State of Ill. v. Sangamo Const. Co.

• Citation: 657 F.2d 855
• Decision Date: 30 July 1981
• Docket Number: Nos. 80-1761,80-2275,s. 80-1761
• Parties: 1981-2 Trade Cases 64,204 STATE OF ILLINOIS, Plaintiff-Appellee, v. SANGAMO CONSTRUCTION CO. and J. L. Simmons Company, Inc., Defendants- Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 855

657 F.2d 855

1981-2 Trade Cases 64,204

STATE OF ILLINOIS, Plaintiff-Appellee, v. SANGAMO CONSTRUCTION CO. and J. L. Simmons Company, Inc. Defendants- Appellants.

Nos. 80-1761, 80-2275.

United States Court of Appeals Seventh Circuit.

Argued Jan. 19, 1981.

Decided July 30, 1981.

Richard A. Makarski, Chicago, Ill., Paul E. Adami, Springfield, Ill., for defendants-appellants.

Stephen P. Juech, Asst. Atty. Gen., Chicago, Ill., for plaintiff-appellee.

Before FAIRCHILD, PELL and SPRECHER, Circuit Judges.

SPRECHER, Circuit Judge.

This appeal concerns the propriety of the district court's award of attorneys' fees and costs, including expert witness fees, to the Illinois Attorney General who successfully pursued this private antitrust action on behalf of the State of Illinois in its proprietary capacity. We affirm the award of attorneys' fees, but reverse and remand the award of costs to be reduced to the extent the amount of expert witness fees awarded exceeds the statutory witness fees set forth in 28 U.S.C. § 1821.

I

Illinois, in its proprietary capacity, brought this suit under Section 1 of the Sherman Act, 15 U.S.C. § 1, and Section 4 of the Clayton Act, 15 U.S.C. § 15, against defendants, Sangamo Construction Company and J. L. Simmons Co., Inc., alleging a conspiracy to allocate certain highway construction projects put out for public bids by Illinois on June 23, 1970. ¹ At the conclusion of trial, the jury returned a verdict in favor of Illinois. Although Illinois had requested damages of $85,720, the jury awarded only $25,000 in damages. The district court, pursuant to Section 4 of the Clayton Act, trebled the actual damages and awarded Illinois $75,000 in total damages.

The district court also ruled that, pursuant to Section 4 of the Clayton Act, Illinois was entitled to costs of suit, including reasonable attorneys' fees. Consequently, the court held an evidentiary hearing on Illinois' request for an itemization of attorneys' fees and costs. The court granted Illinois' entire request for attorneys' fees totaling $63,285. The court also awarded $16,822.36 as costs of suit, including $5,471.91 for deposition charges, $1,501.47 for copying, $56.00 for charts, $9,777.98 for expert witness costs, and $15.00 for filing fees.

Although defendants filed two notices of appeal, the first from the judgment entered on the jury verdict and the second from the final judgment awarding attorneys' fees and costs, the only issues urged on this appeal concern the award of attorneys' fees and costs to the State of Illinois.

II

Section 4 of the Clayton Act, 15 U.S.C. § 15, entitles a successful private litigant to "recover threefold the damages by him sustained, and the costs of suit, including a reasonable attorney's fee." ² Courts uniformly have held that the award of attorneys' fees and costs to the successful plaintiff under Section 4 is mandatory. See Baughman v. Cooper-Jarrett, Inc., 530 F.2d 529, 531 n.2 (3rd Cir.), cert. denied, 429 U.S. 825, 97 S.Ct. 78, 50 L.Ed.2d 87 (1976); Knutson v. Daily Review, Inc., 479 F.Supp. 1263, 1267 (N.D.Cal.1979); see also Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 415 n.5, 98 S.Ct. 694, 697, 54 L.Ed.2d 648 (1978). Furthermore, the determination of what constitutes reasonable attorneys' fees is a matter relegated, in the first instance, to the sound discretion of the trial court, guided by proper standards and due consideration of the unique circumstances of each case. See infra II-C.

Defendants argue that these accepted rules for awarding attorneys' fees under Section 4 of the Clayton Act do not apply in this case of first impression involving an award of fees to a state represented by its Attorney General. ³ First, defendants assert that an award of attorneys' fees to a state, which sues in its proprietary capacity and is represented by its Attorney General, is inconsistent with the policy underlying Section 4's provision for attorneys' fees. Defendants argue, in the alternative, that if a state represented by its Attorney General is entitled to attorneys' fees, then the award of attorneys' fees should be limited to the actual costs incurred by the state, i. e., the salaries of the state lawyers. Finally, defendants argue that the district court abused its discretion by awarding Illinois attorneys' fees which exceed the single damages award.

We disagree with defendants' reasoning. For the reasons detailed below, we affirm the award of attorneys' fees to Illinois as appropriate under Section 4 and within the sound discretion of the district court. ⁴

A

It is well-established that a state is a "person" for purposes of establishing a cause of action and jurisdiction to sue under Section 4 of the Clayton Act. Hawaii v. Standard Oil Co., 405 U.S. 251, 261, 92 S.Ct. 885, 890, 31 L.Ed.2d 184 (1972); Georgia v. Evans, 316 U.S. 159, 62 S.Ct. 972, 86 L.Ed. 1346 (1942). But, defendants argue that a state, represented by its Attorney General, should not be considered a "person" entitled to attorneys' fees and costs under the last clause of Section 4 which entitles a prevailing party to "cost of suit, including a reasonable attorney's fee."

A textual analysis of Section 4 lends no support to defendant's reasoning. Section 4 states that "(a)ny person who shall be injured ... shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney's fee." 15 U.S.C. § 15. Nothing in the text suggests that a state, which is a "person" for purposes of suing for treble damages, is not a "person" for purposes of the next clause which allows recovery of costs and attorneys' fees. The "statute makes no distinction between the applicability of the treble damages and attorney's fees provisions therein." Knutson v. Daily Review, Inc., 479 F.Supp. at 1267.

Failing to find textual support in Section 4 for their position, defendants argue that Section 4's silence as to whether attorneys' fees should be awarded to states indicates that Congress did not intend states to receive attorneys' fees for suits brought under Section 4. Defendants point first to 15 U.S.C. § 15c(a)(2), which explicitly allows a state to recover reasonable attorneys' fees following successful prosecution of a parens patriae antitrust suit. Defendants then point to 15 U.S.C. § 15a, which limits the recovery by the United States in antitrust actions brought for damages sustained in its proprietary capacity to actual damages and costs of suit, but does not provide for recovery of reasonable attorneys' fees. From this brief statutory review, defendants conclude that the absence of a statutory provision explicitly awarding attorneys' fees to a state which sues for damages sustained in its proprietary capacity means that Congress did not intend states to recover attorneys' fees in suits under Section 4.

Defendants' reasoning is unpersuasive. First, the attempted comparison between 15 U.S.C. § 15a (actions by United States for damages sustained in its proprietary capacity) and 15 U.S.C. § 15 (actions by private parties, including states in their proprietary capacity) is inappropriate. Congress enacted 15 U.S.C. § 15a in order to allow recovery of actual damages sustained by the United States. City of Burbank v. General Electric Co., 329 F.2d 825, 830 (9th Cir. 1964); see S.Rep. No. 619, 84th Cong., 1st Sess. 3 (1955), reprinted in (1955) U.S.Code Cong. & Ad.News 2328, 2330. The recovery of damages by the United States was never intended as a major tool in federal enforcement of the antitrust laws. The United States wields primary and substantial enforcement power through other criminal and civil remedies provided by the antitrust laws. On the other hand, actions under 15 U.S.C. § 15 are private enforcement actions wherein the incentive for enforcement created by an award of attorneys' fees is appropriate. In other words, 15 U.S.C. § 15a and 15 U.S.C. § 15 were designed to address different concerns, and Congress' exclusion of attorneys' fees in actions by the United States under § 15a does not reflect Congress' desire to deny attorneys' fees to states suing under 15 U.S.C. § 15. Indeed, we agree with the district court that Congress recognized the distinction between actions by states and those by the United States when it authorized states to bring actions under 15 U.S.C. § 15c(a)(2) as parens patriae and to collect reasonable attorneys' fees for doing so. We think it is equally logical to conclude that Congress intended states, like all other private parties, to collect reasonable attorneys' fees for successful antitrust actions brought under Section 4 of the Clayton Act, 15 U.S.C. § 15.

Finally, defendants assert that an award of attorneys' fees to a state represented by its Attorney General is inconsistent with the policy and purposes behind Section 4's provision for recovery of treble damages, plus costs and attorneys' fees. We agree with defendants that the primary purposes of the Section 4 fee award are 1) to encourage private enforcement of the antitrust laws, 2) to insure that the cost of doing so does not diminish the treble damages award, and 3) to deter violations of the antitrust laws by requiring the "payment of that fee by a losing defendant as part of his penalty for having violated the antitrust laws." Farmington Dowel Products Co. v. Forster Mfg. Co., Inc., 421 F.2d 61, 90 (1st Cir. 1969). Defendants, however, contend that the Attorney General's statutory obligation "(t)o institute and prosecute all actions and proceedings in favor of or for the use of the state," Ill.Rev.Stat. ch. 14, § 4, is sufficient incentive to induce Illinois to bring antitrust actions for damages suffered in its proprietary capacity. Moreover, defendants reason that any possible incentive resulting from recovery of attorneys' fees is remote and speculative because any monies awarded to the Attorney General as attorneys' fees are turned over to the Illinois general fund, and are not...