Pfizer, Inc. v. Lord

• Decision Date: 27 August 1975
• Docket Number: 74-1847 and 74-1870,Nos. 74-1680,s. 74-1680
• Citation: 522 F.2d 612
• Parties: 1975-2 Trade Cases 60,455 PFIZER, INC., et al., Appellants, v. Honorable Miles W. LORD, United States District Judge, Respondent, and The Republic of Vietnam et al., Appellees. PFIZER, INC., American Cyanamid Company, Bristol-Myers Company, Squibb Corporation, Olin Corporation and The Upjohn Company, Appellants, v. The REPUBLIC OF VIETNAM et al., Appellees. PFIZER, INC., et al., Appellants, v. The Honorable Miles W. LORD, United States District Judge, Respondent, and The Government of India, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 612

522 F.2d 612

1975-2 Trade Cases 60,455

PFIZER, INC., et al., Appellants, v. Honorable Miles W. LORD, United States District Judge, Respondent, and The Republic of Vietnam et al., Appellees.

PFIZER, INC., American Cyanamid Company, Bristol-Myers

Company, Squibb Corporation, Olin Corporation and The Upjohn Company, Appellants, v. The REPUBLIC OF VIETNAM et al., Appellees.

PFIZER, INC., et al., Appellants, v. The Honorable Miles W. LORD, United States District Judge, Respondent, and The Government of India, Appellee.

Nos. 74-1680, 74-1847 and 74-1870.

United States Court of Appeals Eighth Circuit.

Submitted March 31, 1975.

Decided Aug. 27, 1975.

Samuel W. Murphy, Jr., Donovan, Leisure, Newton & Irvine, New York City, for appellants.

Douglas V. Rigler, Foley, Lardner, Hollabaugh & Jacobs, Lawrence R. Velvel, Kirkwood, Kaplan, Russin & Vecchi, Harold C. Petrowitz, Becker, Channell, Becker & Feldman, and Samuel R. Simon, U. S. Dept. of Justice, Anti-Trust Div., Washington, D.C., for appellees.

Thomas E. Kauper, Asst. Atty. Gen., Howard E. Shapiro and Samuel R. Simon, Attys., Dept. of Justice, Washington, D.C., filed for the United States, amicus curiae.

Before GIBSON, Chief Judge, and LAY and ROSS, Circuit Judges.

LAY, Circuit Judge.

Several foreign governments ¹ have filed antitrust suits alleging that the defendants, ² six major pharmaceutical firms, conspired to fix prices on certain broad-spectrum antibiotics purchased by the plaintiff governments and their citizens. ³ The cases were consolidated in the District of Minnesota for pretrial proceedings and for trial with numerous other suits known collectively as the Antibiotic Antitrust Cases, and are now pending before Judge Miles Lord. The history and background of this litigation have been summarized in Pfizer, Inc. v. Lord, 456 F.2d 532 (8th Cir.), Cert. denied, 406 U.S. 976, 92 S.Ct. 2411, 32 L.Ed.2d 676 (1972).

The foreign governments assert in their complaints three theories of recovery, the last two of which would seem to be mutually exclusive since they involve the same claims. First, the governments ask treble damages based on their own purchases of defendants' antibiotics. Second, they sue under a Parens patriae claim as "official representative" of their individual and corporate citizens who purchased defendants' products. Third, they assert their right to serve as representatives of the class of all their citizens who have treble damage claims against defendants.

The defendants moved to dismiss the first claim on the ground that a foreign government is not a "person" entitled to bring a treble damage action under Section 4 of the Clayton Act. They asked dismissal of the second or official representative theory on the ground that absent formal assignment of these claims the governments could not sue on them outside the class action rules of Fed.R.Civ.P. 23. The district court denied both motions.

The defendants seek reversal of these interlocutory rulings:

(1) That foreign governments are "persons" entitled to sue for treble damages under § 4 of the Clayton Act; and

(2) That foreign governments may sue to collect the treble damage claims of their citizens, without complying with the requirements of Fed.R.Civ.P. 23 for class actions.

I. Mandamus.

The first issue, that is, whether the foreign governments are persons within the meaning of § 4 of the Clayton Act, is presented here by writ of mandamus, since the district court refused to certify the question for interlocutory appeal under 28 U.S.C. § 1292(b). ⁴ We do not reach the merits of this question since in our view mandamus does not lie to review this ruling of the district court.

The traditional use of the writ in aid of appellate jurisdiction has been to confine a lower court to a lawful exercise of its prescribed jurisdiction. Thus, "(t)he writ is appropriately issued . . . when there is a 'usurpation of judicial power' or a clear abuse of discretion." Schlagenhauf v. Holder, 379 U.S. 104, 110, 85 S.Ct. 234, 238, 13 L.Ed.2d 152 (1964); River Valley, Inc. v. Dubuque Cty., 507 F.2d 582, 585 (8th Cir. 1974). However, mandamus is not to be used when the most that can be claimed is that the district judge may have erred in ruling on a question clearly within his jurisdiction. Will v. United States, 389 U.S. 90, 104, 88 S.Ct. 269, 19 L.Ed.2d 305 (1967).

The district court was presented with a difficult question of statutory interpretation, a question apparently of first impression. Even if its decision were erroneous (and we intimate no view on the merits), under the circumstances of this case it would not constitute a clear abuse of discretion.

Further, the mere fact that a court might err even on jurisdictional questions does not necessarily amount to a usurpation of power making mandamus appropriate.

(J)urisdiction need not run the gauntlet of reversible errors. The ruling on a question of law . . . was made in the course of the exercise of the court's jurisdiction to decide issues properly brought before it. . . . Its decision against petitioner, even if erroneous which we do not pass upon involved no abuse of judicial power.

River Valley, Inc. v. Dubuque Cty., supra, at 585, quoting from Bankers Life & Cas. Co. v. Holland, 346 U.S. 379, 382, 74 S.Ct. 145, 98 L.Ed. 106 (1953).

In Stein v. Collinson, 499 F.2d 91 (8th Cir. 1974), our court refused to reach the merits of a petition for writ of mandamus on a jurisdictional question arising out of a Chapter X reorganization proceeding. The court quoted the following from American Airlines v. Forman, 204 F.2d 230, 232 (3rd Cir. 1953):

It is true that this petition . . . challenges what can fairly be called a jurisdictional ruling. But that difference alone is not enough to make a peremptory writ appropriate. . . . The challenged assumption or denial of jurisdiction must be so plainly wrong as to indicate failure to comprehend or refusal to be guided by unambiguous provisions of a statute or settled common law doctrine. If a rational and substantial legal argument can be made in support of the questioned jurisdictional ruling, the case is not appropriate for mandamus . . . even though on normal appeal a reviewing court might find reversible error.

499 F.2d at 94.

Accordingly, the petition for a writ of mandamus must be denied.

II. Foreign Governments Suing As Parens Patriae on Behalf of Their Citizens in Antitrust Damage Suits.

The district court did certify for appeal under 28 U.S.C. § 1292(b) its order holding that the foreign governments may sue as Parens patriae on behalf of their individual and corporate citizens without notifying the citizens or fulfilling the other requirements of a Rule 23 class action, and may "apply the proceeds from the litigation to the benefit of their citizens as a whole." Misc. Order No. 74-37, Appendix at 18, 21. The district court recognized that several recent decisions had denied to states of the United States the right to bring similar Parens patriae actions on the grounds that the defendants might be subjected to duplicate liability, See e. g., Hawaii v. Standard Oil Co., 405 U.S. 251, 264, 92 S.Ct. 885, 31 L.Ed.2d 184 (1972); or, if the state suit barred the citizens' claims, that so to "take" their damage claims would be a deprivation of property without due process. See In re Multidistrict Vehicle Air Pollution Control Equip., 481 F.2d 122 (9th Cir.), Cert. denied sub nom., Morgan v. Automobile Mfg. Assn., 414 U.S. 1045, 94 S.Ct. 551, 38 L.Ed.2d 336 (1973); California v. Frito-Lay, Inc., 474 F.2d 774 (9th Cir.), Cert. denied, 412 U.S. 908, 93 S.Ct. 2291, 36 L.Ed.2d 974 (1973); Philadelphia Housing Auth. v. American Radiator & Standard Sanitary Corp., 309 F.Supp. 1057 (E.D.Pa.1969), Aff'd., 438 F.2d 1187 (3rd Cir. 1970). Cf. In re Hotel Telephone Overcharges, 500 F.2d 86 (9th Cir. 1974); Eisen v. Carlisle & Jacquelin, 479 F.2d 1005, 1012 (2nd Cir. 1973), Aff'd. on other grounds, 417 U.S. 156, 94 S.Ct. 2140, 40 L.Ed.2d 732 (1974); West Virginia v. Chas. Pfizer & Co., 440 F.2d 1079 (2nd Cir. 1971).

The district court held these objections not applicable here because foreign governments and their resident nationals were concerned. The court found that defendants could not be threatened with duplicate liability because the governments' suit could be given Res judicata effect and, in any event, the practical difficulties facing foreign nationals would generally prevent them from filing their own suits. Due process objections to failure to notify the citizens of the litigation and to permit them to participate directly in it and its proceeds, even though it would bar their claims, were dismissed by the court on the ground that "the relationship between a foreign government and Its citizens is not restricted by the Constitution of the United States." Misc. Order No. 74-37, Appendix at 18, 21 (emphasis original).

We reverse, and hold that the plaintiff governments may not sue on behalf of their citizens' antitrust damage claims as Parens patriae. A Parens patriae action cannot be brought to collect the damage claim of one legally entitled to sue in his own right. The mere fact that the claimant or creditor is a foreign national does not afford him or his government access to judicial procedures barred to domestic creditors. Finally, we are unable to dismiss so easily as did the district court the due process implications of the procedure plaintiffs ask us to approve. In our view, plaintiffs may represent their citizens' damage claims only if they can do so within a Rule 23 class action.

Suits by a sovereign in the Parens patriae capacity have traditionally been limited to certain narrow areas. ⁵ Under English law, the king had the prerogative to act as a guardian of persons under such legal disabilities as infancy, incompetency and insanity. In addition, the king superintended charitable uses. In the United States, these Parens patriae prerogatives were expanded to include the right...