Opinion ID: 364697
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Heading: Contribution Under Federal Antitrust Law

Text: 6 We note at the outset that federal law governs the issue of whether there is a right to contribution in an antitrust case. El Camino Glass v. Sunglo Glass Co., (1977-1) Trade Reg.Rep. (CCH) P 61,533 (N.D.Cal.1976); Sabre Shipping Corp. v. American President Lines, Ltd., 298 F.Supp. 1339 (S.D.N.Y. 1969). 3 The traditional federal common law rule is that contribution is not available from joint tortfeasors. However, National urges that we adopt a rule which would allow contribution from joint tortfeasors in federal antitrust cases. We believe that sound policy reasons dictate such a result and accordingly hold that under certain circumstances an antitrust defendant may be entitled to pro rata 4 contribution from other joint tortfeasors. 5 7 To our knowledge no circuit court has directly decided the precise issue before us. 6 At least four federal district courts have confronted the issue and have unanimously held that there is no right to contribution under federal antitrust law. Olson Farms, Inc. v. Safeway Stores, Inc., (1977-2) Trade Reg.Rep. (CCH) P 61,698 (D.Utah 1977); Wilson P. Abraham Constr. Co. v. Texas Indus., Inc., No. 75-2820 (E.D.La. Oct. 5, 1977); El Camino Glass v. Sunglo Glass Co., supra; Sabre Shipping Corp. v. American President Lines, Ltd., supra. See also Baughman v. Cooper-Jarrett, Inc., 391 F.Supp. 671, 678 n. 3 (W.D.Pa.1975), Aff'd in part, rev'd in part, 530 F.2d 529 (3d Cir.), Cert. denied, 429 U.S. 825, 97 S.Ct. 78, 50 L.Ed.2d 87 (1976) (dictum); Wainwright v. Kraftco Corp., 58 F.R.D. 9, 11-12 (N.D.Ga.1973) (arguably by implication); Washington v. American Pipe & Constr. Co., 280 F.Supp. 802, 804-05 (S.D.Cal.1968) (arguably by implication). Nevertheless, we are not persuaded that a rule barring contribution is correct. Of the above cited cases, only El Camino Glass, supra, and Sabre Shipping Corp., supra, provide any insight into the reasoning of the court. 8 In Sabre Shipping Corp. v. American President Lines, Ltd., supra, the primary case authority relied on by the court was Halcyon Lines v. Haenn Ship Ceiling & Refitting Corp., 342 U.S. 282, 72 S.Ct. 277, 96 L.Ed. 318 (1952). Halcyon is a 1952 admiralty case which has been widely cited for the proposition that there is no federal common law right to contribution and that it should be up to Congress, rather than the courts, to alter the rule. E. g., Sabre Shipping Corp. v. American President Lines, Ltd., supra, 298 F.Supp. at 1344. However, the vitality of Halcyon was seriously eroded by Cooper Stevedoring Co. v. Kopke, Inc., 417 U.S. 106, 94 S.Ct. 2174, 40 L.Ed.2d 694 (1974), decided after Sabre Shipping. In Cooper Stevedoring, the Supreme Court limited the application of Halcyon to those cases where the joint tortfeasor from whom liability is sought is immune from tort liability by statute. In limiting the breadth of Halcyon, the Court stated: (A) 'more equal distribution of justice' can best be achieved by ameliorating the common-law rule against contribution which permits a plaintiff to force one of two wrongdoers to bear the entire loss, though the other may have been equally or more to blame. Cooper Stevedoring Co. v. Kopke, Inc., supra, 417 U.S. at 111, 94 S.Ct. at 2177. The Court further stated (s)ince (plaintiff) could have elected to make (third-party defendant) bear its share of the damages caused by its negligence, we see no reason why (defendant-third-party plaintiff) should not be accorded the same right. Id. at 113, 94 S.Ct. at 2178. As a minimum Cooper Stevedoring and earlier admiralty cases demonstrate that under certain circumstances the Supreme Court is willing to fashion a rule allowing contribution without express direction from Congress. See id. at 110-11, 94 S.Ct. 2174. 9 El Camino Glass v. Sunglo Glass Co., supra, relies on Sabre Shipping, and in addition discusses many of the policy reasons both for and against contribution in antitrust cases. We do not disagree with much of the court's discussion but do take exception to its conclusion that (w)hile the above arguments in favor of permitting contribution are persuasive, the court concludes that on balance the ends of justice will be better served by holding that contribution is not available in an antitrust suit. El Camino Glass v. Sunglo Glass Co., supra, Trade Reg.Rep. (CCH) at 72,112. 10 From an examination of La Maur's brief and the El Camino Glass and Sabre Shipping cases we discern five principal reasons advanced in support of the rule not allowing contribution. First, it is argued that it was the intent of Congress to exclude contribution. The essence of this argument is that since Congress put provisions for contribution in certain sections of the Security Acts of 1933 and 1934, but not in the Antitrust Acts, there was congressional intent to not allow contribution in antitrust cases. Furthermore, Congress has not acted in the face of the longstanding common law rule against contribution or the lower court decisions which hold that contribution is not available in antitrust cases. 11 We initially note that the antitrust statutes are not purported to be comprehensive and, possibly as a result, courts have not been prone to await congressional action to resolve many of the questions left unanswered by these statutes, such as the nature of the cause of action, apportionment of judgments, assignment, survival and limitations. Additionally, contrary to La Maur's assertions, it is our view that the presence of contribution provisions in the security laws is some indication that if the question were presented today, Congress would include a right to contribution as part of the antitrust laws. We further observe that there is a dearth of case law on this issue and comment that a complicated legal issue which is raised so infrequently is unlikely to spur immediate congressional action. Finally, we find further support for our position from the fact that federal courts have been willing to formulate rules for contribution in other areas of the law without express congressional direction. 7 E. g., Kohr v. Allegheny Airlines, Inc., 504 F.2d 400 (7th Cir. 1974) (contribution and indemnification available on a comparative negligence basis in aviation collisions); Chicago & N. W. Ry. v. Minnesota Transfer Ry., 371 F.2d 129 (8th Cir. 1967) (contribution available in FELA case if state law provides); Knell v. Feltman, 85 U.S.App.D.C. 22, 174 F.2d 662 (1949) (contribution available in ordinary negligence cases in District of Columbia); Grogg v. General Motors Corp., 72 F.R.D. 523, 527-28 (S.D.N.Y.1976) (contribution available in federal sex discrimination cases); Gould v. American-Hawaiian Steamship Co., 387 F.Supp. 163, 168-69 (D.Del.1974), Vacated on other grounds, 535 F.2d 761 (3d Cir. 1976) (contribution available under section 14(a) of the Securities Exchange Act of 1934, 15 U.S.C. § 78n(a)); Globus, Inc. v. Law Research Serv., Inc., 318 F.Supp. 955 (S.D.N.Y.1970), Aff'd, 442 F.2d 1346 (2d Cir.), Cert. denied, 404 U.S. 941, 92 S.Ct. 286, 30 L.Ed.2d 254 (1971) (contribution available under section 17(a) of the Securities Act of 1933, 15 U.S.C. § 77q(a) and section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b)). 12 Second, it is contended that allowing contribution will interfere with the plaintiff's ability to maintain control of his lawsuit. The fear expressed, which is indeed a legitimate one, is that a defendant may attempt to complicate the issues and confuse the jury by impleading numerous third-party defendants or fundamentally alter the lawsuit by impleading a third-party defendant with financial resources far superior to the plaintiff or the original defendant. Without downplaying the seriousness of this fear, we are confident that such problems can be avoided by the district court's prudent use of its power to sever where necessary to insure justice. In the present case Professional has not objected to the adding of La Maur as a third-party defendant. 13 A third reason advanced is that a right to contribution might serve as a possible deterrent to settlement. We are not convinced that a holding permitting contribution need undermine the judicial policy in favor of settlement. The problem of how to treat a joint tortfeasor who has settled in good faith is not present in this case. However, in the proper case the court should be able to fashion a rule of contribution which will protect the rights of settling defendants. See, e. g., Herzfield v. Laventhol, Krekstein, Horwath & Horwath, 540 F.2d 27, 38-39 (2d Cir. 1976); Gomes v. Brodhurst, 394 F.2d 465, 468-70 (3d Cir. 1968). See also Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 348, 91 S.Ct. 795, 28 L.Ed.2d 77 (1971) (if plaintiff recovered damages in settlement from one defendant he could not recover for the same damages from another defendant); Leach v. Mon River Towing, Inc., 363 F.Supp. 637, 642-43 (W.D.Pa.1973) (effect of release on amount of damages recoverable from remaining defendants); W. Prosser, Law of Torts § 50, at 309-10 (4th ed. 1971); F. James, Contribution Among Joint Tortfeasors: A Pragmatic Criticism, 54 Harv.L.Rev. 1156, 1161-62 (1941); C. Gregory, Contribution Among Joint Tortfeasors: A Defense, 54 Harv.L.Rev. 1170, 1172-73 (1941); F. Bohlen, Contribution and Indemnity Between Tortfeasors, 21 Corn.L.Q. 522, 567-68 (1936). 14 A fourth argument against contribution in antitrust cases is that antitrust suits are already enormously complex and it is unwise to further complicate matters by adding the issue of contribution among defendants. We reemphasize that district courts have the ability to sever issues and parties if the need arises. More importantly, the vitality of this argument is somewhat suspect since contribution is allowed by statute under certain sections of the Security Acts, and security cases are often as complex as antitrust cases. We are aware of no unmanageable administrative problems which have been caused by allowing contribution in security cases. On the contrary, the trend has been to allow contribution in security actions which are brought under sections of the Security Acts which do not have express contribution provisions. See, e. g., Odette v. Shearson, Hammill & Co., 394 F.Supp. 946, 957-58 (S.D.N.Y.1975); Liggett & Myers Inc. v. Bloomfield, 380 F.Supp. 1044 (S.D.N.Y.1974); Globus, Inc. v. Law Research Serv., Inc., supra, 318 F.Supp. 955; DeHaas v. Empire Petroleum Co., 286 F.Supp. 809 (D.Colo.1968), Aff'd in part, rev'd in part on other grounds, 435 F.2d 1223 (10th Cir. 1970). See also Getter v. R. G. Dickinson & Co., 366 F.Supp. 559, 569 (S.D.Iowa 1975). 15 The final reason urged by La Maur for a rule of no contribution is that the deterrent effect of the antitrust laws is increased by not permitting defendants to redistribute the cost of an antitrust action. We believe that the question of deterrence actually cuts both ways and on balance a rule allowing contribution is actually a greater deterrent. The fact that one tortfeasor may be held liable for all the damages arising from the antitrust violation necessarily means that other joint tortfeasors may go scot free. This possibility of escaping all liability might cause many to be more willing, rather than less willing, to engage in wrongful activity. 16 This possibility significantly increases where a large or powerful tortfeasor has sufficient economic influence to prevent a plaintiff from including it as a defendant. National alleges that this is precisely what happened in the present case. National claims that in their depositions the principal shareholders of Professional stated that they were persuaded not to name La Maur as a defendant because of La Maur's decision to renew Professional's franchise. Whether such allegations are true can only be determined upon further factual development. However, such allegations are indicative of the exact abuses which are encouraged by a rule which automatically denies contribution to antitrust violators and which could be avoided by the formulation of a rule allowing contribution in certain cases. To deny contribution would be to dilute the deterrent effect of the antitrust laws, since a participant in an antitrust violation could escape all responsibility for its wrongdoing. 17 Contribution is an equitable doctrine based on the principle of justice between the parties. See Dawson v. Contractors Transport Corp., 151 U.S.App.D.C. 401, 405-406 & n. 7, 467 F.2d 727, 731-32 & n. 7 (1972). The governing principle of contribution throughout has been that one of two or more joint wrongdoers should not be required to pay more than his share of a common burden, or to put it another way, that no obligor should be unjustly benefitted at the expense of another. Gould v. American-Hawaiian Steamship Co., supra, 387 F.Supp. at 170. In Perma Life Mufflers, Inc. v. International Parts Corp., 392 U.S. 134, 138, 88 S.Ct. 1981, 20 L.Ed.2d 982 (1968), the Supreme Court cautioned against broad application of common law doctrines to prevent recovery if such application will defeat important public purposes. We are convinced that the result of automatically prohibiting contribution among antitrust defendants in all circumstances would be to allow a significant number of antitrust violators to escape liability for their wrongdoing and thereby undermine the policy of the antitrust laws. 18 The deciding factor in our decision is fairness between the parties. We conclude that fairness requires that the right of contribution exist among joint tortfeasors at least under certain circumstances. There is an obvious lack of sense and justice in a rule which permits the entire burden of restitution of a loss for which two parties are responsible to be placed upon one alone because of the plaintiff's whim or spite, or his collusion with the other wrongdoer. See, e. g., Gomes v. Brodhurst, supra, 394 F.2d at 467-68 & n. 1. 19 In sum, we adopt for the Eighth Circuit the rule that contribution may be enforced among joint tortfeasors in an antitrust action. Because of the deterrent policy of the antitrust laws, even intentional tortfeasors may obtain contribution so that tortfeasors will not escape liability. Cf. Odette v. Shearson, Hammill & Co., supra, 394 F.Supp. at 958; Alexander & Baldwin, Inc. v. Peat, Marwick, Mitchell & Co., 385 F.Supp. 230, 238 (S.D.N.Y.1974); Globus v. Law Research Serv., Inc., supra, 318 F.Supp. at 955 (contribution under the security laws even for intentional tortfeasors); sections 9(e), 18(b) of the Securities Exchange Act of 1934, 15 U.S.C. §§ 78i(e), 78r(b). We do not hold that contribution is available to all violators of the antitrust laws, regardless of the flagrancy of the conduct of the party seeking contribution. The decision of whether a particular party is entitled to contribution is best left to the trier of fact upon consideration of all of the circumstances of a case, including the factors specified by Justice White in his concurring opinion in Perma Life Mufflers, Inc. v. International Parts Corp., supra. 8 Cf. Section 11(f) of the Securities Act of 1933, 15 U.S.C. § 77k(f) (contribution unless one party guilty of fraudulent misrepresentation and not the other). At this stage of the proceedings contribution in favor of National is a possibility. Therefore, the district court erred in dismissing its third party complaint. 20