United States v. Hilton Hotels Corp.

In Portland, Oregon, hotels, restaurants, hotel and restaurant supply companies and other businesses organized an association to attract conventions to the city. To finance the association, association members were asked to make predetermined monetary contributions. To aid the collections, Hilton Hotels Corp. (Hilton) (defendant) agreed to give preferential treatment to suppliers who paid their contributions and “boycotted” those suppliers who did not. Hilton was charged with violating § 1 of the Sherman Antitrust Act which prohibits actions in restraint of trade. Hilton’s President testified that it was against corporate policy for a specific hotel to condition purchases of supplies upon payment of a contribution to an association. Further, Hilton’s Portland hotel and his assistant testified that it was the hotel’s policy to purchase supplies solely on the basis of price, quality, and service. Although the Portland Hilton’s purchasing agent was instructed not to take part in the boycott, the purchasing agent ignored the order and threatened a supplier with loss of the hotel’s business unless the supplier financially contributed to the association. The district judge instructed the jury that a corporation is responsible for the acts and statements of its agents within the scope of their employment even if the employees disregard official instructions or the corporation’s policies. Hilton was found guilty and it appealed.