[ 56,202] State of Georgia v. Hiram W. Evans, John W. Greer, Jr., American Bitumuls Company et al. Supreme Court of the United States. No. 872 October Term, 1941. April 27, 1942. On writ of certiorari to the United States Circuit Court of Appeals for the Fifth Circuit. A State comes within the statutory definition of a "person" in Section 8 of the Sherman Act so as to be entitled to maintain a treble damage suit under Section 7 of that Act for injuries resulting to it from practices proscribed by the Act. Said the Court: "Nothing 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. Such a construction would deny all redress to a State, when mulcted by a violator of the Sherman Law, merely because it is a State." * Ellis G. Arnall, Attorney General of Georgia, and E. J. Clower, Assistant Attorney General of Georgia, for petitioners. Edwin W. Moise, C. S. Gentry, Allen Post, Marion Smith, Morgan S. Belser, Hal Linsay, Felix T. Smith, B. B. Taylor, and Barry Wright, for respondents. "Any person who shall be injured in his business or property by any other person or corporation by reason of anything forbidden or declared to be unlawful by this act, may sue therefor in any district court of the United States..., and shall recover threefold the damages by him sustained Section 8 provides that "the word 'person,' or 'persons,' whenever used in this act shall be deemed to include corporations and associations existing under or authorized by the laws of either the United States, the laws of any of the Territories, the laws of any State, or the laws of any foreign country." 26 Stat. 209, 210; 15 U. S. C. § 7. [Ruling of Lower Courts] The District Court dismissed the suit on the ground that the State of Georgia is not a "person" under §7 of the Act. Deeming the question controlled by United States v. Cooper Corp., 312 U. S. 600, the Circuit Court of Appeals for the Fifth Circuit affirmed the judgment. 123 F. 2d 57. The importance of the question in the enforcement of the Sherman Law is attested by the fact that thirty-four states, as friends of the Court, supported Georgia's request that the decision be reviewed on certiorari. And so we brought the case here. 315 U. S. . [Question and Ruling in Cooper Case] The only question in the Cooper case was "whether, by the use of the phrase 'any person,' Congress intended to confer upon the United States the right to maintain an action for treble damages against a violator of the Act." 312 U. S. at 604. Emphasizing that the United States had chosen for itself three potent weapons for enforcing the Act, namely, criminal prosecution under §§ 1, 2, and 3, injunctions under § 4, and seizure of property under § 6, the Court concluded that Congress did not also give the United States the remedy of a civil action for damages. This interpretation was drawn from the structure of the Act, its legislative history, the practice under it, and past judicial expressions. It was not held that the word "person", abstractly considered, could not include a governmental body. Whether the word "person" or "corporation" includes a State or the United States depends upon its legislative environment. Ohio v. Helvering, 292 U. S. 360, 370. The Cooper case recognized that "there is no hard and fast rule of exclusion. The purpose, the subject matter, the context, the legislative history, and the executive interpretation of the statute are aids to construction which may indicate an intent, by the use of the term, to bring state or nation within the scope of the law." 312 U. S. at 604-05. Considering all these factors, the Court found that Congress did not give to the Government, in addition to the other remedies exclusively provided for it, the remedy of treble damages the only remedy originally given to victims of practices proscribed by the Act. [Basis of Court's Construction in Cooper Case Lacking in This Case] The considerations which led to this construction are entirely lacking here. The ¶ 56,202 State of Georgia, unlike the United States, cannot prosecute violations of the Sherman Law. Nor can it seize property transported in defiance of it. And an amendment was necessary to permit suit for an injunction by others than the United States. See Minnesota v. Northern Securities Co., 194 U. S. 48, 70-71, and Act of October 15, 1914, c. 323, § 16, 38 Stat. 730, 737. If the State is not a "person" within § 8, the Sherman Law leaves it without any redress for injuries resulting from practices outlawed by that Act. [Congressional Intent Construed to Give a State the Right to Sue for Damages under Sherman Act] son" in §7 as to exclude a State. Such a construction would deny all redress to a State, when mulcted by a violator of the Sherman Law, merely because it is a State.' Reversed. Mr. Justice BLACK concurs in the result. [Dissenting Opinion] Mr. Justice ROBERTS. I agree that this case is not ruled by our deccision in United States v. Cooper Corp., 312 U. S. 600. Certain of the reasons adduced in support of that decision are inapplicable here. I am, nevertheless, of opinion that the judgment should be affirmed. I base this conclusion upon the plain words of the Sherman Act. Section 7 provides that "any person who shall be injured in his business or property by any other perThe question now before us, therefore, son," by any action forbidden by the statute, is whether no remedy whatever is open to may sue and recover damages therefor. Seca State when it is the immediate victim of a tion 8 provides that the word "person" or "perviolation of the Sherman Law. wherever used in the Act, "shall be sons. We can deemed to include corporations and associations perceive no reason for believing that Conexisting under or authorized by the laws of gress wanted to deprive a State, as pureither the United States, the laws of any of chaser of commodities shipped in interstate the Territories, the laws of any State, or the commerce, of the civil remedy of treble laws of any foreign country." damages which is available to other, purchasers who suffer through violation of the Act. We have already held that such a remedy is afforded to a subdivision of the State, a municipality, which purchases pipes for use in constructing a waterworks sys tem. Chattanooga Foundry v. Atlanta, 203 U. S. 390. Reason balks against implying denial of such a remedy to a State which purchases materials for use in building public highways. Nothing in the Act, its history, or its policy, could justify so restrictive a construction of the word "per If the word "person" is to include a state as plaintiff, it must equally include a state as a defendant or the language used is meaningless. Moreover, when in § 8 Congress took the trouble to include as "persons" corporations organized under the laws of a state, the inference is plain that the state itself was not to be deemed a corporation organized under Its own laws any more than the United States is to be deemed a corporation organized under its own laws. It is not our function to speculate as to what Congress probably intended by the words it used or to enforce the supposed policy of the Act by adding a provision which Congress might have incorporated but omitted. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA No. C-77-0225 SC ROYAL PRINTING COMPANY and HAYTHORNEWHITE ENTERPRISES, et al., PLAINTIFFS, v. KIMBERLY-CLARK CORP., et al., DEFENDANTS. ORDER This matter is before the court on defendants' motions for summary judgment in light of Illinois Brick Co. v. Illinois, 45 U.S.L.W. 4611 (1977). Illinois Brick held that indirect purchasers are barred from suing manufacturers for treble damages under Section 4 of the Clayton Act. Thus, in order to satisfy Illinois Brick, plaintiffs in the instant case must allege and prove that they are direct purchasers of the paper products manufactured by the defendants. Both plaintiff Royal Printing Co. and plaintiff Haythornewhite Enterprises concede that they were not direct purchasers of the paper products which are the subject of this action. Plaintiff Haythornewhite admitted by way of deposition of Raymond Haythornewhite that it made no purchases directly from manufacturers. Therefore, summary judgment must be granted in favor of all defendants against plaintiff Haythornewhite Enterprises. Although plaintiff Royal Printing Co. concedes by way of deposition of Manuel Contreras that it has made no direct purchases from defendants, it argues (1) that it has standing to sue defendant Crown Zellerbach Corp. because a Crown Zellerbach division sold some paper to Royal Printing, and (2) that it has standing to sue defendant Great Northern Nekoosa because an alleged Great Northern subsidiary sold paper to Royal Printing. Such an attempt to circumvent the Illinois Brick rule cannot be permitted. The holding of Illinois Brick is based on "an unwillingness to complicate treble-damage actions with attempts to trace the effects of the overcharge on the purchaser's prices, sales, costs, and profits, and of showing that these variables would have behaved differently without the overcharge." Id. at 4612. The Court's principal concern was the difficulty in tracing the overcharge through the links in the chain of distribution. That difficulty is not changed by the manufacturer's alleged ownership of one of those links. Illinois Brick requires that the defendants' motions be granted. For the above reasons, it is the order of the court that defendants' motions for summary judgment are granted, and it is the further order of the court that the instant case be dismissed. Dated: July 22, 1977. SAMUEL CONTI, Brief for the United States, as Amicus Curiae, Illinois Brick v. Illinois. Question presented Interest of the United States .. Introduction and summary of argument ... A person who purchases goods through an in- A. The language and policy of Section 4 of C. The possibility of double recovery against Conclusion CITATIONS Cases: Allstate Insurance Co. v. McNeill, 382 F. 2d 84, Armco Steel Corp. v. North Dakota, 376 F. 2d 251 Boshes v. General Motors Corp., 59 F.R.D. 589. 20 Page Cases-Continued Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., Carnival Bag Co., Inc. v. Slide-Rite Mfg. Corp., City and County of Denver.v. American Oil Co., Cromar Co. v. Nuclear Materials & Equipment Corp., 543 F. 2d 501 ... Dailey v. Quality School Plan, Inc., 380 F. 2d ... 484 Diamond National Corp. v. State Board of Equalization, 425 U.S. 268 12 11 20 9 20 12, 21 4 13 13 9 9 13 First Agricultural National Bank v. State Tax Georgia v. Evans, 316 U.S. 159 Georgia v. Pennsylvania R. Co., 324 U.S. 439 passim Hanover Shoe, Inc. v. United Shoe Machinery ... 9, 11, 14 Illinois v. Bristol Myers Co., 470 F. 2d 1276 .. 20 Karseal Corp. v. Richfield Oil Corp., 221 F. 2d 358 Malamud v. Sinclair Oil Corp., 521 F. 2d 1142. 11 10 20, 21 Mangano v. American Radiator & Standard |