Twenty-one years of antitrust injury: Down the alley with Brunswick v. Pueblo Bowl-O-Mat

Antitrust Law Journal

Volumn 66, Issue 2, 1998, Pages 273-311

  Jacobson, Jonathan M ^a   Greer, Tracy ^a,b  

^a New York Bar ^*  (United States)

^b US Department of Justice   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 0032375716     PISSN: 00036056     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (214)

1. 429 U.S. 477 (1977).
2. E.g., Cargill, Inc. v. Monfort of Colo., 479 U.S. 104 (1986).
3. E.g., Local Beauty Supply v. Lamaur, Inc., 787 F.2d 1197, 1201-03 (7th Cir. 1986).
4. E.g., Atlantic Richfield Co. v. USA Petroleum Co., 495 U.S. 328 (1990).
5. See infra text accompanying notes 78-81.
6. See infra note 95 and accompanying text; see also Robert H. Lande, Wealth Transfers as the Original and Primary Concern of Antitrust: The Efficiency Interpretation Challenged, 34 HASTINGS L.J. 65 (1982).
7. See infra text accompanying notes 146-59.
8. See infra text accompanying notes 171-76.
9. Act of July 2, 1890, ch. 647, § 7, 26 Stat. 209.
10. The current version is at 15 U.S.C. § 15.
11. 15 U.S.C. § 26.
12. See, e.g., Chattanooga Foundry & Pipe Works v. City of Atlanta, 203 U.S. 390, 397 (1906).
13. See Texas Indus, v. Radcliff Materials, Inc., 451 U.S. 630 (1981).
14. Story Parchment Co. v. Paterson Parchment Paper Co., 282 U.S. 555 (1931); see generally Allan N. Littman & Ronald E. Van Buskirk, The "Dogmas" of Antitrust Actions: A New Perspective, 24 ANTITRUST BULL. 687 (1979).
15. 15 U.S.C. § 15 (emphasis added).
16. Jonathan M. Jacobson, Contribution Among Antitrust Defendants: A Necessary Solution to a Recurring Problem, 32 U. FLA. L. REV. 217, 219 n.14 (1980) (citing ANTITRUST ADVISOR 682 (rev. ed. 1978); John D. Guilfoil, Private Enforcement of U.S. Antitrust Law, 10 ANTITRUST BULL. 747, 750 (1965)).
17. Jonathan M. Jacobson, Contribution Among Antitrust Defendants: A Necessary Solution to a Recurring Problem, 32 U. FLA. L. REV. 217, 219 n.14 (1980) (citing ANTITRUST ADVISOR 682 (rev. ed. 1978); John D. Guilfoil, Private Enforcement of U.S. Antitrust Law, 10 ANTITRUST BULL. 747, 750 (1965)).
18. Jonathan M. Jacobson, Contribution Among Antitrust Defendants: A Necessary Solution to a Recurring Problem, 32 U. FLA. L. REV. 217, 219 n.14 (1980) (citing ANTITRUST ADVISOR 682 (rev. ed. 1978); John D. Guilfoil, Private Enforcement of U.S. Antitrust Law, 10 ANTITRUST BULL. 747, 750 (1965)).
19. 221 U.S. 1 (1911).
20. See H.R. REP. No. 627, 63d Cong., 2d Sess. (1914); S. REP. No. 619, 84th Cong., 1st Sess. (1955).
21. United States v. Trenton Potteries Co., 273 U.S. 392 (1927).
22. United States v. Socony-Vacuum Oil Co., 310 U.S. 150 (1940).
23. Klor's Inc. v. Broadway-Hale Stores, 359 U.S. 207 (1959).
24. International Salt Co. v. United States, 332 U.S. 392 (1947).
25. United States v. Topco Assocs., 405 U.S. 596 (1972).
26. E.g., United States v. Parke, Davis & Co., 362 U.S. 29 (1960).
27. Albrecht v. Herald Co., 390 U.S. 145 (1968), overruled by State Oil Co. v. Khan, 118 S. Ct. 275 (1997).
28. United States v. Arnold, Schwinn & Co., 388 U.S. 365 (1967), overruled by Continental T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36 (1977).
29. United States v. Topco Assocs., 405 U.S. 596 (1972).
30. Moore v. Mead's Fine Bread Co., 348 U.S. 115 (1954).
31. Utah Pie Co. v. Continental Baking Co., 386 U.S. 685 (1967).
32. Id. at 703.
33. Bigelow v. RKO Radio Pictures, 327 U.S. 251 (1946).
34. 368 U.S. 464 (1962).
35. E.g., Norfolk Monument Co. v. Woodlawn Mem'l Gardens, 394 U.S. 700 (1969).
36. Hanover Shoe, Inc. v. United Shoe Mach. Corp., 392 U.S. 481 (1968).
37. Radiant Burners, Inc. v. People's Gas Light & Coke Co., 364 U.S. 656, 659 (1961).
38. Id. at 660. The Radiant Burners case involved a standards-setting organization that was alleged to have "boycotted" the plaintiff by setting standards the plaintiff could not meet. The lower courts dismissed the complaint for failure to allege "general injury to the competitive process," id. at 659; the Supreme Court reversed, holding that the rulings below were inconsistent with the per se rule for boycotts announced in Klor's Inc. v. Broadway-Hale Stores, 359 U.S. 207 (1959).
39. See Richard Posner, A Statistical Study of Antitrust Enforcement, 13 J.L. & ECON. 365, 371 (1970).
40. Id. The second increase is somewhat misleading; of the 3,354 private cases initiated from 1960 through 1964, 1,919 of them involved electrical equipment. Id. A similar table compiling the number of private cases filed from 1960 through 1988 can be found in Terry Calvani & Michael L. Sibarium, Antitrust Today: Maturity or Decline, in 2 THE ANTITRUST IMPULSE 605, 659 (Theodore Kovaleff ed., 1994).
41. Brief of the United States as Amicus Curiae at 25-26, Reiter v. Sonotone Corp., 442 U.S. 330 (1979).
42. MICHAEL PORTER, COMPETITIVE STRATEGY 85-86 (1980): If a firm files a private antitrust suit challenging a competitor, it can be taken as a signal of displeasure or in some cases as harassment or a delaying tactic. Private suits can thus be viewed a lot like cross-parries. Since a private suit can be dropped at any time by the initiating firm, it is potentially a mild signal of displeasure relative to, for example, a competitive price cut. The suit may be saying, "You have pushed too far this time and had better back off," without taking the risks that would accompany a direct confrontation in the marketplace. For the weaker firm suing the stronger firm, the suit may be a way of sensitizing the stronger firm so that it will not undertake any aggressive actions while the suit is outstanding. If the stronger firms feels itself under legal scrutiny, its power may be effectively neutralized. For large firms suing smaller firms, private antitrust suits can be veiled devices to inflict penalties. Suits force the weaker firm to bear extremely high legal costs over a long period of time and also divert its attention from competing in the market. Or, following the argument above, a suit can be a low-risk way of telling the weaker firm that it is attempting to bite off too much of the market. The outstanding suit can be left effectively dormant through legal maneuvering and selectively activated (inflicting costs on the weaker firm) if the weaker firm shows signs of misreading the signal.
43. United States v. General Dynamics Corp., 415 U.S. 486 (1974).
44. United States v. Marine Bancorporation, 418 U.S. 602 (1974) (rejecting government position in actual potential competition merger case).
45. United States v. Citizens & S. Nat'l Bank, 422 U.S. 86 (1975) (rejecting government attack on a series of bank merger acquisitions).
46. 429 U.S. 477 (1977).
47. See supra text accompanying notes 31-36.
48. NBO Indus. Treadway Cos. v. Brunswick Corp., 523 F.2d 262, 266 (3d Cir. 1975), vacated and remanded sub nom. Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477 (1977).
49. Brunswick, 429 U.S. at 479.
50. NBO Industries, 523 F.2d at 267.
51. Id.
52. The plaintiffs also alleged a violation of Section 1 of the Sherman Act, claiming that Brunswick engaged in resale price maintenance. This claim was abandoned prior to trial. Id. at 264-65.
53. Id. at 265-66.
54. See, e.g., Brown Shoe Co. v. United States, 370 U.S. 294, 344 (1962) ("The retail outlets of integrated companies, by eliminating wholesalers and by increasing the volume of purchases from the manufacturing division of the enterprise, can market their own brands at prices below those of competing independent retailers."); FTC v. Procter & Gamble Co., 386 U.S. 568, 578 (1967). For an expansive view of the theory, see the opinion by then-Circuit Judge Burger in Reynolds Metals Co. v. FTC, 309 F.2d 223 (D.C. Cir. 1962).
55. 523 F.2d at 268. As of 1975, Brunswick operated more bowling centers (167) in the United States than anyone else. The next largest competitor operated only 32 centers. Id. at 267.
56. Id. at 268: The entry of a giant into a market of pygmies certainly suggests the possibility of a lessening of horizontal retail competition. This is because such a new entrant has greater ease of entry into the market, can accomplish cost-savings by investing in new equipment, can resort to low or below cost sales to sustain itself against competition for a longer period, and can obtain more favorable credit terms.
57. Id.
58. Id.
59. Id.
60. Id. at 273. The Court remanded the case for a new determination of damages because the district court's instructions did not adequately require the jury to find that Treadway's losses were proximately related to Brunswick's "illegal presence" in the market. Id. at 276.
61. Phillip E. Areeda, Antitrust Violations Without Damages Recovery, 89 HARV. L. REV. 1127 (1976).
62. Brunswick, 429 U.S. at 489.
63. Id. at 489 n.14.
64. Because the Court remanded the Treadway claim for equitable relief, many believed the antitrust injury requirement was limited to damages only. See also Cargill, Inc. v. Monfort of Colo., 479 U.S. at 128 (Stevens, J., dissenting).
65. 451 U.S. 557 (1981).
66. 15 U.S.C. § 13(a).
67. 451 U.S. at 562.
68. Id.
69. Id. (emphasis added).
70. 457 U.S. 465 (1982).
71. 495 U.S. 328 (1990).
72. Id. at 344.
73. 479 U.S. 104 (1986).
74. Id. at 116.
75. Id. at 112.
76. 495 U.S. 328 (1990).
77. 390 U.S. 145 (1968).
78. Albrecht was later overruled in State Oil Co. v. Khan, 118 S. Ct. 275 (1997).
79. 495 U.S. at 344.
80. See Edward A. Snyder & Thomas E. Kauper, Misuse of the Antitrust Laws: The Competitor Plaintiff, 90 MICH. L. REV. 551 (1991) (arguing, based on a statistical sample, that Brunswick had effected no major change by 1983); William H. Page & Roger D. Blair, Controlling the Competitor Plaintiff in Antitrust Litigation, 91 MICH. L. REV. 111, 114 & n.25 (1992) (arguing that the practical importance of Brunswick's doctrine increased substantially over the course of the 1980s).
81. See Edward A. Snyder & Thomas E. Kauper, Misuse of the Antitrust Laws: The Competitor Plaintiff, 90 MICH. L. REV. 551 (1991) (arguing, based on a statistical sample, that Brunswick had effected no major change by 1983); William H. Page & Roger D. Blair, Controlling the Competitor Plaintiff in Antitrust Litigation, 91 MICH. L. REV. 111, 114 & n.25 (1992) (arguing that the practical importance of Brunswick's doctrine increased substantially over the course of the 1980s).
82. See, e.g., William H. Page, Antitrust Damages and Economic Efficiency: An Approach to Antitrust Injury, 47 U. CHI. L. REV. 467 (1980); Frank H. Easterbrook, The Limits of Antitrust, 63 TEX. L. REV. 1, 33-40 (1984).
83. See, e.g., William H. Page, Antitrust Damages and Economic Efficiency: An Approach to Antitrust Injury, 47 U. CHI. L. REV. 467 (1980); Frank H. Easterbrook, The Limits of Antitrust, 63 TEX. L. REV. 1, 33-40 (1984).
84. See, e.g., Shannon v. Crowley, 538 F. Supp. 476 (N.D. Cal. 1981); Bustop Shelters, Inc. v. Convenience & Safety Corp., 521 F. Supp. 989 (S.D.N.Y. 1981); American Hosp. Supply Corp. v. Roy Lapidus, Inc., 493 F. Supp. 1076 (D. Mass. 1980).
85. U.S. GENERAL ACCOUNTING OFFICE, JUSTICE DEPARTMENT CHANGES IN ANTITRUST ENFORCEMENT POLICIES & ACTIVITIES 15 (1990). Of course, Brunswick was far from the only cause. The Supreme Court's substantive antitrust decisions played a major role as well. See generally Maxwell M. Blecher, The Impact of GTE Sylvania on Antitrust Jurisprudence, 60 ANTITRUST L.J. 17 (1991).
86. U.S. GENERAL ACCOUNTING OFFICE, JUSTICE DEPARTMENT CHANGES IN ANTITRUST ENFORCEMENT POLICIES & ACTIVITIES 15 (1990). Of course, Brunswick was far from the only cause. The Supreme Court's substantive antitrust decisions played a major role as well. See generally Maxwell M. Blecher, The Impact of GTE Sylvania on Antitrust Jurisprudence, 60 ANTITRUST L.J. 17 (1991).
87. Courts also scrutinized whether the defendant's conduct in fact caused the plaintiff's injury, see Bigelow v. RKO Radio Pictures, 327 U.S. 251 (1946), but this analysis focused on the plaintiff's ultimate right of recovery, not on whether the plaintiff had a right to sue in the first place.
88. E.g., Kreager v. General Elec. Co., 497 F.2d 468 (2d Cir. 1974).
89. E.g., Calderone Enters, v. United Artists Theatre Circuit, 454 F.2d 1292, 1296 (2d Cir. 1971).
90. E.g., Billy Baxter, Inc. v. Coca-Cola Co., 431 F.2d 183, 189 (2d Cir. 1970).
91. E.g., Loeb v. Eastman Kodak Co., 183 F. 704 (3d Cir. 1910).
92. Similar reasoning, emphasizing the potential for duplicative recovery against the defendant, and the need to avoid complicated apportionment of damages, was later adopted by the Supreme Court in Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977). The Court there limited recoveries to direct purchasers, barring those who purchased from the direct buyer - notwithstanding their very real injuries - from maintaining suit.
93. See, e.g., Herbert Hovenkamp, Antitrust's Protected Classes, 88 MICH. L. REV. 1, 23-24 (1989) (discussing legislative history of the Sherman Act).
94. See William J. Baumol & Janusz Ordover, The Use of Antitrust to Subvert Competition, 28 J.L. & ECON. 247 (1985).
95. Brown Shoe Co. v. United States, 370 U.S. 294 (1962).
96. Id. at 320.
97. See cases cited supra notes 21-30.
98. 429 U.S. at 488.
99. See, e.g., NCAA v. Board of Regents, 468 U.S. 85 (1984); FTC v. Indiana Fed'n of Dentists, 476 U.S. 447 (1986); ARCO, 495 U.S. at 337-41.
100. The "consumer welfare" standard articulated by the Supreme Court in Brunswick and later decisions, see, e.g., Eastman Kodak Co. v. Image Technical Servs., 504 U.S. 451 (1992), is not the same as the approach advocated by some writers from the "Chicago School." E.g., Frank H. Easterbrook, The Limits of Antitrust, 63 TEX. L. REV. 1 (1984). The Court's approach recognizes market imperfections, such as switching and information costs, acknowledges the significance of capital costs and time factors as impediments to entry, and does not presume strongly that market power is transient and markets self-correcting. See Jonathan M. Jacobson, 'Kodak': Daguerreotype or Laser Projection?, N.Y.L.J., July 30, 1992, at 5. The Court's approach condemns, for example, minimum resale price maintenance agreements, e.g., Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752 (1984), the use of power in one market to restrict competition significantly in another, e.g., Kodak, 504 U.S. at 465-71, and the use of market power to exclude competition in a manner that restricts output, e.g., NCAA v. Board of Regents, 468 U.S. 85 (1984), or reduces significantly the choices available to consumers, e.g., Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985). It is a "consumer welfare" approach in the real sense of the term.
101. The "consumer welfare" standard articulated by the Supreme Court in Brunswick and later decisions, see, e.g., Eastman Kodak Co. v. Image Technical Servs., 504 U.S. 451 (1992), is not the same as the approach advocated by some writers from the "Chicago School." E.g., Frank H. Easterbrook, The Limits of Antitrust, 63 TEX. L. REV. 1 (1984). The Court's approach recognizes market imperfections, such as switching and information costs, acknowledges the significance of capital costs and time factors as impediments to entry, and does not presume strongly that market power is transient and markets self-correcting. See Jonathan M. Jacobson, 'Kodak': Daguerreotype or Laser Projection?, N.Y.L.J., July 30, 1992, at 5. The Court's approach condemns, for example, minimum resale price maintenance agreements, e.g., Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752 (1984), the use of power in one market to restrict competition significantly in another, e.g., Kodak, 504 U.S. at 465-71, and the use of market power to exclude competition in a manner that restricts output, e.g., NCAA v. Board of Regents, 468 U.S. 85 (1984), or reduces significantly the choices available to consumers, e.g., Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985). It is a "consumer welfare" approach in the real sense of the term.
102. See infra text accompanying notes 104-70.
103. See, e.g., Music Center S.N.C. v. Prestini Musical Instruments Corp., 874 F. Supp. 543, 555 (E.D.N.Y. 1995); Ball Mem'l Hosp., Inc. v. Mutual Hosp. Ins., Inc., 784 F.2d 1325, 1338 (7th Cir. 1986).
104. Ball Memorial, 784 F.2d at 1338.
105. See, e.g., Balaklaw v. Lovell, 14 F.3d 793, 799-80 (2d Cir. 1994); Filter Queen v. Health-Mor, Inc., 1990-1 Trade Cas. (CCH) ¶ 69,086, at 63,985 (N.D. Ill. 1990).
106. See, e.g., Local Beauty Supply v. Lamaur, Inc., 787 F.2d 1197 (7th Cir. 1986); Todorov v. DCA Healthcare Auth., 921 F.2d 1438 (11th Cir. 1991).
107. Todorov, 921 F.2d at 1453-54.
108. Id.; see also Hammes v. AAMCO Transmissions, 33 F.3d 774, 777 (7th Cir. 1994); Purgess v. Sharrock, 806 F. Supp. 1102, 1107 & n.6 (S.D.N.Y. 1992).
109. See M. Sean Royall, Disaggregation of Antitrust Damages, 65 ANTITRUST L.J. 311, 323 (1997).
110. See, e.g., Bigelow v. RKO Radio Pictures, 327 U.S. 251 (1946). Of course, the plaintiff must also prove "standing" in the constitutional sense. Sanner v. Chicago Bd. of Trade, 62 F.3d 918, 922-27 (7th Cir. 1995); Malamud v. Sinclair Oil Corp., 521 F.2d 1142, 1152 (6th Cir. 1975). Proof of injury in fact tends to satisfy this requirement as well.
111. Bigelow, 327 U.S. at 265-66.
112. See Blue Shield of Va. v. McCready, 457 U.S. at 472-81. Although the Court in McCready indicated that the potential for duplication involves considerations distinct from remoteness, we suggest that the potential for duplication is viewed better as one aspect of the remoteness inquiry. Thus, if a plaintiff's claim presents a serious potential of duplicating damages, the plaintiff is likely to have suffered its injury indirectly and is properly viewed as too remote. A good example is the indirect purchaser from a price-fixing cartel, whose damage suit is barred under Illinois Brick. See supra note 87. The indirect purchaser's claim poses an undue threat of duplicative recovery in part because its injury is indirect and derivative. The same analysis applies to plaintiffs such as shareholders, landlords, or licensors. Their injuries are viewed as too indirect and derivative, and one of the chief reasons is the potential for duplicative recovery raised by their claims.
113. See 2 PHILLIP E. AREEDA & HERBERT HOVENKAMP, ANTITRUST LAW ¶ 360b (rev. ed. 1995).
114. 479 U.S. at 111-13 ("Sections 4 and 16 are thus best understood as providing complementary remedies for a single set of injuries.").
115. Id. at 112 n.6.
116. See, e.g., McCarthy v. Recordex Serv., Inc. 80 F.3d 842, 856 (3d Cir. 1996); Reiter v. Sonotone Corp., 486 F. Supp. 115, 121 (D. Minn. 1980).
117. See Todorov v. DCH Healthcare Auth., 921 F.2d 1438, 1449-54 (11th Cir. 1991); 2 AREEDA & HOVENKAMP, supra note 107, ¶¶ 346a, 364c, 378; ABA ANTITRUST SECTION, ANTITRUST LAW DEVELOPMENTS 781-82 & n.146 (4th ed. 1997).
118. J. Truett Payne Co. v. Chrysler Motors Corp., 451 U.S. 557 (1981).
119. See supra text accompanying notes 63-67.
120. See, e.g., Chrysler Credit Corp. v. J. Truett Payne Co., 670 F.2d 575, 580 (5th Cir. 1982).
121. 457 U.S. 465 (1982).
122. Id. at 467.
123. 405 U.S. 251 (1972) (holding that a state could not sue for general damage to its economy, because state citizens could sue for and recover damages they incurred).
124. 431 U.S. 720 (1977) (holding that only direct purchasers may sue for damages from a horizontal price-fixing conspiracy).
125. 457 U.S. at 473-75.
126. Id. at 478.
127. Id. at 476.
128. See supra note 106 and accompanying text.
129. 459 U.S. 519 (1983).
130. Id. at 540.
131. Id. at 539.
132. Id. at 535.
133. Id. at 535-46.
134. See also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986). There, in the course of ruling that Zenith had not presented adequate evidence to support its charge of a predatory pricing conspiracy among Japanese television manufacturers, the majority opinion said that a conspiracy to raise prices "could not have caused [Zenith] to suffer an 'antitrust injury' . . . because they actually tended to benefit [Zenith]." Id. at 586. This passage compounded the problem, also present in Truett Payne, of jumbling causation and antitrust injury concerns.
135. For cases confusing antitrust injury and causation, see G.K.A. Beverage Corp. v. Honickman, 55 F.3d 762, 766-67 (2d Cir. 1995); O.K. Sand & Gravel, Inc. v. Martin Marietta Tech., Inc., 36 F.3d 565, 573 (7th Cir. 1994); Greater Rockford Energy & Tech. v. Shell Oil Co., 998 F.2d 391, 395 (7th Cir. 1993); Bob Nicholson Appliance, Inc. v. Maytag Co., 883 F. Supp. 321, 326-27 & n.7 (S.D. Ind. 1994); Irvin Indus., Inc. v. Goodyear Aerospace Corp., 803 F. Supp. 951, 954-56 (S.D.N.Y. 1992), on remand from 974 F.2d 241 (2d Cir. 1992); cases cited in 2 AREEDA & HOVENKAMP, supra note 107, ¶ 362a, at 210 n.3. For examples of cases confusing antitrust injury and remoteness, see Southwest Suburban Bd. of Realtors, Inc. v. Beverly Area Planning Ass'n, 830 F.2d 1374, 1379-80 (7th Cir. 1987); Pocahontas Supreme Coal Co. v. Bethlehem Steel Corp., 828 F.2d 211, 219 (4th Cir. 1987); Hairston v. Pac-10 Conference, 893 F. Supp. 1485, 1490-93 (W.D. Wash. 1994), aff'd on other grounds, 101 F.3d 1315 (9th Cir. 1996).
136. 802 F. Supp. 1544 (S.D. Tex. 1991).
137. Id. at 1547-49.
138. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 582-83 (1986).
139. 33 F.3d 774 (7th Cir. 1994).
140. Id. at 782-83 (citations omitted); accord Volvo N. Am. Corp. v. Men's Int'l Prof'l Tennis Council, 857 F.2d 55, 67-70 (2d Cir. 1988); 2 AREEDA & HOVENKAMP, supra note 107, ¶ 373e1.
141. 118 F.3d 178 (3d Cir. 1997).
142. Associated General Contractors, 459 U.S. at 535.
143. Id. at 538.
144. Id.
145. Id.
146. See generally Warth v. Seldin, 422 U.S. 490 (1975).
147. E.g., McCarthy v. Recordex Serv., Inc., 80 F.3d 843 (3d Cir. 1996).
148. E.g., Chrysler Credit Corp. v. J. Truett Payne Co., 670 F.2d 575, 580 (5th Cir. 1982).
149. Volvo N. Am. Corp. v. Men's Int'l Prof'l Tennis Council, 857 F.2d 55, 66 (2d Cir. 1988).
150. E.g., Alberta Gas Chems. v. E.I. du Pont de Nemours & Co., 826 F.2d 1235, 1239-41 (3d Cir. 1987); Todorov v. DCH Healthcare Auth., 921 F.2d 1438 (11th Cir. 1991).
151. See 2 AREEDA & HOVENKAMP, supra note 107, ¶ 360c, at 195-96. AGC did not endorse use of the "standing" nomenclature. Although the Court acknowledged the term's use by others, 459 U.S. at 525, the Court's opinion characterized the proper inquiry as one to determine whether the plaintiff is "a person injured by reason of a violation of the antitrust laws within the meaning of § 4 of the Clayton Act," 459 U.S. at 546, not whether the plaintiff had "standing."
152. 459 U.S. at 542.
153. Huhta v. Children's Hosp., 1994-1 Trade Cas. (CCH) ¶ 70,619, at 72,361 (E.D. Pa. 1994), aff'd, 52 F.3d 315 (3d Cir. 1995); Robles v. Humana Hosp., 785 F. Supp. 989, 999 (N.D. Ga. 1992); Leak v. Grant Med. Ctr., 893 F. Supp. 757, 764 (S.D. Ohio 1995); Rooney v. Medical Ctr., 1994 WL 854372, at *7 (S.D. Ohio 1994); see generally Todorov v. DCH Healthcare Auth., 921 F.2d 1438, 1449 (11th Cir. 1991).
154. 1994-1 Trade Cas. (CCH) at 72,361 (emphasis added); see also Feldman v. Palmetto Gen. Hosp., 980 F. Supp. 467 (S.D. Fla. 1997). But see Ertag v. Naples Community Hosp., 1997-2 Trade Cas. (CCH) ¶ 71,966, at 80,747 (11th Cir. 1997) (unpublished) ("neither this Court nor the Supreme Court has held that a district court must seek out the most efficient enforcer of the antitrust laws"). The Huhta case itself articulated "the most efficient enforcer" requirement as one separate from, and in addition to, the requirement of antitrust injury. Huhta, 1994-1 Trade Cas. (CCH) ¶ 70,619. Thus, in Huhta the problem was not misapplication of Brunswick us much as it was misinterpretation of Associated General Contractors and the issue of remoteness. The confusion is similar in the other "most efficient enforcer" cases discussed above.
155. Huhta, 1994-1 Trade. Cas. at 72,362.
156. W. at 72,361.
157. See Thomas G. Krattenmaker & Steven C. Salop, Anticompetitive Exclusion: Raising Rivals' Costs to Achieve Power over Price, 96 YALE L.J. 209 (1986); Louis Kaplow, Extension of Monopoly Power Through Leverage, 85 COLUM. L. REV. 515 (1985).
158. See Thomas G. Krattenmaker & Steven C. Salop, Anticompetitive Exclusion: Raising Rivals' Costs to Achieve Power over Price, 96 YALE L.J. 209 (1986); Louis Kaplow, Extension of Monopoly Power Through Leverage, 85 COLUM. L. REV. 515 (1985).
159. 15 U.S.C. § 15.
160. 457 U.S. at 472, 482. As discussed above, McCready involved an alleged conspiracy between an insurer and psychiatrists to deny insurance coverage for psychologist services. The Court held that a patient could sue to recover the unreimbursed cost of psychologist services while recognizing that the excluded psychologists were equally entitled to sue.
161. 1994-1 Trade Cas. (CCH) at 72,362-63.
162. 957 F. Supp. 201 (D. Or. 1997).
163. See generally Eastman Kodak Co. v. Image Technical Servs., Inc., 504 U.S. 451 (1992).
164. 957 F. Supp. at 205.
165. Id. at 205-06 (quoting In re Air Passenger Computer Reservation Sys., 727 F. Supp. 564, 568-69 (C.D. Cal. 1989)).
166. See Davis v. Southern Bell Tel. & Tel. Co., 1994-1 Trade Cas. (CCH) ¶ 70,510 (S.D. Fla. 1994); In re Air Passenger Computer Reservation Sys., 727 F. Supp. at 568-69. 160 870 F.2d 1105 (6th Cir. 1989).
167. Id. at 1112.
168. 26 F.3d 36 (6th Cir. 1994).
169. Id. at 38-39.
170. 128 F.3d 398 (6th Cir. 1997).
171. Id. at 404.
172. 599 F.2d 1299 (4th Cir. 1979).
173. 441 F. Supp. 730, 739 (M.D.N.C. 1977), rev'd, 599 F.2d 1299 (4th Cir. 1979).
174. 599 F.2d at 1302-03 (citations omitted).
175. See Brunswick, 429 U.S. at 487; Bayou Bottling, Inc. v. Dr Pepper Co., 725 F.2d 300, 304 (5th Cir. 1984); Eastman Kodak Co. v. Goodyear Tire & Rubber Co., 114 F.3d 1547, 1558 (Fed. Cir. 1997).
176. 457 U.S. at 482-83; see 2 AREEDA & HOVENKAMP, supra note 107, ¶ 363b.
177. Albrecht v. Herald Co., 390 U.S. 145 (1968).
178. 495 U.S. at 341-15.
179. Id. at 335 & n.5.
180. Id. at 335, 345-46. Several lower court cases prior to ARCO had dismissed maximum RPM cases on similar antitrust injury grounds. See, e.g., Jack Walters & Sons Corp. v. Morton Bldg., Inc., 737 F.2d 698 (7th Cir. 1984); Knutson v. Daily Review, Inc., 468 F. Supp. 226 (N.D. Cal. 1979), aff'd, 664 F.2d 1120 (9th Cir. 1981).
181. 118 S. Ct. 275 (1997).
182. See generally Yentsch v. Texaco, Inc., 630 F.2d 46 (2d Cir. 1980); In re Mid-Atlantic Toyota Antitrust Litig., 560 F. Supp. 760 (D. Md. 1983); Khan v. State Oil Co., 93 F.3d 1358 (7th Cir. 1996), rev'd, 118 S. Ct. 275 (1997). Another example is the Valley Products case, which the Sixth Circuit disposed of on "necessary predicate" grounds, as discussed supra at text accompanying notes 164-65. Valley involved, on the merits, the difficult question whether (and if so when) a firm can be guilty of an unlawful tying arrangement where it does not in fact sell the tied product but, rather, collects a fee from the vendor. Valley, 128 F.3d at 401 & nn. 2-3. Compare, e.g., 9 PHILLIP AREEDA, ANTITRUST LAW ¶ 1727d (1991) (receipt of access fees should not ordinarily result in per se tying liability), with Roberts v. Elaine Powers Figure Salons, 708 F.2d 1476, 1479-81 (9th Cir. 1983) (receipt of fees normally is sufficient economic interest to implicate per se rule). The Sixth Circuit's resolution of the case on dubious antitrust injury grounds meant that this important substantive issue did not receive the further development it appeared to deserve.
183. See generally Joseph F. Brodley, Antitrust Standing in Private Merger Cases: Reconciling Private Incentives and Public Enforcement Goals, 94 MICH. L. REV. 1, 78-105 (1995).
184. See 479 U.S. at 492-94.
185. A number of courts held that targets could not bring suit because they had not suffered a cognizable antitrust injury. See, e.g., H.H. Robertson Co. v. Guardian Indus. Corp., 50 Antitrust & Trade Reg. Rep. (BNA) 166 (3d Cir.), vacated pending rehearing en banc, 1986-1 Trade Cas. (CCH)¶ 66,911 (3d Cir. 1986); Central Nat'l Bank v. Rainbolt, 720 F.2d 1183 (10th Cir. 1983); Carter Hawley Hale Stores, Inc. v. The Limited, Inc., 587 F. Supp. 246, 250 (C.D. Cal. 1984). By contrast, a number of courts simply assumed that targets had standing. See, e.g., Grumman Corp. v. LTV Corp., 665 F.2d 10 (2d Cir. 1981); Marathon Oil Co. v. Mobil Corp., 669 F.2d 378 (6th Cir. 1981); Laidlaw Acquisitions Corp. v. Mayflower Group, Inc., 636 F. Supp. 1513 (S.D. Ind. 1986); Gearhart Indus., Inc. v. Smith Int'l, Inc., 592 F. Supp. 203, 211 n.1 (N.D. Tex. 1984).
186. Compare Frank H. Easterbrook & Daniel R. Fischel, Antitrust Suits by Targets of Tender Offers, 80 MICH. L. REV. 1155 (1982) (arguing that targets have the wrong incentives to challenge tender offers and therefore should not be permitted to challenge hostile take-overs), with Glenn A. Graff, Target Standing Under Section 16 of the Clayton Act: When Your Antitrust Injury Hurts, Standing Can Be a Problem, 1991 U. ILL. L. REV. 219 (arguing that targets should have standing).
187. Compare Frank H. Easterbrook & Daniel R. Fischel, Antitrust Suits by Targets of Tender Offers, 80 MICH. L. REV. 1155 (1982) (arguing that targets have the wrong incentives to challenge tender offers and therefore should not be permitted to challenge hostile take-overs), with Glenn A. Graff, Target Standing Under Section 16 of the Clayton Act: When Your Antitrust Injury Hurts, Standing Can Be a Problem, 1991 U. ILL. L. REV. 219 (arguing that targets should have standing).
188. Consolidated Gold Fields, PLC v. Minorco, S.A., 871 F.2d 252, 258 (2d Cir. 1989).
189. See Anago, Inc. v. Tecnol Med. Prods., Inc., 976 F.2d 248, 250 (5th Cir. 1992).
190. See cases cited supra note 179; see also Burnup & Sims, Inc. v. Posner, 688 F. Supp. 1532, 1534-35 (S.D. Fla. 1988) (targets can never sue); Burlington Indus. v. Edelman, 666 F. Supp. 799, 805 (M.D.N.C. 1987) (targets might be able to sue depending on the circumstances); Union Carbide Corp. v. Montell N.V., 944 F. Supp. 1119, 1148-50 (S.D.N.Y. 1996) (targets can sue; following controlling authority in Second Circuit).
191. 871 F.2d at 258-59 (citation omitted).
192. Id. at 260.
193. 976 F.2d at 251.
194. See 21 CONG. REC. 2460, 2598, 3147, 4100 (1890) (remarks of Senators Sherman and George and Representative Mason); see also United States v. Trans-Missouri Freight Ass'n, 166 U.S. 290, 323 (1897); HANS THORELLI, FEDERAL ANTITRUST POLICY 67-68, 91-96 (1954).
195. See, e.g., H.R. REP. No. 1191, 81st Cong., 2d Sess. 2-3 (1949); S. REP. No. 1775, 81st Cong., 2d Sess. 3 (1950); 95 CONG. REC. 11,484, 11494, 11,500-06 (1949) (remarks of Representatives Celler, Yates, Douglas, Biemiller, Boyle, and Byrne); 96 CONG. REC. 16,434, 16,446, 16,452, 16,503 (1950) (remarks of Senators O'Connor, Kefauver, Douglas, and Aiken).
196. Accord Brodley, supra note 177, at 91-95.
197. One of the arguments most frequently advanced in opposition to target standing is that the target's interests are indistinguishable from those of its shareholders and, if the shareholders oppose the takeover, their remedy is simply not to tender their stock. The problem with the argument is that it ignores reality. The shareholders of a public corporation subject to a hostile bid are transient. In a typical hostile takeover context, the identity of the shareholders will change radically from the time prior to the bid. That is not true of the target's other constituencies, however, including employees, suppliers, customers, and managers. Yet it is these other constituencies that in fact represent the company's competitive independence in the marketplace, and that Congress intended to protect in enacting the Celler-Kefauver Act. See supra note 188 and accompanying text.
198. Brodley, supra note 177, at 46-78.
199. 867 F.2d 102 (2d Cir. 1989).
200. Id. at 111.
201. Id.
202. 881 F. Supp. 860 (W.D.N.Y. 1994).
203. Id. at 878.
204. A few other cases have upheld competitor suits on the basis of reasoning similar to that advanced in Bigelow and Bon-Ton. See Community Pubs., Inc. v. Donrey Corp., 892 F. Supp. 1146, 1165-67 (W.D. Ark. 1995), aff'd, 1998 WL 131260 (8th Cir. Mar. 25, 1998); Coors Brewing Co. v. Miller Brewing Co., 889 F. Supp. 1394, 1400-02 (D. Colo. 1995); Tasty Baking Co. v. Ralston Purina, Inc., 653 F. Supp. 1250, 1265 (E.D. Pa. 1987).
205. 842 F.2d 95 (5th Cir. 1988).
206. Id. at 100-02.
207. 1998-1 Trade Cas. (CCH) ¶ 72,037 (S.D.N.Y. 1997).
208. Id. at 81,180.
209. Id. For other post-Cargill cases rejecting merger (or related transaction) challenges, see O.K. Sand & Gravel, Inc. v. Martin Marietta, 36 F.3d 565, 575-74 (7th Cir. 1994); Remington Prods., Inc. v. North Am. Philips Corp., 755 F. Supp. 52 (D. Conn. 1991); Pearl Brewing Co. v. Miller Brewing Co., 1993-2 Trade Cas. (CCH) ¶ 70,370 (W.D. Tex. 1993), aff'd mem., 52 F.3d 1066 (5th Cir. 1995).
210. Brodley, supra note 177, at 46.
211. One might also be more confident than Professor Brodley that truly egregious mergers will be stopped by the enforcement agencies, at least more often than not.
212. See, e.g., Krattenmaker & Salop, supra note 151; Eastman Kodak Co. v. Image Technical Servs., 504 U.S. 451 (1992); Premier Elec. Constr. Co. v. NECA, 814 F.2d 358, 368 (7th Cir. 1987) (Easterbrook, J.).
213. This seems debatable as a factual matter, but the underlying legal principle is sound. If the conduct bars the plaintiff from access to an important factor in marketing its products, and if that impairment facilitates the exercise of market power, consumers are harmed.
214. 842 F.2d at 100. There is some language in Phototron suggesting that a complaining competitor must prove actual predation or exclusionary conduct to challenge a merger. We respectfully suggest that this is a misreading of Cargill, which appeared to reject any such requirement, 479 U.S. at 120-22, and is directly inconsistent with Brunswick, 429 U.S. at 489 n.14 (rejecting requirement that plaintiff show an actual lessening of competition).