Petition for Writ of Certiorari — Morgan v. Automobile Manufacturers Ass'n

SRR eae Rh ERE REIT BESS OTS RELI RE es — ) rm ry

LIBRARY FILED

SUPREME COURT, U. S AUG 31 1973

MICHAEL RODAK, JR_ CLERK

Supreme Court of tthe United States

October Term, 1973.

No. 73- 394

ROBERT MORGAN,

Petitioner,

v.

AUTOMOBILE MANUFACTURERS ASSOCIATION,

INC., et al.,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

THE NINTH CIRCUIT. E

Davin BERGER,

H. Lappre MonracvugE, Jr.,

Davin Bercer, P. A.,

1622 Locust Street,

Philadelphia, Pa. 19103

(215) 732-8000

Counsel for Petitioner.

Of Counsel:

Davin Bercer, P. A.,

Attorneys-at-Law.

International Printing Co., 711 So. 50th St., Phila., Pa. 19143 — Tel. (215) 727-8711

ed

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aeRO eI TANS

OPINIONS BELOW ......-.-sceceeceereecerererseesenenes

JURISDICTION .....-.2-eeeeeeceececescecesceesereseseess

QUESTIONS PRESENTED .....---+--eeeeceeeerecessereseees

STATUTE INVOLVED .......-0ceeeee cece ceeseeseeeenerees

. STATEMENT OF THE CASE .....----+eeeeeeeereeee eee

REASONS FOR GRANTING THE WRIT

Introduction ............0.eceeeeereeeeceeeeeeeeeees

I. The Circuits Are Hopelessly Divided on the Proper

Criteria for Standing Under Section 4 of the Clayton

TN ccke ene eeetersen ren keee eke seit 8

II. The Ninth Circuit Standard Should Not Be Applied

to Dismiss Complaints Consolidated for Pretrial Pur-

poses Under 28 U. S. C. § 1407 ......-.--++++++:- 10

III. The Artificial Tests of Standing Applied by the Court

of Appeals and Other Lower Courts Run Contrary to

This Court’s Construction of Section 4 of the Clayton

ene. esis esdeviaeteeererenbees 13

A. This Court Does Not Recognize the Standing Re-

quirement Imposed Below ........----+-+++++- 14

B. Dictum in Hawaii, Relied Upon by the Court of

Appeals, Is No Bar to Petitioner’s Claim ........ 19

IV. The Court of Appeals Read the Complaint Narrowly

in an Unwarranted Attempt to Defeat It .......... 20

V. The Decision Below Undermines Proper Adminis-

" tration of the Antitrust Laws ..........------+---- 22

CONCLUSION 2.2.22. c cece cece cece cece ccccccccccccececes 28

APPENDIX :

Court of Appeals Opinion ..........--+-+++e+eeeeeeee Al

Court of Appeals Judgment .........------eeeeeeeeeee Al19

District Court Opinion ............--2eeeeee ee eeeeees A20

District Court Order .......-.------++-eeeee: Pea a at A3l

TABLE OF CASES CITED.

Page

Bigelow v. R. K. O. Radio Pictures, 327 U. S. 251 (1946) ...- 20

Conley v. Gibson, 355 U. S. 41 (1957) ...ceeeeeeeeeeeceers 22

Hawaii v. Standard Oil Co. of California, 405 U. S. 251 (1972)

8, 9, 14, 16, 17, 18, 19

In Re Motor Vehicle Air Pollution Control Equipment, 311

F. Supp. 1349 (J. P. M. L. 1970) .-----eeeeeereereees 10

In Re Multidistrict Private Civil Treble Damages Antitrust

Litigation Involving Motor Vehicle Air Pollution Control

Equipment, MDL No. 31, 52 FRD 398 (C. D. Calif.,

1970) 1970 T. C. 973,318 ...-...ee sere reer street 3

Klor’s, Inc. v. Broadway-Hale Stores, Inc., 359 U. S. 207

COE isin wnco ncn aes cacssennpeversexnanses sss ** 20

Lawlor v. National Screen Services Corp., 349 U.S. 322 (1955) 16

Mandeville Island Farms v. American Crystal Sugar Co., 334

U.'S. 219 (1948) ...cceeceeececceeeeeeneceer cess ees 15

Minnesota Mining and Manufacturing Co. v. New Jersey

Wood Finishing, 381 U. S. 311 (1965) ...--+---+++0+0* 16

Perkins v. Standard Oil Co. of California, 395 U. S. 642 (1969)

17, 18

Perma Life Mufflers, Inc. v. International Parts Corp., 392

SE G10 CIID), ox sae snancascestsnenssesensece ter? 16

Poller v. Columbia Broadcasting System, 368 U. S. 464 (1962)

. 20, 22

Radiant Burners v. Peoples Gas Light and Coke Co., 364 U. S.

WE COTE) avon cn cssexcncsasetecssennceneesers ses" 14, 22

Radovich v. The National Football League, 352 U. S. 445

SOD) o iccavsavavensanccedseysecesnseneeses 14, 15, 20, 22

United States v. Borden Co., 334 U S. 219 (1948) ....----- 16

Van Dusen v. Barrack, 376 U. S. 612, 84 S. Ct. 805 (1964)

11, 12, 13

Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U. S. 100

I eaccnnnccenxsanaiweosnsapenanenner state gaye 16, 20

MISCELLANEOUS.

Section 1 of the Sherman Act, 15 U. S.C. §1 .....-----ee- 6, 18

Section 2(a) of the Robinson-Patman Act, 15 U. S. css...

Section 4 of the Clayton Act, 15 U. S. C. § 15, 38 Stat. 731

| Pres 2, 3, 4, 7, 8, 10, 13, 14, 15, 17, 18, 19, 20, 27

Section 16 of the Clayton Act, 15 U. S. C. §26 ......-.-.--- 3

28 U. S. C. §1254(1) 20. e cece eee cere eee e rece eee eecers 1

28 U. S. C. §1292(b) ..... cece cence eect cece cn eereeeere 4

28 U. S.C. § 1404 (a) 22. cece e eee cere teen eee rete eens 11, 13

2B Uz. S. C. $1407 2... eee eee eee eee eee eee ee eeee 2,7, 10, 11, 13

Federal Rules of Civil Procedure, Rule 8(f) ......-..--++-- 22

IN THE

Supreme Court of the United States

OctrosEr TzEm, 1973.

No.

ROBERT MORGAN,

Petitioner,

v.

AUTOMOBILE MANUFACTURERS ASSOCIATION,

INC., ET AL.,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT.

Petitioner, one of the plaintiffs in the proceedings be-

low, respectfully prays that a writ of certiorari issue to

review the judgment of the court of appeals entered on

June 4, 1973.

OPINIONS BELOW.

The opinion of the court of appeals reversing the dis-

trict court (reported in 1973 T-C {| 74,540) is reprinted in

the Appendix, infra, pp. A2-A18. The opinion of the dis-

trict court denying respondents’ Motion to Dismiss is re-

ported at 52 F. R. D. 398 (C. D. Cal. 1970), 1970 T. C.

| 73,318 and appears in the Appendix, infra, pp. A20-A30.

JURISDICTION.

The judgment of the court of appeals was entered on

June 4, 1973 (Appendix, infra, p. A19). The jurisdiction

of this Court is invoked pursuant to 28 U. S. C. § 1254(1).

2 Petition for Writ of Certiorart

QUESTIONS PRESENTED.

This case raises an important and persistently trouble-

some issue in the administration and application of the

Federal Antitrust Laws:

1. Was standing to sue for treble damages under

Section 4 of the Clayton Act properly denied petitioner, a

farmer who was concededly injured in his business and

property as a direct result of an alleged conspiracy by

automobile manufacturers to suppress the development of

air pollution control technology?

In addition, two significant subsidiary issues are

raised:

2. To what extent can a consolidation under 28 U.S. C.

§ 1407 wreak a change in the rules of law applicable to the

sufficiency of a complaint in an antitrust action?

3. Did the court of appeals err in construing the alle-

gations of the complaint narrowly and thereby holding that

petitioner was not within the ‘‘target area’’ of an alleged

anti-competitive conspiracy?

STATUTE INVOLVED.

Section 4 of the Clayton Act, 15 U.S. C. § 15, 38 Stat.

731 (1914) provides:

‘‘Any person who shall be injured in his business or

property by reason of anything forbidden in the anti-

trust 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

amount in controversy, and shall recover threefold the

damages by him sustained, and the cost of suit, includ-

ing a reasonable attorney’s fee.’

Petition for Writ of Certiorart ; 3

STATEMENT OF THE OASE.

This petition presents a threshold question of law

arising out of the celebrated In Re Multidistrict-Private

Civil Treble Damage Antitrust Litigation Involving Motor

Vehicle Air Pollution Control Equipment. The litigation

consists of numerous private antitrust claims filed through-

out the country against the domestic auto makers and

consolidated for pretrial purposes in the Central District

of California. Following the lead of the federal govern-

ment, which charged the automobile industry with violation

of the antitrust laws in the ‘‘development’’ of air pollution

control technology,’ numerous private actions were filed

against the big four auto makers and others under Sections

4 and 16 of the Clayton Act, 15 U. S. C. §§15, 26. The

private suits alleged unlawful conspiracy under Section 1

of the Sherman Act. Damages for past harm and injunc-

tive relief from future injury were sought. Various plain-

tiffs brought individual and class actions including all

persons or residents of the United States, persons within

states and political subdivisions, all persons injured in their

property or business, and governmental entities suing on

behalf of their citizens and as representatives of govern-

mental agencies. Petitioner, a crop farmer, brought suit on

his own behalf and as a representative of all other crop

farmers in the United States.

On September 4, 1970, the district court denied the

defendants’ motions to dismiss for lack of standing under

Sections 4 and 16 of the Clayton Act and upheld certain

parens patriae claims. The court also granted class action

motions except those on behalf of all persons and residents

of the United States and governmental entities suing on

behalf of individual residents.

1. In the Government suit, defendants consented to the entry of

a decree proscribing future violation of the antitrust laws. 1970 T. C.

| 73,070.

RR APE RRS ESI

Petition for Writ of Certiorart

Defendants took a certified interlocutory appeal to the

Ninth Circuit from the district court (under 28 U. S. C.

§ 1292(b)). This appeal resulted, on June 4, 1973, in re-

versal of the district court’s denial of the motion to dismiss

with respect to all claims for damages arising under Sec-

tion 4 of the Clayton Act. In each case the justification for

dismissal was lack of standing to sue. The court of appeals

held that all individual plaintiffs except farmers and all

governmental plaintiffs including governments’ individual

claims, class claims and parens patriae claims failed to

alleged injury to business or property. The court found

that only petitioner alleged injury to business or property

within the meaning of Section 4. Although petitioner was

concededly injured in his business and property, the court

also dismissed his cause of action for failure to allege

any injury ‘‘by reason of’’ a violation of the antitrust

laws. This result was reached because the court of ap-

peals read the Complaint narrowly to allege only a com-

bination or conspiracy to eliminate competition in the re-

search, development and marketing of air pollution control

equipment to the auto companies themselves. Having con-

strued the Complaint in this light, the court then held that

petitioner, as a farmer, was not within the ‘‘target’’ area of

the conspiracy and hence lacked standing to sue for dam-

ages under Section 4.

Nevertheless, despite dismissal of petitioner’s and all

other damage claims, the court of appeals simultaneously

upheld another portion of the district court opinion and

allowed all of the claims for injunctive relief to proceed.

In his complaint, petitioner alleged a combination and

conspiracy to eliminate competition and retard innovation

in the development, marketing and installation of air

pollution control equipment (Paragraph 22(a) of peti-

tioner’s complaint?). This conspiracy was implemented

2. Hereinafter referenced as “Pet. Complaint.”

Petition for Writ of Certiorari — 5

partially by restraining competition among the auto manu-

facturers in the promotion, marketing and installation of

such devices. Petitioner argued below that this was done

to thrust the costs of pollution control onto others, including

petitioner. Petitioner also alleged damage to his crops dur-

ing the period of the conspiracy as a result of the pollution

emitted by automobiles (Pet. Complaint {| 26).

Under the cover of a joint research and development

scheme promoted as achieving economies of scale and

diversifying the costs and risks of development, the auto

industry established an elaborate collusive arrangement

through the industry trade association, the Automobile

Manufacturers Association (Pet. Complaint 21, 22).

This scheme was implemented to coordinate and police a

secret agreement to suppress the development and installa-

tion of automobile pollution control devices (Pet. Complaint

1 23(c)). The agreement was industry-wide and was par-

tially embodied in a cross licensing agreement signed by the

manufacturers. The purpose of this horizontal arrange-

ment was to assure collusive suppression as opposed to

independent development of air pollution technology (Pet.

Complaint {If 21, 22, 23). Where outright suppression was

not possible due to regulatory pressure and knowledge of

the state of the art, delay of research and installation and

hindrance of state or local legislation imposing mandatory

controls became the goal. After the execution of the cross

licensing agreement and the assumption of the role of

directing the conspiracy by the Automobile Manufacturers

Association, a serious retardation took place in applied

and basic research and in the implementation of technology

once it came into existence (Pet. Complaint { 24(a)).

This case was prosecuted in the lower courts by peti-

tioner and others as an antitrust, not an environmental,

action. Petitioner alleged that his injuries arose because of

ERIM) Sk APM aE PD TIME i ee MG yee. sin

6 Petition for Writ of Certiorart

anticompetitive activity in violation of Section 1 of the

Sherman Act.

The decision for which review is sought is concerned

solely with standing to sue for treble damages under the

nation’s antitrust laws. It does not concern either the

merits of petitioner’s claims or the propriety of any of the

class actions.

Lh FO A A EOE LIE ELE EFRON BET

Petition for Writ of Certiorari 7

REASONS FOR GRANTING THE WRIT.

Introduction.

This case poses a question of crucial importance to the

administration and application of the nation’s antitrust

laws. As the court of appeals itself recognized, the issue

of who has standing to sue for treble damages under Sec-

tion 4 of the Clayton Act has beleaguered and divided the

circuits. There are two major conflicting ‘‘tests’’ which

the courts of appeal have devised to limit standing under

Section 4. Despite the fact that every circuit uses one of

these tests, or some combination thereof, both are shock-

ingly deficient and both run contrary to the established

decisions of this Court.

Furthermore, petitioner’s complaint was filed in the

Eastern District of Pennsylvania (in the Third Circuit) and

consolidated for pretrial proceedings in the Central District

of California. Petitioner’s case would have been remanded

to the Third Circuit for trial. In dismissing his complaint,

the Ninth Circuit panel flouted the purposes of 28 U.S. C.

§ 1407 by applying a test which it expressly conceded con-

tradicted the test applied in the Third Circuit.

Finally, it appears that the court of appeals purpose-

fully construed petitioner’s complaint in the narrowest pos-

sible fashion so as to conform to its ‘‘target area’’ test

and still defeat the action for damages. Blatant contraven-

tion of federal standards on the liberal construction of

pleadings, particularly in the antitrust field, should not be

tolerated in a case of this public importance.

Petitioner respectfully urges that the writ issue to

clarify a significant question of federal law and terminate

the stark conflicts which prevail in the lower federal courts.

8 Petition for Writ of Certiorart

L The Circuits Are Hopelessly Divided on the Proper

Criteria for Standing Under Section 4 of the Clayton

Act.

The issue of who has standing to sue for treble dam-

ages under Section 4 of the Clayton Act has perplexed

and divided the lower federal courts. All of the circuits

have spoken on the issue, and the only agreement has

been on the point that “remote” or “incidentally” damaged

parties cannot sue to redress antitrust violations. How-

ever, no single set of criteria has dominated the colloquy

between the circuits on this question.

The Ninth Circuit candidly recognized this confusion

in its decision. Commenting on a dictum in Hawaii v.

Standard Oil Co. of California, 405 U. S. 251 (1972), the

panel, while analyzing the prevailing positions as falling

basically in two major ‘‘camps’’, carefully noted the

division among the circuits:

‘‘ Although the Court [referring to this Court] cited

cases in support from every circuit, it failed to dis-

tinguish essentially two disparate analytical tech-

niques—the ‘direct injury’ and the ‘target area’ ap-

proaches *—employed by different circuits.” [Emphasis

added. }

6. We have employed the terms “target area” and “direct

injury” only as convenient, shorthand methods of identifying the

two major approaches to the interpretation of “by reason of” [in

Section 4 of the Clayton Act].. Use of either label in other cases,

in contrast, has frequently suggested an approach opposite that

so denominated here. E.g., Perkins v. Standard Oil Co., 396

F. 2d 809 (9th Cir. 1968) (Court labeled approach “target area”

but employed the “direct injury” analysis), rev'd. 395 U. S. 642

(1969). Likewise, some courts have failed to perceive signifi-

cant distinctions between the tests. E.g., Nationwide Auto Ap-

praiser Serv., Inc. v. Ass'n. of Cas. & Sur. Cos., 382 F. 2d 925

(10th Cir. 1967). It is to be hoped that the resolution suggested

in our present opinion will obviate the use of either label in the

future.

7. We do not mean to imply that each circuit falls neatly

into one of the two pigeonholes. Only the Eighth Circuit and

ee

EL SRE ie Aree ee

Petition for Writ of Certiorari

7. (Cont’d.)

ours, for example, have consistently followed the “target area”

approach, e.g., Mulvey v. Samuel Goldwyn Productions, 433 F.

2d 1073 (9th Cir. 1970) ; yy. Milk Producers v. Bergjans

Farm Dairy, Inc., 368 F. 2d 679, 688-89 (8th Cir. 1966)

(Blackmun, J.), and even they have diverged occasionally. E.g.,

Perkins v. Standard Oil Co., supra note 6. The First, Third,

Sixth and Tenth Circuits, on the other hand, generally apply the

test we label “direct injury”. E.g., Reibert v. Atlantic Richfield

Co., 471 F. 2d 727 (10th Cir. 1973); Kauffman v. Dreyfus

Fund, 434 F. 2d 727, 732-34 (3d Cir. 1970), cert. denied, 401

U. S. 974 (1971) ; Volasco Products Co. v. Lloyd A. Fry Roof-

ing Co., 308 F. 2d 383, 394-95 (6th Cir. 1962) ; Miley v. John

Hancock Mut. Life Ins. Co., 148 F. Supp. 299 (D. Mass.), aff'd

per curiam, 242 F. 2d 758 (1st Cir.), cert. denied, 355 U. S. 828

(1957). The Second, Fourth and Fifth Circuits have formu-

lated their own particular mixtures of the two tests, e.g., Cal-

derone Enterprises Corp. v. United Artists Theatre Circuit, Inc.,

454 F. 2d 1292 (2d Cir. 1971) ; Dailey v. Quality School Plan,

Inc., 380 F. 2d 484 (Sth Cir. 1967) ; South Carolina Council of

Milk Producers, Inc. v. Newton, 360 F. 2d 414 (4th Cir. 1966),

although the approach of the Second more closely resembles the

“direct injury” test and that of the Fourth and Fifth the test of

“target area”. The Seventh Circuit’s approach is uncertain, al-

though it appears closer to “target area”. Compare Sandidge v.

Rogers, 256 F. 2d 269 (7th Cir. 1958) with Congress Building

Corp. v. Loews, Inc., 246 F. 2d 587 (7th Cir. 1957). In ascrib-

ing positions to the various Circuits, we have ignored self-

descriptions and have attempted to analyze their actual ap-

proaches.”

[The above footnotes are quoted verbatim from the

court of appeals’ opinion in the instant case. ]

Without elaboration upon any disputes with the Ninth

Cireuit’s characterization of positions taken by the various

circuits (and their correctness), petitioner adopts the court

of appeals’ accurate portrayal of the state of anarchy

which presently surrounds this question. Furthermore,

in view of the crucial importance of private treble-damage

actions as part of the regulatory scheme of the Sherman

and Clayton Acts,* the issue of who has standing to sue

3. See, e.g., Hawaii v. Standard Oil Co. of California, 405 U. S.

251, 262 (1972).

ssvoqiencencianenitinielap ee

Lee a eee eT

10 Petition for Writ of Certiorart

for damages under those provisions cannot be deprecated

in importance.

The Ninth Circuit went on to criticize the so-called

‘direct injury’’ test as arbitrary and unjustifiably tech-

nical. Petitioner would contend that the panel then pro-

ceeded to apply the ‘‘target area’’ test in precisely the

same arbitrary manner which they criticized in the applica-

tion of the ‘‘direct injury’’ test. However, irrespective of

which test is preferable, it is plain that the lower federal

courts are floundering about in considerable disarray. The

law is different in almost every circuit. The necessity for

enunciation and clarification of the correct standard is

readily apparent. On this basis alone, the writ should

issue to resolve an important question that has consist-

ently proven to be a major stumbling block in the admin-

istration of federal antitrust law.

IL. The Ninth Circuit Standard Should Not Be Applied to

Dismiss Complaints Consolidated for Pretrial Purposes

Under 28 U. 8. C. § 1407.

Upon defendants’ motion, these actions were consoli-

dated in the Central District of California, under 28 U. S. C.

§ 1407, for pretrial purposes only. Jn re Motor Vehicle

; Air Pollution Control Equipment, 311 F. Supp. 1349

(J. P. M. L. 1970). They were filed in various sections

of the country comprising different circuits. Petitioner’s

4 complaint was filed in the Eastern District of Pennsyl-

vania. This district is in the Third Circuit, which, as the

court of appeals expressly concedes (see page 9, supra),

generally applies the opposing ‘‘direct injury’’ test to

determine standing under Section 4 of the Clayton Act.

Hence, the Ninth Circuit panel applied its contradictory

test to dismiss a complaint which properly fit the standing

requirements imposed by the Third Circuit. This, it is

Petition for Writ of Certiorari 11

submitted, exceeds the proper bounds of the court of

appeals’ discretion under 28 U. S. C. § 1407.

A subsidiary question to the issue of petitioner’s

standing is thus presented: To what extent can a consoli-

dation under 28 U. S. C. § 1407 wreak a change in the

rules of law applicable to an antitrust action?

The issue of which law governs when there is a

consolidation in another jurisdiction or circuit under

§ 1407 has never been expressly settled by this Court.

However, the purposes of the statute indicate clearly that

it is merely a procedural device designed to expedite the

handling of complex litigation in the federal courts. This

is evident from the fact that actions are consolidated for

pretrial purposes only, and the consolidation district

remands the actions for trial to the respective forums in

which they were brought. Furthermore, the statute deals

in terms with ‘‘civil actions involving one or more common

questions of fact....’’ [Emphasis added.] 28 U.S. C.

§ 1407(a). Nowhere is the consolidation forum empowered

to contravene the law applied in the original court and

dismiss a complaint.

Indeed, the only provision analogous to 28 U. S. C.

§ 1407 is the ‘‘permissive change of venue’’ statute—28

U.S. C. § 1404(a). Unlike § 1407, a change of venue under

§ 1404(a) is permanent, and the action proceeds to trial in

the transferee forum. However, this Court has already

held that where the law differs in the two districts, the

law of the transferor forum governs. Van Dusen v. Bar-

rack, 376 U. S. 612, 84 S. Ct. 805 (1964). In Van Dusen,

the Court ensured that a defendant could not effect a

change of law merely by seeking a change of venue for the

‘‘eonvenience of parties and witnesses’’:

‘‘Of course these cases allow plaintiffs to retain what-

ever advantages may flow from the state laws of the

Se I Se ee

NWA RIT OL

AE Mg 48S Dee I 5

12 Petition for Writ of Certiorart

forum they have initially selected. There is nothing,

however, in the language or policy of § 1404(a) to

justify its use by defendants to defeat the advantages

accruing to plaintiffs who have chosen a forum which,

although it was inconvenient, was a proper venue. a

The legislative history of § 1404(a) certainly does not

justify the rather startling conclusion that one might

‘get a change of law as a bonus for a change of venue.’

Indeed, an interpretation accepting such a rule would

go far to frustrate the remedial purposes of § 1404(a).

If a change of law were in the offing, the parties might

well regard the section primarily as a forum-shopping

instrument. And, more importantly, courts would at

least be reluctant to grant transfers, despite considera-

tions of convenience, if to do so might conceivably

prejudice the claim of a plaintiff who had initially

selected a permissible forum. We believe, therefore,

that both the history and purposes of § 1404(a) in-

dicate that it should be regarded as a federal judicial

housekeeping measure, dealing with the placement of

litigation in the federal courts and generally intended,

on the basis of convenience and fairness, simply to

authorize a change of courtrooms.’’ 376 U. S. at 634-

636.

The only arguable distinction between Van Dusen and

the instant case is that the differing laws in Van Dusen

stemmed from the diversity jurisdiction (differing state

laws governing scope of recovery in airline crashes),

whereas here it is the circuits which are at odds. In view

of the identical policy considerations, however, this must

be deemed a distinction without a difference. Forum shop-

ping between circuits is as counterproductive as forum

shopping between jurisdictions. Furthermore, why should

ARE GST ARTY

Petition for Writ of Certiorari 13

plaintiff’s proper choice of forum be entitled to less weight

where the law differs between circuits, as opposed to states?

Most important, petitioner’s case would ultimately

proceed to trial in the Eastern District of Pennsylvania.

The result below indicates that defendants can impose the

law of the Ninth Circuit upon the Third Circuit merely

by seeking consolidation for pretrial purposes. Even more

than § 1404(a), this is a fatuous conclusion with absolutely

no support in the language or the purposes of § 1407. The

district court recognized its limited role in the administra-

tion of these actions. Appendix, infra, p. A23. Neverthe-

less, the Ninth Circuit panel chose to discard the appropri-

ately reserved opinion of the district judge and impose its

view of the law on a case properly brought in the Third

Circuit.

This outcome points up the overreaching position of

the court of appeals below. Furthermore, the decision runs

contrary to the established rule in Van Dusen v. Barrack,

supra. Finally, it highlights the express contradiction

among the circuits which begs for resolution in this Court.

III. The Artificial Tests of Standing Applied by the Court

of Appeals and Other Lower Courts Run Contrary to

This Court’s Construction of Section 4 of the Clayton

Act.

Both the ‘‘direct injury’’ and ‘‘target area’’ tests, as

elucidated by the opinion below, attempt to read new stand-

ing requirements into Section 4 and limit the number of

potential litigants. Thus, the concept of both tests is sim-

ilar. The ‘‘direct injury’’ test relates to outmoded notions

of privity. By contrast, the so-called ‘‘target area’’ test

narrows the field to litigants who were the purported

‘*targets’’ of the conspiracy and thus turns. upon the pro-

fessed or inferred ‘‘intent’’ of the wrongdoers. Both tests

LD ATT Mheebetersa WAT ON

14 Petition for Writ of Certiorart

ignore the ‘‘injury in fact”’ standard repeatedly applied

by this Court. Finally, both tests are wholly insufficient to

deal with the very real problems posed by a modern market

economy. [see Part V, infra]

A. This Court Does Not Recognize the Standing Re-

quirement Imposed Below.

This Court has never read either the requirement of

‘direct’? injury or ‘‘target area’’ of the conspiracy into

Section 4. When the Court has had occasion to comment

or rule on the sufficiency of the complaint in the light of

Section 4, injury in fact—as opposed to ‘‘direct’’ or ‘*in-

tended’’ injury—has been adequate to establish standing

where plaintiff met the other standing requirements set

forth in the statute. In Radovich v. The National Football

League, 352 U. S. 445 (1957), this Court upheld a litigant’s

standing to sue where the plaintiff was a football player

and the victim of a larger monopoly scheme directed at a

competitor football league:

‘‘Petitioner’s claim need only be ‘treated under the

Sherman Act’s general prohibition on unreasonable

restraints of trade’, [citation omitted] and meet the

requirement that petitioner has thereby suffered in-

jury.’’ 352 U. S. 445, 453

Similarly, in Radiant Burners v. Peoples Gas Light

and Coke Co., 364 U. S. 656 (1961), this Court declared :

‘Therefore, to state a claim upon which relief may be

granted under that Section, allegations adequate to

show a violation and, in a private treble damage action,

that plaintiff was damaged thereby are all the law

requires.’ 364 U. S. 656, 660 (1961)

And in Hawaii v. Standard Oil Company of California, 405

U. S. 251 (1972), this Court stated that in Section 4:

PANIED wild bad RL ORE

Petition for Writ of Certiorari 15

‘*‘Congress chose to permit all persons to sue to re-

cover three times their actual damages every time they

were injured in their business or property by an anti-

trust violation’’. 405 U. S. 251, 262 (1972)

Although the Court dismissed the State of Hawaii’s claim,

it did so on the grounds that Hawaii had no standing to sue

in a parens patriae capacity for its citizens or for damage

to its ‘general economy’’.

Injury in fact confers standing under Section 4 be-

cause suit by a victim of an antitrust violation advances the

fundamental purposes of the antitrust laws. A person in-

jured in fact by conduct condemned by these laws is within

the class of protected persons. This principle was expressly

stated in Radovich v. The National Football League, supra,

where the Court said: ‘‘These laws protect the victims of

forbidden practices as well as the public’’. 352 U.S. 447,

454.

Within the class of ‘‘victims’’ the Court has never

limited protection to favored members. Rather, in Mande-

ville Island Farms v. American Crystal Sugar Co., 334 U.S.

219 (1948), this Court declared :

‘‘The Act is comprehensive in its terms and coverage,

protecting all those who are made victims of the for-

bidden practices by whomever they may be perpe-

trated.’’ 334 U.S. 219, 236

For remedial purposes, then, the Court has stated that

victims of an antitrust violation as well as the public are

entitled to protection and may invoke the rights to redress

created by Section 4 of the Clayton Act.

The victim of an antitrust violation is assured stand-

ing under Section 4 for fundamental reasons other than

protection and compensation. The victim sues as a

Be Sadi 8 Oh Nay heed 1 WV

16 Petition for Writ of Certiorart

‘‘private attorney gener » to vindicate public antitrust

policy and to deter future violations. Thus, in Radovich,

supra, the Court stated:

‘‘Congress has by legislative fiat declared that such

prohibited activities are injurious to the public and

has provided sanctions allowing private enforcement

of the antitrust laws by an aggrieved party.’’ 352 ou.

447, 453-454

And in Hawaii, supra, the Court declared :

‘‘By offering potential litigants the prospect of a re-

covery in three times the amount of their damages,

Congress encouraged these persons to serve as ‘private

attorneys general’.’’ 405 U. S. 251, 262

Since every victim is a potential private attorney gen-

eral, the entire class has a mandate under Section 4. This

policy maximizes the enforcement potential of the statute,

an objective intended by Congress and repeatedly endorsed

by this Court.‘ Moreover, the special enforcement role

accorded the private antitrust litigant by Congress man-

dates that technical requirements not be employed to defeat

lawsuits where serious harm has in fact ensued.

In short, the Court has already resolved this issue by

conferring standing on parties injured in fact by a violation

of the antitrust laws. Their identity is determined by

focusing on the harm of the violation and the victims of the

harm, not on the proximity of the victim to the violator or

the directness of the victim’s injury. Rather than opening

the federal courts to a ‘‘flood’”’ of litigation, this standard

4. See United States v. Borden Co., 308 U. S. 188 (1939) ;

Lawlor v. National Screen Service Corp., 349 U. S. 322 (1955) ;

Hawaii v. Standard Oil Co. of California, supra; Zenith Radio Corp.

v. Haseltine Research, Inc., 395 U. S. 100 (1969); Perma Life

Mufflers, Inc. v. International Parts Corp., 392 U. S. 134 (1968) ;

Minnesota Mining and Manu acturing Co. v. New Jersey W ood

Finishing, 381 U. S. 311 (1965).

Petition for Writ of Certiorari 17

merely ensures that the proper plaintiff is brought before

the court.

The two most recent decisions by this Court, Perkins

v. Standard Oil Co. of California, 395 U. S. 642 (1969), and

Hawaii v. Standard Oil Co. of California, supra, reaffirm

this requirement of injury in fact.

Perkins involved an action brought under Seetion 2(a)

of the Robinson-Patman Act, 15 U. 8. C. § 13 and Section 4

of the Clayton Act. In Perkins, the Ninth Circuit had held

that plaintiff was only incidentally injured by a price dis-

crimination where he was sold gasoline on the retail level

and where the price discriminator was a manufacturer who

sold bulk to two intermediaries before the gasoline reached

the retail level. This Court found that analysis to be

‘‘artificial and completely unwarranted by the language and

the purpose of the Act’’, 395 U. S. 642, and reversed the

court of appeals. The Court also permitted Perkins to re-

cover in his capacity as a landiord and creditor, two classes

of plaintiffs traditionally excluded by the arbitrary standing

requirement of ‘‘target’’ or ‘‘direct’’ injury. Noting that

Perkins was the principal victim of the violation, he was

entitled to submit all his damages to the jury. 395 U.S.

642, 650.

The impact of Pericins is apparent in light of the im-

portant function of the private antitrust action. The Court

focused primarily upon implementing the purposes and

policies underlying the Act. In overruling the court of

appeals’ dismissal on the basis of a conceptual determina-

tion of incidental injury, the Court stressed that the ruling

below immunized the violator from liability and under-

mined the purpose of the statute. 395 U. S. at 647-48.

Perkins thus illustrates that no artificial limitation should

be placed on victims injured in their business and property

and willing to sue to vindicate public policy. In a refer-

Pe

ORG OP OIA EE

a ew een dnenemngenere

oe ee a oe Oe ee

18 Petition for Writ of Certiorari

ence to the direct-incidental injury conundrum created by

the court below in Perkins, this Court held standing de-

pendent upon the harm to the victim, not his relationship

or proximity to the defendant.

Applying the principles of Perkins and earlier cases

to the facts of this case, the Ninth Circuit is plainly in error.

Unquestionably, petitioner is a victim of a violation giving

rise to a unique harm to petitioner; he has been injured

in fact by reason of defendants’ alleged anticompetitive

activities. He sues to condemn a new variation of an old

forbidden practice : conspiracy among manufacturers in the

market to rig their conduct and performance, in this case

innovations in automobile pollution control technology.

Unquestionably he advances the public policies underlying

Section 4 of the Clayton Act and the substantive policies

underlying Section 1 of the Sherman Act: he sues to enforce

the Sherman Act prohibition, to deter further and future

violations by the auto makers and other large firms in tight

knit markets characterized by few competitors, and to re-

dress his own injuries. Finally, dismissal wrongly im-

munizes the violators from liability.

The decision in Hawaii v. Standard Oil Co. of Calt-

fornia, supra, in no way vitiates the significance of Perkins.

Nor can Hawaii be construed to foreclose petitioner in this

case. In Hawaii, the Court found that the State of Hawaii

had suffered no “‘injury to business or property’’ within

the meaning of Section 4 by alleging injury to the ‘‘general

economy”’ of the State. 405 U. S. 251, 263. To make this

determination, the Court looked to the purpose of Section 4,

not to an arbitrary test of injury or directness of injury.

The Court found that all persons were entitled to sue every

time they were injured in their business or property by a

violation of the antitrust laws. Violators, however, were

not required to reimburse state and federal governments

for duplicative damage to their respective economies. With

Petition for Writ of Certiorari 19

respect to the issue of injury in the instant case, the Ninth

Circuit panel below expressly conceded that petitioner was

injured in his business and property within the meaning of

Section 4. Appendix, infra, p. A6. For this reason alone,

Hawaii cannot stand as a bar to petitioner’s antitrust

claims.

B. Dictum in Hawaii, Relied Upon by the Court of

Appeals, Is No Bar to Petitioner’s Claim.

In Hawaii, the Court intimated in a footnote that under

certain circumstances it might be willing to limit the ambit

of Section 4.5 Although the footnote leaves the contours

of such a limitation entirely unresolved, in the body of the

opinion the Court expressed concern for the situation which

might give rise to additional standing requirements: selec-

tion of the proper party litigant so as to avoid double or

treble recoveries (by multiple parties) for the same injury.

405 U. S. 251, 263-64. The possibility of such a recovery is

frequently present in the antitrust context, where several

persons are in a position to sue for the same injury and

where a plaintiff, suing under Section 4, derived his injury

from another victim of the violation. In this setting, a

policy reason might exist for curtailing liability—assuming

the most logical plaintiff could be induced to sue.

However, the problem of double recovery for the same

injury has no application to this case. Unlike Hawaii,

where the injury to the general economy consisted in part

of damages to individual consumers and businesses, peti-

tioner here sues as a victim in his own right. The purpose

of automobile pollvtion control is to protect petitioner from

5. Footnote 14 of Hawaii reads, in pertinent part:

“The lower 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 [citations omitted].

IRIE ed as

20 Petition for Writ of Certiorart

harm to his business and property resulting from air pol-

lution. Therefore, he is a principal and immediate victim

of the auto makers’ industry-wide agreement to suppress

pollution controls. He suffers a unique harm, underived

from any third party. The proof of this proposition is the

absence of any other person in a position to recover for his

damages. Thus, there is no threat of double recovery in

the instant case, and the court of appeals’ reliance on

Hawaii was misplaced.

Finally, circumspect use of standing requirements also

follows implicitly from this Court’s oft-expressed view that

private plaintiffs should not be required to overcome arti-

ficial barriers to assert rights under the antitrust laws,

particularly requirements not specifically adumbrated in

Section 4.°

IV. The Court of Appeals Read the Complaint Narrowly in

an Unwarranted Attempt to Defeat It.

The alleged violation is a variation of restrictive hori-

zontal trade practices which have been uniformly con-

demned since the enactment of the antitrust laws. Unlike

collusion to fix prices or allocate market shares, this con-

spiracy to rig performance in the market was aimed at an-

other competitive variable: innovation. The injury to com-

petition lies in the stifling of competitive performance in

6. For example, the Court has eliminated the requirement of

alleging and showing public injury as well as private injury to the

plaintiff. See Klor’s, Inc. v. Broadway-Hale Stores, Inc., 359 U. S.

207 (1959); Radovich, supra; and Radiant-Burners, supra. Simi-

larly, concerning the issue of a causal connection between the injury

and the illegal acts of the violator, the Court has eliminated the re-

quirement that the violation be the “only” factor or that it produce

the effect with “certainty”. See Poller v. Columbia Broadcasting Sys-

tem, 368 U. S. 462 (1962) and Bigelow v. R. K. O. Radio Pictures,

327 U. S. 251 (1946). Also see Zenith Radio Corp., supra, and

Bigelow, supra, on the liberal requirements of proof of damage.

po Set ae a 4

eB Bat BEL TT wm ae DG GOT i RE Oe

Petition for Writ of Certiorart 21

the development of new technology and systems controlling

automobile emissions. The facts alleged in the complaint

(which must be taken as valid for purposes of the motion

to dismiss) indicate that market forces unrestrained by

collusion would have produced controls far sooner than

the industry’s self-proclaimed ‘‘joint development”’ effort.

This horizontal agreement within the automobile in-

dustry to retard a solution to air pollution is a classic illus-

tration of the anti-competitive behavior of tight knit oligo-

polies in areas other than price. The motives underlying

this conspiracy were two-fold: First, independent and un-

restrained development posed a threat to market stability,

particularly market share; second, the industry regarded

the development of pollution controls as a ‘‘pure cost’’

incapable of transformation into new sales and higher

profits and to be avoided entirely or limited as much as

possible—lest the research, development and implementa-

tion costs adversely affect profitability.

In short, under the oligopolistic conditions prevailing

in the auto industry at the time of the cross-licensing agree-

ment, the development of air pollution control systems by

a single firm would have conferred a temporary competitive

advantage upon that firm, and would have compelled the

rest of the industry to offset that edge by innovation of

their own. The complaint alleges that certain jurisdictions

were prepared to require pollution-control devices if the

technology were available (Pet. Complaint { 23(¢c)(2) &

(3)).

Taking the complaint as a whole, petitioner adequately

alleged the foregoing violation to restrain competition in

the automobile industry. However, the court of appeals

construed the complaint narrowly as alleging only a viola-

tion to restrain competition in the market for air pollution

control equipment through an exclusion of potential com-

petitors into that market. The court assumed this unwar-

ranted and narrow position despite repeated efforts in both

a —

Fes GBs sae EE he

22 Petition for Writ of Certiorare

written and oral argument and allegations in the complaint

which suggested a wider—and more obvious—purpose to

the conspiracy. Thus, the complaint alleges that the in-

dustry entered into an agreement to develop air pollution

technology on & ‘‘non-competitive basis’’, implying that

the automobile makers were limiting innovations which

might upset the stability of the market and lead to increased

rivalry (Pet. Complaint { 23(a)). The complaint further

alleges a concerted effort to delay implementation of air

pollution controls once the systems came into existence.

(Pet. Complaint { 23(c)). This suggests an attempt to

limit and/or avoid the cost of developing controls, thus in-

voluntarily thrusting these costs upon petitioner and others.

This unjustifiable constriction of the scope of peti-

tioner’s complaint, undertaken to conform to the require-

ments of the Ninth Circuit’s so-called ‘‘target area’’ test,

runs squarely contrary to the mandate of this Court. Com-

plaints are to be construed liberally in the interests of

justice. Federal Rules of Civil Procedure, Rule 8(f);

Conley v. Gibson, 355 U.S. 41 (1957). Liberal construction

of pleadings is deemed doubly important in antitrust cases.

Radiant Burners v. Peoples Gas Light & Coke Co., supra;

Radovich v. The National Football League, supra. See

also Poller v. Columbia Broadcasting System, 368 U. S. 464

(1962), where the Court rejected summary judgment as a

viable procedural device in antitrust cases.

By contrast, the court of appeals here has purposefully

taken the narrowest possible view of the conspiracy alleged

by petitioner. In essence, the court wore blinders to fa-

cilitate the application of a disputed rule of law.

V. The Decision Below Undermines Proper Administration

of the Antitrust Laws.

As previously noted, the court of appeals permitted

all injunctive claims to proceed even as the damage claims

Petition for Writ of Certiorari 23

were dismissed. Apparently, this was attributable both

to the likelihood of continued harm, and the egregiousness

of the alleged violations. It could also be construed as a

concession to the high public visibility of this case.

In this context, judicial abrogation of the right to

private relief under the antitrust laws, in a highly visible

litigation, foreshadows a considerable diminution of the

publie’s protection from concerted anti-competitive action.

Businessmen, perceiving that courts will not impose liabil-

ity for the full consequences of their actions, are less likely

to be deterred from unlawful conspiracies undertaken with

a complete disregard of public welfare. Certainly the pros-

pect of substantial damages stands as a far greater deter-

rent than an injunction or judicial censure—the very reason

for enactment of the treble-damage provision. Further-

more, other courts, observing the Ninth Circuit’s action in a

salient case, are likely to embellish their own already

chaotic standing requirements. This can only represent

a further departure from the concept of ‘‘private at-

torneys general’’ which the antitrust laws were designed

to implement.

In the instant case, the complaint alleges that business-

men in some of the nation’s largest corporations conspired

to retard the development of automobile pollution control

devices, thus thrusting the hidden costs of their product

upon the unwilling public. Farmers, as cropgrowers, were

forced to absorb a larger proportion of these unallocated

costs than any other group. A denial of their ‘‘standing”’

to challenge an unlawful conspiracy of this magnitude can

only operate as an invitation to exploitation and an abroga-

tion of the private damage provisions of the antitrust laws.

An extensive review of the conflicting case law in the

various circuits (see Part I supra) reveals four primary

‘‘publie policies’? or variations thereof underlying the

PFE AAR Ee RS, NN BSE

24 Petition for Writ of Certiorart

judicially created limitation on standing under Section 4:

ruinous liability ; the desire to eliminate groundless claims

brought for the purpose of extorting a settlement; flood

of litigation; and multiplicity of suits. The latter three

rationales may be dismissed out of hand. A case of this

public importance cannot be dismissed merely to diminish

the ‘flood of litigation’”’—indeed, the injunctive claims are

proceeding in the district court. If the allegations of the

complaint are credited, as they must be on a motion to dis-

miss, spuriousness certainly does not warrant the result

below.

‘‘Ruinous”’ liability probably constitutes the principal

policy rationale underlying the various standing limitations

imposed by the lower federal courts. Whether described

as the “‘target area”’ or ‘‘direct injury’’ test, these limita-

tions have aimed towards circumscribing the so-called ‘‘rip-

ple” effect of an antitrust violation in the commercial

context.

This ‘‘ripple effect’’ may be described as follows:

A single injury to one person is compounded through the

general interdependency of prices and outputs in a mar-

ket economy. In this situation, reasons may exist to cut off

liability after the original victim since the three public

policies underlying Section 4—enforcement, deterrence, and

compensation—can generally be vindicated. Thus, in the

ease of derivative injury, the original victim sues to vindi-

cate public antitrust policy, to deter further violation, and

to recoup his damages. Moreover, derivative victims can

recover their damages through the same mechanism which

transmitted the injury from the violation in the first place

if the original victim recovers his damages.

Where a litigant’s claim does not raise the threat of

double recovery, it is improper to cut off liability. To do

so gives a windfall to the violator and frustrates all the

a es

Petition for Writ of Certiorari 25

policies underlying the antitrust laws and the right of pri-

vate action.’

Petitioner’s claim poses no such threat of double re-

covery. Petitioner’s injury is a ‘‘primary”’ injury. It is

not derived from another victim of the violation situated

between petitioner and the violator. It is not a by-product

of the conspiratorial scheme. As alleged in the complaint,

a basic purpose of the conspiracy was to avoid the price of

developing controls by forcing farmers and others to absorb

the entire cost of air pollution emitted by autos.

In this setting, the possibility of ‘‘ruinous liability’’

(which petitioner contends is unlikely) stems not from the

‘ripple effect’’ or interdependency of the nation’s economy.

Rather, if it looms at all, its source is the immense mag-

nitude of the defendants’ violations. Defendants cannot

be excused from liability because of the outrageous scope

of their own misconduct.

The novel context of petitioner’s antitrust injury ap-

pears to have created the controversy in this case. Peti-

tioner is not a competitor, a buyer, or a supplier of the auto

makers, yet he suffered injury as the result of an antitrust

violation. This is unusual in the antitrust setting.

The court of appeals alluded to the potential com-

pelled use of air pollution devices as an ‘‘externality’’.

(Appendix, infra, p. A3). Petitioner has no objection to

such a description (a technical term of economists, not

7. The rejoinder that producers of pollution-control devices can

sue to vindicate public policy is unpersuasive in the confines of this

case. Unlike farmers and other parties injured by the resulting air

pollution, producers of such devices are subject to several strong de-

fenses by the manufacturers—notably that cost and other product

ramifications would have required internal development and produc-

tion of the devices. Furthermore, the propriety and extent of patents

and the nature and quality of various parties’ research are also at

issue. These problems are completely irrelevant to petitioner’s cause

of action—which derives from the existence of the conspiracy and the

readily foreseeable resultant harm. The “business justification” de-

fense is totally inapplicable to petitioner’s case.

Ea eae eee

26 Petition for Writ of Certiorart

lawyers), and assumes that the court was contemplating the

so-called ‘hidden cost’’ effects of the automobile. These

reflect the fact that air pollution is largely created by the

automobile and causes injury accounting for serious costs |

to farmers and others. Such costs are not included in the

market price of the automobile. That is to say, as the cost

of air pollution increases due to increased automobile use,

the cost of the car in the market place remains fixed. Un-

aware of the true cost to society of the automobile, buyers

continue to purchase and use it based upon a faulty determi-

nation of its utility. The hidden cost effect is a blind spot

in the market and makes it difficult for market economics to

force automakers responsible for the noxious effects of their

product to assume the burden of developing technology to

eliminate them.

Petitioner would argue that, externality or not, peti-

tioner’s serious injury was the immediate result of an anti-

competitive conspiracy, and he discerns no reason why

public policy should treat ‘‘externalities”’ created by anti-

trust violations any differently than other injuries occa-

sioned by unlawful horizontal collusion. In this regard,

petitioner stresses that the court of appeals cannot prop-

erly dismiss petitioner’s claim by labeling it an externality

or analogizing it to some kind of incidental injury. Peti-

tioner’s injury is unrelated to the condition of general and

moderate interdependency between prices and outputs in a

market economy that gives rise to the so-called ripple effect

of an antitrust violation.

Petitioner’s injury is unique but palpable, underived

q from any third party. Externality or no, the auto industry

has created a burdensome cost for him. He has no indirect

or direct market relationship with the industry but has suf-

; fered injury as a primary result of an unlawful horizontal

: conspiracy.

9 Saint OF oh Gt

Petition for Writ of Certiorart 27

In summation, the issue of petitioner’s standing under

Section 4 of the Clayton Act arises out of a claim which

involves the interaction of two sets of operative facts. The

nature of the antitrust violation is a conspiracy among the

domestic auto makers to retard the development and in-

stallation of automobile air pollution control devices. The

nature of petitioner’s injury is damage to his business and

property as a‘result of air pollution during the period of

the retardation. The interaction between these two opera-

tive facts creates a cause of action unlike most traditional

antitrust claims where the parties are typically located in

the same industry.

However novel the context in which the claim arises,

the injury upon which it is based is a traditional antitrust

claim created by a violation of the antitrust laws and is no

less concrete, immediate, or serious than a cause of action

arising in a more typical antitrust setting. A consequence

of environmental pollution condemned in large part for its

effects on crops, petitioner’s injury results from concerted,

unlawful action. Just as purchasers pay higher prices due

to price fixing conspiracies, or competitors are forced out

of business as a result of schemes to dominate or control

markets, petitioner has suffered injury from this conspiracy

to suppress needed technological innovation. It is pre-

cisely the type of injury the antitrust laws are designed to

prevent and redress.

nee eames soma et

in et Prone * —

NGPA SER LIES at COE i LEED BANTER

28 Petition for Writ of Certiorart

CONCLUSION.

In conclusion, petitioner respectfully urges that the

writ issue to resolve serious and persistent conflicts among

the circuits, clarify a crucial issue of federal antitrust law,

and correct a conspicuous decision which patently flouts

the applicable precedents in this Court.

Respectfully submitted,

Davin BERGER,

H. Lappe Montasve, JR.,

Davip Bercer, P. A.,

1622 Locust Street,

Philadelphia, Pa. 19103

(215) 732-8000

Counsel for Petitioner.

Of Counsel:

Davi Bercer, P. A.,

Attorneys-at-Law.

Dated: August 31, 1973.

BN SUR, Sach NERD EY SEP sp PLEIN ELE SDD ONE IRE

Appendix.

UNITED STATES COURT OF APPEALS

For tHe Nintx Circuit.

No. 71-1241.

In ne MULTIDISTRICT VEHICLE AIR POLLUTION

M. D. L. No. 31

STATE OF CALIFORNIA, er At.,

Appellees,

v.

AUTOMOBILE MANUFACTURERS

ASSOCIATION, INC., er At.,

Appellants.

ROBERT MORGAN,

Appellee,

v.

AUTOMOBILE MANUFACTURERS

ASSOCIATION, INC., Er au.,

Appellants.

CITY OF PHILADELPHIA, er 4 t.,

Appellees,

v.

AUTOMOBILE MANUFACTURERS

ASSOCIATION, INC., Er At.,

Appellants.

(Al)

Court of Appeals Opinion

STATE OF NEW YORK,

Appellee,

v.

AUTOMOBILE MANUFACTURERS

ASSOCIATION, INC., eT AL., |

Appellants.

CITY OF NEW YORK, er At,

Appellees,

v.

AUTOMOBILE MANUFACTURERS

ASSOCIATION, INC., Er AL.,

Appellants.

——

CITY AND COUNTY OF DENVER,

Appellees,

v.

AMERICAN MOTORS CORPORATION, ET AL.,

Appellants.

L From THE UNITED Srates District CourT FoR THE

CenTRAL DisTRICT OF CALIFORNIA.

APPEA

—————

Before: Hamuin, BrowniNe, and Exy, Circuit Judges.

oe

OPINION.

el

Exy, Circuit Judge:

This certified interlocutory appeal under 28 U. S. C.

§ 1292(b) arises from pretrial proceedings in Multidistrict

cniiniens -

SRG OM POD AE NRE

Court of Appeals Opinion A3

Air Pollution Control Litigation (C. D. Cal. M. D. L. 31),

which is a consolidation of numerous actions’ under 28

U. 8S. C. § 1407. In re Motor Vehicle Air Pollution Control

Equipment, 311 F. Supp. 1349 (Jud. Panel on Multidist.

Lit. 1970). Since this appeal is from denial of motions to

dismiss, factual allegations are cast most favorably to the

appellees. See Conley v. Gibson, 355 U. S. 41 (1957).

As early as 1953, the nation’s automobile manufac-

turers and their trade association allegedly conspired to

eliminate competition among themselves in the research,

development, manufacture, installation and patenting of

automotive air pollution control devices. Appellees urge

that this horizontal antitrust conspiracy was motivated:

(1) by appellants’ conviction that antipollution devices are

externalities, whose development would increase price with-

out a concomitant spur to consumer interest; (2) by the

apprehension that the first competitor to perfect such a

device would garner exclusive contracts with governmental

purchasers; and (3) by the fear that technological realiza-

tion of the devices would prompt laws compelling their use.’

1. These are the progeny of a civil antitrust action filed by the

federal government against the largest domestic automobile manu-

facturers and the Automobile Manufacturers’ Association. In Oc-

tober of 1969, the Government accepted a consent decree, United

States v. Automobile Mfgrs. Ass’n, 307 F. Supp. 617 (C. D. 1969)

aff'd per curiam sub nom. New York v. United States, 397 U. S.

248 (1970), the text of which is reported in 1969 Trade Cas. {| 72,907.

Similar factual claims were presented to the original jurisdiction

of the Supreme Court in Washington v. General Motors Corp., 406

U. S. 109 (1972). After the Court declined to assume jurisdiction in

that case, and after this court accepted certification of the present ap-

peal, an additional spate of actions was filed in the District Court

under the multidistrict tag-along procedures.

2. Such compulsion would be unattractive to manufacturers

insofar as required use of an externality would likely increase price

while not necessarily increasing demand, thus diminishing overall

product marketability and profit. .

a a

theta shite tei as ts

ee

A4 Court of Appeals Opinion

Appellees argue that this conspiracy inflicted financial

losses that would not have occurred but for the conspiracy-

induced absence of antipollution equipment. Governmental

entity appellees claim losses resulting from diminution in

value of, and expenditures in connection with, government

property and interests. Crop farmer appellees assert

direct damage to crop yields. Variously proceeding in

their individual capacities, as parens patriae and as class

representatives all appellees seek treble damages and

equitable relief under sections 4 and 16 of the Clayton Act,

15 U. S. C. §§ 15, 26.

On appeal, appellants challenge the district court ’s

rulings that appellees have standing to sue under sections 4

and 16 of the Clayton Act, that certain appellees may pro-

ceed as parens patriae, and that others may proceed as

class representatives under Fed. R. Civ. P. 23.

L. Sranpinc Unver Section 4.

Appellees ground their claims for treble damages on

section 4 of the Clayton Act, 15 U. 8. C. § 15, which reads:

‘‘ Any person who shall be injured in his business

or property by reason of anything forbidden in the

anti-trust laws may sue therefor in any district court

of the United States in the district in which the de-

fendant resides or is found or has an agent, without

respect to ameunt in controversy, and shall recover

threefold ine dama, -¢ by him sustained, and the cost

of suit, including a reasonable attorney’s fee.’’

Read literally, this statute could afford relief to all persons

whose injuries are causally related to an antitrust viola-

tion. Recognizing the nearly limitless possibilities of such

an interpretation, however, the judiciary quickly brushed

Court of Appeals Opinion’

aside this construction. Instead, a measured approach

has prevailed; courts have impressed a standing doctrine

so as to confine the availability of section 4 relief only to

those individuals whose protection is the fundamental

purpose of the antitrust laws. Cf. Barlow v. Collins, 397

U. S. 159 (1970) ; Association of Data Processing v. Camp,

397 U. S. 150 (1970); Mount Clemens Industries, Inc. v.

Bell, 464 F. 2d 339, 341-44 (9th Cir. 1972). Unfortunately,

no ‘‘bright line’’ has yet emerged to divine this group,

and courts have formulated varied definitions.

In this case, however, the District Court declined to

apply any of the extant definitions, choosing instead to

expand‘ the coverage of section 4:

‘*We are now concerned with the phrase ‘injured in

his business or property by reason of anything for-

bidden in the antitrust laws’ in the light of the alle-

gations of these complaints, rather than the traditional

legalistic approach defined by the cases cited by de-

fendants in their motion to dismiss. Each of the

plaintiffs allege injury to their respective business

or property by reason of anti-trust violations of the

defendants.

‘*Plaintiffs may fail in their proof, but until then,

they should be given the benefit of employing ‘any

3. See, e.g., Loeb v. Eastman Kodak Co., 183 F. 704 (3d Cir.

1910) (limiting standing under section 7 of the Sherman Act,

predecessor of section 4 of the Clayton Act). Cf. Southern Pacific

Co. v. Darnell-Taenzer Lumber Co., 245 U. S. 531, 534 (1918)

(Holmes, J.) (“the endlessness and futility of the effort to follow

every transaction to its ultimate result”). See also L. Green, The

Rationale of Proximate Cause 122-23, 195-97 (1927); Pollock, The

“Injury” and “Causation” Elements of a Treble-Damage Antitrust

Action, 57 Nw. U. L. Rev. 691, 697-700 (1963).

4. Even some commentators who have lauded the ingenuity of

the district court’s decision ize its clear rture from prior

law. See, e.g., 12 B. C. Ind. & Com. L. Rev. ese (1971) Note, ; 24

Vand. L. Rev. 126 (1970).

gt TN

A6 Court of Appeals Opimion

available remedy to make good the wrong done.’ ’”

[footnote citing J.1. Case Co. v. Borak, 377 U. 8. 426,

433 (1964); Bell v. Hood, 327 U. S. 678, 684 (1946) }.

52 F. R. D. 398, 401 (C. D. Cal. 1970). In the aftermath

of the Supreme Court’s recent decision in H awau v.

Standard Oil Co., 405 U. S. 251 (1972), however, we cannot

so easily disregard the so-called ‘‘traditional legalistic

approach of the cases . . - —

Judicial constructions of standing under section 4 have

keyed on the phrases ‘‘business or property”’ and ‘‘by

reason of” as indicating twin requisites for standing.

First, a plaintiff must allege injury to his ‘*business or

property’, a term definitively limited to interests in com-

mercial ventures or enterprises: ‘‘the words ‘business or

property’. - - refer to commercial interests or enter-

prises.”’ Hawaii, supra at 264. See Control Data Corp.

». IBM, 306 F. Supp. 839, 845 (D. Minn. 1969) (corporate

plaintiff not in legal existence at time of antitrust viola-

tion is without commercial injury). Secondly, a plaintiff

must allege that the injury suffered was occasioned ‘‘by

reason of’’ an antitrust violation. Hawaii, supra at 263-

64 n. 14.

Applying the first predicate, since neither the govern-

ments’ individual claims, nor their class claims, nor their

parens patriae claims allege any injury to commercial

ventures or enterprises, the governmental entities cannot

seek recovery under section 4 of the Clayton Act. In

contrast, the farmers satisfy the first requisite, since a

diminished crop yield, for example, would constitute injury

to commercial interests.

Application of the second prong of the standing for-

mulation is more difficult since ‘‘by reason of’’ has con-

sistently eluded efforts at uniform definition or applica-

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Court of Appeals Opinion’ AT

tion. Compare, e.g., Mulvey v. Samuel Goldwyn Produc-

tions, 433 F. 2d 1073 (9th Cir. 1970) with Fields Produc-

tions, Inc. v. United Artists Corp., 432 F. 2d 1010 (2d Cir.

1970), aff’g per curiam 318 F. Supp. 87 (S. D. N. Y. 1969),

cert. denied, 401 U. S. 923 (1971); and compare Stemer v.

20th Century-Fox Film Corp., 232 F. 2d 190 (9th Cir.

1956) and Congress Building Corp. v. Loew’s, Inc., 246

F. 2d 587 (7th Cir. 1957) with Melrose Realty Co. v.

Loew’s, Inc., 234 F. 2d 518 (3d Cir.), cert. denied, 352

U. S. 890 (1956) and Harrison v. Paramount Pictures,

Inc., 115 F. Supp. 312 (E. D. Pa. 1953), aff’d, 211 F. 2d

405 (3d Cir.), cert. denied, 348 U. S. 828 (1954); and

compare Volasco Products Co. v. Lloyd A. Fry Roofing

Co., 308 F. 2d 383 (6th Cir. 1962), cert. denied, 372 U. S.

907 (1963) with South Carolina Council of Milk Producers,

Inc. v. Newton, 360 F. 2d 414 (9th Cir.), cert. denied, 385

U. S. 934 (1966). The resulting confusion prompted specu-

lation that the Supreme Court would disapprove judicial

application of ‘‘by reason of’’ to limit potential antitrust

claimants.’ In Hawaii, however, the Court appeared to

approve the standing doctrine to require more from a

would-be plaintiff than some remote connection in the

causal chain.

‘*The lower courts have been virtually unanimous

in concluding that Congress did not intend the anti-

trust laws to provide a remedy in damages for all

injuries that might conceivably be traced to an anti-

trust violation.’’

405 U. S. at 263 n. 14. Although the Court cited cases

in support from every circuit, it failed to distinguish

essentially two disparate analytical techniques—the ‘‘direct

5. See, e.g., Kiingsberg, Bull’s Eyes & Carom Shots, XVI Anti-

trust Bull. 381, 368-09 (1971). ;

A8 Court of Appeals Opinion

injury’’ and the ‘‘target area”’ approaches ¢__employed by

different circuits.”

Courts adhering to the ‘direct injury’ test focus

principally on the relationship between the alleged anti-

6. We have employed the terms “target area” and “direct injury”

only as convenient, shorthand methods of identifying the two major

approaches to the interpretation of “by reason of”. Use of either

label in other cases, in contrast, has frequently suggested an approach

ge that so denominated here. E.g., Perkins v. Standard Oil

0., 396 F. 2d 809 (9th Cir. 1968) (court labeled approach “target

area” but employed the “direct injury” analysis), rev'd, 395 U. S.

642 (1969). Likewise, some courts have failed to perceive significant

distinctinc, v. Ass'n of Cas. & Sur. Cos, 382 F- 2d 925 (10th Cir.

1967). It is to be hoped that the resolution suggested in our present

opinion will obviate the use of either label in the future.

example, have consistently followed the “target area” a roach, ¢.g.,

Mulvey v. Samuel Goldwyn Productions, 433 F. 2d 1073 (9th Cir.

1970) ; ee Milk Producers v. Bergjans Farm Dairy, Inc.,

cert. denied, 401 U. S. 974 (1971) ; Volasco Products Co. v. Lloyd

A. Fry Roofing Co., 308 F. 2d 383, 394-95 (6th Cir. 1962) ; Miley

y. John Hancock Mut. Life Ins. Co., 148 F. Supp. 299 (D. Mass.),

aff'd per curiam, 242 F. 2d 758 (ist Cir.), cert. denied, 355 U. S.

828 (1957). The Second, Fourth and Fifth Circuits have formulated

their own particular mixtures of the two tests, e.g., Calderone Enter-

prises Corp. v- United Artists Theatre Circuit, Inc., 454 F. 2d 1292

(2d Cir. 1971) ; Dailey v. Quality. School Plan, Inc., 380 F. 2d 484

(Sth Cir. 1967) ; South Carolina Council of Milk Producers, Inc. v.

Newton, 360 F. 2d 414 (4th Cir. 1966), although the approach of

the Second more closely resembles the “direct injury” test and that

of the Fourth and Fifth, the test of “target area”. The Seventh Cir-

cuit’s approach is uncertain, although it appears closer to “target

area”. Compare Sandidge v. Rogers, 256 F. 2d 269 (7th Cir. 1958)

with Congress Building Corp. v- Loews, Inc., 246 F. 2d 587 (7th

Cir. 1957). In ascribing positions to the various Circuits, we have

ignored self-descriptions and have attempted to analyze their actual

approaches.

aie de?

FRO TEY RFRETREREREE PNE

Court of Appeals Opinion . AS

trust violator and the claimant. Generally, if the claimant

is separated from the violator by an intermediate antitrust

victim, standing is denied by attaching conclusory labels

such as ‘‘remote’’, ‘‘indirect’’, and ‘‘consequential’’.

Resurrecting notions of privity, this test thus arbitrarily

forecloses otherwise meritorious claims simply because

another antitrust victim interfaces the relationship be-

tween the claimant and the alleged violator. Moreover,

the ‘‘direct injury’’ requirement has engendered among

some adherents a regrettable tendency to deny standing

to any plaintiff who happens to fall within certain talis-

manic rubries: ‘‘creditor’’, ‘‘landlord’’, ‘‘lessor’’, ‘‘fran-

chisor’’, ‘‘supplier’’.® This disposition is, we think, un-

satisfactory insofar as it transforms judicial inquiry into

a mere search for labels.

In contrast, courts employing the ‘‘target area’’ ap-

proach focus on claimant’s relationship to the area of the

economy allegedly injured by the defendant.

‘fT ]o state a cause of action under the anti-trust laws

a plaintiff must show more than that one purpose of the

conspiracy was a restraint of trade and that an act

has been committed which harms him. He must show

that he is within that area of the economy which is

endangered by a breakdown of competitive conditions

in a particular industry. Otherwise he is not injured

‘by reason’ of anything forbidden in the anti-trust

laws.”’

8. See, e.g., Kauffman v. Dreyfus Fund, 434 F. 2d 727 (3d Cir.

1970), cert. denied, 401 U. S. 974 (1971) (“shareholder”) ; Nation-

wide Auto Appraiser Serv., Inc. v. Ass'n of Cas. & Sur. Cos., 382

F. 2d 925 (10th Cir. 1967) (“franchisor”); Volasco Products Co.

v. Lloyd A. Fry Roofing Co., 308 F. 2d 383 (6th Cir. 1962) (“sup-

plier”) ; Miley v. John Hancock Mut. Life Ins. Co., 242 F. 2d 758

(Ist Cir.), aff'g per curiam 148 F. Supp. 299 (D. Mass.), cert.

denied, 355 U. S. 828 (1957) (“creditor”) ; Melrose Realty Co. v.

Loew’s, Inc., 234 F. 2d 518 (3d Cir.), cert. denied, 352 U. S. 890

(1956) (“owner-lessor”).

ADS eal a

OAS NIT SG AEPLNEATEN.

A10 Court of Appeals Opimon

Conference of Studio Unions v. Loew’s Inc., 193 F. 2d 51,

54-55 (9th Cir. 1951), cert. denied, 342 U. 8. 919 (1952).

To attain standing, @ plaintiff must thus allege that the

antitrust violation injured a commercial enterprise of the

plaintiff in the area of the economy in which the elimination

of competition occurred. Standing is denied, on the other

hand, if the claimant’s commercial activity occurred outside

that area of the economy. See id. Hence the ‘‘target area”’

approach provides a logical and flexible tool for analyzing

whether a particular claimant falls within the class of per-

sons slated by Congress for protection under section 4 of

the Clayton Act.

‘“<[T]he basic and underlying purposes of the anti-

trust laws [are] to preserve competition and to protect

the consumer. Recovery and damages under the anti-

trust law is available to those who have been directly

injured by the lessening of competition and withheld

from those who seek the windfall of treble damages

because of incidental harm.”’

Id. at 55. See Karseal Corp. v. Richfield Oil Corp., 221 F.

2d 358, 365 (9th Cir. 1955).

The ‘‘direct injury”’ approach to section 4 was im-

plicitly undermined by the Supreme Court in Perkins v.

Standard Oil Co., 395 U. S. 642 (1969), rev’g 396 F. 2d

809 (9th Cir. 1968). Attention centered on whether ‘‘fourth

level’’ price discrimination is proscribed by section 2 of the

Clayton Act, as amended by section 13 of the Robinson-

Patman Act, 15 U.S. C. § 13. A panel of our court, focusing

on the indirect commercial relationship between claimant

and defendant, had concluded in the negative:

‘‘Section 2(a) of the Act does not recognize a causal

connection, essential to liability, between @ supplier’s

price discrimination and the trade practices of a cus-

ET ROSE RAT ES. Se EI <P RELE

Court of Appeals Opinion All

tomer [removed four rungs] . . . on the distributive

[sic] ladder... .”’

396 F.2d at 816. In the Supreme Court’s reversing opinion,

Mr. Justice Black admonished that this direct-indirect

‘limitation is wholly artificial and is unwarranted by the

language or purpose of the Act.’ He reasoned that ‘‘the

competitive harm done . . . is certainly no less because

of the presence of an additional link in this particular dis-

tribution chain from the producer to the retailer.’’? 395

U. S. at 648. Though applying a different section of the

Clayton Act, the opinion argues forcefully by analogy

against ‘‘direct injury’? analysis. The Court eschewed

consideration of the nexus between claimant and defendant

and concentrated instead on the nature of the ‘‘competitive

harm’’.

Direct support of the ‘‘target area’’ approach also

emerges from the Supreme Court’s ‘opinion in Perkins,

supra. The plaintiff had appended an auxiliary claim un-

der section 4 for injuries allegedly suffered in his individual

capacities as creditor, landlord, and broker. In construct-

ing its analytical framework, our court unfortunately—but

quite understandably *—indiscriminately juxtaposed cases

espousing both the ‘‘direct injury’’ and the ‘‘target area’’

tests. We resurrected notions of privity, and, attaching

the determinative ‘‘lessor’’ label, concluded that the plain-

tiff’s claim was comprised of elements not ‘‘properly the

subject of damages.’’ 396 F. 2d at 815. The Supreme

Court’s reversal was grounded solely on a ‘‘target area’’

quotation from Karseal Corp. v. Richfield Oil Corp., 221

F. 2d 358, 363 (9th Cir. 1955) that the Court applied con-

9. See, e.g., South Carolina Council of Milk Producers, Inc.

v. Newton, 360 F. 2d 414 (4th Cir.), cert. denied, 385 U. S. 934

(1966).

ie

A ES TIA BE LOY

Ai2 Court of Appeals Opinion

sistently with its disposition of the section 2 issue. The

Court avoided any categorical characterization of claimant

as, for example, a ‘‘lessor”’ or a ‘‘creditor’’, and affirmed

the propriety of section 4 relief by emphasizing the eco-

nomic impact of the anticompetitive conduct.

Perkins therefore clarifies any ambiguity inhering in

Hawaii’s failure to adopt expressly either of the two pre-

dominant judicial glosses on the language ‘‘by reason of’’.

By repudiating all those aspects of the ‘‘direct injury’’ test

that distinguish it from the ‘‘target area’’ approach, and

by embracing and applying the latter, the Court in Perkins,

at least inferentially, impresses its imprimatur upon the

‘“‘target area’’ approach articulated by this court: a plain-

tiff has standing under section 4 of the Clayton Act if the

claimed losses fall ‘‘within that area of the economy which

is endangered by a breakdown of competitive conditions in

a particular industry.”’ E.g., Mulvey v. Samuel Goldwyn

Productions, 433 F. 2d 1073 (9th Cir. 1970); Hoopes v.

Union Oil Co., 374 F. 2d 480, 485 (9th Cir. 1967) ; Karseal

Corp. v. Richfield Ou Corp., 921 F. 2d 358 (9th Cir. 1955) ;

Conference of Studio Unions v. Loew’s Inc., 193 F. 2d 51

(9th Cir. 1951), cert. denied, 342 U.S. 919 (1952). A proper

application of ‘‘by reason of’? focuses on whether the

anti-competitive conduct directed against an area of the

economy injured business operations conducted by the

claimant in that sector of the economy. The resulting two-

step approach first requires identification of the affected

area of the economy and then the ascertainment of whether

the claimed injury occurred within that area.

Here the crop farmers complaint alleges that the auto-

mobile manufacturers conspired

‘“(a) To eliminate all competition among the automo-

bile manufacturers in the research, development,

manufacture and installation of motor vehicle air

pollution equipment ;

Court of Appeals Opinion A13

‘*(b) To eliminate competition . . . in the purchase of

patents and patent rights from other parties cov-

ering motor vehicle air pollution equipment.’’

It is manifest from these averments that the area of the

economy against which anti-competitive conduct was al-

legedly directed. was that concerned with research; develop-

ment, manufacture, installation and patenting of automotive

air pollution control devices.” No commercial interest of

the crop farmers falls within this area. Not only were the

crop farmers not targets of the alleged conspiracy, they

were not even on the firing range. Accordingly, the farm-

ers lack standing under section 4 of the Clayton Act," to

maintain this action. Upon remand, therefore, all actions

arising under section 4 will be dismissed.

Insofar as the common weal was injured the federal

government was the proper party to seek redress; and, in

fact, it attempted to do so. See Note 1, supra. If the Gov-

ernment did not prosecute its action with sufficient vigor,

the remedy lies in executive or legislative reform, not in

judicial overreaching.

10. Examples of plaintiffs falling within one or more of these

markets, as appellants concede, include an alleged inventor and a

manufacturer of motor vehicle air pollution control equipment who

claim losses from asserted inability to market their devices.

11. “Standing” under section 4 actually encapsulizes two dis-

tinct ingredients. First, a plaintiff must demonstrate that the interests

allegedly injured by the defendant fall within the scope of anti-

trust protection. This requirement, which arises from judicial con-

structions of “business or property” and “by reason of’’, is satisfied

in the manner set forth in our opinion. A second and distinct in-

gredient demands that a plaintiff show that the defendant’s conduct

contributed to his injury. This cause-in-fact requirement also derives

from “by reason of”. Once these two standing issues are resolved

in favor of a plaintiff, the court can proceed to determine if the de-

fendant’s conduct violated the antitrust laws and, then, to ascertain

the consequent damages.

Al4 Court of Appeals Opinion

II. Sranpinc Unver Section 16.

Appellees’ claims for injunctive relief are based on

section 16 of the Clayton Act, 15 U. 8. C. § 26, which reads

in relevant part:

‘‘Any person, firm, corporation, or association

shall be entitled to sue for and have injunctive relief,

in any court of the United States having jurisdiction

over the parties, against threatened loss or damage by

a violation of the anti-trust laws . . - when and under

the same conditions and principles as injunctive relief

against threatened conduct that will cause loss or dam-

age is granted by courts of equity, under the rules

governing such proceedings... .”

As the Court noted in Hawaii, supra at 260, this section

varies significantly from section 4 insofar as the broader

language of section 16 lacks mention of ‘‘business or prop-

erty’’, an omission signalling different standing require-

ments. This treatment is fully justified by the difference

between the remedies available under each section. In con-

trast to section 4, section 16 does not involve punitive and

potentially disasterous judgments for treble damages and

attorneys’ fees; neither is there the potential threat of

12. In antitrust suits, allowance of attorneys’ fees is limited to

that proportion of the fee attributable to a successful suit for damages.

If only equitable relief is sought or obtained, counsel fees are generally

not awarded to a successful plaintiff. See Trans World Airlines, Inc.

v. Hughes, 312 F. Supp. 478, 482 (S. D. N. Y. 1970) (dictum)

modified on other grounds and aff'd, 449 F. 2d 51 (2d Cir. 1971),

rev'd on other grounds, 41 U. S. L. W. 4131 (U. S. Jan. 10, 1973) ;

Union Leader Corp. v. Newspapers of New England, Inc., 218 F.

Supp. 490, 491 (D. Mass. 1963) (dictum), vacated on other grounds,

333 F. 2d 798 (ist Cir.), cert. denied, 379 U. S. 931 (1964) ; Decora-

tive Stone Co. v. Building Trades Council, 23 F. 2d 426, 428 (2d Cir.

1928) ; Ring v. Spina, 84 F. Supp. 403, 408 (S. D. N.Y. 1949)

(dictum) ; Alden-Rochelle Inc. v. American Society of Composers,

Authors & Publishers, 80 F. Supp. 888, 899-900 (S. D. N. Y. 1948).

But cf. Hall v. Cole, 41 U. S. L. W. 4658 (U. S. May 21, 1973)

(dictum).

Sue Ab pee RA LEI

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4

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Court of Appeals Opinion Al5

duplicative recoveries. See Hawaii, supra at 261-64. Con-

sequently, courts have not exercised the same pronounced

restraint in granting standing under section 16 as they have

done under section 4. As we observed in Hawaii v. Stand-

ard Ou Co., 431 F. 2d 1282, 1284-85 (9th Cir. 1970), aff’d,

405 U. S. 251 (1972):

*‘(Section 16] is far broader than § 4. Any person

may secure injunctive relief against threatened loss or

damage by violation of the antitrust laws. Section 4

provides for recovery of treble damages only by a per-

son injured in his business or property by [reason of]

such a violation.’’

Unlike standing under section 4, standing under section

16 does not require an injury to ‘‘commercial interests’’ but

only an injury cognizable in equity. For example, housing

segregation enforced by an antitrust conspiracy of realtors

constitutes an injury to excluded minority members that

confers standing for injunctive relief under section 16, see

Bratcher v. Board of Realtors, 381 F. 2d 723 (6th Cir. 1967),

although not for treble damages under section 4. Since

all appellees herein have alleged ‘‘threatened loss or dam-

age’’ to interests cognizable in equity,!* they have standing

to seek equitable protection under section 16 of the Clayton

Act.

We emphasize that we now intimate no conclusions as

to either the merits of the equitable claims or the avail-

ability of any form of injunctive relief. These issues must,

in the first instance, be resolved by the District Court.

ITI. Parens Parrtar.

At common law, the concept of parens patriae invested

the English Sovereign with powers and duties—the ‘‘royal

13. See, e.g., Georgia v. Pennsylvania R. R., 324 U. S. 439

_ (1945) ; Georgia v. Tennessee Copper Co., 206 U. S. 230 (1907).

Bs a ed Beek. FO St

Al6 Court of Appeals Opinion

prerogative’’—to protect certain interests of his subjects.

See Hawaii, supra at 257-60. In this country the parens

patriae function expanded somewhat and devolved upon

the states that, to some extent, ceded it to the federal gov-

ernment. See Massachusetts v. M ellon, 262 U. S. 447, 485-86

(1923) ; Pubile Utilities Commission v. United States, 356

F. 2d 236, 241 n.1 (9th Cir.), cert. denied, 385 U. S. 816

(1966). Hence, the federal government and the states, as

the twin sovereigns in our constitutional scheme, may in

appropriate circumstances sue as parens patriae to vindi-

cate interests of their citizens. E.g.,H awaii, supra; Georgia

v. Pennsylvania Railroad Co., 324 U. S. 489 (1945) ; North

Dakota v. Minnesota, 263 U. S. 365 (1923) ; Pennsylvania

v. West Virginia, 262 U. S. 553 (1923) ; New York v. New

Jersey, 256 U. S. 296 (1921) ; Georgia v. Tennessee Copper

Co., 206 U.S. 230 (1970) ; Kansas v. Colorado, 206 U. S. 46

(1907) ; Missouri v. I llinois, 180 U. S. 208 (1901) ; Loutstana

v. Texas, 176 U. S. 1 (1900). On the other hand, political

subdivisions such as cities and counties, whose power is

derivative and not sovereign, cannot sue as parens patriae,

although they might sue to vindicate such of their own

proprietary interests as might be congruent with the in-

terests of their inhabitants.

We have already concluded that, inasmuch as appellee

states failed to allege any injury to their ‘‘commercial in-

terests’’, they lack standing qua parens patriae, or in any

other capacity, to seek relief under section 4 of the Clayton

Act. Moreover, our court has recently held that a state

cannot sue as parens patriae under section 4 on behalf of its

citizen-consumers for injuries suffered by them. California

vy. Frito-Lay, Inc., 474 F. 2d 774 (9th Cir. 1973). Their

parens patriae suit under section 16 of the Clayton Act,

however, presents a separate but readily manageable issue.

ee

A Da ET EESTI V5 EE LE IAPR RESON LOA TPO

Court of Appeals Opinion Al7

In Georgia v. Pennsylvania Railroad Co., supra, the

Supreme Court upheld Georgia’s parens patriae action un-

der section 16 for an injunction against a conspiracy be-

tween large railroad companies. The analysis of that case

rendered in Hawaii, supra at 259-60, bespeaks the continu-

ing availability of parens patriae actions under section 16

for injunctive relief for injuries to a state’s economy. In-

sofar as the state appellees have alleged injury to their

economies, they have standing under section 16. In re-

affirming this principle, we quote the presaging language

of Mr. Justice Holmes:

‘‘[T]he State has an interest independent of and be-

hind the titles of its citizens, in all the earth and air

within its domain. It has the last word as to whether

its mountains shall be stripped of their forests and its

inhabitants shall breathe pure air.

“It is a fair and reasonable demand on the part

of a sovereign that the air over its territory should

not be polluted . . . that the forests on its mountains

. Should not be further destroyed or threatened

. . that the crops and orchards on its hills should

not be endangered... .”’

Georgia v. Tennessee Copper Co., supra at 237-38.

IV. Cuass Actions.

In light of our determination that all appellees lack

standing to seek antitrust damages, the District Court must

reevaluate the propriety, under Fed. R. Civ. P. 23(b) (3),

oe. PRE OR BE Lets he Dt

Court of Appeals Opinion

of the class actions for equitable relief."* In addition, the

examine the applicability of Fed. B. Civ.

court may need to

anticipation of probable changes

classes

at this juncture to

and in deference to the accu-

comment further upon the class action issues.

Both in

among the parties plaintiff,

mulated experience of district courts in framing

P. 23(b)(2).

inappropriate

under Rule 23, we deem it

Wuuus Ey,

Affirmed in part; reversed and remanded

in part.

Circuit Judge.

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Court of Appeals Judgment A19

United States Court of Appeals

For tHe Nixta Crmovrr.

No. 71-1241.

DC Nos. 70-541; 70-1044; 70-1477;

70-1137 ; 70-853 ; 70-846 MLR.

In nt MULTIDISTRICT VEHICLE

AIR POLLUTION M. D. L. No. 31,

STATE OF CALIFORNIA, er at. ROBERT MORGAN,

CITY OF PHILADELPHIA, er a. STATE OF

NEW YORK,

Plaintiff-Appellees,

v.

AUTOMOBILE MANUFACTURERS

ASSOCIATION, INC., er au.,

Defendants-A ppellants.

AppzaL From tHe Unirep States Distaict Court FOR THE

Centra District or CaLirornis.

JUDGMENT.

THis Cause came on to be heard on the Transcript of

the Record from the United States District Court for the

Central District of California and was duly submitted.

On Consmeration Wueneor, It is now here ordered and

adjudged by this Court, that the judgment of the said Dis-

trict Court in this Cause be, and hereby is affirmed in part;

reversed and remanded in part.

Filed and entered June 4, 1973

a

= r : —

PO al 5 OE RE Soe a OR

A20 District Court Opinion

OPINION OF THE UNITED STATES

DISTRICT COURT.

In re Multidistrict Private Civil Treble Damage Antitrust

Litigation involving MOTOR VEHICLE AIR POL-

LUTION CONTROL EQUIPMENT.

M. D. L. No. 31.

United States District Court,

C. D. California.

Sept. 4, 1970.

Memorandum Order (Re Motion to Dismiss).

Reat, District Judge.

Defendants have brought motions to dismiss 15 of the

16 complaints filed in this matter. Defendants have clas-

sified the grounds as 1. No Antitrust Injury; 2. No Parens

Patriae Claims; 3. No Injunctive Relief ; and 4. The Handy :

Complaint and they will be dealt with herein in that order.

BacKGROUND.

January 10, 1969 the United States of America filed

its complaint alleging against the major defendants herein

violation of Section 1 of the Sherman Act (15 U. 8S. C. $1).

The acts of conspiracy alleged therein are, without change,

the acts alleged in the actions herein. The action by the

United States resulted in a consent decree approved by

Judge Jesse W. Curtis of the Central District of California

in United States of America v. Automobile Manufacturers

Association, Inc. et al., 307 F. Supp. 617, No. 69-75-J WC.

pe DO Rit SA IIT I EAT Ue Him

District Court Opinion ~ A21

The conspiracy enjoined in the consent decree includes

as pertinent to the actions filed herein:

1. To prevent, restrain or limit the development,

manufacture, installation, distribution or sale of

air pollution control equipment for motor vehicles ;

2. ee a TRS tp Guleitn

and patent rights.

After attempts to intervene in action No. 69-75-JWC

met with failure, actions have been filed by plaintiffs herein

variously in individual, class and parens patriae capacities.

Antitrust Insury.

Title 15, United States Code, Section 1 provides in its

pertinent part:

“$1. Trusts, ete. in restraint of trade illegal; excep-

tion of resale price agreements; penalty.

Every contract, combination in the form of trust

or otherwise, or conspiracy, in restraint of trade or

commerce among the several States * * * is declared to

be illegal.’’

Title 15, United States Code, Section 15 provides in its

pertinent part:

“*§15. Suits by persons injured; amount of recovery.

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, and the cost of suit, in-

cluding a reasonable attorney’s fee.’’

Defendants’ thrust upon the motion in dismiss is that

there is not alleged, nor can there be alleged a ‘‘com-

Be

ie ;

A22 District Court Opinion

mercial relationship’? between plaintiffs and defendants

permitting compensation for the claimed damages. For

of the motion to dismiss the court must assume

the ‘‘injury”’ alleged.

In terms of the development of the anti-trust laws, the

concept of source of injury alleged herein is rather new. It

was not until 1947, that any recognition of pollution as any-

thing more than a seasonal and infrequent nuisance like

hay fever or summer cold came to the public of the United

States. It was not until 1952, that any blame was laid at

the door of the automobile industry and not until 1969,

that anyone recognized that allegedly something could be -

done about it except for the conspiracy of defendants al-

leged in action No. 69-75-JWC. We are now concerned with

the phrase ‘‘injured in his business or property by reason

of anything forbidden in the anti-trust laws’’ in the light

of the allegations of these complaints, rather than the tra-

ditional, legalistic approach defined by the cases cited by

defendants in their motion to dismiss. Each of the plain-

tiffs alleged injury to their respective business or property

by reason of anti-trust violations of the defendants.

Plaintiffs may fail in their proof, but until then, they

should be given the benefit of employing ‘‘any avaliable

remedy to make good the wrong done.’’?

Parens PatrisaE CLAIMS.

The status of parens patriae cannot be used to sub-

stitute for a class action as to individual claims of the

residents of political subdivision.

1. Dailey v. Quality School Plan, Inc., 380 F. 2d 484 (5th Cir.

1967) ; Knuth v. Erie-Crawford Dairy Coop. Association, 395 F. 2d

420 (3d Cir. 1968).

2. Bell v. Hood, 327 U. S. 678, 684, 66 S. Ct. 773, 777, 9 L. Ed.

939 (1946) ; J. I. Case Co. v. Borak, 377 U. S. 426, 433, & S. Ct.

1555, 12 L. Ed. 2d 423 (1964).

Tait! + SEAR RN ee

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ERROR te RE Ai BSE RET LAETOLI

District Court Opinion A23

The question of validity of the parens patriae suit as

applied to the economy of the governmental entities herein

is answered in State of Georgia v. Pennsylvania Railroad

Company, 324 U. S. 439, 65 S. Ct. 716, 89 L. Ed. 1051 (1944)

and State of Hawaii v. Standard Oil Company of Califor-

nia, 301 F. Supp. 982 (D. Hawaii, 1969) and needs no am-

plification here.

Ingunctive Rewer.

The function of the judge assigned cases pursuant to

Title 28, United States Code, Section 1407, is to coordinate

pretrial proceedings with the view of returning cases to the

transferor judge in condition to be tried expeditiously to

the benefit of all parties to the litigation. Defendants’

attack upon the prayer for injunctive relief in 14 of the 15

complaints to which the motion to dismiss has been ad-

dressed is, at this point in this litigation, premature.

The Court has not been advised nor can it conjure any

situation in which discovery will be delayed or, more

onerous, simply because of the request for additional relief

by way of injunction, prohibitory or mandatory.

It may well be that a trial judge, after hearing the evi-

dence may determine that the grant of an injunction which

parallels the relief of the consent decree in action 69-75-

JWC is unwarranted. But pre-judging at this stage of the

litigation, that plaintiffs may not be able to present some

peculiar need for further injunctive relief is not the func-

tion of this Court. The prayers for relief are within the

jurisdiction of this Court given the proof of facts alleged.

Whether it is necessary or desirable is for the trial judge or

development of these cases to where they may be subject to

disposition without trial. We have not yet reached that

posture of the cases. If we ever do depends upon the

parties.

A2%4 District Court Opinion

Tue Hanpy CoMPLAINT.

Defendants’ motion to dismiss attacks Count II of the

- Handy complaint. Count II alleges violation of ‘plaintiffs’

right to clean air and to a safe and healthy environment,

free from the contaminants and pollutants which have re-

sulted, and continue to result, from the operation of auto-

motive vehicles, and the use therein of gasoline, which

vehicles and gasoline were, and still are, manufactured,

distributed and sold by defendants,’’ all protected by the

Fifth, Ninth, Tenth and Fourteenth Amendments to the

United States Constitution and Title 42, United States

Code, Section 1983 and Section 1988 (Civil Rights Act). .

Plaintiff Handy would have this Court establish a right

to clean air and a safe and healthy environment within the

penumbra of the United States Constitution and its amend-

ments. Clearly no extensions have been made by the courts

except where there has been governmental intrusion into

the privacy of its citizens.

The invitation to the Court to now rule that private

corporations, though drawn to gigantic proportions, are

public utilities or have the functions of a government is de-

clined. These constitutional and statutory provisions do

not create or permit any cause of action for a solely private

intrusion.

All Cases Except Sturtz v. General Motors.

Memorandum Order (Re Class Actions).

The propriety of the maintenance of class actions or

class action claims is questioned by defendants in 15 of the

16 cases pending before this Court for consolidated pre-

trial proceedings.

The broadest claims of class representation are found

in the Grossman, Philadelphia, Lackawanna and Handy

SP MES Ns ESHEETS ROR OL ee eae

orp thay

se Dt te.

Rn Se eg HOES SERRA a

District Court Opinion A25

complaints." These complaints purport to represent all

persons in the United States.

The Morgan case? alleges class claims by all the

farmers of the United States.

Complaints of Illinois, New Jersey, New Mexico, Con-

necticut and Wisconsin ® claim classes of all people within

their respective states and their political subdivisions.

Political subdivisions, public corporations and authori-

ties within the state are represented in the New York

complaint.*

Residents are represented in the City of New York,

City and County of Denver and Keane complaints.

California’s* representation is narrowed to ‘‘all per-

sons who own property, real or personal, or who conduct a

business within the State of California damaged as the

result of air pollution caused by automobiles.’’

Each of the class actions are attacked by defendants on

the failure to meet the requirements of Rule 23 of the

Federal Rules of Civil Procedure.

Federal Rules of Civil Procedure Rule 23 provides in

its pertinent part:

‘‘Rule 23. Class Actions.

(a) Prerequisites to a Class Action. One or more

members of a class may sue or be sued as representa-

tive parties on behalf of all only if (1) the class is so

numerous that joinder of all members is impracticable,

(2) there are questions of law or fact common to the

class, (3) the claims or defenses of the representative

See Appendix A(1).

. See Appendix A(2).

. See Appendix A(3).

See Appendix A(4).

See Appendix A(5).

See Appendix A(6).

oe

District Court Opinion

parties are typical of the claims or defenses of the

class, and (4) the representative parties will fairly and

adequately protect the interests of the class.

(b) Class Actions Maintainable. An action may

be maintained as a class action if the prerequisites of

subdivision (a) are satisfied, and in addition :

(1) the prosecution of separate actions by or

against individual members of the class would

create a risk of

(A) inconsistent or varying adjudications

with respect to individual members of the class

which would establish incompatible standards

of conduct for the party opposing the class, or

(B) adjudications with respect to indi-

_ vidual members of the class which would as a

practical matter be dispositive of the interests

of the other members not parties to the ad-

judications or substantially impair or impede

their ability to protect their interests; or

(2) the party opposing the class has acted or

refused to act on grounds generally applicable to

the class, thereby making appropriate final injunc-

tive relief or corresponding declaratory relief with

respect to the class as a whole; or

(3) the court finds that the questions of law

or fact common to the members of the class pre-

dominate over any questions affecting only indi-

vidual members, and that a class action is superior

to other available methods for the fair and efficient

adjudication of the controversy. The matters

pertinent to the findings include: (A) the interest

of members of the class in individually controlling

the prosecution or defense of separate actions;

District Court Opinion A27

; (B) the extent and nature of any litigation con-

cerning the controversy already commenced by or

against members of the class; (C) the desirability

or undesirability of concentrating the litigation of

the claims in the particular forum; (D) the diffi-

culties likely to be encountered in the management

of a clasg action.’’ .

Defendants’ primary attack on the class action status

of this litigation is directed to the absence of common ques-

tions of law and fact which predominate over questions

individual to the class members and the unmanageability

of the classes alleged.

Common Questions or Law anp Fact.

Classically the visceral issues of any litigation are

liability on the part of a defendant and damage on the part

of a plaintiff. Certainly one can, within the framework of

these basic issues, conjure a plethora of factual and legal

issues which must be resolved before a decision can be

reached in the trial of a case. Unlike most litigation, treble

damage (private) anti-trust liability presents the deter-

mination of three issues, (1) conspiracy (monopolization,

etc.), (2) impact and (3) damage.’ Certainly the question

of conspiracy is one which, as alleged herein, is common

not only to the class within each separate action but also

to all of the actions filed.. This is an issue which should,

in the interest of justice, need be litigated only once.

The intrusion of impact into the consideration of the

liability aspect of these cases create a difficulty which cannot

be easily answered. Philadelphia Electric Co. v. Anaconda

7. Haverhill Gazette Co. v. Union Leader Corp., 333 F. 2d 798,

803 (Ist Cir. 1964), cert. denied 379 U. S. 931, 85 S. Ct. 329, 13

L. Ed. 2d 343 (1965) ; Winckler & Smith Citrus Products Co. v.

Sunkist Growers Inc., 346 F. 2d 1012, 1041 n. 1 (9th Cir. 1965).

Wie WD 2h oD PUES eth MA Se Ra tO GS OPS ie

A28 District Court Opinion

American Brass Co., 43 F. RB. D. 452 (E. D. Pa. 1968) ;

State of Illinois v. Harper & Row Publishers, Inc., 301 F.

Supp. 484 (N. D. Ill. 1969) ; In re Multidistrict Private Civil

Treble Damage Antitrust Litigation Involving Water

Meters, 304 F. Supp. 873 (Jud. Pan. Mult. Lit. 1969) if they

are authority for the separation of issues are clearly dis-

tinguishable. All of the cases herein allege a peculiar type

of anti-trust injury, ie., injury resulting from a pollution

caused by the conspiracy to hinder and delay the research,

development, manufacture and installation of effective

motor vehicle air pollution control equipment. It is in effect

a conspiracy to maintain a public nuisance—smog. Impact

is as varied as the public itself. In Philadelphia Electric

Co. v. Anaconda American Brass Co., supra, State of Mli-

nois v. Harper & Row Publishers, Inc., supra, and In Re

Multidistrict Private Civil Treble Damage Antitrust Litiga-

tion Involving Water Meters, supra, the courts are consid-

ering price fixing conspiracies in violation of the anti-trust

laws—where ‘‘impact’’ and ‘‘buyer’’ become almost syn-

onymous. If you qualify as a ‘“buyer’’ of the commodity

in question the liability—damage issues—except as to

amount of damage—lend themselves to common deter-

mination.

Grossman, Philadelphia, Lackawanna, Handy, City of

New York, City and County of Denver and Keane cannot be

maintained as class actions.

Although there may be some differences in the effect

of smog on various crops or the fauna and flora of a state,

political subdivision, public corporation or public authority,

the pleadings as they now stand do allege a class properly

represented in Morgan, linois, New Jersey, New Mexico,

Connecticut, Wisconsin, New York and California with re-

spect to common issues of law and fact which predominate

over questions affecting only individual members.

DARE eh ee ARO RRO AOD

District Court Opinion A29

MANAGEABILITY oF THE CLass.

Manageability of the classes alleged herein may cer-

tainly tax the imagination and ingenuity of the litigants,

counsel and the court. But until management is recognized

as impossible or near impossible, the Court will depend

upon the ingenuity and aid of counsel to solve the complex

problems this litigation may bring. If successful, the eco-

nomies of time, effort and expense will more than compen-

sate the effort.

REPRESENTATION OF THE CLASSES.

The complaints of Illinois, New Mexico, California,

Wisconsin, New York, Connecticut, New Jersey, Philadel-

phia and Lackawanna allege representation by a govern-

mental entity of the individual residents within its jurisdic-

tion. Putting aside the status of parens patriae for a

moment, the question raised is the adherence to the principle

that a plaintiff representative must be a member of the

class purportedly represented.* It is conceivable that a

governmental agency might, with reference to a particular

act or series of acts, stand in the same position as an in-

dividual resident within its jurisdiction. But in the context

of the acts alleged herein and any impact and/or damage

resluting therefrom, a governmental agency raises issues

which are peculiar only to its status as a governmental

agency. It cannot, therefore, be a member of the class of

citizens or residents and cannot maintain a class action on

behalf of individual plaintiffs.

The representation of governmental agencies as a class

is, of course, properly the subject of a class action. Since

more than one action alleges representation of the class,

determination of the representative governmental agency

must be made. That question, or its resolution, does not at

8. Rock, Drilling, Blasting, Roads, Sewers, Viaducts, Bridges,

Foundations, Excavations & Concrete Work, etc., Local Union No.

17 v. Mason & Hangar Co. (S. D. N. Y. 1950) 90 F. Supp. 539.

A30 District Court Opinion

this juncture affect the proceedings herein and is left for

later determination by agreement of the parties and failing

that, hearing and determination by the Court.

Appenpix A.

1. Marshall B. Grossman et al. v. Automobile Manufac-

turers Association, et al. 69-1855-R

City of Philadelphia, ete. v. Automobile Manufacturers

Association, Inc., et al. 70-846-R

County of Lackawanna, Pa., et al. v. Automobile Man- :

ufacturers Association, Inc., et al. 70-858-R, ;

C. Jon Handy et al. v. General Motors, Inc., et al. |

69-1548-R

2. Robert Morgan, etc. v. Automobile Manufacturers As-

sociation, Inc., et al. 70-853-R

3. The State of Illinois v. Automobile Manufacturers Asso-

ciation, Inc., et al. 70-1042-R

State of New Jersey v. American Motors Corporation

et al. 70-1041-R

State of New Mexico v. American Motors Corporation

et al. 70-1040-R,

State of Connecticut v. American Motors Corporation

et al. 70-1043-R

State of Wisconsin v. General Motors Corporation et al.

70-806-R

4. The State of New York v. Automobile Manufacturers

Association, Inc., et al. | , 70-1137-R

5. The City of New York, et. v. Automobile Manufacturers

Association, Inc., et al. 70-1477-R ;

City and County of Denver v. American Motors Cor- :

poration, et al. 70-1044-R

Thomas E. Keane et al. v. General Motors Corporation

et al. 70-1039-R,

6. State of California et al. v. Automobile Manufacturers

Association, et al. 70-541-R

Na a re ei Oe ah cee

SETS ARATE RACE DEO ONTIS

District Court Order A31

ORDER OF THE UNITED STATES DISTRICT COURT.

The Order of the district court reads, in relevant part,

as follows:

ORDER ON DEFENDANTS’ MOTION FOR RE.

CONSIDERATION OR IN THE ALTERNATIVE

FOR AN AMENDMENT TO CERTIFY FOR IN.

TERLOCUTORY APPEAL; AMENDED ORDER

RE CLASS ACTIONS AND MOTION TO DISMISS

FOR ALL CASES EXCEPT STURTZ v. GENERAL

MOTORS AND AMF, INC. v. GENERAL MOTORS:

AND CERTIFICATION PURSUANT TO 28 U.S. C.

§ 1292(b)

UPON CONSIDERATION OF DEFENDANTS’

MOTION FOR RECONSIDERATION OR IN THE

ALTERNATIVE FOR AMENDMENT TO CERTIFY

FOR INTERLOCUTORY APPEAL, AND IN OR-

DER TO MAKE THE RECORD CORRECTLY RE.

FLECT THIS COURT’S DECISION, IT IS OR.-

DERED THAT DEFENDANTS’ SAID MOTION

FOR RECONSIDERATION, ETC. BE, AND THE

SAME HEREBY IS, DENIED EXCEPT AS HERE.

AFTER PROVIDED AND THAT THIS COURT’S

ORDER OF SEPTEMBER 4, 1970 BE, AND

HEREBY IS, AMENDED TO READ AS FOLLOWS:

I. CLASS ACTIONS

II. MOTION TO DISMISS

1. Defendants’ Motion to Dismiss is Granted as

to the following, each of which is hereby dismissed:

ao AR ee oe

District Court Order

2. Defendants’ Motion to Dismiss is Denied as to:

. - oe

(n) Morgan Case No. 70-853-R: individually ;

and ‘‘all other farmers in the United States who

raise crops’’.

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