The fifth premise mentioned by Judge Lord was not necessary to his ultimate decision inasmuch as he dismissed the claims asserted by the owners of homes who had acquired these structures new from builders as well as the claims of those who had purchased homes from a prior homeowner. The factual determination that must now be made is whether on the record here these public bodies eventually came to own the plumbing fixtures in question in the same or a similar manner as described by Judge Lord in premises 1 through 4.
From the affidavits, answers to interrogatories and responses to requests for admission on file in these cases, it is apparent that there is no genuine dispute as to any of the material facts necessary to decide the pending motions. The conclusion is inescapable here that insofar as the issue before this Court is concerned, there is no essential difference between the public body plaintiffs, whose claims are under attack in this proceeding, and the homeowner plaintiffs whose claims were dismissed in Mangano. Both sets of plaintiffs in effect purchased buildings containing plumbing fixtures rather than plumbing fixtures themselves. In this instance as in the homeowners case, wholesalers purchased the plumbing fixtures in question from the defendant manufacturers and sold such fixtures to plumbing contractors. While in Mangano the plumbing contractors in turn included the furnishing and installation of such fixtures in their subcontracts with builders or developers, here there were subcontracts with general contractors which constructed the buildings in question under contracts with the public body owners. This slight difference is not material for a determination of the legal questions presently before the Court. What is significant is that the plumbing fixtures in plaintiffs' buildings, just as in Mangano, passed through successive unrestrained markets with independent pricing decisions having been made at each different level. Accordingly, the plaintiffs here have the same problems of proof as did the plaintiffs in Mangano.
Under these circumstances, this Court concludes that these public body plaintiffs are under the Mangano rationale simply too remote in the chain of distribution to be permitted as a matter of law to recover from price-fixing manufacturers. As Mr. Justice White said in the Hanover case (392 U.S. at 493), the problems of proof under circumstances such as those present here are "nearly insuperable" and would require "a convincing showing of each of these virtually unascertainable figures," a task which "would normally prove insurmountable." As plaintiffs occupying the level of the chain of distribution that these plaintiffs occupy cannot for the reasons stated in Mangano prove that they were injured in their business or property, their claims must be dismissed.
The undisputed facts in the record here establish that the present plaintiffs contracted not for the purchase of plumbing fixtures themselves but for the purchase of public buildings containing plumbing fixtures. The facts also establish that these plaintiffs did not make their purchases of the buildings under a preexisting cost-plus contract or analogous type of arrangement. Indeed, in these cases, it is even clearer than in the homeowner cases that no cost-plus type arrangement was involved. The public bodies here entered into contracts for their finished structures as a result of sealed bids submitted by general contractors and not as a result of negotiated prices. The requirement that competitive bids be submitted necessarily demands that the contractor bear the full risk if prices are inaccurately estimated. Such an arrangement is distinctly different from the cost-plus type of contract which might permit the tracing to an end user of the increased prices paid for the fixtures in question. The facts here then do not fall within the exception noted by Mr. Justice White in Hanover (392 U.S. at 494).
Plaintiffs contend that in building contracts of the type involved here the material costs of plumbing fixtures remain fixed and invariable and that only labor, administrative costs and other factors are the variables in the price of the completed structure. Based on this premise, plaintiffs argue that they would be able to prove damages which resulted from the initial illegal overcharge by the manufacturer and which was then passed on to the end user. The simple answer to this argument is that it would likewise apply to homeowners. For the reasons stated by Judge Lord in Mangano, there is no merit to this contention. In Mangano (50 F.R.D. at 25), the following language from the Hanover opinion was quoted with emphasis:
"A wide range of factors influence a company's pricing policies. Normally the impact of a single change in the relevant conditions cannot be measured after the fact; indeed a businessman may be unable to state whether, had one fact been different (a single supply less expensive, general economic conditions more buoyant, or the labor market tighter, for example), he would have chosen a different price. Equally difficult to determine, in the real economic world rather than an economist's hypothetical model, is what effect a change in a company's price will have on its total sales. Finally costs per unit for a different volume of total sales are hard to estimate. Even if it could be shown that the buyer raised his price in response to, and in the amount of, the overcharge and that his margin of profit and total sales had not thereafter declined, there would remain the nearly insuperable difficulty of demonstrating that the particular plaintiff could not or would not have raised his prices absent the overcharge or maintained the higher price had the overcharge been discontinued." (392 U.S. at 493)
Judge Lord then went on to say this (50 F.R.D. at 25-26):
"All of the difficulties referred to by the Supreme Court with respect to tracing the impact of an overcharge are present in the instant case, and most to a much greater extent than in Hanover. Assuming that the price paid by the wholesaler to the manufacturer contained an unlawful overcharge, claims of the present plaintiffs rest, as has been indicated, at the very least on the following additional premises: (a) that the overcharge was then passed on by the wholesaler to the plumbing contractor; (b) that the plumbing contractor then passed the overcharge on to the builder; (c) that the builder passed on the overcharge to the purchasing homeowner; (d) in the case of used houses, each prior homeowner passed the overcharge on to the present plaintiffs. Each of these steps represents activity in a completely new and unrestrained market. * * * If the Supreme Court regarded the figures underlying corresponding assumptions as 'virtually unascertainable' and applied such adjectives as 'insuperable' and 'insurmountable' to any attempt to support them in that case, it certainly follows a fortiori that insuperable difficulties inhere in the premises underlying the claims at issue in the instant case. Accordingly, the Court agrees with defendants that the claims of the plaintiffs under consideration in their capacity as homeowners are blocked by insurmountable difficulties of proof."