Hawaii v. Standard Oil Co./Dissent Brennan
MR. JUSTICE BRENNAN, with whom MR. JUSTICE DOUGLAS joins, dissenting.
The State of Hawaii seeks treble damages and injunctive relief for an alleged conspiracy among respondents to monopolize and fix prices on the sale of petroleum [p271] products in the State. Count one of Hawaii's complaint alleges an economic injury to the State in its proprietary capacity as purchaser of those products. Count two states a claim by the State, as parens patriae, for injury to its "economy and prosperity," including the withdrawal of its citizens' revenues, increased taxes to offset such losses, curtailment of manufacturing, shipping, and commerce, and injury to the competitive position of Hawaiian goods in the national market. Count three alleges a class action on behalf of all purchasers in the State of respondents' petroleum products. The District Court dismissed count three as unmanageable, but denied respondents' motion to dismiss count two, the parens patriae claim. An interlocutory appeal was taken by respondents under 28 U.S.C. § 1292(b), and the Court of Appeals for the Ninth Circuit reversed and ordered dismissal of count two. The Court of Appeals held that even if the State's economy might suffer injury from antitrust violations independent of the injury suffered by private persons, that injury would not be to the State's "business or property" within the meaning of § 4 of the Clayton Act, and in any event would be too remote from respondents' alleged violations to permit the State to recover as parens patriae.
Georgia v. Pennsylvania R. Co., 324 U.S. 439 (1945), in my view, requires reversal. In that case the State of Georgia sought to invoke the original jurisdiction of this Court to remedy a conspiracy by several railroads to fix rates on the transportation of goods to and from the State. As noted by the Court, ante, at 259 n. 13, Georgia sought damages in each of the four counts of its complaint—in its sovereign capacity, as a quasi-sovereign, in its proprietary capacity, and as representative of its citizens. Treating the complaint as a prayer "for damages and for injunctive relief," 324 [p272] U.S., at 445, the Court held that Georgia, both as parens patriae and proprietor, was an appropriate party to bring these claims:
"The enforcement of the criminal sanctions of [the antitrust] acts has been entrusted exclusively to the federal government. See Georgia v. Evans, (316 U.S. 159), 162. But when it came to other sanctions Congress followed a different course and authorized civil suits not only by the United States but by other persons as well. And we find no indication that, when Congress fashioned those civil remedies, it restricted the States to suits to protect their proprietary interests. Suits by a State, parens patriae, have long been recognized. There is no apparent reason why those suits should be excluded from the purview of the antitrust acts." Id., at 447.
Georgia was in fact denied damages, but only because such recovery might operate as an illegal rebate on rates already approved by the Interstate Commerce Commission. See Keogh v. Chicago & Northwestern R. Co., 260 U.S. 156 (1922). Implicit in the decision, however, was the holding that Georgia, as parens patriae, could have recovered damages under the antitrust laws for a conspiracy involving other than agency-approved transportation charges. That holding applies with equal force here. Hawaii is complaining, not of an affront to its abstract sovereignty, but of the economic loss occasioned by respondents' conspiracy. As in Georgia, this can only be characterized as a wrong to the State "which, if proven, limits the opportunities of her people, shackles her industries, retards her development, and relegates her to an inferior economic position among her sister States." 324 U.S., at 451. If that injury would have been a sufficient basis for a damage claim by [p273] Georgia, as we held in that case, then it supports an identical action by Hawaii here.
Even if Georgia were not dispositive, I would still find in Hawaii's parens patriae count a claim of injury to its "business or property" sufficient to state a claim under § 4. There runs through the Court's opinion an assumption that Hawaii's proprietary claims, though concededly sufficient to state a cause of action, are wholly distinct in concept from those raised by the State as parens patriae. While I agree that the two counts represent injuries to the State in separate capacities, the injuries themselves are not so unrelated as to justify a different treatment under the Clayton Act. In Chattanooga Foundry & Pipe Works v. City of Atlanta, 203 U.S. 390 (1906), the city brought a treble-damages action against two pipe companies whose trust and combination had been invalidated in Addison Pipe & Steel Co. v. United States, 175 U.S. 211 (1899). Claiming injury "'in its business or property,'" 203 U.S., at 395, the city sought damages in its capacity as a purchaser of water pipes for the municipal water system. In upholding the right of the city to bring that action, the Court stated:
"It was injured in its property, at least, if not in its business of furnishing water, by being led to pay more than the worth of the pipe. A person whose property is diminished by a payment of money wrongfully induced is injured in his property." Id., at 396.
See also Georgia v. Evans, 316 U.S. 159 (1942).
The determinant, then, is whether "property is diminished by a payment of money wrongfully induced." But what was the nature of the injury to property for which recovery was permitted in Chattanooga? Clearly it was nothing more than the added expense incurred by the city's treasury as the result of the antitrust violation. [p274] While it was incurred in the course of a business transaction, the harm was to the economic wealth of the city's population as a whole, for any savings in public expenditures that ultimately accrued were for their benefit.
This is the same sort of interest sought to be protected here. Hawaii's economy, to which tourism and the tourist trade are important, would be particularly vulnerable to injury from a price conspiracy involving petroleum products. In seeking to preserve the economic opportunities of its people, and the tax revenues generated thereby, Hawaii is asserting an interest not significantly different in concept from that involved in Chattanooga. Whether the injury sought to be remedied consists of additional payments from the public purse, as in that case, or the failure to generate additional wealth, as here, the result in either instance is the same—the government and its population, as entities, have suffered harm to their economic well-being. If that harm is characterized "business or property" in one case, then we stretch no traditional property concepts in applying the same label in the other.[1]
[p275] This conclusion is not undercut by 15 U.S.C. § 15a, which limits recovery by the United States for injury to its "business or property" caused by a violation of the antitrust laws to "actual damages suffered" "solely as a buyer of goods." S. Rep. No. 619, 84th Cong., 1st Sess., 3 (1955). Nothing in the Act similarly restricts a State, suing as parens patriae. As the legislative history of § 15a shows, the major emphasis during passage of the Sherman Act was on the methods of its enforcement. "[I]t was believed that the most effective method, in addition to the imposition of penalties by the United States, was to provide for private treble-damage suits. It was originally hoped that this would encourage private litigants to bear a considerable amount of the burden and expense of enforcement and thus save the Government time and money." Id., at 2. Thus private litigants, encouraged by the hope of triple recovery, were seen as a major instrument of antitrust enforcement, supplemented by criminal prosecutions and civil forfeiture actions brought by the Federal Government. These remedies did not, however, adequately protect the Government as the volume of its procurement grew and collusion among its suppliers became increasingly evident. This was the mischief Congress enacted § 15a to curb:
"The American taxpayer is entitled to full value for his tax dollar. He should be protected against its going into the pockets of wrongdoers in the form of excessive prices and profits gained through violation of the antitrust laws. If he were spending the money himself, he could sue for triple damages. Surely, he is entitled to protection from actual loss where the Government spends it for him. By permitting the United States Government to recover the provable damages resulting from [p276] unlawful practices engaged in by those with whom it does business, [§ 15a] would afford those safeguard necessary to the Public Treasury and at the same time severely deter those who would conspire in their dealings with Federal departments." H.R. Rep. No. 422, 84th Cong., 1st Sess., 4-5 (1955).
At the same time, however, Congress felt that "unlike the situation with respect to private persons, there is no need to furnish the Government any special incentive to enforce the antitrust laws, a heavy responsibility with which it is already charged," and therefore Congress granted "to the Government the right to recover only actual, as distinguished from treble, damages." Id., at 4. In addition, Congress felt that the United States was "amply equipped with the criminal and civil process with which to enforce the antitrust laws. The proposed legislation, quite properly, treats the United States solely as a buyer of goods and permits the recovery of the actual damages suffered." S. Rep. No. 619, supra, at 3.
Thus § 15a served a narrower purpose than the treble-damages provision of the Sherman and Clayton Acts. The United States was "amply equipped" with "criminal and civil process" for general enforcement, and needed a damage remedy solely to protect itself "as a buyer of goods." On the other hand private litigants, including the States, lacked the Government's "criminal and civil process." Yet they were viewed as primary enforcers of antitrust policy and were armed with the weapon of triple recovery as a means of stimulating their efforts. It is plain from the history of § 15a that Congress did not intend that the States to be denied the treble-damages remedy Hawaii pursues here.
Finally, this result does not necessarily lead to double recovery. Since Hawaii is by definition asserting claims "independent of and behind the titles of its citizens," [p277] Georgia v. Tennessee Cooper Co., 206 U.S. 230, 237 (1907), there may be excluded from its recovery any monetary damages that might be claimed by its citizens individually or as part of a properly constituted class. That problem, like uncertainty of damages, is better answered after trial than on the pleadings.
In sum, I think that since no one questions that Hawaii can maintain a treble-damages action in its proprietary capacity, for analogous reasons, Hawaii may also maintain the action pleaded in count two as parens patriae.
Notes
[edit]- ↑ The Court seems to concede as much in saying that an "injury to the State in its proprietary capacity... affects the citizens in much the same way as an injury of the sort claimed by Hawaii here." Ante, at 262 n. 14. Yet because the assessment of damages might prove more difficult in a parens patriae than a proprietary action, the Court concludes that "the two kinds of injuries are [not] identical in nature." Id., at 263 n. 14. The Court plainly confuses two separate issues. The injury to Hawaii's general economy may present problems of proof not raised in its proprietary action, but a mere difficulty in the assessment of damages cannot change the nature of the damage claimed. In short, I think that Hawaii has alleged an injury to its "business or property," and, on the entirely separate question of proving damages, agree with my Brother DOUGLAS that the injury can be quantified, or at least approximated.