Copperweld Corp. v. Independence Tube Corp.

467 U.S. 752 (1984)

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Nature of the Case

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Facts

In 1968 Lear Siegler, Inc., purchased Regal Tube Co. and operated it as an unincorporated division. David Grohne, who had previously served as vice president and general manager of Regal, became president of the division after the acquisition. In 1972 D purchased the Regal division from Lear Siegler. the sale agreement bound Lear Siegler and its subsidiaries not to compete with Regal in the United States for five years. D then transferred Regal's assets to a newly formed, wholly owned Pennsylvania corporation, Regal Tube Co. The new subsidiary continued to conduct its manufacturing operations in Chicago but shared D's corporate headquarters in Pittsburgh. Shortly before D acquired Regal, David Grohne accepted a job as a corporate officer of Lear Siegler. After the acquisition, while continuing to work for Lear Siegler, Grohne set out to establish his own steel tubing business to compete in the same market as Regal. In May1972 he formed Independence (P), which soon secured an offer from the Yoder Co. to supply a tubing mill. P gave Yoder a purchase order to have a mill ready by the end of December 1973. D informed Yoder of the non-compete agreement. Two days later Yoder voided its acceptance. P obtained another mill who actually performed the work even though it too received a warning letter from D. The total delay was nine months. P sued D and Regal alleging that the two entities had conspired for anticompetitive purposes in violation of § 1 of the Sherman Act. The jury then awarded P $2,499,009 on the antitrust claim, which was trebled to $7,497,027. It awarded $15,000 against Regal alone on the contractual interference and slander counts. The Seventh Circuit affirmed. The court questioned the wisdom of subjecting an 'intra-enterprise' conspiracy to antitrust liability when the same conduct by a corporation and an unincorporated division would escape liability for lack of the requisite two legal persons. The Supreme Court granted certiorari.