Copperweld Corp. v. Independence Tube Corp.

In 1972, David Grohne established Independence Tube Corporation (Independence) (plaintiff). Independence was a potential competitor of Regal Tube Company (Regal) (defendant) in the market for steel tubing. Regal had previously employed Grohne as an executive while under ownership by Lear Siegler, Inc. After Regal was purchased by Copperweld Corporation (Copperweld) (defendant), Grohne continued to work for Lear Siegler under an agreement stating that Lear Siegler and its employees, including Grohne, would not compete with Regal for five years. Independence attempted to purchase supplies from Yoder Company (Yoder) to start doing business, but Copperweld informed Yoder of the non-compete agreement that Grohne had signed. As a result, Yoder voided Independence’s purchase order, and Independence’s business operations were delayed for nine months. In response, Independence brought a suit against Copperweld and Regal, alleging that the two entities had conspired for anticompetitive purposes in violation of § 1 of the Sherman Act. A jury found in favor of Independence and awarded damages. Copperweld appealed the decision, arguing that Copperweld could not be guilty of conspiring with an entity owned by Copperweld. The court of appeals affirmed, holding that antitrust liability could attach to two entities considered to be independent actors. Independence appealed, and the United States Supreme Court granted certiorari to determine whether the coordinated acts of a company and its wholly owned subsidiary could constitute an agreement or conspiracy in violation of antitrust law.