''Copperweld Corp. v. Independence Tube Corp.'', 467 U.S. 752 (1984), is a major

US antitrust law In the United States, antitrust law is a collection of mostly federal laws that regulate the conduct and organization of businesses to promote competition and prevent unjustified monopolies. The three main U.S. antitrust statutes are the Sherma ...

case decided by the Supreme Court concerning the

Pittsburgh Pittsburgh ( ) is a city in the Commonwealth (U.S. state), Commonwealth of Pennsylvania, United States, and the county seat of Allegheny County, Pennsylvania, Allegheny County. It is the most populous city in both Allegheny County and Wester ...

firm Copperweld Corporation and the

Chicago (''City in a Garden''); I Will , image_map = , map_caption = Interactive Map of Chicago , coordinates = , coordinates_footnotes = , subdivision_type = List of sovereign states, Count ...

firm Independence Tube. It held that a

parent company A holding company is a company whose primary business is holding a controlling interest in the securities of other companies. A holding company usually does not produce goods or services itself. Its purpose is to own shares of other companies ...

is incapable of conspiring with its

wholly owned subsidiary A subsidiary, subsidiary company or daughter company is a company owned or controlled by another company, which is called the parent company or holding company. Two or more subsidiaries that either belong to the same parent company or having a sam ...

for purposes of Section 1 of the

Sherman Act The Sherman Antitrust Act of 1890 (, ) is a United States antitrust law which prescribes the rule of free competition among those engaged in commerce. It was passed by Congress and is named for Senator John Sherman, its principal author. ...

because they cannot be considered separate economic entities. Section 1 of the Sherman Act states that "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal." However, for a condition of conspiracy to exist, there must be at least two parties involved. ''Copperweld'' held that separate

incorporation Incorporation may refer to: * Incorporation (business), the creation of a corporation * Incorporation of a place, creation of municipal corporation such as a city or county * Incorporation (academic), awarding a degree based on the student having ...

was not enough to render a parent and its subsidiary capable of conspiring, since forcibly the economic interests of a wholly owned subsidiary must be those of its parent. It does not apply to partially owned subsidiaries.

Facts

Independence Tube commenced a civil action under Section 1 of the Sherman Act against Copperweld Corporation, its wholly owned subsidiary (" Regal Tube Corporation"), and a third party company that supplied mill ("Yoder Company"). Amongst others, Independence Tube claimed that Copperweld Corporation and Regal Tube Corporation had induced Yoder Company to breach a supply contract with Independence Tube to provide a tubing mill. This led to a nine months delay in Independence Tube's entry into the steel tubing business. The Supreme Court considered whether Independence Tube's claim under Section 1 of the Sherman Act could succeed in relation to coordinated acts of a parent and its wholly owned subsidiary.

Judgment

The Supreme Court, in an opinion by

Chief Justice Burger Warren Earl Burger (September 17, 1907 – June 25, 1995) was an American attorney and jurist who served as the 15th chief justice of the United States from 1969 to 1986. Born in Saint Paul, Minnesota, Burger graduated from the St. Paul Colleg ...

and joined by Justices Blackmun, Powell, Rehnquist and O'Connor, held that an agreement between a wholly owned subsidiary and a parent did not fall under the definition of an "agreement" in Section 1 of the

because the two companies, while legally separate, constituted a single economic entity. The majority also observed that Section 1 of the Sherman Act only applied to concerted action between two (or more) independent firms:

"It cannot be denied that § 1's focus on concerted behavior leaves a "gap" in the Act's proscription against unreasonable restraints of trade. An unreasonable restraint of trade may be effected not only by two independent firms acting in concert; a single firm may restrain trade to precisely the same extent if it alone possesses the combined market power of those same two firms. Because the Sherman Act does not prohibit unreasonable restraints of trade as such - but only restraints effected by a contract, combination, or conspiracy - it leaves untouched a single firm's anticompetitive conduct (short of threatened monopolization) that may be indistinguishable in economic effect from the conduct of two firms subject to § 1 liability."Copperweld Corp. v. Independence Tube Corp.

Justice Stevens John Paul Stevens (April 20, 1920 – July 16, 2019) was an American lawyer and jurist who served as an associate justice of the Supreme Court of the United States from 1975 to 2010. At the time of his retirement, he was the second-oldes ...

, joined by Justices Brennan and

Marshall Marshall may refer to: Places Australia * Marshall, Victoria, a suburb of Geelong, Victoria Canada * Marshall, Saskatchewan * The Marshall, a mountain in British Columbia Liberia * Marshall, Liberia Marshall Islands * Marshall Islands, an ...

, dissented.

Notes

External links

* {{caselaw source , case = ''Copperweld Corp. v. Independence Tube Corp.'', {{ussc, 467, 752, 1984, el=no , justia =https://supreme.justia.com/cases/federal/us/467/752/ , loc =http://cdn.loc.gov/service/ll/usrep/usrep467/usrep467752/usrep467752.pdf , oyez =https://www.oyez.org/cases/1983/82-1260 United States Supreme Court cases United States Supreme Court cases of the Rehnquist Court United States Supreme Court decisions that overrule a prior Supreme Court decision United States antitrust case law Anti-competitive practices 1984 in United States case law

Facts

Judgment

See also

Notes

External links