Private Antitrust Suits

AuthorRonan P. Harty
Pages797-1043
797
CHAPTER 9
PRIVATE ANTITRUST SUITS
A. Introduction
Sections 4 and 16 of the Clayton Act create causes of action for private parties to
seek damages and injunctive relief for violations of the federal antitrust laws.1 This
chapter analyzes the elements of private antitrust claims under those statutes, the
principal affirmative defenses to such claims, and issues of practice and procedure
commonly encountered in the litigation of private actions under the federal
antitrust laws.
B. Elements of Private Damages Suits under Section 4 of the
Clayton Act
Section 4 of the Clayton Act establishes a private cause of action for damages under
the federal antitrust laws.2 It provides that “any person who shall be injured in his
business or property by reason of anything forbidden in the antitrust laws may sue . . .
and shall recover threefold the damages by him sustained,” as well as costs, including
reasonable attorneys’ fees.3 Courts also have discretionary authority to award
prejudgment interest on any actual damages, computed from the date of service of a
complaint, if th ey find that such an award is “just in the circumstances.”4 Punitive
damages are not allowed, however, because “[t]he enhancement of damages in an
antitrust case is the damages trebled.”5
Despite the sweeping language, a plaintiff’s right to sue for damages under Section
4 is limited by the text of the statute, as well as by judicial construction giving effect
to the purposes of the antitrust laws (the doctrine of antitrust injury), the ability of
courts to administer antitrust litigation (the doctrine of remoteness), and the problem
of deterring welfare-enhancing conduct.6 A plaintiff seeking to recover damages under
3. Id.
4. Id.
5. McDonald v. Johnson & Johnson Co., 722 F.2d 1370, 1381 (8th Cir. 1983); accor d Brown v.
Presbyterian Healthcare Servs., 101 F.3d 1324, 1332 (10th Cir. 1996).
6. See, e.g., RSA Media, Inc. v. Media Grp., Inc., 260 F.3d 10, 13-14 (1st Cir. 2001) (“Although the
statute is written broadly, the Supreme Court’s doctrine of antitrust standing has significantly
narrowed the number of persons entitled to bring suit.”); Serpa Corp. v. McWane, Inc., 199 F.3d 6,
10 (1st Cir. 1999) (observing that standing is restricted in antitrust cases, despite broad language of
§ 4, to avoid overdeterrence); Greater Rockford Energy & Tech. Corp. v. Shell Oil Co., 998 F.2d
391, 394 (7th Cir. 1993) (“Given the potential scope of antitrust violations and the availability of
798 ANTITRUST LAW DEVELOPMENTS (NINTH)
Section 4 must first meet the statutory definition of “person.” In addition, a plaintiff
must prove not only that it suffered injury-in-fact, but also that its alleged injury
constitutes “antitrust injury,” i.e., injury of the type the antitrust laws are intended to
prevent, and that the alleged injury is not too remote from any alleged antitrust
violation to allow for recovery. The remainder of this part addresses these
requirements. Similar requirements apply to claims for injunctive relief. A party
seeking injunctive relief, however, needs to show only threatened (not actual) injury,
and certain limits related to remoteness are relaxed for these claims. Those differences
are addressed in part E of this chapter.
1. Definitions of Statutory Terms
a. “ANY PERSON DEFINED
(1) Actions by Private P ersons
Section 4 of the Clayton Act creates a cause of action in certain “persons.”7 Section
1 of the Clayton Act defines the term “person” or “persons” to include “corporations
and associations existing under or authorized by the laws of either the United States,
the laws of any of the Territories, the laws of any State, or the laws of any foreign
country.”8 In addition, courts have interpreted the term to include individuals9 and
partnerships.10 Several courts have held that a corporation’s entitlement to sue under
the federal antitrust laws may be jeopardized if its authorization under state law is
dissolved or compromised.11 An association may sue in its proprietary capacity,12 but
its standing is limited to injunctive relief when suing in a representative capacity on
behalf of its members.13
treble damages, an over-broad reading of § 4 could result in ‘overdeterrence,’ imposing ruinous costs
on antitrust defendants.”).
8. 15 U.S.C. § 12.
9. See, e.g., Apple Inc. v. Pepper, 139 S. Ct. 1514, 1520 (2019); Reiter v. Sonotone Corp., 442 U.S.
330, 340-42 (1979); Brignac v. Yelp Inc., 2019 U.S. Dist. LEXIS 94581 (N.D. Cal. 2019) (plaintiff
can bring a federal antitrust suit on behalf of his sole proprietorship because a sole proprietorship
has no legal existence apart from its owner).
10. See, e.g., Coast v. Hunt Oil Co., 195 F.2d 870 (5th Cir. 1952); cf. United States v. Brookman Co.,
229 F. Supp. 862, 864 (N.D. Cal. 1964) (partnership is “person” subject to Sherman Act suit).
11. See, e.g., Hillis Motors v. Haw. Auto. Dealers’ Ass’n, 997 F.2d 581, 584 (9th Cir. 1993) (corporation
lacks capacity to sue after dissolution); Can. Ace Brewing v. Joseph Schlitz Brewing Co., 629 F.2d
1183, 1185-88 (7th Cir. 1980) (neither dissolved corporation nor former shareholders could maintain
§ 4 action where corporation and shareholder’s authority to sue under state law had expired).
12. See American Booksellers Ass’n v. Random House, 1996 U.S. Dist. LEXIS 12775, at *14 (S.D.N.Y.
1996) (association has standing to seek § 16 injunctive relief on behalf of its members); In re Brand
Name Prescription Drugs Antitrust Litig., 1995 U.S. Dist. LEXIS 4815, at *3-4 (N.D. Ill. 1995)
(association has standing to bring suit on behalf of its members); cf. Southwest Suburban Bd. of
Realtors v. Beverly Area Planning Ass’n, 830 F.2d 1374, 1380-81 (7th Cir. 1987) (recognizing in
dictum that associations can have proprietary or representational standing).
13. See Associated Gen. Contractors v. Otter Tail Power Co., 611 F.2d 684, 689 (8th Cir. 1979)
(associational standing “traditionally denied under § 4”); see also Sanner v. Board of Trade, 62 F.3d
918, 922-23 (7th Cir. 1995) (association of farmers would have standing to pursue injunctive relief
under § 16, but lacked standing to assert damage claims under § 4); United Union of Roofers v.
Insurance Corp. of Am., 919 F.2d 1398, 1400 (9th Cir. 1990) (union lacked associational standing
to bring suit to recover money damages representing members’ unpaid wages); National Athletic
Trainers’ Ass’n v. American Physical Therapy Ass’n, 2008 U.S. Dist. LEXIS 70131, at *12-16 (N.D.
Tex. 2008) (association had standing to pursue claims on behalf of members for injunctive and
declaratory relief only).
PRIVATE ANTITRUST SUITS 799
As in any federal civil litigation, a person entitled to bring suit under Section 4 may
sue on behalf of a class of persons under Rule 23 of the Federal Rules of Civil
Procedure.14 A representative sometimes may sue on behalf of a “person” otherwise
entitled to maintain an action. For example, a stockholder may bring a shareholder
derivative suit alleging injury to the corporation.15 On the other hand, once a trustee in
bankruptcy has been appointed, only the trustee may bring suit on the bankrupt’s
claim.16
(2) Actions by Governments
Although the United States is not a “person” for purposes of Section 4,17 Section
4A of the Clayton Act18 authorizes the United States to sue on its own behalf and to
recover treble damages resulting from antitrust violations.19 A state is considered a
“person” and can assert antitrust claims on behalf of itself.20 Under Section 4C,21 a state
may also assert antitrust claims as parens patriae on behalf of its citizens who are
“natural persons” (as opposed to corporations) and recover “monetary relief threefold
the total damage sustained.”22 A foreign government is considered a person,23 but
14. See part H.4 of this chapter.
15. See FED. R. CIV. P. 23.1; see also Kauffman v. Dreyfus Fund, 434 F.2d 727, 734-35 (3d Cir. 1970)
(holding that a mutual fund shareholder may bring derivative antitrust action on behalf of funds in
which he was a shareholder, but may not do so for similarly situated funds in which he was not a
shareholder); Ramsburg v. American Inv. Co., 231 F.2d 333, 339 (7th Cir. 1956) (allowing
shareholder derivative suit under Section 7 of the Clayton Act). But cf. Cosentino v. Carver-
Greenfield Corp., 433 F.2d 1274, 1277 (8th Cir. 1970) (Omaha citizens could not sue on a derivative
theory for injury to their municipality arising from alleged antitrust violations).
16. See Burkett v. Shell Oil Co., 487 F.2d 1308, 1310 (5th Cir. 1973).
17. See U.S. Postal Serv. v. Flamingo Indus. (USA), 540 U.S. 736, 745 (2004); United States v. Cooper
Corp., 312 U.S. 600, 614 (1941). Other governmental entities may be treated as distinct from the
United States for determining “personhood” under § 4. See, e.g., United States v. GE, 209 F. Supp.
197, 205 (E.D. Pa. 1962) (finding Tennessee Valley Authority to be a corporate agency distinct from
United States and allowing it to sue for treble damages as person); cf. In re Uranium Indus. Antitrust
Litig., 458 F. Supp. 1223, 1227-28 (J.P.M.L. 1978) (allowing transfer of TVA’s antitrust claims
because TVA is not the equivalent of the United States).
18. 15 U.S.C. § 15a.
19. Prior to its amendment by Pub. L. No. 101-588, § 5, 104 Stat. 2880 (1990), § 4A permitted the United
States to recover only actual damages. Section 4A now also authorizes an award of prejudgment
interest if such an award is “just in the circumstances.” 15 U.S.C. § 15a. The statute identifies four
criteria for courts to consider in making that determination, including whether either party in the suit
engaged in bad faith or dilatory conduct, and whether interest is “necessary to compensate the United
States adequately for the injury sustained by the United States.” Id. §§ 15a(1)-(4).
20. See Standard Oil Co. v. Arizona, 738 F.2d 1021, 1023 (9th Cir. 1984) (“it is well established that
states are ‘persons’ capable of bringing treble damages actions under the Sherman and Clayton
Acts”).
21 15 U.S.C. § 15c.
22. See In re Electronic Books Antitrust Litig., 14 F. Supp. 3d 525, 529-35 (S.D.N.Y. 2014) (citations
omitted) (thirty-one states, the District of Columbia, and Puerto Rico had standing under Clayton 4C
to pursue damages action based on their own direct injuries and injuries to their citizens); In r e
Packaged Seafood Products Antitrust Litig., 338 F. Supp. 3d 1079, 1091-92 (S.D. Cal 2018)
(dismissing parens patriae complaint brought by the Cherokee Nation under Section 4C of the
Clayton Act, holding plaintiff did not have standing to bring a non-monetary (i.e., injunctive relief)
claim). A state may also collect interest if “just in the circumstances.” 15 U.S.C. § 15c(a)(1)-(2). The
states’ enforcement of the civil antitrust laws is further discussed in Chapter 8.C.2.a.
23. See Pfizer Inc. v. Government of India, 434 U.S. 308, 318-20 (1978). But cf. Republic of Vietnam v.
Pfizer Inc., 556 F.2d 892, 894 (8th Cir. 1977) (foreign government could not sue where it had become
“defunct” upon withdrawal of recognition by the United States).

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