STATE OF MISSOURI v. STUPP BROS. BRIDGE & IRON CO. Cite us 248 F.Supp. 169 (1965) 169 plaintiff purchased equipment through third party rather than directly from defendant does not deprive plaintiff of his right to sue as a person who has been injured in his business or property under section of Clayton Act providing that any person who shall be injured in his business or property by reason of anything forbidden in antitrust laws may sue therefor and shall recover threefold damages sustained by him and cost of suit, including reasonable attorney's fee. Motions denied. 1. Monopolies 28(1.6, 9) Construction by federal District Court of section of Clayton Act providing that any person who shall be injured in his business or property by reason of anything forbidden in antitrust laws may sue therefor and shall recover threefold damages sustained by him and cost of suit, including reasonable attorney's fee, must be consistent with antitrust policy as defined by Congress and stated by Supreme Court. Clayton Act, § 4, 15 U.S. C.A. § 15. 2. Monopolies 28(1.6) Fact that plaintiff purchased equipment through third party rather than directly from defendant does not deprive plaintiff of his right to sue as a person who has been injured in his business or property under section of Clayton Act providing that any person who shall be injured in his business or property by reason of anything forbidden in antitrust laws may sue therefor and shall recover threefold damages sustained by him and cost of suit, including reasonable attorney's fee. Clayton Act, § 4, 15 U.S.C.A. $ 15. 3. Federal Civil Procedure 2470 Where basic facts, on which defendants predicated one phase of their motion for summary judgment, were disputed, question presented was not in proper procedural posture for determination by federal District Court. Fed.Rules Civ. Proc. rule 56, 28 U.S.C.A. 4. Federal Civil Procedure 2557 Motion of defendants for partial summary judgment was required to be 99-065 - 78 - 23 170 248 FEDERAL SUPPLEMENT denied by federal District Court, where motion necessarily dealt with question of amount of damages of plaintiffs and not with question whether plaintiffs were entitled to any damages. Fed.Rules Civ. Proc. rule 56, 28 U.S.C.A. 5. Monopolies 28(1.6) Assumed violation of antitrust laws does not necessarily create a single and exclusive cause of action that must be said to be vested in any single person, and it is possible under particular factual situations that several persons may have causes of action as result of forbidden action in violation of antitrust laws. Clayton Act, § 4, 15 U.S.C.A. § 15. James C. Wilson, Kansas City, Mo., Norman H. Anderson, Atty. Gen., State of Missouri, for plaintiffs. F. Russell Millin, U. S. Atty., and Calvin K. Hamilton, Asst. U. S. Atty., amicus curiae, for the United States. Brown, Douglas & Brown, St. Joseph, Mo., for St. Joseph Structural Steel Co. Spencer, Fane, Britt & Browne, Kansas City, Mo., for Kansas City Structural Steel Co. Watson, Ess, Marshall & Enggas, Kansas City, Mo., for Havens Structural Steel Co. E. C. Hartman, R. H. McRoberts, Stuart Symington, Jr., St. Louis, Mo., and Watson, Ess, Marshall & Enggas, Kansas City, Mo., for Stupp Bros. Bridge & Iron Co. JOHN W. OLIVER, District Judge. This civil anti-trust case pends on defendants' motion (1) for summary judgment dismissing the entire action predicated on the theory that (a) as to most of the structural steel involved, plaintiffs were indirect purchasers lacking capacity to sue under Section 4 of the Clayton Act (15 U.S.C.A. § 15); and (b) as to the remainder of the structural steel involved, no conspiracy can be said to exist because only one defendant-Stupp Bros. Bridge & Iron Company-was capable of handling the fabrication on particular projects which did involve direct pur chases; and on (2) a motion for partial summary judgment based on the alleged ground that the plaintiffs "passed on" a substantial portion of the excessive overcharges to the United States under the Federal Aid to Highways Act. Pursuant to various pre-trial conferences and orders, the parties have filed two separate stipulations. Other facts are presented by various affidavits filed by both sides. The legal questions presented have been ably briefed at length (the briefs total over 150 pages). We have also had the benefit of an amicus curiae brief filed by the United States. We have studied those briefs and the numerous cases cited therein. We now state our reasons why the relief prayed for in both defendants' motions should be denied. I. Section 4 of the Clayton Act The stipulated facts upon which defendants contend they are entitled to summary judgment in connection with their first point were stated in defendants' brief as they appear in Appendix A attached hereto. Plaintiffs do not quarrel with defendants' paraphrase of the stipulated facts but suggest that significant facts were omitted from defendants' statement. Plaintiffs' supplementary statement of stipulated facts is attached as Appendix B. Defendants' legal theory concerning the meaning of Section 4 of the Clayton Act is stated as follows: This first section of defendants' motion is based on the fact that plaintiffs had no dealings with defendants in the transactions claimed to give rise to plaintiffs' claim for treble damages, that plaintiffs purchased no structural steel from defendants (except on Projects Nos. IN 891(5)c, IN 891(5)d, I 892(17), I 229(16)b, and I 229(16)c where Stupp Bros. was the prime contracSee Sec. II, infra.) that the structural steel allegedly affected by defendants' claimed conspiracy was purchased by prime contractors and subcontractors for use in the construction of new steel bridges, which tor. STATE OF MISSOURI v. STUPP BROS. BRIDGE & IRON CO. were in each instance themselves part of and integrated into a larger highway project. These facts are undisputed and are recited in Stipulation No. 1. Based on these facts plaintiffs are too remote from the alleged conspiracy to sue for the incidental injury they allegedly incurred. (P. 7 of Defendants' Brief 1). Defendants' argument is at least twopronged. We shall state defendants' arguments in considerable detail because of the recurring presentation of some facet of the pass-on theory in the trial of civil anti-trust cases. Defendants contend that "indirect purchasers may not maintain private antitrust suits" (p. 8 D.Br.) and that "the cases rejecting the 'pass on' doctrine establish that plaintiffs have no standing to maintain this suit" (p. 25 D.Br.). Defendants also argue that "the rule of damages in private anti-trust actions is governed by Southern Pacific Co. v. Darnell-Taenzer Lumber Co., 245 U.S. 531, 534 [38 S.Ct. 186, 62 L.Ed. 451] (1918)” (p. 7 D.Br.); and that "two relevant lines of authority have developed from the application of the DarnellTaenzer principle to cases brought under Section 4 of the Clayton Act" (p. 8 D.Br.). Defendants contend that one line of cases is exemplified by Commonwealth Edison Co. v. Allis-Chalmers Mfg. Co., 7th Cir. 1963, 315 F.2d 564, cert. denied Illinois v. Commonwealth Edison Co., 375 U.S. 834, 84 S.Ct. 64, 11 L.Ed.2d 64, and that the other line of cases is exemplified by Commonwealth Edison Co V. Allis-Chalmers Mfg. Co., 7th Cir. 1964, 335 F.2d 203. In regard to the latter, defendants assert that the pass-on defense cases require a further holding that, “except in extremely rare and unusual situations not here relevant [an obvious reference to the Oil Jobber cases], the first purchaserand not subsequent purchasers-is the only one who can institute and prosecute a suit for alleged conspiratorial overcharges" (p. 8 D.Br.). 1. Referred to hereinafter as D.Br. 171 Defendants insist that there must be a "direct injury before one may sue under Section 4 of the Clayton Act" (p. 14 D. Br.) and that "one who derives his injury through a contract with one directly injured is too remote from the violation to recover any damage it incidentally caused him" (p. 14 D.Br.). Defendants' review of typical bid tabulations attached to Stipulation No. 1 (Exhibits D to X, inclusive, attached thereto) is tendered in support of its argument that those tabulations and defendants' review "show that plaintiffs were not directly injured in their business and property as required by Section 4 of the Clayton Act and that any injury suffered by plaintiffs was causally connected to the alleged conspiracy of defendants" (p. 23 D.Br.). In specific regard to "pass-on", defendants contend that "the cases rejecting the 'pass on' doctrine are merely the other side of the coin that one indirectly injured can not sue" (p. 25 D.Br.). Defendants add that "the 'pass on' cases establish that, except in the rare Oil Jobber case situation, which is not this one, the party first to pay an overcharge is the party to sue to recover it" and that because "plaintiffs were the second or third parties to pay [they] therefore have no cause of action" (D.Br. p. 37). Plaintiffs insist at the outset that "this is not a passing on case" (page 2 of Plaintiffs' Brief 2). Plaintiffs argue that: Defendants are charged with having participated in an unlawful scheme in violation of the Federal Antitrust Laws, which was directed solely against plaintiffs. This is not a situation in which plaintiffs merely happened to be somewhere in the target area. This is a case where plaintiffs were the only target and consequently plaintiffs were not only hit but they were the only bull's eye on which aim was taken. In such circumstances discussion of the passing-on doctrine or the law relating 2. Referred to hereinafter as P.Br. 172 248 FEDERAL SUPPLEMENT to indirect purchasers is irrelevant. (P. 2 P.Br.) Both parties cite Judge Boldt's decision in State of Washington et al. v. General Electric Co. et al., W.D.Wash., 246 F.Supp. 960, decided March 31, 1965. Defendants, in anticipation of plaintiffs' reliance on that case, contend that this case "is unlike State of Washington v. General Electric" (P. 28 D.Br.). Plaintiffs, on the other hand, and as anticipated by the defendants, argue that "the case most nearly 'on all fours' with the instant case is State of Washington et al. v. General Electric et al., (P. 8 P. Br.); that such case "is practically identical to the present case" (P. 16 P.Br.); and that "precisely the same situation [presented by this case] was considered by Judge Boldt in the State of Washington case" (P. 31 P.Br.). Judge Boldt stated the factual situation involved in the State of Washington case as follows: Briefly stated, plaintiff utility district awarded a contract for an electric power project which included a dam, a hydro-electric power plant and related transportation facilities to Grant County Contractors, a joint venture apparently organized to bid on plaintiff's project. The ten generators which are the subject of this motion were purchased from defendant General Electric by Contractors for use as part of the much larger project. General Electric was fully aware that Contractors intended to install the generators in the Grant County project and even actively solicited the order from the utility district and its power customers. As an alternate ground of decision in support of his action denying defendants' motion for summary judgment, Judge Boldt held that "this Court is unwilling to deny plaintiff its right to sue merely because it purchased the equipment through a third party rather than directly from the manufacturer." We are of the same view. We are of the further opinion that Judge Boldt, most appropriately focused and directed attention to the language of the statute, which he quoted. In ruling cases presenting the sort of questions presented by this case, to use Judge Boldt's words, "[t]he statutory language should * be borne in mind.” Indeed, we believe that the language of the statute is both the point of beginning and the point of ending for any meaningful analysis of the basic question presented by the first point of defendants' motion. Section 4 of the Clayton Act (15 U.S. C.A. § 15) provides: Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor * * * and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney's fee. The language of the present statute is but a codification of a similar section enacted by the Act of July 2, 1890, c. 647, § 7, 26 Stat. 210. As originally enacted, its operation was, of course, restricted to the particular act cited (see Codification section under Historical Note to 15 U.S. C.A. § 15). Mr. Justice Holmes' decision in Chattanooga Foundry & Pipe Works v. City of Atlanta, 203 U.S. 390, 27 S.Ct. 65, 51 L.Ed. 241 (1906), noted that a city was a "person" within the comparable language of original Section 7 of the Act of July 2, 1890, by reason of the express provision of Section 8 of that Act. In determining that "the facts gave rise to a cause of action under the Act of Congress," Mr. Justice Holmes stated that "[t]he city 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." Mr. Justice Holmes added that "[a] person whose property is diminished by a payment of money wrongfully induced is injured in his property." * United States v. Cooper Corp., 312 U.S. 600, 61 S.Ct. 742, 85 L.Ed. 1071 (1941), construed what is now Section 4 of the Clayton Act as its substance originally STATE OF MISSOURI v. STUPP BROS. BRIDGE & IRON CO. appeared in Section 7 of the Sherman It was further held that "it is not our judicial function to engraft on a statute additions which we think the legislature might or should have made" (312 U.S. at 605, 61 S.Ct. at 744). And in State of Georgia v. Evans, 316 U.S. 159, 62 S.Ct. 972, 86 L.Ed. 1346 (1942), holding that a State, as distinguished from the United States, is a "person" within the meaning of what is now Section 4 of the Clayton Act, Mr. Justice Frankfurter held that "[r]eason balks against implying denial of such a remedy [the civil remedy of treble damages] to a State which purchases materials for use in building public highways" (316 U.S. at 162, 62 S.Ct. at 974). He added that "[n]othing in the Act, its history, or its policy, could justify so restrictive a construction of the word 'person' in $7 as to exclude a State," and that "[s]uch a construction would deny all redress to a State, when mulcted by a violator of the Sherman Law, merely because it is a State." (316 U.S. at 162-163, 62 S.Ct. at 974). We recognize, of course, that none of these cases involved the specific factual situation upon which defendants base their argument. These cases are cited to state the rules of decision applicable to our construction of the statute. These cases teach that we are to read Section 4 of the Clayton Act in its ordinary and natural sense; that we are to consider its history and its policy; that we are to avoid restrictive constructions inconsistent therewith; and that we are not to engraft additions on the statute that the Congress did not see fit to enact. So far as the policy of the Congress is concerned, prosecution of private 173 treble-damage actions under Section 4 of the Clayton Act has long been recognized as a supplement to government enforcement of the anti-trust laws of the United States. See, for example, United States v. Borden Co., 347 U.S. 514 at 518, 74 S.Ct. 703, 98 L.Ed. 903 (1954). That policy requires, to use the more recent language of Radovich v. National Football League, 352 U.S. 445, 454, 77 S.Ct. 390, 395, 1 L.Ed.2d 456 (1957), that we "should not add requirements to burden the private litigant beyond what is specifically set forth by Congress in those laws." [1] Twice this year the Supreme Court has recognized that "Congress has expressed its belief that private antitrust litigation is one of the surest weapons for effective enforcement of the antitrust laws." See Minnesota Mining & Mfg. Co. v. New Jersey Wood Finishing Co., 381 U.S. 311 at 318, 85 S.Ct. 1473, at 1477, 14 L.Ed.2d 405 (1965), quoted in Leh v. General Petroleum Corp., 86 S.Ct. 203, decided November 8, 1965. The former case holds that such policy requires that courts construe particular sections of the anti-trust law in a manner that would lend impetus to that poliсу. The latter case teaches that such policy requires that courts avoid "niggardly construction of the statutory language." Our construction of Section 4 of the Clayton Act therefore must be consistent with the anti-trust policy as defined by the Congress and stated by the Supreme Court. * * Stripped of its verbiage, defendants' arguments as we have fully stated them, would have us read into Section 4 of the Clayton Act that only persons who make direct purchases may be considered a "person injured in his business or property" within the meaning of Section 4-or to put it in the converse-that no person who makes an indirect purchase shall be considered a "person" who may be "injured in his business or property" by reason of anything forbidden in the anti-trust laws. Defendants' argument would also require us to read into Section 4 of the Clayton Act a proviso that would declare |
