Document: 497 U.S. 199 110 S.Ct. 2807 111 L.Ed.2d 169 KANSAS and Missouri, etc., Petitionersv.UTILICORP UNITED, INC. No. 88-2109. Argued April 16, 1990. Decided June 21, Syllabus The respondent—an investor-owned public utility operating in the petitioner States—and other utilities natural gas purchasers filed suit District Court against a pipeline company five producers under § 4 of Clayton Act, which authorizes any person injured by violation antitrust laws to sue for treble damages. alleged that defendants had unlawfully conspired inflate price they supplied utilities, sought damages both amount overcharged decrease sales customers caused overcharge. States separate actions same violation, asserting, inter alia, parens patriae claims on behalf all persons residing who purchased from at inflated prices. court consolidated granted partial summary judgment with respect defendants' defense that, since passed through overcharge their customers, lacked standing because suffered no injury as required 4. In light its conclusion Hanover Shoe, Inc. v. United Shoe Machinery Corp., 392 481, 88 2224, 20 1231, Illinois Brick Co. Illinois, 431 720, 97 2061, 52 707, direct but indirect purchasers, not, dismissed States' claims. Appeals affirmed dismissals. Held: When suppliers violate overcharging gas, passes only has cause action it alone injury. Pp. 206-219. 1. Three rationales underlie purchaser rule adopted Brick: (1) establishing an shifted would normally prove insurmountable wide range considerations influencing company's pricing decisions; (2) pass-on reduce effectiveness diminishing recovery available potential plaintiff; (3) allowing suits risk multipleliability violators could not use purchasers. 206-208. 2. aforesaid compel exception should be made involving regulated pass costs customers. 208-217. (a) Allowing such cases might necessitate complex cost apportionment calculations, bears least some portion passed-on extent have gained state permission raise rates absence overcharge, cf. supra, 493, n. 9, S.Ct., 2231, various factors, need seek regulatory approval, may delay passing-on process thereby require utility, interim, bear overcharge's form lower earnings. Here, certified question leaves unclear whether respondent raised prices prior "most or all" time suit, even means occurred. Proof these preliminary issues, are irrelevant liability, turn upon intricacies law, and, if were determined borne costs, adoption formula, very complexity avoid. Moreover, creating make little sense when, difficulty, practical significance is diminished fact obtained 208-212. (b) Even multiple recoveries eliminated petitioners recover lost single lawsuit, additional introduced into case already become quite complicated argues strongly retaining rule. See Brick, U.S., 731, 11, 2067, 11. 212-213 (c) better promote goal vigorous enforcement laws. petitioners' argument lack incentives unpersuasive, bring instances fear regulators will allow them shift known avoidable overcharges customers; there authority indicating recovered, also pay entire exemplary fact, established record diligent successful enforcement. On hand, ineffective consumers expertise experience necessary detect improper utility's suppliers, while attorneys general hesitate exercise device smaller, more speculative harm consumers, event, resident persons, leaving nonresidents small businesses fend themselves. 214-216. (d) Although apply equal force instances, ample justifications exist Court's stated decision carve out exceptions particular types markets. 744-745, 2073-2074. assuming economic assumptions underlying disproved specific case, unwarranted counterproductive litigate series exceptions. 2160-217. 3. suggestion 494, 2232, 736, 2069, departure when buys pre-existing cost-plus contract does justify this did sell contract. created situations merely resemble those governed contracts, applied here, certainty otherwise 217-218. Section 4C Hart-Scott-Rodino Antitrust Improvements Act 1976—which secure monetary relief property sustained reason certain violations—does authorize notwithstanding consumers' status establish new substantive simply procedural enforce existing rights 734, 14, 2068, belong case. 218-219 866 F.2d 1286 (CA 10 1989), affirmed. KENNEDY, J., delivered opinion Court, REHNQUIST, C.J., STEVENS, O'CONNOR, SCALIA, JJ., joined. WHITE, dissenting opinion, BRENNAN, MARSHALL, BLACKMUN, joined, post, p. 219. Thomas J. Greenan, Seattle, Wash., petitioners. Floyd R. Finch, Jr., Kansas City, Mo., respondent. Lawrence S. Robbins, Washington, D.C., amicus curiae, supporting respondent, special leave Court. [Amicus Curiae Information pages 202-204 intentionally omitted] Justice KENNEDY 1 38 Stat. amended, 15 U.S.C. 15, damages, attorney's fee. We must decide laws, Consistent 1231 (1968), 707 (1977), we hold within meaning 2 * UtiliCorp United, Inc., western own resale commercial residential Together second several sued production companies Kansas. They pursuant 3 petitioners, initiated violation. Acting patriae, asserted Missouri representatives agencies, municipalities, political subdivisions defendants. actions. defendants, answer, municipal regulations tariffs wholesale As result, contended, paid 100 percent 5 moved defense, motion. ruled our decisions controlled interpretation It read violator suffers full illegal concluded injury, not. 6 ruling, chose treat motion dismiss then allowed take interlocutory appeal 28 1292(b). following Appeals: 7 "In private fixing State proper plaintiff citizens lawsuit includes plaintiffs purchase subsequently most increase State?" re Wyoming Tight Sands Cases, 695 F.Supp. 1109, 1120 (Kan.1988). 8 answered negative. agreed dismissal 1286, 1294 (CA10 1989). certiorari resolve conflict between ex rel. Hartigan Panhandle Eastern Pipe Line Co., 852 891 (CA7 1988) (en banc). 493 1041, 833, 107 829 (1990). now affirm. II 9 provides full: "[A]ny shall his business anything forbidden therefor district defendant resides found agent, without controversy, threefold him sustained, including reasonable fee." 15(a). 11 noted Appeals, section two allegations 12 monopolized shoe manufacturing machinery industry Sherman 26 209, leasing United. defended, part, ground rejected reasons. First, noting influence decisions, "would insurmountable." 2231. Second, reasoned plaintiff. id., 2232. 13 reach similar result. concrete block manufacturers conspiring blocks sold it. company, instead, masonry subcontractors, State's contractors. decided liability 730-731, 2066-2067. declined overrule create industries. 735-736, 2069-2070, 14 Like distribution chain, immediate buyers violators. bought said fix gas. Unless claim them, assert. ask us press three assert none utilities. argue exception, suggested based contracts. Third, maintain 1976, 90 1394, 15c, Affirming reject each contentions turn. III 16 concerns about difficulties apportionment, recovery, diminution cases. disagree. find inconsistent precedent imprudent event A. 17 serves, eliminate complications apportioning 2231; 740-742, 2071-2073; Blue Shield Va. McCready, 457 465, 475, 102 2540, 2546, 73 149 (1982). unnecessary, respect, commission. cases, assert, obviating litigation over apportionment. can exact whom represent periodic filings showing volume consumers. limit respondent's business. 18 oversimplified problem respects. injure apart business, raises offset increased costs. explained Shoe: 19 "The mere rise followed unlawful show sufferer was undamaged. His been ripe earlier; occasion businessman imposed absent he earlier enjoying benefits higher permit supplier charges being liable This statement recognizes usual principle possessor right deprivation previously exercising it." 9. words, prove, among things, 21 however, proof what done "nearly insuperable difficulty" issue. Id., assume presence regulation less difficult here. simplify instead imports level complexity. To consider market conditions unregulated allowed. Inparticu lar, determine schemes barred rate except reflected increases. issue, one defendant, proceed case-by-case basis law. 22 From do know Its willing greater price, factors than strict Midwest Gas Users Assn. Corporation Comm'n, Kan.App.2d 653, 661, 623 P.2d 924, 931 (1981); Associated Natural Public Service 706 S.W.2d 870, 879-880 (Mo.App.1985). it; rates, paying past. Because remain suit. If add action, devise formula. 23 questions timing if, point, process. Some approval governing raising rates. Other adjustment clauses (PGA's) regulators, adjust reflect changes according prearranged formulas seeking instance. Yet, PGA's often encounter delay. Brief Amicus (describing lags typical PGA consumer rates). During period before Breyer, Regulation Reform 48-49 after moreover, pass-through complete. time, 24 deprive first determining question, addition, passthrough occurred unsettled. allege Commission Commission, "automatically" adjusted increases Petitioners 5, 5. maintains govern sales. Respondent 17. posed issues sort led adopt rule, decline litigation. before: "[T]he task disentangling overlapping lightly litigants, judicial system." 25 addition complications, itself unnecessary. Our deny P. Areeda & D. Turner, Law 337e, pp. 193-194 (1978); Harris Sullivan, Passing Monopoly Overcharge: A Comprehensive Policy Analysis, 128 U.Pa.L.Rev. 269, 342 (1979). criticize consequence circumstances, criticism validity context Both Seventh Circuit (1988), Sands, 1291; Eastern, 895. approach elsewhere. See, e.g., Louisiana Power Light Ex Parte, Nos. U-17906, U-12636, U-17649, 1989 La. PUC LEXIS 3, 31-32 (Mar. 1, 1989) (requiring won $190 million flow proceeds back ratepayers reduced 5-year period). impose requirements, cannot violators, receive compensation Creating so diminished. B serves recoveries. 2066-2067; 474, 2545. sue, different, duplicative, damages; Leaving aside just Brick. Bringing classes together reduction comes too great cost. 27 complicated. involves numerous federal, state, all. use. claims, asserting agencies. measures complicate proceedings further. industrial States. 15c(a)(1) (extending representation persons). These unrepresented intervention further prompt determination expansion confusion, possibility error inherent At serve purpose because, above, law provide appropriate continue believe "even ways huge treble-damages rule." C maintained, throughout 746, 2074; 11; California ARC America 490 93, 102, 6, 109 1661, 1666, 104 86 (1989). convinced interpret stronger. balance, prevail critical part incentive prosecute surmise recovered action. lose nothing gain sue. contrast, maintain, large aggregate give motivation capacity patriae. 29 persuade suppliers. Utilities Kan.Stat.Ann. 66-128a (1985) (allowing commission "review evaluate efficiency prudence . common carrier fair rates"); Mo.Rev.Stat. 393.150 (1986) (interpreted (Mo.App.1985), "considerable discretion" setting reimburse overcharges, cited victorious 30 Utilities, enforcement, having brought highly many instances. well-known group 1960's electrical generating equipment excellent example. involved "a horizontal price-fixing conspiracies characterized shocking history recover[ed] unprecedented sums" though "passed whatever incurred conspiracies." Pollock, Standing Sue, Remoteness Injury, Passing-On Doctrine, 32 A.B.A. L.J. 10-11 (1966). courts suits, considered issue held causes Commonwealth Edison Allis-Chalmers Mfg. 335 203, 208 1964); Ohio Valley Electric Corp. General 244 914, 949-951 (SDNY 1965). Various prompted For example, reasons asserts like interest protecting market. But makes hesitant responsibility enforcing 31 Relying fail Consumers detecting Landes Posner, Economics On: Reply 1274, 1278-1279 (1980). expertise, Should Indirect Purchasers Have Sue Under Laws? An Economic Analysis Rule 46 U.Chi.L.Rev. 602, 613 745, 2074 (stating actions, "the uncertainty how much [and] apportioned sue"). And persons. 15c(a)(1). All others, businesses, insignificance individual reasons, unconvinced current D preceding conclusions broader point. nonetheless justification exists "carve [direct purchaser] markets." 744, 2074. rather meritorious undermine stated: 33 classifying likely susceptibility forum entail problems meant where line drawn class inject 'massive evidence theories' proceedings, albeit somewhat generality." 34 sum, think Having adhered stand IV 35 36 "We recognize situations—for instance, buyer 'cost-plus' contract, thus making easy damaged—where requiring permitted present." observed 37 [a contract] situation, [direct] insulated result attempting customer committed buying fixed quantity regardless price. effect essentially advance, reference interaction supply demand complicates case." 2069-2070. place exception. 39 statements above hypothesis, suffer That 40 commitment guarantee profit. cover ascertain precise happened inelastic see 895, inquire operation forces negate simplicity 742, 2072; H. Hovencamp, 337.3c, 323-324 (Supp.1988). Thus, although alter observations V 41 final argument, contend own. 4C(a)(1) relevant part: 42 "Any attorney civil name provided sections title." 43 view, clear Kintner, Griffin, Goldston, 1976: Geo.Wash.L.Rev. 44 before. liability. Instead, "[i]t device—parens citizens—to [of Act.]." 14. 4, affords "injured laws." Pennsylvania Mid-Atlantic Toyota Distributors, 704 125, (CA4 1983) (suit conspiracy cars). here party predicate established. conclude 45 Affirmed. BLACKMUN join, dissenting. 47 I dissent inappropriate circumstances presented By plain language, reflects " 'expansive remedial purpose.' 472, 2544, (1982) (citation omitted). distinguish grants "any ." enacting Congress ensure victims anticompetitive conduct compensation. Shield, 2544; Pfizer India, 434 308, 314, 98 584, 588, 54 563 (1978). 48 challenge manufacturer's practices deemed conduct. different competitive contractors respondents; possessing monopolies standing. Indeed, last Term "indirect them." (1968). 49 bars retail Before arguing represented indirectpurchas ers. response, contended unnecessary "to wait degree overcharge," 1116 (Kan.1988), accepting position total pass-on, thought bar Likewise, affirming presumed "perfect provable allegedly overcharge." 1293 Vice President Counsel stating "pay [Kansas Light] Affidavit David Black, vice president counsel Company, Record, Doc. 485, Exhibit (emphasis original). Rather embarking, does, amounts factfinding mission, below eschewed, probability complete basis, evident support below. Rather, follow intent remedy section. 50 chiefly feared permitting theories transform massive inconclusive efforts apportion absorbed overcharge—from middlemen ultimate 737, 2070. Judge Posner written: optimal firm input always smaller cost, divided tiers, purchasers—but proportion hard determine, sophisticated techniques analysis. central insight decision." 891, 894 1988). 51 determines set designed return base furnishing service, plainly pipelines resold fanciful, unrealistic, entitled maximum Furthermore, applicable requires And, said, Tenth likelihood perfect pass-on. Of course, this, illegally high demonstrate included charged hence consumer. inflicted reading bills, reveal them. Where through, damage calculated 53 contends simple. compensate still Ante, 209. identified majority peculiar suits. prices, frequently attributable (i.e., "overcharge") legitimate factors. type calculation "has every defendant's loss due partly entirely factors." 897; Bigelow RKO Radio Pictures, 327 251, 66 574, L.Ed. 652 (1946). different: There, concerned unduly onto purchaser. argued difficulty concern present case.* doubtful grounds request well granting lead under-enforcement 745-747, 2074-2075. pass-through," opposite true easily demonstrated, purchasers—and capacity—may readily discover profits resulting measured on, recovery. 55 suggests actively keep recovers. commissions federal Given passthrough, customer, seems me conjures up strange commission, possible existence fails document. 56 third consideration prompting belief subject Again provable" danger damage: 57 "[l]eaving issue" judgment), exists. 212-213. "focused duplicative engendered along chain arising transaction violated 474-475, 2546. difficulty; rather, stems defensive barred, extremely percentage potentially successive levels chain. comparable risk. 58 agree rigid expansive holding context, reliable way measure damage. There speculates, difficulties. judge provable. findings fact. review they, injured. 59 None purchaser's reason, extending 4's grant conduct, twin goals ensuring recompense parties encouraging prosecution "difficult passing process." 210. suggestion, indicated words "might" "may," speculative. realistic sooner later, foot overpriced problem, assumed passthrough.

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