Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc.
Supreme Court of the United States
Argued November 3, 1976 ; January 25, 1977
[*478] [***706] [**692] MR. JUSTICE MARSHALL delivered the opinion of the Court.
This case raises important [****5] questions concerning the interrelationship of the antimerger and private damages action provisions of the Clayton Antitrust Act.
Petitioner is one of the two largest manufacturers of bowling equipment in the United States. Respondents are three of the 10 bowling centers owned by Treadway Companies, Inc. Since 1965, petitioner has acquired and operated a large number of bowling centers, including six in the markets in which respondents operate. Respondents instituted this action contending that these acquisitions violated various provisions of the antitrust laws.
In the late 1950's, the bowling industry expanded rapidly, and petitioner's sales of lanes, automatic pinsetters, and ancillary [**693] equipment rose accordingly. Since this equipment requires a major capital expenditure - $12,600 for each lane and pinsetter, App. A1576 - most of petitioner's sales were for secured credit.
[****6] In the early 1960's, the bowling industry went into a sharp decline. Petitioner's sales quickly dropped to preboom levels. Moreover, petitioner experienced great difficulty in collecting money owed it; by the end of 1964 over $100,000,000, or more than 25%, of petitioner's accounts were more than 90 days delinquent. Id., at A1884. Repossessions rose dramatically, but attempts to sell or lease the repossessed equipment met with only limited success. Because petitioner had borrowed close to $250,000,000 to finance its credit sales, id., at A1900, it was, as the Court of Appeals concluded, "in serious financial difficulty." NBO Industries [***707] Treadway Cos., Inc. v. Brunswick Corp., 523 F. 2d 262, 267 (CA3 1975).
[****7] To meet this difficulty, petitioner began acquiring and [*480] operating defaulting bowling centers when their equipment could not be resold and a positive cash flow could be expected from operating the centers. During the seven years preceding the trial in this case, petitioner acquired 222 centers, 54 of which it either disposed of or closed. Ibid. These acquisitions made petitioner by far the largest operator of bowling centers, with over five times as many centers as its next largest competitor. Ibid. Petitioner's net worth in 1965 was more than eight times greater, and its gross revenue more than seven times greater, than the total for the 11 next largest bowling chains. App. A1675. Nevertheless, petitioner controlled only 2% of the bowling centers in the United States. Id., at A1096. Read The Full CaseNot a Lexis Advance subscriber? Try it out for free.
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429 U.S. 477 *; 97 S. Ct. 690 **; 50 L. Ed. 2d 701 ***; 1977 U.S. LEXIS 37 ****; 1977-1 Trade Cas. (CCH) P61,255
BRUNSWICK CORP. v. PUEBLO BOWL-O-MAT, INC., ET AL.
Prior History: [****1] CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
antitrust, bowling, acquisitions, merger, competitors, pocket
Antitrust & Trade Law, Clayton Act, Remedies, Damages, Mergers & Acquisitions Law, Antitrust, Antitrust Statutes, Clayton Act, General Overview, Private Actions, Regulated Practices, Prioritizing Resources & Organization for Intellectual Property Act, Standing, Governments, Legislation, Interpretation, Claims