Fairmont Glass Works (Fairmont) (defendant) contracted to buy coal from Cub Fork Coal Company and Paragon Colliery Company (Cub) (plaintiffs). Cub sued Fairmont for breach of contract in the United States District Court for the Southern District of Indiana under diversity jurisdiction and requested damages of $32,417 plus interest. Fairmont counterclaimed for $2,000 and raised several defenses. The jury returned a verdict for Fairmont. The United States Court of Appeals for the Seventh Circuit reversed and remanded for a new trial due to legal errors. After the second trial, the jury’s verdict in favor of Fairmont was again reversed by the court of appeals. On remand, the jury in the third trial was instructed that Cub should be awarded the difference between the price stated in the contract and market value if Fairmont breached. The jury found in favor of the plaintiff and awarded damages of $1. Fairmont appealed the judge’s refusal to grant a new trial. The court of appeals reversed based on the inadequacy of the damage amount and concluded that at least $18,250 should be recoverable. The United States Supreme Court granted certiorari.