[Cite as Aladdin's Lights, Inc. v. Eye Lighting Internatl., 2017-Ohio-7229.]


STATE OF OHIO                      )                         IN THE COURT OF APPEALS
                                   )ss:                      NINTH JUDICIAL DISTRICT
COUNTY OF SUMMIT                   )

ALADDINS LIGHTS INC.                                         C.A. No.          28182

          Appellant

          v.                                                 APPEAL FROM JUDGMENT
                                                             ENTERED IN THE
EYE LIGHTING INTERNATIONAL                                   COURT OF COMMON PLEAS
                                                             COUNTY OF SUMMIT, OHIO
          Appellee                                           CASE No.   CV-2013-01-0414

                                  DECISION AND JOURNAL ENTRY

Dated: August 16, 2017



          SCHAFER, Judge.

          {¶1}   Plaintiff-Appellant, Aladdin’s Lights, Inc. (“Aladdin’s Lights”), appeals the

judgments of the Summit County Court of Common Pleas denying its motion for summary

judgment and granting summary judgment in favor of Defendant-Appellee, EYE Lighting

International of North America, Inc. (“EYE Lighting”). For the reasons set forth below, we

affirm.

                                                        I.

          {¶2}   Aladdin’s Lights is located in Twinsburg, Ohio and is a retailer and distributor of

small consumer and commercial horticultural products. EYE Lighting, a subsidiary of Iwasaki

Electric of Japan, is located in Mentor, Ohio, and designs and manufactures a variety of lamps.

One of EYE Lighting’s products is the Hortilux branded grow lamp, which is marketed as a

premium lamp brand. Aladdin’s Lights is owned by a former EYE Lighting employee who left

the company in 1999.
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       {¶3}   Aladdin’s Lights used to sell EYE Lighting’s Hortilux brand grow lamps.

Aladdin’s Lights alleges that on July 1, 2010, EYE Lighting, in cooperation with its master

distributors, implemented a “resale price maintenance” (RPM) policy for its Hortilux lamps,

which EYE Lighting claims it did in order to protect the integrity of its Hortilux brand.

Aladdin’s Lights alleges that as part of this RPM policy, EYE Lighting demanded that resellers

advertise and sell its Hortilux lamps at both a “minimum advertised price” (“MAP”) and a

“minimum selling price” (“MSP”), both of which were established by EYE Lighting. According

to Aladdin’s Lights, EYE Lighting informed them that the MAP/MSP were mandatory and that

noncompliance with its pricing scheme would result in EYE Lighting’s semi-exclusive

distributors cutting-off their supply of Hortilux lamps. Aladdin’s Lights subsequently refused to

take part in EYE Lighting’s MAP/MSP pricing scheme. As such, Aladdin’s Lights asserts that

EYE Lighting “has refused, in conjunction with and by direction to and with compliance by its

master distributors[,] to sell [its] products to [Aladdin’s Lights] and has revoked [Aladdin’s

Lights]’s status as a Hortilux line reseller in the chain of commerce effective August 2010.”

Aladdin’s Lights maintains that to this day, it remains willing and able to order and purchase

Hortilux lamps from EYE Lighting, but that EYE Lighting “refuses to and continues to refuse to

sell to [Aladdin’s Lights] and continues to refuse to permit [Aladdin’s Lights] to sell [its]

products, since [Aladdin’s Lights] refuses to abide by [EYE Lighting]’s illegal MAP and MSP

pricing.”

       {¶4}   Aladdin’s Lights alleges that EYE Lighting’s RPM policy adversely affects

competition, chiefly by artificially inflating the price of Hortilux lamps and eliminating

consumers’ freedom to do comparative shopping for competitive pricing of EYE Lighting’s

products, which results in significant overcharges to consumer customers of all retail resellers
                                                 3


nationwide. Moreover, Aladdin’s Lights alleges that as a direct and proximate result of EYE

Lighting’s insistence that Aladdin’s Lights abide by its RPM policy, Aladdin’s Lights faces “the

inevitable loss of significant sales and profit due to certain neutralization of its competitive and

profitable pricing advantage that flowed from continuous improvement to its operating

efficiencies.”

       {¶5}      Thus, on January 18, 2013, Aladdin’s Lights filed a complaint against EYE

Lighting in the Summit County Court of Common Pleas pleading several antitrust-related claims

and seeking relief under Ohio’s Valentine Act, R.C. 1331.01 et seq. In its complaint, Aladdin’s

Lights requested damages, as well as a restraining order, preliminary injunction, and permanent

injunction enjoining EYE Lighting from “refusing to sell its products to [Aladdin’s Lights] and

further ordering [EYE Lighting] to reinstate and appoint [Aladdin’s Lights] as an authorized

dealer of all of [EYE Lighting]’s and Iwasaki’s products, including, but not limited to the

Hortilux line.” On March 15, 2013, EYE Lighting filed a Civ.R. 12(B)(6) motion to dismiss for

failure to state a claim upon which relief can be granted, arguing that Aladdin’s Lights lacked

standing to bring its antitrust claims and also that the allegations contained in Aladdin’s Lights’

complaint were “much too amorphous to satisfy the stringent applicable antitrust-pleading

requirements.” Aladdin’s Lights filed a brief in opposition to EYE Lighting’s motion to dismiss

and subsequently filed a motion to amend its complaint pursuant to Civ.R. 15(A). The trial court

ultimately granted Aladdin’s Lights’ motion to amend its complaint and denied EYE Lighting’s

Civ.R. 12(B)(6) motion to dismiss.

       {¶6}      On June 18, 2013, Aladdin’s Lights filed an amended complaint, accusing EYE

Lighting of vertical price fixing, entering into a group boycott with other distributors, and

conspiring to not deal with them. Aladdin’s Lights’ amended complaint again requested a
                                                 4


restraining order, preliminary injunction, and permanent injunction enjoining EYE Lighting from

“refusing to sell its products to [Aladdin’s Lights] and further ordering [EYE Lighting] to

reinstate and appoint [Aladdin’s Lights] as an authorized dealer of all of [EYE Lighting]’s and

Iwasaki’s products, including, but not limited to the Hortilux line.” It also sought compensatory,

treble, and punitive damages. On August 9, 2013, EYE Lighting filed its answer denying the

allegations set forth in Aladdin’s Lights’ complaint.

       {¶7}    On October 10, 2013, Aladdin’s Lights filed a motion to compel discovery. The

next day, EYE Lighting filed a motion for a protective order pursuant to Civ.R. 26(C) seeking to

ensure that both parties’ extremely sensitive business documents are used strictly “for litigation

purposes, and not by the opposing parties themselves for business competition.” Aladdin’s

Lights opposed EYE Lighting’s motion for a protective order. The trial court held a hearing on

EYE Lighting’s motion and ultimately granted its motion for a protective order, determining that

14 documents be marked as “Attorneys’ Eyes Only.”

       {¶8}    On February 10, 2014, while EYE Lighting’s motion for a protective order was

still pending before the trial court, EYE Lighting filed a Civ.R. 12(C) motion for judgment on

the pleadings, to which Aladdin’s Lights responded in opposition. The trial court ultimately

denied EYE Lighting’s Civ.R. 12(C) motion for judgment on the pleadings. On September 4,

2015, at the close of discovery, Aladdin’s Lights filed a motion for partial summary judgment

arguing that no genuine issue of material fact exists concerning EYE Lighting’s liability, but that

a dispute remains concerning damages. EYE Lighting filed a motion for summary judgment on

the same day, wherein it articulated at least seven reasons as to why it was entitled to judgment

as a matter of law. Each party filed an opposition brief in response to the opposing party’s

summary judgment motion. On March 2, 2016, the trial court granted EYE Lighting’s motion
                                                  5


for summary judgment on the basis that Aladdin’s Lights was merely an indirect purchaser of the

Hortilux lamp and, thus, did not have standing to bring the instant antitrust lawsuit. On March 4,

2016, the trial court denied Aladdin’s Lights’ motion for partial summary judgment after again

concluding that Aladdin’s Lights lacked standing to bring the present lawsuit.

       {¶9}       Aladdin’s Lights filed this timely appeal and presents three assignments of error

for our review.

                                                  II.

                                       Assignment of Error I

       The trial court erred in granting summary judgment [in favor of EYE
       Lighting].

       {¶10} In its first assignment of error, Aladdin’s Lights argues that the trial court erred by

granting EYE Lighting’s motion for summary judgment. We disagree.

                                        A. Standard of Review

       {¶11} We review an award of summary judgment de novo. Grafton v. Ohio Edison Co.,

77 Ohio St.3d 102, 105 (1996). Summary judgment is only appropriate where (1) no genuine

issue of material fact exists; (2) the movant is entitled to judgment as a matter of law; and (3) the

evidence can only produce a finding that is contrary to the non-moving party. Civ.R. 56(C).

Before making such a contrary finding, however, a court must view the facts in the light most

favorable to the non-moving party and must resolve any doubt in favor of the non-moving party.

Murphy v. Reynoldsburg, 65 Ohio St.3d 356, 358-359 (1992).

       {¶12} Summary judgment consists of a burden-shifting framework. To prevail on a

motion for summary judgment, the party moving for summary judgment must first be able to

point to evidentiary materials that demonstrate there is no genuine issue as to any material fact,

and that the moving party is entitled to judgment as a matter of law. Dresher v. Burt, 75 Ohio
                                                6


St.3d 280, 293 (1996). Once a moving party satisfies its burden of supporting its motion for

summary judgment with sufficient and acceptable evidence pursuant to Civ.R. 56(C), Civ.R.

56(E) provides that the non-moving party may not rest upon the mere allegations or denials of

the moving party’s pleadings.      Rather, the non-moving party has a reciprocal burden of

responding by setting forth specific facts, demonstrating that a “genuine triable issue” exists to

be litigated for trial. State ex rel. Zimmerman v. Tompkins, 75 Ohio St.3d 447, 449 (1996).

                                      Ohio’s Valentine Act

       {¶13} Ohio’s antitrust statutes, known as the Valentine Act, are contained in R.C.

Chapter 1331, which is entitled “Monopolies.” The Valentine Act was modeled after the federal

Sherman Antitrust Act, and the Supreme Court of Ohio has interpreted the Valentine Act in light

of federal judicial construction of the Sherman Antitrust Act. C.K. & J.K., Inc. v. Fairview

Shopping Ctr. Corp., 63 Ohio St.2d 201, 204 (1980); Johnson v. Microsoft Corp., 106 Ohio

St.3d 278, 2005–Ohio–4985, ¶ 13.        Former R.C. 1331.01(B)(6) specifies that a “trust” is

unlawful. A “trust” is defined, inter alia, as a combination by two or more persons to carry out

restrictions in either trade or commerce or to prevent competition in the sale of produce or

commodities. Former R.C. 1331.01(B)(1)-(3). Thus, “[t]o establish a restraint of trade claim, a

plaintiff must show that there is a combination of effort by two or more actors that unreasonably

restrains trade in a relevant market.” Eichenberger v. Graham, 10th Dist. Franklin No. 12AP-

216, 2013-Ohio-1203, ¶ 14, citing N.H.L. Players’ Assn. v. Plymouth Whalers Hockey, 325 F.3d

712, 718 (6th Cir.2003). Examples of anticompetitive practices include price fixing, artificial

restrictions on supply, division of markets, group boycotts, and tying arrangements. See former

R.C. 1331.01(B); see also N. Pacific Ry. Co. v. United States., 356 U.S. 1, 5 (1958).
                                                 7


       {¶14} Keeping in line with Ohio courts’ longstanding practice of interpreting the

Valentine Act in accordance with federal law, the Supreme Court of Ohio adopted the United

States Supreme Court’s holding in Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977), which held

that an indirect purchaser of goods or services is prohibited from bringing a private action

against a seller engaged in allegedly monopolistic practices in the sale of those goods or services,

id. at 746-747. Johnson at ¶ 15. This rule, known as the “Illinois Brick rule” or the “direct-

purchaser requirement,” limits who can bring an antitrust claim to that of “the injured party – the

retailer who contracted directly with the manufacturer and paid the overcharge.” Id. at ¶ 10; see

McCarthy v. Recordex Service, Inc., 80 F.3d 842, 847-848 (3d Cir.1996) (“Recognizing that

allowing an indirect purchaser to assert an antitrust claim for the portion of an overcharge

‘passed on’ to the indirect purchaser would create an intractable problem of tracing and

apportioning damages between different purchasers in the chain of distribution, the [United

States Supreme] Court chose to avoid this morass by enunciating a bright-line rule that only the

purchaser immediately downstream from the alleged monopolist may bring an antitrust action.”),

citing Illinois Brick at 744; see also In re ATM Fee Antitrust Litigation, 686 F.3d 741, 748 (9th

Cir.2012) (noting the Illinois Brick court’s rationale that indirect purchasers suffer no injury

under § 4 of the Clayton Act and, thus, only direct purchasers have standing to seek damages for

antitrust violations). In sum, “an indirect purchaser of goods may not assert a Valentine Act

claim for alleged violations of Ohio antitrust law.” Id.

                                             B. Analysis

       {¶15} Here, the trial court granted EYE Lighting’s motion for summary judgment on the

basis that Aladdin’s Lights was an indirect purchaser of Hortilux lamps and, thus, lacked

standing to bring Valentine Act claims pursuant to the Illinois Brick rule. The trial court also
                                                8


subsequently denied Aladdin’s Lights’ motion for partial summary judgment for the same

reason. Accordingly, we confine our review to this narrow issue.

       {¶16} In its motion for summary judgment, EYE Lighting argued that Aladdin’s Lights

did not have standing under the Valentine Act to bring its antitrust lawsuit. In support of its

motion, EYE Lighting cited to the deposition testimony of Bruce Jenkins, who is Aladdin’s

Lights’ owner and also a former employee of EYE Lighting. Specifically, EYE Lighting cites to

the portion of Mr. Jenkins’ testimony wherein he states that Aladdin’s Lights never purchased

Hortilux product directly from EYE Lighting because “[EYE Lighting] didn’t sell directly. They

only sold through distribution.” From this evidence, we determine that EYE Lighting satisfied

its initial Dresher burden with respect to proving that Aladdin’s Lights was merely an indirect

purchaser and therefore lacked standing to bring the present lawsuit.

       {¶17} With EYE Lighting having satisfied its initial burden on summary judgment, the

burden then shifts to Aladdin’s Lights, as the non-moving party, to provide specific facts which

would demonstrate the existence of a “genuine triable issue” with respect to its standing to

pursue its antitrust claims. Tompkins, 75 Ohio St.3d at 449. In its brief in opposition to EYE

Lighting’s motion for summary judgment, Aladdin’s Lights appears to concede that it is an

indirect purchaser of EYE Lighting’s Hortilux lamps, but cites to a litany of federal cases that

have recognized exceptions to the Illinois Brick rule. One such exception that Aladdin’s Lights

claims to satisfy is the “co-conspirator exception,” which permits an indirect purchaser of goods

to pursue antitrust claims if the manufacturer and the distributor engage in a vertical antitrust

conspiracy by fixing prices that are ultimately borne by the indirect purchaser. In re ATM Fee

Antitrust Litig., 686 F.3d at 748-749.     “Under this ‘co-conspirator’ theory, the party who

purchases from a co-conspirator middleman is treated as a ‘direct purchaser’ because the
                                                9


manufacturers and the middleman direct purchaser are viewed as one entity.” In re Nifedipine

Antitrust Litig., 335 F.Supp.2d 6, 14 (D.D.C.2004). However, we note that the Supreme Court of

Ohio has not adopted the so-called “co-conspirator exception” despite having the opportunity to

do so. See Johnson, 106 Ohio St.3d 278, 2005–Ohio–4985. Therefore, we reject Aladdin’s

Lights’ argument concerning the “co-conspirator exception” to the Illinois Block rule.

       {¶18} Thus, based on the foregoing, we conclude that Aladdin’s Lights has failed to

satisfy its reciprocal burden of demonstrating the existence of a genuine issue of material fact

pertaining to its standing in the present case. Accordingly, we determine that the trial court did

not err by granting EYE Lighting’s motion for summary judgment.

       {¶19} Aladdin’s Lights’ first assignment of error is overruled.

                                    Assignment of Error II

       The trial court erred in denying summary judgment to the Plaintiff.


                                    Assignment of Error III

       The trial court abused its discretion in granting the Defendant’s motion
       regarding their request for a protective order.

       {¶20} In its second assignment of error, Aladdin’s Lights argues that the trial court erred

by denying its motion for partial summary judgment. In its third assignment of error, Aladdin’s

Lights contends that the trial court erred by granting EYE Lighting’s motion for a protective

order concerning the production and treatment of sensitive documents. However, our resolution

of Aladdin’s Lights’ first assignment of error renders these assignments of error moot and we

decline to address them. See App.R. 12(A)(1)(c).
                                                10


                                                III.

       {¶21} Aladdin’s Lights’ first assignment of error is overruled and its second and third

assignments of error are moot. Accordingly, the judgment of the Summit County Court of

Common Pleas is affirmed.

                                                                              Judgment affirmed.




       There were reasonable grounds for this appeal.

       We order that a special mandate issue out of this Court, directing the Court of Common

Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy

of this journal entry shall constitute the mandate, pursuant to App.R. 27.

       Immediately upon the filing hereof, this document shall constitute the journal entry of

judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the

period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is

instructed to mail a notice of entry of this judgment to the parties and to make a notation of the

mailing in the docket, pursuant to App.R. 30.

       Costs taxed to Appellant.




                                                       JULIE A. SCHAFER
                                                       FOR THE COURT


CARR, J.
CONCURS.

HENSAL P. J.
CONCURS IN JUDGMENT ONLY.
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APPEARANCES:

THOMAS C. LOEPP, Attorney at Law, for Appellant.

RICHARD HAMILTON, Attorney at Law, for Appellee.
