Brief Fact Summary. A suit against the Aluminum Co. of America (D) and Aluminum Limited (D), a Canadian corporation formed to take over the properties of Aluminum Co. of America (D) outside the United States, by the United States (P) on the premise of contravening the Sherman Act by the participation of each company in a foreign cartel called the Alliance.
Synopsis of Rule of Law. Any state may impose liabilities even upon persons not within its allegiance, for conduct outside its borders that has consequences within its borders that the state reprehends.
So to limit it would in our judgment emasculate the Act; would permit just such consolidations as it was designed to prevent.
View Full Point of LawIssue. May a state impose liabilities even upon persons not within its allegiance, for the conduct outside its borders that has consequences within its borders?
Held. (L. Hand, Swan, and A. Hand, J). yes. Any state may impose liabilities even upon persons not within its allegiance, for conduct outside its borders that has consequences within its borders that the state reprehends. Under the Sherman Antitrust Act, the agreements of the Alliance in 1931 and 1936 would clearly have been unlawful had they been made within the United States (P) and though made abroad, both are unlawful if they were intended to affect imports and did affect them. Evidence showed that the shareholders of Alliance intended to restrict imports thus shifting the burden of proof of whether they in fact restricted imports into the United States to Limited (D). Hence, this court must conclude that the 1936 agreement violated the Act since the underlying doctrine of the Sherman Act was that all factors that contribute to determining prices must be kept free to operate unhampered by agreements.
Discussion. The Sherman Antitrust Act should not be read without due regard to the limitations customarily observed by nations upon the exercise of their power. Hence, one must not impute to Congress an intent to punish all whom its courts can catch, for conduct that has no consequences in the U.S. when consideration is given to the international complication likely to arise from an effort in the U.S. to treat such agreements as unlawful. Then it is safe to assume that Congress certainly did not intend the Sherman Antitrust Act to cover them.