370 U.S. 690 (1962), 304, Continental Ore Co. v. Union Carbide & Carbon Corp.

Docket Nº:No. 304
Citation:370 U.S. 690, 82 S.Ct. 1404, 8 L.Ed.2d 777
Party Name:Continental Ore Co. v. Union Carbide & Carbon Corp.
Case Date:June 25, 1962
Court:United States Supreme Court

Page 690

370 U.S. 690 (1962)

82 S.Ct. 1404, 8 L.Ed.2d 777

Continental Ore Co.


Union Carbide & Carbon Corp.

No. 304

United States Supreme Court

June 25, 1962

Argued April 16-17, 1962




Petitioners sued respondents under § 4 of the Clayton Act to recover treble damages, alleging that respondents had violated §§ 1 and 2 of the Sherman Act by conspiring to restrain, by monopolizing, and by attempting and conspiring to monopolize, trade and commerce in ferrovanadium and vanadium oxide. The jury brought in a verdict for respondents, and petitioners appealed, contending that the District Court erred in excluding various items of evidence, in giving certain instructions to the jury, in refusing to give other instructions, and in other rulings. The Court of Appeals held that there was insufficient evidence to justify a jury's finding that respondents' illegal acts were the cause of petitioners' failure in the vanadium business and that, therefore, a verdict should have been directed for respondents.

Held: the judgment is vacated and the case is remanded for a new trial. Pp. 691-710.

1. In concluding that there should have been a directed verdict for respondents, the Court of Appeals erred in failing to view the evidence in the light most favorable to petitioners and to give petitioners the benefit of all inferences which the evidence fairly supported, and it erred in holding that there was insufficient evidence to support a finding that respondents' conduct in fact caused injury to petitioners' business. It was the jury's function to weigh the evidence and the inferences to be drawn therefrom, and to come to an ultimate conclusion as to the facts. Pp. 696-702.

2. The District Court erred in rejecting petitioners' offer to prove that they had been excluded from the Canadian market by a wholly owned subsidiary of one of the respondents, which was acting as the exclusive purchasing agent for the wartime Office of Metals Controller of the Canadian Government, but which allegedly operated in this connection under the control and direction of its parent corporation for the purpose of carrying out the overall conspiracy to restrain and monopolize the vanadium industry in the United States. This offer of proof was relevant evidence of a violation of the Sherman Act charged in the complaint, and it was not inadmissible on the ground that the subsidiary corporation was acting as an arm of the Canadian Government. Pp. 702-708.

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3. The District Court committed several trial errors which should not be repeated in a new trial. Pp. 708-710.

(a) The District Court erred in charging the jury that, in the context of the facts alleged in this case, a conspiracy must be proved "which was reasonably calculated to prejudice the public interest by unduly" restraining trade and which was intended "to injure the general public by" restraining trade. P. 708.

(b) The District Court misinterpreted the law in defining "monopolization" and "attempted monopolization" in terms of "conspiracy to monopolize," and this error was prejudicial, rather than harmless. Pp. 708-709.

(c) The District Court erred in its persistent exclusion of evidence relating to the period before petitioners' entrance into the industry, since this evidence was clearly material to petitioners' charge that there was a conspiracy and monopolization in existence when they came into the industry, and that they were eliminated in furtherance thereof. Pp. 709-710.

289 F.2d 86, judgment vacated and case remanded for new trial.

WHITE, J., lead opinion

MR. JUSTICE WHITE delivered the opinion of the Court.

This is a private treble damage action under the antitrust laws.1 Continental [82 S.Ct. 1407] Ore Company, a partnership,

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and its individual partners, who were plaintiffs in the trial court, are petitioners here.2 Henry J. Leir, the principal party in Continental, had engaged in the buying and selling of metals, including vanadium products, in Europe prior to 1938, in which year he immigrated to the United States. This case concerns his subsequent efforts in this country to build a successful business in the production and sale of vanadium.

Vanadium is a metal obtained from certain ores which, in this country, are mined principally on the Colorado plateau. The ore is processed at mills near the mines into a substance commonly known as vanadium oxide. The oxide is then transported to the East and converted into ferrovanadium,3 which is purchased chiefly by steel companies for use as an alloy in hardening steels.

The defendants named in the complaint were Vanadium Corporation of America (VCA), a fully integrated miner and manufacturer of vanadium products, Union Carbide and Carbon Corporation (Carbide), and the following four wholly owned subsidiary corporations of the latter company: United States Vanadium Corporation (USV), engaged in mining vanadium ore and processing vanadium oxide; Electro Metallurgical Company (Electro Met), engaged in making ferrovanadium; Electro Metallurgical Sales Corporation (Electro Met Sales), engaged in the sale of vanadium oxide and ferrovanadium; and Electro Metallurgical Company of Canada, Ltd. (Electro Met of Canada), engaged in selling vanadium products in Canada. The complaint was filed on November 15,

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1949, and service was had on VCA, Carbide and USV. There was no service on Electro Met, Electro Met Sales, or Electro Met of Canada. Carbide acquired the assets of Electro Met and Electro Met Sales by dissolution or merger during the year 1949, prior to the filing of the complaint herein.

The complaint alleged that, beginning in about 1933, the defendants and others acting in concert with them violated §§ 1 and 2 of the Sherman Act4 by conspiring to restrain, by monopolizing, and by attempting and conspiring to monopolize trade and commerce in ferrovanadium and vanadium oxide. The defendants were charged with purchasing and acquiring control over substantially all accessible vanadium-bearing ore deposits in the United States and substantially all vanadium oxide produced by others in the United States, with refusing to sell vanadium oxide to other potential producers of ferrovanadium, including Continental and its associates, with apportioning and dividing sales of ferrovanadium and vanadium oxide among themselves in certain proportions, with fixing identical prices for the sale of ferrovanadium [82 S.Ct. 1408] and vanadium oxide and for the purchase of ore, and with making certain mutual arrangements whereby one or more Carbide subsidiaries supplied VCA with substantial quantities of vanadium oxide at preferential prices to VCA. The complaint stated that, between 1933 and 1949, the defendants produced over

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99% of all ferrovanadium and over 90% of all vanadium oxide produced in the United States, and that, during the same period, the defendants sold over 99% of the ferrovanadium and vanadium oxide sold in this country.5

According to the complaint, as a proximate consequence of defendants' monopolistic and restrictive practices, independent producers and distributors of ferrovanadium and vanadium oxide, including Continental, were eliminated from the business. Specifically, the complaint detailed several efforts which Continental made to enter and maintain itself in the vanadium business, all of which were allegedly frustrated by defendants' Sherman Act violations: (1) In 1938, Continental negotiated a contract with Apex Smelting Company of Chicago whereby Apex was to build and operate a plant for the conversion of oxide to ferrovanadium by use of the aluminothermic process. Continental and Apex were to share the profits of this venture. On its part, Continental agreed to obtain raw materials for Apex and to sell the finished product. Operations under this contract began in the spring of 1940, but Apex terminated the agreement in 1942, allegedly because the illegal activities of defendants prevented the obtaining of a sufficient supply of vanadium oxide. (2) Meanwhile, Continental itself had begun to produce a compound called "Van-Ex," composed of vanadium oxide and other materials, which was designed for direct introduction into the steel-making process without prior conversion to ferrovanadium. This venture was allegedly

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terminated in 1944 because of the difficulty of securing raw materials caused by defendants' unlawful practices, including the efforts of defendants to obtain ownership or control of the mines and mills of Continental's suppliers. (3) Continental had developed a business with a Canadian customer during 1942. When Electro Met Sales of Canada was appointed by the Canadian Government as the exclusive wartime agent to purchase and allocate vanadium for Canadian industries, that company, it is alleged, acting under the control and direction of its parent, Carbide, eliminated Continental entirely from the Canadian market and divided Continental's business solely between defendants. (4) Defendants in 1943, by open threats of reprisals, allegedly frustrated certain arrangements which Continental had with the Climax Molybdenum Corporation for the manufacture of ferrovanadium. (5) In January, 1944, Continental contracted with Imperial Paper & Color Corporation for the processing by the latter of vanadium oxide and ferrovanadium. Continental agreed to act as sales agent for the output. The complaint charged that Imperial abandoned the contract at the end of 1944 because of the inability to secure raw materials and that Continental then left the vanadium business altogether, all as a result of the restrictive and monopolistic practices of the defendants.

Trial was to a jury, and a verdict was returned...

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