United States v. United States Gypsum Co.

438 U.S. 422 (1978)


Gypsum board, a laminated type of wallboard composed of paper, vinyl, or other specially treated coverings over a gypsum core, has substantially replaced wet plaster as the primary component of interior walls and ceilings in residential and commercial construction. It is a fungible product with price, terms and delivery dates being the main ingredients of business. The eight largest companies accounted for some 94% of the national sales with the seven 'single-plant producers' accounting for the remaining 6%. The Gypsum Association has served as a trade association of gypsum board manufacturers since 1930. P charged six major manufacturers (Ds) and various of their corporate officials with violations of § 1 of the Sherman Act. P alleged that Ds restrained competition with the practice of telephoning each other to confirm prices for specific customers. The jury was instructed that if Ds conduct had the effect of fixing prices or even maintaining prices, that intent to achieve the result should be presumed. The instructions on verification closed with the observation: 'The law presumes that a person intends the necessary and natural consequences of his acts. Therefore, if the effect of the exchanges of pricing information was to raise, fix, maintain, and stabilize prices, then the parties to them are presumed, as a matter of law, to have intended that result.' Ds were found guilty. Ds appealed and the Court of Appeals reversed holding that intent was an element of the crime, and it required independent proof. P appealed, and the Supreme Court granted certiorari.