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Supreme Court of the United States
March 5, 1968, Argued ; June 17, 1968, Decided 1
[*483] [***1235] [**2226] MR. JUSTICE WHITE delivered the opinion of the Court.
Hanover Shoe, Inc. (hereafter Hanover) is a manufacturer of shoes and a customer of United Shoe Machinery Corporation (hereafter United), a manufacturer and distributor of shoe machinery. In 1954 this Court affirmed the judgment of the District Court for the District of Massachusetts, 110 F.Supp. 295 (1953), in favor of the United States in a civil action against United under § 4 of the Sherman Act, 26 Stat. 209, 15 U. S. C. § 4. United Shoe Machinery Corp. v. United States, 347 U.S. 521. In 1955, Hanover brought the present treble-damage action against United in the District Court for the Middle District of Pennsylvania. In 1965 the District Court rendered judgment for Hanover and awarded trebled damages, including interest, of $ 4,239,609, as well as $ 650,000 in counsel fees. 245 F.Supp. 258. On appeal, the Court of Appeals for the Third Circuit affirmed the finding of liability but disagreed with the District Court on [***1236] certain questions relating to the damage award. [****6] 377 F.2d 776 (1967). Both Hanover and United sought review of the Court of Appeals' decision, and we granted both petitions. 389 U.S. 818 (1967).
Hanover's action against United alleged that United had monopolized the shoe machinery industry in violation of § 2 of the Sherman Act; that United's practice of leasing and refusing to sell its more complicated and important shoe machinery had been an instrument of the unlawful monopolization; and that therefore Hanover [*484] should recover from United the difference between what it paid United in shoe machine rentals and what it would have paid had United been willing during the relevant period to sell those machines.
Section 5 (a) of the Clayton Act, 38 Stat. 731, as amended, 69 Stat. 283, 15 U. S. C. § 16 (a), ] makes a final judgment or decree in any civil or criminal suit brought by the United States under the antitrust laws "prima facie evidence . . . as to all matters respecting which said judgment [****7] or decree would be an estoppel as between the parties thereto . . . ." Relying on this provision, Hanover submitted the findings, opinion, and decree rendered by Judge Wyzanski in the Government's case as evidence that United monopolized and that the practice of refusing to sell machines was an instrument of the monopolization. United does not contest that prima facie weight is to be given to the judgment in the Government's case. It does, however, contend that Judge Wyzanski's decision did not determine that the practice of leasing and refusing to sell was an instrument of monopolization. This claim, rejected by the courts below, is the threshold issue in No. 463. If the 1953 judgment is not prima facie evidence of the illegality of [**2227] the practice from which Hanover's asserted injury arose, then Hanover, having offered no other convincing evidence of illegality, should not have recovered at all. 2
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392 U.S. 481 *; 88 S. Ct. 2224 **; 20 L. Ed. 2d 1231 ***; 1968 U.S. LEXIS 3147 ****; 1968 Trade Cas. (CCH) P72,490
HANOVER SHOE, INC. v. UNITED SHOE MACHINERY CORP.
Prior History: [****1] CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT.
Disposition: 377 F.2d 776, affirmed in part, reversed in part, and remanded.
leasing, machines, manufacturer, shoe, damages, monopolization, decree, overcharge, buyer, cases, competitors, shoe machinery, monopoly power, Sherman Act, profits, antitrust, customers, machinery, practices, anti trust law, violations, factories, bought, taxes, prima facie evidence, Clayton Act, treble-damage, predatory, charges, effects
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