Standard Oil Co. of California v. Arizona

• Decision Date: 24 July 1984
• Docket Number: No. 83-5517,83-5517
• Citation: 738 F.2d 1021
• Parties: , 1984-2 Trade Cases 66,115 STANDARD OIL COMPANY OF CALIFORNIA, et al., Appellants, v. ARIZONA, California, Florida, Oregon, and Washington, Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1021

738 F.2d 1021

39 Fed.R.Serv.2d 946, 1984-2 Trade Cases 66,115

STANDARD OIL COMPANY OF CALIFORNIA, et al., Appellants, v. ARIZONA, California, Florida, Oregon, and Washington, Appellees.

No. 83-5517.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Oct. 7, 1983.

Decided July 24, 1984.

Richard MacLaury, San Francisco, Cal., Adlai S. Hardin, Jr., New York City, for appellants.

Patricia A. Cutler, Deputy Atty. Gen., San Francisco, Cal. for appellees.

Appeal from the United States District Court for the Central District of California.

Before SKOPIL and PREGERSON, Circuit Judges, and MARQUEZ, ^* District Judge.

PREGERSON, Circuit Judge:

In this antitrust suit, five states allege that major oil companies have conspired to fix the prices of refined petroleum products. The issue to be resolved on this interlocutory appeal is whether the states are entitled to a jury trial of legal claims. ¹ The district court held that the states are entitled to a jury. We affirm.

I. FACTS

Arizona, California, Florida, Oregon, and Washington brought separate actions charging major oil companies with conspiring to fix prices of refined petroleum products. The states brought suit in their proprietary capacities, as class representatives, and as parens patriae. The actions were transferred to the Central District of California for coordinated pretrial proceedings under 28 U.S.C. Sec. 1407 (1982).

The states demanded a jury trial of the legal issues in their antitrust actions. The oil companies moved to strike the jury demand, arguing that the Seventh Amendment does not guarantee the right of jury trial to a state government. The district court held that the states are entitled to a jury trial of legal issues and certified the issue for immediate appeal under 28 U.S.C. Sec. 1292(b) (1982). Thirty-four states collaborated on an amicus curiae brief in support of the plaintiff states. The City of Long Beach, plaintiff in another lawsuit which is part of the multi-district proceedings, obtained leave to appear as amicus curiae to protect its own right to jury trial. ²

The sole question presented on this appeal is whether states have the right to a jury trial of legal issues in antitrust actions in federal court. To answer this question, we must determine whether states have the right to a jury trial under federal statute or the Seventh Amendment. See Lehman v. Nakshian, 453 U.S. 156, 165 n. 13, 101 S.Ct. 2698, 2704 n. 13, 69 L.Ed.2d 548 (1981) (there is no general right to jury trial in federal courts; the right must derive from statute or the Seventh Amendment).

II. STANDARD OF REVIEW

Whether states are entitled to a jury trial of legal antitrust issues in federal court is purely a question of law, requiring us to construe federal statutes and the Seventh Amendment. Therefore, the district court's determination is freely reviewable. Hoptowit v. Ray, 682 F.2d 1237, 1245 (9th Cir.1982); Burlington Northern, Inc. v. Weyerhaeuser Co., 719 F.2d 304, 307 (9th Cir.1983).

Our review is guided by the axiom that the right of jury trial in civil cases is a basic, fundamental right, and that "any seeming curtailment of the right to jury trial should be scrutinized with the utmost care." In re U.S. Financial Securities Litigation, 609 F.2d 411, 421 (9th Cir.1979), cert. denied, 446 U.S. 929, 100 S.Ct. 1866, 64 L.Ed.2d 281 (1980) (quoting Dimick v. Schiedt, 293 U.S. 474, 486, 55 S.Ct. 296, 301, 79 L.Ed. 603 (1935)).

III. STATES' RIGHT TO JURY TRIAL UNDER FEDERAL ANTITRUST LAWS

The right to jury trial in civil cases may be provided by federal statute. Congress may provide for the right to jury trial in instances where the Seventh Amendment would not otherwise guarantee such a right. See, e.g., 28 U.S.C. Sec. 1346(a)(1) (providing for jury trial against the United States in tax refund cases); 28 U.S.C. Sec. 1873 (providing for jury trial in admiralty actions involving shipping on Great Lakes). Because we must, if at all possible, resolve cases on statutory grounds before reaching constitutional questions, see Escambia County, Florida v. McMillan, --- U.S. ----, ----, 104 S.Ct. 1577, 1579, 80 L.Ed.2d 36 (1984) (per curiam), we consider first whether Congress has expressly provided the right to jury trial under the antitrust laws. ³ If so, the right clearly extends to states because it is well established that states are "persons" capable of bringing treble damage actions under the Sherman and Clayton Acts. See Georgia v. Evans, 316 U.S. 159, 162, 62 S.Ct. 972, 974, 86 L.Ed. 1346 (1942) ("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 [antitrust laws].")

As a "person" a state is entitled to the same treatment as an individual or corporation. Cf. Pfizer, Inc. v. Government of India, 434 U.S. 308, 318-19, 98 S.Ct. 584, 590-91, 54 L.Ed.2d 563 (1978) (India could sue for treble damages "to same extent as any other person injured by an antitrust violation ...."). Thus, if the antitrust laws secure the right to a jury trial, a state's right to a jury trial would be clear. ⁴

Unfortunately, the question whether Congress intended to statutorily create a right to jury trial in antitrust actions independent of the Seventh Amendment is far from clear. As we discuss below, the antitrust statutes themselves are silent on the matter, their legislative history provides no positive evidence, and Supreme Court precedent is equivocal.

A. Legislative History

The Sherman and Clayton Acts ⁵ are silent on the subject of jury trial. This silence, however, would not preclude a finding that the statutory scheme implicitly provides a right to jury trial independently of the Seventh Amendment. In a recent case, the Supreme Court found an implicit right to jury trial where the statute in question was silent on the subject. Lorillard v. Pons, 434 U.S. 575, 583, 98 S.Ct. 866, 871, 55 L.Ed.2d 40 (1978). ⁶ In Lorillard, the Court noted that Congress incorporated Fair Labor Standards Act (FLSA) (29 U.S.C. Secs. 201-219) procedures into the Age Discrimination in Employment Act (ADEA) (29 U.S.C. Secs. 621-634) knowing that the right to jury trial under the FLSA was well-established by the courts. The Court interpreted Congress' express incorporation of FLSA procedures as an indication of Congress' intent to guarantee a right to jury trial under the ADEA. Lorillard, 434 U.S. at 584-85, 98 S.Ct. at 872.

A district court and a circuit court have conducted Lorillard examinations of the antitrust laws, seeking signs of an implicit right to jury trial. The district court found evidence in the legislative history "insufficient to allow an extension of the reasoning of Lorillard to the antitrust statutes." Zenith Radio Corp. v. Matsushita Electric Industrial Co., 478 F.Supp. 889, 902 (E.D.Pa.1979). The Third Circuit reversed the district court on other grounds, but affirmed the district court's conclusion that there is no Lorillard -type implicit right of jury trial in the antitrust laws. In re Japanese Electronic Products Antitrust Litigation, 631 F.2d 1069, 1075-76 (3d Cir.1980).

References in the legislative histories of the Sherman and Clayton Acts show that the enacting legislators assumed that treble damage claims would be tried to juries. But the basis for the assumption seems to be the Seventh Amendment, not any language or implicit guarantee in the statutes. The debates on the Sherman Act duly note that the Seventh Amendment would provide for jury trials in treble damage actions, see 21 Cong.Rec. 2643 (1890) (remarks of Senator Gray), cited in In re Japanese Electronic Products Antitrust Litigation, 631 F.2d at 1076. Similarly, in the legislative history of the Clayton Act, there are various remarks showing that Congressmen expected that the constitutional right to jury trial would apply in treble damage actions. For example, certain Congressmen were concerned that the Seventh Amendment would be violated by a provision making findings of fact in government-prosecuted suits conclusive in subsequent private actions. See 51 Cong.Rec. 9491 (1914) (remarks of Reps. Green and Scott) quoted in Zenith Radio Corp., 478 F.Supp. at 903-04 n. 23.

In short, the legislative history shows that Congress expected that a jury trial would be available in treble damage actions under the antitrust laws. The legislative history, however, does not show that Congress intended to guarantee jury trial by virtue of the antitrust laws themselves "where the Seventh Amendment would not." In re Japanese Electronic Products Antitrust Litigation, 631 F.2d at 1076.

B. Supreme Court Pronouncements

The Supreme Court has never determined the precise source of the right to jury trials in antitrust cases. Nonetheless, troublesome dicta in one line of cases does suggest that a right to jury trial is secured directly by the antitrust laws. The problem started in Fleitmann v. Welsbach Street Lighting Co., 240 U.S. 27, 29, 36 S.Ct. 233, 234, 60 L.Ed. 505 (1916) (Holmes, J.), where the Court dismissed a treble damage action brought as a derivative suit because allowing the suit to proceed in equity would deprive the antitrust defendant of the right to jury trial. "[W]hen a penalty of triple damages is sought to be inflicted, the statute should not be read as attempting to authorize liability to be afforded otherwise than through the verdict of a jury in a court of common law. On the contrary, it plainly provides the latter remedy and it provides no other." 240 U.S. at 29, 36 S.Ct. at 234 (citation omitted).

At first reading, Justice Holmes' language in Fleitmann seems to be saying that the antitrust laws provide trial by jury in a court of common law and no other remedy. An equally plausible interpretation of the language, however, is that the antitrust laws do not violate the...