Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc.

Respondents, bowling centers in three distinct markets, brought this antitrust action against petitioner, one of the two largest bowling equipment manufacturers and the largest operator of bowling centers, claiming that petitioner’s acquisitions of competing bowling centers that had defaulted in payments for bowling equipment that they had purchased from petitioner might substantially lessen competition or tend to create a monopoly in violation of § 7 of the Clayton Act. Respondents sought treble damages pursuant to § 4 of the Act, as well as injunctive and other relief. At trial, they sought to prove that petitioner, because of its size, had the capacity to lessen competition in the markets it had entered by driving smaller competitors out of business. To establish damages, respondents attempted to show that, had petitioner allowed the defaulting centers to close, respondents’ profits would have increased. The jury returned a verdict for damages in favor of respondents, which the District Court trebled in accordance with § 4. The Court of Appeals, while endorsing the legal theories upon which respondents’ claim was based, reversed the case and remanded for further proceedings because of errors in the trial court’s instructions to the jury. The court concluded that a properly instructed jury could have found that a “giant” like petitioner entering a market of “pygmies” might lessen horizontal retail competition. The court also concluded that there was sufficient evidence to permit a jury to find that, but for petitioner’s actions, the acquired centers would have gone out of business. The court held that, if a jury were to make such findings, respondents would be entitled to damages for threefold the income they would have earned. Petitioner’s petition for certiorari challenged the theory that the Court of Appeals had approved for awarding damages.