Source: http://www.law.cornell.edu/supremecourt/text/434/308
Timestamp: 2013-12-20 06:15:48
Document Index: 353032982

Matched Legal Cases: ['§ 4', '§ 1', '§ 4', '§ 4', '§ 7', '§ 4', '§ 4', '§ 7', '§ 7', '§ 2', '§ 1', '§ 1', '§ 4', '§ 3140', '§ 1']

PFIZER, INC., et al., Petitioners, v. GOVERNMENT OF INDIA et al. | Supreme Court | LII / Legal Information Institute
Supreme Court aboutsearch liibulletin subscribe previews PFIZER, INC., et al., Petitioners, v. GOVERNMENT OF INDIA et al.
434 U.S. 308 (98 S.Ct. 584, 54 L.Ed.2d 563)
Argued: Nov. 1, 1977.
Decided: Jan. 11, 1978.
[HTML] dissent, BURGER, POWELL, REHNQUIST
[HTML] See 435 U.S. 910, 98 S.Ct. 1462.
Syllabus by the Court A foreign nation otherwise entitled to sue in the courts of this country held to be a "person" within the meaning of § 4 of the Clayton Act and thus to be entitled to sue for treble damages under the federal antitrust laws to the same extent as any other plaintiff. Pp. 311-320.
The complaints alleged that the petitioners had conspired to restrain and monopolize interstate and foreign trade in the manufacture, distribution, and sale of broad spectrum antibiotics, in violation of §§ 1 and 2 of the Sherman Act, ch. 647, 26 Stat. 209, as amended, 15 U.S.C. 1, 2. Among the practices the petitioners allegedly engaged in were price fixing, market division, and fraud upon the United States Patent Office.
India and Iran each alleged that it was a "sovereign foreign state with whom the United States of America maintains diplomatic relations"; the Philippines alleged that it was a "sovereign and independent government." Each respondent claimed that as a purchaser of antibiotics it had been damaged in its business or property by the alleged antitrust violations and sought treble damages under § 4 of the Clayton Act, 38 Stat. 731, 15 U.S.C. 15, on its own behalf and on behalf of several classes of foreign purchasers of antibiotics.
The petitioners asserted as an affirmative defense to the complaints that the respondents as foreign nations were not "persons" entitled to sue for treble damages under § 4. In response to pretrial motions
The trial court certified the question for appeal pursuant to 28 U.S.C. 1292(b).
Id., at 400. We granted certiorari to resolve an important and novel question in the administration of the antitrust laws. 430 U.S. 964, 97 S.Ct. 1643, 52 L.Ed.2d 355.
* As the Court of Appeals observed, this case "turns on the interpretation of the statute." 550 F.2d, at 397. A treble-damages remedy for persons injured by antitrust violations was first provided in § 7 of the Sherman Act, and was re-enacted in 1914 without substantial change as § 4 of the Clayton Act.
Thus, whether a foreign nation is entitled to sue for treble damages depends upon whether it is a "person" as that word is used in § 4. There is no § atutory provision or legislative history that provides a clear answer; it seems apparent that the question was never considered at the time the Sherman and Clayton Acts were enacted.
The Court has previously noted the broad scope of the remedies provided by the antitrust laws. "The Act is comprehensive in its terms and coverage, protecting all who are made victims of the forbidden practices by whomever they may be perpetrated." Mandeville Island Farms, Inc. v. American Crystal Sugar Co., 334 U.S. 219, 236, 68 S.Ct. 996, 1006, 92 L.Ed. 1328; cf. Perma Life Mufflers, Inc. v. International Parts Corp., 392 U.S. 134, 138-139, 88 S.Ct. 1981, 1984, 20 L.Ed.2d 982. And the legislative history of the Sherman Act demonstrates that Congress used the phrase "any person" intending it to have its naturally broad and inclusive meaning. There was no mention in the floor debates of any more restrictive definition. Indeed, during the course of those debates the word "person" was used interchangeably with other terms even broader in connotation. For example, Senator Sherman said that the treble-damages remedy was being given to "any party," and Senator Edmunds, one of the principal draftsmen of the final bill,
said that it established "the right of anybody to sue who chooses to sue." 21 Cong.Rec. 2569, 3148 (1890).
In light of the law's expansive remedial purpose, the Court has not taken a technical or semantic approach in determining who is a "person" entitled to sue for treble damages. Instead, it has said that "the purpose, the subject matter, the context, the legislative history, and the executive interpretation of the statute are aids to construction which may indicate" the proper scope of the law. United States v. Cooper Corp., 312 U.S. 600, 605, 61 S.Ct. 742, 744, 85 L.Ed. 1071.
As to the first of these attributes, the petitioners argue that, in light of statements made during the debates on the Sherman Act and the general protectionist and chauvinistic attitude evidenced by the same Congress in debating contemporaneous tariff bills, it should be inferred that the Act was intended to protect only American consumers. Yet it is clear that a foreign corporation is entitled to sue for treble damages, since the definition of "person" contained in the Sherman and Clayton Acts explicitly includes "corporations and associations existing under or authorized by . . . the laws of any foreign country." See n.9, supra. Moreover, the antitrust laws extend to trade "with foreign nations" as well as among the several States of the Union. 15 U.S.C. 1, 2.
Clearly, therefore, Congress did not intend to make the treble-damages remedy available only to consumers in our own country.
The second distinguishing characteristic of these respondents is that they are sovereign nations. The petitioners contend that the word "person" was clearly understood by Congress when it passed the Sherman Act to exclude sovereign governments. The word "person," however, is not a term of art with a fixed meaning wherever it is used, nor was it in 1890 when the Sherman Ac was passed.
Cf. Towne v. Eisner, 245 U.S. 418, 425, 38 S.Ct. 158, 159, 62 L.Ed. 372. Indeed, this Court has expressly noted that use of the word "person" in the Sherman and Clayton Acts did not create a "hard and fast rule of exclusion" of governmental bodies. United States v. Cooper Corp., 312 U.S., at 604-605, 61 S.Ct., at 743.
In United States v. Cooper Corp., the United States sought to maintain a treble-damages action under § 7 of the Sherman Act for injury to its business or property. The Court considered the question whether the United States was a "person" entitled to sue for treble damages as one to be decided not "by a strict construction of the words of the Act, nor by the application of artificial canons of construction," but by analyzing the language of the statute "in the light, not only of the policy intended to be served by the enactment, but, as well, by all other available aids to construction." Id., at 605, 61 S.Ct., at 744. The Court noted that the Sherman Act provides several separate and distinct remedies: criminal prosecutions, injunctions, and seizure of property by the United States on the one hand, and suits for treble damages "granted to redress private injury" on the other. Id., at 607-608, 61 S.Ct., at 745. Statements made during the congressional debates on the Sherman and Clayton Acts provided further evidence that Congress affirmatively intended to exclude the United States from the treble-damages remedy. Id., at 611-612, 61 S.Ct., at 746-47. Thus, the Court found that the United States was not a "person" entitled to bring suit for treble damages.
"We can perceive no reason for believing that Congress wanted to deprive a foreign nation, as purchaser of commodities shipped in international commerce, of the civil remedy of treble damages which is available to other purchasers who suffer through violation of the Act. . . . Nothing in the Act, its history, or its policy, could justify so restrictive a construction of the word 'person' in § 7 . . . . Such a construction would deny all redress to a foreign nation, when mulcted by a violator of the Sherman Law, merely because it is a foreign nation." 316 U.S., at 162-163, 62 S.Ct., at 974.
The result we reach does not involve any novel concept of the jurisdiction of the federal courts. This Court has long recognized the rule that a foreign nation is generally entitled to prosecute any civil claim in the courts of the United States upon the same basis as a domestic corporation or individual might do. "To deny him this privilege would manifest a want of comity and friendly feeling." The Sapphire, 11 Wall. 164, 167, 20 L.Ed. 127; Monaco v. Mississippi, 292 U.S. 313, 323 n.2, 54 S.Ct. 745, 748, 78 L.Ed. 1282; Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 408-409, 84 S.Ct. 923, 929-930, 11 L.Ed.2d 804; see U.S.Const., Art. III, § 2, cl. 1.
To allow a foreign sovereign to sue in our courts for treble damages to the same extent as any other person injured by an antitrust violation is thus no more than a specific application of a long-settled general rule. To exclude foreign nations from the protections of our antitrust laws would, on the other hand, create a conspicuous exception to this rule, an exception tha could not be justified in the absence of clear legislative intent.
It has long been established that only governments recognized by the United States and at peace with us are entitled to access to our courts, and that it is within the exclusive power of the Executive Branch to determine which nations are entitled to sue. Jones v. United States, 137 U.S. 202, 212, 11 S.Ct. 80, 83, 34 L.Ed. 691; Guaranty Trust Co. v. United States, 304 U.S. 126, 137-138, 58 S.Ct. 785, 791, 82 L.Ed. 1224; Banco Nacional de Cuba v. Sabbatino, supra, 376 U.S., at 408-412, 84 S.Ct., at 929-31. Nothing we decide today qualifies this established rule of complete judicial deference to the Executive Branch.
The Court's reliance on the references to "for ign nations" in §§ 1 and 2 of the Sherman Act and § 1 of the Clayton Act to support an argument that Congress was specifically concerned with foreign commerce and foreign nations in 1890 when the disputed definition was enacted is similarly unavailing. As a threshold matter, congressional concern with the foreign commerce of the United States does not entail either a desire to protect foreign nations or a willingness to allow them to sue Americans for treble damages in our courts. The Webb-Pomerene Act, ch. 50, 40 Stat. 516, as amended, 15 U.S.C. 61 et seq., passed within only a few years of the Clayton Act, indicates that such a concern may instead be served at the expense of foreign states and consumers.
"That all arrangements, contracts, agreements, trusts, or combinations between persons or corporations made with a view or which tend to prevent full and free competition in the production, manufacture, or sale of articles of domestic growth or production, or of the sale of articles imported into the United States, . . . are hereby declared to be against public policy, unlawful and void . . . ." 21 Cong.Rec. 2598 (1890) (first draft) (emphasis added).
The focus of this language on protecting domestic consumers from anticompetitive practices affecting the importation of goods into the United States could not be more clear, nor could the absence of any attention to affording comparable protection for foreign consumers of American exports. The language substituted by the Judiciary Committeelanguage tracking that appearing in the Commerce Clausewas chosen to mollify the objections of those Senators who felt the proposed statute exceeded Congress' constitutional power to regulate commerce, see, e. g., id., at 2600, 3147 (remarks of Sen. George); id., at 2728 (remarks of Sen. Edmunds); id., at 3149 (remarks of Sen. Reagan); cf. Apex Hosiery Co. v. Leader, 310 U.S. 469, 495, 60 S.Ct. 982, 993, 84 L.Ed. 1311 (1940); Atlantic Cleaners & Dyers, Inc. v. United States, 286 U.S. 427, 434-435, 52 S.Ct. 607, 609, 76 L.Ed. 1204 (1932); that language was not intended to work any substantive change in the focus or scope of the Act. See United States v. Wise, 370 U.S. 405, 420, 82 S.Ct. 1354, 1363, 8 L.Ed.2d 590 (1962) (Harlan, J., concurring). To read this language as evidencing an intent to protect foreign nations or foreign consumers simply belies its lineage.
The legislative history of the treble-damages remedy gives no more support to the result reached by the court than does the language of the statute. As five of the eight judges of the Court of Appeals concludedand indeed as the majority here concedes, ante, at 312"Congress, in passing § 4 of the Clayton Act 15 U.S.C. 15, gave no consideration nor did it have any legislative intent whatsoever, concerning the question of whether foreign governments are 'persons' under the Act." 550 F.2d 396, 399 (Ross, J., concurring) (emphasis added). The conversion of this silence in 1890 into an affirmative intent in 1978 is indeed startling.
The failure of Congress even to consider the question of granting treble-damages remedies to foreign nations provides the clearest possible argument for leaving the question to the same political process that gave birth to the Sherman and Clayton Acts. To rely on the absence of any express congressional intent to exclude foreign nations from taking advantage of the treble-damages remedy is a remarkable innovation in statutory interpretation. It is a strange way to camouflage the unassailable conclusion that the legislative history offers no affirmative support for the result reached today. Further, as this Court observed just last Term, the legislative history of the treble-damages remedy which does exist "indicates that it was conceived of primarily as a remedy for 'the people of the United States as individuals,' especially consumers." Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 486 n. 10, 97 S.Ct. 690, 696, 50 L.Ed.2d 701 (1977), quoting from 21 Cong.Rec. 1767-1768 (1890) (remarks of Sen. George). What we so recently saw as primarily a remedy for American consumers is now extended to all the nations of the worlda boon Congress might choose to grant but has not done so.
In Georgia v. Evans, Mr. Justice Frankfurter concluded that absent the right to sue for treble damages, our States would be left without any remedy against violators of the antitrust laws. The Court today analogizes the situation of foreign nations to that of the States in Evans, and finds the analogy dispositive. When viewed solely in terms of the remedies specifically provided by the antitrust laws, the plight of domestic States and foreign sovereigns may, in this limited respect, be roughly comparable. But the very limited scope of the inquiry in Evans precludes consideration of the manifold and patently obvious respects in which foreign nations and our own domestic States differcogent differences bearing on the question under consideration here, though obviously not at all on the Court's inquiry in Evans.
First, the disparate treatment of foreign and domestic States is a legitimate source of concern only on the assumption that Congress in passing the Sherman Act intendedor even contemplated that these two categories of political entities were so essentially alike that they were entitled to the same remedies against anticompetitive conduct. As I have already suggested, this assumption derives no support from either the statutory language or anything in the legislative history. Although our own States were also not the expressly intended beneficiaries of the Act, to deny them the treble-damages remedy would, as Mr. Justice Frankfurter perceived, have the unmistakable result of effectively denying surrogate protection to American citizens in whose behalf the State acts and for whose benefit the Sherman Act was enacted. Thus, while the result in Evans is a tolerable taking of certain liberties with the literal language of the statute, the congruence of that result with Congress' purpose can scarcely be doubted. This same logic, however, does not even remotely apply to the situation of foreign nations.
While problems of jurisdiction and discovery may render antitrust actions against foreign defendants somewhat more problematic than a suit against a corporation in its own country, the limited experience of the Common Market nations in applying their antitrust laws to foreign corporations suggests that such difficulties are certainly not insoluble and are likely exaggerated. See, e. g., Europemballage Corp. v. E. C. Commission, 12 Comm.Mkt.L.R. 199 (1973); Commercial Solvents Corp. v. E. C. Commission, 13 Comm.Mkt.L.R. 309 (1974). And, as the presently existing treaty between the United States and West Germany indicates, reciprocal agreements providing for cooperation in antitrust investigations undertaken by foreign nations are an effective means of mitigating the rigors of discovery in foreign jurisdictions. See Agreement Relating to Mutual Cooperation Regarding Restrictive Business Practices, entered into force Sept. 11, 1976. United StatesFederal Republic of Germany, 1976 27 U.S.T. 1956, T.I.A.S. No. 8291.
Finally, the Court's emphasis on the deterrent effects of treble-damages actions by foreign sovereigns also will not withstand critical scrutiny. We acknowledged in Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S., at 485-486, 97 S.Ct., at 696, that while treble damages do play an important role in deterring wrongdoers, "the treble-damages provision . . . is designed primarily as a remedy." To allow foreign sovereigns who were clearly not the intended beneficiaries of this remedy to nevertheless invoke it reverses this priority of purposes, and does so solely on the basis of this Court's uninformed speculation about some possible beneficial consequences to American consumers of this "maximum deterrent." Ante, at 315. In areas of far less political delicacy, we have been unwilling to expand the scope of the right to sue under the antitrust laws without express congressional intent to do so. See, e. g., Hawaii v. Standard Oil Co., 405 U.S. 251, 264-265, 92 S.Ct. 885, 892, 31 L.Ed.2d 184 (1972).
I had thought it was accepted doctrine that questions of "general policy"especially with respect to foreign sovereigns and absent explicit legislative authorityare beyond the province of the Judicial Branch. If the statute truly reflected a general policy that dictated the inclusion of foreign sovereigns, the Court might be justified in reaching today's result. In Georgia v. Evans, 316 U.S. 159, 62 S.Ct. 972, 86 L.Ed. 1346 (1942), a clear policy to protect the States of the Union was reflected in the antitrust laws and in the legislative history. The Court could "perceive no reason for believing that Congress wanted to deprive a State, as purchaser of commodities shipped in interstate commerce, of the civil remedy of treble damages which is available to other purchasers who suffer through violation of the Act." Id., at 162, 62 S.Ct., at 974.
"shall be deemed to include corporations and associations existing under or authorized by the laws of either the United States, the laws of any of the Territories, the laws of any State, or the laws of any foreign country." 15 U.S.C. 7, 12.
Moreover, in the Webb-Pomerene Act, ch. 50, 40 Stat. 516, as amended, 15 U.S.C. 61 et seq., Congress has provided a narrow and carefully limited exception for export activity that would otherwise violate the antitrust laws. See United States v. Concentrated Phosphate Export Assn., 393 U.S. 199, 89 S.Ct. 361, 21 L.Ed.2d 344. A judicial rule excluding all non-Americans as plaintiffs in treble-damages cases would hardly be consistent with the precisely limited exception Congress has established to the general applicability of the antitrust laws to foreign commerce.
Cases construing federal statutes of the same era also indicate that the use of the term "person" did not invariably imply an intent to exclude governmental bodies. See, e. g., Ohio v. Helvering, 292 U.S. 360, 54 S.Ct. 725, 78 L.Ed. 1307 ("person" in §§ 3140 and 3244 of the Revised Statutes of 1878 includes a State); California v. United States, 320 U.S. 577, 585-586, 64 S.Ct. 352, 356, 88 L.Ed. 322 ("person" in the Shipping Act, 1916, 46 U.S.C. 801 et seq., includes both a State and a city); Chattanooga Foundry & Pipe Works v. City of Atlanta, 203 U.S. 390, 396, 27 S.Ct. 65, 66, 51 L.Ed. 241 ("person" in the Sherman Act includes a city).
In 1955 Congress amended the Clayton Act to allow the United States to sue for single damages when it is injured in its business or property. Ch. 283, § 1, 69 Stat. 282, 15 U.S.C. 15a.
"The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $10,000, exclusive of interest and costs, and is between
"(4) a foreign state . . . as plaintiff and citizens of a State or of different States." 28 U.S.C. 1332(a)(4) (1976 ed.).
The Webb-Pomerene Act exempts certain actions of export associations from the antitrust laws, but the exemption applies only if the association's actions do not restrain trade or affect the price of exported products within the United States and do not restrain the export trade of any domestic competitor of the association. 15 U.S.C. 62. Although the Act was subsequently regarded as carving out an exemption from the antitrust laws, the legislative history indicates considerable question at the time whether the conduct of exporters meeting the conditions specified in the Act would have violated the antitrust laws even without the putative exemption. See H.R.Rep. No. 50, 65th Cong., 1st Sess., 2 (1917).