YOU ARE NOT ALONE! - How to Put Together a Small Group of Injured Persons to Start a Single Robinson-Patman Price and/or Service Discrimination Lawsuit against a Superstore, Major Wholesaler or a Manufacturer?

Initial Publication Date: 2/28/98; Last Update 2/28/98

The Problem. This website has received a significant amount of interest from small and medium-size retailers, wholesalers and even manufacturers complaining about the discriminatory practices of the large manufacturers, wholesalers, superstores and category killer stores.

The main problem is that one small retailer doing, say, $5,000 to $10,000 in business each week (or $250,000 to $500,000 per year), usually breaking even from a tax standpoint, is in no position to finance the needed legal work to maintain a lawsuit alone to obtain injunctive relief and damages. The cost can be kept down in proportion to RPA and other antitrust lawsuits generally, but even a streamlined antitrust suit can and usually does cost more than one small plaintiff can afford.

In one recent antitrust case, the single defendant advised the court it had spent at least $250,000 for in-house photocopying of documents used by the defendant's own attorneys in the litigation.

Then there are the costs of deposition transcripts, often $400 to $1,500 per witness, if you keep the deposition short. There could be 20 depositions in one case by the plaintiff, amounting to perhaps $20,000 in court reporter costs; then there is the need to purchase a copy of the transcripts of the deposition taken by the other side (unless the deposition is taken of the plaintiff [or one of the plaintiffs], in which case the plaintiff's lawyer obtains a copy of the transcript without payment).

A case for injunctive relief (i.e., for a decree enjoining the defendants from further activities in violation of the RPA, Sherman Antitrust Act or Clayton Antitrust Act) can be expected to cost more in attorneys' fees than an antitrust action essentially for recovery of damages, because the attorney needs to be paid for his time in the former (injunction) suit, whereas the attorney can do a substantial amount of a suit for damages on a contingent-fee basis.

Anyway, these are some of the considerations you need to think about, and they all point to trying to put together a small group of plaintiffs to commence a single RPA (or Sherman/Clayton) antitrust suit.

The Solution. The solution is simple, and is working. Use a hidden website to enable interested plaintiffs to obtain relevant information about the proposed suit and to be able to communicate with each other to discuss a proposed suit. A hidden website is no more than a website:

1. not itself a domain name;
2. without meta tags to be picked up by search engines;
3. with the address not linked to any other parts of the website in which it is found
4. with an address which is known only to the prospective plaintiffs and their proposed attorney
5. which address is kept confidential;
6. which does not contain any information which would be damaging to the prospective lawsuit or prospective plaintiffs if uncovered by the defendants or their attorneys (therefore requiring some discretion on the part of the attorney as to what should be put on, and what should not be put on, the hidden website); and
7. which index page is marked as "attorney-client privilege" and "confidential" and to clearly indicate that anyone else using the website is in violation of one or more laws.

Of course, what the website will contain (and more) will become publicly known as soon as the complaint is filed and served of the defendants. Thus, the hidden website will have a useful life of about two months or less, to enable the action to be put together or forgotten about (and removed or altered by the attorney, presumably).

Such hidden website will allow the attorney to:

1. gather together the relevant rules and regulations relating to the problem, including links to other parts of the overall website;
2. present descriptions or copies of evidence for review by the prospective plaintiffs;
3. list the names, telephone/fax numbers and e-mail addresses/websites of persons in another hidden website (and only available to the persons on the list) who have agreed to become plaintiffs in the suit;
4. present an estimate of the costs of the litigation to be shared among the plaintiff group and the dates at which payments would have to be made to continue the suit;
5. list the federal causes of action, such as violation of Section 2(a) of the Robinson-Patman Act, 15 U.S.C. Section 13(a), with a link to the text of such statute;
6. list any state causes of action which would be included, under the doctrine of supplemental (or pendent - the older term) jurisdiction, such as fraud, breach of contract, inducing breach of contract, interference with advantageous business relationships, unfair competition, unjust enrichment, quasi contract, breach of implied contract, breach of implied covenant of good faith and fair dealing, quantum meruit, and the like;
7. list the possible defenses and a discussion about them, such as the RPA defense of "cost justification", which defense is usually not even asserted because the amount of the price discrimination is usually far greater than any savings or "cost justification" which the defendant could prove;
8. estimate the length of time the litigation will probably last;
9. describe the type of discovery to expect;
10. describe the type of experts which will probably have to be used;
11. identify what type of records the plaintiffs should have and continue to maintain to avoid losing their claims for damages;
12. state what to do if the injured person is now insolvent, out of business, or in bankruptcy and what impact if any such financial status would have on the suit;
13. what impact a filing of bankruptcy would have on the suit if done by one of the plaintiffs after the suit was commenced;
14. indicate whether or not there should be any award-sharing arrangement among the plaintiffs before commencing the suit, and there are major pros and cons on each side of that issue;
15. state whether and on what terms a plaintiff could settle out or leave the suit and a discussion of what impact, if any, this would have on the remaining plaintiffs;
16. discuss how hidden websites are working to accomplish their goal; and
17. set forth other matters which from time to time may be added to this list or added to the hidden website for a proposed litigation.

Also, after the plaintiffs are put together the site can be used to post drafts of the complaint for the plaintiffs to review.

E-mail can be used to alert site users to important additions or changes made to the hidden website, or to changes in the hidden address to keep the site hidden.

The Procedure.

The procedure to start a hidden website for a proposed lawsuit is simple. Call Carl Person, the author of this website (or some other attorney willing to do the same) and tell him/her of the antitrust problem and explain how others are also adversely affected by the problem.

If the attorney agrees there is a serious problem and that there is a likelihood that other plaintiffs would want to join in a lawsuit (but not a class action, which is a suit basically for attorneys and not for the clients), then the attorney can set up a hidden website for use as described above.

This would be done, at least by the author of this website, without charge to the interested group, in the same way that attorneys review the problem of a proposed plaintiff without fee while trying to decide whether or not to take the case, for a fee or contingent fee.

The hidden website procedure is available only because of internet and websites, and enables the attorney to focus on the problem, and to present his/her relevant material to the website, which can be followed daily by the interested persons (plaintiffs and prospective plaintiffs).

The job of the interested persons is to communicate with friends and associates in the industry and advise them about the possibility of a lawsuit and to get them interested in finding out about the proposed lawsuit by looking at the material posted on the hidden website. Each person using the hidden website is under duty not to breach the confidentiality of the website in the same way as if the person attended a session with other prospective plaintiffs and their proposed lawyer to discuss whether the lawyer was willing to take the case. Nothing is perfect, obviously, but this hidden website technique seems right for the technology available, and enables the attorneys and their prospective clients to obtain immediate updates without the need for the attorney to send costly, time-consuming Federal Express or other express deliveries, mailings, telephone calls or faxes, or even e-mailings to the interested persons!

If you have any questions about how to start a hidden website or how they are working out in practice, please give me (attorney Carl Person) a call, at 212-307-4444, or send me an e-mail to carlpers@ix.netcom.com.

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Copyright © 1998 by Carl E. Person