Cargill, Inc. v. Monfort of Colo., Inc. - 479 U.S. 104, 107 S. Ct. 484 (1986)

Rule:

Sections 4 and 16 of the Clayton Act are best understood as providing complementary remedies for a single set of injuries. In order to seek injunctive relief under § 16, a private plaintiff must allege threatened loss or damage of the type the antitrust laws were designed to prevent and that flows from that which makes defendants' acts unlawful.

Facts:

Respondent Monfort of Colorado, Inc., the country's fifth largest beef packer, brought an action under § 16 of the Clayton Act, 15 U.S.C.S. § 26, to enjoin a prospective merger between petitioner, Excel Corporation, the country's second largest beef packer, and the third largest packer in the market. The district court enjoined the merger, holding that respondent's allegation of a "price cost squeeze" that would severely narrow its profit margin constituted an allegation of antitrust injury, and that the merger violated § 7 of the Clayton Act, 15 U.S.C.S. § 18. Petitioner appealed, and the court of appeals affirmed the judgment in all respects. Petitioner sought review.

Issue:

Did the respondent’s allegation of a “price cost squeeze” constitute an allegation of antitrust injury under the Clayton Act, thereby warranting the grant of injunctive relief in its favor? 

Answer:

No.

Conclusion:

The Court found that in order to seek injunctive relief under § 16, respondent had to show a threat of antirust injury. The Court found that respondent's loss of profits caused by petitioner's lowered prices after the merger did not constitute antitrust injury. The Court found that respondent neither raised nor proved any claim of predatory pricing before the district court and even if it had, the Court doubted that the facts as found by the district court would have supported it. Accordingly, the Court reversed and remanded.