
between the price-fixers’ conduct and the prices Murray
ultimately paid. Id. at 583. We also observed that, because
Murray was not a direct purchaser from the price-fixers, “[t]he
defendants secured no illegal benefit at Murray’s expense.” Id.

       Additionally, as in Illinois Brick, it would have been
difficult to trace Murray’s alleged injuries to the price-fixers’
conduct, or to prove that the price-fixers’ competitors would
not have charged the elevated price for reasons other than
defendants’ conspiracy. Comparing Murray’s claim to Illinois
Brick, we explained:

       [I]n both situations the plaintiff seeks to recover
       for higher prices set by, and paid by it to, parties
       other than the defendants. And the rationale
       underlying Illinois Brick [–] that it would be
       almost impossible, and at the very least
       unwieldy, to attempt to trace the incidence of the
       anticompetitive effect of defendants’ conduct
                               21
       [–] bears even greater truth in the context of a
       purchaser from a competitor of the defendants.
       For . . . it cannot readily be said with any degree
       of economic certitude to what extent, if indeed at
       all, purchasers from a competitor of the price-
       fixers have been injured by the illegal
       overcharge.

Id. at 584.

        We did not want to sanction the transformation of
antitrust litigation “into the sort of complex economic
proceeding that the Illinois Brick Court was desirous of
avoiding if at all possible.” Id. at 585. Hence, we concluded,
Murray could not be considered among “those whose
protection is the fundamental purpose of the antitrust laws.”
Id. at 583 (internal quotation marks omitted). Barring parties
like Murray from recovering under an “umbrella theory,” from
antitrust conspirators with whom Murray had no direct
relationship, would not undercut the goals of “depriv[ing] the
violators of all the fruits of their illegality” or deterring further
wrongdoing, but would instead efficaciously “concentrat[e] the
entire award in the hands of the direct purchasers.” Id. at 585
(internal quotation marks omitted). This would give direct
purchasers “an incentive to sue” and “compensate[] those
victims who are most likely to assume the mantle of private
attorneys general for the injuries they suffered.” Id.; see also
id. at 578 n.9 (“[T]he [Supreme] Court has ensured that under
all circumstances there will be an incentive for direct
purchasers to sue, a factor that, in the Court’s view, is
necessary to promote effective enforcement of the antitrust
laws . . . .”).
                                 22
                                V

       In this case, the District Court applied Mid-West Paper
and Illinois Brick and concluded that Plaintiffs lack antitrust
standing. The District Court remarked that a significant
proportion of the eggs used in the egg products purchased by
Plaintiffs were non-conspirator eggs; that is, they had come
from suppliers who were neither price-fixing conspirators nor
defendants.

       The District Court reiterated concerns it had raised in a
previous ruling in a related case (also part of the MDL)
regarding Defendants’ opposition to a class certification
motion. There, the Court had observed:

       ‘[T]he failure to investigate the effect of the eggs
       from non-defendants on the prices of egg
       products weighs against a finding that the
       conspiracy would have had a common impact on
       the members of the putative subclass, [because]
       non-conspiring producers might price their
       products differently than conspirators, [and these
       differences might be reflected] in the prices of
       egg products, even if sold by Defendants,
       meaning that certain subclass members might
       not have experienced an impact as a result of the
       conspiracy.’

(JA7-8) (quoting Processed Egg, 312 F.R.D. at 202 n.22)

       As the District Court pointed out, “Plaintiffs’ theory of
the case is that Defendants conspired to reduce the supply of

                               23
eggs. This, in turn, raised the price of eggs, and, consequently,
the price of egg products.” (JA9) Given that “[a] significant
proportion of the egg products at issue here is made with eggs
purchased from non-conspirators,” the absence of any analysis
by Plaintiffs of what Defendants paid for non-conspirator eggs
and how much of Defendants’ egg products were made with
those eggs rendered it “impossible to tell whether [or to what
extent] the Defendants profited unduly from these egg
products.” (Id.) It seemed to the District Court that, instead,
Defendants may have had to pay the non-conspirator egg
producers a price that could have precluded Defendants from
“reap[ing] ill-gotten gains from the egg products sales.” (Id.)

        In the District Court’s view, because “Plaintiffs are
relying on the theory that the conspiracy raised prices for all
eggs, even those produced by non-conspirators,” their claim “is
a quintessential restatement of the umbrella theory” rejected in
Mid-West Paper. (Id.) Alternatively, but also unavailing, the
District Court found Plaintiffs’ claims could be characterized
as a combination of umbrella damages and a pass-on/indirect
purchaser “problem” of Illinois Brick. (Id.) As the District
Court saw it: “Attempting to link the raw egg prices of non-
conspirators to the conspiracy is, under Mid-West Paper, too
attenuated, and recovering overcharges when the Plaintiffs
have not presented evidence that the Defendants, and not the
non-conspirators, pocketed those overcharges creates a
situation in which Plaintiffs are seeking recovery of pass-
through overcharges, something prohibited by Illinois Brick.”
(JA9-10) Furthermore, despite Plaintiffs’ insistence that “their
expert has isolated the effects of the conspiracy on the prices
of egg products,” to the District Court the expert could not have
done so “without any analysis whatsoever of the non-
                               24
conspirator egg producers’ pricing decisions and without any
knowledge of which eggs went into which egg products, and
in what proportion.” (JA10) Accordingly, because “Plaintiffs
are indeed at odds with the ‘umbrella’ damages rule,” the
District Court granted summary judgment to Defendants.
(JA4; see also JA10 n.4 (concluding Plaintiffs “cannot
distinguish their damages theory from prohibited umbrella
damages”))

                               VI

                               A

        We have a different view than the District Court. While
the District Court appropriately turned to Mid-West Paper and
Illinois Brick as the most relevant precedents, we see this case
as one in which the correct result is not compelled by either of
these opinions – or, indeed, by any other. Instead, this case
presents an issue of first impression. The novel issue is
whether a direct purchaser of a product that includes a price-
fixed input has antitrust standing to pursue a claim against the
party that sold the product to the purchaser, where the seller is
a participant in the price-fixing conspiracy, but where the
product also includes some amount of price-fixed input
supplied by a third-party non-conspirator.

       Before answering that question, we first note that
Plaintiffs plainly have antitrust standing to seek damages for
overcharges for egg products made only with internal eggs.
Relatedly, Plaintiffs have antitrust standing to seek damages
for just the portion of the egg products they purchased that
were made from internal eggs. These conclusions are
                               25
compelled by our holdings in Stotter and Linerboard. Just as
the Stotter defendants were accused of fixing the price of sugar,
and then incorporating price-fixed sugar into candy they sold
directly to the Stotter plaintiff, Defendants here allegedly
conspired to raise the price of shell eggs (by reducing supply),
and then incorporated their price-fixed internal eggs into the
egg products they sold directly to Plaintiffs. Like the plaintiff
in Stotter, if Plaintiffs cannot sue for the overcharges they paid
for egg products made with Defendants’ internal eggs, no one
can. Cf. Stotter, 579 F.2d at 18 (“[T]o deny recovery [here] . .
. would leave a gaping hole in the administration of the antitrust
laws . . . [by] allow[ing] the price-fixer of a basic commodity
to escape the reach of a treble-damage penalty simply by
incorporating the tainted element into another product.”).
Moreover, any difficulty in computing damages arises not from
“parceling out damages among entities in the chain, but in
isolating the excessive cost of one ingredient.” Id. This is a
challenging task, but also one we found in Stotter to be
amenable to litigation and worthy of the efforts of federal
courts, and we again find so here.

       We need not belabor these points. Defendants concede
that, had Plaintiffs limited their claim to damages based only
on the internal eggs used in the Defendants’ egg products,
Plaintiffs likely would have had antitrust standing. Plaintiffs
have avoided limiting their claim in this manner and strongly
prefer not to do so now. Nor does it appear that the parties
asked the District Court to assess the viability of an antitrust
claim based solely on egg products made from internal eggs.



                               26
                              B

       As the Plaintiffs have chosen to pursue a claim for
damages on all the egg products they purchased from the
Suppliers, without regard to whether those egg products were
made with internal eggs, non-conspirator eggs, or both, we
must determine whether Plaintiffs have antitrust standing with
respect to this broader claim. We hold that they do.

       We do not view Plaintiffs’ claim as “a quintessential
restatement of the umbrella theory” of Mid-West Paper. (JA9-
10) To be sure, there are similarities between the Purchasers’
allegations here and those that were inadequate to create
antitrust standing in Mid-West Paper. The Purchasers’ claims,
like those of Murray in Mid-West Paper, involve allegations
that the conspiracy raised the price of a product that was
produced both by conspirators and non-conspirators. This
allegedly price-fixed product found its way into the injured
parties’ hands and, as in Mid-West Paper, the Purchasers seek
to recover for overcharges for products whose manufacture
involved non-conspirators. But the pertinent similarities
between the Purchasers’ claims and those rejected in Mid-West
Paper end there.

       Crucially, unlike the plaintiff in Mid-West Paper, who
sued price-fixing suppliers from whom it made no purchases
and with whom it had no direct relationship, here the
Purchasers are pressing claims against price-fixing suppliers
from whom they directly purchased products that incorporate
a price-fixed component. While Murray, in Mid-West Paper,
had to predicate its purported injuries on an “umbrella theory”
– that is, that the price-fixing defendants’ wrongful conduct
                              27
created an artificially high price “umbrella” under which non-
conspiring producers from whom the plaintiff purchased also
benefitted by charging higher prices – here the Purchasers’
theory of injury is different, and simpler. The Purchasers are
suing the conspiring parties from whom they bought the price-
fixed product. The Purchasers were directly injured by
wrongful conduct undertaken by their Suppliers.

        The direct relationship between the Purchasers and their
Suppliers, and the fact that the Suppliers are alleged price-
fixing conspirators and not merely competitors of those
conspirators, are key distinctions from the scenario we
confronted in Mid-West Paper. See In re Modafinil, 837 F.3d
at 264-65 (“Mid-West Paper reached its result because it
wanted to ensure that only those who are most directly harmed
by the anticompetitive conduct can sue to remedy the antitrust
violation.”); In re Lower Lake Erie Iron Ore Antitrust Litig.,
998 F.2d 1144, 1167-68 (3d Cir. 1993) (discussing Mid-West
Paper and noting “all-important[] directness factor”). The
plaintiff in Mid-West Paper was “not in a direct or immediate
relationship to the antitrust violators,” 596 F.2d at 583, and was
“seek[ing] to recover for higher prices set by, and paid by [it]
to, parties other than the defendants,” id. at 584. Here, the
Purchasers are in a direct relationship with the antitrust
violators and seek to recover for higher prices set by those
violators, and paid by the Purchasers to those very parties.
These quite different facts render the Purchasers “among those




                               28
whose protection is the fundamental purpose of the antitrust
laws.” Id. at 583 (internal quotation marks omitted). 10

        Nor is the outcome here governed by Illinois Brick.
Unlike Illinois and the other municipal purchasers of
completed masonry structures and buildings from non-
conspirators, who had only a highly attenuated relationship
with the concrete manufacturer conspirators, Plaintiffs are in a
direct purchaser relationship with the conspirator Defendants.
Plaintiffs simply are not seeking to press an indirect purchaser
antitrust claim: the egg products are alleged to be price-fixed,
as the principal component of the egg products – shell eggs –
is alleged to be price-fixed, regardless of whether those shell
eggs are internal eggs or non-conspirator eggs. Moreover,
unlike in Illinois Brick, here there appears to be no “serious
risk of multiple liability” – Defendants can be sued by, and
likely only by, direct purchasers, such as Plaintiffs – and the
issues of proof and apportionment of damages are not of a
magnitude that imposes intolerable “costs to the judicial
system and the efficient enforcement of the antitrust laws.”
Illinois Brick, 431 U.S. at 730-32.



10
  Additionally, our holding in Mid-West Paper reflected
reluctance to “expand the standing doctrine” in cases where
complex economic analyses “are a prerequisite to establishing
that the plaintiff has suffered compensable injury altogether.”
596 F.2d at 585. That problem is not presented here. To the
contrary, as noted above, the question of whether the
Purchasers suffered any actionable harm is clearly resolved in
their favor under Stotter.
                              29
       Application of the AGC factors confirms the conclusion
that Plaintiffs have antitrust standing to pursue their full claim.
See generally 459 U.S. at 537-38; see also Ethypharm, 707
F.3d at 232-33. Plaintiffs allege a clear “causal connection
between the antitrust violation and the harm to [them] and the
intent by the defendant[s] to cause that harm.” That is,
Plaintiffs contend that Defendants drove up the price of shell
eggs intending to likewise artificially inflate the price of egg
products and then injured Plaintiffs by making them pay
overcharges to Defendants. Further, Plaintiffs’ “alleged
injury” – that is, being made to pay higher prices – “is of the
type for which the antitrust laws were intended to provide
redress,” and the injury allegedly flowed “direct[ly]” from
Defendants to Plaintiffs. See generally In re Modafinil, 837
F.3d at 263 (“[D]irectness of injury is the focal point by which
the remainder of the AGC factors are guided.”) (internal
quotation marks omitted). Also, there are no “more direct
victims of the alleged antitrust violations,” no “potential for
duplicative recovery,” and no “complex apportionment of
damages” issues among various levels of injured parties. Our
recognition here that direct purchasers, like Plaintiffs, have
antitrust standing to sue conspirators, like Defendants, from
whom they purchased a price-fixed product, does not make
Defendants vulnerable to suit from downstream consumers –
for instance, a purchaser of waffles made by Plaintiffs with
Defendants’ egg products – with whom Defendants have no
relationship. To the contrary, if Plaintiffs cannot sue for the
overcharges incorporated in the egg products they purchased,
no one else can sue Defendants for these losses.

      The Purchasers’ antitrust standing does not turn on
whether it is the Suppliers, as opposed to someone else, who
                                30
benefitted from the overcharges the Purchasers paid. Damages
recoverable by a plaintiff on a § 4 claim do not depend on the
ill-gotten benefit of the wrongdoer. See Howard Hess Dental
Labs. Inc. v. Dentsply Int’l, Inc., 424 F.3d 363, 374 (3d Cir.
2005). Instead, the “typical measure” of damages on such a
claim is the overcharge paid by the plaintiff, that is “the
difference between the actual price and the presumed
competitive price multiplied by the quantity purchased.” Id.
(internal quotation marks omitted). Regardless of who actually
collected the overcharge, the Purchasers’ econometric analysis
purports to show the “difference between the actual
[supracompetitive] price and the presumed competitive price”
of the egg products they purchased. This purported difference,
and the Purchasers’ resulting injury, was allegedly a direct and
intended result of the Suppliers’ conspiracy to reduce the
supply of eggs and to artificially inflate the price of egg
products.

       In sum, we conclude that Plaintiffs-Appellants have
antitrust standing to pursue overcharge damages from the
Defendants-Appellees from whom they purchased egg
products, regardless of whether those egg products were made
with internal eggs, non-conspirator eggs, or both.
Consequently, we reverse the District Court’s grant of
summary judgment to Defendants and remand for further
proceedings.

                               C

        We emphasize that our holding today is limited to
determining that Plaintiffs have antitrust standing to pursue
their claims. We conclude that the District Court’s grant of
                              31
summary judgment due to lack of such standing was error. 11
We express no view as to the merits of Plaintiffs’ claims. Nor
have we reached any conclusion as to whether their claims may
suffer from other flaws that may make this case amenable to
resolution short of trial. Hence, while Plaintiffs ask us to
“remand the case for trial” (OB at 56), we have not done so.
Instead, it will be for the District Court to determine whether,
given our conclusion that Plaintiffs have antitrust standing, this
case should proceed to trial.

        We recognized in Mid-West Paper that antitrust
plaintiffs must prove “actual causation” with “reasonable
certainty,” and provide the trier of fact enough to “make a
reasonable estimate of damages.” 596 F.2d at 584 n.43
(internal quotation marks omitted). We reiterate these
holdings. Our decision today does not consider whether
Plaintiffs have made, or can make, a sufficient evidentiary
showing on these elements to warrant presenting their claims
to a jury. Similarly, it is for the District Court to decide
whether to entertain any challenge to Plaintiffs’ expert’s
econometric analysis under the familiar standard set out in
Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579




11
  Defendants’ motion for summary judgment was based solely
on their theory that Plaintiffs lack antitrust standing due to their
reliance on an invalid umbrella theory of damages.
Consequently, the District Court’s summary judgment opinion
considered only that issue.

                                32
(1993), 12 and whether to grant any request it may receive from
any party to expand the record in light of today’s decision.

                              VII

       For the reasons given above, we find that Plaintiffs-
Appellants have antitrust standing to pursue their Clayton Act
§ 4 claims. The District Court’s grant of summary judgment
to Defendants-Appellees is reversed. The case is remanded for
proceedings not inconsistent with this Opinion.




12
  The District Court noted that “no party has challenged the
admissibility of [Plaintiffs’] expert report or testimony.” (JA5)
                               33
