Associated General Contractors of California, Inc. v. California State Council of Carpenters
In Associated General Contractors of California v. California State Council of Carpenters, 459 U.S. 519, 535 n. 31, 103 S.Ct. 897, 907 n. 31, 74 L.Ed.2d 723 (1983), a leading antitrust damages case, two unions alleged that a multi-employer association and its members coerced certain business entities into entering into contractual relationships with nonunion firms.
The unions contended that this coercion served to restrain the trade of certain unionized firms and thereby adversely affected and injured the business activities of the unions with which the unionized firms had contracts.
In holding that the unions did not have standing under section 4, the Court emphasized the fact that it was the unionized firms and not the unions who were the objects of the restraint in trade. The Court therefore rejected the unions' damages claim, relying on, among other factors, the potential for duplicative recovery or complex apportionment of damages, as well as the indirectness of the injury and the existence of more direct victims. 459 U.S. at 539-44, 103 S.Ct. at 909-12.
In Associated General Contractors of Cal., Inc., v. California State Council of Carpenters, 459 U.S. 519, 529-35 (1983), the Supreme Court set forth six factors that must be evaluated on a case-by-case basis to determine whether a plaintiff has standing to bring an antitrust action.
These factors are:
(1) the causal connection between the alleged antitrust violation and harm to the plaintiff;
(2) an improper motive;
(3) the nature of the plaintiff's alleged injury and whether the injury was of a type that Congress sought to redress with the antitrust laws ("antitrust injury");
(4) the directness with which the alleged market restraint caused the asserted injury;
(5) the speculative nature of the damages;
(6) the risk of duplicative recovery or complex apportionment of damages. See id.
In Associated General Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519 (1983), a union alleged that members of a contractors' trade association coerced member and nonmember contractors and landowners to give some of their business to nonunion contracting firms, thereby injuring unionized firms, as well as the business activities of the unions.
In denying the union standing, the Court examined the following factors:
(1) the causal connection between the alleged violation and the injury to the plaintiff; (2) the intent to cause harm to the plaintiff; (3) the nature of the injury, i.e., whether the plaintiff was either a consumer of the defendants' goods or a competitor of the defendants; and (4) the directness of the injury.
The Court concluded that the plaintiff union was neither a consumer nor a competitor of the defendants; in particular, the Court noted that "the existence of more direct victims of the alleged conspiracy" (unionized firms) should ensure adequate protection of the markets directly involved.
Finally, the Court found it significant that the type of harm allegedly suffered by the union was more clearly the concern of the labor laws.
In Associated General Contractors of California, Inc., v. California State Council of Carpenters, 459 U.S. 519, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983), the Court's latest pronouncement on the question, a labor union was not permitted to challenge an alleged restraint under which an association of building and construction contractors coerced landowners and others into using only nonunion contractors and subcontractors on their construction projects.
The union, though clearly injured by the restraint, was held to be too remote a party to bring the suit. In its opinion, the Court recognized the "contradictory and inconsistent results" in this area due to the use of ill-defined tests for standing such as "target area," "direct injury" or "zone of interests." Associated General Contractors, 459 U.S. at 536 n. 33, 103 S.Ct. at 907 n. 33.
In Associated General Contractors, Inc. v. California State Council of Carpenters, 459 U.S. 519, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983) (AGC ), a union sued a contractors' association on antitrust grounds, alleging a conspiracy to force builders and contractors to use primarily nonunionized subcontractors.
The court of appeals had framed the union's argument for antitrust standing (which it had accepted) in much the same way that the Funds frame their argument here: "In support of the Union's standing, the court of appeals reasoned that the Union was within the area of the economy endangered by a breakdown of competitive conditions, not only because injury to the Union was a foreseeable consequence of the antitrust violation, but also because that injury was specifically intended by the defendants." (Id. at 525, 103 S.Ct. 897.)
After discussing at length proximate cause principles likely incorporated by Congress into the Sherman Act in 1890, see id. at 530-34 & nn.20-25, 103 S.Ct. 897,5 the Supreme Court outlined a number of factors to consider in the flexible antitrust standing analysis:
(1) the causal connection between defendant's wrongdoing and plaintiff's harm;
(2) the specific intent of defendant to harm plaintiff;
(3) the nature of plaintiff's alleged injury (and whether it relates to the purpose of the antitrust laws, i.e., ensuring competition within economic markets);
(4) "the directness or indirectness of the asserted injury";
(5) whether the "damages claim is ... highly speculative";
(6) "keeping the scope of complex antitrust trials within judicially manageable limits," i.e., "avoiding either the risk of duplicate recoveries on the one hand, or the danger of complex apportionment of damages on the other." (Id. at 537-38, 540, 542-44, 103 S.Ct. 897)
In Associated General Contractors v. California State Council of Carpenters, U.S. 103 S.Ct. 897, 74 L.Ed.2d 723 (1983), the Supreme Court held that a union could not sue under the Clayton Act for damages resulting from alleged coercion of an employer organization of certain third parties without a direct showing of injury to itself.
In reaching its decision the Court relied upon the fact that antitrust laws were designed to protect consumers and competitors from anticompetitive practices, and that unions, which typically serve to restrain competition, do not fall within the law's protected zone of interest.
The Court further noted that union-management relations were governed by the national labor law.
In Associated General Contractors of Cal. v. Cal. State Council of Carpenters, 459 U.S. 519, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983), the Supreme Court stated that determining "whether plaintiff may recover for the injury it allegedly suffered by reason of the defendants' coercion against certain third parties ... requires us to evaluate the plaintiff's harm, the alleged wrongdoing by the defendants, and the relationship between them." (Id. at 535, 103 S.Ct. 897.)
"The label "antitrust standing" has traditionally been applied to some of the elements of this inquiry. As commentators have observed, the focus of the doctrine of `antitrust standing' is somewhat different from that of standing as a constitutional doctrine." (Id. at 535 n. 31, 103 S.Ct. 897.)
In Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 529, 103 S.Ct. 897, 904, 74 L.Ed.2d 723 (1983), the Supreme Court declined to articulate a bright-line rule and instead directed courts to consider a number of factors when deciding whether a plaintiff would be an efficient enforcer. 459 U.S. at 536-37, 103 S.Ct. at 908.
The Court reviewed these factors in Todorov v. DCH Healthcare Auth., 921 F.2d 1438, 1448 (11th Cir.1991): the directness or indirectness of the injury, the remoteness of the injury, whether other potential plaintiffs were better suited to vindicate the harm, whether the damages were highly speculative, the extent to which the apportionment of damages was highly complex and would risk duplicative recoveries, and whether the plaintiff would be able to efficiently and effectively enforce the judgment. 921 F.2d at 1451-52.
The Court also made clear that other factors not identified by the Supreme Court might be relevant depending on the case. Id. at 1452.
These factors are often intertwined, and no single factor will necessarily predominate over the others. See Associated Gen., 459 U.S. at 537-46, 103 S.Ct. at 908-12 (discussing and applying the factors).