Fortner Enterprises, Inc. v. United States Steel Corporation

PETITIONER: Fortner Enterprises, Inc.
RESPONDENT: United States Steel Corporation
LOCATION: Stanley's Home

DOCKET NO.: 306
DECIDED BY: Warren Court (1967-1969)
LOWER COURT: United States Court of Appeals for the Sixth Circuit

CITATION: 394 US 495 (1969)
ARGUED: Jan 23, 1969
DECIDED: Apr 07, 1969

Facts of the case

Question

Media for Fortner Enterprises, Inc. v. United States Steel Corporation

Audio Transcription for Oral Argument - January 23, 1969 in Fortner Enterprises, Inc. v. United States Steel Corporation

Earl Warren:

Number 306, Fortner Enterprises Incorporated, petitioner versus United States Steel Corporation.

Kenneth L. Anderson:

Mr. Chief Justice and may it --

Earl Warren:

Mr. Anderson, now you may proceed with your argument.

Kenneth L. Anderson:

Thank you, Your Honor, may it please the Court.

This is antitrust suit filed by me and the Federal District for the Western District of Kentucky in 1962 charging the respondents, United States Steel Corporation and its wholly owned subsidiary U.S. Steel Homes Credit Corporation with conspiring to violate Sections 1 and 2 of the Sherman Act.

The background of the case is that in December of 1959, Mr. A, B, Fortner of Louisville, Kentucky had an interest in a number of corporations and he had been involved in the real estate business, the real estate development business since approximately 1939.

In the period immediately prior to this December 1959 term, Mr. Fortner and one of his business associates and another corporation had commenced development of a subdivision in the Louisville, Kentucky in Jefferson County area.

They had in fact, prior to December of 1959, built 250 conventional homes in this subdivision which was called Golden Meadow Subdivision.

In December of 1959, Mr. Fortner was approached by representatives of the United States Steel Corporation and their Homes Division which manufactures prefabricated homes.

These are house packages that they deliver in a -- on a truck or trailer van and the builder has people there to erect the homes.

Now when these people approached Mr. Fortner they approached him on the premise that there were substantial financing benefits to be derived from this second conspirator and we charged her in this case the -- what I call the Credit Corporation.

This was a financing subsidiary and its purpose at the beginning was to aid the dealer builders of the Homes Division at U.S. Steel.

As we indicate in our brief, this purpose got extended in 1958 just before they -- about a year before they started talking to Mr. Fortner and they decided that they were going to use the financing as their own people have described it as a tool to obtain sales of these prefabricated homes.

So Mr. Fortner had numerous discussions with these people and financing offers I believe in construing the evidence of course where we are basically talking about whether the summary judgment should have been given against this that the evidence should be construed most favorably to our side and not the other side.

And I think that the inference most reasonably to be drawn from this record is that this financing offers according to Mr. Fortner's affidavits kept getting better and better to the point that they offered Mr. Fortner a 100% money to buy the land and develop the land that had not been develop that was left in the remainder of the subdivision, that they also were going to provide its construction money.

All at a 6% interest in 1/2 points, now there are substantial differences between this financing of a 100% at 6% in 1/2 point and other financing available, I believe, generally through out the eastern portion of United States and certainly in Louisville, Kentucky area during this time to dealer builders or to builders.

The conventional development and land purchase loan as their own documents show was a 60% loan not a 100%.

The other manufacturers who were supposedly in this financing business also were offering 6% interest but 10 points.

So that when this offer came to Mr. Fortner this was on exceedingly attractive proposition to him.

Potter Stewart:

I'm sufficiently ignorant and naive in this general field of financing so that I don't quite -- I'm not quite sure I understand what 6% interest at 10 points is? Give me an example of that.

Kenneth L. Anderson:

The 6% interest would be 6% per year and in terms of the loan, the 10 points would be 10% of the gross amount of the loan.

Potter Stewart:

In which way?

Now give me an example.

Kenneth L. Anderson:

Deducted when the loan proceeds are distributed a 10% is deducted from the amount that is distributed to the person receiving the loan.

Potter Stewart:

Borrower?

Kenneth L. Anderson:

Yes, the borrower.

Potter Stewart:

The borrower.

Kenneth L. Anderson:

So that it --

Potter Stewart:

The borrower, let's say the borrower borrows a million dollars.

Kenneth L. Anderson:

Alright, he gets $900,000.00.