Under § 4 of the Clayton Act, a manufacturer of gas heaters
brought a suit for treble damages against a trade association and
ten of its members which are pipeline companies, gas distributors
and manufacturers of gas burners, claiming that the defendants had
combined and conspired to restrain interstate commerce in the
manufacture and sale of gas burners in violation of § 1 of the
Sherman Act. It alleged that: the association tests burners and
issues a seal of approval for those which pass its tests; such
tests are not objective, but are influenced by some of the
defendants which are in competition with plaintiff; the association
has improperly refused to approve plaintiff's gas burners; two of
the defendants which are gas distributors refuse to provide gas for
use in plaintiff's burners; and plaintiff's gas burners have thus
been effectively excluded from the market.
Held: it was error for the District Court to dismiss
the complaint for failure to state a claim upon which relief could
be granted.
Klor's, Inc. v. Broadway-Hale Stores,
359 U. S. 207. Pp.
364 U. S.
657-660.
273 F.2d 196 reversed.
Page 364 U. S. 657
PER CURIAM.
The question here is whether petitioner's complaint stated a
claim upon which relief could be granted. Petitioner is engaged at
Lombard, Illinois, in the manufacture and sale in interstate
commerce of a ceramic gas burner, known as the "Radiant Burner,"
for the heating of houses and other buildings. Claiming that
American Gas Association, Inc. (AGA), a membership corporation
doing business in the Northern District of Illinois and in other
States, and 10 of its numerous members [
Footnote 1] who also are doing business in the Northern
District of Illinois, combined and conspired to restrain interstate
commerce in the manufacture, sale and use of gas burners in
violation of § 1 of the Sherman Act, petitioner brought this action
against those parties for treble damages and an injunction in the
United States District Court for the Northern District of Illinois.
[
Footnote 2]
Page 364 U. S. 658
The complaint included the following allegations: American Gas
Association operates testing laboratories wherein it purports to
determine the safety, utility and durability of gas burners. It has
adopted a "seal of approval" which it affixes on such gas burners
as it determines have passed its tests. Its tests are not based on
"objective standards," but are influenced by respondents, some of
whom are in competition with petitioner, and thus its
determinations can be made "arbitrarily and capriciously."
Petitioner has twice submitted its Radiant Burner to AGA for
approval, but it has not been approved, although it is safer and
more efficient than, and just as durable as, gas burners which AGA
has approved.
"[B]ecause AGA and its Utility members, including Peoples and
Northern, effectuate the plan and purpose of the unlawful
combination and conspiracy alleged herein by . . . refusing to
provide gas for use in the plaintiff's Radiant Burner[s] . . .
which are not approved by AGA,"
petitioner's gas burners have been effectively excluded from the
market, as its potential customers will not buy gas burners for
which they cannot obtain gas, and in consequence petitioner has
suffered and is suffering the loss of substantial profits.
Respondents moved to dismiss for failure of the complaint to
state a claim upon which relief could be granted. The District
Court granted the motions, dismissed the
Page 364 U. S. 659
complaint and entered judgment for respondents. The Court of
Appeals for the Seventh Circuit affirmed. 273 F.2d 196. It stated
that "No boycott, conspiracy to boycott or other form of
per
se violation is established by the facts alleged"
(
id. at 199), and that
"[i]n the absence of a
per se violation, the Sherman
Act protects the individual injured competitor and affords him
relief, but only under circumstances where there is such general
injury to the competitive process that the public at large suffers
economic harm."
Id. at 200. It held that public injury was not alleged,
since
"[t]he allegations of [the] plaintiff's complaint fail to
establish that there has been any appreciable lessening in the sale
of conversion gas burners or gas furnaces or that the public has
been deprived of a product of overall superiority."
Id. at 200. Because of petitioner's claim that this
holding is contrary to controlling decisions of this Court, we
granted certiorari. 363 U.S. 809.
We think the decision of the Court of Appeals does not accord
with our recent decision in
Klors, Inc. v. Broadway-Hale
Stores, 359 U. S. 207. The
allegation in the complaint that
"AGA and its Utility members, including Peoples and Northern,
effectuate the plan and purpose of the unlawful combination and
conspiracy . . . by . . . refusing to provide gas for use in the
plaintiff's Radiant Burner[s]"
because they "are not approved by AGA" clearly shows "one type
of trade restraint and public harm the Sherman Act forbids. . . ."
Id. at
359 U. S. 210.
It is obvious that petitioner cannot sell its gas burners, whatever
may be their virtues, if, because of the alleged conspiracy, the
purchasers cannot buy gas for use in those burners. The
conspiratorial refusal "to provide gas for use in the plaintiff's
Radiant Burner[s] [because they] are not approved by AGA" therefore
falls within one of the
"classes of restraints which from their 'nature or character'
[are] unduly restrictive, and hence forbidden by
Page 364 U. S. 660
both the common law and the statute. . . . As to these classes
of restraints . . . , Congress [has] determined its own criteria of
public harm, and it [is] not for the courts to decide whether in an
individual case injury [has] actually occurred."
Id. at
359 U. S. 211.
The alleged conspiratorial refusal to provide gas for use in
plaintiff's Radiant Burners
"interferes with the natural flow of interstate commerce [and]
clearly has, by its 'nature' and 'character', a 'monopolistic
tendency.' As such, it is not to be tolerated merely because the
victim is just one [manufacturer] whose business is so small that
his destruction makes little difference to the economy."
Id. at
359 U. S.
213.
By § 1, Congress has made illegal: "Every contract, combination
. . . or conspiracy, in restraint of trade or commerce among the
several States. . . ."
Standard Oil Co. v. United States,
221 U. S. 1.
Congress having thus prescribed the criteria of the prohibitions,
the courts may not expand them. Therefore, to state a claim upon
which relief can be granted under that section, allegations
adequate to show a violation and, in a private treble damage
action, that plaintiff was damaged thereby are all the law
requires.
The judgment of the Court of Appeals is reversed, and the cause
is remanded to the District Court for further proceedings not
inconsistent with this opinion.
Reversed.
[
Footnote 1]
Of the 10 members of AGA who were joined with it as defendants,
two are public utilities engaged in the distribution of gas in the
Northern District of Illinois, namely, The Peoples Gas Light &
Coke Company and Northern Illinois Gas Company; two are pipeline
companies engaged in transporting natural gas in interstate
commerce into the Northern District of Illinois, namely, Natural
Gas Pipeline of America and Texas-Illinois Natural Gas Co.; the
other six are manufacturers of gas burners, namely, Autogas
Company, Crown Stove Works, Florence Stove Company, Gas Appliance
Service, Inc., Norge Sales Corporation, and Sellers Engineering
Company.
[
Footnote 2]
Section 1 of the Sherman Act provides:
"Every contract, combination in the form of trust or otherwise,
or conspiracy, in restraint of trade or commerce among the several
States, or with foreign nations, is hereby declared to be illegal.
. . ."
Section 4 of the Clayton Act, 38 Stat. 731, 15 U.S.C. § 15,
states,
"Any person who shall be injured in his business or property by
reason of anything forbidden in the antitrust laws may sue therefor
. . . and shall recover threefold the damages by him sustained. . .
."
Section 16 of the Clayton Act, 38 Stat. 737, 15 U.S.C. § 26,
states,
"Any person, firm, corporation, or association shall be entitled
to sue for and have injunctive relief, in any court of the United
States having jurisdiction over the parties, against threatened
loss or damage by a violation of the antitrust laws. . . ."