State of Missouri v. Stupp Bros. Bridge & Iron Co.

248 F. Supp. 169, 1965 U.S. Dist. LEXIS 10039, 1966 Trade Cas. (CCH) 71,654
CourtDistrict Court, W.D. Missouri
DecidedNovember 22, 1965
Docket14277-1
StatusPublished
Cited by12 cases

This text of 248 F. Supp. 169 (State of Missouri v. Stupp Bros. Bridge & Iron Co.) is published on Counsel Stack Legal Research, covering District Court, W.D. Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State of Missouri v. Stupp Bros. Bridge & Iron Co., 248 F. Supp. 169, 1965 U.S. Dist. LEXIS 10039, 1966 Trade Cas. (CCH) 71,654 (W.D. Mo. 1965).

Opinion

JOHN W. OLIVER, District Judge.

This civil anti-trust case pends on defendants’ motion (1) for summary judgment dismissing the entire action predicated on the theory that (a) as to most of the structural steel involved, plaintiffs were indirect purchasers lacking capacity to sue under Section 4 of the Clayton Act (15 U.S.C.A. § 15); and (b) as to the remainder of the structural steel involved, no conspiracy can be said to exist because only one defendant — Stupp Bros. Bridge & Iron Company — was capable of handling the fabrication on particular projects which did involve direct purchases ; and on (2) a motion for partial summary judgment based on the alleged ground that the plaintiffs “passed on” a substantial portion of the excessive overcharges to the United States under the Federal Aid to Highways Act.

Pursuant to various pre-trial conferences and orders, the parties have filed two separate stipulations. Other facts are presented by various affidavits filed by both sides.

The legal questions presented have been ably briefed at length (the briefs total over 150 pages). We have also had the benefit of an amicus curiae brief filed by the United States. We have studied those briefs and the numerous cases cited therein. We now state our reasons why the relief prayed for in both defendants’ motions should be denied.

I. Section J of the Clayton Act

The stipulated facts upon which defendants contend they are entitled to summary judgment in connection with their first point were stated in defendants’ brief as they appear in Appendix A attached hereto. Plaintiffs do not quarrel with defendants’ paraphrase of the stipulated facts but suggest that significant facts were omitted from defendants’ statement. Plaintiffs’ supplementary statement of stipulated facts is attached as Appendix B.

Defendants’ legal theory concerning the meaning of Section 4 of the Clayton Act is stated as follows:

This first section of defendants’ motion is based on the fact that plaintiffs had no dealings with defendants in the transactions claimed to give rise to plaintiffs’ claim for treble damages, that plaintiffs purchased no structural steel from defendants (except on Projects Nos. IN 891 (5)c, IN 891(5)d, I 892(17), I 229(16)b, and I 229(16)c where Stupp Bros, was the prime contractor. See Sec. II, infra.) that the structural steel allegedly affected by defendants’ claimed conspiracy was purchased by prime contractors and subcontractors for use in the construction of new steel bridges, which *171 were in each instance themselves part of and integrated into a larger highway project. These facts are undisputed and are recited in Stipulation No. 1. Based on these facts plaintiffs are too remote from the alleged conspiracy to sue for the incidental injury they allegedly incurred. (P. 7 of Defendants’ Brief 1 ).

Defendants’ argument is at least two-pronged. We shall state defendants’ arguments in considerable detail because of the recurring presentation of some facet of the pass-on theory in the trial of civil anti-trust cases.

Defendants contend that “indirect purchasers may not maintain private antitrust suits” (p. 8 D.Br.) and that “the cases rejecting the ‘pass on’ doctrine establish that plaintiffs have no standing to maintain this suit” (p. 25 D.Br.).

Defendants also argue that “the rule of damages in private anti-trust actions is governed by Southern Pacific Co. v. Darnell-Taenzer Lumber Co., 245 U.S. 531, 534 [38 S.Ct. 186, 62 L.Ed. 451] (1918)” (p. 7 D.Br.); and that “two relevant lines of authority- have developed from the application of the DarnellTaenzer principle to cases brought under Section 4 of the Clayton Act” (p. 8 D.Br.). Defendants contend that one line of cases is exemplified by Commonwealth Edison Co. v. Allis-Chalmers Mfg. Co., 7th Cir. 1963, 315 F.2d 564, cert. denied Illinois v. Commonwealth Edison Co., 375 U.S. 834, 84 S.Ct. 64, 11 L.Ed.2d 64, and that the other line of cases, is exemplified by Commonwealth Edison Co. v. Allis-Chalmers Mfg. Co., 7th Cir. 1964, 335 F.2d 203.

In regard to the latter, defendants assert that the pass-on defense cases require a further holding that, “except in extremely rare and unusual situations not here relevant [an obvious reference to the Oil Jobber cases], the first purchaser— and not subsequent purchasers — is the only one who can institute and prosecute a suit for alleged conspiratorial overcharges” (p, 8 D.Br.).

Defendants insist that there must be a “direct injury before one may sue under Section 4 of the Clayton Act” (p. 14 D. Br.) and that “one who derives his injury through a contract with one directly injured is too remote from the violation to recover any damage it incidentally caused him” <p. 14 D.Br.).

Defendants’ review of typical bid tabulations attached to Stipulation No. 1 (Exhibits D to X, inclusive, attached thereto) is tendered in support of its argument that those tabulations and defendants’ review “show that plaintiffs were not directly injured in their business and property as required by Section 4 of the Clayton Act and that any injury suffered by plaintiffs was causally connected to the alleged conspiracy of defendants” (p. 23 D.Br.).

In specific regard to “pass-on”, defendants contend that “the cases rejecting the ‘pass on’ doctrine are merely the other side of the coin that one indirectly injured can not sue” (p. 25 D.Br.). Defendants add that “the ‘pass on’ cases establish that, except in the rare Oil Jobber case situation, which is not this one, the party first to pay an overcharge is the party to sue to recover it” and that because “plaintiffs were the second or third parties to pay [they] therefore have no cause of action” (D.Br. p. 37).

Plaintiffs insist at the outset that “this is not a passing on case” (page 2 of Plaintiffs’ Brief 2 ). Plaintiffs argue that:

Defendants are charged with having participated in an unlawful scheme in violation of the Federal Antitrust Laws, which was directed solely against plaintiffs. This is not a situation in which plaintiffs merely happened to be somewhere in the target area. This is a case where plaintiffs were the only target and consequently plaintiffs were not only hit but they were the only bull’s eye on which aim was taken. In such circumstances discussion of the passing-on doctrine or the law relating *172 to indirect purchasers is irrelevant. (P. 2 P.Br.)

Both parties cite Judge Boldt’s decision in State of Washington et al. v. General Electric Co. et al., W.D.Wash., 246 F.Supp. 960, decided March 31, 1965. Defendants, in anticipation of plaintiffs’ reliance on that case, contend that this case “is unlike State of Washington v. General Electric” (P. 28 D.Br.).

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248 F. Supp. 169, 1965 U.S. Dist. LEXIS 10039, 1966 Trade Cas. (CCH) 71,654, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-of-missouri-v-stupp-bros-bridge-iron-co-mowd-1965.