               IN THE SUPREME COURT OF IOWA
                             No. 137 / 04-1972

                             Filed June 22, 2007


JEFF SOUTHARD, TRISH SOUTHARD, JEFFREY STICKEL, HEATHER
STICKEL, MEL LINT, KEITH GOODYK, and GREG DANA, On Behalf of
Themselves and All Others Similarly Situated in the State of Iowa,

      Appellants,

vs.

VISA U.S.A. INC. and MASTERCARD INTERNATIONAL INC.,

      Appellees.


      Appeal from the Iowa District Court for Dallas County, Darrell J.

Goodhue, Judge.



      Plaintiff consumers appeal the dismissal of their class action against

defendant national bank card associations in which plaintiffs sought

recovery based on defendants’ alleged violation of Iowa’s competition law,

Iowa Code ch. 553 (2003), and based on a theory of unjust enrichment.

AFFIRMED.



      Andrew    B.   Howie    of   Hudson,   Mallaney   &   Shindler,   P.C.,

West Des Moines, for appellants.



      Edward W. Remsburg of Ahlers & Cooney, P.C., Des Moines;

Robert C. Mason of Arnold & Porter LLP, New York, New York; and

Stephen V. Bomse and David M. Goldstein of Heller Ehrman LLP,

San Francisco, California, for appellee Visa U.S.A. Inc.
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      Kim J. Walker of Faegre & Benson LLP, Des Moines; Kenneth A. Gallo

of Paul, Weiss, Rifkind, Wharton & Garrison LLP, Washington, D.C.; and

Gary R. Carney of Paul, Weiss, Rifkind, Wharton & Garrison LLP, New York,

New York, for appellee MasterCard International Inc.
                                       3

TERNUS, Chief Justice.

      The plaintiffs, Jeff Southard, Trish Southard, Jeffrey Stickel, Heather

Stickel, Mel Lint, Keith Goodyk, and Greg Dana, filed this class action on

September 18, 2003, alleging the defendants, Visa U.S.A. Inc. and

MasterCard International Inc., violated Iowa’s competition law, Iowa Code

chapter 553 (2003). They also sought relief against the defendants on the

common-law ground of unjust enrichment.

      The defendants filed a motion to dismiss the plaintiffs’ action on the

basis that under well-established, common-law principles the plaintiffs

could not recover for derivative or remote injuries.        The district court

granted the defendants’ motion and dismissed the plaintiffs’ petition in its

entirety.

      The plaintiffs appealed. We affirm.

      I. Standard of Review.

      We review a ruling on a motion to dismiss for the correction of errors

at law. Comes v. Microsoft Corp., 646 N.W.2d 440, 442 (Iowa 2002). A

dismissal will be affirmed “only if the petition shows no right of recovery

under any state of the facts.” Id.

      A motion to dismiss tests the legal sufficiency of the challenged
pleading. Haupt v. Miller, 514 N.W.2d 905, 907 (Iowa 1994). Thus, the

motion must stand or fall on the contents of the petition and matters of

which the court can take judicial notice. See Leuchtenmacher v. Farm

Bureau Mut. Ins. Co., 460 N.W.2d 858, 861 (Iowa 1990). Well-pled facts in

the pleading assailed are deemed admitted. Haupt, 514 N.W.2d at 907. In

addition, the petition is assessed in the light most favorable to the plaintiffs,

and all doubts and ambiguities are resolved in the plaintiffs’ favor. State ex

rel. Miller v. Philip Morris Inc., 577 N.W.2d 401, 403 (Iowa 1998).
                                      4

      “If the viability of a claim is at all debatable, courts should not

sustain a motion to dismiss.” Muzingo v. St. Luke’s Hosp., 518 N.W.2d 776,

777 (Iowa 1994).     Although motions to dismiss are not favored, they

continue to be used, particularly when the issue is standing or the capacity

to sue.   See, e.g., Philip Morris Inc., 577 N.W.2d at 406-07 (affirming

dismissal of State’s claims against tobacco manufacturers as too remote

and derivative).

      II. Background Proceedings.

      The plaintiffs filed a detailed, forty-eight-page petition.    In their

petition, they allege they are and they represent consumers who purchased

goods for cash or used Visa or MasterCard debit cards to make purchases

from merchants who accept Visa or MasterCard credit cards as a form of

payment. The plaintiffs contend the defendants required merchants who

accepted Visa and MasterCard credit cards to also accept Visa and

MasterCard debit cards.     Due to this tying arrangement, the plaintiffs

allege, merchants were forced to pay inflated fees for processing debit

transactions over the Visa and MasterCard networks. The plaintiffs assert

these magnified costs were passed along to all consumers in the form of

higher prices for the goods sold by the merchants.

      The plaintiffs allege the tying arrangement orchestrated by the

defendants was a violation of Iowa’s competition law.        See Iowa Code

§§ 553.4, .5. They claim they and others in the class were injured by the

defendants’ illegal conduct because all consumers paid merchants

artificially inflated prices for all merchandise.   See id. § 553.12(2) (“[A]

person who is injured . . . by conduct prohibited under this chapter may

bring suit to . . . [r]ecover actual damages resulting from conduct prohibited

under this chapter.”).
                                            5

       The plaintiffs also allege the same conduct of the defendants resulted

in the defendants’ unjust enrichment at the expense of the plaintiffs and

other class members. The plaintiffs seek restitution of the monies received

by the defendants as a result of the defendants’ conduct. 1

       The defendants filed a motion to dismiss for failure to state a claim

upon which relief can be granted. See Iowa R. Civ. P. 1.421(1). They

asserted the plaintiffs could not recover because the plaintiffs’ injuries were

derivative and remote.         See Philip Morris Inc., 577 N.W.2d at 406-07

(explaining and applying the remoteness doctrine). They further contended

the plaintiffs were not “indirect purchasers” who may sue under Iowa’s

antitrust law. See Comes, 646 N.W.2d at 451 (allowing suit by indirect

purchasers under Iowa’s competition law). Finally, the defendants argued

the plaintiffs’ unjust enrichment claim was unsupported by the facts alleged

in the petition.

       The district court granted the defendants’ motion to dismiss.

Employing the test set forth in Associated General Contractors v. California

Council of Carpenters, 459 U.S. 519, 103 S. Ct. 897, 74 L. Ed. 2d 723

(1983), the district court held the plaintiffs’ injuries were too remote to

support a claim under chapter 553. The court agreed with the defendants
that the plaintiffs in this action were not indirect purchasers like the

plaintiffs permitted to sue Microsoft in the Comes suit.

       The district court also rejected the plaintiffs’ claim of unjust

enrichment. It concluded the same obstacles to recovery that existed with


       1The   plaintiffs also allege a claim for “money had and received.” This claim was
ultimately dismissed by the district court, who concluded this theory was indistinguishable
from the plaintiffs’ unjust enrichment claim. On appeal, the plaintiffs state the district
court erred in dismissing their claim for money had and received, but make no argument
with respect to this theory and cite no authorities to support this statement distinct from
their briefing of the unjust enrichment claim. We therefore do not separately consider or
discuss the plaintiffs’ theory of money had and received.
                                        6

respect to the plaintiffs’ statutory claim precluded their recovery under an

unjust enrichment theory. The court further held that as a result of the

merchants’ previous recovery from the defendants for injuries the

merchants sustained as a result of the defendants’ illegal tying

arrangement, the defendants had been stripped of their ill-gotten gains and

no unjust enrichment remained.          See In re Visa Check/MasterMoney

Antitrust Litig., 297 F. Supp. 2d 503, 506-09 (E.D.N.Y. 2003), aff’d sub nom.

Wal-Mart Stores, Inc. v. Visa U.S.A. Inc., 396 F.3d 96 (2d Cir. 2005).

         III. Issues on Appeal.

         The plaintiffs claim the district court’s dismissal of their antitrust

claims due to the remoteness of their injuries was error. They maintain this

court rejected such a limitation when we held in Comes that indirect

purchasers could sue under Iowa’s competition law. The plaintiffs argue

that if we do not find Comes dispositive, we should use the “target area” test

to analyze whether they can bring suit under the Iowa competition law,

rather than the Associated General Contractors test employed by the district

court.

         The plaintiffs also claim the dismissal of their unjust enrichment

claim constitutes error. They assert any deficiency in their antitrust claims
should not impact the viability of their unjust enrichment theory. The

plaintiffs further argue they have sufficiently alleged the required elements

for this common-law claim.

         IV. Applicability of Comes.

         We begin our analysis by addressing the plaintiffs’ assertion that our

decision in Comes—that indirect purchasers may bring suit under chapter

553—is dispositive of the present appeal.        The premise underlying the

plaintiffs’ position is that this court in Comes held common-law rules
                                      7

barring recovery for remote and derivative injuries do not apply to actions

brought under chapter 553.

      Admittedly, our Comes decision contains some expansive statements

with respect to the reach of Iowa’s antitrust statute. See, e.g., Comes, 646

N.W.2d at 445 (“Given the clear, broad language of the state antitrust law,

we conclude the Iowa Competition Law creates a cause of action for all

consumers, regardless of one’s technical status as a direct or indirect

purchaser.”), 451 (“We conclude our antitrust law contemplates all injured

consumers are authorized to bring suit to enforce our antitrust laws.”).

Nonetheless, these statements must be interpreted within the context in

which they were made. As we stated in Comes: “The only issue on appeal

is whether the United States Supreme Court case, Illinois Brick [Co. v.

Illinois, 431 U.S. 720, 97 S. Ct. 2061, 52 L. Ed. 2d 707 (1977)], should be

followed in interpreting the Iowa Competition Law.”        Id. at 442.      It is

appropriate, therefore, to briefly examine the holding in Illinois Brick.

      In Illinois Brick, the Supreme Court held that “the overcharged direct

purchaser, and not others in the chain of manufacture or distribution, is

the party ‘injured in his business or property’ within the meaning of [the

federal antitrust law.]” 431 U.S. at 729, 97 S. Ct. at 2066, 52 L. Ed. 2d at
714. The Court pointed out that this issue was “analytically distinct from

the question of which persons have sustained injuries too remote to give

them standing to sue for damages” under federal law. Id. at 728 n.7, 97

S. Ct. at 2065 n.7, 52 L. Ed. 2d at 714 n.7.

      In Comes, this court decided the Illinois Brick rule prohibiting

indirect-purchaser suits should not be followed in interpreting Iowa’s

competition law.    646 N.W.2d at 450.       Accordingly, we held “indirect

purchasers may maintain an antitrust action in state court.” Id. at 441.

Because the plaintiffs in Comes qualified as indirect purchasers who had
                                       8

standing under state law, we had no need in that case to determine whether

persons who were not indirect purchasers and who suffered injuries even

more remote than those sustained by indirect purchasers had standing.

      Thus, with respect to setting the outer limits of what injuries are

compensable under Iowa’s competition law, our decision in Comes is

narrow. We simply rejected the federal rule barring claims by indirect

purchasers. We certainly did not, as suggested by the plaintiffs, determine

there were no limits on who could sue under chapter 553. Cf. Kanne v. Visa

U.S.A. Inc., 723 N.W.2d 293, 299-301 (Neb. 2006) (holding Nebraska

decision rejecting Illinois Brick indirect-purchaser rule in antitrust suit

against Microsoft did not reject all standing requirements).

      Before discussing what limits exist with respect to who may sue

under Iowa antitrust law due to the common-law remoteness doctrine, we

address the plaintiffs’ argument that they are indirect purchasers in the

same position as the Comes plaintiffs.         The plaintiffs in Comes had

purchased computers that came with the Windows 98 operating system

preinstalled. Comes, 646 N.W.2d at 441. As a precondition to the use of

this operating system, the plaintiffs became end-user licensees of Microsoft.

Id. at 441-42. The plaintiffs alleged in the class action filed on behalf of all
end-user licensees of Windows 98 living in Iowa that “Microsoft maintained

or used a monopoly in conjunction with its Windows 98 operating system

for the purpose of excluding competition or controlling, fixing, or

maintaining prices in violation of the Iowa Competition Law.” Id. at 442. As

a result of this illegal conduct, alleged the plaintiffs, Microsoft charged a

higher price for its Windows 98 system than what it would have been able

to charge in a competitive market. Id.

      The plaintiffs bringing suit in Comes were indirect purchasers of the

Windows 98 operating system because “Microsoft did not directly sell its
                                      9

products [to the plaintiffs, but the plaintiffs] ultimately obtained the

products through the stream of commerce.” Comes v. Microsoft Corp., 696

N.W.2d 318, 320 (Iowa 2005). The plaintiffs in the present action are not in

a comparable position because they did not purchase, directly or indirectly,

the product that is the subject of anticompetitive activity by Visa and

MasterCard—debit processing services. It is clear from the petition that the

plaintiffs are nonpurchasers; they simply bought merchandise from

businesses that used the defendants’ debit processing services. Kanne, 723

N.W.2d at 301 (holding consumer plaintiffs in identical Nebraska antitrust

suit were not indirect purchasers of Visa and MasterCard services).

Consequently, our decision in Comes is not dispositive of the issue

presented by the present appeal: can a nonpurchaser suffering a derivative

injury recover under Iowa’s competition statute?

      V. Recovery by Person Having a Derivative or Remote Injury.

      Iowa law bars recovery of derivative and remote injuries in a variety of

situations. See, e.g., Philip Morris Inc., 577 N.W.2d at 406-07 (suit by state

against tobacco manufacturers for state’s payment of medical expenses for

citizens’ tobacco-related illnesses); Anderson Plasterers v. Meinecke, 543

N.W.2d 612, 613 (Iowa 1996) (suit by employer for its losses due to third-
party’s negligent injury of employee). As we explained in Philip Morris Inc.,

“The remoteness doctrine ‘is not based upon a factual inquiry to determine

whether the damages claimed were foreseeable or whether they were a

proximate cause; rather, it is a legal doctrine incorporating public policy

considerations.’ ” 577 N.W.2d at 406 (quoting Kraft Chem. Co. v. Ill. Bell Tel.

Co., 608 N.E.2d 243, 245 (Ill. App. Ct. 1993)).

      In determining whether this doctrine precludes the plaintiffs’ antitrust

claims, we first examine whether recovery for derivative or remote injuries is

permitted under Iowa’s competition law. As we noted in Comes, the Iowa
                                     10

statute authorizes recovery by a very broad category of persons: “[A] person

who is injured . . . by conduct prohibited under this chapter may bring suit

to: . . . [r]ecover actual damages resulting from conduct prohibited under

this chapter.” 646 N.W.2d at 443 (quoting Iowa Code § 533.12(2)). In part

due to the broad language of the statute, this court in Comes rejected

application of the federal rule barring suits by indirect purchasers. Id. at

445.   Our decision was also based on the fact that although Iowa’s

competition law “took its cues from federal law,” the indirect-purchaser rule

was not a part of federal antitrust law at the time the Iowa general assembly

enacted its statute. Id. at 447 (noting “six of the seven federal courts of

appeals that considered this issue [had] held indirect purchasers could

recover damages for antitrust violations”). We concluded, therefore, that “it

was impossible for the legislature to have adopted a judicial construction

which did not exist at that time.” Id.

       Obviously, in considering the application of the remoteness doctrine

in the present case, we are dealing with the same broad statutory language

interpreted in Comes. The history of federal antitrust law is, however, quite

different with respect to the remoteness doctrine than it was with respect to

the indirect-purchaser rule. Prior to the enactment of the Iowa competition
law in 1976, see 1976 Iowa Acts ch. 1224, the United States Supreme Court

observed, “The lower courts have been virtually unanimous in concluding

that Congress did not intend the 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., 405 U.S. 251, 264 n.14, 92 S. Ct.

885, 892 n.14, 31 L. Ed. 2d 184, 193 n.14 (1972).

       As we determined in Comes, the interpretation given to the federal

antitrust law at the time the Iowa competition law was adopted informs our

search for legislative intent. Therefore, we conclude the Iowa legislature did
                                     11

not intend to allow every person tangentially affected by a violation of the

statute to have a remedy in damages. This conclusion leads us to consider

whether the plaintiffs’ injuries are too remote to be recoverable under

chapter 553.

      VI. Test to Determine Antitrust Standing.

      Although lower courts had unanimously rejected claims for remote

injuries prior to Iowa’s adoption of its antitrust law in 1976, the United

States Supreme Court did not directly address this issue until its 1983

decision in Associated General Contractors. In that case, the Court noted

the federal antitrust statute was “broad enough to encompass every harm

that can be attributed directly or indirectly to the consequences of an

antitrust violation,” but concluded “Congress intended the Act to be

construed in the light of its common-law background.” Associated Gen.

Contractors, 459 U.S. at 529, 531, 103 S. Ct. at 904-05, 74 L. Ed. 2d at 733.

This common-law background encompassed constraints on who could

recover, including limitations on recovery for remote injuries. Id. at 532

n.25, 103 S. Ct. at 905 n.25, 74 L. Ed. 2d at 734-35 n.25. In determining

who could recover under the federal act, i.e., who has “antitrust standing,”

the Court focused on “the plaintiff’s harm, the alleged wrongdoing by the

defendants, and the relationship between them.” Id. at 535, 103 S. Ct. at

907, 74 L. Ed. 2d at 736.

      The plaintiffs urge us to reject the Associated General Contractors

(AGC) test and employ the “target area” test to analyze standing. Under the

latter test, a plaintiff must simply be in the “target area” of the antitrust

conspiracy, that is, “the area of the economy which is endangered by a

breakdown of competitive conditions in a particular industry.” Id. at 537

n.33, 103 S. Ct. at 908 n.33, 74 L. Ed. 2d at 737 n.33. The United States

Supreme Court rejected this test in Associated General Contractors,
                                       12

instructing courts to consider the multiple factors set forth in that decision.

Id. Moreover, contrary to the plaintiffs’ claim the “target area” test is more

widely accepted, it appears federal and state courts have uniformly applied

the AGC test.

       The “target area” test, which is in essence an analysis of

foreseeability, is inconsistent with Iowa’s common-law limitation on

recovery for remote injuries, which is not based on the foreseeability of the

plaintiff’s damages.    See Philip Morris Inc., 577 N.W.2d at 406 (“The

remoteness doctrine ‘is not based upon a factual inquiry to determine

whether the damages claimed were foreseeable . . . .’ ” (quoting Kraft Chem.

Co., 608 N.E.2d at 245)). We think the AGC test is more reflective of the

legal context within which the Iowa legislature enacted Iowa’s competition

law.   Therefore, we apply the AGC factors to determine whether the

plaintiffs may recover under Iowa law.

       VII. Application of the AGC Test.

       To determine standing under our antitrust law, we will examine “the

plaintiff’s harm, the alleged wrongdoing by the defendants, and the

relationship between them.” Associated Gen. Contractors, 459 U.S. at 535,

103 S. Ct. at 907, 74 L. Ed. 2d at 736. In Associated General Contractors,
the Court focused on five factors to guide its examination: (1) whether the

claim alleges a causal connection between the antitrust violation and the

plaintiff’s alleged harm; (2) whether the plaintiff’s alleged injury is of a type

sought to be redressed by the antitrust laws; (3) the directness or

indirectness of the asserted injury; (4) whether denying a remedy is likely to

leave a significant antitrust violation undetected or unremedied; and (5)

whether the damages claimed are highly speculative or abstract. Id. at 536-

45, 103 S. Ct. at 908-12, 74 L. Ed. 2d at 737-43. We think the district
                                      13

court properly applied these factors in deciding the plaintiffs had no

standing under Iowa’s competition law.

      It is not disputed the plaintiffs have alleged a causal connection

between the defendants’ illegal conduct and the plaintiffs’ alleged injuries.

On the other hand, the plaintiffs are neither consumers of the defendants’

products nor competitors of the defendants. Therefore, the plaintiffs are not

“participants in the relevant market,” and their injuries are not of the type

sought to be compensated by antitrust laws. Id. at 538, 103 S. Ct. at 908-

09, 74 L. Ed. 2d at 738. Clearly, the injuries alleged by the plaintiffs are

not even indirect, as the plaintiffs are not in the chain of distribution. Their

injuries are better described as derivative. Denying a remedy will not leave

the alleged antitrust violation undetected or unremedied. Indeed, the action

brought by merchants against Visa and MasterCard was settled by the

defendants’ payment of more than three billion dollars into a settlement

fund and an agreement to abandon the alleged tying arrangements. See In

re Visa Check/MasterMoney Antitrust Litig., 297 F. Supp. 2d at 506-09.

Finally, a determination of the plaintiffs’ damages would be a complex

process at best and speculative at worst because many factors impact a

retailer’s decision-making process when setting prices on products sold to

consumers.     Considering the AGC factors, we hold the district court

properly determined the plaintiffs’ injuries were too remote to be

compensable under Iowa’s competition law. See Kanne, 723 N.W.2d at 298-

99 (affirming dismissal of identical action brought under Nebraska antitrust

law, holding consumers’ injuries were too remote under AGC test); Ho v.

Visa U.S.A., Inc., 793 N.Y.S.2d 8, 9 (App. Div. 2005) (same).

      VIII. Unjust Enrichment Claim.

      The plaintiffs alleged in their petition that the defendants’ illegal tying

arrangements unjustly enriched the defendants at the plaintiffs’ expense
                                     14

because the merchants who paid artificially high prices for the defendants’

debit processing services passed those costs along to the plaintiff

consumers. The district court dismissed this claim, concluding it suffered

from the same remoteness-of-injury problem as the plaintiffs’ antitrust

claims and that there was no enrichment due to the defendants’ settlement

of the antitrust action brought by merchants.

      Plaintiffs rely on the broad and open-ended nature of the equitable

doctrine of unjust enrichment to support their claim. See State ex rel.

Palmer v. Unisys Corp., 637 N.W.2d 142, 150 (Iowa 2001) (stating that

unjust enrichment “can stand on its own as an open-ended, broad theory of

restitution”). Plaintiffs overlook that this common-law theory is subject to

the common-law rule that bars recovery for remote injuries. Relying on the

remoteness doctrine, this court, in Philip Morris Inc., concluded the district

court had correctly dismissed the State’s claim for indemnity, a form of

unjust enrichment. 577 N.W.2d at 406. See generally Unisys Corp., 637

N.W.2d at 149-50 (noting the theory of unjust enrichment has “given rise to

specific derivative theories, such as contribution and indemnity”). We held

the State’s injury—payment of citizens’ medical expenses made necessary

by the defendants’ conduct—was too remote to recover. Philip Morris Inc.,

577 N.W.2d at 406-07.

      The same conclusion must logically be reached here. Therefore, the

district court did not err in dismissing the plaintiffs’ unjust enrichment

claim on the basis the plaintiffs’ injuries were too remote.

      IX. Summary.

      Iowa’s competition law does not provide a remedy to every person who

can trace an injury to a defendant’s anticompetitive conduct. Injuries that

are remote under the analysis used in the Associated General Contractors

case may not be recovered under chapter 553.
                                      15

      In the present case, the plaintiff consumers’ injuries are remote, and

therefore, the plaintiffs lack antitrust standing. Moreover, the plaintiffs are

not indirect purchasers of the defendants’ services; they are nonpurchasers.

Consequently, they cannot benefit from our decision in Comes to allow

indirect purchasers to bring suit under Iowa’s competition law.

      Finally, the plaintiffs cannot recover under a theory of unjust

enrichment because their injuries are too remote.

      The district court correctly granted the defendants’ motion to dismiss

the plaintiffs’ claims. Accordingly, we affirm.

      AFFIRMED.

      All justices concur except Hecht and Appel, JJ., who take no part.
