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

Facts

Brunswick (D) is one of the two largest manufacturers of bowling equipment in the United States. Pueblo (P) are three of the 10 bowling centers owned by Treadway Companies, Inc. Since 1965, D has acquired and operated a large number of bowling centers, including six in the markets in which Ps operate. Ps instituted this action contending that these acquisitions violated various provisions of the antitrust laws. The industry went through a bubble expansion, and D's sales quickly dropped to pre-boom levels. D experienced great difficulty in collecting money owed it; by the end of 1964 over $100,000,000, or more than 25%, of D's accounts were more than 90 days delinquent. Repossessions rose dramatically but attempts to sell or lease the repossessed equipment met with only limited success. D had borrowed close to $250,000,000 to finance its credit sale, and it was an understatement to say that D was 'in serious financial difficulty.' D began acquiring and operating defaulting bowling centers when their equipment could not be resold, and a positive cash flow could be expected from operating the centers. During the seven years preceding the trial, in this case, petitioner acquired 222 centers, 54 of which it either disposed of or closed. D was by far the largest operator of bowling centers, with over five times as many centers as its next largest competitor. 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 sued D alleging, inter alia, that these acquisitions might substantially lessen competition or tend to create a monopoly in violation of 7 of the Clayton Act, 15 U.S.C. 18. P sought damages, pursuant to 4 of the Act, 15 U.S.C. 15, for three times 'the reasonably expectable profits to be made from the operation of their bowling centers.' Ps also sought a divestiture order, an injunction against future acquisitions, and such 'other further and different relief' as might be appropriate under 16 of the Act, 15 U.S.C. 26. App. A27. The jury returned a verdict in favor of Ps in the amount of $2,358,030, which represented the minimum estimate by Ps of the additional income they would have realized had the acquired centers been closed. The District Court trebled the damages. It also awarded respondents costs and attorneys' fees totaling $446,977.32, and, sitting as a court of equity, it ordered petitioner to divest itself of the centers involved. D appealed. The Court of Appeals, while endorsing the legal theories upon which respondents' claim was based, reversed the judgment and remanded the case for further proceedings. Both sides petitioned this Court for writs of certiorari. D's petition challenged the theory the Court of Appeals had approved for awarding damages; Ps' petition challenged the Court of Appeals' conclusions with respect to the jury instructions and the appropriateness of a divestiture order.

Issues

Rule of Law

Holding and Decision

Legal Analysis

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