Adams v. Pan American World Airways, Inc.

828 F.2d 24, 264 U.S. App. D.C. 174, 1987 U.S. App. LEXIS 11571
CourtCourt of Appeals for the D.C. Circuit
DecidedSeptember 1, 1987
DocketNos. 86-5468, 86-5469, 86-5538 and 86-5540
StatusPublished
Cited by19 cases

This text of 828 F.2d 24 (Adams v. Pan American World Airways, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Adams v. Pan American World Airways, Inc., 828 F.2d 24, 264 U.S. App. D.C. 174, 1987 U.S. App. LEXIS 11571 (D.C. Cir. 1987).

Opinion

WILLIAMS, Circuit Judge:

This action is the fourth in a series of antitrust suits spawned by the collapse of Laker Airways Limited. The core allegation in each suit is that a group of airlines, an aircraft manufacturer and the latter’s subsidiary conspired to drive Laker out of business, in violation of §§ 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 1px solid var(--green-border)">2 (1982 & Supp. Ill 1985).1 The first set of actions, Laker I,2 was brought by Laker itself and culminated in a settlement requiring defendants to pay substantial sums to Laker’s stockholders, creditors, and attorneys. See Adams v. Pan American World Airways, Inc., 640 F.Supp. 683, 684 (D.D.C. 1986). The second, Laker II, was initiated by a class of transatlantic travelers asserting that the destruction of Laker forced them travel on more expensive airlines. This too was settled, with the defendants establishing a fund to provide plaintiffs reduced airfares for a five-year period. In re Atlantic Air Travel Antitrust Litigation, No. 84-1013, mem. order (March 18, 1986 D.D.C.) (approving settlement). The third, Laker III, was brought by a travel agent claiming that the demise of Laker caused it to lose business. This action was dismissed for want of standing. Brian Clewer, Inc. v. Pan American World Airways, Inc., No. 86-119 (C.D.Cal. May 21, 1986), aff'd, 811 F.2d 1507 (9th Cir.1987).

Plaintiffs in the present action, a group of 313 former Laker employees,3 allege that the illegal conspiracy cost them their jobs. As recompense they seek treble damages under § 4 of the Clayton- Act, 15 U.S.C. § 15 (1982). The District Court concluded that plaintiffs lacked standing to bring an antitrust action and granted defendants’ motion to dismiss. Adams v. [176]*176Pan American World Airways, Inc., 640 F.Supp. at 684-86. We affirm.

I.

Section 4 of the Clayton Act permits “any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws” to bring a treble-damages action. 15 U.S.C. § 15(a). This language, however, has never been read literally to allow suit by every party affected by an antitrust violation’s “ripples of harm.” Blue Shield of Virginia v. McCready, 457 U.S. 465, 476-77, 102 S.Ct. 2540, 2547, 73 L.Ed.2d 149 (1982).

The first prerequisite to maintaining a § 4 action is that the plaintiff have suffered the kind of injury the antitrust laws were designed to prevent. “The antitrust laws ... were enacted for ‘the protection of competition, not competitors.’ ” Brunswick Corp. v. Pueblo Bowl-O-Mat. Inc., 429 U.S. 477, 488, 97 S.Ct. 690, 697, 50 L.Ed.2d 701 (1977) (quoting Brown Shoe Co. v. United States, 370 U.S. 294, 320, 82 S.Ct. 1502, 1521, 8 L.Ed.2d 510 (1962)) (emphasis in original). Thus, only harm stemming from a reduction in competition qualifies as injury cognizable under the antitrust laws. E.g., id.; see also Cargill, Inc. v. Monfort of Colorado, Inc., — U.S. -, 107 S.Ct. 484, 93 L.Ed.2d 427 (1986) (extending Brunswick to claim for injunctive relief under § 16 of the Clayton Act, 15 U.S.C. § 26 (1982)).

In addition to alleging “antitrust injury,” the would-be claimant must show that it is a “proper plaintiff.” See Cargill, 107 S.Ct. at 489 n. 5; Associated General Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 535-46, 103 S.Ct. 897, 907-13, 74 L.Ed.2d 723 (1983). The Court’s guiding principle has been to exclude as plaintiffs those whose suits might “undermine[ ] the effectiveness of treble-damages suits.” Associated General, 459 U.S. at 545, 103 S.Ct. at 912 (citing Illinois Brick Co. v. Illinois, 431 U.S. 720, 745, 97 S.Ct. 2061, 2074, 52 L.Ed.2d 707 (1977)). Claims of remote victims could severely complicate an action by more direct ones, raising the latters’ costs of suit. Further, the interest in avoiding multiple recoveries may force courts to reduce awards to the direct victims. These impairments of direct victims’ incentive to sue could jeopardize the effectiveness of the treble-damage claim. Associated General, 459 U.S. at 544-46, 103 S.Ct. at 911-13; Blue Shield of Virginia v. McCready, 457 U.S. at 475 n. 11, 102 S.Ct. at 2546 n. 11; Illinois Brick, 431 U.S. at 745, 97 S.Ct. at 2074; cf. Cargill, 107 S.Ct. at 489-90 nn. 5, 6 (such concerns less relevant to suit for injunctive relief under § 16 of the Clayton Act, as duplicative lawsuits and multiple recoveries not involved). See generally Page, The Scope of Liability for Antitrust Violations, 37 Stan.L.Rev. 1445, 1483-98 (1985); Landes & Posner, Should Indirect Purchasers Have Standing to Sue Under the Antitrust Laws? An Economic Analysis of the Rule of Illinois Brick, 46 U.Chi.L.Rev. 602, 608-25 (1979).

Accordingly, once plaintiff has crossed the threshold by alleging a genuine antitrust injury (one deriving from a decrease in competition), the Court directs us to consider such factors as whether the injury is direct (compared to that of other victims), whether the claim for damages is “speculative,” and whether the case presents “the potential for duplicative recovery or complex apportionment of damages.” Associated General, 459 U.S. at 545, 103 S.Ct. at 912; see also id. at 538-45, 103 S.Ct. at 908-12.4

While plaintiffs allege an antitrust injury, we find that the other factors control[177]*177ling under Associated General preclude accepting them as proper plaintiffs.

II.

A. Antitrust Injury

The only market where an illegal restraint's alleged to have taken place is the transatlantic air transportation market. Amended Adams Complaint ¶ 46, Joint Appendix (“J.A.”) at 217-18. Plaintiffs supply services (their labor) to competitors selling in that market. While decreased competition will almost invariably harm consumers, its effects on suppliers such as plaintiffs are quite complex. Output is greater at competitive levels than in a cartelized market; everything else being equal, a competitive industry will require more employees, increasing job opportunities for persons such as plaintiffs. Indeed, plaintiffs represented at oral argument that none among them had managed to obtain employment comparable to that previously held with Laker.

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828 F.2d 24, 264 U.S. App. D.C. 174, 1987 U.S. App. LEXIS 11571, Counsel Stack Legal Research, https://law.counselstack.com/opinion/adams-v-pan-american-world-airways-inc-cadc-1987.