Minnesota Mining & Manufacturing Company v. New Jersey Wood Finishing Company/Dissent Black

Mr. Justice BLACK, dissenting.

Section 4B of the Clayton Act bars a private antitrust damage suit unless brought within four years after the cause of action arises. Section 5(b) of the Act, as amended, 15 U.S.C. § 16(b) (1964 ed.), however, suspends the running of this limitation period '(w)henever any civil or criminal proceeding is instituted by the United States to prevent, restrain, or punish violations of any of the antitrust laws * *  * .' I am unable to agree with the Court's holding that a purely administrative proceeding initiated by the Federal Trade Commission and decided by that same regulatory agency is the kind of 'civil or criminal proceeding *  *  * instituted by the United States *  *  * ' which tolls the statute of limitations under § 5(b). The Court itself concedes that even as amended 'the precise language of § 5(b) does not clearly encompass Commission proceedings' and that 'there is little in the legislative history to suggest that Congress consciously intended to include Commission actions within the sweep of the tolling provision.' And the Solicitor General, while urging as amicus curiae the result the Court reaches today, candidly admits that this 'result is difficult and perhaps impossible to justify in terms of conventional analysis of the text and legislative history * *  * .' It is because I think both the language of the statute and the legislative history persuasively, if not conclusively, show that Congress did not intend the construction the Court gives § 5(b) today, that I am unable to agree with its decision.

The whole of § 5, now divided into subdivisions (a) and (b), was passed in response to President Wilson's 1914 plea to Congress to enact a law designed to make it easier for antitrust victims to collect damages through private lawsuits since preparing an antitrust case against a major corporate defendant was a larger task than most injured persons could undertake. To accomplish that single purpose he recommended to Congress, as the Court notes, two things-that these victims be permitted to seek 'redress upon the facts and judgments proved and entered in suits by the Government' and also that 'the statute of limitations * *  * be suffered to run against such litigants only from the date of the conclusion of the Government's action.' 51 Cong.Rec. 1964. Congress accepted the President's recommendation and passed § 5, a single section in two paragraphs, making 'a final judgment or decree * *  * rendered in any criminal prosecution or in any suit or proceeding in equity brought by or on behalf of the United States *  *  * prima facie evidence' against a civil antitrust defendant and tolling the statute of limitations during the pendency of 'any suit or proceeding in equity or criminal prosecution *  *  * instituted by the United States *  *  * .' This language of § 5 as it passed the Congress in 1914 clearly did not refer to administrative proceedings but to antitrust suits or criminal prosecutions instituted by the Government in civil or criminal courts. Moreover, the purpose and effect of the two parts of this provision were obviously complementary, permitting the injured party to utilize a final judgment obtained by the Government and also providing a means whereby the injured party could await the result of the government action confident that his suit would not be barred by the statute of limitations. In the words of one of the committee reports, the 'entire provision is intended to help persons of small means who are injured in their property or business by combinations or corporations violating the antitrust laws.' H.R.Rep.No.627, 63d Cong., 2d Sess., 14. (Emphasis supplied.) See S.Rep.No.698, 63d Cong., 2d Sess., 45. Therefore, both the language and the complementary nature of the two paragraphs of § 5 ought to show beyond any doubt that the whole section as passed was intended to apply to the same kind of proceeding in the same kind of tribunal that is a proceeding brought in a civil or criminal court, the only tribunal which in common understanding has power to render the kind of 'final judgment or decree' mentioned in § 5(a). Furthermore, since the two paragraphs of § 5 when offered and when passed were regarded as an entity because of their identical language and purpose, it is not surprising that the Senators and Congressmen addressing themselves to § 5 did not specifically direct their remarks to the tolling provision as distinct from the effect to be given a court judgment or decree. Those discussing the measure naturally treated the 'suit or proceeding in equity' or 'criminal prosecution' set out in both paragraphs in identical terms as referring to the same kind of proceeding in the same kind of tribunal, namely a court. It is true that the language was changed in 1955 from 'suit or proceeding in equity' and 'criminal prosecution' to 'civil or criminal proceeding,' the present language, but the legislative history of the 1955 amendment affirmatively shows that there was no intention to affect in any way the kind of court proceedings necessary to suspend the statute of limitations. Thus, I am unable to go along with the Court in construing the tolling provision of § 5(b) as though it applies to both court and Trade Commission proceedings while treating § 5(a) as though it may apply to court proceedings only. Such a holding would, in my judgment, run counter to the whole legislative history of the 1914 Act.

I am setting out as an Appendix some of the legislative history of the original Act and of the 1955 amendment, which points out specifically something which does not surprise me at all: that while Congress was ready to make the final judgment of a court prima facie evidence against a defendant, it was at the same time entirely unwilling to give such effect to administrative hearings and orders and was also unwilling to toll the statute of limitations during the pendency of such proceedings. It is true that many administrative agencies now conduct hearings, make findings, and issue orders in a way more or less comparable to courts. I doubt, however, that the time has even yet come when Congress would be willing to compel judges and juries to treat administrative orders as prima facie proof of a violation of law, either civil or criminal, or to treat those proceedings as though they were conducted in a court of law with all the protections there afforded litigants.

I would reverse this judgment.

APPENDIX TO OPINION OF MR. JUSTICE BLACK, DISSENTING.

THE 1914 ACT.

Herewith for illustration are statements made about § 5 of the 1914 Clayton Act by Senators and Congressmen particularly interested in § 5, all of whom took part in the preparation and sponsorship of the 1914 bill or the discussions that took place as it went through the House and Senate.

Senator Walsh, the spokesman for the Judiciary Committee, led the fight for the House version of § 5 and defended it on the ground that the defendant 'has had an opportunity to try out before a court, with all the forms of the law, every question involved in the lawsuit. * *  * ' 51 Cong.Rec. 13851. (Emphasis added.) And Senator Walsh later added that 'Here the party has had his day in court. He has tried every issue, and it is simply a question, now that he has had it tried, whether he may insist upon a second trial.' 51 Cong.Rec. 13857. (Emphasis added.) Opponents of the 'conclusive evidence' proposal of the House bill never challenged the premise, implicit in the remarks of Senator Walsh and others, that only judgments rendered in judicial proceedings were contemplated by § 5. Not once did any member of Congress suggest that under the House version, administrative findings based upon evidence which would not be admissible in a court should be conclusive of the defendant's liability in a later treble-damage action.

Senator Walsh, in arguing that his proposal would not violate the Constitution, again emphasized that § 5 did not apply to administrative orders, but only to judgments or decrees of the courts:

'I want to say just a word with reference to the authorities     to which the attention of the Senate has been invited *  *  *. Nobody questions them. They all lay down the rule that in an     action brought against an individual who has never      theretofore had his day in court you can not make a      certificate or a recital or an order of an administrative      board or anything of that kind conclusive evidence against      him.' 51 Cong.Rec. 13856-13857. (Emphasis added.) On the other hand, there were Senators who thought a judgment or decree for a defendant should be equally binding on a treble-damage plaintiff. In opposing this idea, Senator White argued:

'Then, Mr. President, as has been said, it is burdensome     enough to require parties to the litigation themselves to be      bound by the findings of a court or jury in a particular      case. So many things that we can not at the time possibly     foresee influence such decisions. The way in which the     evidence is produced may have its effect upon a jury or a      court.

'The manner in which the case is handled by the lawyers     employed may determine in the mind of a jury or a court what      the verdict or the judgment shall be, and yet, Mr. President,      those things should probably not have been controlling      influences in the conclusions reached.' 51 Cong.Rec. 13900.     (Emphasis added.)

And Senator Cummins said: 'But when the suit is brought, then the judgment or decree of the court in the suit that has been brought by the Government would be prima facie evidence of violation of the antitrust law * *  * .' 51 Cong.Rec. 13850. (Emphasis added.)

When the bill left the conference committee and went back to the House, the managers were called on to defend the changes against charges that elimination of the criminal penalties had emasculated the bill. Chairman Webb of the House Judiciary Committee attempted to describe the proposed enforcement procedures in the strongest possible light. After reading the provision vesting enforcement responsibility in the Trade Commission, he stated:

'Now, the value of these two sections is this: That they not     only give the individual the right to sue for treble damages      where he pleases, and we not only suspend the statute of limitations against an individual if a      Government suit is brought against a trust, but we also      require the Federal Trade Commission to stop these practices      and take those guilty of such practices into court.

'But that is not all. Some argue that after the Trade     Commission takes jurisdiction that excludes individuals from      pursuing these other remedies. The bill further provides:

"No order of the commission or board or the judgment of the     court to enforce the same shall in any wise relieve or      absolve any person from any liability under the antitrust      acts.'

'So you have three or four distinct remedies, all of which     may be invoked at the same time.' 51 Cong.Rec. 16274.     (Emphasis added.)

It is clear therefore that Chairman Webb distinguished between suits by the 'Government'-the suits to which the tolling provision applied-and proceedings of the Federal Trade Commission. He believed that the statute was suspended only when actions were brought under the direction of the Attorney General. This was confirmed a few moments later by the following exchange:

'Mr. HARDY. Under the bill does the Government have the     authority to bring suit for injunction as well as private      parties?

'MR. WEBB. Yes. Section 15 gives the district attorneys under     the direction of the Attorney General the right to apply for      an injunction.' 51 Cong.Rec. 16276.

The day following Chairman Webb's remarks Representative Floyd, another of the House managers, again attempted to persuade the House that the enforcement scheme contemplated by the bill was strong:

'That is not all. Under section 5 of the bill any private     litigant injured by the unlawful acts of any corporation where the Government of the United States has      proceeded against such corporation and obtained a judgment,      either in a court of law or equity, is allowed the use of      that judgment or decree to show the unlawful acts of the      combination to the full extent that it would be an estoppel      between the Government and the original offender. * *  * That      is a new remedy and a most efficient remedy. The Government     of the United States, acting in behalf of all of its      citizens, prosecutes a trust, convicts it either in a      criminal court or a civil court, and the private litigant,      injured by the unlawful acts of such trust, has nothing to do      in order to recover the three-fold damages except to prove      the amount of damages and that the injury was done by this      trust or corporation. * *  *

'But that is not all. There are several other remedies     provided in this bill. Under section 11 the violation of     sections 2, 3, 7, and 8 may be enforced, respectively, by the      Trade Commission, by the Interstate Commerce Commission, or      by the Federal Reserve Board.' 51 Cong.Rec. 16319. (Emphasis     added.)

Another relevant discussion in the House is the following:

'Mr. McKENZIE: If this section is left in the bill, do you     not feel and believe that this decree that is mentioned in      this section should be the decree of the court of last resort      the Supreme Court of the land?

'Mr. VOLSTEAD. No.

'Mr. McKENZIE. You think it would be good policy to leave a     matter of such great importance in the hands of an inferior      court?

'Mr. VOLSTEAD. Yes.' 51 Cong.Rec. 9079.

As originally presented to the House, § 5 also made a 'judgment or decree' rendered in a 'suit or proceeding in equity brought by or on behalf of the United States' conclusive against any prospective treble-damage plaintiff. Opponents of this clause vigorously challenged the constitutionality of binding a party who had never had his 'day in court.' The debates made it clear time and again that the proceeding contemplated was an action brought for the United States by the Attorney General, not an administrative proceeding:

'Mr. SISSON. * *  * (D)oes the gentleman believe that his      rights in the court should be determined upon the questions      raised by the Attorney General of the United States?

'Mr. PROUTY. Why, certainly not; the Constitution expressly     prohibits it. In other words, the Attorney General could go     in and prevent my having a trial before a jury.

'Mr. SISSON. That is the point I had in mind.

'Mr. PROUTY. By instituting a proceeding in equity and having     the case tried.

'Mr. SISSON. That is the point I had in mind, that the     Attorney General, if he was disposed to do so-we would not      charge that of any particular Attorney General-might cook up      a case which would directly defeat the rights of every      individual if he had been injured.' 51 Cong.Rec. 9492.

Defenders of the proposition, on the other hand, stated:

'Mr. CULLOP. My question is this: Supposing a collusive suit     was brought and the defendant won on the issue, then is every      outsider barred from any further suit? According to this     language he is.

'Mr. FLOYD of Arkansas * *  *.

' * *  * My answer to that proposition is that if the time ever      comes in this Government when any Attorney General will enter into collusive suits with corporations      and combinations engaged in unlawful acts, it will be an evil      day for our Republic, a day when every statute will become      useless and justice will become a mockery.' 51 Cong.Rec. 9489.

Furthermore, an amendment was in fact offered to the Senate which arguably would have resulted in bringing administrative proceedings within the scope of the phrase 'suit or proceeding.' The amendment met with opposition and was withdrawn. The House bill originally dealt only with a 'suit or proceeding in equity,' and did not apply to criminal proceedings. After the bill reached the Senate, Senator Bryan moved to strike out the words 'in equity,' so the provision would read simply 'any suit or proceeding.' As observed by Senator Reed, 'That would cover any kind of proceeding.' Senator Culberson proposed a substitute adding the phrase 'criminal prosecution or,' and retaining the phrase 'in equity.' Senator Bryan withdrew his broader proposal and accepted Senator Culberson's limited substitute. 51 Cong.Rec. 13897-13898.

The House initially passed the Act with four substantive sections, each having a criminal penalty attached. All of the criminal penalties were removed in the Senate or in conference. Senator Reed of Missouri, leading the opposition to the bill, charged repeatedly that the Clayton Act had been stripped of all force and effectiveness:

'We end by providing a smooth and easy road which may be     traveled through the years, until finally a commission shall      issue an innocuous, non-enforcible decree, a decree that can      be vitalized only by being affirmed by a court. At the     conclusion of all the litigation we propose to impose no      penalty, levy no fine, send no one to jail, and we permit the      culprit to preserve his swag!' 51 Cong.Rec. 15867. (Emphasis     added.) Had the proponents of the measure contemplated the use of administrative findings as evidence it appears that the obvious answer to Senator Reed would have been that the bill does have teeth for the Commission's order would be admissible as prima facie evidence against the 'culprit,' and private claimants would be able to reclaim 'his swag,' three times over. Neither this, nor any other answer challenging the accuracy of Senator Reed's statement, was heard on the Senate floor, although his complaint was repeatedly made. And in the House, Representative Nelson charged:

'Finally, the penalty is cut out; they can do all these     things, and the Trade Commission can only say, 'You must not      to it any more.' Then there is the long delay in an appeal to      the courts; and they go through the courts. And then what? There may be an injunction issued, but they have got away     with the loot with impunity.' 51 Cong.Rec. 16325.

For further examples see 51 Cong.Rec. 9079, 9169, 9488-9490, 9492, 9494-9495, 12789-12790, 13850-13851, 13856-13857, 13897 13898, 13900, 14262, 14328, 15867, 15948, 15950, 16003, 16044, 16046, 16149, 16154, 16274, 16281, 16319, 16325.

THE 1955 AMENDMENT.

The committee reports on the amendment detailed carefully every change the bill would make, but there is absolutely no evidence that there was any intent to amend § 5(b) for the purpose of suspending the statute of limitations during the pendency of Federal Trade Commission hearings. See H.R.Rep. No. 422, 84th Cong., 1st Sess.; S.Rep.No.619, 84th Cong., 1st Sess., U.S.Code Cong.Admin. News 1955, p. 2328. And the debates and the hearings affirmatively show that no change was intended. For example, in the 1951 hearings Representative Patman appeared before the House subcommittee considering the bill and questioned whether § 5 had been changed to deny the right of a private litigant to use a judgment obtained by the Government. Representative Wilson assured him that: 'This doesn't change the present law.' Representative Keating, the author of the bill, then commented: 'I think there is a slight change in existing law where it refers to the subsequent numbers. There has to be a change in phraselogy in that because of what we have done in section 4. I believe that is the only change.' Hearings on H.R. 3408 before the Subcommittee on Study of Monopoly Power of the House Committee on the Judiciary, 82d Cong., 1st Sess., Part 3, 98-100. And on the floor of the House in the discussion of the bill which became the present law, Representative Quigley stated:

'It was the specific purpose of the committee in reporting     this bill to in no way affect the substantive rights of      individual litigants. It is simply a procedural change and     suggested with the thought of setting up a uniform statute of      limitations. That is the sole purpose.' 101 Cong.Rec. 5131.