Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc.

429 U.S. 477 (1977)

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Nature of the Case

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Facts

D was a manufacturer of bowling equipment. D is one of the two largest manufacturers of bowling equipment in the United States. D financed purchases, but the market grew too fast, and many defaulted on their payments. Attempts to sell or lease the repossessed equipment met with only limited success. Because P had borrowed close to $250,000,000 to finance its credit sales, it was in serious financial difficulty. The solution was repossession and continued operation of the businesses. D has acquired 222 centers and operated a large number of bowling centers, including six in the markets in which Ps operate. D's net worth in 1965 was more than eight times greater, and its gross revenue more than seven times greater, than the total for the 11 next largest bowling chains. D controlled only 2% of the bowling centers in the United States. Ps instituted this action contending that these acquisitions violated various provisions of the antitrust laws. P contends that these acquisitions in his market might substantially lessen competition or tend to create a monopoly in violation of § 7 of the Clayton Act. To establish a § 7 violation, P sought to prove that because of its size, D had the capacity to lessen competition in the markets it had entered by driving smaller competitors out of business. P attempted to show that had D allowed the defaulting centers to close, P's profits would have increased. The jury returned a verdict in favor of P in the amount of $2,358,030. The District Court trebled the damages. It also awarded costs and attorneys' fees totaling $446,977.32, and, sitting as a court of equity, it ordered D to divest itself of the centers involved herein. The Court of Appeals reversed the judgment and remanded the case in that a properly instructed jury could have concluded that D was a 'giant' whose entry into a 'market of pygmies' might lessen horizontal retail competition. P and D petitioned for writs of certiorari. D's petition challenged the theory the Court of Appeals had approved for awarding damages; P's petition challenged the Court of Appeals' conclusions with respect to the jury instructions and the appropriateness of a divestiture order. D’s petition was granted.