Hawaii v. Standard Oil Co./Dissent Douglas

by William O. Douglas

MR. JUSTICE DOUGLAS, dissenting.

Today's decision reflects a miserly approach to the fashioning of federal remedies rectifying injuries to the collective interests of the citizens of a State through [p267] action by the State itself. It is reminiscent of the ill-starred decision in Ohio v. Wyandotte Chemicals Corp., 401 U.S. 493.^[1]

Hawaii, in her fourth amended complaint, sues for damages and injunctive relief as parens patriae by virtue of her "duty to protect the general welfare of the State and its citizens." She alleges that the alleged conspiracy among the respondent oil companies has "injured and adversely affected the economy and prosperity" of Hawaii as follows:

"(a) revenues of its citizens have been wrongfully extracted from the State of Hawaii;

"(b) taxes affecting the citizens and commercial entities have been increased to affect such losses of revenues and income;

"(c) opportunity in manufacturing, shipping and commerce have been restricted and curtailed;

"(d) the full and complete utilization of the natural wealth of the State has been prevented;

"(e) the high cost of manufacture in Hawaii has precluded goods made there from equal competitive access with those of other States to the national market;

"(f) measures taken by the State to promote the general progress and welfare of its people have been frustrated; [p268]

"(g) the Hawaii economy has been held in a state of arrested development.

I see no way of distinguishing the instant case from Georgia v. Pennsylvania R. Co., 324 U.S. 439. The Georgia case held that a State may sue as parens patriae under the antitrust laws for injury to the economy of the State resulting from a conspiracy to restrain trade and commerce through the fixing of railroad rates. Id., at 446. As we said:

"Georgia as a representative of the public is complaining of a wrong 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. These are matters of grave public concern in which Georgia has an interest apart from that of particular individuals who may be affected." Id., at 451.

So-called "growth," "progress," and "development" are more than symbols of power in modern society; they represent the goal which planners—private and public alike—establish and seek to attain. And the State plays an important, at times crucial, role in achieving that goal.^[2] If Hawaii can sustain her allegations by proof, [p269] she establishes injury both as respects her tourism and her industry, her "growth" and her "development."

The Court of Appeals was "skeptical of the existence of an independent harm to the general economy." 431 F. 2d 1282, 1285. But as Alabama states in her brief amicus:

"Economists have developed models for measuring the effects upon local economies from infusions or extractions of given sums of money from those economies. In short, a state's economy is susceptible of articulation and measurement."

Hawaii is the magnet of tourism and of industry as well. She measures the health of her economy by her economic growth. No one citizen can stand in her shoes in those respects, for she represents the collective. Those interests should be held to be the State's "business or property" interests, within the meaning of the Clayton Act, and not merely the plants, factories, or hotels which she may own as a proprietor. We held as much in the Georgia case. It is indisputable that if Hawaii does prove damages, Georgia authorizes recovery. For as MR. JUSTICE BRENNAN points out, Georgia was denied damages only because of a technicality irrelevant to the present case.

Injury to the collective will commonly include injury to members of the collective. In that event, damages recovered by Hawaii could not later be recovered by individual entrepreneurs. It might, of course, be shown that the individual's loss for the period in question was distinct from any impact on the collective. Thus, if [p270] Hawaii failed to prove that the alleged conspiracy damaged her economy, a single entrepreneur might still be able to prove that it drove him to the wall. The difficulties advanced in this regard are more imaginary than real. They are doubtless rationales that express a prejudice against liberal construction of the antitrust laws. Since a collective damage is alleged, I would allow the case to go to trial, saving to Congress the question whether § 4 of the Clayton Act should be restricted to a State's proprietary interests.

I would adhere to the Georgia case and allow Hawaii a chance to prove her charges and to establish the actuality of damages or the need for equitable relief.^[3]

I would reverse the judgment and remand the case for trial.^[4]

Notes

1. In Wyandotte, the Court refused to exercise its conceded original jurisdiction over an original complaint filed by the State of Ohio to enjoin alleged pollution of Lake Erie by manufacturing plants in Michigan and Ontario, Canada, because "as a practical matter, it would be inappropriate for this Court to attempt to adjudicate the issues..." 401 U.S., at 501. In the light of our rules permitting the appointment of special masters, however, this rationale is questionable at least. Id., at 510-512 (DOUGLAS, J., dissenting). See generally Woods & Reed, The Supreme Court and Interstate Environmental Quality: Some Notes on the Wyandotte Case, 12 Ariz. L. Rev. 691 (1970).
2. "In these three respects—as a clearing house for necessary institutional innovations; as an agency for resolution of conflicts among group interests; and as a major entrepreneur for the socially required infrastructure—the sovereign state assumes key importance in channeling the explosive impacts of continuous structural changes, in providing a proper framework in which these structural changes, proceeding at revolutionary speed, are contained and prevented from exploding into a civil war (as they sometimes may, and have). Thus, the high rate of change in economic structure is linked to the importance of the sovereign state as an organizing unit. It is not accidental that, in measuring and analyzing economic growth, we talk of the economic growth of nations and use national economic accounts. In doing so, we imply that the sovereign state is an important factor in modern economic growth; that, given the transnational, worldwide character of the supply of useful knowledge and science, the major permissive factor of modern economic growth, the state unit, in adjusting economic and social institutions to facilitate and maximize application, plays a crucial supplementary role." S. Kuznets, Economic Growth of Nations 346-347 (1971).
3. The question of injunctive relief concerns the meaning of § 16 of the Clayton Act which grants relief to any "person" against loss or damage by a violation of "the antitrust" laws. It is settled that a State is a "person" within the meaning of § 16. Georgia v. Pennsylvania R. Co., 324 U.S. 439, 452. Hence, it is clear that even if Hawaii does not prove damages, equitable relief is available as it was in the Georgia case.
4. My quarrel with the Court does not extend to its approving reference to the possibility that Hawaii may yet be able to maintain a class action on behalf of her consumers, ante, at 266. Cf. Comment, Wrongs Without Remedy: The Concept of Parens Patriae Suits for Treble Damages Under the Antitrust Laws, 43 S. Cal. L. Rev. 570, 580-583 (1970). The District Court's dismissal of Hawaii's class action count as "unmanageable" was not certified for interlocutory appeal, and Hawaii's rights under Fed. Rule Civ. Proc. 23 are not before us for review.