Opinion ID: 368855
Heading Depth: 3
Heading Rank: 1

Heading: Conduct Prior to the Limitations Period

Text: 145 By statute, 15 U.S.C. § 15b, a four-year period of limitations applies in private antitrust suits. The plaintiff, therefore, clearly can recover only for overcharges suffered since the beginning of the limitations period. It remains to be decided, however, whether the conduct element of the offense may be satisfied by wrongful action occurring before the limitations period but that nevertheless made an enduring contribution to the monopolist's ability to charge an excessive price. Judge Frankel, without articulating reasons, concluded that § 15b requires a negative answer. 146 Unless tolled, that provision requires suit to be commenced within four years after the cause of action accrued. In effect, therefore, the judge held that the cause of action of a purchaser seeking to recover an illegal overcharge accrues when the defendant engages in the anticompetitive conduct that is a prerequisite for suit. We believe that the purchaser's claim cannot accrue until it actually pays the overcharge. Accordingly, Judge Frankel's ruling was erroneous. 147 It is plain from the treble-damage statute itself (15 U.S.C. § 15) that a cause of action accrues and the statute begins to run when a defendant commits an act that injures a plaintiff's business. Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 338, 91 S.Ct. 795, 806, 28 L.Ed.2d 77 (1971). Although the business of a monopolist's rival may be injured at the time the anticompetitive conduct occurs, a purchaser, by contrast, is not harmed until the monopolist actually exercises its illicit power to extract an excessive price. The case of predatory pricing illustrates the point clearly. As soon as the dominant firm commences such a policy, other producers, who may be driven out of the market, are injured. But, clearly, purchasers are not, for they receive the temporary boon of artificially low prices. It is only when the monopolist, having devoured its smaller rivals, enjoys the spoils of its conquest by boosting its price to excessive levels that a purchaser feels the adverse impact of the violation. Id. at 339, 91 S.Ct. 795. And if the monopolist never consummates its scheme by taking this final step, the purchaser has no cause of action. 148 So long as a monopolist continues to use the power it has gained illicitly to overcharge its customers, it has no claim on the repose that a statute of limitations is intended to provide. Thus, in this setting, as in the context of a continuing conspiracy to violate the antitrust laws. . . . each time a plaintiff is injured by an act of the defendants a cause of action accrues to him to recover the damages caused by that act. . . . . (A)s to those damages, the statute of limitations runs from the commission of the act. Id. at 338, 91 S.Ct. at 806. 149 Untoward consequences would follow were we to hold that the anticompetitive conduct itself triggered the running of the limitations period. As the Supreme Court stated in Zenith Radio: 150 (I)t is hornbook law, in antitrust actions as in others, that even if injury and a cause of action have accrued as of a certain date, further damages that might arise from the conduct sued on are unrecoverable if the fact of their accrual is speculative or their amount and nature unprovable. Id. at 339, 91 S.Ct. at 806. 151 Plainly, at the time a monopolist commits anticompetitive conduct it is entirely speculative how much damage that action will cause its purchasers in the future. Indeed, some of the buyers who will later feel the brunt of the violation may not even be in existence at the time. Cf. Continental Ore Co., supra, 370 U.S. at 709-10, 82 S.Ct. 1404. Not until the monopolist actually sets an inflated price and its customers determine the amount of their purchases can a reasonable estimate be made. The purchaser's cause of action, therefore, accrues only on the date damages are suffered:Otherwise future damages that could not be proved within four years of the conduct from which they flowed would be forever incapable of recovery, contrary to the congressional purpose that private actions serve as a bulwark of antitrust enforcement. Perma Life Mufflers, Inc. v. International Parts Corp., 392 U.S. 134, 139, 88 S.Ct. 1981, 1984, 20 L.Ed.2d 982 (1968). . . . . 152 Zenith Radio Corp., supra, 401 U.S. at 340, 91 S.Ct. at 807. 153 Our view is supported by the fundamental principles of § 2 that we outlined earlier in this opinion. Monopoly power, we indicated, is itself the primary target of § 2. To be sure, a showing of anticompetitive conduct is necessary to support liability for damages, for otherwise the law would be unfair to a firm that has gained success solely by fair means. But there can be no unfairness in preventing a monopolist that has established its dominant position by unlawful conduct from exercising that power in later years to extract an excessive price. After all, it is only a pristine origin, Alcoa, supra, 148 F.2d at 429, that may save a monopoly so long as it continues to refrain from anticompetitive activity from the condemnation of § 2. The taint of an impure origin does not dissipate after four years if a monopolist continues to extract excessive prices because of it. 154 Moreover, it would undercut enforcement of the Sherman Act to hold that, if a monopolist merely retains its illicit market control for four years after its last anticompetitive action, it may charge an exorbitant price until its power is eviscerated in an appropriate suit for equitable relief. 55 The rule urged by Kodak would mean that, as the Supreme Court has indicated in a related context: 155 those who had unlawfully built their empires could preserve them intact. They could retain the full dividends of their monopolistic practices and profit from the unlawful restraints of trade which they had inflicted on competitors. Such a course would make enforcement of the Act a futile thing unless perchance the United States moved in at the incipient stages of the unlawful project. 156 Schine Chain Theatres, Inc., supra, 334 U.S. at 128, 68 S.Ct. at 957. An unlawful monopolist must be deprived of the fruits of its wrongful conduct, Id. at 129, and one of the forbidden fruits is an excessive price. In Grinnell, Judge Wyzanski also used the biological metaphor: § 2 requires the rooting out of a plant . . . (that) represents an ultimate growth from seeds which have been declared unlawful. 236 F.Supp. at 258. So long as a monopolist enjoys the flower of evil, Id., at the expense of its customers, those victims must have a remedy. 157 We hold, therefore, that a purchaser suing a monopolist for overcharges paid within the previous four years may satisfy the conduct prerequisite to recovery by pointing to anticompetitive actions taken before the limitations period. It should not be inferred that this ruling grants antitrust plaintiffs a license to embark on a search for Ichthyosauria that is, on a time-warped fishing expedition. A trial court in its discretion may always set a reasonable cut-off date, evidence before which point is to be considered too remote to have sufficient probative value to justify burdening the record with it. Continental Ore Co., supra, 370 U.S. at 710, 82 S.Ct. at 1416. Moreover, the trial court might not be without flexibility to limit the proof where delay in bringing suit may have caused injustice to the defendants. See 3 P. Areeda & D. Turner, Supra, at 93.