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An antitrust violation may be expected to cause ripples of harm to flow through the nation's economy; but despite the broad wording of § 4 of the Clayton Act there is a point beyond which a wrongdoer should not be held liable. It is reasonable to assume that Congress did not intend to allow every person tangentially affected by an antitrust violation to maintain an action to recover threefold damages for the injury to his business or property.
Plaintiff unions, the California State Council of Carpenters and the Carpenters 46 Northern Counties Conference Board, alleged that, in violation of the antitrust laws, defendants, a multiemployer association and its members coerced certain third parties, as well as some of the association's members, to enter into business relationships with nonunion firms. This coercion, according to the complaint, adversely affected the trade of certain unionized firms and thereby restrained the business activities of the unions. The unions sought treble damages under 4 of the Clayton Act (15 USCS 15), which authorized the award of damages to those injured in their business or property by antitrust violations. The United States District Court for the Northern District of California dismissed the complaint. The United States Court of Appeals for the Ninth Circuit reversed the District Court's dismissal of the antitrust claim, holding that a Sherman Act violation, a group boycott, had been alleged, and that the defendants' conduct was not within the antitrust exemption for labor activities. Moreover, the Ninth Circuit held that the plaintiffs had standing to recover damages for the injury to their own business activities occasioned by the defendants' boycott. The United States Supreme Court granted a writ of certiorari.
Under the circumstances, were the plaintiff unions a person injured by reason of a violation of the antitrust laws within the meaning of § 4 of the Clayton Act?
The Court held that an agreement to restrain trade could be unlawful even though it did not entirely exclude its victims from a market, but that even if defendants' conduct directed at third parties was unlawful, plaintiffs were not automatically injured by reason of a violation of the antitrust laws within the meaning of § 4. The Court further held that plaintiffs were not the proper parties to bring a private antitrust action against defendants where plaintiffs' injury was indirect, remote, and consequential to defendants' allegedly unlawful actions. Accordingly, judgment holding that plaintiffs' complaint was sufficient to sustain a cause of action was reversed.