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Cargill, Inc. v. Monfort of Colorado, Inc.

Supreme Court of the United States

October 6, 1986, Argued ; December 9, 1986, Decided

No. 85-473

Opinion

 [*105]   [***433]   [**487]  JUSTICE BRENNAN delivered the opinion of the Court.

 ] Under § 16 of the Clayton Act, 38 Stat. 737, as amended, 15 U. S. C. § 26, private parties "threatened [with] loss or damage by a violation of the antitrust laws" may seek injunctive relief. This case presents two questions: whether a plaintiff seeking relief under § 16 must prove a threat of antitrust injury, and, if so, whether loss or damage due to increased competition constitutes such injury.

 [*106]  I

Respondent Monfort of Colorado, Inc. (Monfort), the plaintiff below, owns and operates three integrated beef-packing plants, that is, plants for both the slaughter of cattle and the fabrication of beef. 2 Monfort operates in both the market for fed cattle (the input market) and the market for fabricated beef (the output market). These markets are highly competitive, and the profit margins of the major beef packers are low. The current markets are a product of two decades of intense competition, during which time packers with modern integrated plants have gradually displaced packers with separate slaughter and fabrication plants.

 [****5]  Monfort is the country's fifth-largest beef packer. Petitioner Excel Corporation (Excel), one of the two defendants below, is the second-largest packer. Excel operates five integrated plants and one fabrication plant. It is a wholly owned subsidiary of Cargill, Inc., the other defendant below, a large privately owned corporation with more than 150 subsidiaries in at least 35 countries.

On June 17, 1983, Excel signed an agreement to acquire the third-largest packer in the market, Spencer Beef, a division of the Land O'Lakes agricultural cooperative. Spencer Beef owned two integrated plants and one slaughtering plant. After the acquisition, Excel would still be the second-largest packer, but would command a market share almost equal to that of the largest packer, IBP, Inc. (IBP). 3

 [****6]   [*107]  Monfort brought an action under § 16 of the Clayton Act, 15 U. S. C. § 26, to enjoin the prospective  [***434]  merger. 4 Its complaint  [**488]  alleged that the acquisition would "[violate] Section 7 of the Clayton Act because the effect of the proposed acquisition may be substantially to lessen competition or tend to create a monopoly in several different ways. . . ." 1 App. 19. Monfort described the injury that it allegedly would suffer in this way:

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479 U.S. 104 *; 107 S. Ct. 484 **; 93 L. Ed. 2d 427 ***; 1986 U.S. LEXIS 21 ****; 55 U.S.L.W. 4027; 1986-2 Trade Cas. (CCH) P67,366

CARGILL, INC., ET AL. v. MONFORT OF COLORADO, INC.

Prior History:  [****1]  CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT.

Disposition:  761 F.2d 570, reversed and remanded.

CORE TERMS

antitrust, merger, predatory, competitors, injunctive, acquisition, beef, packer, concentration, squeeze, plants, price-cost, cattle, forbidden, bowling, boxed

Antitrust & Trade Law, Clayton Act, Remedies, Damages, General Overview, Regulated Practices, Private Actions, Prioritizing Resources & Organization for Intellectual Property Act, Scope, Mergers & Acquisitions Law, Antitrust, Antitrust Statutes, Clayton Act, Costs & Attorney Fees, Transportation Law, Commercial Vehicles, Traffic Regulation, Claims, Civil Procedure, Justiciability, Standing, Injunctions, Regulated Industry Mergers, Price Fixing & Restraints of Trade, Actual Monopolization, Anticompetitive & Predatory Practices