HAWAII v. STANDARD OIL CO.
Legal provision: Clayton
Argument of Maxwell M. Blecher
Chief Justice Warren E. Burger: Number 49, Hawaii against Standard Oil Company.
Mr. Blecher, you may proceed whenever you are ready.
Mr. Maxwell M. Blecher: Mr. Chief Justice and may it may please the Court.
The basic issue presented by this appeal on a Writ of certiorari to the Ninth Circuit is whether the claim of a state parens patriae for damages under the antitrust laws presents a justiciable controversy.
At page 11 of their brief, the respondents assert that we are asking the court as they dramatically put in “To boldly create new law”.
And while I suppose most lawyers appearing before this aghast body would like in some measure to be the architect of some new jurisprudential principle.
I must respectfully submit to you that it is the respondents in asking you to affirm what we regard to be the erroneous decision of the Ninth Circuit who in fact asked you to make new law by overruling the established law made by this Court.
To submit to the Court that under two separate sets of precedents and analysis, reversal of the Ninth Circuit's decision is required.
And to begin with the case of this Court in 1945 in State of Georgia versus Pennsylvania Railroad, is I submit dispositive of the issue framed by this appeal.
In that case, the Court dealt with precisely the same question laid before it here.
Namely, whether a justiciable controversy existed by the claim of the State of Georgia for both damages and injunctive relief alleged parens patriae based on violations of the antitrust laws in the Railroad Industry.
And while this Court in holding that such a justiciable controversy was presented in permitting the State of Georgia to file an original complaint in this Court.
Ultimately concluded that its prior holding in Keogh versus Chicago and Northwestern Railroad presented an impediment of the collection of damages, I respectfully submit and I think it patently obvious that the interdiction of that defense is completely unrelated to the standing question presented by this appeal and is no more relevant than if the claim for damages would have been barred for example, by the statute of limitations by release, by res judicata or by some other substantive legal defense.
The Court in fact dealt with the same question whether or not the claim could be perfected in equity under Section 16 of the Clayton Act which the Court will recall interdicts private parties from securing injunctive relief on subject matters which are under the jurisdiction, regulatory jurisdiction of the Interstate Commerce Commission.
In that case the Court went on to hold that Section 16 did not interdict Georgia’s claim parens patriae for equitable relief.
But the basic holding remains unimpaired, the District Court found that the Georgia case was dispositive and that this Court had ruled in Georgia that a justiciable controversy is presented by reason of a section for a claim for damages parens patriae under the antitrust laws brought by a State.
I respectfully submit that the underpinning of Georgia is the recognition by this Court that Section 4 of the Clayton Act which permits treble damages and Section 16 of the Clayton Act which permits equitable relief are coextensive.
A concept expressly articulated later by this Court in its first decision in Zenith versus Hazeltine in 1969 which recognized the fact that the two statutes afford different remedies for the invasion of a property rights.
Section 4 permits damages and Section 16 permits injunctive relief against threat and future injury.
In the Georgia case, it must be clear therefore that the Court made a valued judgment and said that the interest of a State in the protection of its general economy against invasion, constituted a property right capable of protection and capable of redress under the antitrust laws.
So we say to you as we said to the District Judge that where conduct violative of the antitrust laws affects the general welfare of the state, where there is an alleged price-fixing conspiracy which on the record before us, we must accept is factually supportive.
Where there is a pervasive price-fixing conspiracy affecting a large number of consumers, that this kind of controversy which affects the general welfare and economy of a State rises above the question of local private rights and involves a matter of state interest such that it raises a property interest under Section 4 of the Clayton Act or Section 16 of the Clayton Act which is protected parens patriae by an action by the State.
Now, we submit here that it is unnecessary to reexamine the rationale of the Georgia versus Pennsylvania Railroads analysis.
We would contend that the majority opinion of Mr. Justice Douglas and the dissent of Mr. Justice Stone adequately exhaust the merits of the respected positions which could be articulated in respect to whether or not a State parens patriae can make a claim for damages under the antitrust laws, where there has been an extensive injury to the consumers of the State by reason of a pervasive antitrust violation.
We asked only that the Court here reversed the error of the Ninth Circuit in holding that the Georgia case did not dispose of the present claim in to District Court.
And in saying that we urge upon you that as respondents who are here before you in effect suggesting that you repeal the decision in Georgia which has remained unimpaired for more than 25 years.
I further respectfully submit to you that even absent of decision in Georgia versus Pennsylvania Railroad.
This Court and the basis of prior precedence would not be charging any new jurisprudential ground were to affirm the holding of the District Court and reverse the Ninth Circuit.
Recall in the case of J.I Case Company versus Borak, this Court said that it is the duty of the Courts to provide such remedies, as are necessary to make effective a Congressional purpose.
And that where legal rights have been invaded and a federal statute provides for a general right to sue for such invasion, Federal Courts may use any available remedy to make good the wrong done.
Recently, in this year, the Court again in the case of Bivens versus Narcotics Agents, citing the Borak case concluded that it was the responsibility of the federal judiciary to create a remedy, to write a wrong where an act of Congress interdicted specific unlawful conduct.
Now, how do those decisions apply even absent the Georgia precedent to this particular case?
I would respectfully submit that they ought to be predicated against this Court's statement in Hanover Shoe versus United Shoe Machinery, that the high purpose of antitrust enforcement is best served by permitting private treble damage actions as an effective deterrent to violations of the law.
And as this Court recognized in Hanover that any holding which retains, which permits a group of antitrust violators to retain the fruit of their illegal conduct because no effective suit could be brought against them.
Any such holding, I suggest respectfully must undermine the effective law enforcement through treble damage litigation.
So if we take the principles of Borak as reaffirmed earlier this year in the Bivens case against the background of the judicial and legislative purpose to be served by treble damage litigation, I respectfully submit that that series of precedence would require this Court to affirm the District Court.
And here again, we submit to you that it is the respondents and not the appellant who ask you to ignore established precedence in affirming the Ninth Circuit decision.
I think little need to be said with respect to the subject matter of damages which also formed in part a basis of the Ninth Circuit’s reversal of the District Court’s decision.
I would respectfully characterize the holding of Ninth Circuit and that respect is antediluvian.
As long ago we passed the stage in the development of antitrust or any law where wrong doers are permitted to retain the fruits of illegal conduct simply because there is some difficulty or lack of precision in the measurement of damages.
In Bigelow versus RKO in 1946, this Court made that principle perfectly clear in antitrust law and it is finally seeping down to the level of the District Courts and the Courts of Appeal.
The gravament of this charge is presented by the State and the District Court is that it is entitled.
It is entitled to recover the overcharge by reason of the price fix imposed upon the consumers of the State.
And that mathematical computation is capable I submit to you of almost precise measurement, the first mistake that permeates to Court of Appeal’s determination that the damages in this case are simply too remote and speculative to be measured.
Justice Potter Stewart: I assume if this case were reversed and it was tried and if there was an award of money damages in favor of the State of Hawaii.
That money would go into the general treasury of the State of Hawaii?
Mr. Maxwell M. Blecher: We presented the Court, Mr. Justice Stewart, with alternative views on that.
It is essentially a matter of indifference to the State of Hawaii except that the administrative burdens would be substantially reduced if your hypothetical were correct, that the money belonged to the State and in effect belonged to the citizens only because the State had it available for uses which would reduce the tax burden of its citizens.
On the other hand, the State is not antithetical to the notion that it collect the money belonging to the consumers in the capacity as trustee and setup the necessary machinery to permit those people who actually want the money to make a claim against the Attorney General.
But what we do say, in response to the question of whether or not there are other means available to redress the wrong standard, we do say is that the federal judiciary particularly at this stage in life ought not to be burdened by the problems of it administering a fund as is now being done in the collection of these cases under the antitrust laws.
Cases that are presented here for appeal, for example, in the antibiotic litigation, which this Court, the Court of Appeals and District Courts have been burdened for three years even though they are theoretically settled.
This is a matter, I submit to you that ought to be resolved between the State and its government and the consumers, ought not to be burdened upon the Courts with notice requirements and the administration of funds and that sort of thing.
So that the suggestion that is implicit by the respondents that the class action is really the appropriate means of redressing this kind of case and to dissent the claim which the State ought to assert, is I respectfully suggest window dressed.
Justice Byron R. White: Do the State of Hawaii have antitrust law?
Mr. Maxwell M. Blecher: Yes it does, Mr. Justice White.
It has an antitrust law fashioned almost verbatim after the Sherman Act.
Justice Byron R. White: Treble damages?
Mr. Maxwell M. Blecher: Yes, Your Honor.
Justice Byron R. White: Is that cause of action open to the State?
Mr. Maxwell M. Blecher: As far as I know, it is open to the State.
I would assume that the federal precedence by statute had to apply in Hawaii and since that State is the State for federal -- a person for federal purposes I assume it must be for State purposes as well.
Justice Byron R. White: And does treble damage provision lead on injury to business or property?
Mr. Maxwell M. Blecher: Yes, I believe it does.
I think it is patent almost precisely and verbatim after the Sherman Act and applicable portions of the Clayton Act.
Even, addressing ourself back to the question of damages, even if the total overcharge were not the gravament of the complaint and even if the State of Hawaii were for some reason not entitled to that.0
The Ninth Circuit, I respectfully submit erred, when it said that the impact to the general economic welfare of the State was not in this sophisticated day and age capable of reasonably precise computation or measurement.
I submit that today, as we pointed out in our brief in an article in the Columbia Journal of Law and Sociology.
There has been discussion which would permit the quantification of damages just to the injury to the economy or welfare of the State and I also submit that in a more recent article which we have not had time to say it by an eminent professor of Economics, he concurs in this solution that there are ways and methods by which economic testimony, economic analysis can quantify the impact to a State on its economy or general welfare resulting from a pervasive antitrust price-fixing violation.
Now, I respectfully submit here that there are no other means that are practicably available for the redress of this grievance.
And that is illustrated, I submit to you, by the fact that in the fourth amended complaint in file as count three, the plaintiff here, the State of Hawaii had a class action seeking damages under the antitrust laws as representative of the consumers of the State of Hawaii as a result of this pervasive overcharge.
As the respondents now come before the Court and tell you that there are other and better means available for the adjudication of this kind of controversy who opposed the maintenance of that class successfully and persuaded the District Judge as he put it that the class was unmanageable.
It is the same industry and at least one defendant of the group that stands before you, who persuaded Judge Augelli recently in the District Court of New Jersey that a consumer class action involving overcharges in the Oil industry was unmanageable.
And I respectfully submit to you that unless the decision in Georgia is reaffirmed and the Ninth Circuit reversed and States are permitted to seek the redress of damages for pervasive violations to the consumers, these violations will go un-redressed.
The violators will be permitted to retain the fruits of their conspiracy and the thrust of antitrust enforcement substantially diminished and for those reasons we respectfully argue to reverse the Ninth Circuit's judgment.
Chief Justice Warren E. Burger: Very well Mr. Blecher.
Argument of Francis R. Kirkham
Mr. Francis R. Kirkham: Mr. Chief Justice, may it please the Court.
In view of the remarks of Mr. Blecher, I think it might be helpful to clarify what is before this Court and what is not.
He referred to recovery of the amounts suffered by these damages, suffered by the citizens of Hawaii.
In the third amended complaint in this case, Hawaii pleaded first the cause of action for damages to which business and property, its proprietor.
And second, a cause of action for damages suffered by its citizens.
On the authority of an unbroken line of decisions by this Court, Judge Pence dismissed that count, as have the other judges who considered it below except for one.
Holding at the State of Hawaii had no standing as parens patriae (Inaudible) recover for the injuries to its citizens.
Thereupon, Hawaii filed a fourth amended complaint with a totally different cause of action.
And this time, it asserted as its parens patriae, a claim for damages sustained by it as distinguished from its citizens.
But a claim, in addition, to its injury to business and property provided by Section 4, of the Clayton Act, namely a claim for injury to its general economy and prosperity.
Now, that claim was sustained by Judge Pence on what we think is most extraordinary misreading of the Georgia case which I will come to in a moment.
And it was appealed on special appeals in the Court of Appeals and the only decision and only question before the Court of Appeals was whether the fourth amended complaint of Hawaii in this case asserting a cause of action in addition to its cause of action for damaged business and property or an injury to its general economy and prosperity is a claim that they will be recovered under the Sherman Act.
We submit that for four reasons, this claim could not be recovered, first because the injury to the general economy and prosperity of Hawaii is not an injury to its business or property within the meaning of Section 4.
Secondly, because even if it could be considered the business and property of Hawaii, nevertheless, the injury is so remote, consequential and indirect as to fall clearly outside the area which the standing cases upheld must be the injured person must be within.
Those two dispose off the case and they were the only two decided by the Court below.
But there are two other, that I will mention briefly that we think stand as in severable obstacles to Hawaii’s maintenance of this suit.
The first is that the very nature of the right which a State must assert in order to have a standing to sue parens patriae as its sovereign.
Namely the injury to its citizens as a whole to its entire social community, is the type of injury which cannot be measured by a money calculus and that an injunction is the only remedy that a Court may grant.
And it is the only remedy which this Court has granted in any of the parens patriae cases before it over the course of nearly a hundred years.
And finally we contend that in this case since the gravamen of the complaint is a price-fixing conspiracy, consumer oriented as stated in the reply brief of petitioners directed at the consumers in a particular segment of the economy.
That that is the type of injury for which a State may not sue parens patriae and that this is determined by the Oklahoma case in this Court.
Now let me return to the points decided by the Court below.
Unknown Speaker: Just to make it sure I understand your last point, your position is that the State of Hawaii could not sue for an injunction in this case?
Mr. Francis R. Kirkham: No.
The State of -- that is correct either an injunction or for damages.
Now to return to the two points that were decided by the Court below.
In the first place it had been settled of course since at least the Northern Securities case that the remedies provided in the Sherman Act are the exclusive remedies for the enforcement of the Sherman Act and that the remedies for damages under the Sherman Act are those provided in the Clayton Act.
The Clayton Act provides that one injury by anything forbidden in the antitrust laws in his business or property may recover threefold at the damages.
The term business and property has been construed over and over again by the Courts to have its ordinary meaning, meaning as referring to business venture and the Clayton Act has been construed to apply within that area in which the Sherman Act applies which is in the stream of commerce.
It is as this Court said in the North case an act tailored to the marketplace.
And it has never been conceived by anyone that an injury such as an injury, an indescribable and immeasurable injury, in addition to the injury to the State’s business and property which has not contested, is an injury to business and property of the State within the meaning of Section 4.
When Congress amended the Clayton Act in 1955 to give United States the cause of action similar to that -- that this Court had held Georgia, Evans, Georgia against Evans, it belonged to the State.
And permitted it to sue for an injury to its business and property.
There is nothing in the reports, nothing that could possibly indicate that when that right was given the United States was being given a right to sue in addition for an injury to its business or property, the right to sue for some immeasurable harm to its general economy and prosperity.
We believe that no precedent sustains that and as I say the unusual thing in this case is the misreading by the Court, the District Court of the Georgia case to repeat that is requiring that decision.
Now, the Georgia case does not meet this case at all.
In Georgia, there were two counts, in the fill up complaint by Georgia which were considered by this Court.
One was the suit, a count alleging an injury to Georgia as a proprietor, or injury to the railroads owned by these institutions and so on.
And under that count, it prayed for treble damages under the Clayton Act.
The other count was a parens patriae count and under that count, the State prayed for an injunction and it also had an unusual money damage statement in there.
It stated that the injury to the State of Georgia as parens patriae an injury to its entire economy was of such a nature that it could not be measured by money damages, but on the State of Georgia, that does not mean that we have not been injured and therefore we ask this court to award us “token damages” in an amount not to exceed $5 million.
A request in the nature, we request to an international tribunal to award reparation.
As far as the decision of this court indicates, the request for token damages in the parens patriae count, is not again mentioned or considered.
But what this court held was, first on Georgia's proprietary count which was the only count for treble damages in the case.
The court did not recover damages because of the rule of the Keogh case which does not permit treble damages with respect to race proved by the Commission.
But this did not dispose off the main prayer of the complaint which was for an injunction.
The court then went onto hold that Georgia as a sovereign had the right at a standing to sue for an injunction against the conspiracy that underlay the rates that have been fixed and that injured Georgia.
And that is all the Georgia case was.
It has always been quite impossible for me to understand how Judge Pence could have misread the case.
It has no bearing whatsoever upon a claim of a State to obtain treble damages under the Clayton Act for an injury to its business or prosperity.
That claim was impleaded, was not argued, was not considered, it could not possibly been in the mind of the court.
The next ground of the decision by the court below is we think equally compelling.
At least since the decision of the Eastman case in 1910, the courts of this nation have held that injuries that are remote from the stream of commerce upon which the conspiracy acts may not be recovered.
It is the rule of every Circuit, certiorari has been denied in numerous cases.
But the rule has been stated in various ways said that the injury must be direct instead of indirect.
It said that the person who seeks damages must be within the target area at which the conspiracy was directed.
Under this principle employees of corporations who have suffered from an injury, from a conspiracy, creditors of that corporations, stockholders of that corporation, royalty holders, lessors have been held not to be within the area of directness which must be proved before recovery maybe had under the Clayton Act.
On the other hand, where the impact of the conspiracy was intended to fall upon particular suppliers, as in the case of a conspiracy concerned with explosive dealing, then not only the competitor of the person who conspired but it is the supplier has been held to be sufficiently connected with the conspiracy.
In some cases where the lessor has had rents that are computed on the receipts of the lessee who has been injured by the conspiracy, he has been held sufficiently direct.
But no case, as even considered, effects of a conspiracy upon consumers in a particular segment of the State's economy, upon the entire economy and prosperity of that State which has reacted upon by everything that happens within the State.
It seems clear beyond question that it lies entirely outside of the area of any realm of directness.
It is far less direct and the charity to whom the corporation might have attributed, but for the injury, it is far less direct from the injury to the school to whom the son of an employee might have gone, but for diminution of his earnings, occasioned by the diminution in earnings the corporation occasion by the conspiracy.
It is simply outside the area.
For these reasons the court below reversed the District Court and we think properly so.
And it is not necessary to go beyond that in order to sustain that decision.
But there are two principles we think that are important which the State would have to overcome as we submit.
It cannot if it were to maintain its action in this case.
And the first one of these as I mentioned a moment ago is the fact that when a State appears parens patriae, it must assert a right which is sovereign in its nature as the decisions of this court have held, which affects the welfare and the health and the prosperity of the entire community.
This Court has described it as rights over and beyond the State's properties rights and all the rights of its citizens.
That type of right is the type that Georgia asserts and that Hawaii asserts in this case.
It states that the injury that has been done has hindered its economic growth, has prevented its manufacturers from growing.
It is the type of injury that was alleged in the Georgia case.
But, that type of injury is an injury which the State of Georgia itself said in its bill of complaint in this case and understandably so, is not measurable by a money calculus.
It simply does not present a case or controversy, it is not a justiciable issue and it certainly is not an issue which under any rational system of law could be tried to a jury.
There is no way and to segregate the economy of a State from the economy of the United States, actually from the standpoint of proof with the models that econometricians have made, it would be easier to measure the effect upon the national product of the United States than it would be a upon a State.
The economy of a State is so dependent upon the surrounding State.
It simply does not present a justiciable issue.
Therefore the only relief that could be met would be an injunction against the wrong that has been directed against that State.
Now the final reason is this.
It was articulated by the dissenting judges in Georgia and the opinion of the court that met the views of the dissenting judges, makes so very clear the principle upon which I rely.
In Oklahoma against Atchison, Topeka & Santa Fe, a bill of complaint was filed in this court alleging that the railroad had overcharged the citizens of Oklahoma rates and it alleged that the industry of Oklahoma, the oil industry, the building industry, the construction industry of Oklahoma as a young growing State, was being seriously affected by this overcharge.
And that the overcharge of these rates was adversely affecting the economy of the State and would hinder its growth and development.
Charges which are virtually identical with the charges that are made in this case, but not with those in Georgia, this court dismissed the bill holding that the gravamen of the complaint was simply the allegation of injury to individual citizens of the State and each of those citizens had a remedy.
Now, when the Georgia case came, allegations there were also made that the economy of the State had been hindering this growth, and had been seriously and adversely affected.
But this Court construed in meeting the allegations on the decision of Oklahoma.
This Court construed and twice specifically stated that it construed the allegations in the Georgia Bill to allege a conspiracy directed at Georgia as a State and further that the conspiracy there alleged was to establish discriminatory rates, discriminating against Georgia geographically as a State, so as to erect a trade barrier around that State and disadvantages economically vis-à-vis the other states of the Union.
Now, there is extraordinary allegation, the court found -- was the type of allegation that was not present in the Oklahoma case and it did give Georgia standing if it could proved those allegations for an injunction, not for damages, against the continuation of that conspiracy.
Unknown Speaker: And you agree with that?
Mr. Francis R. Kirkham: Yes, I agree with that.
Unknown Speaker: And what are the (Inaudible) to prevent a irreparable injury?
Mr. Francis R. Kirkham: It would be to prevent irreparable injury and one of the injury --
Unknown Speaker: What kind of injury would the defendant, Georgia take?
Mr. Francis R. Kirkham: The allegation --
Unknown Speaker: What types of injury to its economy or its citizens?
Mr. Francis R. Kirkham: Well, there were two types of injuries, one was the injury that Georgia suffered by the excessive rates paid by railroads owned by it and by institutions that it owned.
And the other type of injury was the injury to Georgia as an organized community.
Unknown Speaker: Well, what kind of an injury is that?
Mr. Francis R. Kirkham: Well --
Unknown Speaker: And how would that be manifested?
What would be a symptom of it?
Mr. Francis R. Kirkham: Symptom of it?
I would -- it would be very difficult to prove Mr. Justice, but Georgia alleged that its industries had been hindered.
That in the North industry had grown and into the South, it had been retarded.
Of course, when they came to prove, then the master held that they --
Unknown Speaker: (Voice Overlap) individual industries and the citizen?
Mr. Francis R. Kirkham: It would be and somehow you would finally aggregate those.
Unknown Speaker: And, or you have just to walk up (Inaudible).
Mr. Francis R. Kirkham: It called it its economy.
Unknown Speaker: And you would agree that the State is getting an injunction.
Mr. Francis R. Kirkham: Well, I would agree that Georgia, I would agree that Georgia and the injunction that this Court said, could not grant it in Georgia, does not operate as a precedent for an injunction in this case.
Unknown Speaker: What if you were wrong about that?
Mr. Francis R. Kirkham: Mr. Justice, I cannot be wrong about that because the written words --
Unknown Speaker: You mean -- the Court pointed the essential --
Mr. Francis R. Kirkham: Oh! No.
No, I am talking about the distinction of the Georgia case from this case.
Unknown Speaker: (Inaudible) at one point the State can get an injunction in this case because there is some kind of an injury that you want to prevent irreparable --
Mr. Francis R. Kirkham: It has no bearing on this case, it has no bearing on this case because when you call one -- the State --
Unknown Speaker: Well, you still have to be praying if there is some injury to the State.
Mr. Francis R. Kirkham: That is true.
Unknown Speaker: To get an injunction.
Mr. Francis R. Kirkham: I am simply saying, Your Honor that the State does not have standing to sue parens patriae, it is another reason for dismissal, but as far as its impact upon this case is concerned, it is negligible.
Unknown Speaker: But just assuming the State does have standing and it has the legal right to an injunction would it issue the State --
Mr. Francis R. Kirkham: What?
That -- that an injunction can issue in this case Mr. Justice.
If an issue under count, one of the complaint under Section 16.
Unknown Speaker: Well, I know but -- let us not assume that it can get an injunction and its parens patriae --
Mr. Francis R. Kirkham: It would be no difference in the reliefs that they could get.
I would simply say this, that a Court in the appropriate administration of justice would say the State sues as parens patriae and as a proprietor.
We, as parens patriae, it does not have standing to sue but it has the right to obtain the same relief under count one and so regret the injunction.
The problem of measuring the economy does not come until you reach the area of damages.
Unknown Speaker: I understand that but --
Mr. Francis R. Kirkham: The injunction is against the continuance of the conspiracy.
Unknown Speaker: But that -- if the State can get an injunction here I assume you are saying the Court, some Court would be saying that at least they would be saying that there is an injury in the State which the injunction must issue to prevent -- .
Mr. Francis R. Kirkham: Yes and I think that would be bad law.
Unknown Speaker: I understand that.
Let us assume that you are wrong.
Mr. Francis R. Kirkham: Very well.
Then it has no effect upon the result in this case.
Unknown Speaker: Because even though the State is injured as a State and its economy or is somehow -- you just cannot measure it.
Mr. Francis R. Kirkham: That is right and the only wrong that the petitioner complaints off as injuring in the State is the conspiracy.
And the conspiracy approved may be enjoined.
Unknown Speaker: But the Court below did not decide it on the --
Mr. Francis R. Kirkham: No, no.
It did not --
Unknown Speaker: It is not measurable.
Mr. Francis R. Kirkham: It did not reach the points with respect to parens patriae.
I did not find it necessary to and most respectfully I submit that it is not necessary to reach those points.
Now, if I may say just a word in closing, I am not unmindful of the policy argument that petitioners urged before this Court with respect to liberal enforcement of the antitrust laws.
I think it can be no disagreement with the fact that the Sherman Act expressed its principles just as a fundamental to our economic life as the Bill of Rights does for civil liberty.
But as I pointed out earlier, it has been held from the beginning that the remedies under the Sherman Act are the exclusive remedies for its enforcement.
Cases like J.I case and Bevin and Solomon to which Mr. Blecher referred are cases where the Court has as it always has supplied from its arsenal of actions a remedy for any person who has suffered from a violation of his rights enacted by a statute where the statute does not provide for a remedy.
But here the statute does provide for remedies and they have been held over and over to be exclusive.
The other point is I think that factually, Mr. Blecher I think is mistaken.
This Court is familiar with the statistics that are handed down by the administrative office.
So in the last ten years, the number of private, treble damage actions filed every year in this country has nearly quadrupled.
And as of last June, there were over 2,000 antitrust cases pending in the Federal Courts of this country.
And as all of us who are familiar with the nature of those cases go, there are many, many a class actions, and the result is that there are literally millions of plaintiffs before the Courts of this country today in treble damage, antitrust actions.
Unknown Speaker: Do you think the federal -- that Congress had given these State standing to sue on behalf of its citizens to recover treble damages?
Mr. Francis R. Kirkham: Yes, I think so.
Unknown Speaker: And there would be a ground of facts -- grounds for a future controversy?
Mr. Francis R. Kirkham: I think they could still -- probably if the Congress could give the States a right to sue for damages to its citizens.
I do not think it is likely that Congress would, it is most unlikely that it would.
Judge Rehal (ph) in one of these cases has held that the State can exercises its powers, the ancient powers of the king, parens patriae to as a protector of incompetences, idiots and the lunatics.
And he had said that any antitrust defendant, potential defendant who does not have a size large enough to make him wish to litigated is non sui juris, therefore incompetent and therefore the State can sue this decision I think will be appealed.
But the last thing that I do wish to emphasize is that, in fact, the remedies provided by Congress are providing a very formidable arsenal for the enforcement of the antitrust laws.
Chief Justice Warren E. Burger: Thank you, Mr. Kirkham.
Mr. Blecher, you have 14 minutes left.
Rebuttal of Maxwell M. Blecher
Mr. Maxwell M. Blecher: Thank you Mr. Chief Justice. Respondent’s suggestion that the Georgia case did not dispose off this because the claim for damages in the Georgia case was solely with respect to Georgia’s own railroads, its proprietary interest as a respectfully submit it, clearly refuted by the language of the Court itself.
And majority opinion holding as it did that Georgia may maintain this sued as parens patriae acting on behalf of her citizens was the language of the holding.
And in making that holding the very next phrase is we treat the injury to the State as proprietor merely as make weight.
So it seems perfectly clear when you read the allegations of the Georgia petition that they alleged one total injury to the economy, to the citizenry of the State.
And then reaching that analysis, I think, it perfectly obvious that a State is for purposes of bringing a parens patriae lawsuit, whether it be injunction or damages, nothing more than the aggregation of its people which as Mr. Justice White points out when world together is called the economy or welfare of the community.
It perfectly obvious, it seems to us that the Georgia case said that that total controversy rose above the question of a mere local or private right.
And that Georgia acting on behalf of its people was entitled to litigate the question of recovery of damages, parens patriae in addition to the claim for injunctive relief.
And carrying that to its logical extension, if as respondents contend, the parens patriae doctrine is totally unnecessary because the sweep of Clayton 16 is sufficiently broad to permit suits for injunctive relief wholly apart from the doctrine of parens patriae, then I respectfully submit the entire question presented to this Court in Georgia was futile.
It is a waste of the Court’s time to present to it an issue as to whether a justiciable controversy existed because the question litigated in Georgia is whether that ball of wax, that economy, that general interest of the State, constituted a property right capable of protection by both damage relief and injunctive relief.
And if there has been an injury, if there has been an injury to the State that permits it to acquire injunctive relief.
Then as I pointed out in our opening, it seems to me we have long passed that day where that injury is not susceptible of some reasonable monetary estimate for purposes of recovering damages.
And the starting point has to be, the overcharge to the consumers as a whole.
Now, for these reasons, we think that the Ninth Circuit’s opinion must be reversed.
And let me leave you with this final thought if I may, while it is true that there are a large number of antitrust cases as Mr. Kirham correctly points out pending in the District Courts, most of them are the result of singular type litigation following Government complaints and indictment.
And the impact on the Courts in those cases is going to be substantially reduced I submit by permitting, instead of the aggregate number of cases, a single case by a State through generally an elected or appointed responsible official to recover damages for a pervasive price-fixing agreement.
And while the respondents had many technical legal arguments which are designed to preclude the recovery by the State in a case such as this, they have not answered the question which I say to you is of singular importance.
And that is Mr. Justices, what happens to the money, they have acquired as a result of this illegal conduct.
If you follow the path they have chartered for you, they retain it, in the antitrust enforcement and this Bill Of Rights to which Mr. Kirham refers suffer enormously.
I say the case price for reversal.
Justice Byron R. White: Let me just ask you, if -- your theory is that the injury to the State is separate from that of the consumers?
Mr. Maxwell M. Blecher: I say it is separate.
I think Mr. Justice White --
Justice Byron R. White: Well, at least you claimed an injury to the State?
Mr. Maxwell M. Blecher: Yes.
Justice Byron R. White: And if the State recovered, could any consumer recover again?
Mr. Maxwell M. Blecher: I think that would --
Unknown Speaker: I mean for his separate injury?
Mr. Maxwell M. Blecher: I think that would depend upon a clarification of Georgia that this Court would be required to make and consistently Mr. Justice --
Justice Byron R. White: Well, what is your answer to it, could he or could he not?
Mr. Maxwell M. Blecher: I would think that the appropriate mechanism would be for the State to recover the money, to keep it and assume that the citizens are benefited by the return of the money to the State.
Justice Byron R. White: And so you would dismiss the citizen’s suit?
Mr. Maxwell M. Blecher: Right.
On the other hand --
Justice Byron R. White: So it really is a -- his damages really are being recovered by the State?
Mr. Maxwell M. Blecher: In one form or another.
But recognizing the problems that might be present by the first approach, as I suggested to Mr. Justice Stewart, the State is not antithetical to the view that it recover under what we think is the alternate, parens patriae approach.
And that is recovered as trustee with an obligation imposed upon it to return the money to those people who can present an appropriate claim through the machinations of State or mechanics of State Government.
Justice Byron R. White: But neither of your approaches then, what the State is recovering is money representing damages suffered by the citizens?
Mr. Maxwell M. Blecher: No.
No, I would not say that Mr. White.
Under the second, theory clearly it recovers the citizen’s money.
Under the first I think that one of the measurements of the impact upon the economy of the State or upon its general welfare has to be the total overcharge to the people and so I take it --
Unknown Speaker: But you would still the bar the citizen’s suit.
Mr. Maxwell M. Blecher: Not under the first approach --
Unknown Speaker: What about you said you were.
Mr. Maxwell M. Blecher: No, I – then I misspoke --
Unknown Speaker: So you would review -- if the state kept the money on its treasury the citizens should be able to sue for its own injury?
Mr. Maxwell M. Blecher: That is correct and that is what Judge Pence held in this case.
That is what the District Court held.
Unknown Speaker: Alright, thank you, thank you for it and I just wanted to make that clear.