author: Justice Brennan

text:
    HECKLER, SECRETARY OF HEALTH AND HUMAN SERVICES v. MATHEWS et al.
    No. 82-1050.
    Argued December 5, 1983
    Decided March 5, 1984

      Brennan, J., delivered the opinion for a unanimous Court.

      Mark I. Levy argued the cause for appellant. With him on the briefs were Solicitor General Lee, Assistant Attorney General McGrath, and Deputy Solicitor General Geller.

      John R. Benn argued the cause for appellees. With him on the brief were Robert W. Bunch and Bruce K. Miller

        Isabelle Katz Pinzler, Burt Neubome, and Nancy Duff Campbell filed a brief for the American Civil Liberties Union et al. as amici curiae urging affirmance.

        Edith U. Fierst, Joseph F. Henderson, and James R. Rosa filed a brief for the American Federation of Government Employees et al. as amici curiae.

   Justice Brennan

delivered the opinion of the Court.

Califano v. Goldfarb, 430 U. S. 199 (1977), held that a gender-based classification in the spousal-benefit provisions of the Social Security Act violated the right to the equal protection of the laws guaranteed by the Due Process Clause of the Fifth Amendment. In this case, the United States District Court for the Northern District of Alabama held that amendments to the Act, adopted in 1977 partly in response to our decision, unjustifiably revive the gender-based classification that was invalidated in Goldfarb and therefore also violate the Fifth Amendment. App. to Juris. Statement la-9a. The Secretary of Health and Human Services appealed directly to this Court. We noted probable jurisdiction under 28 U. S. C. § 1252, 460 U. S. 1036 (1983), and now reverse.

I

A

The Social Security Act (Act) provides spousal benefits for the wives, husbands, widows, and widowers of retired and disabled wage earners. 42 U. S. C. § 402 (1976 ed. and Supp. V). Prior to December 1977, benefits were payable only to those husbands or widowers who could demonstrate dependency on their wage-earning wives for one-half of their support. Wives and widows, on the other hand, were entitled to spousal benefits without any such showing of dependency on their husbands. See former 42 U. S. C. §§ 402(b), (c)(1)(C), and (f)(1)(D). In March 1977, Califano v. Goldfarb, supra, affirmed the judgment of a three-judge District Court which held that the gender-based dependency requirement for widowers violated the equal protection component of the Due Process Clause of the Fifth Amendment. Subsequently, the Court summarily affirmed two District Court decisions invalidating the dependency requirement for husbands’ benefits. Califano v. Silbowitz, 430 U. S. 924 (1977); Jablon v. Califano, 430 U. S. 924 (1977).

Following these decisions, as part of a general reform of the Social Security system, Congress repealed the dependency requirement for widowers and husbands. Social Security Amendments of 1977 (1977 Amendments), §§ 334(b)(1), (d)(1), Pub. L. 95-216, 91 Stat. 1544, 1545, 42 U. S. C. §§ 402(c)(1), (f)(1) (1976 ed., Supp. V). See S. Rep. No. 95-572, pp. 88, 93 (1977). It concluded, however, that elimination of the dependency test, by increasing the number of individuals entitled to spousal benefits, could create a serious fiscal problem for the Social Security trust fund. See id., at 27-28. This problem was particularly acute with respect to the large number of retired federal and state employees who would now become eligible for spousal benefits. Unlike most applicants, who must offset any dual Social Security benefits against each other, 42 U. S. C. § 402(k)(3)(A), retired civil servants could, at the time of the 1977 Amendments, receive the full amount of both the spousal benefits and the government pensions to which they were entitled. Congress estimated that payment of unreduced spousal benefits to such individuals could cost the system an estimated $190 million in 1979. S. Rep. No. 95-572, supra, at 27-28.

To avoid this fiscal drain, Congress included as part of the 1977 Amendments a “pension offset” provision that generally requires the reduction of spousal benefits by the amount of certain Federal or State Government pensions received by the Social Security applicant. 1977 Amendments, §§334 (a)(2) and (b)(2), 42 U. S. C. §§ 402(b)(4)(A) and (c)(2)(A) (1976 ed., Supp. V). Congress estimated that 90 percent of the savings that would be achieved by the pension offset provision as proposed by the Senate would be attributable to a reduction in payments to nondependent husbands and widowers who had not been entitled to any spousal benefits prior to the decision in Goldfarb. See S. Rep. No. 95-572, supra, at 81. The remaining portion of the savings, however, would come from a reduction in benefits to individuals, mostly women but also dependent men, who had retired or were about to retire and who had planned their retirements in reliance on their entitlement, under pre-1977 law, to spousal benefits unreduced by government pension benefits. See ibid.; H. R. Conf. Rep. No. 95-837, p. 72 (1977); S. Conf. Rep. No. 95-612, p. 72 (1977). In order to protect the reliance interests of this group, see infra, at 742, Congress exempted from the pension offset requirement as ultimately enacted those spouses who were eligible to receive pension benefits prior to December 1982 and who would have qualified for unreduced spousal benefits under the Act “as it was in effect and being administered in January 1977.” 1977 Amendments, § 334(g)(1), note following 42 U. S. C. §402 (1976 ed., Supp. V).

In the same subsection in which it established this 5-year grace period for individuals who qualified for spousal benefits in January 1977, Congress also included a severability clause, which provides:

“If any provision of this subsection, or the application thereof to any person or circumstance, is held invalid, the remainder of this section shall not be affected thereby, but the application of this subsection to any other persons or circumstances shall also be considered invalid.” 1977 Amendments, § 334(g)(3), note following 42 U. S. C. §402 (1976 ed., Supp. V).

The Conference Committee explained that the severability clause was enacted “so that if [the exception to the pension offset provision] is found invalid the pension-offset. . . would not be affected, and the application of the exception clause would not be broadened to include persons or circumstances that are not included within it.” H. R. Conf. Rep. No. 95-837, pp. 71-72 (1977); S. Conf. Rep. No. 95-612, pp. 71-72 (1977).

B

Appellee Robert H. Mathews (hereafter Mathews or appel-lee) retired from his job with the United States Postal Service on November 18, 1977. His wife, who had retired from her job a few months earlier, was fully insured under the Social Security Act. In December 1977, Mathews applied for husband’s benefits on his wife’s account. On review of the application, the Social Security Administration (SSA) informed Mathews that he was entitled to spousal benefits of $153.30 per month but that, because, as appellee acknowledged, he was not dependent upon his wife for one-half of his support, this amount would be entirely offset by his $573 per month Postal Service pension in accordance with § 334(b)(2) of the 1977 Amendments, 42 U. S. C. § 402(c)(2) (1976 ed., Supp. V). App. to Juris. Statement 2a. After a hearing, an Administrative Law Judge (ALJ) affirmed the SSA’s initial decision. Id., at 16a-22a. The ALJ’s decision was in turn affirmed by the Appeals Council of the Department of Health and Human Services and thereby became the final decision of the Secretary. Id., at 13a-14a.

Mathews and his wife then brought this class action against the Secretary in the United States District Court for the Northern District of Alabama under § 205(g) of the Act, 42 U. S. C. 405(g). The complaint alleged that application of the pension offset provision of the 1977 Amendments to Mathews and other nondependent men but not to similarly situated nondependent women violated the Due Process Clause of the Fifth Amendment and sought a declaratory judgment to that effect. Appellee also contended that the severability clause of the 1977 Amendments was unconstitutional. The District Court certified a nationwide class composed of “all applicants for husband’s insurance benefits . . . whose applications . . . have been denied [beginning 60 days before the filing of the complaint] solely because of the statutory requirement that husbands must have received more than one-half of their support from their wives in order to be entitled to benefits.” App. to Juris. Statement 10a.

Shortly thereafter, the District Court filed an opinion, id., at la-9a, and order, id., at 27a-28a, holding both the pension offset exception of § 334(g)(1)(B) and the severability clause of § 334(g)(3) unconstitutional. The court noted that, in essence, the exception to the pension offset “provides a five-year grace period for all women who retire within five years of the enactment, and for men who retire within five years of the enactment and who are economically dependent upon their wives.” Id., at 3a. In light of this gender-based classification, the court noted that the offset exception could be upheld only if it “‘serve[s] important governmental objectives and [is] substantially related to achievement of those objectives.’” Id., at 4a, quoting Craig v. Boren, 429 U. S. 190, 197 (1976). The court decided that the exception could not be justified as protecting the reliance interests of individuals who had planned their retirements prior to the 1977 Amendments in expectation of undiminished benefits because, by requiring men to prove dependency notwithstanding the decision in Goldfarb, the offset exception presumes that “women would have relied upon the practices of the Social Security Administration, yet men would not have relied upon a decision of the Supreme Court.” App. to Juris. Statement 5a. Accordingly, the court held that the “portion of the exception to the pension offset provision that requires a male applicant to prove that he received one-half of his economic support from his wife violates the equal protection guarantees of the due process clause of the fifth amendment.” Id., at 6a-7a (footnote omitted).

Having invalidated the exception to the offset provision, the District Court considered the severability clause of § 334(g)(3). The court noted that, in the event appellee obtained a judgment that the offset exception unconstitutionally discriminates against him, the clause, if valid, would require nullification of the exception as to all persons, rather than extension of the exception to persons like appellee. Consequently, all government retirees not covered by Social Security, without regard to gender or dependency, would have their spousal benefits offset by the amount of their government pensions. The court characterized this effect of the severability clause as an effort by Congress “to mandate the outcome of any challenge to the validity of the [pension offset] exception by making such a challenge fruitless. Even if a plaintiff achieved success in having the gender-based classification stricken, he would derive no personal benefit from the decision, because the pension offset would be applied to all applicants without exception.” Id., at 8a. Because of its view that Congress could not have meant to defeat the reliance interests of government retirees in that way, the court concluded “that the severability clause is not an expression of the true Congressional intent, but instead is an adroit attempt to discourage the bringing of an action by destroying standing.” Ibid. Accordingly, the court held the severability provision unconstitutional and ordered the Secretary to pay Mathews and the rest of the plaintiff class full spousal benefits without regard to dependency and without offsetting the amount of their government pensions. Id., at 9a.

II

Because it may affect our jurisdiction, see Linda R. S. v. Richard D., 410 U. S. 614, 616 (1973), we consider first the District Court’s conclusion that the severability provision of the 1977 Amendments would, if valid, deprive appellee of standing to bring this action by preventing him from receiving any more spousal benefits if he prevails than he is now allowed. Appellee agrees with the District Court’s analysis and, for that reason, contends that the severability clause amounts to an unconstitutional attempt by Congress to thwart the jurisdiction and remedial power of the federal courts. We agree with the Secretary, however, that because the right asserted by appellee is the right to receive “benefits . . . distributed according to classifications which do not without sufficient justification differentiate among covered [applicants] solely on the basis of sex,” Weinberger v. Wiesenfeld, 420 U. S. 636, 647 (1975), and not a substantive right to any particular amount of benefits, appellee’s standing does not depend on his ability to obtain increased Social Security payments.

In order to establish standing for purposes of the constitutional “case or controvery” requirement, a plaintiff “must show that he personally has suffered some actual or threatened injury as a result of the putatively illegal conduct of the defendant,” Gladstone, Realtors v. Village of Bellwood, 441 U. S. 91, 99 (1979), and that the injury “is likely to be redressed by a favorable decision,” Simon v. Eastern Kentucky Welfare Rights Organization, 426 U. S. 26, 38 (1976). In this case, appellee claims a type of personal injury we have long recognized as judicially cognizable. He alleges that the pension offset exception subjects him to unequal treatment in the provision of his Social Security benefits solely because of his gender; specifically, as a nondependent man, he receives fewer benefits than he would if he were a similarly situated woman. App. 6.

Although the severability clause would prevent a court from redressing this inequality by increasing the benefits payable to appellee, we have never suggested that the injuries caused by a constitutionally underinclusive scheme can be remedied only by extending the program’s benefits to the excluded class. To the contrary, we have noted that a court sustaining such a claim faces “two remedial alternatives: [it] may either declare [the statute] a nullity and order that its benefits not extend to the class that the legislature intended to benefit, or it may extend the coverage of the statute to include those who are aggrieved by the exclusion.” Welsh v. United States, 398 U. S. 333, 361 (1970) (Harlan, J., concurring in result). See Califano v. Westcott, 443 U. S. 76, 89-91 (1979). For that reason, we have frequently entertained attacks on discriminatory statutes or practices even when the government could deprive a successful plaintiff of any monetary relief by withdrawing the statute’s benefits from both the favored and the excluded class.

These decisions demonstrate that, like the right to procedural due process, see Carey v. Piphus, 435 U. S. 247, 266 (1978), the right to equal treatment guaranteed by the Constitution is not coextensive with any substantive rights to the benefits denied the party discriminated against. Rather, as we have repeatedly emphasized, discrimination itself, by perpetuating “archaic and stereotypic notions” or by stigmatizing members of the disfavored group as “innately inferior” and therefore as less worthy participants in the political community, Mississippi University for Women v. Hogan, 458 U. S. 718, 725 (1982), can cause serious noneconomic injuries to those persons who are personally denied equal treatment solely because of their membership in a disfavored group. Accordingly, as Justice Brandéis explained, when the “right invoked is that to equal treatment,” the appropriate remedy is a mandate of equal treatment, a result that can be accomplished by withdrawal of benefits from the favored class as well as by extension of benefits to the excluded class. Iowa-Des Moines National Bank v. Bennett, 284 U. S. 239, 247 (1931). Because the severability clause would forbid only the latter and not the former kind of relief in this case, the injury caused by the unequal treatment allegedly suffered by appellee may “be redressed by a favorable decision,” Simon v. Eastern Kentucky Welfare Rights Organization, supra, at 38, and he therefore has standing to prosecute this action.

HH I — I f — 1

Although appellee prevailed in the District Court on his constitutional claim, he urges as an alternative ground for affirmance that we construe the pension offset exception so that it does not incorporate a gender-based classification of the kind invalidated in Califano v. Goldfarb, 430 U. S. 199 (1977), but instead exempts from the offset requirement both men and women, without regard to dependency. Relying on “the maxim that statutes should be construed to avoid constitutional questions,” United States v. Batchelder, 442 U. S. 114, 122 (1979), he contends that Congress, in reviving the qualifying criteria in effect before the decision in Goldfarb, must be presumed to have done so without reenacting the gender-based dependency test which this Court had held unconstitutional.

The canon favoring constructions of statutes to avoid constitutional questions does not, however, license a court to usurp the policymaking and legislative functions of duly elected representatives. Yu Cong Eng v. Trinidad, 271 U. S. 500, 518 (1926). See NLRB v. Catholic Bishop of Chicago, 440 U. S. 490, 499-501 (1979); id., at 508-511 (Brennan, J., dissenting); United States v. Sullivan, 332 U. S. 689, 693 (1948). “‘[Although this Court will often strain to construe legislation so as to save it against constitutional attack, it must not and will not carry this to the point of perverting the purpose of a statute . . .’or judicially rewriting it.” Aptheker v. Secretary of State, 378 U. S. 500, 515 (1964), quoting Scales v. United States, 367 U. S. 203, 211 (1961). In this case, the language and history of the offset exception plainly demonstrate that Congress meant to resurrect, for a 5-year grace period, the gender-based dependency test of pre-Goldfarb law.

As we have noted, supra, at 731-733, Congress adopted the pension offset requirement to prevent the serious fiscal drain that it concluded would result from payment of unreduced benefits to the new class of recipients made eligible by the decision in Goldfarb. Nevertheless, in an effort to protect the reliance interests of individuals who had planned their retirement before the March 1977 Goldfarb decision and the resulting amendments to the Act, see H. R. Conf. Rep. No. 95-837, p. 72 (1977); S. Conf. Rep. No. 95-612, p. 72 (1977), Congress exempted from the offset requirement those individuals eligible for spousal benefits under the Act “as it was in effect and being administered in January 1977.” There can be no dispute that in January 1977 men were eligible for benefits only upon a showing of dependency whereas women were subject to no such requirement. See former 42 U. S. C. §§ 402(c) and (f); Califano v. Goldfarb, supra, at 201-202, and nn. 1, 2. And Congress further indicated its intent to revive those eligibility criteria by including an unusual severability clause that would, in the event the classification were held invalid, sacrifice the exception’s protection of reliance interests to the goal served by the offset provision itself — preventing an undue financial burden on the system. See supra, at 734, and n. 5; H. R. Conf. Rep. No. 95-837, supra, at 72; S. Conf. Rep. No. 95-612, supra, at 72.

Consistent with the plain import of these provisions, Senator Long, then Chairman of the Senate Finance Committee and principal manager of the bill in the Senate, explained that the exception clause was meant “to afford . . . protection to those who anticipated receiving their spouses benefits prior to March 1977 without providing it also to those [who] would qualify only as a result of [the Goldfarb] decision.” 123 Cong. Rec. 39134 (1977) (emphasis added). See also id., at 39008 (remarks of Rep. Ullman). Appellee’s proposed interpretation of the exception provision would defeat this clearly expressed intention and, by rendering the offset requirement applicable to very few applicants, frustrate the congressional aim of preventing a major fiscal drain on the Social Security trust fund. Accordingly, we reject appellee’s construction of the Act and conclude that the exception to the offset provision applies to otherwise eligible men only when they can show dependency on their wives for one-half of their support. We turn therefore to consider the constitutionality of that gender-based classification.

HH <

We recently reviewed the “firmly established principles by which to evaluate a claim of gender discrimination like that made by appellee:

“Our decisions . . . establish that the party seeking to uphold a statute that classifies individuals on the basis of their gender must carry the burden of showing an ‘exceedingly persuasive justification’ for the classification. . . . The burden is met only by showing at least that the classification serves ‘important governmental objectives and that the discriminatory means employed’ are ‘substantially related to the achievement of those objectives.’. . .
“Although the test for determining the validity of a gender-based classification is straightforward, it must be applied free of fixed notions concerning the roles and abilities of males and females. Care must be taken in ascertaining whether the statutory objective itself reflects archaic and stereotypic notions. Thus, if the statutory objective is to exclude or ‘protect’ members of one gender because they are presumed to suffer from an inherent handicap or to be innately inferior, the objective itself is illegitimate. . . .
“If the State’s objective is legitimate and important, we next determine whether the requisite direct, substantial relationship between objective and means is present.” Mississippi University for Women v. Hogan, 458 U. S., at 724-725. (Citations and footnotes omitted.)

We therefore consider in turn whether the Secretary has carried her burden of (A) showing a legitimate and “exceedingly persuasive justification” for the gender-based classification of the pension offset provision and (B) demonstrating “the requisite direct, substantial relationship” between the classification and the important governmental objectives it purports to serve.

A

Although the offset exception temporarily revives the gender-based eligibility requirements invalidated in Gold-farb, Congress’ purpose in adopting the exception bears no relationship to the concerns that animated the original enactment of those criteria. The Court concluded in Goldfarb that the original gender-based standards, which were premised on an assumption that females would normally be dependent on the earnings of their spouses but males would not, constituted an “accidental byproduct of a traditional way of thinking about females,” 430 U. S., at 223 (Stevens, J., concurring in judgment), that reflected “‘old notions’ and ‘archaic and overbroad’ generalizations” about the roles and relative abilities of men and women, id., at 211,217 (plurality opinion). Accordingly, the statute’s “objective itself [was] illegitimate.” Mississippi University for Women v. Hogan, supra, at 725.

The provision at issue here, in contrast, reflects no such illegitimate government purposes. As detailed above, Congress adopted the offset exception in order to protect the expectations of persons, both men and women, who had planned their retirements based on pre-January 1977 law, under which they could receive spousal benefits unreduced by the amount of any government pensions to which they were also entitled. Congress accomplished its aim by incorporating the eligibility criteria as they existed in January 1977; its choice of this approach rather than an explicit adoption of new gender-based standards confirms that its purpose was to protect reliance on prior law, not to reassert the sexist assumptions rejected in Goldfarb.

Nor is that purpose rendered illegitimate by the fact that it is achieved through a temporary revival of an invalidated classification. We have recognized, in a number of contexts, the legitimacy of protecting reasonable reliance on prior law even when that requires allowing an unconstitutional statute to remain in effect for a limited period of time. See, e. g., Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U. S. 50, 87-89 (1982) (plurality opinion); Buckley v. Valeo, 424 U. S. 1, 142-143 (1976) (per curiam); Chevron Oil Co. v. Huson, 404 U. S. 97, 106-107 (1971). See also Los Angeles Dept. of Water & Power v. Manhart, 435 U. S. 702, 718-723 (1978). Although an unconstitutional scheme could not be retained for an unduly prolonged period in the name of protecting reliance interests, or even for a brief period if the expectations sought to be protected were themselves unreasonable or illegitimate, there is no indication that the offset exception suffers from either of these flaws. The duration of the exception is closely related to its goal of protecting only individuals who had planned their retirements in reliance on prior law, see infra, at 748-749, and appellee does not suggest that the expectations of those individuals, who hardly could have anticipated the adoption of the offset requirement, were unreasonable or illegitimate.

The protection of reasonable reliance interests is not only a legitimate governmental objective: it provides “an exceedingly persuasive justification” for the statute at issue here. See Kirchberg v. Feenstra, 450 U. S. 455, 461 (1981); Personnel Administrator of Mass. v. Feeney, 442 U. S. 256, 273 (1979). Appellee does not, and cannot, contest the Secretary’s statement that “it is a significant and salutary goal to secure the retirement plans of our Nation’s workers who in good faith had long and reasonably relied on the provisions of the Social Security Act.” Brief for Appellant 33. Instead, appellee contends that the only people who could justifiably have relied on an expectation of unreduced benefits are those who actually retired before the effective date of the offset provision and those individuals will not be required to offset their benefits. Brief for Appellees 28-29, and n. 21, 31-32. Congress determined, however, that many individuals adjusted their spending and savings habits prior to their retirements in expectation of receiving full spousal benefits as well as a government pension, and we have no reason to doubt that conclusion. One commentator has explained:

“Many couples have undoubtedly made retirement plans and adjusted the level of their private saving and investment in anticipation of retirement benefits from social security which include a special benefit for a spouse. An abrupt denial of benefits in these cases, even if the spouse who would have received them is shown to be not truly dependent on the other is clearly inequitable since the couple’s savings and retirement plans would have been different had the spouse benefit not been anticipated. Thus, were it to be decided that wives should prove dependency in order to receive spouse benefits, a strong argument could be made for making such a change gradually so as to avoid inequities to couples approaching retirement who had anticipated that such benefits would be available to them and had made their retirement plans accordingly.” M. Flowers, Women and Social Security: An Institutional Dilemma 41 (1977).

In short, particularly in the years immediately preceding retirement, individuals make spending, savings, and investment decisions based on assumptions regarding the amount of income they expect to receive after they stop working. For such individuals reliance on the law in effect during those years may be critically important. In recognition of this fact, the offset exception, in the words of the Conference Report, protects “people who are already retired, or close to retirement, from public employment and who cannot be expected to readjust their retirement plans to take account of the ‘offset’ provision that will apply in the future.” H. R. Conf. Rep. No. 95-837, p. 72 (1977); S. Conf. Rep. No. 95-612, p. 72 (1977). That purpose, consistent with the principle that “ ‘[gjreat nations, like great men, should keep their word,’” Astrup v. INS, 402 U. S. 509, 514, n. 4 (1971), quoting FTC v. Tuscarora Indian Nation, 362 U. S. 99, 142 (1960) (Black, J., dissenting), provides an exceedingly persuasive justification for the gender-based classification incorporated in the offset exception.

B

Having identified the legitimate and important governmental purpose of the offset exception, we have little trouble concluding that the means employed by the statute is “substantially related to the achievement of [that] objectiv[e].” Wengler v. Druggists Mutual Insurance Co., 446 U. S. 142, 150 (1980). By reviving for a 5-year period the eligibility criteria in effect in January 1977, the exception is narrowly tailored to protect only those individuals who made retirement plans prior to the changes in the law that occurred after that date. Individuals who were eligible for spousal benefits before the law changed and who retire within five years of the statute’s enactment may reasonably be assumed to have begun planning for their retirement prior to the adoption of the offset provision. See supra, at 747-748. Such persons, men as well as women, may receive spousal benefits unreduced by their government pensions, while those persons, men as well as women, who first became eligible for benefits after January 1977 may not.

Moreover, the offset exception was plainly adopted “through reasoned analysis rather than through the mechanical application of traditional, often inaccurate, assumptions about the proper roles of men and women.” Mississippi University for Women v. Hogan, 458 U. S., at 726 (footnote omitted). As the legislative history set out above demonstrates, Congress considered carefully and at length both the financial problems that led to the offset provision and the reliance interests that might be frustrated by that requirement. The solution finally adopted, after rejection of more expensive or impractical alternatives, distinguishes Social Security applicants, not according to archaic generalizations about the roles and abilities of men and women, but rather according to whether they planned their retirements with the expectation, created by the law in effect in January 1977, that they would receive both full spousal benefits and a government pension.

V

The exception to the pension offset requirement set out in § 334(g)(1) of the 1977 Amendments to the Social Security Act, while temporarily reviving the gender-based classification invalidated in Califano v. Goldfarb, is directly and substantially related to the important governmental interest of protecting individuals who planned their retirements in reasonable reliance on the law in effect prior to that decision. Accordingly, the judgment of the District Court is

Reversed.

       There was no majority opinion in Goldfarb. See 430 U. S., at 201 (plurality opinion); id., at 217 (Stevens, J., concurring in judgment).

       At the same time, Congress directed the Department of Health, Education, and Welfare to include “the entire question of such gender-based distinctions ... in [a] 6-month study of proposals to eliminate dependency and sex discrimination H. R. Conf. Rep. No. 95-837, p. 73 (1977). Thereafter, other gender-based distinctions were eliminated from the Act by the Social Security Amendments of 1983, Pub. L. 98-21, §§ 301-309, 97 Stat. 109-115; see H. R. Conf. Rep. No. 98-47, p. 140 (1983).

       Section 334(g) of the 1977 Amendments, Pub. L. 95-216, 91 Stat. 1546, note following 42 U. S. C. § 402 (1976 ed., Supp. V), provides in full:
      “(1) The amendments made by the preceding provisions of this section [section 334] shall not apply with respect to any monthly insurance benefit payable, under subsection (b), (c), (e), (f), or (g) (as the case may be) of section 202 of the Social Security Act, to an individual —
      “(A) to whom there is payable for any month within the 60-month period beginning with the month in which this Act is enacted (or who is eligible in any such month for) a monthly periodic benefit (within the meaning of such provisions) based upon such individual’s earnings while in the service of the Federal Government or any State or political subdivision thereof, as defined in section 218(b)(2) of the Social Security Act); and
      “(B) who at time of application for or initial entitlement to such monthly insurance benefit under such subsection (b), (c), (e), (f), or (g) meets the requirements of that subsection as it was in effect and being administered in January 1977.
      “(2) For purposes of paragraph (1)(A), an individual is eligible for monthly periodic benefit for any month if such benefit would be payable to such individual for that month if such individual were not employed during that month and had made proper application for such benefit.
      “(3) If any provision of this subsection, or the application thereof to any person or circumstance, is held invalid, the remainder of this section shall not be affected thereby, but the application of this subsection to any other persons or circumstances shall also be considered invalid.”
      On January 12, 1983, Congress created an exception from the pension offset provision for any person eligible for a pension prior to July 1983 who satisfies a half-support dependency test. Pub. L. 97-455, § 7, 96 Stat. 2501. On April 20, 1983, Congress revised the pension offset provision, which is now applicable to all persons, without exception, who become eligible to retire in or after July 1983 and which requires the offsetting of only two-thirds of the public pension. Pub. L. 98-21, § 337, 97 Stat. 131. The exception to the offset provision at issue in this case still applies to non-dependent women eligible for pensions prior to December 1982 but not to such nondependent men as the named plaintiff in this action. Accordingly, the recent amendments to the Act do not moot this case.

         E. g., Wengler v. Druggists Mutual Insurance Co., 446 U. S. 142, 147-149 (1980); Califano v. Goldfarb, 430 U. S. 199, 212 (1977) (plurality opinion). See Baker v. Carr, 369 U. S. 186, 207 (1962) (finding standing in case in which “[t]he injury which appellants assert is that this classification disfavors the voters in the counties in which they reside, placing them in a position of constitutionally unjustifiable inequality vis-a-vis voters in irrationally favored counties”). See also Linda R. S. v. Richard D., 410 U. S. 614, 620-621 (1973) (White, J., dissenting).

       Although the choice between “extension” and “nullification” is within the “constitutional competence of a federal district court,” Califano v. Westcott, 443 U. S., at 91, and ordinarily “extension, rather than nullification, is the proper course,” id., at 89, the court should not, of course, “use its remedial powers to circumvent the intent of the legislature,” id., at 94 (opinion of Powell, J.), and should therefore “measure the intensity of commitment to the residual policy and consider the degree of potential disruption of the statutory scheme that would occur by extension as opposed to abrogation.” Welsh v. United States, 398 U. S., at 365 (Harlan, J., concurring in result). See also Califano v. Westcott, supra, at 90. In this case, Congress has, through the severability clause, clearly expressed its preference for nullification, rather than extension, of the pension offset exception in the event it is found invalid. Because we conclude that the severability clause does not deprive appellee of standing to seek judicial redress for the alleged discrimination of the offset exception, we need riot consider his claim that a legislative attempt to thwart a court’s ability to remedy a constitutional violation would itself violate the Constitution. See Brief for Appellees 40-55.

         E. g., Wengler v. Druggists Mutual Insurance Co., supra, at 152-153; Orr v. Orr, 440 U. S. 268, 272 (1979); Califano v. Webster, 430 U. S. 313, 316 (1977); Kahn v. Shevin, 416 U. S. 351, 352 (1974); Stanton v. Stanton, 421 U. S. 7, 17-18 (1975).

       See, e. g., Bob Jones University v. United States, 461 U. S. 574, 593-595 (1983); Havens Realty Corp. v. Coleman, 455 U. S. 363, 373-374 (1982); Gladstone, Realtors v. Village of Bellwood, 441 U. S. 91, 109-114 (1979); Norwoods. Harrison, 413 U. S. 455, 465-466, 467 (1973);Frontiero v. Richardson, 411 U. S. 677, 684-685 (1973) (plurality opinion); Traficante v. Metropolitan Life Ins. Co., 409 U. S. 205, 208 (1972); id., at 212 (WHITE, J., concurring); Brown v. Board of Education, 347 U. S. 483, 493 (1954). See also Sierra Club v. Morton, 405 U. S. 727, 734-735 (1972).

       Consistent with Justice Brandéis’ explanation of the appropriate relief for a denial of equal treatment, we have often recognized that the victims of a discriminatory government program may be remedied by an end to preferential treatment for others. E. g., Gilmore v. City of Montgomery, 417 U. S. 556, 566-567 (1974); Norwood v. Harrison, supra, at 470-471; Griffin v. School Board of Prince Edward County, 377 U. S. 218, 232-234 (1964). See also Califano v. Westcott, supra, at 93-94 (opinion of Powell, J.) (finding federal aid program violative of plaintiffs’ right to equal protection but arguing that appropriate remedy under statute was to enjoin further payment of benefits to all applicants, including plaintiffs).

       The relationship between the right asserted by appellee and the injury allegedly caused by the denial of that right distinguishes this case from Simon v. Eastern Kentucky Welfare Rights Organization. In that case, the Court concluded that indigents, who contended that they were denied medical treatment by tax-exempt hospitals, lacked standing to challenge the Government’s allegedly unlawful administration of the Tax Code because it was “purely speculative” whether their injury was caused by the Government’s actions or was instead attributable to “decisions made by the hospitals without regard to the tax implications.” 426 U. S., at 42-43. Here, in contrast, there can be no doubt about the direct causal relationship between the Government’s alleged deprivation of appellee’s right to equal protection and the personal injury appellee has suffered — denial of Social Security benefits solely on the basis of his gender. Similarly, because appellee personally has been denied benefits that similarly situated women receive, his is not a generalized “claim of ‘the right possessed by every citizen, to require that the Government be administered according to law . . . .’” Baker v. Carr, 369 U. S., at 208, quoting Fairchild v. Hughes, 258 U. S. 126, 129 (1922).

       This conclusion, contrary to appellee’s suggestion, is not altered by the fact that in January 1977 the SSA was withholding disputed benefit claims pending this Court’s disposition of Goldfarb. The Social Security Claims Manual in effect at the time notes: “The current law requires that claimants for (widower’s) (husband’s) benefits meet a one-half support requirement. [While that requirement has been challenged in court], the law remains unchanged and no payment can be made until a final decision has been rendered on the constitutionality of the one-half support requirement.” Social Security Administration Claims Manual Transmittal No. 3844 (July 14,1976). Thus, the Manual indicates that, as provided by the extant provisions of the Act, the SSA did not in January 1977 pay benefits to male claimaints who failed to demonstrate dependency on their wives.

       The only individuals identified by appellee who would be subject to the offset requirement under his interpretation of the Act are those who first became eligible for spousal benefits after enactment of the statute in December 1977. See Brief for Appellees 23-24; Reply Brief for Appellant 4, 5, n. 2. For example, the 1977 Amendments shortened the number of years a divorced wife must be married before being eligible for spousal benefits, effective December 1978, Pub. L. 95-216, § 337, 91 Stat. 1548, 42 U. S. C. §§ 402(b)(1)(G), 416(d) (1976 ed., Supp. V), and a number of judicial decisions just prior and subsequent to the Amendments extended eligibility for benefits to new categories of individuals, see, e. g., Cooper v. Harris, 87 F. R. D. 107 (ED Pa. 1980) (young husbands); Mertz v. Harris, 497 F. Supp. 1134 (SD Tex. 1980) (remarried widowers); Yates v. Califano, 471 F. Supp. 84 (WD Ky. 1979) (surviving divorced fathers); Oliver v. Califano, [1977-1978 Transfer Binder] CCH Unempl. Ins. Rep. ¶ 15244 (ND Cal. 1977) (divorced husbands). These groups were not, however, mentioned in the legislative history of the offset and exception provisions, and limiting the offset to such newly eligible beneficiaries would frustrate Congress’ express desire to prevent the financial burden to the system of extending unreduced benefits to those nondependent men first made eligible by the Goldfarb decision. See S. Rep. No. 95-572, pp. 27-28 (1977).

       See also Wengler v. Druggists Mutual Insurance Co., 446 U. S., at 147-149; Weinberger v. Wiesenfeld, 420 U. S. 636, 643 (1975); Schlesinger v. Ballard, 419 U. S. 498, 507 (1975); Frontiero v. Richardson, 411 U. S., at 688.

       See H. R. Conf. Rep. No. 95-837, p. 72 (1977) (“The managers are concerned that there may be large numbers of women, especially widows in their late fifties, who are already drawing pensions, or would be eligible to draw them within 5 years of the date of enactment of this bill, based on their non-covered work and whose retirement income was planned for on the assumption of the availability of full wife’s or widow’s benefits under social security”); S. Conf. Rep. No. 95-612, p. 72 (1977) (same); Staff of Senate Committee on Finance, 95th Cong., 1st Sess., Summary of H. R. 9346, the Social Security Amendments of 1977 as Passed by the Congress (P. L. 95-216) 7 (Comm. Print 1977) (“To assure that persons who have been counting on these benefits for many years and who are now at or near retirement age will not be adversely affected, H. R. 9346 includes a transitional exception under which certain individuals will not have their social security benefits as spouses reduced by the amount of their public pension. This exception applies to those who . . . would qualify for spouses benefits under social security under the law as in effect and as administered in January 1977”).

       Indeed, the Social Security Act itself recognizes the critical importance of protecting an individual’s expectation of benefits even in circumstances where payment is contrary to current law. The Act forbids recovery of such overpayments when the recipient is not at fault and recapture “would be against equity and good conscience.” 42 U. S. C. § 404(b).

       The latter group includes persons who first became entitled to spousal benefits under the 1977 Amendments themselves as well as those whose eligibility was first established in judicial decisions issued from 1977 to the present. See n. 11, supra. Because the offset provision was enacted at the end of 1977, the only members of this group who, under the law in effect at any given time, might have expected to receive spousal benefits unreduced by their government pensions are those who became eligible during 1977 as a result of Goldfarb and other decisions announced that year. The Act protects the reliance interests of most such people, however, by providing that the offset applies only to applicants who file their claims for spousal benefits in or after December 1977, the month of enactment of the Amendments. 1977 Amendments § 334(f), Pub. L. 95-216, 91 Stat. 1546, note following 42 U. S. C. §402 (1976 ed., Supp. V).
      The reliance of appellee on the Goldfarb decision was frustrated not by operation of the exception provision but rather by the unfortunate timing of his retirement. After being informed that, as a result of the March 1977 Goldfarb decision, he would receive spousal benefits unreduced by his Government pension, Brief for Appellees 2, Mathews retired in October 1977 and filed his application for benefits on December 15. App. 4. If he had applied for benefits before December 1, he would have been exempt from the offset provision which, as noted, took effect that day. Alternatively, if he had not retired until after December 20, the day the 1977 Amendments were enacted, he would have known that he could not expect spousal benefits unreduced by his Government pension and might therefore have altered his plans. Although the bind thus imposed on Mathews by the enactment and effective dates of the Amendments is regrettable, the statute is not rendered fatally underinclusive because it protects only expectations of substantially greater duration than his.

       See, e. g., Staff of the House Committee on Ways and Means, 95th Cong., 1st Sess., WMCP: 95-57, Summary of the Principal Provisions of H. R. 9346, The Social Security Financing Amendments of 1977 As Passed By the House 4 (Comm. Print 1977) (House version proposing 6-month administration study of, inter alia, “various proposals to mitigate the cost impact of the recent Goldfarb decision on the system”); S. Rep. No. 95-572, p. 28 (1977) (describing consideration and rejection on grounds of potential abuse, inequity, invasion of privacy, and administrative difficulty of requirement that each applicant for spousal benefits prove dependency on spouse).


source: Caselaw Access Project

author: Justice Powell Justice Brennan,

license: Public Domain

text:
    MONSANTO CO. v. SPRAY-RITE SERVICE CORP.
    No. 82-914.
    Argued December 5, 1983
    Decided March 20, 1984

      Powell, J., delivered the opinion of the Court, in which all other Members joined, except White, J., who took no part in the consideration or decision of the case. Brennan, J., filed a concurring opinion, post, p. 769.

      Fred H. Bartlit, Jr., argued the cause for petitioner. With him on the briefs were Jeffrey J. Kennedy, Marjorie Press Lindblom, Robert J. Kopecky, Michael T. Hannafan, and Richard W. Duesenberg.

      Assistant Attorney General Baxter argued the cause for the United States as amicus curiae in support of petitioner. With him on the brief were Solicitor General Lee, Deputy Solicitor General Wallace, Deputy Assistant Attorney General Lipsky, Jerrold J. Ganzfried, Robert B. Nicholson, and Edward T. Hand.

      Edward L. Foote argued the cause for respondent. With him on the briefs were Earl A. Jinkinson, Robert G. Foster, and David B. Love

      Briefs of amici curiae urging reversal were filed for Associates for Antitrust Analysis by Wesley J. Liebeler; for the National Agricultural Chemicals Association by Donald F. Turner, Arnold M. Lerman, James S. Campbell, and Ronald J. Greene; and for the National Association of Manufacturers by Donald I. Baker, Robert H. Rawson, Jr., Thomas E. Kauper, William E. Blasier, and Quentin Riegel.

      Briefs of amici curiae urging affirmance were filed for Burlington Coat Factory Warehouse Corp. by Herbert S. Kassner; for the National Mass Retailing Institute by Endicott Peabody, Timothy J. Waters, and William D. Coston; for the National Association of Catalog Showroom Merchandisers by Richard B. Kelly; for Service Merchandise Co., Inc., by William A. Carey, John F. Sherlock III, and Donald F. Mintmire; and for Forty-Six States by Ken Eikenberry, Attorney General of Washington, John R. Ellis, Deputy Attorney General, Jon P. Ferguson and James Kirkham Johns, Assistant Attorneys General, Charles A. Graddick, Attorney General of Alabama, Susan Beth Farmer, Assistant Attorney General, Norman C. Gorsuch, Attorney General of Alaska, Louise E. Ma, Assistant Attorney General, Robert K. Corbin, Attorney General of Arizona, Alison B. Swan, Assistant Attorney General, John Steven Clark, Attorney General of Arkansas, David L. Williams, Deputy Attorney General, Jeffrey A. Bell, Assistant Attorney General, John K. Van de Karnp, Attorney General of California, Andrea Sheridan Ordin, Chief Assistant Attorney General, Sanford N. Gruskin, Assistant Attorney General, Wayne M. Liao, Deputy Attorney General, Duane Woodard, Attorney General of Colorado, Thomas P. McMahon, Assistant Attorney General, Joseph I. Lieberman, Attorney General of Connecticut, Robert M. Danger, Assistant Attorney General, Charles M. Oberly, Attorney General of Delaware, Vincent M. Amberly, Deputy Attorney General, Jim Smith, Attorney General of Florida, Bill L. Bryant, Jr., Assistant Attorney General, Tany S. Hong, Attorney General of Hawaii, Sonia Faust, Deputy Attorney General, Neil F. Hartigan, Attorney General of Illinois, Thomas M. Genovese, Assistant Attorney General, Linley E. Pearson, Attorney General of Indiana, Frank A. Baldwin, Deputy Attorney General, Thomas J. Miller, Attorney General of Iowa, John R. Perkins, Assistant Attorney General, Robert T. Stephan, Attorney General of Kansas, Wayne E. Hundley, Deputy Attorney General, Steven L. Beshear, Attorney General of Kentucky, James M. Ringo, Assistant Attorney General, William J. Guste, Attorney General of Louisiana, John R. Flowers, Jr., Assistant Attorney General, James E. Tierney, Attorney General of Maine, Stephen

        L. Wessler, Assistant Attorney General, Stephen H. Sachs, Attorney General of Maryland, Charles 0. Monk II, Assistant Attorney General, Francis X. Bellotti, Attorney General of Massachusetts, Alan L. Kovacs, Assistant Attorney General, Frank J. Kelley, Attorney General of Michigan, Edwin M. Bladen, Assistant Attorney General, Hubert H. Humphrey III, Attorney General of Minnesota, Stephen P. Kilgriff, Special Assistant Attorney General, Bill Attain, Attorney General of Mississippi, Robert E. Sanders, Special Assistant Attorney General, Mike Greely, Attorney General of Montana, Pat Driscoll, Chief Assistant Attorney General, Paul L. Douglas, Attorney General of Nebraska, Dale A. Comer, Assistant Attorney General, Brian McKay, Attorney General of Nevada, William E. Isaeff, Chief Deputy Attorney General, Gregory H. Smith, Attorney General of New Hampshire, Irwin I. Kimmelman, Attorney General of New Jersey, Laurel A. Price, Paul Bardacke, Attorney General of New Mexico, Robert Abrams, Attorney General of New York, Lloyd Constantine, Assistant Attorney General, Rufus L. Edmisten, Attorney General of North Carolina, H. A. Cole, Jr., Special Deputy Attorney General, John R. Come, Associate Attorney General, Robert 0. Wefald, Attorney General of North Dakota, Daniel Hobland, Assistant Attorney General, Michael C. Turpén, Attorney General of Oklahoma, James B. Franks, Assistant Attorney General, Dave Frohnmayer, Attorney General of Oregon, Richard L. Caswell, Assistant Attorney General, Leroy S. Zimmerman, Attorney General of Pennsylvania, Eugene F. Wage, Deputy Attorney General, Dennis J. Roberts, Attorney General of Rhode Island, Faith LaSalle, Special Assistant Attorney General, Mark V. Meierhenry, Attorney General of South Dakota, Dennis R. Holmes, Assistant Attorney General, William M. Leech, Jr., Attorney General of Tennessee, William J. Haynes, Jr., Deputy Attorney General, Jim Mattox, Attorney General of Texas, James V. Sylvester, Assistant Attorney General, David L. Wilkinson, Attorney General of Utah, Stephen G. Schwendiman, Chief Assistant Attorney General, Suzanne M. Dallimore, Assistant Attorney General, John J. Easton, Jr., Attorney General of Vermont, Glenn R. Jarrett, Assistant Attorney General, Gerald L. Battles, Attorney General of Virginia, Elizabeth B. Lacy, Deputy Attorney General, Craig T. Merritt, Assistant Attorney General, Chauncey H. Browning, Attorney General of West Virginia, Bronson C. La Follette, Attorney General of Wisconsin, Michael L. Zaleski, Assistant Attorney General, A. G. McClintock, Attorney General of Wyoming, Gay Vanderpoel, Senior Assistant Attorney General, and Judith W. Rogers, Corporation Counsel for the District of Columbia.
      Briefs of amici curiae were filed for the Association of General Merchandise Chains, Inc., by James F. Rill, James M. Nicholson, and Edward T. Borda; for the Beverly Hills Bar Association by Eliot G. Disner; for Dayton-Hudson Corp. by John D. French and James T. Hale; for the Small Business Legal Defense Committee by Lawrence A. Sullivan; and for Senator Howard M. Metzenbaum et al. by Wesley J. Howard.

   Justice Powell

delivered the opinion of the Court.

This case presents a question as to the standard of proof required to find a vertical price-fixing conspiracy in violation of § 1 of the Sherman Act.

I

Petitioner Monsanto Co. manufactures chemical products, including agricultural herbicides. By the late 1960’s, the time at issue in this case, its sales accounted for approximately 15% of the corn herbicide market and 3% of the soybean herbicide market. In the corn herbicide market, the market leader commanded a 70% share. In the soybean herbicide market, two other competitors each had between 30% and 40% of the market. Respondent Spray-Rite Service Corp. was engaged in the wholesale distribution of agricultural chemicals from 1955 to 1972. Spray-Rite was essentially a family business, whose owner and president, Donald Yapp, was also its sole salaried salesman. Spray-Rite was a discount operation, buying in large quantities and selling at a low margin.

Spray-Rite was an authorized distributor of Monsanto herbicides from 1957 to 1968. In October 1967, Monsanto announced that it would appoint distributors for 1-year terms, and that it would renew distributorships according to several new criteria. Among the criteria were: (i) whether the distributor’s primary activity was soliciting sales to retail dealers; (ii) whether the distributor employed trained salesmen capable of educating its customers on the technical aspects of Monsanto’s herbicides; and (iii) whether the distributor could be expected “to exploit fully” the market in its geographical area of primary responsibility. Shortly thereafter, Monsanto also introduced a number of incentive programs, such as making cash payments to distributors that sent salesmen to training classes, and providing free deliveries of products to customers within a distributor’s area of primary responsibility.

In October 1968, Monsanto declined to renew Spray-Rite’s distributorship. At that time, Spray-Rite was the 10th largest out of approximately 100 distributors of Monsanto’s primary corn herbicide. Ninety percent of Spray-Rite’s sales volume was devoted to herbicide sales, and 16% of its sales were of Monsanto products. After Monsanto’s termination, Spray-Rite continued as a herbicide dealer until 1972. It was able to purchase some of Monsanto’s products from other distributors, but not as much as it desired or as early in the season as it needed. Monsanto introduced a new corn herbicide in 1969. By 1972, its share of the corn herbicide market had increased to approximately 28%. Its share of the soybean herbicide market had grown to approximately 19%.

Spray-Rite brought this action under § 1 of the Sherman Act, 26 Stat. 209, as amended, 15 U. S. C. § 1. It alleged that Monsanto and some of its distributors conspired to fix the resale prices of Monsanto herbicides. Its complaint further alleged that Monsanto terminated Spray-Rite’s distributorship, adopted compensation programs and shipping policies, and encouraged distributors to boycott Spray-Rite in furtherance of this conspiracy. Monsanto denied the allegations of conspiracy, and asserted that Spray-Rite’s distributorship had been terminated because of its failure to hire trained salesmen and promote sales to dealers adequately.

The case was tried to a jury. The District Court instructed the jury that Monsanto’s conduct was per se unlawful if it was in furtherance of a conspiracy to fix prices. In answers to special interrogatories, the jury found that (i) the termination of Spray-Rite was pursuant to a conspiracy between Monsanto and one or more of its distributors to set resale prices, (ii) the compensation programs, areas of primary-responsibility, and/or shipping policies were created by Monsanto pursuant to such a conspiracy, and (iii) Monsanto conspired with one or more distributors to limit Spray-Rite’s access to Monsanto herbicides after 1968. The jury awarded $3.5 million in damages, which was trebled to $10.5 million. Only the first of the jury’s findings is before us today.

The Court of Appeals for the Seventh Circuit affirmed. 684 F. 2d 1226 (1982). It held that there was sufficient evidence to satisfy Spray-Rite’s burden of proving a conspiracy to set resale prices. The court stated that “proof of termination following competitor complaints is sufficient to support an inference of concerted action.” Id., at 1238. Canvassing the testimony and exhibits that were before the jury, the court found evidence of numerous complaints from competing Monsanto distributors about Spray-Rite’s price-cutting practices. It also noted that there was testimony that a Monsanto official had said that Spray-Rite was terminated because of the price complaints.

In substance, the Court of Appeals held that an antitrust plaintiff can survive a motion for a directed verdict if it shows that a manufacturer terminated a price-cutting distributor in response to or following complaints by other distributors. This view brought the Seventh Circuit into direct conflict with a number of other Courts of Appeals. We granted cer-tiorari to resolve the conflict. 460 U. S. 1010 (1983). We reject the statement by the Court of Appeals for the Seventh Circuit of the standard of proof required to submit a case to the jury in distributor-termination litigation, but affirm the judgment under the standard we announce today.

p — H HH

This Court has drawn two important distinctions that are at the center of this and any other distributor-termination case. First, there is the basic distinction between concerted and independent action — a distinction not always clearly drawn by parties and courts. Section 1 of the Sherman Act requires that there be a “contract, combination ... or conspiracy” between the manufacturer and other distributors in order to establish a violation. 15 U. S. C. §1. Independent action is not proscribed. A manufacturer of course generally has a right to deal, or refuse to deal, with whomever it likes, as long as it does so independently. United States v. Colgate & Co., 250 U. S. 300, 307 (1919); cf. United States v. Parke, Davis & Co., 362 U. S. 29 (1960). Under Colgate, the manufacturer can announce its resale prices in advance and refuse to deal with those who fail to comply. And a distributor is free to acquiesce in the manufacturer’s demand in order to avoid termination.

The second important distinction in distributor-termination cases is that between concerted action to set prices and concerted action on nonprice restrictions. The former have been per se illegal since the early years of national antitrust enforcement. See Dr. Miles Medical Co. v. John D. Park & Sons Co., 220 U. S. 373, 404-409 (1911). The latter are judged under the rule of reason, which requires a weighing of the relevant circumstances of a case to decide whether a restrictive practice constitutes an unreasonable restraint on competition. See Continental T. V., Inc. v. GTE Sylvania Inc., 433 U. S. 36 (1977).

While these distinctions in theory are reasonably clear, often they are difficult to apply in practice. In Sylvania we emphasized that the legality of arguably anticompetitive conduct should be judged primarily by its “market impact.” See, e. g., id., at 51. But the economic effect of all of the conduct described above — unilateral and concerted vertical price setting, agreements on price and nonprice restrictions — is in many, but not all, cases similar or identical. See, e. g., Parke, Davis, supra, at 44; n. 7, supra. And judged from a distance, the conduct of the parties in the various situations can be indistinguishable. For example, the fact that a manufacturer and its distributors are in constant communication about prices and marketing strategy does not alone show that the distributors are not making independent pricing decisions. A manufacturer and its distributors have legitimate reasons to exchange information about the prices and the reception of their products in the market. Moreover, it is precisely in cases in which the manufacturer attempts to further a particular marketing strategy by means of agreements on often costly nonprice restrictions that it will have the most interest in the distributors’ resale prices. The manufacturer often will want to ensure that its distributors earn sufficient profit to pay for programs such as hiring and training additional salesmen or demonstrating the technical features of the product, and will want to see that “free-riders” do not interfere. See Sylvania, supra, at 55. Thus, the manufacturer’s strongly felt concern about resale prices does not necessarily mean that it has done more than the Colgate doctrine allows.

Nevertheless, it is of considerable importance that independent action by the manufacturer, and concerted action on nonprice restrictions, be distinguished from price-fixing agreements, since under present law the latter are subject to per se treatment and treble damages. On a claim of concerted price fixing, the antitrust plaintiff must present evidence sufficient to carry its burden of proving that there was such an agreement. If an inference of such an agreement may be drawn from highly ambiguous evidence, there is a considerable danger that the doctrines enunciated in Syl-vania and Colgate will be seriously eroded.

The flaw in the evidentiary standard adopted by the Court of Appeals in this case is that it disregards this danger. Permitting an agreement to be inferred merely from the existence of complaints, or even from the fact that termination came about “in response to” complaints, could deter or penalize perfectly legitimate conduct. As Monsanto points out, complaints about price cutters “are natural — and from the manufacturer’s perspective, unavoidable — reactions by distributors to the activities of their rivals.” Such complaints, particularly where the manufacturer has imposed a costly set of nonprice restrictions, “arise in the normal course of business and do not indicate illegal concerted action.” Roesch, Inc. v. Star Cooler Corp., 671 F. 2d 1168, 1172 (CA8 1982), on rehearing en banc, 712 F. 2d 1235 (CA8 1983) (affirming District Court judgment by an equally divided court). Moreover, distributors are an important source of information for manufacturers. In order to assure an efficient distribution system, manufacturers and distributors constantly must coordinate their activities to assure that their product will reach the consumer persuasively and efficiently. To bar a manufacturer from acting solely because the information upon which it acts originated as a price complaint would create an irrational dislocation in the market. See F. Warren-Boulton, Vertical Control of Markets 13, 164 (1978). In sum, “[t]o permit the inference of concerted action on the basis of receiving complaints alone and thus to expose the defendant to treble damage liability would both inhibit management’s exercise of its independent business judgment and emasculate the terms of the statute.” Edward J. Sweeney & Sons, Inc. v. Texaco., Inc., 637 F. 2d 105, 111, n. 2 (CA3 1980), cert. denied, 451 U. S. 911 (1981).

Thus, something more than evidence of complaints is needed. There must be evidence that tends to exclude the possibility that the manufacturer and nonterminated distributors were acting independently. As Judge Aldisert has written, the antitrust plaintiff should present direct or circumstantial evidence that reasonably tends to prove that the manufacturer and others “had a conscious commitment to a common scheme designed to achieve an unlawful objective.” Edward J. Sweeney & Sons, supra, at 111; accord, H. L. Moore Drug Exchange v. Eli Lilly & Co., 662 F. 2d 935, 941 (CA2 1981), cert. denied, 459 U. S. 880 (1982); cf. American Tobacco Co. v. United States, 328 U. S. 781, 810 (1946) (Circumstances must reveal “a unity of purpose or a common design and understanding, or a meeting of minds in an unlawful arrangement”).

HH HH

A

Applying this standard to the facts of this case, we believe there was sufficient evidence for the jury reasonably to have concluded that Monsanto and some of its distributors were parties to an “agreement” or “conspiracy” to maintain resale prices and terminate price cutters. In fact there was substantial direct evidence of agreements to maintain prices. There was testimony from a Monsanto district manager, for example, that Monsanto on at least two occasions in early 1969, about five months after Spray-Rite was terminated, approached price-cutting distributors and advised that if they did not maintain the suggested resale price, they would not receive adequate supplies of Monsanto’s new corn herbicide. Tr. 1929-1934. When one of the distributors did not assent, this information was referred to the Monsanto regional office, and it complained to the distributor’s parent company. There was evidence that the parent instructed its subsidiary to comply, and the distributor informed Monsanto that it would charge the suggested price. Id., at 1933-1934. Evidence of this kind plainly is relevant and persuasive as to a meeting of minds.

An arguably more ambiguous example is a newsletter from one of the distributors to his dealer-customers. The newsletter is dated October 1, 1968, just four weeks before Spray-Rite was terminated. It was written after a meeting between the author and several Monsanto officials, id., at 2564, 2571-2573, and discusses Monsanto’s efforts to “ge[t] the ‘market place in order.’” App. A-65. The newsletter reviews some of Monsanto’s incentive and shipping policies, and then states that in addition “every effort will be made to maintain a minimum market price level.” Id., at A-66. The newsletter relates these efforts as follows:

“In other words, we are assured that Monsanto’s company-owned outlets will not retail at less than their suggested retail price to the trade as a whole. Furthermore, those of us on the distributor level are not likely to deviate downward on price to anyone as the idea is implied that doing this possibly could discolor the outlook for continuity as one of the approved distributors during the future upcoming seasons. So, none interested in the retention of this arrangement is likely to risk being deleted from this customer service opportunity. Also, as far as the national accounts are concerned, they are sure to recognize the desirability of retaining Monsanto’s favor on a continuing basis by respecting the wisdom of participating in the suggested program in a manner assuring order on the retail level ‘playground’ throughout the entire country. It is elementary that harmony can only come from following the rules of the game and that in case of dispute, the decision of the umpire is final.” Id., at A-66 — A-67.

It is reasonable to interpret this newsletter as referring to an agreement or understanding that distributors and retailers would maintain prices, and Monsanto would not undercut those prices on the retail level and would terminate competitors who sold at prices below those of complying distributors; these were “the rules of the game.”

B

If, as the courts below reasonably could have found, there was evidence of an agreement with one or more distributors to maintain prices, the remaining question is whether the termination of Spray-Rite was part of or pursuant to that agreement. It would be reasonable to find that it was, since it is necessary for competing distributors contemplating compliance with suggested prices to know that those who do not comply will be terminated. Moreover, there is some circumstantial evidence of such a link. Following the termination, there was a meeting between Spray-Rite’s president and a Monsanto official. There was testimony that the first thing the official mentioned was the many complaints Monsanto had received about Spray-Rite’s prices. Tr. 774, 1295. In addition, there was reliable testimony that Monsanto never discussed with Spray-Rite prior to the termination the distributorship criteria that were the alleged basis for the action. See 684 F. 2d, at 1239. By contrast, a former Monsanto salesman for Spray-Rite’s area testified that Monsanto representatives on several occasions in 1965-1966 approached Spray-Rite, informed the distributor of complaints from other distributors — including one major and influential one, see Tr. 126, 135 — and requested that prices be maintained. Id., at 109-110, 114. Later that same year, Spray-Rite’s president testified, Monsanto officials made explicit threats to terminate Spray-Rite unless it raised its prices. Id., at 619, 711.

H — ( <

We conclude that the Court of Appeals applied an incorrect standard to the evidence in this case. The correct standard is that there must be evidence that tends to exclude the possibility of independent action by the manufacturer and distributor. That is, there must be direct or circumstantial evidence that reasonably tends to prove that the manufacturer and others had a conscious commitment to a common scheme designed to achieve an unlawful objective. Under this standard, the evidence in this case created a jury issue as to whether Spray-Rite was terminated pursuant to a price-fixing conspiracy between Monsanto and its distributors. The judgment of the court below is affirmed.

It is so ordered.

Justice White took no part in the consideration or decision of this case.

Justice Brennan,

concurring.

As the Court notes, the Solicitor General has filed a brief in this Court for the United States as amicus curiae urging us to overrule the Court’s decision in Dr. Miles Medical Co. v. John D. Park & Sons Co., 220 U. S. 373 (1911). That decision has stood for 73 years, and Congress has certainly been aware of its existence throughout that time. Yet Congress has never enacted legislation to overrule the interpretation of the Sherman Act adopted in that case. Under these circumstances, I see no reason for us to depart from our longstanding interpretation of the Act. Because the Court adheres to that rule and, in my view, properly applies Dr. Miles to this case, I join the opinion and judgment of the Court.

       These areas of primary responsibility were not exclusive territorial restrictions. Approximately 10 to 20 distributors were assigned to each area, and distributors were permitted to sell outside their assigned area.

       The three special interrogatories were as follows:
      “1. Was the decision by Monsanto not to offer a new contract to plaintiff for 1969 made by Monsanto pursuant to a conspiracy or combination with one or more of its distributors to fix, maintain or stabilize resale prices of Monsanto herbicides?
      “2. Were the compensation programs and/or areas of primary responsibility, and/or shipping policy created by Monsanto pursuant to a conspiracy to fix, maintain or stabilize resale prices on Monsanto herbicides?
      “3. Did Monsanto conspire or combine with one or more of its distributors so that one or more of those distributors would limit plaintiff’s access to Monsanto herbicides after 1968?” 684 F. 2d 1226, 1233 (CA7 1982).
      The jury answered “Yes” to each of the interrogatories.

       See n. 6, infra.

       The court later in the same paragraph restated the standard of sufficiency as follows: “Proof of distributorship termination in response to competing distributors’ complaints about the terminated distributor’s pricing policies is sufficient to raise an inference of concerted action.” 684 F. 2d, at 1239 (emphasis added). It may be argued that this standard is different from the one quoted in text in that this one requires a showing of a minimal causal connection between the complaints and the termination of the plaintiff, while the textual standard requires only that the one “follow” the other. As we explain infra, at 763-764, the difference is not ultimately significant in our analysis.

       The court below recognized that its standard was in conflict with that articulated in Edward J. Sweeney & Sons, Inc. v. Texaco, Inc., 637 F. 2d 105, 110-111 (CA3 1980), cert. denied, 451U. S. 911 (1981). Other Courts of Appeals also have rejected the standard adopted by the Court of Appeals for the Seventh Circuit. See Schwimmer v. Sony Corp. of America, 677 F. 2d 946, 952-953 (CA2), cert. denied, 459 U. S. 1007 (1982); Davis-Watkins Co. v. Service Merchandise, 686 F. 2d 1190, 1199 (CA6 1982), cert. pending, No. 82-848; Bruce Drug, Inc. v. Hollister Inc., 688 F. 2d 853, 856-857 (CA1 1982); see also Blankenship v. Herzfeld, 661 F. 2d 840, 845 (CA10 1981). The Court of Appeals for the Fourth Circuit has adopted the Seventh Circuit’s standard. See Bostick Oil Co. v. Michelin Tire Corp., 702 F. 2d 1207, 1213-1215 (1983). One panel of the Court of Appeals for the Eighth Circuit also has adopted that standard, see Battle v. Lubrizol Corp., 673 F. 2d 984, 990-992 (1982), while another appears to have rejected it in an opinion issued the same day, see Roesch, Inc. v. Star Cooler Corp., 671 F. 2d 1168, 1172 (1982). On rehearing en banc, the Court of Appeals was equally divided between the two positions. Compare Roesch, Inc. v. Star Cooler Corp., 712 F. 2d 1235 (1983) (en banc), with Battle v. Watson, 712 F. 2d 1238, 1240 (1983) (en banc) (McMillian, J., dissenting).

       Monsanto also challenges another part of the Court of Appeals’ opinion. It argues that the court held that the nonprice restrictions in this case — the compensation and shipping policies — would be judged under a rule of reason rather than a per se rule ‘“only if there is no allegation that the [nonpriee] restrictions are part of a conspiracy to fix prices.’” Brief for Petitioner 15 (emphasis deleted) (quoting 684 F. 2d, at 1237). Monsanto asserts that under this holding a mere allegation that nonprice restrictions were part of a price conspiracy would subject them to per se treatment. Monsanto contends this view undermines our decision in Continental T. V., Inc. v. GTE Sylvania Inc., 433 U. S. 36 (1977), that such restrictions are subject to the rule of reason.
      If this were what the Court of Appeals held, it would present an arguable conflict. We think, however, that Monsanto misreads the court’s opinion. Read in context, the court’s somewhat broad language fairly may be read to say that a plaintiff must prove, as well as allege, that the nonprice restrictions were in fact a part of a price conspiracy. Thus, later in its opinion the court notes that the District Court properly instructed the jury that “Monsanto’s otherwise lawful compensation programs and shipping policies were per se unlawful if undertaken as part of an illegal scheme to fix prices.” 684 F. 2d, at 1237 (emphasis added). The court cited White Motor Co. v. United States, 372 U. S. 253, 260 (1963), in which this Court wrote that restrictive practices ancillary to a price-fixing agreement would be restrained only if there was a finding that the two were sufficiently linked. And the Court of Appeals elsewhere noted the jury’s finding that the nonprice practices here were “created by Monsanto pursuant to a conspiracy to fix . . . resale prices.” 684 F. 2d, at 1233.
      Monsanto does not dispute Spray-Rite’s view that if the nonprice practices were proved to have been instituted as part of a price-fixing conspiracy, they would be subject to per se treatment. See Brief for Petitioner 23-27. Instead, Monsanto argues that there was insufficient evidence to support the jury’s finding that the nonprice practices were “created by Monsanto pursuant to” a price-fixing conspiracy. Monsanto failed to make its sufficiency-of-the-evidence argument in the Court of Appeals with respect to this finding, see Brief for Defendant-Appellant Monsanto Co. in No. 80-2232 (CAT), pp. 27-34, and the court did not address the point. We therefore decline to reach it. See, e. g., Adickes v. S. H. Kress & Co., 398 U. S. 144, 147, n. 2 (1970); Duignan v. United States, 274 U. S. 195, 200 (1927).
      In view of Monsanto’s concession that a proper finding that nonprice practices were part of a price-fixing conspiracy would suffice to subject the entire conspiracy to per se treatment, Sylvania is not applicable to this case. In that case only a nonprice restriction was challenged. See 433 U. S., at 51, n. 18. Nothing in our decision today undercuts the holding of Sylvania that nonprice restrictions are to be judged under the rule of reason. In fact, the need to ensure the viability of Sylvania is an important consideration in our rejection of the Court of Appeals’ standard of sufficiency of the evidence. See infra, at 763.

       The Solicitor General (by brief only) and several other amici suggest that we take this opportunity to reconsider whether “ccntract[s], combination[s]... or conspiracies]” to fix resale prices should always be unlawful. They argue that the economic effect of resale price maintenance is little different from agreements on nonprice restrictions. See generally Continen

        tal T. V., Inc. v. GTE Sylvania Inc., 433 U. S., at 69-70 (White, J., concurring in judgment) (citing sources); Baker, Interconnected Problems of Doctrine and Economics in the Section One Labyrinth: Is Sylvania a Way Out?, 67 Va. L. Rev. 1457, 1465-1466 (1981). They say that the economic objections to resale price maintenance that we discussed in Sylvania, supra, at 51, n. 18 — such as that it facilitates horizontal cartels — can be met easily in the context of rule-of-reason analysis.
      Certainly in this case we have no occasion to consider the merits of this argument. This case was tried on perse instructions to the jury. Neither party argued in the District Court that the rule of reason should apply to a vertical price-fixing conspiracy, nor raised the point on appeal. In fact, neither party before this Court presses the argument advanced by amici. We therefore decline to reach the question, and we decide the case in the context in which it was decided below and argued here.

       We do not suggest that evidence of complaints has no probative value at all, but only that the burden remains on the antitrust plaintiff to introduce additional evidence sufficient to support a finding of an unlawful contract, combination, or conspiracy.

       The concept of “a meeting of the minds” or “a common scheme” in a distributor-termination ease includes more than a showing that the distributor conformed to the suggested price. It means as well that evidence must be presented both that the distributor communicated its acquiescence or agreement, and that this was sought by the manufacturer.

       In addition, there was circumstantial evidence that Monsanto sought agreement from the distributor to conform to the resale price. The threat to cut off the distributor’s supply came during Monsanto’s “shipping season” when herbicide was in short supply. The jury could have concluded that Monsanto sought this agreement at a time when it was able to use supply as a lever to force compliance.

       The newsletter also is subject to the interpretation that the distributor was merely describing the likely reaction to unilateral Monsanto pronouncements. But Monsanto itself appears to have construed the flyer as reporting a price-fixing understanding. Six weeks after the newsletter was written, a Monsanto official wrote its author a letter urging him to “correct immediately any misconceptions about Monsanto’s marketing policies.” App. A-98. The letter disavowed any intent to enter into an agreement on resale prices. The interpretation of these documents and the testimony surrounding them properly was left to the jury.

       Monsanto argues that the reference could have been to complaints by Monsanto employees rather than distributors, suggesting that the price controls were merely unilateral action, rather than accession to the demands of the distributors. The choice between two reasonable interpretations of the testimony properly was left for the jury. See also Tr. 1298 (identifying source of one complaint as a distributor).

       The existence of the illegal joint boycott after Spray-Rite’s termination, a finding that the Court of Appeals affirmed and that is not before us, is further evidence that Monsanto and its distributors had an understanding that prices would be maintained, and that price cutters would be terminated. This last, however, is also consistent with termination for other reasons, and is probative only of the ability of Monsanto and its distributors to act in concert.

       Monsanto’s contrary evidence has force, but we agree with the courts below that it was insufficient to take the issue from the jury. It is true that there was no testimony of any complaints about Spray-Rite's pricing for the 15 months prior to termination. But it was permissible for the jury to conclude that there were complaints during that period from the evidence that they continued after 1968 and from the testimony that they were mentioned at Spray-Rite’s post-termination meeting with Monsanto. There is also evidence that resale prices in fact did not stabilize after 1968. On the other hand, the former Monsanto salesman testified that prices were more stable in 1969-1970 than in his earlier stint in 1965-1966. Id,., at 217. And, given the evidence that Monsanto took active measures to stabilize prices, it may be that distributors did not assent in sufficient numbers, or broke their promises. In any event, we cannot say that the courts below erred in finding that Spray-Rite produced substantial evidence of the concerted action required by § 1 of the Sherman Act, and that — despite the sharp conflict in evidence — the case properly was submitted to the jury.