Document: 392 U.S. 134 88 S.Ct. 1981 20 L.Ed.2d 982 PERMA LIFE MUFFLERS, INC., et al., Petitioners,v.INTERNATIONAL PARTS CORP. al. No. 733. Argued April 22 and 23, 1968. Decided June 10, Robert F. Rolnick, Washington, D.C., for petitioners. Glenn W. McGee, Chicago, Ill., respondents. Mr. Justice BLACK delivered the opinion of Court. 1 The principal question presented is whether plaintiffs in this private antitrust action were barred from recovery by a doctrine known Latin phrase pari delicto, which literally means 'of equal fault.' plaintiffs, petitioners here, all dealers who had operated 'Midas Muffler Shops' under sales agreements granted respondent Midas, Inc. Their complaint charged that Midas entered into conspiracy with other named defendants—its parent corporation International Parts Corp., two subsidiaries, six individual defendants officers or agents corporations—to restrain substantially lessen competition violation § Sherman Act1 3 Clayton Act.2 They also violated 2(a) Act, as amended Robinson-Patman Act,3 granting discriminations prices services to some their customers without offering same advantages plaintiffs. District Court summary judgment respondents respect petitioners' claims. On appeal Appeals reversed on claim but, over Judge Cummings' dissent, affirmed Court's ruling claims delicto. court held Act was because Mides International, while functioning separate corporations, common ownership therefore could cooperate creating an illegal conspiracy.4 376 F.2d 692 (7 Cir. 1967). Because these rulings seemed threaten effectiveness vital enforcing policy United States, we certiorari. 389 1034, 770, 19 821 (1968). For reasons be stated, reverse. 2 economic arrangements led lawsuit have long history. Respondent has been business manufacturing automobile mufflers exhaust system parts since 1938. In 1955 owners initiated detailed plan promoting sale extensively advertising 'Midas' trade name establishing nationwide chain would specialize selling equipment. Each prospective dealer offered agreement prepared Inc., wholly owned subsidiary International. obligated purchase his honor guarantee sold any dealer, sell at resale fixed locations specified agreement. carry complete line products, general refrain dealing Midas' competitors. return promised underwrite cost muffler gave permissing use registered trademark service mark Shops.' exclusive right products within defined territory. He not required pay franchise fee lease substantial capital equipment cancelable either party 30 days' notice. Petitioners' challenged restraints numerous provisions agreements, such terms barring them purchasing sources supply, preventing outside designated territory, tying line, requiring retail prices. Petitioners alleged they often requested eliminate restrictions but refused threatened terminate if failed comply. Finally one canceled competitor, plaintiff themselves agreements. All claimed treble damages monetary loss suffered having abide restrictive provisions. 4 Appeals, agreeing Court, suit noted each enthusiastically sought acquire full knowledge 'solemnly subscribed' containing terms. made enormous profits dealers, eagerly additional franchises, voluntarily fully aware now challenge. Under circumstances, concluded, '(i)t difficult visualize case more appropriate application delicto doctrine.' F.2d, 699. 5 We find ourselves disagreement Appeals. There nothing language acts indicates Congress wanted make common-law defense treble-damage actions, facts suggest no basis applying even it did exist. Although fault,' applied, correctly incorrectly, wide variety situations seeking equitable relief himself involved sort wrongdoing. indicated inappropriateness invoking broad barriers where serves important public purposes. It reason Kiefer-Stewart Co. v. Joseph E. Seagram & Sons, 340 211, 71 259, 95 L.Ed. 219 (1951), proof he engaged unrelated commit violation. Similarly, Simpson Union Oil Co., 377 13, 84 1051, 12 98 (1964), whose consignment failure adhere price bring laws though signing extent become participant illegal, competition-destroying scheme. Both premised recognition purposes are best served insuring will ever-present threat deter anyone contemplating behavior laws. reaps reward may less morally reprehensible than defendant, law encourages further overriding favor competition. A fastidious regard relative moral worth parties only result seriously undermining usefulness bulwark enforcement. And permitting recover windfall gain does encourage continued violations those position remain subject civil criminal penalties own conduct. Kiefer-Stewart, supra. 6 light considerations, cannot accept Appeals' idea courts power undermine denying injured merely participated utilizing arranements formulated carried out others. criticism taken part respondents' allegedly scheme franchises profits, participation voluntary meaningful sense. actively seek every clause Rather, many clauses quite clearly detrimental interests, continually objected them. apparently accepted solely acquiescence necessary obtain otherwise attractive opportunity. argument conduct defeats sue completely refuted following statement Simpson: 'The fact retailer can refuse deal give supplier immunity arrangement schemes condemned laws.' U.S., 16, S.Ct., 1054. Moreover, actually favored supported restrictions, blamed minimize disadvantages once forced its onerous condition doing business. possible beneficial byproducts restriction plaintiff's point view course consideration computing damages, shown aggressively support monopolistic parcel it, understandable attempts bad situation should ground him him. hold complex scope, contents, effects, recognized action. 7 Respondents, however, below considerably narrower ground. picture supporting entire program such, participating formulation encouraging continuation. need decide, truly involvement ever basis, apart cause action, present factual attempt paint utterly record. One most strenuously challenge requirement supplies exclusively Midas. Another parts. Neither dealer's self-interest obligate buy regardless favorable obtained supply needs certain all.5 addition, depositions refer instances asked permission source supply. record shows requests repeatedly representatives, underscored refusals describing very 'heresy' commenting bought 'asking trouble' 'were going punished.' official warned petitioner Pierce, buying manufacturers, 'Joe, just like cheating your wife; grounds divorce.' 8 These statements refute active participants show, contrary, thrust upon 9 remains alternative holding dismissed single entity entitled conspiracy. But availed privilege through save obligations imposes entities. See Timken Roller Bearing 341 593, 598, 971, 974, 1199 (1951); states Yellow Cab 332 218, 227, 67 1560, 1565, 91 2010 (1947). event charge combination between himself, day unwillingly complied Albrecht Herald 390 145, 150, n. 6, 869, 872, 998 (1968); supra, firmly enforced induced 'the communicated danger termination,' States Arnold, Schwinn 388 365, 372, 87 1856, 1862, 18 1249 (1967); Parke, Davis 362 29, 80 503, 505 (1960). object particular theories pressed sufficient specificity complaint, suggestion merit. Our modern rules provide trying cases serve ends justice require pleadings 'be so construed do justice.' Rule 8(f), Fed.Rules Civ.Proc. gist clear outset, way prejudiced permitted rely 10 follows must reversed. remanded directions reverse remand trial. 11 ordered. Judgment directions. 13 WHITE, concurring. 14 I join observations. 15 As ago 1927, Eastman Kodak N.Y. Southern Photo Materials 273 359, 47 400, 684, unlawful bar defendant' superior bargaining arrangement. said plaintiff' delinquency always suit. Bales Kansas City Star 336 439, 444 (C.A.8th 1964); Jewel Tea Local Unions, 274 217, 223 (C.A.7th Cir.), cert. denied, 936, 757, 747 enough warrant reversal case, concluded This conclusion reached agree it. 16 historic useful concept sorting might venture still participants. Judgments better hewing closer aims 38 Stat. 731, U.S.C. 15, gives violates 17 4, show defendant caused complaint. Normally, causation 'materially contributed' injury, Continental Ore Carbide Carbon 370 690, 702, 82 1404, 1412, 777 (1962); 'substantially contributed, notwithstanding factors contributed also,' Momand Universal Film Exchanges, 172 37, 43 (C.A.1st 1948), 967, 69 939, 93 1118 (1949). illegality other. Haverhill Gazette Leader 333 798, 805—806 379 931, 85 329, 343 (1964). rule, third proving undertaking combination. Those normally both responsibility originating different roles effectuating ends. neithr acted alone, violation; degree essential create reach Act. Either deemed material permit recover. when conspirators sued outsider. what sues other' Assume three situations: first, A, manufacturer, sells B, retailer. B's objection, insists adhering B agrees A's product get nowhere else. suffers decline inability match competing products. A. obviously prove injury. Second, suppose maintains suggested product, simply C's handles. hurt, is. B. 21 Third, D E, competitors, combine fix higher D's customer sets up great damage. claiming E arguable supposed denied wrongdoers left found. deterrent statute undiscriminating approach makes little When market leverage persuade, coerce, influence others damage, allowing latter consistent purpose likely responsible organizing forbidden schemes. principles responsible, injured, party. first hypothetical therefore, order imposing maintenance customers. 23 second manufacturer contrary expectations, not, there reason, based cooperation recovered both. moving force, rewarded efforts effect take trebled, competitor. unwilling enter scheme, motivated principally thought necessity avoid losing being unable offer major line—and marginally deterred prospect liability. 24 proves resulting loss, absent believable showing scheme' No doubt factor hence injury; violating law. equally damages. To counterdeterrent. By bassuring restraint succeeds, fails, designed prevent. situation, doubtful measurably recovery. If judge jury finds 25 simple formula encompass infinite situations. Generally speaking, deny bear injury rule pose issue particularized form. mystery evidence relevant proof: originating, negotiating, implementing scheme; reasonably expected benefit provision making 1; attempted encountered resistance counter-measures other; ultimately profite dor 26 before us, insufficient repondents, so, admittedly us partners origin implementation distributing mufflers, benefits circumstances improper. 27 FORTAS, concurring result. 28 case. interest 'private attorneys general' enforce 29 has, significant limited role fault scale—if 'delictum' approximately 'par' then example, combined formulate operate collusive co-adventurer discriminatory practices diminished enterprise. equality nature apply remedy. Unless limited, remedy provided nullified extent. owner gas station distributor less-thanequal crime recovering compensable harm. decision clearly. intended protect individuals 'from combinations fashioned (them) * feasible method (they) business.' Ring Spina, 148 647, 653, 160 A.L.R. 371 (2 1945). 31 points out, franchisee proved collaborator, co-adventurer, true particeps criminis aspect originated insisted inclusion territorial exclusivity drafted franchisor. this, if, essentially, act. 32 Clearly, here coadventurers whole, remand, orders, chargeable covenant is, substance, act, allowed 33 MARSHALL, 34 While much reasoning myself place Not unnecessary pass proposition reveals, itself my opinion, incorrect. 35 'complex effects' grown applied mechanically actions federal statute. hand, believe basic principle behind proper desirable filed. notes, ante, 138, literal meaning fault. formation implementaion fault, liability defendant. 36 Such perfectly clear, mere enters violative intent money operating existence Furthermore, certainly correct concluding replete evidence, relating exclusive-dealing agreement, indicates, probative force withstand motion judgment, anticompetitive embodied franchise. 37 However, inquiry stop here. contains observance franchises. ones which, least face, ordinarily franchisees restrict franchisees, suppliers franchisees. adequate inserted behest fellow should, contending damaged enforcement attributable against sole Cf. Moore Mead Service 944, 528, 681 vacating 184 338 (C.A.10th 1950). done stage litigation, trading off freedom (such provisions) territories), whole. 39 argued propose unduly complicates litigation. violate altogether (as here) or, extreme, absolutely free stem operations seems hold) presumably easier cases. me, neither represent satisfactory resolution problems concerning administration raised 40 rejecting are, said, persuasively set forth see perhaps, related eliminating forms equities parties. wrongdoer shall profit wrongdoing fundamental our jurisprudence. traditional principle. nevertheless agree, strong competition, refinements demanded legal doctrines volenti non fit injuria, unclean hands, variation applicalble field. requires about demand redress—in form damages—from partner plaintiff. 41 added deterrence produced well equaled, surpassed, new incentive violations, potential violator lose losses work benefit. 42 appears consequences away suggesting able 'beneficial restriction' (ante, 140) account computation This, course, already Illegal per se plaintiff; shown. financial rewards outweighed harm provisions, accordingly offset theory nothing. envisioned hardly unjust enrichment. First, permits awarded outweigh adds unnecessarily speculative element trier difficulty allocating allocation hard surrounding determination suit, almost invariably amount speculation, matter how informed. Bigelow RKO Radio Pictures, 327 251, 264—266, 66 574, 579-581, 90 652 (1946). speculation unavoidable provable. Here offsetting prevent enrichment goal achieved evaluation parties' respective 44 determine various decide surpassed arrangements. Since respectivefault damage-offset principle, compliations inherent reinforce conviction unwise broadly 45 HARLAN, whom STEWART joins, dissenting part. 46 views engendered me lack definition term 'in delicto,' disagreement, standards govern properly applied. misused term, used refers Consequently, immediate trial fresh standards. Plaintiffs defendant.1 liable prosecution. manufacturers strike bargain whereby accepts 48 peron activities forbade engage in, why award offenders. bizarre 'further competition,' 139, violators times seeks doing. Even intra-conspiracy effect, think too 'fastidious parties,' ibid., sanction kind rests well-compensated dishonor among thieves. 49 disinct 'consent' maxim 'volenti injuria' sometimes invoked. Where X Y conspire sell, Z, knowing conspiracy, purchases X, committed offense: knowingly offense stated opinions BLACK, told do. 50 distinguishable illustrated 219, relied trebledamage defendants' reprisal independent again, defense. frowns vigilante justice. leave punishment 51 98, 998, understand.2 them, dealership, participate formulating, 'accepted' dealership. satisfactorily found, acceptance dealership fall heading person lawful prevented suing contriving If, something do, understood 'coercion' exception doctrine. That although large dictate small cease both, sanctions contract results acceptance, considered 'par,' accepting dictation minimally blameworthy. 52 view, standard 'each therefrom. (therefore?) *.'3 At another 'We freely assents act 'no injury' therefrom.'4 passing distinction 'unclean hands' doctrines, meant any, public-law along defendants. 53 similar. quoted above, adding auto parts, measure afford absolute defense.5 54 record, sense term. rendered complexity history plaintiffs' activities, formidable obscurity vertical restraints, fostered Simpson, supra Albrecht, above 505. drain bog point, am goes lower given opportunity consider legally liable, existing affidavits side wish adduce. 209, 1. 14. 1526, 13. permissible reasonable marks, answer interrogatories pertinent defense, district ordered stricken, prejudice renewal promptly answered interrogatories. disposition merits nor renewed decided resolved, issues, merits. Respondents requirements helped win confidence brand, evidently try reap thes advertising, 'You nationally-advertised products.' highly unlikely, mitigate slightly suffer higher-priced particularly midas preferences brand sufficiently price. See, e.g., Williams Hedley, East 378, 381—382, 103 Eng.Rep. 388, 389. generally Note, Pari Delicto Consent Defenses Private Antitrust Suits, 78 Harv.L.Rev. 1241, distinguishing defenses. good illustration maintaining distinct characterized 'consent,' hands,' forth. 156, 875. 1966 Trade Cases 71,801, 82,705. Id., 82,706. 692, 693, 695.

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