Pfizer, Inc. v. Government of India

• Decision Date: 18 April 1977
• Docket Number: No. 76-1064,76-1064
• Parties: 1976-1 Trade Cases 60,892, 1976-2 Trade Cases 61,175 PFIZER, INC., et al., Appellants, v. The GOVERNMENT OF INDIA et al., Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 396

550 F.2d 396

1976-1 Trade Cases 60,892, 1976-2 Trade Cases 61,175

PFIZER, INC., et al., Appellants, v. The GOVERNMENT OF INDIA et al., Appellees.

No. 76-1064.

United States Court of Appeals Eighth Circuit.

Submitted March 11, 1976.

Decided May 19, 1976.

On Rehearing En Banc Sept. 3, 1976.

Certiorari Granted April 18, 1977. See 97 S.Ct. 1643.

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

Douglas V. Rigler, Foley, Lardner, Hollabaugh & Jacobs, Washington, D. C., for appellee, Republic of the Philippines.

Julius Kaplan, Kirkwood, Kaplan, Russin & Vecchi, Washington, D. C., for Government of India and Republic of Vietnam.

Harold C. Petrowitz, Becker, Channell, Becker & Feldman, Washington, D. C., for appellee, Imperial Government of Iran.

Catherine G. O'Sullivan, Dept. of Justice, Washington, D. C., for Thomas E. Kauper, Asst. Atty. Gen., Antitrust Division, Howard E. Shapiro and Samuel R. Simon, Attys., Dept. of Justice, on the brief, for amicus curiae (urging affirmance), United States of America.

Allen F. Maulsby, New York City, for appellants, Squibb Corp., E. R. Squibb & Sons, Inc. and Olin Corp.

John H. Morrison, Chicago, Ill., and Joe A. Walters, Minneapolis, Minn., for appellant, Pfizer, Incorporated.

Peter Dorsey, Minneapolis, Minn., for appellant, American Cyanamid Co.

Before LAY, ROSS and STEPHENSON, Circuit Judges.

LAY, Circuit Judge.

This interlocutory appeal is brought under 28 U.S.C. § 1292(b) by six major pharmaceutical firms, defendants in the district court in antitrust treble damage suits brought by the governments of several foreign countries. ¹ The sole question certified for appeal is whether the district court was correct in holding that foreign governments are "persons" entitled to sue for treble All parties agree this is a case of first impression. ² Civil suits by foreign sovereigns have long been recognized in federal courts. See The Sapphire, 78 U.S. 164, 11 Wall. 164, 20 L.Ed. 127 (1870). ³ The Constitution of the United States extends the jurisdiction of the federal courts "to all Cases . . . (and) Controversies . . . between a State, or the Citizens thereof, and foreign States, Citizens or Subjects." U.S.Const. Art. III, § 2.

damages under § 4 of the Clayton Act, 15 U.S.C. § 15. We affirm the judgment of the district court.

It is agreed, however, that whether a foreign government may sue under the Clayton Act turns on the interpretation of the statute and nothing more. Our task is to determine the intent of Congress in passing the Act. ⁴

Section 4 of the Clayton Act provides:

Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor in any district court of the United States in the district in which the defendant resides or is found or has an agent, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney's fee.

15 U.S.C. § 15.

Section 1 of the Act provides the following definition:

The word "person" or "persons" wherever used in this Act shall be deemed to include corporations and associations existing under or authorized by the laws of either the United States, the laws of any of the Territories, the laws of any State, or the laws of any foreign country.

15 U.S.C. § 12.

The Supreme Court has stated, with reference to the antitrust laws,

Whether the word "person" or "corporation" includes a State or the United States depends upon its legislative environment. . . . The Cooper case recognized that "there is no hard and fast rule of exclusion. The purpose, the subject matter, the context, the legislative history, and the executive interpretation of the statute are aids to construction which may indicate an intent, by the use of the term, to bring state or nation within the scope of the law." 312 U.S. at Georgia v. Evans, 316 U.S. 159, 161, 62 S.Ct. 972, 974, 86 L.Ed. 1346, 1350 (1942) (emphasis added).

604-05, 61 S.Ct. at page 743, 85 L.Ed. at 1071.

Two decisions of the United States Supreme Court offer guidance, but beyond these we find little relevant help in construing the statute. In United States v. Cooper Corp., 312 U.S. 600, 61 S.Ct. 742, 85 L.Ed. 1071 (1941), the Court decided that the United States government was not within the definition of "person" under the antitrust laws. One year later, however, in Georgia v. Evans, 316 U.S. 159, 62 S.Ct. 972, 86 L.Ed. 1346 (1942), the Court held that Congress intended a state of the United States to be a "person" entitled to sue for treble damages. ⁵

The appellant pharmaceutical firms rely on Cooper in urging that foreign governments are not entitled to sue. In Cooper, the Supreme Court found that Congress' provision of certain antitrust sanctions and remedies available only to the United States indicated an intent to exclude the United States government from the class of persons entitled to sue for treble damages. The Court pointed out in Cooper that only the United States could institute criminal prosecutions, request injunctions to restrain violations, and seize goods owned under contracts which violated the antitrust laws. ⁶

Cooper does contain passages which on the surface lend support to appellants' argument. The Court observed:

Since, in common usage, the term "person" does not include the sovereign, statutes employing the phrase are ordinarily construed to exclude it.

312 U.S. at 604, 61 S.Ct. at 743, 85 L.Ed. at 1074.

The Court further stated:

The more natural inference, we think, is that the meaning of the word was in both uses limited to what are usually known as natural and artificial persons, that is, individuals and corporations.

Id. at 606, 61 S.Ct. at 744, 85 L.Ed. at 1075.

Finally, the Court concluded:

The very fact, however, that this sweeping inclusion of various entities was thought important to preclude any narrow interpretation emphasizes the fact that if the United States was intended to be included Congress would have so provided expressly.

Id. at 607, 61 S.Ct. at 745, 85 L.Ed. at 1076.

However, these observations must be read in light of the subsequent decision of Georgia v. Evans, supra, which recognized that the word "person", as used in the antitrust laws, did include the governments of domestic states. In Evans, Mr. Justice Frankfurter pointed out that Cooper held only that, due to the alternative antitrust weapons granted to the United States government, that government was not entitled to sue for treble damages as well. However, he emphasized that Cooper did not hold "that the word 'person', abstractly In Evans the Court said:

considered, could not include a governmental body." 316 U.S. at 161, 62 S.Ct. at 973, 86 L.Ed. at 1350. Thus, in Evans, the Court distinguished Cooper by focusing on the distinctions between the array of remedies and sanctions given to the United States government and the single remedy of a treble damage suit provided to others who might be injured due to antitrust violations.

The considerations which led to this construction (in Cooper ) are entirely lacking here. The State of Georgia, unlike the United States, cannot prosecute violations of the Sherman Law. . . . If the State is not a "person" within § 8, the Sherman Law leaves it without any redress for injuries resulting from practices outlawed by that Act.

The question now before us, therefore, is whether no remedy whatever is open to a State when it is the immediate victim of a violation of the Sherman Law. We can perceive no reason for believing that Congress wanted to deprive a State, as purchaser of commodities shipped in interstate commerce, of the civil remedy of treble damages which is available to other purchasers who suffer through violation of the Act. . . . Reason balks against implying denial of such a remedy to a State which purchases materials for use in building public highways. Nothing in the Act, its history, or its policy, could justify so restrictive a construction of the word "person" in § 7 as to exclude a State. Such a construction would deny all redress to a State, when mulcted by a violator of the Sherman Law, merely because it is a State.

316 U.S. at 162-63, 62 S.Ct. at 974, 86 L.Ed. at 1350.

We find the same reasoning applicable to a foreign sovereign who claims injury due to antitrust violations and seeks to recover treble damages under the Clayton Act. When Congress enacted the antitrust laws, it expressly recognized that illegal contracts, conspiracies and monopolies by domestic firms may affect commerce with other nations. ⁷ In view of the holding in Evans that Congress intended domestic state governments to have standing to sue for treble damages under the antitrust laws, we conclude that Congress intended other bodies politic, such as a foreign government, to enjoy the same right. ⁸ There is certainly no indication of a contrary intent in the legislative history. In contrast to Cooper, no other provisions of the Act support the contention that Congress intended to exclude foreign nations. We find that the district court correctly held that foreign nations are "persons" under § 4 of the Act entitled to sue for treble damages.

The judgment is affirmed.

ROSS, Circuit Judge (concurring).

I concur in the opinion of Judge Lay because I think the result is mandated by Georgia v. Evans, supra. I believe, however, that Congress, in passing § 4 of the Clayton Act, 15 U.S.C. § 15, gave no consideration nor did it have any legislative intent whatsoever, concerning the question of whether foreign governments are "persons" under the Act. In my opinion it is time for Congress to re-examine this extremely important

question and clarify it by legislation.

ON REHEARING EN BANC

Before GIBSON, Chief Judge, and LAY, HEANEY, BRIGHT, ROSS, STEPHENSON, WEBSTER and HENLEY, Circuit Judges, en banc.

PER CURIAM.

The original panel opinion filed on May 19,...