US SUPREME COURT DECISIONS

UNITED STATES STEEL CORP. V. FORTNER ENTERPRISES, INC., 429 U. S. 610 (1977)

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U.S. Supreme Court

United States Steel Corp. v. Fortner Enterprises, Inc., 429 U.S. 610 (1977)

United States Steel Corp. v. Fortner Enterprises, Inc.

No. 75-853

Argued November 1, 1976

Decided February 22, 1977

429 U.S. 610

Syllabus

In exchange for respondent real estate development corporation's promise to purchase prefabricated houses to be erected on certain land, petitioner United States Steel Corp.'s Home Division (the manufacturer of the houses) and petitioner Credit Corp., a wholly owned subsidiary that provides financing to the Home Division's customers, agreed to finance respondent's cost of acquiring and developing the land. After difficulties arose while the development was in progress, respondent brought a treble damages action against petitioners, alleging that the transaction was a tying arrangement forbidden by the Sherman Act, because the competition for prefabricated houses (the tied product) was restrained by petitioners abuse of power over credit (the tying product). After this Court, in a prior review of the case upon reversing a summary judgment in petitioners' favor, held that the agreement affected a "not insubstantial" amount of commerce in the tied product, and that respondent was entitled to an opportunity to prove that petitioners possessed "appreciable economic power" in the market for the tying product, the District Court ultimately held that the evidence justified the conclusion that petitioners did have sufficient economic power in the credit market to make the tying arrangement unlawful, and the Court of Appeals affirmed. That evidence related to four propositions: (1) petitioner Credit Corp. and the Home Division were owned by one of the Nation's largest corporations; (2) petitioners entered into tying arrangements with a significant number of customers in addition to respondent; (3) the Home Division charged respondent a noncompetitive price for its prefabricated houses; and (4) the financing provided to respondent was "unique," primarily because it covered 100% of respondent's acquisition and development costs.

Held: The record does not support the conclusion that petitioners had appreciable economic power in the market for credit, the tying product. Where the record merely shows that the credit terms are unique because the seller was willing to accept a lesser profit -- or to incur greater risks -- than its competitors, such uniqueness does not give rise to any inference of economic power in the credit market. The chanrobles.com-red

Page 429 U. S. 611

unusual credit bargain offered to respondent proves nothing more than a willingness to provide cheap financing in order to sell expensive houses, and without any evidence that the Credit Corp. had some cost advantage over its competitors -- or could offer a form of financing that was significantly differentiated from that which other lenders could offer if they so elected -- the unique character of its financing does not support the lower courts' conclusion that petitioners had the kind of economic power that respondent had the burden of proving in order to prevail. Pp. 429 U. S. 614-622.

523 F.2d 961, reversed.

STEVENS, J., delivered the opinion for a unanimous Court. BURGER, C.J.,filed a concurring opinion, in which REHNQUIST, J., joined, post, p. 429 U. S. 622.



























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