MINNESOTA MINING & MANUFACTURING CO. v. NEW JERSEY WOOD FINISHING CO.
No. 291
Supreme Court of the United States
Argued April 29, 1965. — Decided May 24, 1965.
381 U.S. 311
Albert G. Besser argued the cause and filed a brief for respondent.
Lewis C. Green and Gustav B. Margraf filed a brief for Reynolds Metals Co., as amicus curiae, urging reversal.
Briefs of amici curiae, urging affirmance, were filed by Solicitor General Cox, Assistant Attorney General Orrick, Frank Goodman, Robert B. Hummel and Irwin A. Seibel for the United States, and by Alex Akerman, Jr., Thomas A. Ziebarth and Robert E. Staed for Highland Supply Corp.
MR. JUSTICE CLARK delivered the opinion of the Court.
This private treble-damage antitrust action was brought by the New Jersey Wood Finishing Company against Minnesota Mining and Manufacturing Company and the
vides that a “civil or criminal proceeding . . . instituted by the United States to prevent, restrain, or punish violations of any of the antitrust laws” suspends the running of the statute of limitations during the pendency thereof and for one year thereafter with respect to private actions arising under those laws and based on any matter complained of in the government suit. The questions here are whether proceedings by the Federal Trade Commission toll the running of the § 4B statute of limitations to the same extent as do judicial proceedings and, if they do, whether the claim of New Jersey Wood is based on “any matter complained of” in the Commission action. The District Court denied Minnesota Mining‘s motion to dismiss, holding that the four-year statute had been tolled by § 5 (b) and that this suit was timely filed. 216 F. Supp. 507. The Court of Appeals affirmed. 332 F. 2d 346. We granted certiorari because of a conflict between circuits7 and the importance of the question in the administration of the Clayton Act. 379 U. S. 877.
I.
New Jersey Wood is engaged in the manufacture of electrical insulation materials, some of which it sells to independent distributors who, in turn, sell to wire and
In August 1956 Minnesota Mining bought all the assets of Insulation Wires and in 1960 the Federal Trade Commission filed a proceeding against it under
Thereafter, within a year, this suit was filed. We need not detail the allegations of the complaint. It is sufficient to say that the gist of it was that prior to August 1956 Insulation Wires was the primary distributor of New Jersey Wood products throughout the United States; that in August 1956 Minnesota Mining acquired all of the assets of Insulation Wires and during the next month notified New Jersey Wood that beginning in January 1957 Insulation Wires would no longer distribute its products. The complaint also charged Minnesota Mining and Essex with conspiring to restrain trade and commerce in the manufacture, sale and distribution of electrical insulation products beginning with the acquisition of Insulation
II.
At the outset it is necessary to examine § 5 (a) of the Clayton Act8 and its relationship to § 5 (b). The former makes a final judgment or decree in any civil or criminal proceeding brought by or on behalf of the United States prima facie evidence in subsequent private suits “as to all matters respecting which said judgment or decree would be an estoppel as between the parties thereto.” Several distinctions between these sections are apparent and suggest that they are not wholly interdependent. First, the words “final judgment or decree” are used in § 5 (a) and are of crucial significance in its application. However, § 5 (b) tolls the statute of limitations set out in § 4B from the time suit is instituted by the United States regardless of whether a final judgment or decree is ultimately entered. Its applicability in no way turns on the success of the Government in prosecuting its case. Moreover, under § 5 (a) the judgment or decree may be used only as to matters respecting which it would operate as an estoppel between the parties. No such limitation ap-
When we turn from the express language of these two statutory provisions to the congressional policies underlying them, it becomes even more apparent that the applicability of § 5 (a) to Federal Trade Commission actions should not control the question whether such proceedings toll the statute of limitations. We have discussed these policies at greater length below. At this juncture it is sufficient to say that in framing § 5 (a) Congress focused on the narrow issue of the use by private parties of judgments or decrees as prima facie evidence. This was recognized in Emich Motors Corp. v. General Motors Corp., 340 U. S. 558, 568 (1951), where we stated that the purpose of § 5 (a) was “to minimize the burdens of litigation for injured private suitors by making available to them all matters previously established by the Government in antitrust actions” and to permit them “as large an advantage as the estoppel doctrine would afford had the Government brought suit.” Id., at 568. As we shall show, however, its purpose in adopting § 5 (b) was not so limited, for it was not then dealing with the delicate area in which a judgment secured in an action between two parties may be used by a third. Whatever ambiguities may exist in the legislative history of these provisions as to other questions, it is plain that in § 5 (b) Congress meant to assist private litigants in utilizing any benefits they might cull from government antitrust actions. See S. Rep. No. 619, 84th Cong., 1st Sess., 6. The distinction was emphasized in Union Carbide & Carbon Corp. v. Nisley, 300 F. 2d 561 (1962), where the court, after noting the analysis of § 5 (a) set out in Emich Motors Corp., supra, stated that:
“The corollary purpose of the tolling provisions of the second paragraph of Section 5 [now § 5 (b)] is
to vouchsafe the intended benefits of related government proceedings by suspending the running of the statute of limitations until the termination of the government proceedings, and allowing the private suitor one year thereafter in which to prepare and file his suit. The competency of a government judgment in a private suit is necessarily restricted to the requirements of due process. But the tolling of the statute during the pendency of the government litigation is not so limited.” Id., at 569.
In our view, therefore, the two sections are not necessarily coextensive; they are governed by different considerations as well as congressional policy objectives. This makes § 5 (b) readily severable from § 5 (a). Even if we assumed arguendo that § 5 (a) is inapplicable to Commission proceedings — a question upon which we venture no opinion — that conclusion would be immaterial in our consideration of § 5 (b) and
III.
Section 5, later §§ 5 (a) and 5 (b), was passed in response to the plea of President Wilson. In a speech to the Congress on January 20, 1914, he urged that a law be enacted which would permit victims of antitrust violations to have “redress upon the facts and judgments proved and entered in suits by the Government” and 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. The broad aim of this enactment was to use “private self-interest as a means of enforcement” of the antitrust laws. Bruce‘s Juices, Inc. v. American Can Co., 330 U. S. 743, 751
It may be, as Minnesota Mining contends, that when it was enacted the tolling provision was a logical backstop for the prima facie evidence clause of § 5 (a). But even though § 5 (b) complements § 5 (a) in this respect by permitting a litigant to await the outcome of government proceedings and use any judgment or decree rendered therein — a benefit which often is of limited practical value9 — it is certainly not restricted to that effect. As we have pointed out, the textual distinctions as well as the policy basis of § 5 (b) indicate that it was to serve a more comprehensive function in the congressional scheme of things. The Government‘s initial action may aid the private litigant in a number of other ways. The pleadings, transcripts of testimony, exhibits and documents are available to him in most instances. In fact, the rules of the Commission so provide.
It is in light of this legislative silence that we must determine whether § 4B is tolled by Commission proceedings. In resolving this question we must necessarily rely on the one element of congressional intention which is plain on the record — the clearly expressed desire that private parties be permitted the benefits of prior government actions. Implicit in such an objective is the necessity that the tolling provision include Commission proceedings. Otherwise the benefits flowing from a major segment of the Government‘s enforcement effort would, in many cases, be denied to private parties. In this connection, and of crucial significance, is the fact that the potential advantages available to such litigants because of § 5 (b) reach far beyond the specific and limited benefits accruing to them under § 5 (a). Furthermore, the § 5 (b) advantages flow as naturally from Commission proceedings as they do from Justice Department actions. Yet petitioner contends that § 4B must be tolled in the latter but not in the former. Such a grudging interpretation of the interrelationship of § 5 (b) and § 4B, however, would collide head-on with Congress’ basic policy objectives. Acceptance of petitioner‘s position would make enjoyment of these intended benefits turn on the arbitrary allocation of enforcement responsibility between the Department and the Commission, and we must therefore reject it.
“A statute may indicate or require as its justification a change in the policy of the law, although it expresses that change only in the specific cases most likely to occur to the mind. The Legislature has the power to decide what the policy of the law shall be, and if it has intimated its will, however indirectly, that will should be recognized and obeyed. The major premise of the conclusion expressed in a statute, the change of policy that induces the enactment, may not be set out in terms, but it is not an adequate discharge of duty for courts to say: We see what you are driving at, but you have not said it, and therefore we shall go on as before.”
We hold, therefore, that the limitation provision of § 4B is tolled by Commission proceedings to the same ex-
IV.
Minnesota Mining further contends that even though § 5 (b) tolls Commission proceedings, the suit here, insofar as it asserts Sherman Act claims, is not based in part on any matter complained of in the Commission‘s proceeding. We cannot agree.
New Jersey Wood‘s Sherman Act claims rest on an alleged conspiracy to restrain and attempt to monopolize trade and commerce in the manufacture, sale and distribution of electrical insulation products. The purposes of the conspiracy were alleged to be: (1) to control Insulation Wires; (2) to prevent it from distributing New Jersey Wood products; (3) to insure that Insulation Wires’ supplies were purchased from a Minnesota Mining subsidiary; (4) to effect tie-in sales of electrical insulation products with other Minnesota Mining products; and (5) to have Essex deal only with Insulation Wires in purchasing electrical insulation products to the exclusion of competitive distributors handling New Jersey Wood products. The effect of the conspiracy was alleged to be the complete disruption of the pattern of manufacture, sale and distribution that New Jersey Wood had enjoyed with Insulation Wires and denial to it of access to substantial national markets for electrical insulation products.
Certainly the allegations are based “in part” on the Commission action. It charged that the Insulation Wires acquisition, along with that of another distributor, placed
Minnesota Mining‘s claim seems to be that the crucial difference between the Commission and the New Jersey Wood proceedings is that the former alleges conduct that may substantially lessen competition while the latter asserts activity that has actually done so. We think that this is a distinction without a difference and does not deprive New Jersey Wood of the tolling effect of § 5 (b). That clause provides for tolling as long as the private claim is based “in part on any matter complained of” in the government proceedings. The fact that New Jersey Wood claims that the same conduct has a greater anticompetitive effect does not make the conduct challenged any less a matter complained of in the government action.
Affirmed.
MR. JUSTICE HARLAN and MR. JUSTICE STEWART did not participate in the decision of this case.
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.1 Section 5 (b) of the Act, as amended,
The whole of § 5, now divided into subdivisions (a) and (b), was passed in reponse 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 ac-
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
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.)
“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.
“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 Attor-
ney 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, nonenforcible 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.)
“Finally, the penalty is cut out; they can do all these things, and the Trade Commission can only say, ‘You must not do 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. 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 pri-
“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.
MR. JUSTICE GOLDBERG, dissenting.
With all deference, I dissent. I agree with the Court, ante, at 321, that, as we recently stated in Burnett v. New York Central R. Co., 380 U. S. 424, 427, the pivotal question for determination is “whether congressional purpose is effectuated by tolling the statute of limitations in given circumstances.” I cannot agree, however, that the Court has correctly applied that test in this case. As my Brother BLACK has so well demonstrated in his dissenting opinion, both the language and legislative history of the statutes before us clearly show that Congress did not intend that the statute of limitations applicable to private antitrust actions be tolled by the institution of a Federal Trade Commission administrative proceeding. Cf. United States v. Welden, 377 U. S. 95. It frustrates rather than effectuates congressional purpose to fail to honor the express intent of Congress in this given circumstance.