Coordinated Pretrial Proceedings in Petroleum Products Antitrust Litigation, In re
| Decision Date | 09 November 1982 |
| Docket Number | 81-5930,Nos. 81-5117,s. 81-5117 |
| Parties | 1982-83 Trade Cases 65,028 In re COORDINATED PRETRIAL PROCEEDINGS IN PETROLEUM PRODUCTS ANTITRUST LITIGATION STATE of California, et al., Plaintiffs-Appellants, v. STANDARD OIL COMPANY OF CALIFORNIA, et al., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Otis Pratt Pearsall, New York City, and Richard J. MacLaury, San Francisco, Cal., argued for defendants-appellees;
Adlai S. Hardin, Jr., Sharon W. Lindsay, Milbank, Tweed, Hadley & McCloy, New York City, Graham B. Moody, Jr., McCutchen, Doyle, Brown & Enerson, San Francisco, Cal., Howard Mahany, Jr., Woodbridge, N.J., on brief for Amerada Hess Corp.
Otis Pratt Pearsall, John A. Donovan, Philip H. Curtis, Bruce R. Kelly, Hughes Hubbard & Reed, New York City, Donald A. Bright, Howard S Fredman, Los Angeles, Cal., Ronald C. Redcay, Hughes Hubbard & Reed, Los Angeles, Cal., on brief for Atlantic Richfield Co.
Paul B. Wells, Procopio, Cory, Hargreaves & Savitch, San Diego, Cal., Russell H. Smith, Darrel A. Kelsey, Tulsa, Okl., on brief for Cities Service Co.
Max L. Gillam, Latham & Watkins, Los Angeles, Cal., Bruce R. Merrill, Thomas H. Burton, Donald McAviney, Houston, Tex., on brief for Conoco, Inc.
McCutchen, Black, Verleger & Shea, Philip K. Verleger, David A. Destino, Los Angeles, Cal., John H. Chiles, Robert L. Norris, James A. Drexler, Houston, Tex., A. P. Lindemann, Jr., New York City, on brief for Exxon Corp.
C. Lansing Hays, Jr., Robert A. Cohen, Dechert Price & Rhoads, New York City, Carl J. Schuck, George Christensen, Overton, Lyman & Prince, R. D. Copley, Jr., Los Angeles, Cal., on brief for Getty Oil Co.
John E. Bailey, Joan B. Oxford, Houston, Tex., George E. Jarvis, Los Angeles, Cal., on brief for Gulf Oil Corp.
Andrew J. Kilcarr, Vincent Tricarico, Donovan Leisure Newton & Irvine, Washington, D.C., Charles F. Rice, Donald L. Clarke, New York City, Don T. Hibner, Jr., Charles W. McCoy, Jr., Sheppard, Mullin, Richter & Hampton, Los Angeles, Cal., Stephen D. Houck, Donovan, Leisure, Newton & Irvine, New York City, on brief for Mobil Oil Corp.
Sullivan & Cromwell, John W. Dickey, Richard G. Menaker, Howard D. Burnett, New York City, Adams, Duque & Hazeltine, John H. Brinsley, Robert M. Mitchell, Catherine Hunt Ruddy, Los Angeles, Cal., Lewis J. Ottaviani, Neal F. Lehman, John B. Sivertsen, Robert A. Youngberg, Bartlesville, Okl., on brief for Phillips Petroleum Co.
John J. Quinn, Lawrence A. Cox, Kadison, Pfaelzer, Woodard, Quinn & Rossi, Los Angeles, Cal., on brief for Powerine Oil Co.
William Simon, William R. O'Brien, Robert M. Bruskin, Howrey & Simon, Washington, D.C., Stephen D. Long, Houston, Tex., on brief for Shell Oil Co.
Pillsbury, Madison & Sutro, Richard J. MacLaury, Robert A. Mittelstaedt, David C. Stegall, San Francisco, Cal., on brief for Standard Oil Company of Cal M. J. Keating, Paula J. Clayton, Chicago, Ill., Oliver F. Green, Jr., Paul, Hastings, Janofsky & Walker, Los Angeles, Cal., on brief for Standard Oil Co. (Indiana).
J. King Rosendale, Cleveland, Ohio, Paul C. Shafer, Jr., Payne Morehouse Shafer & Harlow, Fairfield, Conn., for Standard Oil Company (Ohio) & RP Oil Inc.
John G. Harkins, Jr., Pepper, Hamilton & Scheetz, Philadelphia, Pa., Robert M. Dubbs, Radnor, Pa., on brief for Sun Oil Co., Inc.
Robert D. Wilson, Sharon S. Jacobs, White Plains, N.Y., Leslie C. Randall, Los Angeles, Cal., James O. Sullivan, Allan J. Reniche, William D. Hughes, Sullivan, Jones & Archer, San Diego, Cal., Milton J. Schubin, Barry Willner, Kaye, Scholer, Fierman, Hays & Handler, New York City, on brief for Texaco Inc.
Edward S. Renwick, Gregory C. Brown, Hanna & Morton, Los Angeles, Cal., on brief for Thums Long Beach Co.
John E. Sparks, Brobeck, Phleger & Harrison, San Francisco, Cal., Edward A. McFadden, Asst. Gen. Counsel, Robert G. Pott, Los Angeles, Cal., Harold E. Zahner, Los Angeles, Cal., on brief for Union Oil Co.
Michael I. Spiegel, Wayne M. Liao, Deputy Attys. Gen., San Francisco, Cal., argued for plaintiffs-appellants; George Deukmejian, Atty. Gen., Sanford N. Gruskin, Asst. Atty. Gen., on brief.
Robert K. Corbin, Atty. Gen., Allison B. Swan, Chief, Counsel, Antitrust Division, David B. Goldstein, Asst. Attys. Gen., Phoenix, Ariz., for State of Ariz.
Dave Frohnmayer, Atty. Gen., Richard L. Caswell, Nancy K. Nakata, Asst. Attys. Gen., Salem, Or., for State of Or.
Ken Eikenberry, Atty. Gen., John R. Ellis, Jay Uchida, Jon P. Ferguson, James Kirkham Johns, Asst. Attys. Gen., Consumer Protection & Antitrust, Seattle, Wash., for State of Wash.
Jim Smith, Atty. Gen., Bill L. Bryant, Jr., Larry H. Evans, Jerome W. Hoffman, David G. Guest, Asst. Attys. Gen., Antitrust Unit, Tallahassee, Fla., for State of Fla.
John J. Easton, Atty. Gen., Jay I. Ashman, Chief, Antitrust Division, Glen A. Jarrett, Asst. Atty. Gen., Montpelier, Vt., for State of Vt.
Chauncey H. Browning, Atty. Gen., Charles G. Brown, Deputy Atty. Gen., Director, Antitrust Division, Charleston, W.Va., for State of W.Va.
Bronson C. La Follette, Atty. Gen., Michael L. Zaleski, Asst. Atty. Gen., Dept. of Justice, Madison, Wis., for State of Wis.
Gay Vanderpoel, Asst. Atty. Gen., Cheyenne, Wyo., for State of Wyo.
Tyrone C. Fahner, Atty. Gen., Thomas M. Genovese, Asst. Atty. Gen. & Chief, Antitrust Div., Thomas S. Malciauskas, Asst. Atty. Gen., Chicago, Ill., on brief for all States.
Before ANDERSON, SKOPIL and CANBY, Circuit Judges.
These interlocutory appeals are before us under 28 U.S.C. Sec. 1292(b). They arise from a group of antitrust actions brought against sixteen oil companies by the states of Arizona, California, Florida, Oregon, and Washington. The complaints, which are similar in all material respects, allege violations of the Sherman Act, 15 U.S.C. Secs. 1 & 2. The portions of the complaints material to these appeals allege that the defendant oil companies combined and conspired to raise or stabilize the prices of refined petroleum products.
The cases were filed at various times between July 1973 and February 1977. In August 1976, the Judicial Panel on Multidistrict Litigation transferred the then-pending cases to the Central District of California for coordinated pretrial proceedings. In re Petroleum Products Antitrust Litigation, 419 F.Supp. 712 (Jud.Pan.Mult.Lit.1976). Subsequent cases were filed directly in the Central District.
The plaintiff States sue in their proprietary capacity and on behalf of their citizens as parens patriae pursuant to section 4C of the Clayton Act, 15 U.S.C. Sec. 15c. They also seek to represent classes of government entities and a consumer sub-class consisting of natural persons who purchased defendants' products prior to the September 30, 1976 effective date of the states' parens patriae authority.
The primary goal of plaintiffs in this action is the recovery of antitrust damages for allegedly inflated retail gasoline prices paid by the plaintiffs and the classes they seek to represent. The principal difficulty plaintiffs have faced is the Supreme Court's intervening announcement in Illinois Brick v. Illinois, 431 U.S. 720, 97 S.Ct. 2061, 52 L.Ed.2d 707 (1977), that indirect purchasers of price-fixed goods may not maintain an antitrust damage action for overcharges passed on to them by direct purchasers from the defendant. According to the plaintiff States, an estimated 80 percent of the retail gasoline transactions at issue here involve indirect purchases from non-defendant retail dealers.
Shortly after the decision in Illinois Brick, the defendant oil companies moved to dismiss portions of the plaintiff States' complaints on various grounds, among them that plaintiffs are indirect purchasers barred by Illinois Brick from recovering damages. On August 26, 1980, the district court issued an order on the applicability of Illinois Brick to the instant proceedings. Portions of this order are the subject of the first interlocutory appeal.
The second interlocutory appeal is from a subsequent order of the district court denying plaintiffs' motion for certification of the consumer sub-class. The district court made the required certification of the two appeals and the plaintiffs filed timely petitions for permission to appeal. This court granted both interlocutory appeals and the cases were calendared together for oral argument. We now affirm the district court's orders in both cases.
The first appeal is from the district court's certification to us of paragraphs "third" and "fourth" of its August 26, 1980 order. 1 At paragraph "third," the district court ruled: "[A]ll claims for damages based on purchases from firms that competed with the defendants but did not conspire with them to violate the antitrust laws are dismissed." Paragraph "fourth" states: "[T]he plaintiffs may amend their complaints to allege that defendants conspired with retail dealers of petroleum products only if the conspiring retail dealers are joined as parties defendant." For the reasons set forth below, we affirm these rulings.
Paragraph "Third"
Paragraph "third" dismissed plaintiffs' claims for damages sought under an "umbrella" theory of liability. 2 Plaintiffs contend that defendants' successful price-fixing conspiracy created a "price umbrella" under which non-conspiring competitors of the defendants raised their gasoline prices to an artificial level at or near the fixed price. Since defendants are allegedly responsible for creating a market situation where conduct of this nature is possible, plaintiffs argue that defendants should be held responsible for damages resulting from their competitors' higher prices.
The umbrella theory is essentially a consequential damages theory. It seeks to hold price-fixers liable for harm allegedly flowing from the illegal conduct even though the price-fixing defendants received none of the illegal gains and were uninvolved in their...
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