Law School Case Brief
Hanover Shoe v. United Shoe Mach. Corp. - 392 U.S. 481, 88 S. Ct. 2224 (1968)
Section 4 of the Clayton Act, 38 Stat. 731, 15 U.S.C.S. § 15, provides that any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor and shall recover threefold the damages by him sustained. When a buyer shows that the price paid by him for materials purchased for use in his business is illegally high and also shows the amount of the overcharge, he has made out a prima facie case of injury and damage within the meaning of § 4.
In a prior action, United States was awarded judgment against United Shoe Machinery Corp. (United), under the Sherman Act. Hanover Shoe, Inc. (Hanover) then initiated action for treble-damages against United alleging United monopolized the shoe machinery industry in violation of § 2 of the Sherman Act. The court found that United was liable and on appeal, the court of appeals affirmed but recomputed the damages award to take into account the taxes Hanover would have paid had it purchased the machines.
Was United liable for illegal monopolization under the Sherman Act?
The United States Supreme Court affirmed the judgment in part and reversed in part. The Court's opinion in the prior action constituted prima facie evidence because it specifically concluded United's practice of leasing machines was a monopolization. Thus, the Court affirmed the decision holding respondent liable under the Sherman Act because the decision in the United States action provided prima facie evidence of respondent's illegal monopolization. However, the Court reversed the recalculation of Hanover's award because under the appellate court's plan, Hanover would essentially be taxed twice on the award. The award would be diminished by taxes Hanover would have paid and then taxed when Hanover recovered it from United.
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