Document: 429 U.S. 477 97 S.Ct. 690 50 L.Ed.2d 701 BRUNSWICK CORPORATION, Petitioner,v.PUEBLO BOWL-O-MAT, INC., et al. No. 75-904. Argued Nov. 3, 1976. Decided Jan. 25, 1977. Syllabus Respondents, bowling centers in three distinct markets, brought this antitrust action against petitioner, one of the two largest equipment manufacturers and operator centers, claiming that petitioner's acquisitions competing had defaulted payments for they purchased from petitioner might substantially lessen competition or tend to create a monopoly violation § 7 Clayton Act. Respondents sought treble damages pursuant 4 Act as well injunctive other relief. At trial prove because its size capacity markets it entered by driving smaller competitors out business. To establish damages, respondents attempted show allowed defaulting close, respondents' profits would have increased. The jury returned verdict favor respondents, which District Court trebled accordance with 4. Appeals, while endorsing legal theories upon claim was based, reversed case remanded further proceedings errors court's instructions jury. court concluded properly instructed could found "giant" like entering market "pygmies" horizontal retail competition. also there sufficient evidence permit find but actions, acquired gone held if were make such findings, be entitled threefold income earned. Petitioner's petition certiorari challenged theory Appeals approved awarding damages. Held: 1. For plaintiffs an recover on account violations, must more than suffered injury causally linked illegal presence market; type laws intended prevent flows makes defendants' acts unlawful. reflect anticompetitive effect either made possible violation. Pp. 484-489. (a) Section is essentially remedial provision, violated 7. 485-487. (b) Congress has condemned mergers only when may produce effects; yet under Appeals' holding, once merger violate 7, all dislocations caused are actionable regardless whether anything do reason condemned. Here unlawful "deep pocket" parent into "pygmies," unrelated acquiring company competitors; identical loss without any recourse secured refinancing been bought "shallow parent. 487-488. 2. Petitioner Fed.Rule Civ.Proc. 50(b) judgment notwithstanding verdict, since based solely their novel theory, rejected herein, ascribable received closed, not shown require new trial. P. 489-490. 3. remain free remand seek equitable 491. 3 Cir., 523 F.2d 262, vacated remanded. Bernard G. Segal, Philadelphia, Pa., petitioner. Malcolm A. Hoffmann, New York City, respondents. Mr. Justice MARSHALL delivered opinion Court. 1 This raises important questions concerning interrelationship antimerger private provisions Antitrust 2 * United States. 10 owned Treadway Companies, Inc. Since 1965, operated large number including six operate. instituted contending these various laws. In late 1950's, industry expanded rapidly, sales lanes, automatic pinsetters, ancillary rose accordingly.1 requires major capital expenditure $12,600 each lane pinsetter, App. A1576 most credit. early 1960's, went sharp decline. quickly dropped preboom levels. Moreover, experienced great difficulty collecting money owed it; end 1964 over $100,000,000, 25%, accounts 90 days delinquent. Id., at A1884. Repossessions dramatically, attempts sell lease repossessed met limited success.2 Because borrowed close $250,000,000 finance credit sales, id., A1900, was, concluded, "in serious financial difficulty." NBO Industries Cos., v. Brunswick Corp., 267 (CA3 1975). 5 meet difficulty, began operating resold positive cash flow expected centers. During seven years preceding case, 222 54 disposed closed. Ibid. These far five times many next competitor. net worth 1965 eight greater, gross revenue total 11 chains. A1675. Nevertheless, controlled 2% A1096. 6 issue here located: Pueblo, Colo., Poughkeepsie, N. Y., Paramus, J. center Paramus area. 1969, third market, 1970 fourth. closed Poughkeepsie 1969 after unsuccessful operation; proved unsuccessful, March 1973 gave notice cease expired. four operational time initiated June 1966, alleging, inter alia, Act, 15 U.S.C. 18.3 15, "the reasonably expectable (by respondents) operation centers." A24. divestiture order, injunction future acquisitions, "other different relief" appropriate 16 26. A27. 8 Trial spring 1973, following initial mistrial due hung violation, size, request, accord nature basis amount $2,358,030, represented minimum estimate additional realized A1737. As required law, damages.4 It awarded costs attorneys' fees totaling $446,977.32, and, sitting equity, ordered divest itself involved here, Cos. 389 F.Supp. 996 (N.J.1974). appealed.5 9 proceedings. supra. whose entry "market pygmies" competition, "has greater ease can accomplish cost-savings investing equipment, resort low below cost sustain longer period, obtain favorable terms." F.2d, 268. conclude 273, 275-277. And After reviewing issues, however, decided charged therefore required. 275-277.6 "an essential predicate" Court's grant relief claim, decree should well. 277-278. event "should restricted preventing those practices deep pocket entrant harms . (D)ivestiture simply inappropriate." 279. 12 Both sides petitioned writs certiorari. Brunswick's damages; plaintiffs' conclusions respect appropriateness order.7 We granted petition.8 424 908, 96 1101, 47 311 (1976). II 13 decision narrow one. does presently contest conclusion Nor challenge determination support finding business available where sole alleged continued business, thereby denying anticipated increase shares.9 14 answer question necessary examine treble-damages proscribes "may monopoly." (Emphasis added.) is, we observed times, prophylactic measure, "primarily arrest apprehended consequences intercorporate relationships before work evil ." States E. I. du Pont de Nemours & Co., 353 586, 597, 77 872, 879, 1057 (1957). See Brown Shoe Co. States, 370 294, 317-318, 82 1502, 510 (1962); Philadelphia Nat. Bank, 374 321, 362-363, 83 1715, 915 (1963); Penn-Olin Chemical 378 158, 170-171, 84 1710, 775 (1964); Von's Grocery 384 270, 277, 86 1478, 555 (1966); FTC Procter Gamble 386 568, 577-578, 87 1224, 18 303 (1967); Gulf Oil Corp. Copp Paving 419 186, 201, 95 392, 42 (1974). 4, contrast, essence provision. provides "(a)ny person who shall injured his property forbidden Of course, play role penalizing wrongdoers deterring wrongdoing, frequently observed. Perma Life Mufflers International Parts 392 134, 139, 88 1981, 20 982 (1968); Fortner Enterprises, Steel 394 495, 502, 89 1252, 22 495 (1969); Zenith Radio Hazeltine Research, 395 100, 130, 1562, 23 129 Hawaii Standard 405 251, 92 885, 31 184 (1972). nevertheless true awards parties, measures multiple actually proved, designed primarily remedy.10 Intermeshing statutory prohibition potential cause certain remedy difficulty. Plainly, proof establishes result. contend element need demonstrate worse position committed acts. agreed, holding compensable "causally linked" mere violator market." 272-273. divorces recovery purposes clear command so, cannot agree it. 17 Every existing entities one, lawful unlawful, producing economic readjustments adversely affect some persons. But account; them effects. Yet actionable, entirely fortuitous, authorize losses no concern laws.11 illustrated facts case. If "pygmies." accrued bankrupt bears relationship competitors. "loss" instead obtained parents acknowledged, 279.12 Thus, statute forestall," Wyandotte 191, 202, 379, 386, 19 407 (1967).13 merely indifferent claimed here. base, complain failing preserved depriving benefits increased concentration. provide reduced. laws, enacted protection competitors," U.S., 320, S.Ct., 1521. inimical award free, desires, mandate despite peculiar so doing. consequences, "we insist expression congressional purpose," 264, 892, attributing intent Congress. language legislative history contrary, windfall failed even constitutes "injury" within meaning quite injured, "by laws": occurred of" did occur 21 hold market. Plaintiffs injury, say should, short, violations likely cause." 125, 1577.14 III come, then, disposition very least, trial, instructional noted see n. 6, supra, instruction inconsistent our outlined above. Our review record, persuades us unwarranted. rejected. While produced conclusory testimony suggesting abused engaging conduct,15 attempt lost result predation.16 Rather, entire earned cognizable offered justification allowing trials litigation, opportunity follows that, entitled, motion Rule 50(b), verdict. Neely Eby Constr. 317, 326-330, 1072, 75 Generes, 93, 106-107, 827, 62 Respondents' complaint prayed relief, established "those competition." contested remand, decree. 24 vacated, consistent opinion. 25 ordered. Sales example, 1,890 1956, 16,288 1961. A1866. pinsetters 300 1961 5,996 1965. 1963, two-thirds repossessed; typically, one-third resold, less one-quarter resold. A1879. contained counts. Count Sherman 1, fixing resale prices supplies sold count abandoned prior virtue acts, guilty monopolization monopolize count, appeal. named National Bowl-O-Mat, predecessor subsidiaries Treadway. counts, appeal judgments them. Judgment ultimately $6,575,040, $499,050 jury's award, respondent Pueblo Bowl-O-Mat consented remittitur proposed alternative retrial 364 316, 324-326 (N.J.1973). deemed apparently dating back began, rather began. thought confused use same methods calculating sections. cross-appeal fee initially dismissed want jurisdiction neither nor certified claims 54(b). 500 1400 1974) (order reported); A1563-A1566 (per curiam reprinted). then previously judgment, parties reappealed. appeals pending, consolidated pending appeals. With liability, "did concentration," erred focusing shares "indicators qualitative substantiality" "relative strength Brunswick, Treadway, "any advantage" enjoyed status financier manufacturer. 274-275 direct decide actions responsible keeping considering how much 276-277. held, 275, instructing requirement "engaged commerce," American Bldg. Maint. Industries, 422 271, 2150, 45 177 (1975), read commerce" restrictively leading Third Circuit, Transamerica Board Governors, 206 163, cert. denied, 346 901, 74 225, 98 L.Ed. 401 (1953). Indeed, indicated record satisfy test. 271. given change "unjust" insufficient deny test retrial. petitions questioned relitigation issue, maintained directed issue; argued satisfied excluded present sufficiency companies engaged nn. No taken petition. directly through first presented, indirectly second, asks: "Does 'failing company' principle dismissal treble-damage damage premise 'acquired' businesses disappeared defendant kept alive making 'acquisitions?' " Pet. Cert. light occasion consider applicability failing-company defense conglomerate-like Treble-damages authorized 26 Stat. 210 (1890). discussions section floor Senate indicate conceived "(t) he people individuals," especially consumers. Cong.Rec. 1767-1768 (1890) (remarks Sen. George); 2612 (Sens. Teller Reagan), 2615 (Sen. Coke), 3146-3149. Treble provided part punitive purposes, 3147 George), meaningful counterbalancing maintaining suit combination described" 2456 Sherman). When 1914, "extend(ed) Act" persons H.R.Rep.No.627, 63d Cong., 2d Sess., (1914). House debates related reveal "open(ing) door justice every man, whenever giv(ing) party ample wrong suffered." 51 9073 (1914) Rep. Webb); see, e. g., 9079 (Rep. Volstead), 9270 Carlin), 9414-9417, 9466-9467, 9487-9495. conference committee report, sponsors bill saw suits means enforcing law. 16274-16275 Webb), 16317-16319 Floyd). virtually discussion enforcement value though attacked lacking sanctions, 15818-15821 Reed), 16042-16046 Norris). Areeda, Violations Without Damage Recoveries, Harv.L.Rev. 1127, 1130-1136 (1976); Symposium, Private Enforcement Antimerger Laws, Record N.Y.C.B.A., 239, 260-261 Conversely, thriving least violative instant otherwise received. instances unsuccessfully injuries prohibited, Reibert Atlantic Richfield, 471 727 (CA10), 411 938, 93 1900, 36 399 (1973); Peterson Borden 644 (CA7 1931); Kirihara Bendix 306 72 (Haw. 1969); Goldsmith St. Louis-San Francisco R. 201 867 (WDNC 1962). generally GAF Circle Floor 463 752 (CA2 1972), dismissed, 413 901 Comment, Act: Plaintiff's Remedies, B.C.Ind. Comm.L.Rev. 333 Actions 38 U.Chi.L.Rev. 404 (1971). necessarily mean, feared, 272, actual lessening order recover. short-term behavior predatory below-cost pricing, example stimulate price able driven lessened. will strongest diminished. See, Calnetics Volkswagen America, Inc., 532 674 (CA9 1976); Metric Hosiery Spartans F.R.D. (S.D.N.Y.1970); Klingsberg, Bull's Eyes Carom Shots: Complications Conflicts Standing Sue Causation Under Bull. 351, concerned reductions A.170, A420, A431; unjustified expenses A503-A506, A829-A830; extravagant "give-aways," A169-A170, A222-A223, A413-A414, A569. unimpressive viewed both contemporaneous records lower took Defendant's Exhibits D-32, D-33, D-36, D-38, own exhibits, profit A1700, generated others, A1717, A1720, A1725, A1733. One witnesses testify knew league shifted installed faster pinsetters. 508. Assuming, arguendo, installations justified constituted form predation, still quantify loss.

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