Copperweld Corporation v. Independence Tube Corporation

PETITIONER: Copperweld Corporation
RESPONDENT: Independence Tube Corporation
LOCATION: Environmental Protection Agency

DOCKET NO.: 82-1260
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: United States Court of Appeals for the Seventh Circuit

CITATION: 467 US 752 (1984)
ARGUED: Dec 05, 1983
DECIDED: Jun 19, 1984

ADVOCATES:
Erwin N. Griswold - on behalf of the Petitioners
Lawrence G. Wallace - as amicus curiae
The Clerk -
Victor E. Grimm - on behalf of the Respondent

Facts of the case

Question

Media for Copperweld Corporation v. Independence Tube Corporation

Audio Transcription for Oral Argument - December 05, 1983 in Copperweld Corporation v. Independence Tube Corporation

Warren E. Burger:

Mr. Griswold, I think you may proceed whenever you are ready.

Erwin N. Griswold:

Mr. Chief Justice, and may it please the Court:

This case is here on certiorari from the Seventh Circuit.

It is an antitrust case turning on the construction of Section 1 of the Sherman Act.

Put briefly the issue is whether a corporation and its wholly-owned subsidiary can provide the two parties necessary to provide a combination or conspiracy under Section 1.

The wholly-owned subsidiary here is the Petitioner Regal Tube Company which the other Petitioner Copperweld purchased in 1972.

Regal was a small manufacturer of structural steel tubing with about 14 percent of the market.

Structural steel tubing is used to support buildings, machinery, and the like.

Copperweld was never in this business and did not compete with Regal.

Copperweld manufactures, among other things, wire and cable and tubing which is used to transport gases and liquids.

Upon purchasing Regal, Copperweld caused it to be organized as a separate subsidiary for tax purposes.

All of the stock in Regal was owned by Copperweld.

All of Regal's officers and directors were Copperweld's officers and directors and Regal's corporate headquarters are in Pittsburgh with Copperweld.

The Regal business had been previously owned by Lear Siegler, Inc., a California company.

It had been run as an unincorporated division.

David Grohne, one of the counterdefendants below, was president of the Regal Division under Lear Siegler.

Just before Regal was sold to Copperweld, Grohne accepted a position as Lear Siegler's corporate secretary.

Within a few months though, Grohne decided to establish his own steel tubing business.

In May 1972, he formed the Respondent Independence Tube Corporation which sought bids on tubing mills from manufacturers.

By October 1972, his new company gave an order for the delivery of a tubing mill and the supplier was Yoder Company which was one of the defendants below.

The Petitioners, with the advice of counsel, sent out letters designed to protect Copperweld's interest in designs, plans, drawings, and trade secrets and to prevent third parties from developing reliance interests in dealing with Independence.

One of these letters was sent to Yoder.

Yoder then cancelled its acceptance of the purchase order for a tubing mill.

However, Independence found another supplier which furnished the mill and the Respondent Independence commenced operations in September 1974, nine months later than would have happened if Yoder had delivered the tubing mill originally ordered.

The present suit was commenced in the Northern District of Illinois in 1976.

It contained three counts.

The first of these was under Section 1 of the Sherman Act and it alleged that Copperweld and Regal, together with Phillip Smith, the chairman and chief executive officer of both companies, had conspired with Yoder to restrict trade in the market for structural steel tubing.

The second count alleged that the Petitioners and Smith had attempted to monopolize the market for steel tubing in violation of Section 2 of the Sherman Act.

And the third count alleged that the Petitioners and Smith had interfered with the Respondent's contractual relations with Yoder, a state law tort.

Before the trial began, the Respondent dismissed this claim under Section 2 of the Sherman Act, that is the attempt-to-monopolize claim.