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Keywords

lawsuitdamagestrustantitrusttreble damagespiracy

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Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 104 S.Ct. 2731, 81 L.Ed.2d 628, 1984-2 Trade Cases P 66,065

Facts

Copperweld Corp. purchased Regal Tube Co. from Lear Siegler, Inc., which had operated Regal as an unincorporated division. After the acquisition, Regal was transferred to a newly formed wholly owned subsidiary. David Grohne, a former officer of Regal, formed Independence Tube Corp. to compete with Regal. Copperweld sent letters to potential suppliers warning them against doing business with Grohne, leading to a lawsuit by Independence Tube against Copperweld and Regal for conspiracy under the Sherman Act. The jury found that Copperweld and Regal conspired to violate the Act, resulting in treble damages awarded to Independence Tube.

Petitioner Copperweld Corp. purchased petitioner Regal Tube Co., a manufacturer of steel tubing, from Lear Siegler, Inc., which had operated Regal as an unincorporated division, and which under the sale agreement was bound not to compete with Regal for five years.

Issue

Rule

Analysis

The court analyzed the nature of the relationship between Copperweld and Regal, concluding that they operated as a single entity. The court emphasized that the Sherman Act's focus on concerted behavior does not extend to actions taken by a parent and its wholly owned subsidiary, as they share a unity of purpose and interest. Therefore, the actions taken by Copperweld to protect Regal from competition did not amount to a conspiracy under the Act.

Conclusion

Who won?

Copperweld Corp. prevailed in this case as the Supreme Court reversed the lower court's ruling that had found them liable for conspiracy under the Sherman Act. The Court determined that the coordinated actions of Copperweld and Regal were not subject to antitrust scrutiny as they constituted a single enterprise, thus eliminating the basis for the conspiracy claim.

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