Frank J. Ostrofe v. H.S. Crocker Company, Inc.

740 F.2d 739, 117 L.R.R.M. (BNA) 2105, 1984 U.S. App. LEXIS 19542
CourtCourt of Appeals for the Ninth Circuit
DecidedAugust 15, 1984
Docket77-3985
StatusPublished
Cited by88 cases

This text of 740 F.2d 739 (Frank J. Ostrofe v. H.S. Crocker Company, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Frank J. Ostrofe v. H.S. Crocker Company, Inc., 740 F.2d 739, 117 L.R.R.M. (BNA) 2105, 1984 U.S. App. LEXIS 19542 (9th Cir. 1984).

Opinions

BROWNING, Chief Judge:

Plaintiff brought this suit under Section 4 of the Clayton Act to recover treble damages for injuries resulting from a violation of the Sherman Antitrust Act. The district court dismissed a part of plaintiffs claim for lack of standing to sue under Section 4, and granted summary judgment as to the remainder. We reversed. Ostrofe I, 670 F.2d 1378 (9th Cir.1982). The Supreme Court vacated our judgment and remanded for further consideration in light of Associated General Contractors v. California State Council of Carpenters, 459 U.S. 519, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983). See 460 U.S. 1007, 103 S.Ct. 1244, 75 L.Ed.2d 475 (1983).

We first summarize the holding in Associated General Contractors, then recount the facts in Ostrofe, and finally consider the three bases on which we held Ostrofe had standing: (1) as a victim of a boycott in the market for personal services; (2) as a victim of a boycott to effectuate a price fixing conspiracy in the labels market; and (3) as a victim of a unilateral discharge by one of the conspirators in furtherance of the price fixing conspiracy. We note that Associated General Contractors did not address the first basis for standing, but conclude that Ostrofe clearly has standing on this basis in light of the determinative factors stated by the Supreme Court. Reexamining our finding of standing on the other two bases in light of Associated General Contractors, we conclude that Ostrofe also has standing both as a direct boycott victim who has sustained antitrust injury from the labels market conspiracy, and in [741]*741the alternative, if antitrust injury is construed narrowly, as a direct victim of a boycott undertaken as a means to accomplish the purpose of the price fixing conspiracy in the labels market — a case the Court specifically reserved.

I.

Associated General Contractors v. California State Council of Carpenters

Associated General Contractors deals only with the issue of standing to sue under Section 4. A union of carpenters and other construction workers brought suit under the antitrust laws against a group of building and construction contractors. The complaint alleged the defendants had restrained competition in the market for construction contracting by coercing landowners and others to enter into construction contracts with non-union contractors and subcontractors. This allegedly reduced the business of union contractors and subcontractors which, in turn, diminished the business activities of plaintiff union.

The Court held that not all parties who suffer consequential harm have standing to sue for antitrust damages, even if the harm is intentional. It did not, however, announce a new test for determining whether a party injured by an antitrust violation could recover treble damages. Rather, the principal message of the case is that it is “virtually impossible to announce a black-letter rule that will dictate a result in every case. Instead, previously decided cases identify factors that circumscribe and guide the exercise of judgment in deciding whether the law affords a remedy in specific circumstances.” Associated General Contractors, 103 S.Ct. at 907-08. The Court enumerated these factors, drawing largely upon its previous decisions and those of this and other courts of appeals. The factors to be considered, according to the Court, include the nature of the injury in relation to the purpose of the antitrust laws, the directness of the injury, and the potential for duplicative recovery or complex apportionment of damages. Id. at 908-13. The plaintiff union in Associated General Contractors satisfied the causal connection and intentional harm factors set forth by the Supreme Court, but the Court concluded that on balance the other relevant considerations “weigh[ed] heavily against judicial enforcement of the Union’s antitrust claim.” Id. at 913.

The Court focused on the nature of plaintiff’s injury in relation to the purpose of the Sherman Act: assuring competition and protecting the economic freedom of participants in the relevant market, citing Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 97 S.Ct. 690, 50 L.Ed.2d 701 (1977) and Blue Shield of Virginia v. McCready, 457 U.S. 465, 102 S.Ct. 2540, 73 L.Ed.2d 149 (1982); Associated General Contractors, 103 S.Ct. at 908-09.

The union’s claims arose from alleged restraints caused by defendant in the market for construction contracting. Id. at 903. The Court noted the union was neither a consumer nor competitor in that market, and it was unclear whether its interests — improving wages and working conditions — would be helped or hurt if competition in that market were enhanced. Id. at 909.

The injury to the union was only indirect, allegedly resulting from the injury to the direct victims of the conspiracy — the union contractors who lost business because of coercion directed against builders to compel them to deal with non-union contractors. Id. at 910. The existence of direct victims of the antitrust violation diminished the justification for affording standing to a more remote party such as the union. Id. at 911. Denying the union standing was unlikely to leave a significant antitrust violation undetected or unremedied. Id. The union's damages were highly speculative, and any attempt to assess them would have involved a danger of duplicative recovery among the several layers of victims. Id. at 911-12.

II.

Ostrofe v. H.S. Crocker Company

Frank J. Ostrofe, former marketing director of H.S. Crocker, Inc., filed suit [742]*742against Crocker for damages for injuries resulting from a violation of the Sherman Act. The complaint alleged that Crocker and other manufacturers of paper lithograph labels conspired to restrain interstate trade and commerce in such labels in violation of Section 1 of the Act, 15 U.S.C. § 1 (1976), and that the conspiracy was effectuated in part by coercing Ostrofe, as Crocker’s sales manager, to rig bids, fix prices, and allocate markets. Ostrofe violated the agreement by competing freely for business. Crocker’s co-conspirators complained to Crocker’s executive officers, who in turn warned Ostrofe to cooperate. Ostrofe refused. He was forced to resign from his job as Crocker’s sales manager and alleged he was boycotted from further employment in the industry.

Crocker moved to dismiss for lack of standing under Section 4. The district court granted the motion in part, holding that Ostrofe lacked standing to attack the alleged conspiracy to restrain competition in the sale of labels, of which the agreement to terminate and boycott Ostrofe was allegedly a part. The Court rejected Ostrofe’s motion to amend the complaint to allege that his termination was a unilateral act undertaken by Crocker to effectuate the conspiracy.

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Cite This Page — Counsel Stack

Bluebook (online)
740 F.2d 739, 117 L.R.R.M. (BNA) 2105, 1984 U.S. App. LEXIS 19542, Counsel Stack Legal Research, https://law.counselstack.com/opinion/frank-j-ostrofe-v-hs-crocker-company-inc-ca9-1984.