Document: 479 U.S. 104 107 S.Ct. 484 93 L.Ed.2d 427 CARGILL, INC. and Excel Corporation, Petitionerv.MONFORT OF COLORADO, No. 85-473. Argued Oct. 6, 1986. Decided Dec. 9, Syllabus Section 16 of the Clayton Act entitles a private party to sue for injunctive relief against "threatened loss or damage by violation antitrust laws." Respondent, country's fifth-largest beef packer, brought an action in Federal District Court under § enjoin proposed merger petitioner second-largest Spencer Beef, third-largest packer. Respondent alleged that it was threatened with profits possibility Excel, after merger, would lower its prices level at above costs attempt increase market share. During trial, moved dismissal on ground respondent had failed allege show suffer injury, but denied motion. After held respondent's allegation "price-cost squeeze" severely narrow profit margins constituted injury. The Appeals affirmed, holding not simply one injury from competition claim form predatory pricing which drive other companies out market. Held: 1. A plaintiff seeking must threat "of type laws were designed prevent flows makes defendants' acts unlawful." Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 477, 489, 97 690, 697, 50 701. Pp. 109-113. 2. does constitute showing, as this case, due merely increased such And while is capable inflicting here neither raised nor proved any before Court, thus erred interpreting allegations equivalent conduct. 113-119. 3. This however, will adopt effect per se rule denying competitors standing challenge acquisitions basis predatory-pricing theories. Nothing Act's language legislative history suggests Congress intended ignore injuries caused anticompetitive practices pricing. Pp.120-122. 761 F.2d 570, reversed remanded. BRENNAN, J., delivered opinion REHNQUIST, C.J., MARSHALL, POWELL, O'CONNOR, SCALIA, JJ., joined. STEVENS, filed dissenting opinion, WHITE, joined, post, 122. BLACKMUN, took no part consideration decision case. Ronald G. Carr, Washington, D.C., petitioners. Louis R. Cohen, United States Trade Commission, amicus curiae, support petitioners, special leave Court. William C. McClearn, Denver, Colo., respondent. Justice BRENNAN 1 Under Act, 38 Stat. 737, amended, 15 U.S.C. 26, parties [with] laws" may seek relief. case presents two questions: whether prove and, if so, constitutes 2 * Monfort Colorado, Inc. (Monfort), below, owns operates three integrated beef-packing plants, is, plants both slaughter cattle fabrication beef.1 fed (the input market) fabricated output market). These markets are highly competitive, major packers low. current product decades intense competition, during time modern have gradually displaced separate plants. 3 Petitioner Corporation (Excel), defendants five plant. It wholly owned subsidiary Cargill, defendant large privately corporation more than 150 subsidiaries least 35 countries. 4 On June 17, 1983, signed agreement acquire packer market, division Land O'Lakes agricultural cooperative. Beef slaughtering acquisition, still be command share almost equal largest IBP, (IBP).2 5 prospective merger.3 Its complaint acquisition "violat[e] 7 because substantially lessen tend create monopoly several different ways. . ." App. 19. described allegedly way: 6 "(f) Impairment plaintiff's ability compete. result concentration economic power relevant threatens Monfort's supply compete boxed market." Id., 20. Upon parties, consolidated motion preliminary injunction full trial merits. second day involuntary ground, inter alia, defined 701 (1977). court entered memorandum order enjoining merger. 'squeeze' " "severely narro[w]" 591 F.Supp. 683, 691-692 (Colo.1983). also shown cause squeeze occur, violated Act.4 709-710. 8 appeal, argued lost nothing losses vigorous do analyzing facts inquiry. affirmed judgment all respects. competition; view, injured what "consider[ed] paying suppliers charging less sells institutional buyers consumers." 575 (CA10 1985). issue, Court's clearly erroneous. We granted certiorari, 474 1049, 106 784, 88 763 (1985). II 9 requires us decide, outset, question we previously addressed: To decide question, look first source requirement, lies related provision 4, 15. 10 Like 16, provides vehicle enforcement laws. "any person who shall his business property reason anything forbidden therefor district ., recover threefold damages him sustained, cost suit, including reasonable attorney's fee." In supra, plaintiffs treble "injury causally linked" particular merger; instead, "plaintiffs say U.S., S.Ct., 697 (emphasis original). did bowling centers relatively small chain. defendant, chains country, acquired located plaintiffs' gone acquisition. sought alleging "the income accrued bankrupt" their consequently been reduced. 487, 696. although violate 7, since "[i]t inimical [the antitrust] award damages" stemming continued competition. 488, 697. reasoning consistent principle enacted 'the protection competitors.' Ibid., quoting Brown Shoe Co. States, 370 294, 320, 82 1502, 1521, 510 (1962) 11 Subsequent decisions confirmed importance showing 4. Blue Shield Virginia McCready, 457 465, 102 2540, 73 149 (1982), found health-plan subscriber suffered plan's "purposefully scheme reduce psychotherapeutic services reimbursing subscribers provided psychiatrists psychologists. 483, 2550. noted "as analyzed Brunswick, factor considered determining redressability 4," id., n. 19, 2550, "plain McCready's redress providing remedy violations Similarly, Associated General Contractors California, Carpenters, 459 519, 103 897, 74 723 (1983), applied test," 539-540, 909.5 12 "[a]ny person, firm, corporation, association entitled 26. plain differ various For example, actual only "threatened" damage; similarly, "business property," cf. Hawaii Standard Oil Co., 405 251, 92 885, 31 184 (1972), contains limitation.6 Although these differences affect nature cognizable each section, courts, courts prevent.7 agree. 13 wording concerning relationship section comparable. proof "by laws"; anomalous, think, read authorize secure he compensation actually occurred. 14 There indication result. Indeed, view affords those According House Report: "Under act July 2, 1890 [revised incorporated into 4], corporations combinations acting Sherman law, wrongful act. existing law authorizing commission unlawful acts, purpose defect law." H.R.Rep. 627, 63d Cong., 2d Sess., pt. 1, p. 21 (1914) added).8 Sections best understood complementary remedies single set injuries. Accordingly, conclude therefore turn III 17 Initially, confront problem be. little assistance regard, therein—"an impairment compete" "a power." pretrial largely restates general allegations. Record 37. At present testimony evidence helped define loss. expense smaller rivals, Monfort. end, claimed, bid up price pay cattle, sold beef. strategy, labeled squeeze," Excel's profits, parent financial reserves enable pursue strategy. Eventually, according Monfort, lacking significant unable match driven market; point raise supracompetitive levels, recoup initial phase. F.Supp., 691-692. 18 From scenario theories emerge: (1) slightly costs; (2) being below costs.9 discuss theory turn. 19 some position multiplant efficiencies provide, 74-75, 369-370. remain prices; result, profitability, business.10 circumstances 20 resolve again supra. evaluated significance competitors' resulting entry firm concluded: "[T]he indifferent claimed here. base, respondents complain acquiring failing preserved thereby depriving benefits concentration. obtained provide them they realized laws, competitors,' 1521. purposes here." 22 concern resulted argues can distinguished here, latter increase, rather mere continuation, range actions broad enough, claims, finding whenever competitor faced competition.11 find construction too broad, reasons illustrates. holds require protect businesses kind alleges share, activity simply, petitioners claim, hold would, effect, render illegal cut perverse interest permit dominant firms engage competition." Arthur S. Langenderfer, S.E. Johnson 729 1050, 1057 (CA6), cert. denied, 469 1036, 105 510, 83 401 (1984). logic compels conclusion possible following B 23 engaging sustained Predatory appropriate measure eliminating short run reducing long run.12 practice harms contrast cutting aimed increasing has aim elimination "inimical laws," injury.13 24 "what consider F.2d, 575. "could harmed pricing," "it impossible tell advance acquisition" fact course conduct; could pricing, 576. 25 explicitly meant interpretations plausible. First, mean above-cost If proper interpretation, then court's erroneous (a) made intent (b) activity, discussed Part III-A, 26 Second, credible below-cost extent rests reversed, twice assertion See 691 ("Plaintiff contend engaged IBP"); 710 ("Monfort IBP activities cost-price squeeze").14 there record below. evidence, consists four passing references, deposition testimony, might dip costs. 276; 626, 666, 669. Such references fall far establishing Court.15 IV 27 brief, "danger allowing necessarily speculative claims post-acquisition outweighs danger go unchallenged." Brief Amicus Curiae 25. basis, invites "denying theories." 10. 28 decline invitation. As foregoing discussion plain, ----, While infrequently, ample suggesting occur.16 novel indeed deny rarely occur.17 V 29 Because make requires, need reach violates 7. remanded further proceedings opinion. 30 so ordered. BLACKMUN 32 whom WHITE joins, dissenting. 33 challenges horizontal between competitors. issue approached along fundamentally paths. focus attention entirely postmerger conduct merging unless Act. concentrate itself grant probability adversely Today takes step down former path;1 I believe directed follow path. 34 satisfaction 709-710 (Colo.1983), Appeals, 578-582 1985), illegal. holds, should aside adverse impact "antitrust injury" demonstrate, rejected "novel theory," 490, 698; implicit determination forecloses line inquiry quite misguided. my sufficient equitable 1914, 731, expanded 1950, 64 1125, concluded prohibition mergers adequate.2 unlike proscribes certain produce either An prohibited monopoly." 18. teaches delphic "to cope monopolistic tendencies incipiency well attained effects justify proceeding." S.Rep. 1775, 81st 4-5 (1950), U.S.Code Cong.Service 4293, 4296.3 recognized prophylactic measure, 'primarily arrest apprehended consequences intercorporate relationships work evil. .' 485, 695 (quoting E.I. du Pont de Nemours & 353 586, 597, 77 872, 879, (1957)). 36 1950 amendment particularly concerned created which, when viewed itself, appear completely harmless, historical setting dangerous Stewart explained: 37 "The principal addressed erosion through cumulative centripetal corporations, none Congress' immediate fear buying companies. aspect perceived trend toward absentee ownership local business. Another, generalized, congressional revealed businessmen stem rising tide economy. goals, thought, achieved 'arresting lessening commerce incipiency.' [370 U.S.,] 317, 1519." Von's Grocery 384 270, 283-284, 86 1478, 1485-1486, 555 (1966) (dissenting). Thus, poses serious even though falls proving restraint reflects emphasis probable harm harm. authorizes obtain "against damage" 7.4 scope identifies requirements squarely held, harm, justifies relief: 39 evident premise striking issue] Zenith's failure barred damages. unsound, available invokes traditional principles equity upon demonstration 'threatened' That characteristically yet injury; demonstrate impending contemporary likely continue recur." Zenith Radio Hazeltine Research, 395 100, 130, 89 1562, 1580, 129 (1969) (citations omitted). 40 Judged standards, conferred alleged, proved, 7: 41 "Competition procurement sale lessened Act; 42 "Concentration lines tendency towards accelerated." 21. 43 More generally, given statutory markets, trying stay changing ask changed character way. Certainly businesses—small large—that face altered directly affected transaction. Their inability exactly how why place outside circle interested statute protect. 44 Virtually ignoring relief, bases construing "private provisions" 478, 692. began our analysis acknowledging difficulty meshing potential harms," "damages harms." 486, damages, "since establishes result." Ibid. Beyond differs terms threaten damage, "injur[y] property." 45 based estimated additional earned competing alleys instead defendant. "that windfall failed" recovered "did occur 'by of' 46 contrast, harm—to market—that plainly controlling case.5 concept injury," heart treble-damages action, element depends incipient disease poison entire 47 recognized, established satisfies him. When discloses corresponding course. gives proceeding adequate confer otherwise frustrate restrictively. 48 strange enforceable party. Effective always depended attorney generals, itself.6 recently 1976, specifically indicated encourage recovery fee Hart-Scott-Rodino Antitrust Improvements 90 1396 (amending 26). 49 misunderstands message conveyed 1914 emphasized 1950. If, illegal, aside. respectfully dissent. explained, '[f]abrication' process whereby carcass broken whole cuts (referred 'primals', 'subprimals' 'portions') beef." 690 (D.Colo.1983). Whole vacuum packed shipment called "boxed beef"; "80% received retail supermarket hotel, restaurant, ('HRI') level" relied witnesses 706-707. 5.5%, 13.3%, IBP's 24.4%. 69. production 5.7%, 14.1%, 27.3%. 64. 20.4%. 64, 69; 577 states: "Any having jurisdiction over sections 13, 14, 18, title, same conditions equity, rules governing proceedings, execution bond improvidently irreparable immediate, issue: Provided, herein contained construed entitle association, except bring suit common carrier subject provisions subtitle title 49, respect matter regulation, supervision, Interstate Commerce Commission. prevails, fee, plaintiff." prohibits monopoly," necessary, sufficient, establish reasons. generally Page, Scope Liability Violations, Stan.L.Rev. 1445, 1483-1485 (1985) (distinguishing concepts standing). factors addition determine 540, 909. explain, infra, many 16. Standing identical difference means considerations remedy, afforded "every tangentially violation," 476-477, 2546-2547, "all conceivably traced 263, 891, "open door duplicative recoveries," 264, 892, multiple lawsuits. lawsuits recoveries, examine recovery, complexity apportioning existence harmed, Contractors, 544-545, 911-912; Illinois Brick Illinois, 431 720, 2061, 52 707 Conversely, nature, effective concomitantly, 100 injunctions one." 261, 890. raises Ball Memorial Hospital, Mutual Hospital Insurance, 784 1325, 1334 (CA7 1986); Midwest Communications, Minnesota Twins, 779 444, 452-453 (CA8 476 1163, 2289, 730 (1986); Christian Schmidt Brewing Heileman 753 1354, 1358 dism'd, 1200, 1155, 84 309 (1985); Schoenkopf Williamson Tobacco Corp., 637 205, 210-211 (CA3 1980). 698, pp. 17-18, (1914). debates passage scarce, Senate Reports. excerpt provision-by-provision description bill, Representative McGillicuddy (a member Judiciary Committee) stated: damage. fact, able irreparable. practical man sit see ruined take advantage remedy. condition costly lawsuit defend rights? bill solves most excellent wait until Thus protects individual relieves tremendous burden expensive litigation, often intolerable." 51 Cong.Rec. 9261 added). Floyd terms: "In litigant new ". [S]ection individual, company, combination right doing done destroyed [S]o discriminatory contract, tying stock someone unlawfully director banks restrain committing acts." 16319. oligopoly pricing" 18-20. address conceded viability prices: "Because operations efficient remove obstacle." 11-12; 5, just Excel"); 18; 576 pricing"). finds 1976 intends apply Report, cites approval statement 275, 1480, (1966), basic Celler-Kefauver [amending Act] American economy keeping number business." 94-803, 63 (1976). Even correct keep efficiency, proposition about considerable disagreement, use squeeze. 10, Most commentators reserve term cost, measure. See, e.g., Areeda Turner, Pricing Related Practices Harv.L.Rev. (1975); McGee, Revisited, J.Law Econ. 289 (1980) (reviewing definitions). No consensus reached definition context, however. Matsushita Electric Industrial 475 574, 1348, 538 (1986), "(i) necessary sell products, (ii) cost." 585, 8, 1355, 8. Definitions vary among Circuits. Compare 1056-1057 (CA6) (pricing marginal average variable presumptively legal), 511, (1984), Transamerica Computer International Business Machines 698 1377 (CA9) total deemed intent), 464 955, 370, 78 329 (1983). cost. decision, intent. unnecessary "consider ever incremental cost," coupled state predation. 11, ("The short-term behavior—predatory example—may stimulate But lessened"). speculation distinct pricing." 710. followed observation dicta. advanced doubt supported it. resources absorb extended period, factors, capacity barriers considered. succeed campaign predator shares rivals once cut. cannot predation presumably fail, demand goods higher price, 20.4% lack Williamson, Pricing: Strategic Welfare Analysis, 87 Yale L.J. 284, 292 (1977) (60% necessary); Pricing, 1337, 1348 (1978) enough). low nevertheless excess rapidly expand rivals. expert witness, 28.4%. 66. Moreover, appears like packers, 85% capacity. 135-136. alone satisfy conceivable collusively work, "assert collusion effort others market," With 28.4% plan collude, embarking Courts incapable successfully pursuing scheme. infra. important "without maintain time." Matsushita, 591, 15, 1358, discussing "costs delays" building [available] facilities [$20-40 million] associated refurbishing old facilities." 707-708. restrict premised premerger period competitive evaluating context exist merged eliminated remaining begin charge prices, existed insignificant. high, succeeded driving bankrupt available, shows, without apparent contradiction, shut-down producing efficiently manner months equipment labor force readily obtained. 95-96. determined high "formidable" barrier industry," 707, speaks likelihood profitability return investment period. Koller, Myth Empirical Study, Law Econ.Rev. (1971); Miller, Comments Baumol Ordover, 267 Claims must, course, care. benefit "inherently uncertain: short-run [from cost] definite, long-run gain neutralizing [and] maintaining enough predator's harvest gain." 589, 1357. disagree rational conduct, obstacles successful strategy manifold, disincentives accordingly numerous. 588-593, 1357-1359 (discussing conspiracy); Bork, Paradox 144-159 (1978); J. Econ., 291-300; Posner, Chicago School 127 U.Pa.L.Rev. 925, 939-940 (1979). stated "predatory schemes tried, successful." 587, 1356. mechanism engages pricing—lowering prices—is stimulates "cutting very essence .[;] mistaken inferences especially costly, chill protect." 594, 1360. Whether intends, concludes that, entity "able cut," "sufficient rivals." Ante, 119-120, 120, expressly states "require 116 By emphasizing reduces virtual irrelevance legality itself. "Broadly stated, treatment restraints monopolies, seeks prohibit trade rule, singly themselves, covered Act], thus, making creation trusts, conspiracies, monopolies consummation." follows: "[I]t keystone erection saw concentration, authority arresting incipiency. dynamic force; assure Commission brake outset gathered momentum." 317-318, 1519-20, (footnote states, part: issue. reserved stating: one. questions where sole business, anticipated shares." 484, 695, Nor competitor's 524, 901, 5. fees 130-131, (1969), observed: giving treble-damage serve enforcing Perma Life Mufflers, Parts 392 134, 139, 1981, 1984, 982 (1968); Fortner Enterprises, Steel 394 495, 502, 1252, 1258, 495 (1969); 262, (1972).

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