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UNITED STATES v. UNITED SHOE MACHINERY CORP.

decided: May 20, 1968.

UNITED STATES
v.
UNITED SHOE MACHINERY CORP.



APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS.

Warren, Black, Douglas, Harlan, Brennan, Stewart, White, Fortas; Marshall took no part in the consideration or decision of this case

Author: Fortas

[ 391 U.S. Page 245]

 MR. JUSTICE FORTAS delivered the opinion of the Court.

In 1953, in a civil suit brought by the United States, the District Court for the District of Massachusetts held that appellee had violated ยง 2 of the Sherman Antitrust Act by monopolizing the manufacture of shoe machinery. The court found that "(1) defendant has, and exercises, such overwhelming strength in the shoe machinery market that it controls that market, (2) this strength excludes some potential, and limits some actual, competition, and (3) this strength is not attributable solely to defendant's ability, economies of scale, research, natural advantages, and adaptation to inevitable economic laws." United States v. United Shoe Machinery Corp., 110 F.Supp. 295, 343 (1953). The court did

[ 391 U.S. Page 246]

     not order the relief requested by the Government -- that appellee be dissolved into three separate shoe machinery manufacturing companies. Rather, the court imposed a variety of restrictions and conditions designed "to recreate a competitive market."*fn1 Appellee appealed to this Court, which affirmed the decision of the District Court. United Shoe Machinery Corp. v. United States, 347 U.S. 521 (1954).

The decree of the District Court, entered on February 18, 1953, and subsequently modified on July 12 and September 17, 1954, provided in paragraph 18 that:

"On [January 1, 1965] both parties shall report to this Court the effect of this decree, and may then petition for its modification, in view of its effect in establishing workable competition. If either party takes advantage of this paragraph by filing a petition, each such petition shall be accompanied by affidavits setting forth the then structure of the shoe machinery market and defendant's power within that market." 110 F.Supp., at 354.

[ 391 U.S. Page 247]

     Pursuant to this provision, the Government reported to the District Court on January 1, 1965, that appellee continued to dominate the shoe machinery market, that workable competition had not been established in that market, and that additional relief was accordingly necessary. The Government asked that appellee be required to submit to the Court a plan, pursuant to which United's business would be reconstituted so as to form two fully competing companies in the shoe machinery market. It also requested "such other and further relief as may be necessary to establish workable competition in the shoe machinery market."

The District Court, after a hearing, denied the Government's petition.*fn2 It held that under United States v. Swift & Co., 286 U.S. 106 (1932), its power to modify the original decree was limited to cases involving "(1) a clear showing of (2) grievous wrong (3) evoked by new and unforeseen conditions." United States v. United Shoe Machinery Corp., 266 F.Supp. 328, 330 (1967). Analyzing its 1953 decree, as amended, the court said that the object of the decree was "not to restore so-called workable competition but to move toward establishing it," and that "the 1953 decree has operated in the manner and with the effect intended. It has put in motion forces which, aided by new technology, have eroded United's power and already dissipated much of the effect of United's monopolization." 266 F.Supp., at 330, 334. Accordingly, in view of the stringent requirements of Swift as the court construed that decision, the District Court denied the Government's petition.

From this decision the Government appealed to this Court. We noted probable jurisdiction. 389 ...


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