Petitioner multiemployer association and respondents
(collectively the Union) are parties to collective bargaining
agreements governing the terms and conditions of employment in
construction-related industries in California. The Union filed suit
in Federal District Court, alleging that petitioner and its
members, in violation of the antitrust laws, coerced certain third
parties and some of petitioner's members to enter into business
relationships with nonunion contractors and subcontractors, and
thus adversely affected the trade of certain unionized firms,
thereby restraining the Union's business activities. Treble damages
were sought under § 4 of the Clayton Act, which authorizes recovery
of such damages by "[a]ny person who shall be injured in his
business or property by reason of anything forbidden in the
antitrust laws." The District Court dismissed the complaint as
insufficient to allege a cause of action for treble damages under §
4. The Court of Appeals reversed.
Held: Based on the allegations of the complaint, the
Union was not a person injured by reason of a violation of the
antitrust laws within the meaning of § 4 of the Clayton Act. Pp.
459 U. S.
526-546.
(a) Even though coercion allegedly directed by petitioner at
third parties in order to restrain the trade of "certain"
contractors and subcontractors may have been unlawful, it does not
necessarily follow that the Union is a person injured by reason of
a violation of the antitrust laws within the meaning of § 4. Pp.
459 U. S.
526-529.
(b) The question whether the Union may recover for the alleged
injury cannot be answered by literal reference to § 4's broad
language. Instead, as was required in common law damages litigation
in 1890 when § 4's predecessor was enacted as § 7 of the Sherman
Act, the question requires an evaluation of the Union's harm, the
petitioner's alleged wrongdoing, and the relationship between them.
Pp.
459 U. S.
529-535.
(c) The Union's allegations of consequential harm resulting from
a violation of the antitrust laws, although buttressed by an
allegation of intent to harm the Union, are insufficient as a
matter of law. Other relevant factors -- the nature of the alleged
injury to the Union, which is
Page 459 U. S. 520
neither a consumer nor a competitor in the market in which trade
was allegedly restrained, the tenuous and speculative character of
the causal relationship between the Union's alleged injury and the
alleged restraint, the potential for duplicative recovery or
complex apportionment of damages, and the existence of more direct
victims of the alleged conspiracy -- weigh heavily against judicial
enforcement of the Union's antitrust claim. Pp.
459 U. S.
535-546.
648 F.2d 527, reversed.
STEVENS, J., delivered the opinion of the Court in which BURGER,
C.J., and BRENNAN, WHITE, BLACKMUN, POWELL, REHNQUIST, and
O'CONNOR, JJ., joined. MARSHALL, J., filed a dissenting opinion,
post, p.
459 U. S.
546.
JUSTICE STEVENS delivered the opinion of the Court.
This case arises out of a dispute between parties to a
multiemployer collective bargaining agreement. The plaintiff unions
allege that, in violation of the antitrust laws, the multiemployer
association and its members coerced certain third parties, as well
as some of the association's members, to enter into business
relationships with nonunion firms. This coercion, according to the
complaint, adversely affected the trade of certain unionized firms,
and thereby restrained the
Page 459 U. S. 521
business activities of the unions. The question presented is
whether the complaint sufficiently alleges that the unions have
been "injured in [their] business or property by reason of anything
forbidden in the antitrust laws," and may therefore recover treble
damages under § 4 of the Clayton Act. 38 Stat. 731, 15 U.S.C. § 15.
Unlike the majority of the Court of Appeals for the Ninth Circuit,
we agree with the District Court's conclusion that the complaint is
insufficient.
I
The two named plaintiffs (the Union) -- the California State
Council of Carpenters and the Carpenters 46 Northern Counties
Conference Board -- are affiliated with the United Brotherhood of
Carpenters and Joiners of America, AFL-CIO. The Union represents
more than 50,000 individuals employed by the defendants in the
carpentry, drywall, piledriving, and related industries throughout
the State of California. The Union's complaint is filed as a class
action on behalf of numerous affiliated local unions and district
councils. The defendants are Associated General Contractors of
California, Inc. (Associated), a membership corporation composed of
various building and construction contractors, approximately 250
members of Associated who are identified by name in an exhibit
attached to the complaint, and 1,000 unidentified
coconspirators.
The Union and Associated, and their respective predecessors,
have been parties to collective bargaining agreements governing the
terms and conditions of employment in construction-related
industries in California for over 25 years. The wages and other
benefits paid pursuant to these agreements amount to more than $750
million per year. In addition, approximately 3,000 contractors who
are not members of Associated have entered into separate
"memorandum agreements" with the Union, which bind them to the
terms of the master collective bargaining agreements between the
Union and Associated. The amended complaint does not
Page 459 U. S. 522
state the number of nonsignatory employers or the number of
nonunion employees who are active in the relevant market.
In paragraphs 23 and 24 of the amended complaint, the Union
alleges the factual basis for five different damages claims.
[
Footnote 1] Paragraph 23
alleges generally that the defendants conspired to abrogate and
weaken the collective bargaining relationship between the Union and
the signatory employers. In seven subsections, paragraph 24 sets
forth activities allegedly committed pursuant to the conspiracy.
The most specific allegations relate to the labor relations between
the parties. [
Footnote 2] The
complaint's description of actions affecting nonparties is both
brief and vague. It is alleged that defendants
"(3) Advocated, encouraged, induced, and aided nonmembers of
defendant Associated General Contractors of California, Inc., to
refuse to enter into collective bargaining relationships with
plaintiffs and each of them;"
"(4) Advocated, encouraged, induced,
coerced, aided and
encouraged owners of land and other letters of construction
contracts to hire contractors and subcontractors who are not
signatories to collective bargaining agreements with plaintiffs and
each of them; "
Page 459 U. S. 523
"(5) Advocated, induced,
coerced, encouraged, and aided
members of Associated General Contractors of California, Inc.,
nonmembers of Associated General Contractors of California, Inc.,
and 'memorandum contractors' to enter into subcontracting
agreements with subcontractors who are not signatories to any
collective bargaining agreements with plaintiffs and each of them.
. . ."
App. E to Pet. for Cert. 17-19 (emphasis added). [
Footnote 3]
Paragraph 25 describes the alleged "purpose and effect" of these
activities: first, "to weaken, destroy, and restrain the trade of
certain contractors," who were either members of Associated or
memorandum contractors who had signed agreements with the Union;
and second, to restrain "the free exercise of the business
activities of plaintiffs and each of them." [
Footnote 4] Plaintiffs claim that these alleged
antitrust violations
Page 459 U. S. 524
caused them $25 million in damages. [
Footnote 5] The complaint does not identify any specific
component of this damages claim.
After hearing "lengthy oral argument" and after receiving two
sets of written briefs, one filed before and the second filed after
this Court's decision in
Connell Construction Co. v. Plumbers
& Steamfitters, 421 U. S. 616
(1975), the District Court dismissed the complaint, including the
federal antitrust claim.
404 F.
Supp. 1067 (ND Cal.1975). [
Footnote 6] The court observed that the complaint alleged
"a rather vague, general conspiracy," and that the allegations
"appear typical of disputes a union might have with an employer,"
which, in the normal course, are resolved by grievance and
arbitration or by the NLRB.
Id. at 1069. [
Footnote 7] Without seeking to clarify or
further amend the first amended complaint, the Union filed its
notice of appeal on October 9, 1975.
Over five years later, on November 20, 1980, the Court of
Appeals reversed the District Court's dismissal of the Union's
federal antitrust claim. 648 F.2d 527. [
Footnote 8] The majority
Page 459 U. S. 525
of the Court of Appeals disagreed with the District Court's
characterization of the antitrust claim; it adopted a construction
of the amended complaint which is somewhat broader than the
allegations in the pleading itself. [
Footnote 9] The Court of Appeals held (1) that a Sherman
Act violation -- a group boycott -- had been alleged,
id.
at 531-532; (2) that the defendants' conduct was not within the
antitrust exemption for labor activities,
id. at 532-536;
and (3) that the plaintiffs had standing to recover damages for the
injury to their own business activities occasioned by the
defendants' "industry-wide boycott against all subcontractors with
whom the Unions had signed agreements. . . ."
Id. at 537.
In support of the Union's standing, the majority reasoned that the
Union was within the area of the economy endangered by a breakdown
of competitive conditions, not only because injury to the Union was
a foreseeable consequence of the antitrust violation, but also
because that injury was specifically intended by the defendants.
The court noted that its conclusion was consistent with other cases
holding that union organizational
Page 459 U. S. 526
and representational activities constitute a form of business
protected by the antitrust laws. [
Footnote 10]
II
As the case comes to us, we must assume that the Union can prove
the facts alleged in its amended complaint. It is not, however,
proper to assume that the Union can prove facts that it has not
alleged, or that the defendants have violated the antitrust laws in
ways that have not been alleged. [
Footnote 11]
We first note that the Union's most specific claims of injury
involve matters that are not subject to review under the antitrust
laws. The amended complaint alleges that the defendants have
breached their collective bargaining agreements in various ways,
and that they have manipulated their corporate names and corporate
status in order to divert business to nonunion divisions or firms
that they actually control. Such deceptive diversion of business to
the nonunion portion of a so-called "double-breasted" operation
might constitute a breach of contract, an unfair labor practice, or
perhaps even a
Page 459 U. S. 527
common law fraud or deceit, but in the context of the bargaining
relationship between the parties to this litigation, such
activities are plainly not subject to review under the federal
antitrust laws. [
Footnote
12] Similarly, the charge that the defendants "advocated,
encouraged, induced, and aided nonmembers . . . to refuse to enter
into collective bargaining relationships" with the Union (� 24(3))
does not describe an antitrust violation. [
Footnote 13]
The Union's antitrust claims arise from alleged restraints
caused by defendants in the market for construction contracting and
subcontracting. [
Footnote
14] The complaint alleges that defendants "coerced" [
Footnote 15] two classes of persons:
(1) landowners and
Page 459 U. S. 528
others who let construction contracts,
i.e., the
defendants' customers and potential customers; and (2) general
contractors,
i.e., defendants' competitors and defendants
themselves. Coercion against the members of both classes was
designed to induce them to give some of their business -- but not
necessarily all of it -- to nonunion firms. [
Footnote 16] Although the pleading does not
allege that the coercive conduct increased the aggregate share of
nonunion firms in the market, it does allege that defendants'
activities weakened and restrained the trade "of certain
contractors."
See n 4,
supra. Thus, particular victims of coercion may have
diverted particular contracts to nonunion firms, and thereby caused
certain unionized subcontractors to lose some business.
We think the Court of Appeals properly assumed that such
coercion might violate the antitrust laws. [
Footnote 17] An agreement to restrain trade may
be unlawful even though it does not entirely exclude its victims
from the market.
See Associated Press v. United States,
326 U. S. 1,
326 U. S. 17
(1945). Coercive activity that prevents its victims from making
free choices between market alternatives is inherently destructive
of competitive conditions, and may be condemned even without proof
of its actual market effect.
Cf. Klors, Inc. v. Broadway-Hale
Stores, Inc., 359 U. S. 207,
359 U. S.
210-214 (1959). [
Footnote 18]
Page 459 U. S. 529
Even though coercion directed by defendants at third parties in
order to restrain the trade of "certain" contractors and
subcontractors may have been unlawful, it does not, of course,
necessarily follow that still another party -- the Union -- is a
person injured by reason of a violation of the antitrust laws
within the meaning of § 4 of the Clayton Act.
III
We first consider the language in the controlling statute.
See Consumer Product Safety Comm'n v. GTE Sylvania, Inc.,
447 U. S. 102,
447 U. S. 108
(1980). The class of persons who may maintain a private damages
action under the antitrust laws is broadly defined in § 4 of the
Clayton Act. 15 U.S.C. § 15. That section provides:
"Any person who shall be injured in his business or property by
reason of anything forbidden in the antitrust laws may sue therefor
in any district court of the United States in the district in which
the defendant resides or is found or has an agent, without respect
to the amount in controversy, and shall recover threefold the
damages by him sustained, and the cost of suit, including a
reasonable attorney's fee."
A literal reading of the statute is broad enough to encompass
every harm that can be attributed directly or indirectly to the
consequences of an antitrust violation. Some of our prior cases
have paraphrased the statute in an equally expansive way. [
Footnote 19] But before we hold that
the statute is as broad as its
Page 459 U. S. 530
words suggest, we must consider whether Congress intended such
an open-ended meaning.
The critical statutory language was originally enacted in 1890
as § 7 of the Sherman Act. 26 Stat. 210. The legislative history of
the section shows that Congress was primarily interested in
creating an effective remedy for consumers who were forced to pay
excessive prices by the giant trusts and combinations that
dominated certain interstate markets. [
Footnote 20] That history supports a broad
construction of this remedial provision. A proper interpretation of
the section cannot, however, ignore the larger context in which the
entire statute was debated.
Page 459 U. S. 531
The repeated references to the common law in the debates that
preceded the enactment of the Sherman Act make it clear that
Congress intended the Act to be construed in the light of its
common law background. [
Footnote
21] Senator Sherman stated that the bill
"does not announce a new principle of law, but applies old and
well-recognized principles of the common law to the complicated
jurisdiction of our State and Federal Government. [
Footnote 22]"
Thus, our comments on the need for judicial interpretation of §
1 are equally applicable to § 7:
"One problem presented by the language of § 1 of the Sherman Act
is that it cannot mean what it says. The statute says that 'every'
contract that restrains trade is unlawful. But, as Mr. Justice
Brandeis perceptively noted, restraint is the very essence of every
contract; read literally, § 1 would outlaw the entire body of
private contract law. . . ."
"Congress, however, did not intend the text of the Sherman Act
to delineate the full meaning of the statute or its application in
concrete situations. The legislative history makes it perfectly
clear that it expected the courts to give shape to the statute's
broad mandate by drawing on common law tradition."
National Society
of
Page 459 U. S. 532
Professional Engineers v. United States, 435 U.
S. 679,
435 U. S.
687-688 (1978) (footnotes omitted). Just as the
substantive content of the Sherman Act draws meaning from its
common law antecedents, so must we consider the contemporary legal
context in which Congress acted when we try to ascertain the
intended scope of the private remedy created by § 7.
In 1890, notwithstanding general language in many state
constitutions providing in substance that "every wrong shall have a
remedy," [
Footnote 23] a
number of judge-made rules circumscribed the availability of
damages recoveries in both tort and contract litigation --
doctrines such as foreseeability and proximate cause, [
Footnote 24] directness of injury,
[
Footnote 25] certainty of
damages, [
Footnote 26]
Page 459 U. S. 533
and privity of contract. [
Footnote 27] Although particular common law limitations
were not debated in Congress, the frequent references to common law
principles imply that Congress simply assumed that antitrust
damages litigation would be subject to constraints comparable to
well-accepted common law rules applied in comparable litigation.
[
Footnote 28]
The federal judges who first confronted the task of giving
meaning to § 7 so understood the congressional intent. Thus, in
1910, the Court of Appeals for the Third Circuit held as a matter
of law that neither a creditor nor a stockholder of a corporation
that was injured by a violation of the antitrust laws could recover
treble damages under § 7.
Loeb v. Eastman
Page 459 U. S. 534
Kodak Co., 183 F. 704. The court explained that the
plaintiff's injury as a stockholder was "indirect, remote, and
consequential."
Id. at 709. [
Footnote 29] This holding was consistent with Justice
Holmes' explanation of a similar construction of the remedial
provision of the Interstate Commerce Act a few years later: "The
general tendency of the law, in regard to damages at least, is not
to go beyond the first step."
Southern Pacific Co. v.
Darnell-Taenzer Lumber Co., 245 U. S. 531,
245 U. S. 533
(1918). [
Footnote 30] When
Congress enacted § 4 of the Clayton Act in 1914, and when it
reenacted that section in 1955, 69 Stat. 282, it adopted the
language of § 7 and presumably also the judicial gloss that avoided
a simple literal interpretation.
As this Court has observed, the lower federal courts have
been
"virtually unanimous in concluding that Congress did not intend
the antitrust laws to provide a remedy in damages for all injuries
that might conceivably be traced to an antitrust violation."
Hawaii v. Standard Oil Co., 405 U.
S. 251,
405 U. S. 263,
n. 14 (1972). Just last Term we stated:
"An antitrust violation may be expected to cause ripples of harm
to flow through the Nation's economy; but, 'despite the broad
wording of § 4, there is a point beyond which the wrongdoer should
not be held liable.' [
Illinois
Page 459 U. S. 535
Brick Co. v. Illinois, 431 U.S.] at
431 U. S.
760 (BRENNAN, J., dissenting). It is reasonable to
assume that Congress did not intend to allow every person
tangentially affected by an antitrust violation to maintain an
action to recover threefold damages for the injury to his business
or property."
Blue Shield of Virginia v. McCready, 457 U.
S. 465,
457 U. S.
476-477 (1982).
It is plain, therefore, that the question whether the Union may
recover for the injury it allegedly suffered by reason of the
defendants' coercion against certain third parties cannot be
answered simply by reference to the broad language of § 4. Instead,
as was required in common law damages litigation in 1890, the
question requires us to evaluate the plaintiff's harm, the alleged
wrongdoing by the defendants, and the relationship between them.
[
Footnote 31]
IV
There is a similarity between the struggle of common law judges
to articulate a precise definition of the concept of "proximate
cause" [
Footnote 32] and the
struggle of federal judges to
Page 459 U. S. 536
articulate a precise test to determine whether a party injured
by an antitrust violation may recover treble damages. [
Footnote 33] It is common ground
that the judicial remedy cannot encompass every conceivable harm
that can be traced to alleged wrongdoing. In both situations, the
infinite variety of claims that may arise make it virtually
impossible to announce a blackletter rule that will dictate the
result in every case. [
Footnote
34] Instead,
Page 459 U. S. 537
previously decided cases identify factors that circumscribe and
guide the exercise of judgment in deciding whether the law affords
a remedy in specific circumstances.
The factors that favor judicial recognition of the Union's
antitrust claim are easily stated. The complaint does allege a
causal connection between an antitrust violation and harm to the
Union and further alleges that the defendants intended to cause
that harm. As we have indicated, however, the mere fact that the
claim is literally encompassed by the Clayton Act does not end the
inquiry. We are also satisfied that an allegation of improper
motive, although it may support a plaintiff's damages claim under §
4, [
Footnote 35] is not a
panacea that will enable any complaint to withstand a motion to
dismiss. [
Footnote 36]
Indeed, in
McCready, we specifically held: "The
availability of the § 4 remedy to some person who claims its
benefit is not a question of the specific intent of the
conspirators." 457 U.S. at
457 U. S. 479. [
Footnote 37]
Page 459 U. S. 538
A number of other factors may be controlling. In this case, it
is appropriate to focus on the nature of the plaintiff's alleged
injury. As the legislative history shows, the Sherman Act was
enacted to assure customers the benefits of price competition, and
our prior cases have emphasized the central interest in protecting
the economic freedom of participants in the relevant market.
[
Footnote 38] Last Term in
Blue Shield of Virginia v. McCready, supra, we identified
the relevance of this central policy to a determination of the
plaintiff's right to maintain an action under § 4. McCready alleged
that she was a consumer of psychotherapeutic services and that she
had been injured by the defendants' conspiracy to restrain
competition in the market for such services. [
Footnote 39] The Court stressed the fact that
"McCready's injury was of a type that Congress sought to redress in
providing a private remedy for violations of the antitrust laws."
457 U.S. at
457 U. S. 483,
citing
Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc.,
429 U. S. 477,
429 U. S.
487-489 (1977). After noting that her injury "was
inextricably intertwined with the injury the conspirators sought to
inflict on psychologists and the psychotherapy market," 457 U.S. at
457 U. S. 484,
the Court concluded that such an injury "falls squarely within the
area of congressional concern."
Ibid.
Page 459 U. S. 539
In this case, however, the Union was neither a consumer nor a
competitor in the market in which trade was restrained. [
Footnote 40] It is not clear whether
the Union's interests would be served or disserved by enhanced
competition in the market. As a general matter, a union's primary
goal is to enhance the earnings and improve the working conditions
of its membership; that goal is not necessarily served, and indeed
may actually be harmed, by uninhibited competition among employers
striving to reduce costs in order to obtain a competitive advantage
over their rivals. [
Footnote
41] At common law -- as well as in the early days of
administration of the federal antitrust laws -- the collective
activities of labor unions were regarded as a form of conspiracy in
restraint of trade. [
Footnote
42] Federal policy has since developed not only a broad labor
exemption from the antitrust laws, [
Footnote 43] but also a separate body of
Page 459 U. S. 540
labor law specifically designed to protect and encourage the
organizational and representational activities of labor unions. Set
against this background, a union, in its capacity as bargaining
representative, will frequently not be part of the class the
Sherman Act was designed to protect, especially in disputes with
employers with whom it bargains. In each case, its alleged injury
must be analyzed to determine whether it is of the type that the
antitrust statute was intended to forestall.
See Brunswick
Corp. v. Pueblo Bowl-O-Mat, Inc., supra, at
429 U. S.
487-488. In this case, particularly in light of the
longstanding collective bargaining relationship between the
parties, the Union's labor-market interests seem to predominate,
and the
Brunswick test is not satisfied.
An additional factor is the directness or indirectness of the
asserted injury. In this case, the chain of causation between the
Union's injury and the alleged restraint in the market for
construction subcontracts contains several somewhat vaguely defined
links. According to the complaint, defendants applied coercion
against certain landowners and other contracting parties in order
to cause them to divert business from certain union contractors to
nonunion contractors. [
Footnote
44] As a result,
Page 459 U. S. 541
the Union's complaint alleges, the Union suffered unspecified
injuries in its "business activities." [
Footnote 45] It is obvious that any such injuries were
only an indirect result of whatever harm may have been suffered by
"certain" construction contractors and subcontractors. [
Footnote 46]
If either these firms or the immediate victims of coercion by
defendants have been injured by an antitrust violation, their
injuries would be direct and, as we held in
McCready, they
would have a right to maintain their own treble damages actions
against the defendants. An action on their behalf would encounter
none of the conceptual difficulties that
Page 459 U. S. 542
encumber the Union's claim. [
Footnote 47] The existence of an identifiable class of
persons whose self-interest would normally motivate them to
vindicate the public interest in antitrust enforcement diminishes
the justification for allowing a more remote party such as the
Union to perform the office of a private attorney general.
[
Footnote 48] Denying the
Union a remedy on the basis of its allegations in this case is not
likely to leave a significant antitrust violation undetected or
unremedied.
Partly because it is indirect, and partly because the alleged
effects on the Union may have been produced by independent factors,
the Union's damages claim is also highly speculative. There is, for
example, no allegation that any collective bargaining agreement was
terminated as a result of the coercion, no allegation that the
aggregate share of the contracting market controlled by union firms
has diminished, no allegation that the number of employed union
members has declined, and no allegation that the Union's revenues
in the form of dues or initiation fees have decreased. Moreover,
although coercion against certain firms is alleged, there is no
assertion that any such firm was prevented from doing business with
any union firms, or that any firm or group of firms was subjected
to a complete boycott.
See nn.
9 15 and
16 supra.
Page 459 U. S. 543
Other than the alleged injuries flowing from breaches of the
collective bargaining agreements -- injuries that would be
remediable under other laws -- nothing but speculation informs the
Union's claim of injury by reason of the alleged unlawful coercion.
Yet, as we have recently reiterated, it is appropriate for § 4
purposes "to consider whether a claim rests at bottom on some
abstract conception or speculative measure of harm."
Blue
Shield of Virginia v. McCready, 457 U.S. at
457 U. S. 475,
n. 11, citing
Hawaii v. Standard Oil Co., 405 U.S. at
405 U. S.
262-263, n. 14. [
Footnote 49]
The indirectness of the alleged injury also implicates the
strong interest, identified in our prior cases, in keeping the
scope of complex antitrust trials within judicially manageable
limits. [
Footnote 50] These
cases have stressed the importance of avoiding
Page 459 U. S. 544
either the risk of duplicate recoveries on the one hand, or the
danger of complex apportionment of damages on the other. Thus, in
Hanover Shoe, Inc. v. United Shoe Machinery Corp.,
392 U. S. 481
(1968), we refused to allow the defendants to discount the
plaintiffs' damages claim to the extent that overcharges had been
passed on to the plaintiffs' customers. We noted that any attempt
to ascertain damages with such precision "would often require
additional long and complicated proceedings involving massive
evidence and complicated theories."
Id. at
392 U. S. 493.
In
Illinois Brick Co. v. Illinois, 431 U.
S. 720 (1977), we held that treble damages could not be
recovered by indirect purchasers of concrete blocks who had paid an
enhanced price because their suppliers had been victimized by a
price-fixing conspiracy. We observed that potential plaintiffs at
each level in the distribution chain would be in a position to
assert conflicting claims to a common fund, the amount of the
alleged overcharge, thereby creating the danger of multiple
liability for the fund and prejudice to absent plaintiffs.
"Permitting the use of pass-on theories under § 4 essentially
would transform treble damages actions into massive efforts to
apportion the recovery among all potential plaintiffs that could
have absorbed part of the overcharge from direct purchasers to
middlemen to ultimate consumers. However appealing this attempt to
allocate the overcharge might seem in theory, it would add whole
new dimensions of complexity to treble-damages suits, and seriously
undermine their effectiveness."
Id. at
431 U. S.
737-738.
The same concerns should guide us in determining whether the
Union is a proper plaintiff under § 4 of the Clayton Act. [
Footnote 51]
Page 459 U. S. 545
As the Court wrote in
Illinois Brick, massive and
complex damages litigation not only burdens the courts, but also
undermines the effectiveness of treble damages suits.
Id.
at
431 U. S. 745.
In this case, if the Union's complaint asserts a claim for damages
under § 4, the District Court would face problems of identifying
damages and apportioning them among directly victimized contractors
and subcontractors and indirectly affected employees and union
entities. It would be necessary to determine to what extent the
coerced firms diverted business away from union subcontractors, and
then to what extent those subcontractors absorbed the damage to
their businesses or passed it on to employees by reducing the
workforce or cutting hours or wages. In turn, it would be necessary
to ascertain the extent to which the affected employees absorbed
their losses and continued to pay union dues. [
Footnote 52]
We conclude, therefore, that the Union's allegations of
consequential harm resulting from a violation of the antitrust
laws, although buttressed by an allegation of intent to harm the
Union, are insufficient as a matter of law. Other relevant factors
-- the nature of the Union's injury, the tenuous and speculative
character of the relationship between the alleged antitrust
violation and the Union's alleged injury, the potential for
duplicative recovery or complex apportionment of damages, and the
existence of more direct victims of the alleged conspiracy -- weigh
heavily against judicial enforcement of the Union's antitrust
claim. Accordingly, we hold that, based on the allegations of this
complaint, the District
Page 459 U. S. 546
Court was correct in concluding that the Union is not a person
injured by reason of a violation of the antitrust laws within the
meaning of § 4 of the Clayton Act. The judgment of the Court of
Appeals is reversed.
It is so ordered.
[
Footnote 1]
The facts set forth in paragraphs 23 and 24, initially alleged
in support of the Union's federal antitrust claim, are realleged in
each of the other claims for relief: breach of collective
bargaining agreements (�� 29-31); intentional interference with
contractual relations (�� 32-35); intentional interference with
business relationships (�� 36-39); and violation of the California
antitrust statute (�� 40-43).
[
Footnote 2]
For example, it is alleged that defendants breached their
collective bargaining agreements
"by failing to pay agreed-upon wages, by failing to use the
hiring hall, by failing to pay Trust Fund contributions, by failing
to observe other terms and conditions of employment, and by
generally weakening the good faith requirement of the collective
bargaining agreements;"
that defendants improperly changed their names and corporate
status, and made use of so-called "double-breasted operations"; and
that they encouraged nonmembers of Associated to refuse to enter
into collective bargaining agreements with the Union.
[
Footnote 3]
The word "coerced" did not appear in the complaint as originally
filed. Even as amended after the filing of motions to dismiss, the
complaint does not allege that the defendants used any coercion to
persuade nonmembers of Associated to refuse to enter into
collective bargaining agreements with the Union (� 24(3)). The
complaint alleges neither the identity nor the number of
landowners, general contractors, or others who were coerced into
making contracts with nonunion firms.
[
Footnote 4]
Paragraph 25, which describes the effect of the conspiracy,
reads in full as follows:
"The purpose and effect of the above described activities, plan
and conspiracy are oppressive, unreasonable, and illegal, and are
in restraint of trade and an unlawful interference and restraint of
the free exercise of the business activities of plaintiffs and each
of them, all in violation of 15 U.S.C. Section 1. The purpose and
effect of the above described activities, plan and conspiracy, in
addition, are to weaken, destroy, and restrain the trade of certain
contractors, both members of the Associated General Contractors of
California, Inc., and nonmembers, who are 'memorandum contractors,'
who have faithfully performed the terms and conditions set out in
the master collective bargaining agreements described above. The
effect of this restraint on trade is to further weaken and destroy
plaintiffs in this matter. These activities are in restraint of the
free exercise of plaintiffs' trade and an interference therein, all
in violation of 15 U.S.C. Section 1."
App. E to Pet. for Cert. 20-21.
[
Footnote 5]
Plaintiffs do not seek injunctive relief under § 16 of the
Clayton Act, 15 U.S.C. § 26, and they do not ask us to consider
whether they have standing to request such relief.
[
Footnote 6]
An order dismissing the federal antitrust claim and the state
law claims was filed on August 4, 1975, and an amended order
dismissing the entire complaint was entered on September 10, 1975.
The District Court had initially stayed the breach-of-contract
claim for 120 days pending grievance and arbitration procedures. On
reconsideration, it also dismissed the breach-of-contract claim,
deciding that the suit had been prematurely filed.
[
Footnote 7]
Addressing the federal antitrust claim, the District Court
concluded:
"The essence of plaintiffs' claim seems to be that defendants
violated the antitrust laws insofar as they declined to enter into
agreements with plaintiffs to deal only with subcontractors which
were signatories to contracts with plaintiffs, precisely the type
of agreement which subjected the union in
Connell to
antitrust liability."
404 F. Supp. at 1070. The District Court reasoned that the
employers' refusal to enter into such an agreement could not
provide the basis for an antitrust claim.
[
Footnote 8]
The Court of Appeals affirmed the dismissal of all other
claims.
[
Footnote 9]
The Court of Appeals majority read subparagraph (4) of paragraph
24, quoted
supra, at
459 U. S. 522,
as though it alleged that the defendants had coerced landowners and
other persons who let construction contracts "to hire
only
construction firms, primarily subcontractors, who had not signed
with the Unions." 648 F.2d at 532 (emphasis added);
see also
id. at 544 (denying petition for rehearing). The word "only"
does not appear in the amended complaint, and it implies that the
defendants' activities gave rise to a broader restraint than was
actually alleged.
The majority read subparagraph (5) of paragraph 24 to charge
that defendants had "coerced and aided each other to subcontract
only with subcontractors who had not signed with the
Unions."
Id. at 531 (emphasis added). Again using the word
"only," which does not appear in the complaint itself, the majority
characterized the defendants' alleged activities as "very similar
to a concerted refusal to deal, or a group boycott."
Ibid.
It concluded that the allegations "present virtually the obverse of
the situation described in
Connell:" the conspiracy, if
successful, "would effectively lock union-signatory subcontractors
out of a portion of the market for carpentry work."
Id. at
532.
[
Footnote 10]
See Tugboat, Inc. v. Mobile Towing Co., 534 F.2d 1172,
1176-1177 (CA5 1976);
International Assn. of Heat & Frost
Insulator v. United Contractors Assn., 483 F.2d 384, 397-398
(CA3 1973).
Circuit Judge Sneed dissented. He first rejected the majority's
characterization of the complaint, agreeing instead with the
District Court. Second, assuming that the complaint alleged a
boycott of certain employers, he concluded that neither the
employees of a victim of the boycott nor their collective
bargaining representative had standing to assert the antitrust
claim. Finally, he concluded that an injury that affected only the
Union's organizational and representational activity was remediable
under the labor laws, rather than the antitrust laws.
The Court of Appeals denied the petition for rehearing and
rehearing en banc on May 22, 1981. Accompanying the order was a
statement by the majority rebutting the petitioners' assertion that
the opinion rendered multiemployer bargaining units unlawful, and a
dissent by Circuit Judge Sneed. 648 F.2d at 543, 545.
[
Footnote 11]
The Union had an adequate opportunity to amend its pleading to
add factual allegations demonstrating that the District Court's
decision to dismiss the complaint was based on a misunderstanding
of its antitrust claim.
[
Footnote 12]
In analyzing the antitrust allegations in the amended complaint,
we therefore construe the references to "contractors and
subcontractors who are not signatories to collective bargaining
agreements" as referring to completely independent nonunion firms
rather than to operations covertly controlled by one or more
defendants.
[
Footnote 13]
The Court of Appeals did not reverse the District Court's
dismissal of the complaint with regard to these allegations. 648
F.2d at 531-532, 537, 540.
[
Footnote 14]
See Brief for Respondents 37. There is no allegation of
wrongful conduct directed at nonunion subcontracting firms. We
therefore assume that, if any nonunion firms refused to bargain
with the Union because of the conspiracy, they did so because they
were rewarded with business they would not otherwise have obtained.
Thus, nonunion firms could not be considered victims of the
conspiracy; rather, they appear to have been its indirect
beneficiaries. None are named either as defendants or as
coconspirators.
The amended complaint also does not allege any restraint on
competition in the market for labor union services. Unlike the two
cases involving union plaintiffs cited by the Court of Appeals,
see n 10,
supra, in this case, there is no claim that competition
between rival unions has been injured, or even that any rival
unions exist.
[
Footnote 15]
The complaint does not specify the nature of the "coercion." It
does not, for example, allege that the defendants refused to deal
with all members of either of the two classes of persons against
whom coercion was applied. Indeed, it is highly improbable that the
defendants -- all of whom are signatories to union contracts --
would refuse to deal with all of their customers and potential
customers in an attempt to divert all of their business to nonunion
firms.
[
Footnote 16]
There is no allegation that any person subjected to coercion was
required to deal exclusively with nonunion firms.
[
Footnote 17]
Had the District Court required the Union to describe the nature
of the alleged coercion with particularity before ruling on the
motion to dismiss, it might well have been evident that no
violation of law had been alleged. In making the contrary
assumption for purposes of our decision, we are perhaps stretching
the rule of
Conley v. Gibson, 355 U. S.
41,
355 U. S. 47-48
(1957), too far. Certainly, in a case of this magnitude, a district
court must retain the power to insist upon some specificity in
pleading before allowing a potentially massive factual controversy
to proceed.
[
Footnote 18]
Although we do not know what kind of coercion defendants
allegedly employed, we assume for purposes of decision that it had
a predatory "nature or character,"
Klors, Inc. v. Broadway-Hale
Stores, Inc., 359 U.S. at
359 U. S. 211,
and that it would "cripple the freedom of traders, and thereby
restrain their ability to sell in accordance with their own
judgment."
Kiefer-Stewart Co. v. Joseph E. Seagram & Sons,
Inc., 340 U. S. 211,
340 U. S. 213
(1951).
[
Footnote 19]
In
Mandeville Island Farms, Inc. v. Sugar Co.,
334 U. S. 219
(1948), the Court held that growers of sugar beets could maintain a
treble-damages action against refiners who had allegedly conspired
to fix the price that they would pay for the beets. Although
previous price-fixing cases had involved agreements among sellers
to fix sales prices, the Court readily concluded that the Act
applied equally to an agreement among competing buyers to fix
purchase prices. The Court stated:
"The statute does not confine its protection to consumers, or to
purchasers, or to competitors, or to sellers. Nor does it immunize
the outlawed acts because they are done by any of these.
Cf.
United States v. Socony-Vacuum Oil Co., 310 U. S.
150;
American Tobacco Co. v. United States,
328 U. S.
781. The Act is comprehensive in its terms and coverage,
protecting all who are made victims of the forbidden practices by
whomever they may be perpetrated."
Id. at
334 U. S.
236.
Similarly broad language was used in later cases holding that
actions could be maintained by consumers,
Reiter v. Sonotone
Corp., 442 U. S. 330,
442 U. S.
337-338 (1979), by a foreign government,
Pfizer Inc.
v. India, 434 U. S. 308,
434 U. S.
313-314 (1978), and by the direct victim of a boycott.
Blue Shield of Virginia v. McCready, 457 U.
S. 465,
457 U. S.
472-473 (1982). In each of those cases, however, the
actual plaintiff was directly harmed by the defendants' unlawful
conduct. The paraphrasing of the language of § 4 in those opinions
added nothing to the even broader language that the statute itself
contains.
[
Footnote 20]
See 21 Cong.Rec. 1767-1768, 2455-2456, 2459, 2615,
3147-3148 (1890). The original proposal, which merely allowed
recovery of the amount of actual enhancement in price, was
successively amended to authorize double-damages and then
treble-damages recoveries, in order to provide otherwise remediless
small consumers with an adequate incentive to bring suit.
Id. at 1765, 2455, 3145. The same purpose was served by
the special venue provisions, the provision for the recovery of
attorney's fees, and the elimination of any requirement that the
amount in controversy exceed the jurisdictional threshold
applicable in other federal litigation.
See, e.g., id. at
2612, 3149. Moreover, changes in the description of the remedy
extended the section's coverage beyond price-fixing.
[
Footnote 21]
See, e.g., id. at 2456, 2459, 3151-3152.
[
Footnote 22]
Id. at 2456. Senator Sherman added:
"The purpose of this bill is to enable the courts of the United
States to apply the same remedies against combinations which
injuriously affect the interests of the United States that have
been applied in the several States to protect local interests."
Ibid.; see also id. at 2459, 3149, 3151-3152. Although
Members of Congress referred particularly to common law definitions
of "monopoly" and "restraint of trade," they appear to have been
generally aware that the statute would be construed by common law
courts in accordance with traditional canons. For example, at the
beginning of the debate on the Sherman Act, one Senator cautioned
his colleagues:
"A careful analysis of the terms of the bill is essential. We
must know what it means, what its legal effect is, if we give force
to it as it is written. . . . We must adopt, therefore, the known
methods of the courts in determining what the bill means."
Id. at 1765.
[
Footnote 23]
For example, the State Constitution of Illinois, adopted in
1870, provided:
"Every person ought to find a certain remedy in the laws for all
injuries and wrongs which he may receive in his person, property or
reputation. . . ."
Art. II, § 19. Comparable provisions were found in the State
Constitutions of Arkansas, Connecticut, Delaware, Indiana, Kansas,
Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota,
Mississippi, New Hampshire, Ohio, and Vermont.
See
generally F. Hough, American Constitutions (1871).
[
Footnote 24]
One treatise stated: "Natural, proximate, and legal results are
all that damages can be recovered for, even under a statute
entitling one
to recover any damage.'" 3 J. Lawson, Rights,
Remedies, and Practice 1740 (1890). Another leading treatise
explained:
"The chief and sufficient reason for this rule is to be found in
the impossibility of tracing consequences through successive steps
to the remote cause, and the necessity of pausing in the
investigation of the chain of events at the point beyond which
experience and observation convince us we cannot press our
inquiries with safety."
T. Cooley, Law of Torts 73 (2d ed. 1888).
[
Footnote 25]
In torts, a leading treatise on damages set forth the general
principle that,
"
[w]here the plaintiff sustains injury from the defendant's
conduct to a third person, it is too remote if the plaintiff
sustains no other than a contract relation to such a third person,
or is under contract obligation on his account, and the injury
consists only in impairing the ability or inclination of such
person to perform his part, or in increasing the plaintiff's
expense or labor of fulfilling such contract, unless the wrongful
act is willful for that purpose."
Thus, A, who had agreed with a town to support all the town
paupers for a specific period, in return for a fixed sum, had no
cause of action against S for assaulting and beating one of the
paupers, thereby putting A to increased expense. Similarly, a
purchaser under an output contract with a manufacturer had no right
of recovery against a trespasser who stopped the company's
machinery, and a creditor could not recover against a person who
had forged a note, causing diminution in the dividends from an
estate. 1 J. Sutherland, Law of Damages 55-56 (1882) (emphasis in
original, footnote omitted).
Similarly, in contract, the common law courts drew a distinction
between direct and consequential damages; the latter had to be
specifically included in the contract to be recoverable.
See
id. at 74-93; 1 T. Sedgwick, Measure of Damages 203-244 (8th
ed. 1891) (discussing the rule of
Hadley v. Baxendale, 9
Exch. 341, 156 Eng.Rep. 145 (1854)).
[
Footnote 26]
The common law required the plaintiff to prove, with certainty,
both the existence of damages and the causal connection between the
wrong and the injury. No damages could be recovered for uncertain,
conjectural, or speculative losses.
See generally cases
cited in F. Bohlen, Cases on the Law of Torts 292-312 (2d ed.1925)
(cases alleging emotional harm to plaintiff). Even if the injury
was easily provable, there would be no recovery if the plaintiff
could not sufficiently establish the causal connection.
See 1 Sutherland,
supra, n 25, at 94-126; 1 Sedgwick,
supra,
n 25, at 245-294.
[
Footnote 27]
See, e.g., Winterbottom v. Wright, 10 M. & W. 109,
152 Eng.Rep. 402 (Ex. 1842).
[
Footnote 28]
See n 22,
supra. The common law, of course, is an evolving body of
law. We do not mean to intimate that the limitations on damages
recoveries found in common law actions in 1890 were intended to
serve permanently as limits on Sherman Act recoveries. But
legislators familiar with these limits could hardly have intended
the language of § 7 to be taken literally.
[
Footnote 29]
See also Ames v. American Telephone & Telegraph
Co., 166 F. 820 (CC Mass.1909). Applying "ordinary principles
of law" to the general language of the statute, the court held that
a stockholder had no legally cognizable antitrust claim against
defendants for illegally acquiring the corporation, thereby
rendering plaintiff's stock worthless. Plaintiff's claim was not
distinguishable from any injury sustained by the company itself.
Therefore, the court stated, a contrary result would "subject the
defendant not merely to treble damages, but to sextuple damages,
for the same unlawful act."
Id. at 823.
[
Footnote 30]
The Court held in that case that the plaintiff shippers could
recover damages from the defendant railroad for charging an
excessive freight rate, even though they had been able to pass on
the damage to their purchasers. Justice Holmes wrote that the law
holds the defendant "liable if proximately the plaintiff has
suffered a loss," but "does not attribute remote consequences to a
defendant." 245 U.S. at
245 U. S.
533-534.
[
Footnote 31]
The label "antitrust standing" has traditionally been applied to
some of the elements of this inquiry. As commentators have
observed, the focus of the doctrine of "antitrust standing" is
somewhat different from that of standing as a constitutional
doctrine. Harm to the antitrust plaintiff is sufficient to satisfy
the constitutional standing requirement of injury in fact, but the
court must make a further determination whether the plaintiff is a
proper party to bring a private antitrust action.
See
Berger & Bernstein, An Analytical Framework for Antitrust
Standing, 86 Yale L.J. 809, 813, n. 11 (1977); Pollock, Standing to
Sue, Remoteness of Injury, and the Passing-On Doctrine, 32 A.B.A.
Antitrust L.J. 5, 6-7 (1966).
[
Footnote 32]
In his comment,
Mahoney v. Beatman: A Study in
Proximate Cause, 39 Yale L.J. 532, 533 (1930), Leon Green noted:
"Legal theory is too rich in content not to afford alternative
ways, and frequently several of them, for stating an acceptable
judgment." Earlier, in his Rationale of Proximate Cause 135-136
(1927) (footnote omitted), Green had written:
"'Cause,' although irreducible in its concept, could not escape
the ruffles and decorations so generously bestowed: remote,
proximate, direct, immediate, adequate, efficient, operative,
inducing, moving, active, real, effective, decisive, supervening,
primary, original, contributory, ultimate, concurrent,
causa
causans, legal, responsible, dominating, natural, probable,
and others. The difficulty now is in getting anyone to believe that
so simple a creature could have been so extravagantly garbed."
[
Footnote 33]
Some courts have focused on the directness of the injury,
e.g., Loeb v. Eastman Kodak Co., 183 F. 704, 709 (CA3
1910);
Productive Inventions, Inc. v. Trico Products
Corp., 224 F.2d 678, 679 (CA2 1955),
cert. denied,
350 U.S. 936 (1956);
Volasco Products Co. v. Lloyd A. Fry
Roofing Co., 308 F.2d 383, 394-395 (CA6 1962),
cert.
denied, 372 U.S. 907 (1963). Others have applied the
requirement that the plaintiff must be in the "target area" of the
antitrust conspiracy, that is, the area of the economy which is
endangered by a breakdown of competitive conditions in a particular
industry.
E.g., Pan-Islamic Trade Corp. v. Exxon Corp.,
632 F.2d 539, 546-547 (CA5 1980);
Engine Specialties, Inc. v.
Bombardier Ltd., 605 F.2d 1, 17-18 (CA1 1979);
Calderone
Enterprises Corp. v. United Artists Theater Circuit, Inc., 454
F.2d 1292, 1292-1295 (CA2 1971). Another Court of Appeals has asked
whether the injury is "arguably within the zone of interests
protected by the antitrust laws."
Malamud v. Sinclair Oil
Corp., 521 F.2d 1142, 1151-1152 (CA6 1975).
See
generally Berger & Bernstein,
supra, n 31.
As a number of commentators have observed, these labels may lead
to contradictory and inconsistent results.
See Berger
& Bernstein,
supra, n 31, at 835, 843; Handler, The Shift From Substantive to
Procedural Innovations in Antitrust Suits, 71 Colum.L.Rev. 1, 27-31
(1971); Sherman, Antitrust Standing: From
Loeb to
Malamud, 51 N.Y. U.L.Rev. 374, 407 (1976) ("it is simply
not possible to fashion an across-the-board and easily applied
standing rule which can serve as a tool of decision for every
case"). In our view, courts should analyze each situation in light
of the factors set forth in the text
infra.
[
Footnote 34]
Cf. Blue Shield of Virginia v. McCready, 457 U.S. at
457 U. S.
477-478, n. 13 (discussing elusiveness of test of
proximate cause);
Palsgraf v. Long Island R. Co., 248 N.Y.
339, 162 N.E. 99 (1928);
id. at 351-352, 162 N.E. at 103
(Andrews, J., dissenting) ("What is a cause in a legal sense, still
more what is a proximate cause, depend in each case upon many
considerations. . . . What we do mean by the word
proximate' is
that, because of convenience, of public policy, of a rough sense of
justice, the law arbitrarily declines to trace a series of events
beyond a certain point").
[
Footnote 35]
It is well settled that a defendant's specific intent may
sometimes be relevant to the question whether a violation of law
has been alleged.
See United States v. Columbia Steel Co.,
334 U. S. 495,
334 U. S. 522
(1948). Moreover, there no doubt are cases in which such an
allegation would adequately support a plaintiff's claim under § 4.
Cf. Handler,
supra, n 33, at 30 (specific intent of defendant to cause injury
to a particular class of persons should "ordinarily be dispositive"
in creating standing to sue); Lytle & Purdue, Antitrust Target
Area Under Section 4 of the Clayton Act: Determination of Standing
in Light of the Alleged Antitrust Violation, 25 Am.U.L.Rev. 795,
814-816 (1976) (suggesting that standing in a group boycott
situation should be based on the purpose of the boycott).
[
Footnote 36]
See Sherman,
supra, n 33, at 389-391, citing
Billy Baxter, Inc. v.
Coca-Cola Co., 431 F.2d 183, 189 (CA2 1970),
cert.
denied, 401 U.S. 923 (1971).
[
Footnote 37]
In
McCready, we rejected the contention that, because
there was no specific intent to harm the plaintiff, her injury was
thereby rendered remote. This case presents a different question,
but in neither case is the motive allegation of controlling
importance.
[
Footnote 38]
See United States v. Topco Associates, Inc.,
405 U. S. 596,
405 U. S. 610
(1972) ("Antitrust laws in general, and the Sherman Act in
particular, are the Magna Carta of free enterprise. They are as
important to the preservation of economic freedom and our free
enterprise system as the Bill of Rights is to the protection of our
fundamental personal freedoms. And the freedom guaranteed each and
every business, no matter how small, is the freedom to compete --
to assert with vigor, imagination, devotion, and ingenuity whatever
economic muscle it can muster").
[
Footnote 39]
McCready, a Blue Shield subscriber, alleged that Blue Shield and
the Neuropsychiatric Society of Virginia, Inc., had unlawfully
conspired to restrain competition in the market for
psychotherapeutic services by providing insurance coverage only for
consumers who patronized psychiatrists, not psychologists. McCready
obtained services from a psychologist, and was denied
reimbursement.
[
Footnote 40]
Moreover, it has not even alleged any market-wide restraint of
trade. The allegedly unlawful conduct involves predatory behavior
directed at "certain" parties, rather than a claim that output has
been curtailed or prices enhanced throughout an entire competitive
market.
[
Footnote 41]
In
Mine Workers v. Pennington, 381 U.
S. 657,
381 U. S. 664
(1965), the Court recognized that wages lie at the heart of the
subjects of mandatory collective bargaining, and that "the
elimination of competition based on wages among the employers in
the bargaining unit," which directly benefits the union, also has
an effect on competition in the product market.
See
generally Leslie, Principles of Labor Antitrust, 66 Va.L.Rev.
1183, 1185-1188 (1980); Winter, Collective Bargaining and
Competition: The Application of Antitrust Standards to Union
Activities, 73 Yale L.J. 14, 17-20, 28-30 (1963).
[
Footnote 42]
See, e.g., Coronado Coal Co. v. Mine Workers,
268 U. S. 295,
268 U. S. 310
(1925) (applying Sherman Act to alleged conspiracy by unions
involved in labor dispute to restrain interstate trade in coal);
Loewe v. Lawlor, 208 U. S. 274
(1908) (applying Sherman Act to boycott by labor organization
seeking to unionize plaintiff's hat factory); Cox, Labor and the
Antitrust Laws -- A Preliminary Analysis, 104 U.Pa.L.Rev. 252,
256-262 (1955); Meltzer, Labor Unions, Collective Bargaining, and
the Antitrust Laws, 32 U.Chi.L.Rev. 659, 661-666 (1965); Winter,
supra, n 41, at
30-38.
[
Footnote 43]
See 29 U.S.C. § 52 (statutory labor exemption);
Mine Workers v. Pennington, supra; Meat Cutters v. Jewel Tea
Co., 381 U. S. 676
(1965) (nonstatutory exemption). In this case, we need not reach
petitioner's contentions that the alleged activities are within the
statutory and nonstatutory labor exemptions.
[
Footnote 44]
There is a parallel between these allegations and the claim in
Connell Construction Co. v. Plumbers & Steamfitters,
421 U. S. 616
(1975). The plaintiff in that case, a general building contractor,
was coerced by the defendant union into signing an agreement not to
deal with nonunion subcontractors. Similarly, in the
McCready case, the plaintiff was the direct victim of
unlawful coercion. As the Court noted,
"McCready did not yield to Blue Shield's coercive pressure, and
bore Blue Shield's sanction in the form of an increase in the net
cost of her psychologist's services."
457 U.S. at
457 U. S. 483.
Her status was thus comparable to that of a contracting or
subcontracting firm that refused to yield to the defendants'
coercive practices, and therefore suffered whatever sanction that
coercion imposed. Like McCready, and like Connell Construction Co.,
such a firm could maintain an action against the defendants. In
contrast, the Union is neither a participant in the market for
construction contracts or subcontracts nor a direct victim of the
defendants' coercive practices. We therefore need not decide
whether the direct victim of a boycott, who suffers a type of
injury unrelated to antitrust policy, may recover damages when the
ultimate purpose of the boycott is to restrain competition in the
relevant economic market.
[
Footnote 45]
Its brief merely echoes the Court of Appeals' description of its
allegations:
"the Unions have been injured in their business,
i.e.,
organizing carpentry industry employees, negotiating and policing
collective bargaining agreements, and securing jobs for their
members."
Brief for Respondents 25-26.
[
Footnote 46]
Because of the absence of specific allegations, we can only
speculate about the specific components of the Union's claim. If
the Union asserts that its attempts to organize previously nonunion
firms have been frustrated because nonunion firms wish to continue
to obtain business from those subjected to coercion by the
defendants, its harm stems most directly from the conduct of
persons who are not victims of the conspiracy.
See
n 14,
supra. If the
Union claims that dues payments were adversely affected because
employees had less incentive to join the Union in light of
expanding nonunion job opportunities, its damage is more remote
than the harm allegedly suffered by unionized subcontractors. The
same is true if the Union contends that revenues from dues payments
declined because its members lost jobs or wages because their
unionized employers lost business. That harm, moreover, is even
more indirect than the already indirect injury to its members, yet
a number of decisions have denied standing to employees with merely
derivative injuries.
See, e.g., Pitchford v. PEPI, Inc.,
531 F.2d 92, 97 (CA3),
cert. denied, 426 U.S. 935 (1976);
Contreras v. Grower Shipper Vegetable Assn., 484 F.2d 1346
(CA9 1973),
cert. denied, 415 U.S. 932 (1974);
Reibert
v. Atlantic Richfield Co., 471 F.2d 727 (CA10),
cert.
denied, 411 U.S. 938 (1973).
But see Nichols v. Spencer
Int'l Press, Inc., 371 F.2d 332, 334 (CA7 1967).
[
Footnote 47]
Indeed, if there is substance to the Union's claim, it is
difficult to understand why these direct victims of the conspiracy
have not asserted any claim in their own right. The Union's
suggested explanations of this fact tend to shed doubt on the
proposition that these "victims" were actually harmed at all.
"Many unionized firms will respond to the alleged boycott . . .
by setting up double-breasted operations or shifting more of their
resources to the non-unionized part of their operations when
double-breasted operations already exist. In this manner, unionized
subcontractors can avoid losing any business and, as a result,
these subcontractors will not 'possess the classic economic
incentive to file suit.' Alternatively, unionized subcontractors
may simply not renew the collective bargaining agreement when it
expires."
Brief for Respondents 49 (citation omitted).
[
Footnote 48]
Cf. Blue Chip Stamps v. Manor Drug Stores, 421 U.
S. 723,
421 U. S.
739-748 (1975) (purchaser-seller limitation on actions
under § 10(b) of Securities Exchange Act of 1934).
[
Footnote 49]
We expressly noted in
McCready:
"[O]ur cautious approach to speculative, abstract, or
impractical damages theories has no application to McCready's suit.
The nature of her injury is easily stated: as the result of an
unlawful boycott, Blue Shield failed to pay the cost she incurred
for the services of a psychologist. Her damages were fixed by the
plan contract and, as the Court of Appeals observed, they could be
'ascertained to the penny.'"
457 U.S. at
457 U. S.
475-476, n. 11.
[
Footnote 50]
This interest was also identified in the legislative debates
preceding the enactment of the Sherman Act. Speaking in opposition
to a proposed amendment that might have complicated the procedures
in private actions, Senator Edmunds said:
"Therefore I say as to the suggested amendment of my friend from
Mississippi -- and I repeat it in all earnestness -- that, if I
were a lobbyist and wanted to entangle this business, I should
provide that everybody might sue everybody else in one common suit
and have a regular
pot-pourri of the affair, as his
amendment proposes, and leave it to the lawyers of the trust to
have an interminable litigation in respect of the proper parties,
whether their interests were common or diverse or how they were
affected, and take twenty years in order to get a result as to a
single one of them. The Judiciary Committee did not think it wise
to do that sort of thing, because we were in earnest about the
business, as I know my friend is."
21 Cong.Rec. 3148 (1890).
See also id. at 3149 (remarks of Senator Morgan
opposing same amendment: "There is as much harm in trying to do too
much as there is in not trying to do anything, and I think we have
stopped at about the proper line in this bill, and I shall support
it just as it is").
[
Footnote 51]
We pointed out in
McCready, 457 U.S. at
457 U. S. 475,
n. 11:
"If there is a subordinate theme to our opinions in
Hawaii and
Illinois Brick, it is that the
feasibility and consequences of implementing particular damages
theories may, in certain limited circumstances, be considered in
determining who is entitled to prosecute an action brought under §
4. . . . Thus, we recognized that the task of disentangling
overlapping damages claims is not lightly to be imposed upon
potential antitrust litigants, or upon the judicial system."
[
Footnote 52]
Although the policy against duplicative recoveries may not apply
to the other type of harm asserted in the Union's brief --
reduction in its ability to persuade nonunion contractors to enter
into union agreements -- the remote and obviously speculative
character of that harm is plainly sufficient to place it beyond the
reach of § 4.
See n
46,
supra.
JUSTICE MARSHALL, dissenting.
Section 4 of the Clayton Act provides that a damages action may
be brought under the antitrust laws by "
any person who
[has been] injured in his business or property by reason of
anything forbidden in the antitrust laws." 15 U.S.C. § 15
(emphasis added). Despite the absence of an "articulable
consideration of statutory policy" supporting the denial of
standing,
Blue Shield of Virginia v. McCready,
457 U. S. 465,
457 U. S. 473
(1982), the Court today holds that the intended victim of a
restraint of trade does not constitute a "person who [has been]
injured in his business or property by reason of anything forbidden
in the antitrust laws." Because I believe that this decision
imposes an unwarranted judge-made limitation on the antitrust laws,
I respectfully dissent.
Congress' adoption of the broad language of § 4 was not
accidental. As this Court observed in
Pfizer Inc. v.
India, 434 U. S. 308,
434 U. S. 312
(1978):
"Congress used the phrase 'any person' intending it to have its
naturally broad and inclusive meaning. There was no mention in the
floor debates of any more restrictive definition."
Only last Term, we emphasized that the all-encompassing language
of § 4
"reflects Congress' 'expansive remedial purpose' in enacting §
4: Congress sought to create a private enforcement mechanism that
would deter violators and deprive them of the fruits of their
illegal actions, and would provide ample compensation to the
victims of antitrust violations."
Blue Shield of Virginia v. McCready, supra, at
457 U. S. 472,
quoting
Pfizer Inc. v. India, supra, at
434 U. S.
313-314.
In keeping with the inclusive language and remedial purposes of
§ 4, this Court has "refused to engraft artificial limitations
Page 459 U. S. 547
on the § 4 remedy."
Blue Shield of Virginia v. McCready,
supra, at
457 U. S. 472
(footnote omitted). [
Footnote 2/1]
Thus, for example, in
Pfizer Inc. v. India, the Court held
that the statutory phrase "any person" is broad enough to encompass
a foreign sovereign. In
Reiter v. Sonotone Corp.,
442 U. S. 330
(1979), the Court likewise adopted an expansive reading of the
statutory term "property," ruling that a consumer who pays a higher
price as a result of a price-fixing conspiracy has sustained an
injury to his "property" and therefore has standing to sue under §
4.
The plaintiff unions fit comfortably within the language of § 4.
The complaint alleges that plaintiffs suffered injury as a result
of a restraint of trade that was "designed to weaken and destroy
plaintiffs and each of them." Complaint � 26. The Court does not
suggest that a union is not a "person" within the meaning of § 4,
or that plaintiffs cannot prove injury to their "business or
property." Moreover, it would require a strained reading of § 4 to
conclude that a party that an antitrust violation was aimed at
cannot prove that it suffered injury "by reason of" an antitrust
violation.
Far from supporting the Court's conclusion,
ante at
459 U. S.
531-533, the common law background of the antitrust laws
highlights the anomaly of denying a remedy to the intended victim
of unlawful conduct. Since antitrust violations are essentially
"tortious acts,"
Bigelow v. RKO Radio Pictures, Inc.,
327 U. S. 251,
327 U. S. 264
(1946), [
Footnote 2/2] the most apt
analogy is to the common law of torts. Although many legal battles
have been fought over the extent of tort liability for remote
consequences
Page 459 U. S. 548
of
negligent conduct, it has always been assumed that
the victim of an
intentional tort can recover from the
tortfeasor if he proves that the tortious conduct was a
cause-in-fact of his injuries. An inquiry into proximate cause has
traditionally been deemed unnecessary in suits against intentional
tortfeasors. [
Footnote 2/3] For
example, if one party makes false representations to another,
intending them to be communicated to a third party and acted upon
to his detriment, the third party can bring an action for
misrepresentation against the originator of the false information
if he suffers injury as a result. [
Footnote 2/4] Indeed, in many situations the common law
holds
Page 459 U. S. 549
an intentional tortfeasor liable even for the unforeseeable
consequences of his conduct. [
Footnote
2/5] I am not aware of any cases exonerating an intentional
tortfeasor from responsibility for the intended consequences of his
actions merely because he inflicted harm upon his victim
indirectly, rather than directly.
This case does not implicate the sort of "articulable
consideration of statutory policy" which we have deemed necessary
to deny standing to a party encompassed by the language of § 4.
Blue Shield of Virginia v. McCready, 457 U.S. at
457 U. S. 473.
In
Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc.,
429 U. S. 477
(1977), we denied standing to parties that suffered injury because
an illegal acquisition prevented them from reaping profits that
they would have reaped had the acquired firms been permitted to
fail. We reasoned that permitting recovery for "the profits
[plaintiffs] would have realized had competition been reduced"
would be "inimical" to the purposes of the antitrust laws,
id. at
429 U. S. 488,
since plaintiffs' injuries did not "reflect the anticompetitive
effect either of the violation or of anticompetitive acts made
possible by the violation,"
id. at
429 U. S. 489.
This consideration of statutory policy is not applicable here, for
plaintiffs allege that they suffered injury as a result of the
defendants' efforts to coerce and induce letters of construction
contracts and others to deal with nonunion carpentry firms solely
because of their nonunion status. If plaintiffs prove their
allegations, they will prove that they suffered harm attributable
to the anticompetitive consequences of the defendants' restraint of
trade.
Nor does the present case implicate the consideration of
statutory policy underlying this Court's decisions in
Illinois
Brick Co. v. Illinois, 431 U. S. 720
(1977), and
Hawaii v. Standard Oil Co., 405 U.
S. 251 (1972). Critical to the denial of standing in
those cases was the risk of duplicative recovery that would have
been created by affording the plaintiffs
Page 459 U. S. 550
standing. [
Footnote 2/6] In
Illinois Brick, the Court held that an indirect purchaser
has no standing to sue a seller on the theory that overcharges paid
to the seller by a direct purchaser were passed on to the indirect
purchaser. 431 U.S. at
431 U. S.
730-731. If the Court had held in
Illinois
Brick that the indirect purchaser has standing, sellers would
have faced the prospect of two treble damages actions based on the
same overcharges.
Hanover Shoe, Inc. v. United Shoe Machinery
Corp., 392 U. S. 481
(1968), had established that a direct purchaser can sue a seller
for the entire amount of the seller's overcharges, and that the
seller cannot assert as a defense that the direct purchaser passed
the overcharges through to its customers (the indirect purchasers).
Similarly, in
Hawaii v. Standard Oil Co., where the State
of Hawaii sought to recover for financial harm allegedly suffered
by the general economy of the State, the Court denied standing
because
"[a] large and ultimately indeterminable part of the injury to
the 'general economy,' as it is measured by economists, is no more
than a reflection of injuries to the 'business or property' of
consumers, for which they may recover themselves under § 4."
405 U.S. at
405 U. S. 264.
[
Footnote 2/7]
There is no risk of double recovery here. The plaintiff unions
seek recovery for injuries distinct from those that other parties
may have suffered. One such distinct injury
Page 459 U. S. 551
plaintiffs may have suffered is a decrease in union dues
resulting from a reduction in work available to union members. In
addition to regular dues, it is not uncommon for employees to pay
periodic dues representing a percentage of their wages.
See R. Gorman, Basic Text on Labor Law 650 (1976).
[
Footnote 2/8] If union members
lost work as a result of the alleged restraint of trade, their
wages and thus the dues collected by the plaintiff unions may have
been reduced.
Any recovery of lost dues by the plaintiff unions would not
duplicate recoveries that might be obtained by either unionized
carpentry firms or employees of those firms. A recovery of lost
dues by a union would not duplicate a recovery for lost profits
that might be obtained by a firm for which union members worked,
for union dues are not an element of a firm's profits. Nor would a
recovery of lost dues by a union duplicate recoveries of lost wages
that employees might obtain. Although periodic union dues are based
on a percentage of wages, there would be no double recovery,
because union dues would be subtracted from lost wages in
calculating the employees' damages. The
Hanover Shoe rule
barring the assertion of a "pass-through" defense would not prevent
subtraction of union dues from wages in determining the employees'
damages. The
Hanover Shoe rule was designed to avoid the
"additional long and complicated proceedings involving massive
evidence and complicated theories" that would be required to
determine the extent to which price overcharges were passed through
to an indirect purchaser. 392 U.S. at
392 U. S. 493.
In sharp contrast, where union dues are a percentage of wages,
there is no difficulty in determining the amount of dues that a
union lost as a result of a reduction in the wages earned by union
members.
Page 459 U. S. 552
I recognize that it may not be easy to ascertain to what extent
any reduction in union dues was attributable to the defendants'
conduct. But our cases make it clear that
"[i]f there is sufficient evidence in the record to support an
inference of causation, the ultimate conclusion as to what the
evidence proves is for the jury."
Perkins v. Standard Oil Co., 395 U.
S. 642,
395 U. S. 648
(1969) (reinstating jury verdict based on injury indirectly caused
by price discrimination in violation of the Robinson-Patman Act).
Insofar as the amount of damages is concerned, an antitrust
plaintiff need only provide a reasonable estimate of the damages
stemming from an antitrust violation.
See Bigelow v. RKO Radio
Pictures, Inc., 327 U.S. at
327 U. S. 266.
"
Difficulty of ascertainment is no longer confused with right
of recovery,'" id. at 327 U. S. 265,
quoting Story Parchment Co. v. Paterson Co., 282 U.
S. 555, 282 U. S. 566
(1931), and "[t]he most elementary conceptions of justice and
public policy require that the wrongdoer shall bear the risk of the
uncertainty which his own wrong has created," 327 U.S. at
327 U. S.
265.
Any concern the Court may have that the plaintiffs cannot prove
their case does not justify throwing them out of court solely on
the basis of the pleadings. If, during discovery, it becomes
apparent that plaintiffs cannot establish a reasonable inference of
causation or cannot provide evidence supporting a rational estimate
of damages, they will be vulnerable to a motion for summary
judgment. Dismissal for failure to state a claim is too crude a
procedural device to be used to vindicate the "interest . . . in
keeping the scope of complex antitrust trials within judicially
manageable limits."
Ante at
459 U. S.
543.
[
Footnote 2/1]
Cf. Radovich v. National Football League, 352 U.
S. 445,
352 U. S.
453-454 (1957) (given Congress' determination that the
activities prohibited by the antitrust laws are "injurious to the
public" and its creation of "sanctions allowing private enforcement
of the antitrust laws by an aggrieved party," "this Court should
not add requirements to burden the private litigant beyond what is
specifically set forth by Congress in those laws").
[
Footnote 2/2]
See Karseal Corp. v. Richfield Oil Corp., 221 F.2d 358,
363 (CA9 1955) (antitrust action is basically a suit to recover
"for a tort").
[
Footnote 2/3]
See Restatement of Torts § 279 (1934) ("If the actor's
conduct is intended by him to bring about bodily harm to another
which the actor is not privileged to inflict, it is the legal cause
of any bodily harm of the type intended by him which it is a
substantial factor in bringing about");
id. Comment c
("There are no rules which relieve the actor from liability because
of the manner in which his conduct has resulted in the injury such
as there are where the liability of a negligent actor is in
question. Therefore, the fact that the actor's conduct becomes
effective in harm only through the intervention of new and
independent forces for which the actor is not responsible is of no
importance") (citations omitted);
id. § 280 (same rule
applies to conduct intended to cause harm other than bodily harm);
Seidel v. Greenberg, 108 N.J.Super. 248, 261-269,
260 A.2d 863, 871-876 (1969);
Derosier v. New England Tel.
& Tel. Co., 81 N.H. 451, 464, 130 A. 145, 152 (1925) ("For
an intended injury, the law is astute to discover even very remote
causation").
The Court's reliance on Sutherland's treatise on damages is
misplaced.
Ante at
459
U.S. 532-533, n. 25. Although Sutherland stated as a general
proposition that a defendant is not liable to a plaintiff for
injuries suffered as a result of the defendant's conduct with
respect to a third party, he distinguished cases in which "the
wrongful act is willful for that purpose," by which he presumably
meant cases in which the defendant intended to injure the
plaintiff. 1 J. Sutherland, Law of Damages 55 (1882) (footnote
omitted). In the examples given by Sutherland and cited by the
Court, there is no suggestion that the defendants intended to
inflict injury upon the plaintiffs.
[
Footnote 2/4]
See, e.g., Watson v. Crandall, 7 Mo.App. 233 (1879),
aff'd, 78 Mo. 583 (1883);
Campbell v. Gooch, 131
Kan. 456, 292 P. 752 (1930).
See generally Prosser,
Misrepresentation and Third Persons, 19 Vand.L.Rev. 231, 240-242
(1966).
[
Footnote 2/5]
See, e.g., W. Prosser, Law of Torts 32-33 (4th ed.1971)
(doctrine of transferred intent);
id. at 67-68 (trespasser
is responsible for unforeseeable consequences of his trespass).
[
Footnote 2/6]
See Blue Shield of Virginia v. McCready, 457 U.
S. 465,
457 U. S.
474-475 (1982) (noting that
Illinois Brick and
Hawaii v. Standard Oil Co. "focused on the risk of
duplicative recovery engendered by allowing every person along a
chain of distribution to claim damages arising from a single
transaction that violated the antitrust laws").
[
Footnote 2/7]
Significantly, the risk of duplicative recovery that the Court
relied on in both
Illinois Brick and
Hawaii v.
Standard Oil Co. is not simply a judicially invented reason
for restricting the broad scope of § 4. Permitting two recoveries
based on the very same injuries would be contrary to the basic
statutory scheme governing damages actions, for the result would be
to subject antitrust defendants to sextuple-damages awards, rather
than the treble damages awards that Congress contemplated.
See 2 P. Areeda & D. Turner, Antitrust Law § 337d
(1978).
[
Footnote 2/8]
Since we have only the pleadings before us, we do not know how
the plaintiff unions collect their dues. However, plaintiffs are
entitled to survive a motion to dismiss under Federal Rule of Civil
Procedure 12(b)(6) if there is any set of facts that, if proved at
trial, would entitle them to recover.