Opinion ID: 2420919
Heading Depth: 4
Heading Rank: 1

Heading: Plaintiffs Must Demonstrate Antitrust Injury from the Challenged Statutes

Text: Plaintiffs argue that they proved a per se violation of the Sherman Act by showing that the MSA constructed an output cartel, Appellants' Br. at 57, and the Escrow and Contraband Statutes conscript[] NPMs into the cartel as involuntary members, id. at 58. Plaintiffs contend that because they demonstrated such a per se violation, they were not required to adduce direct evidence of the challenged statutes' actual anti-competitive effects. See National Collegiate Athletic Ass'n v. Bd. of Regents of the Univ. of Okla., 468 U.S. 85, 109, 104 S.Ct. 2948, 82 L.Ed.2d 70 (1984) ([W]hen there is an agreement not to compete in terms of price or output, `no elaborate industry analysis is required to demonstrate the anticompetitive character of such an agreement.' (quoting National Soc'y of Prof'l Eng'rs v. United States, 435 U.S. 679, 692, 98 S.Ct. 1355, 55 L.Ed.2d 637 (1978)). Even if such evidence were required, plaintiffs submit that they proved that the MSA has eliminated NPM competition, has preserved the market share of participating manufacturers, and has allowed participating manufacturers to maintain supra-competitive prices. At the outset, we note that plaintiffs do not challenge the MSA directly in making their per se argument. Nor could they. Section 16 of the Clayton Act affords injunctive relief only to plaintiffs who suffer threatened loss or damage by a violation of the antitrust laws. 15 U.S.C. § 26. While a conspiracy among MSA participating manufacturers to fix prices or to divide the cigarette market among themselves would certainly violate the antitrust laws, see United States v. Topco Assocs., Inc., 405 U.S. 596, 92 S.Ct. 1126, 31 L.Ed.2d 515 (1972); United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129 (1940), such a violation would not threaten plaintiffs with loss or damage. To the contrary, if NPMs are not penalized for increasing market share, they can maintain lower prices and thereby benefit from the alleged anti-competitive effects of the MSA. See Sanders v. Brown, 504 F.3d 903, 911 (9th Cir.2007) (If the OPMs really are charging artificially high prices, and thus making artificially high profits, an NPM conceivably could compete on price by charging a `normal' price and still make a `normal' profit, even taking the escrow payment into account.). Thus, because the law is well established that competitors lack standing to challenge a conspiracy by their rivals to raise their own prices, see Atlantic Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 337, 110 S.Ct. 1884, 109 L.Ed.2d 333 (1990); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 582-83, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986), in analyzing plaintiffs' appeal from the trial judgment, we ask whether they proved a per se antitrust injury attributable to the challenged statutes. [14]