CIRCUIT COURT FOR BALTIMORE CITY
STATE OF MARYLAND,
Plaintiff,
v.
PHILIP MORRIS INCORPORATED, et al
Defendants
Case No.: 96122017/211487
December 23, 1996
SURREPLY MEMORANDUM IN OPPOSITION TO DEFENDANTS' MOTION TO
DISMISS
Defendants' Reply Memorandum proposes a series of invalid propositions.
At the outset, Defendants assert, correctly, that the State "is required
by law to pay for the medical expenditures of its indigent citizens,"
and then characterize this case as an attempt by the State "to shift
that statutory obligation to private parties" -- as if there is anything
wrong with that attempt given the Defendants' legal responsibility for
the harm. The State is required by federal law to "ascertain the legal
liability of third parties . . . to pay for care and services available
under the plan" and to "seek reimbursement for such assistance
to the extent of such legal liability." 42U.S.C. § 1396a(a)(25)(1994).
Nothing in the federal statute limits this obligation to the recoupment
of payments for which third parties have a liability to the Medicaid
recipients. Any "legal liability" to make such payments,
including liability to the State itself, is plainly included.
I. SUBROGATION IS NOT THE STATE'S EXCLUSIVE REMEDY
Defendants mistakenly contend that the existence of
a statutory subrogation right precludes the
State's use of common law or other statutory causes
of action in pursuit of third-party
wrongdoers' liability.
A. Defendants erroneously cite a series of cases that have nothing
to do with the availability of common law causes of action to supplement
statutory causes of action.
Defendants rely primarily on cases holding that the enactment of an
express statutory remedy for the violation of a statute ordinarily means
that no additional implied statutory cause of action for that violation
is authorized by the same statute. This is the lesson of
National R.R. 1 Passenger Corp. v. National Ass'n of R.R. Passengers,
414 U.S. 453, 458 (1974) and its progeny. As Defendants themselves
quote from National R.R. Passenger, that case, which deals with
who may sue for violation of the Amtrak Act, merely states that the courts
should not "expand the coverage of the statute to subsume other
remedies," that is, should not infer the existence of other statutory
remedies under that statute. [ The additional cases cited by Defendants
are also inapplicable, either for the reasons that National R.R. Passenger
is inapplicable, or because the doctrines under which they were decided
are even more remote from the issues in this case. In Office and Professional
Employees lnt'l Union v. Mass Transit Admin., 295 Md. 88,453 A.2d 1191
(1982), the court(per Eldridge, J.) simply held that the statute authorized
collective bargaining agreements only with the groups it specified and
not with others whom it did not mention. That case says nothing about the
availability of common law actions which do not derive from the statute,
and which, therefore are not affected by limitations on the statutory grant
of authority. See also White v. Prince George's County, 282 Md. 641, 387
A.2d 260 (1978)("[T]he question of whether the Legislature intended
a particular statutory remedy to be exclusive only arises where the claimant
is pursuing a possible alternate remedy. Where the type of action which
the plaintiff is attempting to bring as an alternative to the special statutory
remedy simply does not lie, logically no question of exclusiveness arises.").
In Baker, Watts & Co. v. Miles & Stockbridge, 690 F.Supp. 431,
433-34 (D. Md 1988) rev'd in part on other grounds, 876 F.2d 1101 (4th
Cir. 1989),the portion to which the quoted material from National R.R.
Passenger applies dealt only with the question whether a statute authorizes
an unstated implied statutory remedy for its violation in addition to any
express remedy in the same statute. ] It certainly does not hold that the
statute implicitly repeals common law rights and remedies. In any
event, the Maryland Declaration of Rights prohibits any such implied repeal
of common law rights.
As Judge Eldridge has pointed out [ Office & Professional Employees
Int'l Union v. Mass Transit Admin., 295 Md. at 96.] , furthermore, the
materials cited by Defendants are simply variations of the expressio
unius maxim, which is merely a guide towards legislative intent concerning
the coverage of a document. Limitations and exceptions to the maxim are
as familiar as are examples of its application. [ In Phipps v. General
Motors Corp., 278 Md. 337, 363 A.2d 955 (1976) (per Eldridge, J.) the Maryland
Court of Appeals recognized a common law strict liability action for harm
caused by defective products, notwithstanding the existence of a statutory
cause of action for such harm in the Uniform Commercial Code, which statutory
cause of action had more restrictive requirements than the new common law
action. "In the absence of any expression of intent by the Legislature
to limit the remedies available to those injured by defective goods exclusively
to those provided by the Maryland Uniform Commercial Code, we believe that
General Motors' preemptive contention is without merit." Id., 278
Md. at 350, 363 A.2d at 962(emphasis added). Similarly, Miles Lab., Inc.,
Cutter Lab., Div. v. Doe, 315 Md. 704, 556 A.2d1107 (1989), is a case cited
but apparently not understood by Defendants. It held that a statutory defense
to strict tort liability available to suppliers of blood products (i.e.
immunity against strict liability for serum hepatitis) did not apply to
contamination not specified in the statute (i.e., AIDS). The court nevertheless
held that the common law defense under the Restatement of Torts that certain
blood products are "unavoidably unsafe" products would be applicable
to both hepatitis and AIDS contamination. This newly announced common law
defense was recognized despite the fact that its existence was deemed to
have preceded the enactment of the statutory defense for serum hepatitis,
and therefore impliedly to have made the statute unnecessary. The common
law defense was also recognized as negating statutory claims for breach
of implied warranty under the Uniform Commercial Code. Id., 315 Md. at
737. ]
B. Defendants' assertion that the State of Maryland has no common
law right to, I recover its medical expenditures from third parties is
unsupported and false.
Defendants' argument that subrogation is the State's exclusive remedy
is not a statement of fact, but is merely an assertion of Defendants' legal
claim, in the face of an overwhelming body of common law principles, well-established
to the contrary, that are evidenced. e.g., in the Restatements of Torts
and of Restitution. The only authorities suggested by Defendants are based
on fragmentary dicta in a Florida cases which dealt with the effective
date of the statutory abrogation of certain common law rules [ Agency
for Health Care Admin. v. Associated Indus., 678 So. 2d 1239. 1248 - 1250
(1996) (making it clear that the court uses the phrase "independent
cause of action" to refer to an action where "all . . . affirmative
defenses normally available to a liable third party, are to be abrogated,"
as provided in state statutes of 1990 and 1994 peculiar to Florida.).]
(whereas the State in the present case seeks to apply the common
law), and a Supreme Court discussion of a question of federal, not
state, law that is explicitly not based on tort law, but instead
on fiscal policy to be determined by Congress. [ United States v. Standard
Oil Co., 332 U.S. 301, 395 (1947) ("We agree . . . that the creation
or negation of such a liability is not a matter to be determined by state
law."); id. at 314 ("[W]e have not here simply a question of
creating a new liability in the nature of a tort. For grounded though the
argument is in analogies drawn from that field, the issue comes down in
final consequence to a question of federal fiscal policy, coupled with
considerations concerning the need for and the appropriateness of means
to be used in executing the policy sought to be '' established.").
Federal fiscal policy was then, indeed, confirmed by Congress in the FMCRA
as favoring reimbursement of medical expenses, and the appropriateness
of means to be used in executing the policy was confirmed in that Act as
including direct actions independent of subrogation. Federal fiscal policy
to require reimbursement of Medicaid expenses by wrongdoers, inter alia,
has similarly been confirmed by Congress, in 42 U.S.C. § 1396a(a)(25).]
The availability or not of an action under Florida common law does not
determine its availability under Maryland law, and there are no unresolved
federal fiscal policy considerations that require statutory resolution
under the rule of United States v. Standard Oil Co.
II. DEFENDANTS ERRONEOUSLY CHARACTERIZE PLAINTIFF'S
RESTITUTION CLAIM AS "EQUITABLE" AS A BASIS FOR
CONTENDINGTHAT JURISDICTION FOR THESE CLAIMS IS DEFEATED BY THEEXISTENCE
OF AN "ADEQUATE REMEDY AT LAW.
"The ordinary test for whether a claim is equitable is whether
a "coercive remedy is invoked," see D. Dobbs, Law of Remedies
§2.6 (3) at 155-156 (1993), or, sometimes, whether historically a
claim was one particularly identified with equity, such as mortgage foreclosure.
Id."[If the remedy sought is merely an ordinary damages award,
the remedial test suggests that the claim is a 'common law' claim triable
to a jury. The Supreme Court has not suggested how to weigh these two tests
when they conflict, but it has said that the remedy sought is the more
weighty consideration." Id. (emphasis added).
Restitution for Defendants' unjust enrichment can be characterized as
"an ordinary damage award" or its equivalent. Restitution is
a traditional principle in both law and equity, and therefore is not uniquely
associated with equity. See G. Palmer, The Law of Restitution 1-2
(1978) (including restitution liability based on unjust enrichment as among
"the principal source of civil liability at common law."); see
also id. at 3-4 ("For a long time restitution developed more or
less independently at law and in equity, and both are therefore within
the scope of this book."). For instance, restitution under quasi-contract
is an obvious example of a remedy at law. Icl. at 4.
Equity can, of course, grant money damages in addition to coercive relief,
but this does not make a count equitable where only a money award is sought
and where the basis for the relief is a claim traditionally associated
with the common law. The cases cited by Defendants suggest nothing else.
They are all cases where either coercive relief was sought and granted,
in addition to money damages, or where the term "damages" in
an insurance policy is construed for purposes of insurance law, rather
than for a determination of jurisdiction in law or equity. [ United States
v. Long, 537 F.2d 1151 (4th Cir. 1975) ( injunction granted pursuant to
authority to grant "preventive relief''); Haines v. St. Paul Fire
& Marine Ins. Co., 428 F. Supp. 435, 439 (D. Md. 1977) (dealing with
characterization of "ancillary relief . . . available in SEC , injunction
actions"); cf. Maryland Cas. Co. v. Arrnco, Inc., 822 F.2d 1348, 1353
(4th Cir. 1987) (dealing with insurer's liability for toxic clean - up
costs; distinguishing "damages" for purposes of comprehensive
liability insurance policies from the "costs" incurred in complying
with equitable or injunctive orders on grounds of insurance theory, rather
than theory of equitable jurisdiction).] For this purpose a distinction
is sometimes drawn between monetary awards characterized as "restitution"
and those characterized as "damages," but such a distinction
is not determinative for classifying an action as equitable or legal. According
to D. Dobbs, The Law of Remedies §2.6(3) at 157(1993):
Money claims for restitution: Some
money claims are not damages, representing the plaintiff's loss but restitution
representing the defendants' unjust gains in a transaction. As indicated
below, some restitution claims were, equitable. However, many were not.
Many restitution claims were brought under, the common law writ of assumpsit,
using its common law counts such as the count for money had and received.
These claims are claims at law in every sense, first because they seek
simply money relief, and second because they were historically brought
in the separate law courts.
Money claims for restitution with equitable enforcement: constructive
trusts. Just the opposite is true for some other kinds of restitutional
claims. The constructive trust is the most familiar case . . . the upshot
of the constructive trust is an order compelling the defendant (or the
bank) to place the fund in the plaintiff's name. It differs from an ordinary
judgment at law, which would adjudicate the plaintiff's right to recover
an amount of money from the defendant, but would not identify the particular
source…
Because the constructive trust is ultimately enforceable by a personal
order (convey Blackacre or transfer the specific fund of money), it has
at least a latent injunctive or coercive quality. And because it was historically
and substantively equitable in nature, the constructive trust suit is almost
always regarded as equitable in nature, even though it might ultimately
reach a fund of money.
If no particular property is identified as belonging to the plaintiff
in equity and good conscience, the plaintiff's claim for money restitution
looks like an ordinary claim for a money judgment. In that case, the claim
seems to be legal by ordinary standards. [ Professor Dobbs cites in
support a Maryland case, Kahle v. John McDonough Builders, Inc., 85 Md.
App. 141, 151 - 52, 582 A.2d 557, 562 (1990) (recognizing the analogous
proposition that an action as traditionally equitable as a claim by a beneficiary
against a trustee can be an action at law "if the trustee is under
a duty to pay money immediately and unconditionally to the beneficiary");
see also Mass Transit Administration v. Granite Constr. Co. 57 Md. App.
766, 775, 471 A.2d 1121 (1984) (restitution claim for "simple money
judgment" is "action . . . at law;" notwithstanding defendants'
protestations to the contrary, the Court of Special Appeals was entirely
clear that this remedy makes an action one "at law," for which
a question of adequacy of alternative remedy at law could not arise).]
(Emphasis added; footnotes in original omitted.)
III. PLAINTIFF HAS A RIGHT TO RESTITUTION FOR THE ADVANTAGES
CONFERRED UPON DEFENDANTS BY VIRTUE OF THE STATE'S PROVISION OF MEDICAL
CARE FOR INJURED SMOKERS.
Plaintiff argues that Defendants are liable for restitution because,
among other things, Defendants breached a duty owed to Maryland smokers,
and the State conferred a benefit by covering the resulting health care
costs. See Opposition Memorandum at 24 n.6. The State also argues
that, as made clear by Restatement of Restitution § 1, comment b,
it need not show, to confer a benefit, that it satisfied a legal duty of
the Defendants; it suffices to show that the State conferred a benefit
on the Defendants by adding to their security or advantage or saving them
from expense or loss. Defendants also rely on Restatement of Restitution
§ 1, comment b, quoting and underlining it, but Defendants deceptively
omit key disjunctive language, without even including an ellipse to indicate
this omission. Reply at 10. The relevant text of that comment, with the
portion omitted by Defendants in bold, states:
A person confers a benefit upon another if he . . . satisfies a debt
or duty of the other, or in any way adds to the other's security or
advantage. He confers a benefit not only where he adds to the property
of another, but also where he saves the other from expense or loss. The
word "benefit" therefore denotes any form of advantage.
(emphasis added).
Using the test from this commentary, which Defendants concede is the
applicable analysis for "benefit," the State has adequately pleaded
a benefit conferred. As explained in Plaintiff's Opposition, the State's
intervention to cover health care costs caused by Defendants' misconduct
added to Defendants' security and advantage by saving them from
litigation expenses and increasing their profits from addicted
smokers.
Furthermore, Defendants misconstrue the basis for Plaintiff's entitlement
to restitution, which is based in part on Restatement of Restitution §
78, allowing recovery where a party, acting pursuant to its own legal duty,
pays a third party who was actually injured by the defendant's wrongdoing.
Defendants (at Reply 11-12) state that § 78 "addresses payment
by coercion," referring to the Chapter 3 "Scope Note"
of that Restatement for support. That note also states, "[A] payment
is made by coercion if it is made in the performance of a legal duty .
. .", Restatement of Restitution at 288. The State, of course, acted
pursuant to its legal duties under the Medicaid program in paying for the
medical costs of injured smokers, and was forced to do so by the deliberate
and negligent actions of Defendants.
IV. DEFENDANTS' CONDUCT COMPELS THE FINDING OF DUTY TOWARDSTHE
STATE AND ITS RESIDENTS BASED UPON DEFENDANTS' VOLUNTARY STATEMENTS AND
REPRESENTATIONS AND THE PHYSICAL HARM RESULTING FROM THE BREACH OF THOSE
PROMISES.
The fundamental issue this court must confront is how the law will respond
to the tremendous toll of personal physical injury caused by the conduct
of Defendants detailed in Plaintiff's Complaint. "When blameworthy
conduct causes harm to others, the blameworthy l actor ought, in general,
to compensate for those harms.... [This] fault principle applies only to
conduct that is antisocial in the sense that its costs (including harms)
outweigh its benefits." W. Page Keeton, et al., Prosser and
Keeton on the Law of Torts, § 85 at 608 (5th Ed. 1984). Plaintiff
plainly asserts that Defendants' conduct
has been antisocial in the broadest sense
in their deliberate deception of the public and indifference
to the health consequences to those addicted to cigarettes. "One
factor affecting the development of tort law is the moral aspect
of the defendant's conduct -- the moral guilt or blame to be attached in
the eyes of society to the defendant's acts, motives and state of mind
B W. Keeton § 4 at 21.
V. PLAINTIFF'S DAMAGES HAVE RESULTED FROM PHYSICAL INJURIES
PERMITTING TORT RECOVERY UNDER MARYLAND LAW.
Defendants' reliance upon Clinical Perfusionists, Inc. v. St. Paul
Fire and Marine Ins. Co 336 Md. 685, 650 A.2d 285 (1994) is misplaced;
that case is not analogous to the ease at bar, and is not controlling.
Clinical Perfusionists involved an insurance coverage dispute in
which the plaintiff insured was a medical provider which had not filed
the required notice with its insurer regarding a potential medical malpractice
claim against one of its agents. The insured argued that the insurer had
been given "constructive notice" of the claim when another medical
professional insured by the defendant had given notice of its need for
defense and had included a reference to the involvement of plaintiff's
agent. The court found that the facts alleged, including the claim filed
by the third party, did not constitute sufficient notice to trigger the
insurer's duty to defend Plaintiff under the insurance contract and that
the insurer breached no duty to plaintiff by failing
to investigate the third party's claim more thoroughly. The potential harm
to any party in Clinical Perfusionists from the insurer's failure
to investigate the third party's claim was purely
financial.
Accordingly, when the court discusses Restatement (Second) of Torts
§ 324A, involving the voluntary undertaking of
a duty to a third party, the court emphasized that the harm it
was analyzing involved "exclusively economic
loss" -- as a duty to defend dispute would necessarily
involve. Id., 650 A.2d at 294. Immediately thereafter, however,
the court makes the following revealing citation: "C.{
United States Gypsum Co. v. Baltimore, 336
Md. 145, 156-58, 647 A.2d 405, 410-11 (1994) (tort recovery permitted
for economic loss based on a defective product where the defect creates
a substantial and unreasonable risk of death or personal injury); Council
of Co-Owners Atlantis Condominium v. Whiting-Turner Contracting Co., 308
Md. 18, 32-35, 517 A.2d 336, 34445 (1986) (defective construction -- same)."
Thus, the court clearly recognized the distinction between plaintiffs which
suffer financial loss remedying a condition, involving the risk of death
or personal injury and the situation before it, an insured pursuing financial
protection against an insurer whose alleged tort involved no risk of death
or physical injury to anyone.
The State of Maryland is analogous to the City of Baltimore in U.S.
Gypsum, in that it has provided services that have remedied personal
injury and the risk of death caused by cigarettes, the product sold and/or
marketed by Defendants. Thus, the Medicaid funds have been spent due to
actual personal injury and to prevent further injury and death. As emphasized
in Jacques v. First Nat 'l Bank of Maryland, 307 Md. 527, 533-34,
515 A.2d 756. 759-60 (1980):
Where the failure to exercise due care creates a risk of economic loss
only, courts have generally required an intimate nexus between the parties
as a condition to the imposition of tort liability. This intimate nexus
is satisfied by contractual privity or its equivalent. By contrast, where
the risk created is one of personal injury, no such direct relationship
need be shown, and the principal determinant of duty becomes foreseeability.
VI. DEFENDANTS HAVE MISCHARACTERIZED THE FACTS AND LAW SUPPORTING
THE CONSUMER PROTECTION ACT COUNTS.
Rather than addressing the arguments made by the State, Defendants
choose to misrepresent various Maryland consumer protection cases
and the significance of the Washington trial court decision in State
v. American Tobacco Co.
Neither Consumer Protection Division v. Consumer Publishing Co.,
304 Md. 731, 501 A.2d48 (1985) nor Consumer Protection Division
v. Outdoor World Corp., 91 Md. App. 275, 603 A.2d 1376 (1992), cert
denied, 327 Md. 523, 610 A.2d 796 (1992), limit restitution as Defendants
contend (Reply pp. 24-25). Indeed, Outdoor World specifically rejects
the limitation for which it is cited by Defendants. Defendants indicate
that restitution is limited to consumer purchasers and cite for that proposition
as follows:
Outdoor World Corp., 91 Md. App. at 290 (CPA authorizes the State
to "fashion restitution orders requiring sellers to make refunds
to consumers who bought products" in reliance on deceptive acts)(emphasis
added).
Defendants' Reply p. 24, n.23, (emphasis in original). The quote that
Defendants take out of context in order to misrepresent the court's holding
in Outdoor World was a discussion of the specific restitution ordered
in Consumer Publishing, not a discussion of the breadth of restitution
available under the Act.
Contrary to the Defendants' argument, the Court of Special Appeals in
Outdoor World held that restitution under the Act was not limited
to purchasers. Rather, it held that the Division could "require
OWC to refund to Marylanders who visited its campgrounds in reliance on
a notice that violated the Consumer Protection Act and who did not subsequently
purchase a membership an amount equal to the cost of the trip."
91 Md. App. at 293, 603 A.2d at 1385 (emphasis added).
The Defendants similarly seek to mislead the Court as to the result
in the Washington trial court in State v. American Tobacco. First,
the court, contrary to the contention of the Defendants, did not dismiss
the consumer protection counts, Counts I and II, in their entirety. Rather,
the Court's order granted the Defendants' motion, which was limited to
the monetary relief that the State was seeking as a "person."
See Order, State of Washington v. American
Tobacco at 10.
The trial court in American Tobacco relied upon the wording of
Washington's statute which limited restitution to a "person"
and limited the definition of "person" to "natural persons,
corporations, trusts, unincorporated associations and partnerships."
Id. In contrast, Maryland's, CPA provides a broad nonexclusive definition
of person that, inter alia, "includes . . . any other legal
or commercial entity." Accordingly, the American Tobacco decision,
in addition to being far more limited in scope than represented by Defendants,
is based on a far narrower statute than the one adopted by the Maryland
General Assembly.
Defendants have failed to demonstrate that the Maryland General Assembly
intended when it enacted the CPA to permit Defendants to reap the benefits
of the type of unfair and deceptive trade practices the State has alleged
and force the State and its citizens to bear the costs of that wrongdoing
without redress. Defendants' failure is due to the fact that the General
Assembly intended to stop those deceptive practices and to have wrongdoers,
not the State and its citizens, bear the costs of their wrongdoing.
VII. THE STATE MAY PROPERLY PURSUE ANTITRUST REMEDIES TO
ADDRESS THE HARMS CAUSED BY DEFENDANTS' ANTICOMPETITIVE
CONSPIRACY.
A. The State is suing as sovereign enforcer of its laws and for proprietary
damages.
Under Md. Comm. Law Code Ann. § 11-209(a), "The Attorney
General shall institute proceedings in equity" to prevent or restrain
violations of the Maryland Antitrust Act. This authority is a "sovereign
power," that is, one "necessary to accomplish the legitimate
ends and l purposes of government." Black's Law Dictionary
(6th ed. 1990). Inexplicably, Defendants do not comment on this
sovereign power of the State, instead misdirecting the Court's attention
to the State's authority to proceed criminally pursuant to § 11-207.
Further, in a proceeding brought under § 11-209(a), this Court
now has the authority to exercise all equitable powers necessary
to remove the effects of a violation, including ordering restitution. Defendants'
reliance on State v. Jonathan Logan, Inc., 301 Md. 63, 482 A.2d
1 (1984), is entirely misplaced because in 1993, the General Assembly effectively
overruled its holding. Under Md. Comm. Law Code Ann. § 11-209(b),
the General Assembly expressly designated "the State" as "a
person having standing to bring an action," establishing a category
for governmental plaintiffs separate and apart from private persons. Thus,
while the State is attempting to recover damages for injury to its proprietary
interests, it is not, as Defendants claim, a "'private' party."
Notably, Defendants do not even attempt to rebut the plain language of
the statute.
As Defendants point out, the courts of Minnesota and Washington both
interpreted liberally differences in language between their respective
state antitrust acts and federal antitrust law. Both rejected Defendants'
standing argument. In Maryland, the General Assembly has expressly instructed
that the Maryland Antitrust Act "be liberally construed to serve its
beneficial purposes." Md. Comm. Law Code Ann. § 11-202(b). The
General Assembly also instructed that the State has standing under §
11-209(b) to bring an action for damages. This Court need only give §
11 -209(b)(1) its plain meaning to grant standing the State of Maryland
here.
B. The State's damages are the necessary and intended consequences
of Defendants' actions.
In the present case the injury to the State of Maryland was not only
foreseeable by Defendants but was intended. Defendants knew that the inevitable
result of their conspiracy to suppress information and product innovations
would be to transfer the costs of tobacco-related health problems from
the cigarette market to the health care market. Defendants intentionally
shifted costs from one market to the other where the State was indisputably
a participant. Thus, through Defendants' own actions, the two markets --
for cigarettes and for health care -- became, in the Supreme Court's words,
"inextricably intertwined." Blue Shield of Virginia v. McCready,
457 U.S. 465, 484 (1982). As in McCready, having the State shoulder
the burden of health care costs was necessary to the success of Defendants'
conspiracy and was a principal goal of the conspiracy.
Despite Defendants' attempts in their brief to attenuate the chain of
causation, the State's injury was not so remote as to deprive the State
of standing to bring the present claim. Atlantic::: Richfield Co. v.
USA Petroleum Co., 495 U.S. 328, 334 (1990), teaches that "antitrust
injury" is injury "attributable to an anti-competitive aspect
of the practice under scrutiny" that "flows from" that aspect.
Contrary to Defendants' assertion, Atlantic Richfield does not require
damages to be direct.
In the present case, the State does not attempt to claim standing as
a supplier of an antitrust victim or as a landlord of one. It is not a
union with labor-market interests that predominate over its antitrust claims.
These are the flawed analogies that Defendants
seek to draw. Rather, the State is like the health care
consumer in McCready, a purchaser in an interrelated market whom
the Supreme Court granted standing. This Court, guided by the
decision in McCready, should recognize
that the State would have standing under §4 of
the Clayton Act, and hold that the State has standing under
§11-209(b) of the Maryland Antitrust Act to bring the present action.
WHEREFORE, for the reasons discussed above, Plaintiff requests that
the Motion to Dismiss be DENIED.
Respectfully Submitted,
J. Joseph Curran, Jr.
Attorney General
Office of the Attorney General
200 Saint Paul Place
16th Floor
Baltimore, MD 21202
Carmen M. Shepard
Deputy Attorney General
John B. Howard, Jr.
Assistant Attorney General
Office of the Attorney General
200 Saint Paul Place
16th Floor
Baltimore, MD 21202
(410) 576-6300
Peter G. Angelos
H. Russell Smouse
E. David Hoskins
John C.M. Angelos
David L. Cahn
Law offices of Peter G. Angelos
A Professional Corporation
210 W. Pennsylvania Avenue
Suite 515, Court Towers
Towson, MD 21204
(410) 825-7300
Of Counsel:
Oscar S. Gray
Jacob A. France Professor Emeritus of Torts
University of Maryland School of Law
Baltimore, MD 21201
(410) 328-7174
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a copy of the foregoing was mailed, first class, postage prepaid, to the
following counsel:
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New York, NY 10019
Michael C. Lasky, Esquire
Bruce M. Ginsberg, Esquire
Stuart L. Friedel, Esquire
Davis & Gilbert
1740 Broadway
New York, NY 10019
John P. Sweeney, Esquire
Gregory L. Lockwood, Esquire
Miles & Stockbridge
10 Light Street
Baltimore, MD 21202-1487
Steven Klugman, Esquire
Joseph P. Moodhe, Esquire
Debevoise & Plimpton
875 Third Avenue
New York, NY 10022
William F. Ryan, Jr., Esquire
Whiteford, Taylor & Preston, LLP
Seven Saint Paul Street
Baltimore, MD 21202-1626
Douglas A. Dworkin, Esquire
Elizabeth H. Baus, Esquire
Arnold & Porter
555 12th Street, N.W.
Washington, D.C. 20004
John Vanderstar, Esquire
R. Laird Hart, Esquire
Covington & Burling
1201 Pennsylvania Avenue, N.W.
P.O. Box 7566
Washington, D.C. 20004-7566