The Supreme Court, throwing a key antitrust question to Congress, yesterday unaniamously ruled that companies convicted of price fixing cannot force other conspirators to help pay damages.
In an unanimous decision written by Chief Justice Warren Burger, the court upheld lower court rulings that denied the efforts of a Texas concrete company to force other companies to share the penalty. The Justice Department's Antitrust Division also opposed the petition, arguing that permitting the sharing of antitrust penalties would undermine the government's effectiveness in prosecuting price-fixing laws.
Burger, in noting that there is no "right to contribution," also wrote that the court is not ruling on the complex policy questions involved in the contribution issue. "Rather, we recognize that, regardless of the merits of the conflicting arguements, this is a matter for Congress, not the courts, to resolve," Burger wrote.
The case stems from a 1973 federal grand jury indictment of Texas Industries Inc. and three other companies, who ultimately pleaded no contest to criminal charges of fixing the price of concrete in the New Orleans area.
Federal antitrust law, however, permits private concerns to sue for triple damages rising from a price-fixing conspiracy. In 1975, the Wilson P. Abraham Construction Corp. sued Texas Industries. Texas Industries then sued the three other companies, Jimco Inc., Radcliff Materials Inc. and OKC Dredging Inc. in order to seek their contribution to any damage penalties resulting from the private case.
The Supreme Court upheld the lower court opinions denying Texas Industries' contention. "We are unable to discern any basis in federal statutory or common law that allows federal courts to fashion the relief urged by the petitioner," the Supreme Court concluded.
The issue argued the plaintiffs in the case is essentially one of judicial equity, a position the Supreme Court said "has a certain appeal." But the court also said these arguements "presuppose a legislative intent."
Further, the court rejected the argument that decisions on contribution belong in the courts, hand in hand with decisions on the merits of a particular case.
"Contribution among antitrust wrongdoers does not involve the duties of the federal government, the distribution of powers in our federal system, or matters necessarily subject to federal control even in the absence of statutory authority," the court wrote.
The decision comes as Congress is considering legislation that would allow an antitrust defendant ordered to pay more than a proportionate share of damages to recover damages from co-conspirators.
Meanwhile, the legal fraternity is deeply divided over the issue, as are the appeals courts. Former Attorney General Griffin Bell, for instance, endorsed contribution legislation before the Senate Judiciary Committee, saying the issue should not be decided on a case-by-case basis. On the other hand, the Justice Department and some private attorneys vehemently oppose the legislation.