Nature of the Case
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Facts
Steel production is divided into two stages: the production of rolled steel products and their fabrication into finished steel products. United States Steel (D) and its subsidiaries engage in the business of producing rolled steel products and in structural fabrication but do no plate fabrication work. Consolidated Steel (D), the sale of whose assets the government seeks to enjoin, is engaged only in structural fabrication and plate fabrication. United States Steel (D) with its subsidiaries is the largest producer of rolled steel products in the United States with sales of $1.5 billion. It produced, almost exactly, a third of all rolled steel products produced in the United States. Consolidated (D), by contrast, had plants whose depreciated value was less than ten million dollars. During the five-year period 1937-1941, it had average sales of only twenty million dollars. During the war Consolidated (D), produced over a billion and a half dollars worth of ships with government-furnished facilities. It no longer possesses any facilities for building ships. Consolidated (D accounts for approximately 3% of the national demand for rolled steel. A purchase agreement was made by United States Steel (D) for the purchase of Consolidated (D). United States Steel's (D) purpose in purchasing Consolidated (D) was to assure a market for plates and shapes and Consolidated's (D) purpose was to withdraw the stockholders' equity from the fabrication business with its cyclical fluctuations at a time when a favorable price could be realized. P sued. It claims that the acquisition constitutes an illegal restraint of interstate commerce because all manufacturers except United States Steel (D) will be excluded from the business of supplying Consolidated's (D) requirements of rolled steel products. P claimed this was an attempt by United States Steel (D) to monopolize the production and sale of fabricated steel products in Consolidated’s (D) markets. The parties are in sharp dispute as to the size and nature of the market for rolled steel products with which Consolidated's (D) consumption is to be compared. Ds argue for a national market comparison, and P argues for a regional standard. For D, that is less than ½ of 1% and for P, that is about 3%. The trial court found that the steel requirements of Consolidated (D) represented 'a small part' of the consumption in the Consolidated (D) area, that Consolidated (D) was not a 'substantial market' for rolled steel producers selling in competition with United States Steel (D), and that the acquisition of Consolidated (D) would not injure any competitor of United States Steel (D) engaged in the production and sale of rolled steel products in the Consolidated (D) market or elsewhere. The Court ruled for Ds, and P appealed.
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