Illinois Brick Co. v. Illinois

Mr. Justice Brennan,

with whom Mr. Justice Marshall and Mr. Justice Blackmun join, dissenting.

Respondent State of Illinois brought this treble-damages civil antitrust action under § 4 of the Clayton Act on behalf of itself and various local governmental entities in the Greater Chicago area alleging that an overcharge in the price of concrete block used in the construction of public buildings was made by the petitioners, manufacturers and sellers of concrete block, pursuant to a price-fixing conspiracy in violation of § 1 of the Sherman Act, 15 U. S. C. § l. 1 Section 4 of the Clayton Act, 38 Stat. 731 , 15 U. S. C. § 15 , broadly provides: “[A]ny 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 . . . .”

Decisions of the Court defining the reach of § 4 have been consistent with its broad objectives: to compensate victims of antitrust violations and to deter future violations. The Court has stated that § 4 “does not confine its protection to consumers, or to purchasers, or to competitors, or to sellers . . . [but] is comprehensive in its terms and coverage, protecting all who are made victims of the forbidden practices by whomever they may be perpetrated.” Mandeville Island Farms, Inc. v. American Crystal Sugar Co., 334 U. S. 219, 236 (1948). 2 *749 Today’s decision that § 4 affords a remedy only to persons who purchase directly from an antitrust offender is a regrettable retreat from that line of cases. Section 4 was clearly intended to operate to protect individual consumers who purchase through middlemen. Indeed, Congress acted on the premise that § 4 gave a cause of action to indirect as well as direct purchasers when it recently enacted the Hart-Scott-Rodino Antitrust Improvements Act of 1976, 90 Stat. 1394r-1396, 15 U. S. C. § 15c et seq. (1976 ed.), and authorized state attorneys general to sue as parens patriae to recover damages on behalf of citizens of their various States.

Today’s decision flouts Congress’ purpose and severely undermines the effectiveness of the private treble-damages action as an instrument of antitrust enforcement. For in many instances, the brunt of antitrust injuries is borne by indirect purchasers, often ultimate consumers of a product, as increased costs are passed along the chain of distribution. 3 In these instances, the Court’s decision frustrates both the compensation and deterrence objectives of the treble-damages action. Injured consumers are precluded from recovering damages from manufacturers, and direct purchasers who act as middlemen have little incentive to sue suppliers so long as they may pass on the bulk of the illegal overcharges to the ultimate consumers. This frustration of the congressional scheme is in no way mandated by Hanover Shoe, Inc. v. United Shoe Machinery Corp., 392 U. S. 481 (1968). To the contrary, the same considerations that Hanover Shoe held *750 required rejection of the defendant’s argument there, that because plaintiff had passed on cost increases to consumers in the form of higher prices defendant should be relieved of liability — especially the consideration that it is essential to the public interest to preserve the effectiveness of the private treble-damages action — require affirmance of the decision below construing § 4 to authorize respondents’ suit.

I

In Hanover Shoe, supra, the Court held that a defendant in a treble-damages action could not escape liability, except in very limited circumstances, 4 by proof that the plaintiff had passed on illegal overcharges to others farther along in the chain of distribution. 5 The defendant in Hanover Shoe, United Shoe, argued that Hanover was not entitled to recover damages because the increased price it had paid for United’s equipment 6 had in turn been reflected in the increased price at which Hanover had sold its shoes to the consuming public. The Court held that several reasons supported its conclusion that this defense was not available to United despite “the argument that sound laws of economics require” its recognition, 392 U. S., at 492 . First, the Court followed earlier cases holding that the “victim of an overcharge is [immediately] *751 damaged within the meaning of § 4 to the extent of that overcharge,” Id., at 491. The particularly apt precedent supporting this proposition was Southern Pacific Co. v. DarnellTaenzer Lumber Co., 245 U. S. 531 (1918), 7 where a pass-on defense had been rejected because of “[t]he general tendency of the law, in regard to damages at least, . . . not to go beyond the first step,” and the Court’s belief that “[t]he carrier ought not to be allowed to retain his illegal profit, and the only one who can take it from him is the one that alone was in relation with him, and from whom the carrier took the sum. ...” Id., at 533-534 . In other words, the requirement of privity between plaintiff and defendant was a reason to deny defendant the pass-on defense, since otherwise the defendant would be able to profit by his own wrong. Hanover Shoe cannot be read, however, as limiting actions to parties in privity with one another. That was made clear in Perkins v. Standard Oil Co., 395 U. S. 642, 648 (1969), decided the next Term, a price discrimination case in which the Court traced an illegal overcharge through several levels in the chain of distribution, ultimately holding that a plaintiff seeking to recover damages need show only a “causal connection between the price discrimination in violation of the [antitrust laws] and the injury suffered. ... If there is sufficient evidence in the record to support an inference of causation, the ultimate conclusion as to what that evidence proves is for the jury.” Darnell-Taenzer does, however, support Hanover Shoe’s denial of the pass-on defense for the other reasons relied upon in Hanover Shoe: the difficulty of proving and quantifying a pass-on, and the role of the treble-damages action as the most effective means of antitrust enforcement. 392 U. S., at 492-494 .

The Court correctly discerned that the difficulty of recon *752 structing hypothetical pricing decisions, 8 would aggravate the already complex nature of antitrust litigation since pass-on defenses would become commonplace whenever the chain of distribution extended beyond the plaintiff. This would lessen the effectiveness of the treble-damages action, since ultimate consumers individually often suffer only minor damages and therefore have little incentive to bring suit. Limiting defendants' liability to the loss of profits suffered by direct purchasers would thus allow the antitrust offender to avoid having to pay the full social cost of his illegal conduct in many cases in which indirect purchasers failedi to bring suit. Consequently,

“those who violate the antitrust laws by price fixing or monopolizing would retain the fruits of their illegality because no one was available who would bring suit against them. Treble damage actions, the importance of which the Court has many times emphasized, would be substantially reduced in effectiveness.'' Id., at 494 .

Hanover Shoe thus confronted the Court with the choice, as had been true in Darnell-Taenzer, of interpreting § 4 in a way that might overcompensate the plaintiff, who had certainly suffered some injury, or of defining it in a way that under-deters the violator by allowing him to retain a portion of his ill-gotten overcharges. The Court chose to interpret § 4 so as to allow the plaintiff to recover for the entire overcharge. This choice was consistent with recognition of the importance *753 of the treble-damages action in deterring antitrust violations. 9 But Hanover Shoe certainly did not imply that an indirect purchaser would not also have a cause of action under § 4 when the illegal overcharges were passed on to him.

Despite the superficial appeal of the argument that Hanover Shoe should be applied “consistently,” thus precluding plaintiffs and defendants alike from proving that increased costs were passed along the chain of distribution, there are sound reasons for treating offensive and defensive passing-on cases differently. The interests at stake in “offensive” passing-on cases, where the indirect purchasers sue for damages for their injuries, are simply not the same as the interests at stake in the Hanover Shoe, or “defensive” passing-on situation. There is no danger in this case, for example, as there was in Hanover Shoe, that the defendant will escape liability and frustrate the objectives of the treble-damages action. Rather, the same policies of insuring the continued effectiveness of the treble-damages action and preventing wrongdoers from retaining the spoils of their misdeeds favor allowing indirect purchasers to prove that overcharges were passed on to them. Hanover Shoe thus can and should be limited to cases of defensive assertion of the passing-on defense to antitrust liability, where direct and indirect purchasers are not parties in the same action. 10 I fully agree with the observation:

“The attempt to transform a rejection of a defense *754 because it unduly hampers antitrust enforcement into a reason for a complete refusal to entertain the claims of a certain class of plaintiffs seems an ingenious attempt to turn the decision [in Hanover Shoe] and its underlying rationale on its head.” In re Master Key Antitrust Litigation, 1973-2 Trade Cas. ¶ 74,680 , pp. 94,978-94,979 (Conn.).

II

A

Today’s decision goes far to frustrate Congress’ objectives in creating the treble-damages action. Treble-damages actions were first authorized under § 7 of the Sherman Act, 26 Stat. 210 . The legislative history of this section shows that it was conceived primarily as a remedy for “[t]he people of the United States as individuals,” especially for consumers. See, e. g., 21 Cong. Rec. 1767-1768 (1890) (remarks of Sen. George); see also id., at 2612 (Sens. Teller and Reagan), 2615 (Sen. Coke), 2640 (Sen. Spooner). 11 In the Clayton Act of *755 1914, Congress extended the § 7 remedy to persons injured by “any violation of the antitrust laws.” See Brunswick Corp v. Pueblo Bowl-O-Mat, Inc., 429 U. S. 477 , 486 n. 10 (1977), citing H. R. Rep. No. 627, 63d Cong., 2d Sess., 14 (1914). These actions were conceived primarily as “ 'open[ing] the door of justice to every man, whenever he may be injured by those who violate the antitrust laws, and giv[ing] the injured party ample damages for the wrong suffered.’ ” 12 Brunswick, supra, at 486 n. 10, quoting 51 Cong. Rec. 9073 (1914) (remarks of Rep. Webb); see, e. g., id., at 9079 (Rep. Volstead), 9270 (Rep. Carlin), 9414-9417, 9466-9467, 9487-9495. See also the House debates following the conference committee report. Id., at 16274-16275 (Rep. Webb), 16317-16319 (Rep. Floyd).

The Court has interpreted § 4 broadly, this in recognition of the plainly stated congressional objective, Northern Pacific R. Co. v. United States, 356 U. S. 1, 4 (1958), that the private treble-damages action play a paramount role in the enforcement of the fundamental economic policy of the Nation, Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U. S. 100, 130-131 (1969); Minnesota Mining & Mfg. Co. v. New Jersey Wood Finishing Co., 381 U. S. 311, 318 (1965), and has concluded that “the purposes of the antitrust laws are best served by insuring that the private action will be an ever-present threat to deter anyone contemplating business behavior in violation of the antitrust laws.” Perma Life Mufflers, Inc. v. International Parts Corp., 392 U. S. 134, 139 (1968). The federal courts have accordingly been cautioned “not [to] *756 add requirements to burden the private litigant beyond what is specifically set forth by Congress in [the antitrust] laws,” Radovich v. National Football League, 352 U. S. 445, 454 (1957), and express approval has been given the “ ‘tendency of the courts ... to find some way in which damages can be awarded where a wrong has been done. Difficulty of ascertainment is no longer confused with right of recovery’ for a proven invasion of the plaintiff’s rights.” Bigelow v. RKO Radio Pictures, 327 U. S. 251, 265-266 (1946). See also Zenith Radio Corp. v. Hazeltine Research, Inc., supra, at 130-131; Perma Life Mufflers, Inc. v. International Parts Corp., supra; Hanover Shoe, Inc. v. United Shoe Machinery Corp., 392 U. S., at 494. And Radiant Burners, Inc. v. Peoples Gas Light & Coke Co., 364 U. S. 656, 660 (1961), emphasized that to plead a cause of action under § 4 “allegations adequate to show a violation and . . . that plaintiff was damaged thereby are all the law requires.”

B

The recently enacted Hart-Scott-Rodino Antitrust Improvements Act of 1976 was expressly adopted to create “an effective mechanism to permit consumers to recover damages for conduct which is prohibited by the Sherman Act, by giving State attorneys general a cause of action [to sue as parens patriae on behalf of the States’ citizens] against antitrust violators.” S. Rep. No. 94-803, p. 6 (1976). Title III of the new Act responded to the holding of Hawaii v. Standard Oil Co. of Cal., 405 U. S. 251 (1972), that the Clayton Act does not authorize a State to sue for damages for an injury to its general economy allegedly attributable to a violation of the antitrust laws. The Senate Report accompanying the new Act expressly found that “[t]he economic burden of most antitrust violations is borne by the consumer in the form of higher prices for goods and services,” S. Rep. No. 94-803, supra, at 39, and it is clear that the new Act is intended to provide a remedy *757 for injured consumers whether or not they purchased directly from the violator. The Senate Report states, id., at 42:

“A direct cause of action is granted the States to avoid the inequities and inconsistencies of restrictive judicial interpretations. . . . Section 4C is intended to assure that consumers are not precluded from the opportunity of proving the amount of their damage and to avoid problems with respect to manageability [of class actions], standing, privity, target area, remoteness, and the like.” 13 (Emphasis supplied.)

Representative Rodino, a sponsor, stated during the House debates:

''[A]ssuming the State attorney general proves a violation, and proves that an overcharge was 'passed on’ to the consumers, injuring them 'in their property’; that is, their pocketbooks — recoveries are authorized by the compromise bill whether or not the consumers purchased directly from the price fixer, or indirectly, from intermediaries, retailers, or middlemen. The technical and procedural argument that consumers have no 'standing’ whenever they are not 'in privity’ with the price fixer, and have not purchased directly from him, is rejected by the compromise bill. Opinions relying on this procedural *758 technicality . . . are squarely rejected by the compromise .bill.” 122 Cong. Rec. H10295 (daily ed. Sept. 16, 1976).

It is difficult to see how Congress could have expressed itself more clearly. Even if the question whether indirect purchasers could recover for damages passed on to them was open before passage of the 1976 Act, and I do not believe that it was, Congress’ interpretation of § 4 in enacting the parens patriae provision should resolve it in favor of their authority to sue. Indeed, the House Report accompanying the bill actually referred to the opinion of the District Court in this case as an example of the correct answer. N. 13, supra. The Court’s tortuous efforts to impose a “consistency” upon this area of the law that Congress has so clearly rejected is a return to the “legal somersaults and twistings and turnings” of the Court’s earlier opinions that ultimately led to the passage of the Clayton Act in 1914 to salvage the ailing Sherman Act., See 51 Cong. Rec. 9086 (1914) (remarks of Rep. Kelly).

Ill

Hanover Shoe correctly observed that the necessity of tracing a cost increase through several levels of a chain of distribution “would often require additional long and complicated proceedings involving massive evidence and complicated theories.” 392 U. S., at 493. But this may be said of almost all antitrust cases. Hanover Shoe itself highlights this unavoidable complication, in that it requires the plaintiff to prove a probable course of events which would have occurred but for the violation. 14 In essence, estimating the amount of *759 damages passed on to an indirect purchaser is no different from and no more complicated than estimating what the middleman’s selling price would have been, absent the violation. See ante, at 733 n. 13.

Nor should the fact that the price-fixed product in this case (the concrete block) was combined with another product (the buildings) before resale operate as an absolute bar to recovery. It may well be true, as the State claims, that the cost of the block was included separately in the project bids and therefore can be factored out from the price of the building with relative certainty. In any case, this is a factual matter to be determined based on the strength of the plaintiff’s evidence. 15 See, e. g., In re Western Liquid Asphalt Cases, 487 F. 2d 191 (CA9 1973), cert. denied sub nom. Standard Oil Co. of Cal. v. Alaska, 415 U. S. 919 (1974). Admittedly, there will be many cases in which the plaintiff will be unable to prove that the overcharge was passed on. In others, the portion of the overcharge passed on may be only approximately determinable. But again, this problem hardly distinguishes this case from other antitrust cases. Reasoned estimation is required in all antitrust cases, but “while the damages [in such cases] may not be determined by mere speculation or guess, it will be enough if the evidence show the extent of the damages as a matter of just and reasonable inference, although the result be only approximate.” Story Parchment Co. v. Paterson Co., 282 U. S. 555, 563 (1931). See also Bigelow v. RKO Radio Pictures, 327 U. S., at 266 ; Eastman Kodak Co. v. Southern Photo Materials Co., 273 U. S. 359, 379 (1927). Lack of precision in apportioning damages between direct and indirect purchasers is thus plainly not a convincing reason for denying *760 indirect purchasers an opportunity to prove their injuries and damages. Moreover, from the deterrence standpoint, it is irrelevant to whom damages are paid, so long as someone redresses the violation. Antitrust violators are equally deterred whether the judgments against them are in favor of direct or indirect purchasers. Hanover Shoe said as much. The Court’s decision recognized that some plaintiffs would recover more than their due, but concluded that the necessity of assuring that someone recover and thus deter future violations and prevent the antitrust offender from profiting by his .illegal overcharge outweighed any resulting injustice. 16

I concede that despite the broad wording of § 4 there is a point beyond which the wrongdoer should not be held liable. See, e. g., Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U. S. 477 (1977); Hawaii v. Standard Oil Co. of Cal., 405 U. S. 251 (1972). Courts have therefore developed various tests of antitrust “standing,” not unlike the concept of proximate cause in tort law, to define that point. The definition has been variously articulated, usually in terms of two tests. The more restrictive test focuses on the directness of the injury; 17 the more liberal, and more widely accepted, on whether the plaintiff is within the “target area” of the defendant’s violation. 18 *761 But if the broad language of § 4 means anything, surely it must render the defendant liable to those within the defendant’s chain of distribution. It would indeed be “paradoxical to deny recover to the ultimate consumer while permitting the middlemen a windfall recovery.” P. Areeda, Antitrust Analysis: Problems, Text, Cases 75 (2d ed. 1974).

IV

I acknowledge some abstract merit in the argument that to allow indirect purchasers to sue, while, at the same time, precluding defendants from asserting pass-on defenses in suits by direct purchasers, subjects antitrust defendants to the risk of multiple liability. But as a practical matter, existing procedural mechanisms can eliminate this danger in most instances. Even though, as the Court says, no procedure currently exists which can eliminate the possibility entirely, ante, at 731 n. 11, the hypothetical possibility that a few defendants might be subjected to the danger of multiple liability does not, in my view, justify erecting a bar against all recoveries by indirect purchasers without regard to whether the particular case presents a significant danger of double recovery. The “double recovery” specter was argued in the Congress that passed the Hart-Scott-Rodino Act, and was rejected. The Senate Report recorded the Act’s purpose to codify the holding of the Court of Appeals for the Ninth Circuit in In re Western Liquid Asphalt Cases, supra:

“ ‘We therefore see no problem of double tecovery, and we believe that if this difficulty should arise in some other connection, the district court will be able to fashion relief accordingly. In addition to the court’s control over its decree, numerous devices exist. We note that the consolidation of cases, which has already occurred, is one means of averting duplicitous awards. The short, four-year statute of limitations is another; later suits, after *762 final judgment herein, are unlikely. 15 U. S. C. § 15b. In other cases, it may be that statutory interpleader, 28 U. S. C. § 1335 , could be used by antitrust defendants to avoid double liability. If necessary, special masters may be appointed to handle complex cases. Finally, there are the doctrines of res judicata and collateral estoppel and procedures for compulsory joinder. The day is long past when courts, particularly federal courts, will deny relief to a deserving plaintiff merely because of procedural difficulties or problems of apportioning damages.’

“We would prefer to place the burden of proving apportionment upon appellees, rather than deny all recovery to appellants. Such a burden would be the consequence of appellees’ illegal acts, not appellants’ suits. Where the choice is between a windfall to intermediaries or letting guilty defendants go free, liability is imposed. Hanover Shoe, supra, 392 U. S. at 494. So, too, between ultimate purchasers and defendants.” S. Rep. No. 94-803, p. 44 (1976), quoting 487 F. 2d, at 201 (citation omitted).

Moreover, the possibility of multiple recovery arises in only two situations: (1) where suits by direct and indirect purchasers are pending at the same time but in different courts; and (2) where additional suits are filed after an award of damages based on the same violation in a prior suit. 19 In the first situation, the United States, Brief as Amicus Curiae 25, cogently points out that district courts may make use of the alternatives suggested by the Manual for Complex Litigation, 1 (pt. 2) J. Moore, Federal Practice (1976): district courts may use the intradistrict transfer power created by 28 U. S. C. § 1404 (b), coordinate pretrial proceedings of cases pending in *763 different districts, or transfer cases to a single district pursuant to § 1404 (a). In addition, the Judicial Panel on Multidistrict Litigation is empowered by 28 U. S. C. § 1407 to transfer cases involving common questions of fact to any district for coordinated pretrial proceedings upon its determination that the transfer “will be for the convenience of parties and witnesses and will promote the just and efficient conduct of such actions.” After pretrial transfers under this section, cases can be consolidated and transferred to the same district for trial pursuant to the transfer power under § 1404 (a). 20 A further device mentioned in Western Liquid Asphalt is statutory interpleader under 28 U. S. C. § 1335 , by which the defendant can bring all potential plaintiffs into the same court and require them to litigate inter se to determine their appropriate shares of the total- recovery. 21

True, there is a greater hypothetical danger of multiple recovery where suits are independently instituted after an earlier suit based on the same violation has proceeded to judgment. 22 But even here the likelihood that defendants *764 will be subjected to multiple liability is, as a practical matter, remote. The extended nature of antitrust actions, often involving years of discovery, combines with the short four-year statute of limitations to make it impractical for potential plaintiffs to sit on their rights until after entry of judgment in the earlier suit.

The Court today regrettably weakens the effectiveness of the private treble-damages action as a deterrent to antitrust violations by, in most cases, precluding consumers from recovering for antitrust injuries. For in many instances, consumers, although indirect purchasers, bear the brunt of antitrust violations. To deny them an opportunity for recovery is particularly indefensible when direct purchasers, acting as middlemen, and ordinarily reluctant to sue their suppliers, 23 pass on the bulk of their increased costs to consumers farther along the chain of distribution. Congress has given us a clear signal that § 4 is not to be read to have the restrictive *765 scope ascribed to it by the Court today. I would follow the congressional understanding and therefore would affirm. 24

There is, of course, a point beyond which antitrust defendants should not be held responsible for the remote consequences of their actions. See the discussion in Part III, infra, at 760-761.

The portion of an illegal overcharge that a direct purchaser can pass on depends upon the elasticity of demand in the relevant product market. If the market is relatively inelastic, he may pass on a relatively large portion. If demand is relatively elastic, he may not be able to raise his price and will have to absorb the increase, making it up by decreasing other costs or increasing sales volume. It is extremely unlikely that a middleman could pass on the entire cost increase. But rarely would he have to absorb the entire increase. R. Posner, Antitrust Cases, Economic Notes, and Other Materials 147-149 (1974).

The opinion recognizes that “there might be situations — for instance, when an overcharged buyer has a pre-existing 'cost-plus’ contract, thus making it easy to prove that he has not been damaged — where the considerations requiring that the passing-on defense not be permitted in this case would not be present.” 392 U. S., at 494.

Hanover Shoe, did not involve the consumers of the plaintiff’s shoes, to whom the overcharge allegedly was passed. United’s passing-on argument is referred to as “defensive” passing on. The State’s position, seeking recovery of illegal overcharges allegedly passed on to it and its citizens, is referred to as “offensive” passing on.

Hanover alleged that United monopolized the shoe machinery industry in violation of §2 of the Sherman Act by its practice of leasing but refusing to sell its shoemaking machinery.

In DarneU-Taenzer, shippers brought suit for reparations against a railroad claiming that the railroad had charged unreasonable rates. The railroad argued that the shippers had in turn passed on to their customers any excess over the reasonable rate.

“[T]he impact of a single change in the relevant conditions cannot be measured after the fact; indeed a businessman may be unable to state whether, had one fact been different ... , he would have chosen a different price. . . .” 392 U. S., at 492-493. The Court further observed that it is equally difficult to ascertain “what effect a change in a company's price will have on its total sales”; and it is all but impossible to demonstrate that the particular plaintiff “could not or would not have raised his prices absent the overcharge or maintained the higher price had the overcharge been discontinued.” Id., at 493. See generally Posner, supra, n. 3, at 147-149.

The pass-on defense in Hanover Shoe was asserted by a defendant against whom a prima facie case of liability had already been made out. The Clayton Act provides: “A final judgment . . . rendered in any civil or criminal proceeding brought by or on behalf of the United States under the antitrust laws . . . shall be prima facie evidence against such defendant . . . 15 U. S. C. §16 (a). The Government had secured a judgment against United in United States v. United Shoe Machinery Corp., 110 F. Supp. 295 (Mass. 1953), summarily aff'd, 347 U. S. 521 (1954).

Commentators almost unanimously conclude that, despite Hanover Shoe, § 4 should be construed to authorize indirect purchasers to recover *754 upon proof that increases were passed on to them. See, e. g., Comment, Standing to Sue in Antitrust Cases: The Offensive Use of Passing-on, 123 U. Pa. L. Rev. 976 (1975); Comment, Mangana and Ultimate-Consumer Standing: The Misuse of the Hanover Doctrine, 72 Colum. L. Rev. 394 (1972); Note, The Effect of Hanover Shoe on the Offensive Use of the Passing-on Doctrine, 46 So. Cal. L. Rev. 98 (1972). But see Handler & Blechman, Antitrust and the Consumer Interest: The Fallacy of Parens Patriae and A Suggested New Approach, 85 Yale L. J. 626, 638-655 (1976). In addition, most courts have read Hanover Shoe as not preventing indirect purchasers from attempting to prove that they have been injured. See, e. g., Yoder Bros., Inc. v. California-Florida Plant Corp., 537 F. 2d 1347 (CA5 1976); In re Western Liquid Asphalt Cases, 487 F. 2d 191 (CA9 1973), cert. denied sub nom. Standard Oil Co. of Cal. v. Alaska, 415 U. S. 919 (1974); Illinois v. Bristol-Myers Co., 152 U. S. App. D. C. 367, 470 F. 2d 1276 (1972); West Virginia v. Chas. Pfizer & Co., 440 F. 2d 1079 (CA2), cert. denied sub nom. Cotler Drugs, Inc. v. Chas. Pfizer & Co., 404 U. S. 871 (1971); In re Master Key Antitrust Litigation, 1973-2 Trade Cas. ¶ 74,680 (Conn.).

A further indication of Congress’ desire to create a remedy for all *755 persons, including consumers, even though their individual injuries might be comparatively slight, was the elimination of the jurisdictional-amount requirement for antitrust actions. See 21 Cong. Rec. 2612, 3148-3149 (1890) (remarks of Sens. Sherman and Edmunds).

The fact that damages are trebled both aids deterrence and provides the incentive of compensation, since it encourages suits for relatively minor injuries.

Congress rejected earlier Court of Appeals and District Court decisions erecting standing barriers to suits by indirect purchasers and chose instead to pattern the Act “after such innovative decisions as In re Western Liquid Asphalt Cases, 487 F. 2d 191 (9th Cir. 1973); In re Master Key Litigation, 1973 Trade Cases ¶ 74,680 and 1975 Trade Cases ¶ 60,377 (DC Conn.); State of Illinois v. Ampress Brick Co., 1975 Trade Cases ¶ 60,295 (DC Ill.) [this case below]; Carnivale Bag Co. v. Slide Rite Mfg., 1975 Trade Cases ¶ 60,370 (S. D. N. Y.); In re Antibiotics Antitrust Actions, 333 F. Supp. 278 (S. D. N. Y. 1971); and West Virginia v. Charles Pfizer & Co., 440 F. 2d 1079 (2d Cir. 1971).” Congress accepted these decisions as correctly stating the law. S. Rep. No. 94-803, pp. 42-43 (1976).

In Hanover Shoe, the measure of damages was the difference between the amount Hanover paid for the lease and the amount it would have paid had United agreed to sell the machinery. It has been suggested that the burden of demonstrating a pass-on may be no more difficult or speculative than the plaintiff’s initial task of proving an overcharge in the first instance. See Pollock, Automatic Treble Damages and the Passing-on Defense: The Hanover Shoe Decision, 13 Antitrust Bull. 1183,1210 (1968).

One commentator has suggested that, in deciding whether to permit recovery by indirect purchasers in a particular case, courts should consider the number of intervening hands the product has passed through and the extent of its change in the process. P. Areeda, Antitrust Analysis: Problems, Text, Cases 75 (2d ed. 1974).

This holding is consistent with the Court’s continuing concern for the effectiveness of the treble-damages action, which has been sustained even when the plaintiff was “no less morally reprehensible than the defendant” with whom he had conspired. Perma Life Mufflers, Inc. v. International Parts Corp., 392 U. S. 134, 139 (1968).

See, e. g., Loeb v. Eastman Kodak Co., 183 F. 704 (CA3 1910).

Earlier this Term, Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., disallowed a -treble-damages recovery, stating that in order to recover antitrust plaintiffs must prove “antitrust injury, which is to say injury of the type the antitrust laws were intended to prevent and that flows from that which makes [the] defendants’ acts unlawful.” 429 U. S., at 489 . At least one Court of Appeals has rephrased the target-area test in terms of whether the injury to the plaintiff is a reasonably foreseeable consequence of the defendant’s illegal conduct. Mulvey v. Samuel Goldwyn Productions, 433 F. 2d 1073 (CA9 1970), cert. denied, 402 U. S. 923 (1971).

If direct and indirect purchasers bring suit in the same court, the cases may be consolidated and damages allocated in accordance with Fed. Rule Civ. Proe. 42 (a). See West Virginia v. Chas. Pfizer & Co., 440 F. 2d 1079 (CA2 1971).

For a discussion of this process, see Note, The Judicial Panel and the Conduct of Multidistrict Litigation, 87 Harv. L. Rev. 1001 (1974); Comment, The Experience of Transferee Courts Under the Multidistriet Litigation Act, 39 U. Chi. L. Rev. 588 (1972).

Petitioners suggest that interpleader may be an impractical alternative for some defendants, since it requires a defendant to complicate the suit by bringing in ultimate consumers and to post bond for the amount in controversy. See 28 U. S. C. § 1335 (a) (2). Although § 1335 clearly places a burden upon defendants who elect to use it in order to avoid potential multiple liability, that burden is not unique to antitrust cases, and Congress has clearly indicated that it considers the burden justified. See S. Rep. No. 94-803, p. 44 (1976).

The problem of potential multiple recoveries is not present in this case. All suits against petitioners were filed in the Northern District of Illinois. Petitioners never sought consolidation under Fed. Rule Civ. Proc. 42 (a) and stipulated in settlements with direct purchasers that the settlement would not affect the rights of indirect purchasers.

The opinion for the Court “recognize [s] that direct purchasers sometimes may refrain from bringing a treble-damages suit for fear of disrupting relations with their suppliers,” but concludes that “on balance, and until there are clear directions from Congress to the contrary, we conclude that the legislative purpose in creating a group of 'private attorneys general’ to enforce the antitrust laws ... is better served by holding direct purchasers to be injured to the full extent of the overcharge paid by them than by attempting to apportion the overcharge among all that may have absorbed a part of it.” Ante, at 746. But the intent of Congress in enacting the parens patriae provision of the 1976 Act was clearly to provide a mechanism to permit recovery by consumers, and this purpose is not furthered by a rule that will keep most consumers out of court.

The Court’s opinion further observes that “[m]any of the indirect purchasers barred from asserting pass-on claims . . . have such a small stake in the lawsuit that even if they were to recover as part of a class, only a small fraction would be likely to come forward to collect their damages.” Ante, at 747. Yet it was precisely because of judicially perceived weaknesses in the class action as a device for consumer recovery for antitrust violations that Congress enacted the parens patriae provision of the 1976 Act.

Abundant authority sanctions deference to congressional indications in subsequent legislation regarding the congressional meaning in earlier Acts worded consistently with that meaning. NLRB v. Bell Aerospace Co., 416 U. S. 267, 275 (1974); Red Lion Broadcasting Co. v. FCC, 395 U. S. 367, 380 (1969); FHA v. The Darlington, Inc., 358 U. S. 84, 90 (1958); United States v. Stafoff, 260 U. S. 477, 480 (1923); New York & Norfolk R. Co. v. Peninsula Exchange, 240 U. S. 34, 39 (1916). Although it is true, as the Court’s opinion states, ante, at 734 n. 14, that the post-enactment statements of “particular legislators” who participated in the enactment of a statute cannot change its meaning, see Regional Rail Reorganization Act Cases, 419 U. S. 102, 132 (1974), quoting National Woodwork Manufacturers Assn. v. NLRB, 386 U. S. 612 , 639 n. 34 (1967), in this case, the House and Senate Reports accompanying the amendments to § 4 of the Clayton Act clearly reveal the 94th Congress’ interpretation of that section as permitting the kind of consumer action which the Court now prohibits. Moreover, it is no answer to this to say that the new parens patriae provision will not in all cases directly compensate indirect purchasers, ante, at 747 n. 31, for it is clear that despite the difficulty of distributing benefits to such injured persons the new Act authorizes recovery by the State on their behalf.