State v. Jonathan Logan, Inc.

482 A.2d 1, 301 Md. 63, 1984 Md. LEXIS 350
CourtCourt of Appeals of Maryland
DecidedOctober 4, 1984
Docket129, September Term, 1983
StatusPublished
Cited by11 cases

This text of 482 A.2d 1 (State v. Jonathan Logan, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State v. Jonathan Logan, Inc., 482 A.2d 1, 301 Md. 63, 1984 Md. LEXIS 350 (Md. 1984).

Opinion

RODOWSKY, Judge.

The construction of § 11-209(a) of the Maryland Antitrust Act, Md.Code (1975, 1983 Repl. Vol.), §§ 11-201 to 11-213 of the Commercial Law Article (the Md.Act) is the principal question presented in this case. 1 The State of Maryland, acting through the Antitrust Division of the Attorney General’s Office and alleging a resale price maintenance conspiracy in raincoats, brought this action under § ll-209(a). The State contends that the section authorizes an equity court to order the alleged price fixer to pay to the State for the benefit of retail purchasers the difference between the price they paid for the raincoats as affected by the conspiracy and the price which they would have paid but for the price fixing. The trial court held, on demurrer, that § ll-209(a) does not permit recovery of that monetary relief. In Part I hereof we shall explain why we agree with *65 the trial court on that issue. That court also held that the State had failed to state a claim for injunctive relief. In Part II we set forth the reasons for our concurrence in that conclusion.

On March 2, 1981, the State, expressly suing only in its sovereign capacity, filed this action against Jonathan Logan, Inc., (Logan) in the Eighth Judicial Circuit. The complaint described Logan as one of the nation’s largest manufacturers of apparel goods which through its Misty Harbor Division sells rainwear to resellers in Maryland and elsewhere throughout the United States. It was alleged that, from “a time prior to 1972 and continuing thereafter at least until April, 1977,” Logan had engaged in a combination or conspiracy in unreasonable restraint of trade “to fix, raise and maintain resale prices of [its] rainwear,” and that, unless enjoined, the unlawful combination would “continue or be renewed .... ”

Prayer B of the complaint asked the court to
[r]emove the effect of the violation complained of herein by compelling defendant, pursuant to Md.Com.Law Code Ann. § 11 — 209(a)(2)(i), to disgorge its ill gotten gains, making full restitution to the consumers of Jonathan Logan’s rainwear in the State of Maryland, in an amount as yet undetermined, such amount representing the price paid by those consumers in excess of that which would have been paid but for the aforementioned contract, combination or conspiracy.

Logan demurred on two grounds: (1) section ll-209(a) does not empower the State to recover monetary awards for consumers, and (2) the complaint failed to state a claim for injunctive relief. As to the latter point Logan relied, in part, on a 1979 Federal Trade Commission cease and desist order, the terms of which were broad enough to enjoin *66 Logan from the same conduct alleged by the State in the instant action. 2

The circuit court sustained Logan’s demurrer but did not prohibit further amendment of the claim for injunctive relief. The State, however, declined further to amend and, in order to eliminate any question concerning appealability of the judgment to be entered, voluntarily dismissed as to all relief other than (1) that sought in prayer B and (2) an appropriate injunction. Thereupon, the trial court dismissed the complaint with prejudice. From that order the State appealed. We granted the State’s petition for certiorari prior to consideration of the case by the Court of Special Appeals.

Section ll-209(a) provides for an enforcement action. It reads:

(a) Proceedings by Attorney General. —(1) The Attorney General shall institute proceedings in equity to prevent or restrain violations of § 11-204 and may require assistance from any State’s attorney for that purpose.
(2) In a proceeding under this section, the court shall determine whether a violation has been committed and enter any judgment or decree necessary to:
(i) Remove the effects of any violation it finds; and
(ii) Prevent continuation or renewal of the violation in the future.
(3) The court may exercise all equitable powers necessary for this purpose, including injunction, divestiture of property or business units, and suspension or termination of the right of a foreign corporation or association to do business in the State.

An analogous civil enforcement provision under the federal antitrust laws is found in the Sherman Act § 4, 15 U.S.C. § 4 (1982), although the degree of analogy is disputed by *67 the parties to this case. 3 In addition to civil enforcement proceedings brought by the Attorney General, actions for treble damages, for injunctive relief, or for both are authorized under the Md. Act by § 11-209(b). Under § 11-209(b)(2)(i) these “private” actions may be brought by “[a] person whose business or property has been injured or threatened with injury by a violation of § 11-204” of the Md. Act, and, by virtue of § 11-209(b)(1), the State, when injured in its business or property, “is a person having standing to bring an action under” § 11-209(b). 4 The com *68 parison in federal statutes for private actions is to the Clayton Act § 4, 15 U.S.C. § 15 (1982). 5

Under the State’s theory the prayer B type of relief is available in an enforcement action brought in equity by the Attorney General. The State labels the requested award of consumers’ excess payments as “restitution.” Utilization of this “equitable” remedy, says the State, will “[r]emove the effects” of the retail price maintenance combination and, by its deterrent effect, also “[pjrevent continuation or renewal of the violation in the future,” all as authorized by § 11-209(a)(2)(i) and (ii).

Logan’s position is that there can be no monetary award for the benefit of consumers in an enforcement action under § 11-209(a). It points out that a consumer who suffers a loss by way of overpayment resulting from the alleged violation of the Md. Act can recover that loss, trebled, under § 11-209(b), but that a § 11-209(b) action differs from an enforcement action under § ll-209(a). Logan emphasizes that, under the antitrust laws of the United States, courts have uniformly rejected claims brought by states attempting to use a parens patriae theory to collect damages on behalf of consumers. The rationale of those federal cases, *69 Logan urges, should be applied to an action predicated on § ll-209(a) and result in dismissal of the complaint.

Before we analyze the arguments in detail, three general observations will bring the issue more sharply into focus.

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Bluebook (online)
482 A.2d 1, 301 Md. 63, 1984 Md. LEXIS 350, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-v-jonathan-logan-inc-md-1984.