Opinion · Supreme Court of the United States
Reiter v. Sonotone Corp.
442 U.S. 330
- Type
- Opinion
- Court
- Supreme Court of the United States
- Jurisdiction
- Federal
- Date
- 1979-06-11
- Topic
- general
holding that consumers of retail goods and services have standing to sue under the antitrust laws when they suffer a price increase resulting from anti-competitive conduct | holding that consumers of retail goods and services have standing to sue under the antitrust laws when they suffer a price increase resulting from anticompetitive conduct | holding that district courts are vested with broad power and discretion in matters of certification and management of class actions | recognizing that district courts “have broad power and discretion vested in them by Fed. Rule Civ. Proc. 23” | recognizing that district courts “have broad power and discretion vested in them by Fed. Rule Civ. Proc. 23” | holding that “injury to business or property” was not limited to commercial interests | holding that Title VII may not be bypassed through resort to Section 1985(3) | holding that courts must give effect to every word when interpreting a statute | holding that "injury to business or property" was not limited to commercial interests | holding that the phrase "business or property" in the context of the Clayton Act, ch. 323, sec. 4, 38 Stat. 731, 15 U.S.C. sec. 15 , does not denote physical or emotional harm to a person. | reiterating that “[c]anons of construction ordinarily suggest that terms connected by a disjunctive be given separate meanings, unless the context dictates otherwise” | noting that private antitrust suits “provide a significant supplement to the limited resources available at the Department of Justice” | holding that consumers have standing under the Clayton Act | directing that when construing a statute a court must give “terms connected by a disjunctive ... separate meanings, unless the context dictates otherwise” | explaining that "[c]anons of construction ordinarily suggest that terms connected by a disjunctive be given separate meanings , unless the context dictates otherwise" (emphasis supplied) | explaining that canons of statutory construction “ordinarily suggest that terms connected by a disjunctive be given separate meanings, unless the context dictates otherwise” | noting that district courts “have broad power and discretion vested in them” as to the “certification and management of potentially cumbersome” class actions | noting that district courts “have broad power 2 and discretion vested in them by Fed. Rule Civ. Proc. 23” | noting that district courts “have broad power and discretion vested in them” as to the “certification and management of potentially cumbersome” class actions | noting that, in statutory construction, every word of the statute should be given effect if possible | stating that "[c]anons of construction ordinarily suggest that terms connected by a disjunctive be given separate meanings, unless the context dictates otherwise" | explaining that the phrase “business or property” in the Clayton Act, 15 U.S.C. § 15, “retains restrictive significance” and “would ... exclude personal injuries suffered” | noting that district courts “have broad power and discretion vested in them” as to the “certification and management of potentially cumbersome” class actions | noting that district courts “have broad power and discretion vested in them” as to the “certification and management of potentially cumbersome” class actions | noting that district courts “have broad power and discretion vested in them” as to the “certification and management of potentially cumbersome” class actions | explaining that words connected by a disjunctive “or” ordinarily have separate meaning and independent significance | stating that “[cjanons of construction ordinarily suggest that terms connected by a disjunctive be given separate meanings, unless the context dictates otherwise” | noting that district courts “have broad power and discretion vested in them” as to the “certification and management of potentially cumbersome” class actions | noting that district courts “have broad power and discretion vested in them” as to the “
Citator
- Cited by
- 548 opinions
REITERv. SONOTONE CORP.,442 U.S. 330(1979)
REITERv. SONOTONE CORP. ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT.
No. 78-690.
Argued April 25, 1979.
Decided June 11, 1979.
(a) Statutory construction must begin with the language employed by Congress. The word "property" has a naturally broad and inclusive meaning comprehending, in common usage, anything of material value owned or possessed. Congress' use of the disjunctive "or" in the phrase "business or property" indicates "business" was not intended to modify "property," nor was "property" intended to modify "business." Giving the word "property" the independent significance to which it is entitled in this context does not destroy the restrictive significance of the phrase "business or property" as a whole. Pp. 337-339.
(b) Monetary injury, standing alone, may be injury in one's "property" within the meaning of § 4.Chattanooga Foundry Pipe WorksPage 331v.Atlanta,203 U.S. 390. Thus, the fact that petitioner was deprived of only money is no reason to conclude that she did not sustain a "property" injury. Pp. 339-340.
(c) Nor does petitioner's status as a "consumer" who purchased goods at retail for personal use change the nature of the injury she suffered or the intrinsic meaning of "property" in § 4. Pp. 340-342.
(d) The legislative history reflects that the treble-damages remedy was designed to protect consumers, and that no one questioned the right of consumers to sue under § 4. Thus, to the extent that § 4's legislative history is relevant, it also supports the conclusion that a consumer deprived of money by reason of anticompetitive conduct is injured in "property" within the meaning of § 4. Pp. 342-344.
(e) The fact that allowing class actions such as this may add a significant burden to the federal courts' already overcrowded dockets is an important but not a controlling consideration, since Congress created the § 4 treble-damages remedy precisely for the purpose of encouragingprivatechallenges to antitrust violations. P. 344.
(f) Respondents' arguments that the cost of defending consumer class actions will have a potentially ruinous effect on small businesses in particular and will ultimately be paid by consumers, are policy considerations more properly addressed to Congress than to this Court; in any event they cannot govern the reading of the plain language of § 4. Pp. 344-345.579 F.2d 1077, reversed and remanded.
BURGER, C. J., delivered the opinion of the Court, in which all other Members joined, except BRENNAN, J., who took no part in the decision of the case. REHNQUIST, J., filed a concurring opinion,post, p. 345.
I
Petitioner brought a class action on behalf of herself and all persons in the United States who purchased hearing aids manufactured by five corporations, respondents here. Her complaint alleges that respondents have committed a variety of antitrust violations, including vertical and horizontal price fixing.1Because of these violations, the complaint alleges, petitioner and the class of persons she seeks to represent have been forced to pay illegally fixed higher prices for the hearing aids and related services they purchased from respondents' retail dealers. Treble damages and injunctive relief are sought under §§ 4 and 16 of the Clayton Act,38 Stat. 731, 737, as amended,15 U.S.C. § 15and26.
Respondents moved for dismissal of the complaint or summary judgment in the District Court. Among other things, respondents argued that Reiter, as a retail purchaser of hearing aids for personal use, lacked standing to sue for treble damages under § 4 of the Clayton Act because she had not been injured in her "business or property" within the meaning of the Act.
The District Court held that under § 4 a retail purchaser is injured in "property" if the purchaser can show that antitrust violations caused an increase in the price paid for the article purchased. The District Court relied onChattanoogaFoundry Pipe Worksv.Atlanta,203 U.S. 390,396(1906), and the legislative history of the Clayton Act set forth inBrunswick Corp. v.Pueblo Bowl-O-Mat, Inc.,429 U.S. 477,Page 336486 n. 10 (1977), indicating that Congress intended to give a § 4 remedy to consumers.435 F. Supp. 933,935-938(Minn. 1977).
The District Court determined, however, that the respondents had raised a "controlling question of law as to which there is substantial ground for difference of opinion."id., at 938, and accordingly certified the question for interlocutory review under28 U.S.C. § 1292(b). It then stayed further proceedings in the case and declined to express any opinion on the merits of the other issues raised by respondents' motions or on the certifiability of the class.
The Court of Appeals reversed, holding that retail purchasers of consumer goods and services who allege no injury of a commercial or business nature are not injured in their "business or property" within the meaning of § 4.579 F.2d 1077(CA8 1978). Noting the absence of any holdings on this precise issue by this Court or other courts of appeals, the court reasoned that the phrase "business or property" was intended to limit standing to those engaged in commercial ventures. It relied on the legislative history and this Court's statement inHawaiiv.Standard Oil Co.,405 U.S. 251,264(1972), that "business or property" referred to "commercial interests or enterprises." A contrary holding, the Court of Appeals observed, would add a substantial volume of litigation to the already strained dockets of the federal courts and could be used to exact unfair settlements from retail businesses. Small and medium-sized retailers would be especially hard hit by "gigantic consumer class actions," and granting standing to retail consumers might actually have an anticompetitive impact as a consequence. Accordingly, the Court of Appeals thought "it sensible as a matter of policy and compelled as a matter of law that consumers alleging no injury of a commercial or competitive nature are not injured in their property under section 4 of the Clayton Act." 579 F.2d. at 1087.Page 337
We granted certiorari,439 U.S. 1065(1979).2We reverse.3
II
As is true in every case involving the construction of a statute, our starting point must be the language employed by Congress. Section 4 of the Clayton Act,38 Stat. 731, provides:
"Any personwho shall be injured in his businessorpropertyby reason ofanythingforbidden in the antitrust laws may sue therefor in any district court of the United States . . . without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney's fee."15 U.S.C. § 15(emphasis added).
On its face, § 4 contains little in the way of restrictive language. InPfizer Inc. v.Government of India,434 U.S. 308(1978), we remarked:
"`The Act is comprehensive in its terms and coverage, protecting all who are made victims of the forbidden practicesPage 338by whomever they may be perpetrated.'MandevilleIsland Farms, Inc. v.American Crystal Sugar Co.,334 U.S. 219,236; cf.Perma Life Mufflers, Inc. v.InternationalParts Corp.,392 U.S. 134,138-139. And the legislative history of the Sherman Act demonstrates that Congress used the phrase `any person' intending it to have its naturally broad and inclusive meaning. There was no mention in the floor debates of any more restrictive definition."Id., at 312.
Similarly here, the word "property" has a naturally broad and inclusive meaning. In its dictionary definitions and in common usage "property" comprehends anything of material value owned or possessed. See,e. g., Webster's Third New International Dictionary 1818 (1961). Money, of course, is a form of property.
Respondents protest that, if the reference to "property" in § 4 means "money," the term "business" then becomes superfluous, for every injury in one's business necessarily involves a pecuniary injury. They argue that if Congress wished to permit one who lost only money to bring suit under § 4, it would not have used the restrictive phrase "business or property"; rather, it would have employed more generic language akin to that of § 16, for example, which provides for injunctive relief against any "threatened loss or damage."15 U.S.C. § 26. Congress plainly intended to excludesomecategory of injury in choosing the phrase "business or property" for § 4. Only a "commercial interest" gloss, they argue, both gives the phrase the restrictive significance intended for it and at the same time gives independent significance to the word "business" and the word "property." The argument of respondents is straightforward: the phrase "business or property" means "business activity or property related to one's business." Brief for Respondents 11 n. 7.
That strained construction would have us ignore the disjunctive "or" and rob the term "property" of its independentPage 339and ordinary significance; moreover, it would convert the noun "business" into an adjective. In construing a statute we are obliged to give effect, if possible, to every word Congress used.United Statesv.Menasche,348 U.S. 528,538-539(1955). Canons of construction ordinarily suggest that terms connected by a disjunctive be given separate meanings, unless the context dictates otherwise; here it does not. SeeFCCv.Pacifica Foundation,438 U.S. 726,739-740(1978). Congress' use of the word "or" makes plain that "business" was not intended to modify "property," nor was "property" intended to modify "business."
When a commercial enterprise suffers a loss of money it suffers an injury in both its "business" and its "property." But neither term is rendered redundant by recognizing that a consumer not engaged in a "business" enterprise, but rather acquiring goods or services for personal use, is injured in "property" when the price of those goods or services is artificially inflated by reason of the anticompetitive conduct complained of. The phrase "business or property" also retains restrictive significance. It would, for example, exclude personal injuries suffered.E. g., Hammanv.United States,267 F. Supp. 420,432(Mont. 1967). Congress must have intended to exclude some class of injuries by the phrase "business or property." But it taxes the ordinary meaning of common terms to argue, as respondents do, that a consumer's monetary injury arising directly out of a retail purchase is not comprehended by the natural and usual meaning of the phrase "business or property." We simply give the word "property" the independent significance to which it is entitled in this context. A consumer whose money has been diminished by reason of an antitrust violation has been injured "in his . . . property" within the meaning of § 4.
Indeed, this Court indicated as much inChattanoogaFoundry Pipe Worksv.Atlanta,203 U.S. 390(1960). There the city alleged that the anticompetitive conduct of the defendantsPage 340had caused the city to pay more for water pipes purchased for use in the city's water system. The defendants answered that the pecuniary injury resulting from the alleged overcharges did not injure the city in its "business or property" within the meaning of § 4. This Court, without relying on the fact that the city was engaged in a business enterprise, stated:
"The city was . . . injured in its property, at least, if not in its business of furnishing water, by being led to pay more than the worth of the pipe. A person whose property is diminished by a payment of money wrongfully induced is injured in his property."203 U.S., at 396.
The holding ofChattanooga Foundrycould well have been grounded on the undisputed fact that the city was engaged in the commercial enterprise of supplying water for a charge and, therefore, engaged in a business. It was not uncommon for both municipalities and private companies to own and operate competing waterworks at the turn of the century. In operating a municipal public utility, the city was in a real sense engaged in the "business of furnishing water" when it purchased the pipe to carry water from the city's reservoirs to its customers.Ibid.
Yet, the Court's holding inChattanooga Foundrywas deliberately grounded on the premise that the city had been injured in its "property" — independent of any injury it had sustained in its "business of furnishing water" — because the defendants' antitrust violation caused it to pay a higher price for the pipe than it otherwise would have paid.Ibid.Chattanooga Foundrytherefore establishes that monetary injury, standing alone, may be injury in one's "property" within the meaning of § 4. Thus, the fact that petitioner Reiter was deprived of only money, albeit a modest amount, is no reason to conclude that she did not sustain a "property" injury.
Nor does her status as a "consumer" change the nature ofPage 341the injury she suffered or the intrinsic meaning of "property" in § 4. That consumers of retail goods and services have standing to sue under § 4 is implicit in our decision inGoldfarbv.Virginia State Bar,421 U.S. 773,780,782(1975). There we held that a bar association was subject to a treble-damages suit brought under § 4 by persons who sought legal services in connection with the purchase of a residence. Furthermore, we have often referred to "consumers" as parties entitled to seek damages under § 4 without intimating that consumers of goods and services purchased for personal rather than commercial use were in any way foreclosed by the statutory language from asserting an injury in their "property."E. g., Pfizer Inc. v.Government of India,434 U.S., at 313-315;Brunswick Corp. v.Pueblo Bowl-O-Mat, Inc.,429 U.S., at 486n. 10;Hanover Shoe, Inc. v.United Shoe MachineryCorp.,392 U.S. 481,494(1968);Mandeville Island Farmsv.American Crystal Sugar Co.,334 U.S. 219,236(1948).Hawaiiv.Standard Oil Co.,405 U.S. 251(1972), is not to the contrary. There we held that injury to a state's total economy, for which the state sought redress in itsparenspatriaecapacity, was not cognizable under § 4. It is true we noted that the words "business or property" refer to "commercial interests or enterprises," and reasoned that Hawaii could not recover on its claim for damage done to its "general economy" because such injury did not harm Hawaii's "commercial interests."405 U.S., at 264.
However, the language of an opinion is not always to be parsed as though we were dealing with language of a statute. Use of the phrase "commercial interests or enterprises," read in context, in no sense suggests that only injuries to a business entity are within the ambit of § 4. Respondents ignore the Court's careful use of the disjunctive and the naturally broad meaning of the term "interests" inHawaiiv.Standard Oil Co., supra. The phrase "commercial interests" was used there as a generic reference to the interests of thePage 342State of Hawaii as a party to a commercial transaction. This is apparent fromHawaii'sexplicit reaffirmance of the rule ofChattanooga Foundryand statement that, where injury to a state "occurs in its capacity as a consumer in the marketplace" through a "payment of money wrongfully induced." treble damages are recoverable by a state under the Clayton Act.Hawaiiv.Standard Oil Co., supra, at 263 n. 14. A central premise of our holding inHawaiiwas concern over duplicative recoveries. We noted that a "large and ultimately indeterminable part of the injury to the `general economy'" for which the State sued was "no more than a reflection of injuries to the `business or property' of consumers" for which, on a proper showing, they could recover in their own right.405 U.S., at 263-264.
Consumers in the United States purchase at retail more than $1.2 trillion in goods and services annually. 1978 Economic Report of the President 257 (Table B-1). It is in the sound commercial interests of the retail purchasers of goods and services to obtain the lowest price possible within the framework of our competitive private enterprise system. The essence of the antitrust laws is to ensure fair price competition in an open market. Here, where petitioner alleges a wrongful deprivation of her money because the price of the hearing aid she bought was artificially inflated by reason of respondents' anticompetitive conduct, she has alleged an injury in her "property" under § 4.
Nothing in the legislative history of § 4 conflicts with our holding today. Many courts and commentators have observed that the respective legislative histories of § 4 of the Clayton Act and § 7 of the Sherman Act, its predecessor, shed no light on Congress' original understanding of the terms "business or property."4Nowhere in the legislative recordPage 343is specific reference made to the intended scope of those terms. Respondents engage in speculation in arguing that the substitution of the terms "business or property" for the broader language originally proposed by Senator Sherman5was clearly intended to exclude pecuniary injuries suffered by those who purchase goods and services at retail for personal use. None of the subsequent floor debates reflect any such intent. On the contrary, they suggest that Congress designed the Sherman Act as a "consumer welfare prescription." R. Bork, The Antitrust Paradox 66 (1978). Certainly the leading proponents of the legislation perceived the treble-damages remedy of what is now § 4 as a means of protecting consumers from overcharges resulting from price fixing.E. g., 21 Cong. Rec. 2457, 2460, 2558 (1890). Because Congress in 1890 rejected a proposal to allow a group of consumers to bring a collective action as a class, some legislators questioned whether individual consumers would be willing to bring actions for relatively small amounts. See,e. g., id., at 1767-1768, 2569, 2612, 3147-3148, 3150. At no time, however, was therightof a consumer to bring an action for damages questioned.6
InBrunswick Corp. v.Pueblo Bowl-O-Mat, Inc., supra, after examining the legislative history of § 4, we described the Sherman Act as "conceived of primarily as a remedy for `[t]he people of the United States as individuals,' especially consumers," and the treble-damages provision of the Clayton Act as "conceived primarily as `open[ing] the door of justicePage 344to every man . . . and giv[ing] the injured party ample damages for the wrong suffered.'"429 U.S., at 486n. 10. Thus, to the extent that the legislative history is relevant, it supports our holding that a consumer deprived of money by reason of allegedly anticompetitive conduct is injured in "property" within the meaning of § 4.7
Respondents also argue that allowing class actions to be brought by retail consumers like the petitioner here will add a significant burden to the already crowded dockets of the federal courts. That may well be true but cannot be a controlling consideration here. We must take the statute as we find it. Congress created the treble-damages remedy of § 4 precisely for the purpose of encouragingprivatechallenges to antitrust violations. These private suits provide a significant supplement to the limited resources available to the Department of Justice for enforcing the antitrust laws and deterring violations. Indeed, nearly 20 times as many private antitrust actions are currently pending in the federal courts as actions filed by the Department of Justice. Administrative Office of the United States Courts Ann. Rep. 101, Table 28 (1978). To be sure, these private suits impose a heavy litigation burden on the federal courts; it is the clear responsibility of Congress to provide the judicial resources necessary to execute its mandates.
Finally, respondents argue that the cost of defending consumer class actions will have a potentially ruinous effect on small businesses in particular and will ultimately be paid byPage 345consumers in any event. These are not unimportant considerations, but they are policy considerations more properly addressed to Congress than to this Court. However accurate respondents' arguments may prove to be — and they are not without substance — they cannot govern our reading of the plain language in § 4.
District courts must be especially alert to identify frivolous claims brought to extort nuisance settlements; they have broad power and discretion vested in them by Fed. Rule Civ. Proc.23with respect to matters involving the certification and management of potentially cumbersome or frivolous class actions. See generally Durham Dibble, Certification: A Practical Device for Early Screening of Spurious Antitrust Litigation, 1978 B. Y. U. L. Rev. 299. Recognition of the plain meaning of the statutory language "business or property" need not result in administrative chaos, class-action harassment, or "windfall" settlements if the district courts exercise sound discretion and use the tools available.
The judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings consistent with this opinion.Reversed and remanded.
MR. JUSTICE BRENNAN took no part in the decision of this case.
- Page 334David Berger, H. Laddie Montague, Jr., Merrill G. Davidoff, StanleyJ. Friedman, Frederick P. Furth, Thomas R. Fahrner, Aaron M. Fine, andJosef D. Cooperfiled a brief for the plaintiffs inKennedy Smithv.ToyotaMotor Sales U.S. A. et al. asamici curiaeurging reversal. ↩
- Page 335 Specifically, Reiter alleges that respondents violated §§ 1 and 2 of the Sherman Act,26 Stat. 209, as amended,15 U.S.C. § 1and2, and §3of the Clayton Act,38 Stat. 731,15 U.S.C. § 14. She claims respondents restricted the territories, customers, and brands of hearing aids offered by their retail dealers, used the customer lists of their retail dealers for their own purposes, prohibited unauthorized retailers from dealing in or repairing their hearing aids, and conspired among themselves and with their retail dealers to fix the retail prices of the hearing aids. ↩
- Page 337 Differing views on this issue have been expressed by various courts. See,e. g., Reiterv.Sonotone Corp.,579 F.2d 1077(CA8 1978) (case below);Bravmanv.Bassett Furniture Industries,552 F.2d 90,98-99, and n. 23 (CA3), cert. denied,434 U.S. 823(1977);Clearyv.Chalk, 159 U.S.App.D.C. 415, 419 n. 17,488 F.2d 1315,1319n. 17 (1973), cert. denied,416 U.S. 938(1974);Theophilv.Sheller-Globe Corp.,446 F. Supp. 131(EDNY 1978);Gutierrezv.E. J.Gallo Winery Co.,425 F. Supp. 1221(ND Cal. 1977), appeal docketed, No. 77-1725 (CA9). ↩
- Page 337 The Court of Appeals expressly noted that Reiter's claim for injunctive relief under § 16 of the Clayton Act was not before it on interlocutory appeal.579 F.2d, at 1087n. 19. The court therefore expressed no view as to Reiter's standing to raise this claim. It also expressly refused to decide whether Reiter's claim for treble damages under § 4 was barred by the direct-purchaser rule ofIllinois Brick Co. v.Illinois,431 U.S. 720(1977).579 F.2d, at 1079n. 3. Accordingly, these issues are not before us. ↩
- Page 342 See,e. g., Hawaiiv.Standard Oil Co.,405 U.S. 251,261(1972);Weinbergv.Federated Department Stores, Inc.,426 F. Supp. 880,882-883(ND Cal. 1977), appeal docketed, No. 77-1547 (CA9); M. Forkosch, Page 343 Antitrust and the Consumer 2-3 (1956); Comment, Closing the Door on Consumer Antitrust Standing, 54 N.Y. U. L. Rev. 237, 242-243, 249-252 (1979). See also 1 P. Areeda D. Turner, Antitrust Law ¶ 106, pp. 14-16 (1978). ↩
- Page 343 As originally introduced, the bill that ultimately became the Sherman Act authorized "any person or corporation injured or damnified by [an unlawful] arrangement, contract, agreement, trust, or combination" to sue for damages thereby sustained. S. 1, 51st Cong., 1st Sess., § 2 (1889). ↩
- Page 343 Of course, the treble-damages remedy of § 4 took on new practical significance for consumers with the advent of Fed. Rule Civ. Proc.23. ↩
- Page 344 Although in no sense a controlling consideration, we note that our holding is consistent with the assumption on which Congress enacted the Hart-Scott-Rodino Antitrust Improvements Act of 1976,90 Stat. 1394,15 U.S.C. § 15cet seq. The text and legislative history of this statute make clear that in 1976 Congress believed that consumers have a cause of action under § 4, which the statute authorizes the states to assert in aparens patriaecapacity. See,e. g.,15 U.S.C. § 15c(a)(1),15c(a)(1) (B) (ii),15c(b)(2); H.R. Rep. No. 94-499, pp. 6, 9 (1975). See alsoIllinois Brick Co. v.Illinois,431 U.S., at 734n. 14. ↩