PFIZER INC. v. INDIA
Legal provision: Clayton
Argument of Samuel W. Murphy, Jr.
Chief Justice Warren E. Burger: We will hear arguments next in 76-749 Pfizer Incorporated against Government of India and others.
Mr. Samuel W. Murphy, Jr.: Thank you!
Chief Justice Warren E. Burger: Mr. Murphy I think you can proceed whenever you are ready.
Mr. Samuel W. Murphy, Jr.: Mr. Chief Justice may it please the Court.
These cases present the question of whether foreign governments may sue for treble-damages under our antitrust laws.
Or precisely the question is, did Congress intend to include the sovereign governments of foreign nations among those 'persons' for whom it created a treble-damage remedy in the Sherman Act?
There are three cases here which were consolidated for appeal.
They are part of the so-called antibiotic antitrust litigation which at one time consisted of upwards of 160 damaged cases.
The plaintiff's respondents here are the Imperial Government of Iran, the Government of India, the Republic of the Philippines.
The principal allegations and their complaints are the same.
Each of them alleges the defendant's fixed prices and otherwise suppress competition in the manufacture and sale of certain antibiotic drugs in the United States and abroad.
Each of them alleges that it purchased antibiotics which were exported from the United States.
Each of them alleges that it sues on behalf of various classes, one of which is described as all individual consumers within their respective country.
And finally, each of them alleges that it is an independent sovereign nation.
The issue was raised in the District Court on motions addressed to the pleadings.
The District Court decided that foreign nations may maintain treble-damages resting its decision primarily on the Judge's perception that, that was necessary as he put it to the effective enforcement of the antitrust laws.
His decision was certified for immediate appeal on a panel of the Eight Circuit affirmed.
The panel did not rest its decision on the same ground that District Court had but instead relied principally on this Court's decision in Georgia against Evans holding that states are persons for treble-damage purposes.
One member the panel filed a concurring opinion in which he observed that in his view Congress had no intent on this question whatsoever.
He thought the result was dictated by this Court's Georgia against Evans decision but he recommended that Congress should examine the question and clarify it.
There was a rehearing en banc after which six of the eight active Judges of the Eighth Circuit adopted the panel's opinion.
Three of those six also adopting the concurring opinion.
There were two dissents, the dissenters relied on the Court's decision the United States against Cooper in which it was held that the United States is not a person.
And the dissenters observed that in their opinion it would be anomalous to hold that the United States could not sue for treble-damages but a foreign sovereign could.
I think it is fair to say that neither the District Court nor the Court of Appeals made an independent examination of the legislative history and instead they looked entirely to this Court's two decisions which I have mentioned for guidance.
Now, if the Court please, we have a straight-forward question of congressional intent here.
There is no issue in this case about whether a foreign nation may sue in United States Courts if it has a proper client.
Of course it can, the question is, did these foreign nations have the claim they pleaded?
And that in turn depends upon whether Congress gave it to them.
Our argument begins with the language of the statute which confers the treble-damage remedy on any person who shall be injured by reason of a violation and so forth.
It is our contention that language just read in its ordinary and natural sense would not be taken to include sovereign governments and we have cited in our brief three decisions by this Court in which the Court made a similar observation, the Fox case in 1876, the Cooper case itself and United Mine Workers in 330 United States.
Now, if the Court please we believe that there is evidence here developed at some length in our briefs that Congress in 1890 had a pretty clear understanding of the term 'person' and a pretty clear understanding of what that meant and did not mean.
One point that we rely on as such evidence is the statute of 1871 in which a Congress says, this Court's prior opinions have set -- created it's own dictionary and an amendment in that statute, when the revised statutes of 1874 were enacted.
The 1871 statute had defined a person by saying that it may extend and be applied to Bodies Politic and corporations unless the context indicates a more limited meaning.
When the revisers of the statutes submitted their report to Congress they suggested that the phrase Bodies Politic be deleted on the ground that it introduced an unnecessary ambiguity and that, with that ambiguity it might be thought in future statutes necessary expressly to exclude governmental entities.
For that purpose the phrase was deleted from the definitional statute when it was reenacted in 1874 so that it read then, and at the time of the Sherman Act and now that the word 'person' may extend and be applied to corporations and associations unless the context indicates a more limited meaning.
We have cited in our brief evidence that senators who were the principal draftsmen of the Sherman Act were familiar with that little bit of legislative history.
Specifically senators Edmunds and Hore.
And when those senators wrote their definition in the Sherman Act they nailed down the fact that person must include corporation.
That is to say the 1874 statute made it allowable, person may extend, but in Section 8 of the Sherman Act that is written, person shall be deemed to include corporations.
Now when Senator Edmunds introduced the Sherman Act on the floor of the Senate, he said that the legislation is clear in its terms and definite in its definitions.
The definition of person is the only one in the Sherman Act, and we submit that it is a matter of logical construction.
If the Congress in the light of the change and the definitional statute thought it necessary expressly to include corporations which might have been included as a matter of discretion in any event.
It must follow that they had no intention whatever to include sovereign Government.
Justice John Paul Stevens: Mr. Murphy would not your argument require as to overrule Georgia against Evan?
Mr. Samuel W. Murphy, Jr.: No, Justice Stevens we do not think so.
The terms of the problem we are discussing we submit that first Georgia was not really a Sovereign.
Georgia was not able to exercise sovereignty over the problem it was faced with.
A combination and restraint of interstate trade.
Justice John Paul Stevens: But was it a corporation or a person as defined in Section 8 of the Sherman Act?
Mr. Samuel W. Murphy, Jr.: No, my argument Justice Stevens is not that the definitional statutes are conclusive.
Our argument is that they are very Weighty evidence of what Congress intended and that should take a fairly clear expression of congressional purpose to read a government into that word.
Now in the Georgia case I think there is evidence that the Supreme Court intended to include Georgia and the other states.
One of the problems that Congress was dealing with in the Sherman Act was the inability of states to reach combinations and trust.
Senator Sherman used as an example to illustrate the need for the statute.
The inability of the State of New York to reach the Sugar trust because if members were beyond then territorial jurisdiction of the State of New York so that Congress had very much in mind and we both submit -- intended to create a remedy for limited state jurisdiction which was involved in the Georgia case.
Chief Justice Warren E. Burger: Do you see any constitutional objection counsel to having the united states if it elected to enter into conventions or treaties with certain countries granting them the rights the Eighth Circuit has given here, granting it by treaty or convention either on a reciprocal basis or for any reason the Executive Branch and the Congress agreed on?
Mr. Samuel W. Murphy, Jr.: No Sir, I do not believe I do, and I do not see any reason why Congress had it thought it desirable to do so, or if it should think it is desirable to do so now, could not legislate that result.
Mr. Samuel W. Murphy, Jr.: In other words, if other countries did not grant the same right to the United States then we could deny it to them.
Mr. Samuel W. Murphy, Jr.: Yes Sir.
It seems to me that one of the very strong points in our position, in just an ordinary practical sort of way is it simply is improbable that a Congress which intended to exclude the United States from the treble-damage remedy as the Cooper case decided that did, could have intended to give that remedy to a foreign sovereign because the interest of the United States government are closely associated, perhaps indistinguishable from those of the American public for whose protection the antitrust laws were passed whereas the interests of foreign sovereigns may and frequently are divergent and on occasion opposed to those interests.
And following along on that line of thought it seems to me more than just improbable but highly-unlikely that a Congress with that sort of intention might have intended to recruit foreign sovereigns to assist in the enforcement of our antitrust laws which was the basis for the District Court's decision and as I read it is essentially the argument which the Department of Justice has made in it's amici's brief.
Justice John Paul Stevens: Particularly I suppose with the situation in 1890 recruiting the kingdom of Spain, with whom we are going to war eight years later and the United Kingdom with whom we have almost gone to work 20 years before over the Alabama claim.
Mr. Samuel W. Murphy, Jr.: Exactly Sir.
The speeches of Congressmen who were prominent in this legislation at that time which we have cited in our briefs, I think to make it very clear that what they were interested in doing was protecting domestic consumers, protecting the domestic market and they had no interest whatever in protecting foreign governments.
In short if the Court please, it appears to us that there is ample evidence in the legislative history of a congressional intent not to make the treble-damage remedy available to foreign nations, whereas it seems to us there is evidence in the legislative history of an intent to make it available to State governments.
Now the decision of the Eighth Circuit at least we suggest brings about a peculiar result.
Peculiar in the sense that it gives, for example, the imperial government of Iran a right to sue for treble-damages when the United States government now can sue only for actual damages.
And we submit that an intent to bring about that result or not being imputed to Congress without some very clear and strong evidence, but that is what it intended to do.
Chief Justice Warren E. Burger: Would it have included in North Vietnam during the recent hostilities, while those hostilities were ongoing?
Mr. Samuel W. Murphy, Jr.: Well, Your Honor, one of the difficulties with the Eighth Circuit's result is it confers the remedy on a foreign nation whether it is friend or foe.
Now I am sure that reasons could be thought of to keep the government of North Vietnam out of Court while hostilities were going on, but perhaps not.
And any government in the world will be entitled to sue, unless the Eighth Circuit is reversed and we ask that the Court do so.
Chief Justice Warren E. Burger: Well, nothing would have prevented the North Vietnamese from hiring American lawyers to bring such a lawsuit, will it?
Mr. Samuel W. Murphy, Jr.: Well, indeed Your Honor one of the complications we had in this litigation was one of the original foreign government plaintiffs was the Republic of Vietnam, and in the midst of the litigation that government disappeared, was swallowed up, by my view, by North Vietnam and the question was presented, should the Vietnam case be dismissed or suspended?
There was counsel in Court for Vietnam, whatever Vietnam was at that time trying to keep this case alive.
The District Court and the Eighth Circuit held that it should be dismissed.
Chief Justice Warren E. Burger: In other words a suit of this kind is not barred under the Eighth Circuit opinion if we either have broken-off diplomatic relations or have no diplomatic relations for any reason, they can still sue.
Mr. Samuel W. Murphy, Jr.: Well, if we have no diplomatic relations at all Mr. Chief Justice it may be that our Courts would not recognize that government as an entity which would be entitled to sue.
Chief Justice Warren E. Burger: Well, recognition and the government as such and the presence of diplomatic representatives are not always exactly the same.
Mr. Samuel W. Murphy, Jr.: Well, quite so, Sir.
Justice Lewis F. Powell: Mr. Murphy, are any of the petitioning companies in this case subject to the jurisdiction of respondent countries?
Mr. Samuel W. Murphy, Jr.: I believe so Justice Powell.
Plaintiffs allege in their complaints, each of the plaintiffs allege in its complaint, that all five of the petitioning companies are engaged in a pharmaceutical business within those countries.
Justice Lewis F. Powell: Any of those countries have their proximate equivalent about antitrust laws?
Mr. Samuel W. Murphy, Jr.: Yes sir, they do.
We have cited them in our briefs.
Justice Lewis F. Powell: Have any suits been brought in those countries against these particular United States covenant?
Mr. Samuel W. Murphy, Jr.: Not to my knowledge.
We have pointed out in our briefs that the government of West Germany which has filed amicus has commenced an investigation under its equivalent of the antitrust laws against one of the petitioning companies.
A copy of that letter has been lodged with the Court.
Justice Lewis F. Powell: Is there any evidence that the United States government would have reciprocal rights to sue in any of these countries?
Mr. Samuel W. Murphy, Jr.: There is no evidence in this record and I am not sufficiently familiar with the laws of those countries to answer the question.
With the Court's permission I would like to reserve time for rebuttal.
Chief Justice Warren E. Burger: Very well Mr. Murphy.
Chief Justice Warren E. Burger: Mr. Rigler.
Argument of Douglas V. Rigler
Mr. Douglas V. Rigler: Mr. Chief Justice may it please the Court.
There are at least five compelling reasons for including the Congress intended foreign governments to have standing to obtain relief when they are the victims of antitrust violations launched at them from within the United States.
Conversely, there is no reason to suppose that Congress intended to create an area of damaged-free conspiracy so that American companies could prey on friendly foreign governments engaged in making purchases to satisfy their needs in this country.
Chief Justice Warren E. Burger: Is there any special significance to your use of the adjective friendly --?
Mr. Douglas V. Rigler: No there is not, Your Honor.
Chief Justice Warren E. Burger: -- but Cuba could, Cuba or the --
Mr. Douglas V. Rigler: Turning to one of the questions that was just raised, it is our view that without diplomatic relations a foreign government's right to enter the Courts of this country would be governed by rules of comity and that they would not have that privilege extended to them.
It is a reciprocal privilege based on comity.
Indeed this Court said and Cuba v. Sabbatino --
Chief Justice Warren E. Burger: Taiwan could bring a suit, but the other, China could not, is that your suggestion?
Mr. Douglas V. Rigler: That is my suggestion Mr. Chief Justice.
Chief Justice Warren E. Burger: Does it not that bring the Courts pretty close to getting involved in political questions of the highest magnitude --
Mr. Douglas V. Rigler: I don't believe so Your Honor.
Chief Justice Warren E. Burger: -- to make decisions of that kind?
Mr. Douglas V. Rigler: I believe the test would be very simple, that is, whether or not we had diplomatic relations with the foreign government.
I do not believe that an extensive judicial determination would be required.
Chief Justice Warren E. Burger: Do you agree Mr. Murphy that United States could enter into conventions or treaties with other countries granting those sovereigns the right to sue for treble-damages if we have the same right In their Courts?
Rebuttal of Samuel W. Murphy, Jr.
Mr. Samuel W. Murphy, Jr.: Well, it is our position Mr. Chief Justice that the right for foreign governments to sue here is already established so that there would be no necessity for such a treaty.
However, we have entered into treaties with countries such as West Germany which brought their treaty to your attention in their amicus brief.
Chief Justice Warren E. Burger: There would be nothing to prevent the Congress of the United States from -- if the Eighth Circuit opinion should stand nothing to prevent the Congress from terrifying it so that right to sue for treble-damages did not exist and then do you see any problem about negotiating treaties or conventions of its reciprocity.
Mr. Samuel W. Murphy, Jr.: If the Eighth Circuit opinion is affirmed there would be no problem in the Congress entering into additional treaties or approving additional treaties to specify the mechanics as to how those rights might be gained or amplified.
Indeed, however, our State department through the Secretary has appeared as we note in our brief repeatedly urging other countries to adopt their antitrust principles.
And one of the points we would make is that it is simply incomprehensible that we could go urge other countries to adopt our philosophy and throw them out of our own Courts when they are over here to seek redress for --
Justice William H. Rehnquist: But the Secretary of the State in 1890 was not wandering around the world urging other countries to adopt the Sherman Act, was he?
Mr. Samuel W. Murphy, Jr.: Not to my knowledge, Mr. Rehnquist.
Justice William H. Rehnquist: And is that not the time we take congressional intent as of?
Mr. Samuel W. Murphy, Jr.: Yes it is, however among the five compelling reasons which I hope to cite.
We do come to the point that Congress intended foreign governments to be included in 1890.
I disagree very strongly with defendants argument that that was not the intent of Congress in 1890.
Justice William H. Rehnquist: But how does the conduct of the Attorney General in recent years and urging other countries to adopt out antitrust principles there on the intended Congress in 1890?
Mr. Samuel W. Murphy, Jr.: The recent conduct of the Attorney General surely could not bear on the intended Congress in 1890.
Chief Justice Warren E. Burger: What policy or considerations or let me just back up a little, of necessity, your argument must be that Congress intended this result that the Eighth Circuit reached.
I take it, that is the premise of your whole case.
Mr. Samuel W. Murphy, Jr.: Certainly that is a principle premise.
Justice William H. Rehnquist: What policy considerations would impel the Congress of the United States to grant to foreign -- other sovereign nations rights which it did not grant to the United States itself?
Mr. Samuel W. Murphy, Jr.: Well, principles of comity plus the fact that not only where these rights granted.
Justice William H. Rehnquist: Comity is usually something like reciprocity, is it not?
Mr. Samuel W. Murphy, Jr.: Yes Sir.
Justice William H. Rehnquist: There is no reciprocity in my hypothetical.
Mr. Samuel W. Murphy, Jr.: Alright.
With respect to the Cooper case which is the case denying those rights to the United States itself, the Cooper result was a direct and a deliberate congressional intent not to extend the damage remedy to the United States and that deliberate intent was explicitly stated by Senator Sherman who stated that the damage remedy was not to extend to the United States at all.
That appears on page 24-61 and again on 24-63 of 21 Congressional Record.
Senator Sherman was (Inaudible) to distinguish between the first section of his bill which allowed the United States alternate remedies, criminal remedies, injunctive remedies, seizure remedies, and he said that these remedies were made available for the US.
It turned upon the perceived obligations of the sovereign to enforce its own laws without reference to the added stimulus of the damage remedy.
Then, having distinguished the remedy made available solely to the US, he said that the damage remedy was to be made available to all other parties as he put it, so that the Cooper result is a direct reflection of the intent of the sponsors as a bill.
All other parties were to have the benefit of the bill.
Moreover the treble-damage remedy has been extended to persons, to states, to foreign corporations, and since this Court has said in Dunhill nation enters this country in a commercial capacity, it is to be treated the same as every other traitor subject to the same structures of the marketplace; subject to the same penalties of the marketplace.
It would be very unfair then to deny in any remedy when there are multi-district Courts set in Georgia by a violator of the antitrust laws.
Justice Potter Stewart: Mr. Rigler, you start up by telling us that there are at least five compelling reasons why your possession is correct, and I am sure by our interrogation we have gotten you to -- you have probably given us all the reasons but not in one, two, three, four, five --
Rebuttal of Douglas V. Rigler
Mr. Douglas V. Rigler: I am not sure that I have covered them, but I will cover them briefly, Mr. Justice Stewart.
First in 1890 Congress was aware of the prevailing canon in general rule that a sovereign, a foreign government may take advantage of a general remedial statute whether or not it is just named as a person or purposes of that statute.
Second, in Georgia v. Evans this Court recognized that governments were included as persons within the meaning of the Sherman Act.
The rationale of that decision that these governments not withstanding their sovereignty within their own territory, within their own area of sovereignty might have their own antitrust statutes, nonetheless they would be denied any effective relief without reference to the federal statute.
Third, in both Cooper and in Georgia, this Court set forth five aids to construction with reference to each of those five aids we satisfy the test and should be granted standing.
Fourth and normally it would be created but extending the right to foreign corporations which are 100% owned by foreign governments and then denying that same standard to the government itself in making its direct purchases.
We know coincidentally that this would favor the eastern block nations, to socialist and communist block nations which carry out more of their trading to the mechanism of the State trading corporation and would disfavor our traditional western allies who are more apt to purchase directly.
Justice William H. Rehnquist: With foreign corporations though at least that they are wholly owned by the government, this is a two-way street, they are suable as well as capable of being sued under your analysis, right?
Mr. Douglas V. Rigler: The fifth reason I was about to come to Mr. Justice Rehnquist was Dunhill which I have mentioned previously and it seems to us that the government itself may be suable as you put it under the principles enunciated in Dunhill.
Justice William H. Rehnquist: So your feeling is that if your position were adopted not only could the government of Iran sue for treble-damages, but it could be sued in the Courts of this country for treble-damages.
Mr. Douglas V. Rigler: For its commercial activities I believe that this Court has stated that rule and indeed since the Court stated that rule it has been incorporated in the Foreign Sovereign Immunities Act.
Justice William H. Rehnquist: We have not yet decided whether or not the municipality in the United States is covered by the antitrust laws defendant, let alone, whether or not a foreign nation is.
Mr. Douglas V. Rigler: I heard the City of Lafayette's argument if it is that to which you refer Sir.
However, it seems to me that it is clear that a foreign government is subject both under the Dunhill rationale and rule announced by this Court and under the Foreign Sovereign Immunities Act that for its commercial activities it would be subject to our law, by the way it is interesting to note that in the house report on the Foreign Sovereign Immunities Act a commercial activity is defined as the purchase by the armed services of a foreign government of goods and commodities in this country, and of course some of the varied purchases from which we are attempting to recover our purchases of medicines, of antibiotics bought for the armed services of the Philippines among other governments.
Justice Thurgood Marshall: Is there anything in 1890 that mentioned foreign government?
Mr. Douglas V. Rigler: There is Mr. Justice Marshall.
In responding to a question about the constitutional foundation of his bill, Senator Sherman referred to Article III Section 2 and pointed out that this gave the federal Courts wide latitude to resolve disputes, and then he enumerated the type of disputes and as one of those disputes he enumerated disputes between citizens of this country and the foreign nations.
And it seems to us inconceivable that on the one hand he would say, here is a constitutional basis from our bill, this among others, and yet turn around and say but they are not to receive the benefits of a damage remedy.
Justice Thurgood Marshall: Is there anything that Senator Sherman said other than I want to protect American people, did not he said it over-and-over again?
Mr. Douglas V. Rigler: No, he did not as a matter of fact.
Justice Thurgood Marshall: He said he will protect the foreign governments?
Mr. Douglas V. Rigler: He did not say specifically foreign governments, however, he referred, he did not -- Senator Sherman did not referred to the protection of the American people as opposed to the exclusion of foreign interest.
Justice Thurgood Marshall: I did not say that.
Did he say he will protect the American people.
Mr. Douglas V. Rigler: I do not know.
He did not.
Justice Thurgood Marshall: What did he say he was protecting?
Mr. Douglas V. Rigler: He said that he was trying to make effective pre-existing remedies both common law and state remedies on page 21 Congressional Record 24-60, he gave a speech which outlined his philosophy of the bill, and his philosophy was that the individual remedies then existing for antitrust defenses simply were ineffective to control the trusts.
Justice Thurgood Marshall: He was talking about American people.
Mr. Douglas V. Rigler: No Sir, because he went on to say that he referred to the foreign commerce of the United States --
Justice Thurgood Marshall: That was taking advantage of the people.
Mr. Douglas V. Rigler: No, absolutely not right.
Justice Thurgood Marshall: Yes, he was.
Mr. Douglas V. Rigler: Mr. Justice Marshall, I respectfully urge you to return to the reference at 24-60 -- 24-56 because repeatedly he referred to foreign commerce of the United States in addition to which the bill itself not only mentions foreign commerce but as the Eighth Circuit noted trade and commerce with the foreign nations found its way into the statutory language and it seems to us that while respondents argue we were not concerned.
Justice Thurgood Marshall: Well, why did not the statute say persons and foreign governments?
Mr. Douglas V. Rigler: It did say foreign corporations by the way.
Justice Thurgood Marshall: Why did not it say, persons and foreign governments?
Mr. Douglas V. Rigler: Probably because --
Justice Thurgood Marshall: It said, persons.
Mr. Douglas V. Rigler: It said, persons include.
Justice Thurgood Marshall: And when it said, persons, that included corporations, because this Court had already said that corporation were included in the word 'persons' in the Fourteenth Amendment.
So corporations were meant to be included, but I do not know who else was meant to be included in persons.
Mr. Douglas V. Rigler: Well, surely governments were meant to be included in persons.
Justice Thurgood Marshall: I thought this Court said the US government was not.
Mr. Douglas V. Rigler: But this Court said that State governments were and this Court has recognized the right of Municipal Government.
Justice Thurgood Marshall: But he said US government was not.
Mr. Douglas V. Rigler: But that is because Senator Sherman specifically excluded in the legislative history, specifically indicated why the United States government was to be excluded.
Uknown Speaker: Well, do you equate -- I was going to say Texas, but let us make it California.
Do you equate California whether as a sovereign in the sense of Yugoslavia or --?
Mr. Douglas V. Rigler: For purposes of the rationale in this Court's decision in Georgia v. Evans I certainly do.
Uknown Speaker: But then to pursue Mr. Justice Marshall's inquiry why would the Congress pinpoint foreign corporations as being included, and almost clearly exclude any others.
Was that not exclude under the usual rules of construction?
Mr. Douglas V. Rigler: No, because the usual rule, that is the point I want to make, the usual rule in 1890 was that sovereigns are included and this Court said so in 1893 a contemporary case.
Uknown Speaker: Included in the term, Foreign Corporations?
Mr. Douglas V. Rigler: Included in the term, Persons, whether or not if the definition said Persons and Persons may include natural persons and corporations.
If the statute said nothing more and it is a remedial statute then foreign governments, sovereigns are entitled to the benefits of that statute and that is exactly what this Court said in Stanly v. Schwalby.
And I might point out that in that instance it was the United States which was taking advantage of the remedy and the United States was a foreign sovereign because Stanley v. Schwalby was a case under Texas law and this Court said, although not mentioned by name in a remedial statute it does refer to persons generally, the United States may take advantage of it.
And that rule was announced only three years different from the passage of the Sherman Act.
And we have referred to the treatises and to the authorities specifically Black on statutory interpretation, the 1896 edition, which repeated that role.
Justice William H. Rehnquist: Did Stanley comment on the SR1 the definition of person in the revised statutes?
Mr. Douglas V. Rigler: No it did not.
The revised statute it is, Mr. Justice Rehnquist, we do not believe support the argument of the petitioners here for several reasons.
Number one, this Court could not have reached it's result in Georgia if the defendants were correct in their argument about their applicability nor could this Court have reached the result it did in US v. California rising under the shipping act to US v. Nardone under the Communications Act because they all used ‘persons’ an in approximately in the same sense as it was done in the Sherman Act.
Secondly if you take the language, the very language upon which the petitioner's purport to rely, the fair and ordinary reading indicates that Congress specifically would have had to include governments in order to read them out of the statute.
Let me read exactly what the reviser said.
It requires that the draftsmen in the majority of cases of employing the word ‘person’ to take care that states, territories, foreign governments, etcetera, appear to be excluded.
But that is not what senator Sherman and the other sponsors of the bill did.
They took no care to see that they were excluded.
They wrote a definition that was inclusive.
Justice William H. Rehnquist: Well why wasn’t that the draftsmen complaint about the existing state of the law before SR1, rather than how it would be if SR1 was (Voice Overlap).
Mr. Douglas V. Rigler: I do not believe that that’s a fair reading of the statement.
Moreover the draftsmen were not to make any substantive change in the laws, as a matter of fact they were in essence fired and Congress, there was a great deal of legislative history than to the effect that no substantive change was intended.
Justice William H. Rehnquist: Well, of course, they would not -- in 1875 there have been substantively changing of law that was enacted in 1980.
Mr. Douglas V. Rigler: No, no, but they would have been tampering with the general rule that the sovereign may avail himself of a general remedial statute.
Even though, the sovereign not be expressly mentioned as a person.
Justice Potter Stewart: Well really that basic general rule that the Federal Court's of this country are opened to sovereign nations as plaintiff.
So if they state a cause of action then it is not directly applicable here.
This is different and somewhat a narrower question, that is, what is the word ‘person’ in the Sherman act inclusive of foreign sovereign governments.
That is the question is not it?
Mr. Douglas V. Rigler: It is certainly that is the question.
It would be directed narrowest question before Court.
Justice Potter Stewart: And the general rule is interesting but really does not bear on that question.
Mr. Douglas V. Rigler: Well It does in terms of what Congress would have thought in 1890 Mr. Justice Stewart.
Justice Potter Stewart: It is a definition of the word ‘person’ that is what is said here in a particular statute.
Mr. Douglas V. Rigler: Yes but although that definition did not mentioned government says such, we have seen that the municipal governments may avail themselves as a provision to the Sherman Act.
State governments may, and like that we have no effective remedy except with reference.
Justice Potter Stewart: Municipal governments are corporations.
Mr. Douglas V. Rigler: Some are, some are not.
In the Chattanooga Case, Atlanta did turn out to be a corporation.
I did not read that as the turning point to the case however.
Let me comment on another argument raised by the petitioners.
Namely, that in 1890 no damage rights existed.
Remember that Sherman's intent was to consolidate the pre-existing remedies under the common law and under state statutes in order to make them effective.
Well as long ago, 1623 in the English statute of monopolies, the remedy of treble damages had been extended and if you consult that statute you will see that among the people to whom that was extended was bodies politic, i.e., governments.
In 1890 no less than 13 states already had antitrust statutes on their books, some of which provided for damages, Kansas being an example.
Justice Potter Stewart: And did any of them explicitly provide that a foreign nation could seek redress?
Mr. Douglas V. Rigler: Not to my knowledge Mr. Justice --
Justice Potter Stewart: Any of the state statutes is what I mean?
Mr. Douglas V. Rigler: I understand, no Sir.
However, you read that again Sherman's intent, which was to incorporate the general pre-existing rules and bashing them into a single federal statute so that trust could be eliminated and so that antitrust principles would be enhanced.
Justice Thurgood Marshall: What do you say to the argument that your brother makes that in 1890 there was a generalized atmosphere of xenophobia or something that came to it?
Mr. Douglas V. Rigler: Well if you would consult his references they are not to the direct legislative history of the Sherman Act.
They are such things as speeches before the whole --
Justice Thurgood Marshall: The generalized atmosphere of probalism (ph) if you will.
Mr. Douglas V. Rigler: But consult to references that I gave Mr. Justice Marshall, where Sherman is talking specifically of foreign commerce and the words ‘foreign corporations’ how could you accommodate on the one hand.
Congress’s extension of the remedy explicitly to foreign corporations with a desire to read foreigners out of the remedial provisions of the antitrust law.
It simply can not be done.
Chief Justice Warren E. Burger: And do you accept that they did not grant some comparable privileges or reciprocal privileges to foreign countries at that time.
Mr. Douglas V. Rigler: True they did not grant --
Chief Justice Warren E. Burger: Most countries did not grant this comparable privileges and remedies to our country because it was somewhat a new concept at that time.
Mr. Douglas V. Rigler: Well plainly though, the remedy of treble damages was extended to foreign corporations whether or not US corporations could obtained comparable rights really is of no moment because right there in the statute, the question was why do we assume that congress did not want to read out foreign interest altogether?
And the answer is, because they specifically included some foreign interest namely foreign corporations in the --
Justice Thurgood Marshall: It could have been that then as if now this lot of real “foreign corporations” bounded by Americans?
Mr. Douglas V. Rigler: It could have been the either way Mr. Justice Marshall, somewhere quite obviously but the statute would not raise that distinction.
Uknown Speaker: That is true
Well you have to argue, I guess, that a state is a corporation?
Mr. Douglas V. Rigler: No indeed.
Uknown Speaker: What do you argue on?
Mr. Douglas V. Rigler: That a state is sovereign.
Uknown Speaker: I know but how it is a person?
Mr. Douglas V. Rigler: Well actually as a matter of fact we do argue that, although I do not think that the argument was (Voice Overlap) I agree with that prophecies.
Uknown Speaker: You say a foreign government is a person is that what you are saying?
Mr. Douglas V. Rigler: Yes Sir.
Uknown Speaker: And why is it a person?
Certainly is not by any common ordinary definition of word person.
You suppose that corporation has been included if they had never put the definitional section in, they have just used the word person?
Is it a foreign statement?
Mr. Douglas V. Rigler: Absolutely.
Uknown Speaker: Well is that your argument that you have to -- you go directly from person to foreign state or do you go through corporation?
Mr. Douglas V. Rigler: Either way.
I think that even if they were not a corporation they would be a person but -- yes they are a corporation and so on that account as well they are person.
Uknown Speaker: And you think that is just so clear from the face of the Act and did not (Voice Overlap)
Mr. Douglas V. Rigler: From the face of the Act, no Sir.
Uknown Speaker: What?
Do you say it is or not?
Mr. Douglas V. Rigler: Not on the face of the Act but it --
Uknown Speaker: On the face of the act of (Voice Overlap) was the act, the words of the act you would no include the foreign state, is that it?
Mr. Douglas V. Rigler: If the Act said “person's injured in their business and property may recover”, foreign governments would be included.
If the act said “corporations injured in their business and property” foreign nations would be included.
So either way foreign nations would be included.
Uknown Speaker: So you need (Voice Overlap) from just the face of the Act you think?
Mr. Douglas V. Rigler: But that was the prevailing rule at that time, contrary to the Fox case which the respondents took side of.
The general rule which was stated in 1889 in Republic of Honduras v. Soto was that sovereign's were persons availing themselves a remedial statute.
That was said -- there it was said in Republic of Mexico v. Arangoiz in 1856 cases bracketing the Fox decision.
And it was said again in Stanley v. Schwalby.
Chief Justice Warren E. Burger: Were any of those involving treble damage claims?
Mr. Douglas V. Rigler: No sir, however there was a treble damage case returning to my point that Sherman intended to consolidate the common law remedies in 1887 in New York.
And since this argument first was raised in the reply brief we have not had a chance to address that.
I would like to call the Court's attention to buffalo lubrication.
The standard oil, the part of the Standard Oil Trust, in 1887 New York case, 106 New York 669, holding that damages were an available common law remedy.
Chief Justice Warren E. Burger: Remember that is not in your brief.
Mr. Douglas V. Rigler: That is not in our brief because the argument was not raised until the reply brief --
Uknown Speaker: Could you tell me again why the revised statute, statutory, the usual rule or the rule stated in the revised statutes about defining persons.
Why, that is not relevant here?
Mr. Douglas V. Rigler: It is not relevant for several reasons first because the revisers were not entrusted with the task of making any substantive change in the law.
Second because the revisers in essence were fired.
Third, even if you take the reviser's language, fairly read, it supports the concept that you had to specifically exclude a sovereign as a person for the sovereign would be included.
Uknown Speaker: On the face of the provision?
Mr. Douglas V. Rigler: Well that is certainly what the language says.
Justice William H. Rehnquist: Well if Senator Sherman had been defeated at the election after the enactment of the Sherman Act you would not read the Sherman Act out of the text, would you?
They did adopt the revised statute, Congress did even though the revisers may have been fired.
Mr. Douglas V. Rigler: They did not intend to make any change in the substantive rule and the remainder of my answer to Mr. Justice White is that this Court simply could not have come out where it did in Georgia v. Evans or in US v. California or in US v. Nardone or the other cases we cite, if the defendant’s version or the 1874 revision were correct.
Justice William H. Rehnquist: Well maybe that is an argument that was not called to the Court's attention in those cases and perhaps they were wrongly decided.
Mr. Douglas V. Rigler: It is my recollection that the 1874 decision was called to the Court's attention either in Cooper or Georgia.
I would have to check that but I believe that too have been the case from our review of the briefs.
Mr. Murphy mentioned one other case by the way which is --
Justice Byron R. White: Well it certainly was not there in the Justice Homes case.
There was no issue raised about whether a municipal corporation is a person.
Mr. Douglas V. Rigler: No it was assumed that (Voice Overlap) municipality had standing.
Justice Byron R. White: And Evans relied on it?
Mr. Douglas V. Rigler: No Evans may have recognized it but they did -- I do not believe that that was the basic rationale of the decision Mr. Justice White.
Justice Byron R. White: I did not said, I said that relied on it.
Mr. Douglas V. Rigler: It did not dispute it; yes in that sense it relied on it.
Justice William H. Rehnquist: Well let us say it would be ironic to let a city sue and not by the states.
Mr. Douglas V. Rigler: Yes correct.
Justice Byron R. White: Mr. Rigler could I ask you one question about your argument that I did not quite follow. You made references of the Statute of Monopolies.
Mr. Douglas V. Rigler: Yes Sir.
Justice Byron R. White: Is there a precedent to the effect that foreign governments could sue for damages under that statute?
I thought that statute basically is a prohibition against grants to monopolies by the Crown.
How did the damage remedy figure in that statute?
Mr. Douglas V. Rigler: Because the statute indicated that the remedy was available to bodies politic.
I believe that appears in the text of the statute itself.
Justice Byron R. White: What remedy could have been under that statute that is what I --
Mr. Douglas V. Rigler: Treble damages were specifically mentioned.
Justice Byron R. White: For doing what?
Mr. Douglas V. Rigler: For violating the statute.
And I now believe that one of the provisions, one of the wrongs covered by the statute was the illegal assertion of a patent monopoly, which of course is one of the allegations in the very case before us here.
Justice William H. Rehnquist: Are there cases that it hold that a foreign government could sue –- you are just relying on the statutory language in that.
Mr. Douglas V. Rigler: On the Statute of Monopoly Sir?
Justice William H. Rehnquist: Yes.
Mr. Douglas V. Rigler: Yes Sir.
I wanted to address the United mine worker's case which the respondents say disputes the proposition that sovereigns may avail themselves of the language in a general remedial statute.
United mine workers stands on a different proposition namely the sovereign's may not be stripped of preexisting sovereign as opposed to commercial prerogatives.
In the event of the subsequent statute is passed.
I mentioned among my points the anomaly it seems just inconceivable to conclude that on the purchases of identical goods, to say aircraft on the one hand, quite written, could not recover for purchases by the Royal Air Force whereas British Airways a wholly owned government corporation could.
Chief Justice Warren E. Burger: I think your time has expired now Mr. Rigler.
Mr. Murphy do you have anything further?
Rebuttal of Samuel W. Murphy, Jr.
Mr. Samuel W. Murphy, Jr.: Mr. Chief Justice just one or two points.
These plaintiffs just are not corporations.
They can’t get under the statute by saying that they plead themselves in their complaints as independent sovereign nations.
My brother referred to Senator Sherman's statement that the United States would be excluded from the treble damage remedy as evidence, someone expressed congressional intent.
In making that statement Senator Sherman was referring to the provision and his then draft, which limited the remedy to -- I think it was put the person is indemnified or injured.
There was never in any of Senator Sherman's address any express exclusion of the United States, other than as may be implied from the use of the word ‘person’.
My brother misspoke himself twice about the Amendment of the 1871 statute and the revisers report.
The language he referred to as I think Mr. Justice Rehnquist suggested was from a revisers report recommending that the phrase bodies politic be deleted from the statute so that in future statute's it would not be necessary to exclude them expressly.
Neither the Cooper case nor the Georgia case mentioned the 1874 statute.
The Cooper case does cite the case of United States against Fox which was an 1876 decision of this Court holding that the United States was not a person within the meeting of the New York statute of wills and stating that ordinarily a statue employing the word person will be construed to exclude the sovereign.
Our friends on the other side suggest that the general rule in 1890 was that the word ‘person’ includes sovereigns.
We just flatly disagree with that.
We think they are wrong -- the point is thoroughly covered in the briefs and I would not repeat myself.
Justice William H. Rehnquist: Assume we agree to it what do you do with Georgia, you said it will just confine it to its facts and say a state is a state and a foreign government is a foreign government (Voice Overlap) a person --
Mr. Samuel W. Murphy, Jr.: In a practical sense the way a 1890 Congressmen would look at it, I am sure that is what he would say, he could think of all kinds of reasons why Georgia ought to be able to sue and Iran or would not.
Uknown Speaker: But certainly that case does.
At least stand for the proposition that the word person can include a quasi sovereign state.
Mr. Samuel W. Murphy, Jr.: Yes sir it does stand for that proposition.
As I said an answer to Justice Stevens’ question, I think that state fits our analysis for two reasons.
One because Georgia just did not have sovereign power --
Uknown Speaker: In this area?
Mr. Samuel W. Murphy, Jr.: In this area.
And secondly because there is evidence in the legislative history that a reason for the Sherman Act was the limited reach of state law.
Justice Potter Stewart: Of course, India or even Iran do not have sovereign power to do anything about illegal antitrust activity in the United States unless they can be plaintiffs.
They do not have sovereign power to do it.
Mr. Samuel W. Murphy, Jr.: I think they clearly do Justice Stewart.
Justice Potter Stewart: To enforce the antitrust laws in the United States?
Mr. Samuel W. Murphy, Jr.: No, no, they clearly have sovereign power to deal with trade restraining combinations which affect their commerce.
Either in terms of goods imported into that country from other places or in terms of activity (Voice Overlap).
Justice Potter Stewart: In my sense you were talking about the inability or the powerlessness of a state such as Georgia or any other state to enforce the agreements in restraint of trade and other violations of the antitrust laws in the United States.
Mr. Samuel W. Murphy, Jr.: Under their own laws.
And I say that a foreign sovereign has the ability to deal with trade restraining combinations affecting their commerce to the same extent as does the United States as full sovereign power.
Justice Potter Stewart: Hardly, you do not really mean that.
They can not bring criminal prosecutions and go to the antitrust laws.
Mr. Samuel W. Murphy, Jr.: Not under our antitrust laws.
No sir of course not.
Justice Potter Stewart: No, we are talking about our antitrust laws.
Mr. Samuel W. Murphy, Jr.: Yes we are but the reason I feel Georgia fits into our analysis is because Georgia under its laws, was powerless to reach a restraint in the interstate commerce of the United States.
Chief Justice Warren E. Burger: Well does not foreign sovereign, whether it is Iran or Turkey have certain powers which the State of Georgia or California does not have namely they can boycott our commerce and prevent passage and do great many political things which under our commerce clause no state may do here.
Mr. Samuel W. Murphy, Jr.: Exactly, exactly.
And that is why that seems to us to be just all a difference as night and day between of the State of Georgia and the Government of Turkey.
Chief Justice Warren E. Burger: Thank you gentlemen.
The case is submitted.