Cargill, Inc. v. Monfort of Colorado, Inc.

PETITIONER: Cargill, Inc.
RESPONDENT: Monfort of Colorado, Inc.
LOCATION: U.S. Army Medical Research Institute of Chemical Defense

DOCKET NO.: 85-473
DECIDED BY: Rehnquist Court (1986-1987)
LOWER COURT: United States Court of Appeals for the Tenth Circuit

CITATION: 479 US 104 (1986)
ARGUED: Oct 06, 1986
DECIDED: Dec 09, 1986

ADVOCATES:
Louis R. Cohen - for the United States and Federal Trade Commission, as amici curiae, in support of Petitioners
Louis R. Cohen - for United States Federal Trade Commission, as amicus curiae, in support of the petitioners, by special leave of Court
Ronald G. Carr - on behalf of the Petitioners
William C. McClearn - on behalf of the Respondent

Facts of the case

Question

Media for Cargill, Inc. v. Monfort of Colorado, Inc.

Audio Transcription for Oral Argument - October 06, 1986 in Cargill, Inc. v. Monfort of Colorado, Inc.

William H. Rehnquist:

We will hear arguments next in Cargill v. Monfort.

Mr. Carr, you may proceed whenever you're ready.

Ronald G. Carr:

Mr. Chief Justice, and may it please the Court:

This case presents two issues.

The first issue is whether the plaintiff, Monfort of Colorado, in seeking to prevent the acquisition by one of its rivals, Excel Corporation, of another of its rivals, Spencer Beef, established the kind of injury to itself necessary to support relief under Section 16 of the Clayton Act.

The second issue is whether the acquisition could be thought substantially to lessen competition under the standards this Court has employed in applying Section 7's prohibition.

Under this Court's decision in the Brunswick case, these two issues necessarily are interrelated, analytically, and in light of the purposes of the antitrust laws.

In Brunswick, the Court held that a damages plaintiff, in order to get relief, must establish that his injury will flow from the anticompetitive effects of the act he challenges.

In other words, the plaintiff's theory and proof of violation must be congruent with his theory and proof of injury.

The injury must flow from what makes the act in question unlawful.

All of the purposes that the Brunswick requirement was intended to serve apply just as much under Section 16 as they do under Section 4.

The basic purpose of the Brunswick rule was to assure that the antitrust remedies are invoked and are deployed in circumstances that serve the pro-competitive purposes of the antitrust laws.

In Section 16 actions quite as much, and perhaps even more, than Section 4 actions this purpose is implicated.

Indeed, in Section 16 actions, if the injunction can be applied to what may he pro-competitive conduct, the public loses the benefit of that enhanced competition altogether.

In this case, exactly that problem is revealed by the record.

And the rulings below would allow that danger to take place, and disserve the purposes of the antitrust laws.

Byron R. White:

How does any... under your approach, how does any merger damage competition, or could it ever?

Ronald G. Carr:

An acquisition... if you mean competitors as opposed to competition, it can indeed.

But an acquisition can harm competitors in any one of a number of ways.

Byron R. White:

Well, I know.

But how can it harm competition?

Ronald G. Carr:

An acquisition can harm competition by so significantly increasing concentration--

Byron R. White:

That what?

Ronald G. Carr:

--and raising entry barriers as to make the market perform less competitively.

Byron R. White:

Well, that may be so.

But then who could ever sue for it besides the government?

Ronald G. Carr:

In the event that an acquisition had those effects, the standard effects predicted by Section 7 horizontal merger analysis, consumers, large-scale consumers particularly, would have an interest in preventing the acquisition.

In this instance where the--

Byron R. White:

But no... it would never... nobody in the same trade level could sue?

No competitor could sue?