Radiant Burners, Inc. v. Peoples Gas & Coke Co.

Radiant Burners, Inc. (Radiant) (plaintiff) manufactured and sold a ceramic gas burner called the Radiant Burner. The American Gas Association (the association) (defendant) tested the safety, utility, and durability of gas burners. The association gave a seal of approval to gas burners that met its criteria. Certain gas distributors, including Peoples Gas & Coke Co. (Peoples), were members of the association and refused to provide gas for gas burners that did not have the association’s seal of approval. Radiant twice applied for a seal of approval from the association for the Radiant Burner and was rejected both times. Because the Radiant Burner lacked a seal of approval, Peoples and other distributors who were members of the association refused to provide gas to consumers who used the Radiant Burner. As a result, the Radiant Burner was excluded from the market, because consumers would not purchase a gas burner for which they could not buy gas to use. Radiant sued the association and its members, alleging that the actions of the association and its members restrained trade in the gas-burner market in violation of § 1 of the Sherman Act. In its lawsuit, Radiant sought an injunction and treble damages. The association filed a motion to dismiss for failure to state a claim upon which relief could be granted, arguing Radiant had failed to allege an injury that harmed the public. The association reasoned that unless there is a per se violation of the Sherman Act, the Sherman Act only protects individual competitors in situations in which the public suffers harm. As there had been no impact in the overall gas-burner market resulting from the association’s actions, the public had not suffered. The district court granted the association’s motion and dismissed the case. The court of appeals affirmed the district court. Radiant appealed.