Story Parchment Co. v. Paterson Parchment Paper Co.

Background

A company that began making vegetable parchment sued three rival firms (and another firm not joined) under the Sherman Act, saying they had kept uniform prices, then combined to cut prices and drive the new seller out of interstate trade. A jury found for the new company for $65,000, and the district court trebled that award under the statute. A court of appeals reversed, saying the plaintiff had not proved recoverable damages.

Reasoning

The Court considered two main questions: whether there was evidence of a conspiracy to monopolize interstate parchment trade, and whether the plaintiff had proved damages. The opinion finds evidence that the rivals had maintained monopoly prices, then engaged in price cutting below fair profit and even below cost after the newcomer entered. The Court held that the jury reasonably could conclude the illegal combination caused lower prices and business loss. It explained that proof of some damage is enough even if the exact amount is uncertain, because the wrongdoer must bear uncertainty caused by its own conduct. The Court also found evidence that the plant’s value declined after it closed, supporting the jury’s award.

Real world impact

The decision restores the district court judgment and treble damages, allowing the harmed parchment maker to recover. It confirms that businesses harmed by price-fixing or exclusionary conduct can obtain damages even when exact amounts must be estimated by a jury. It places the risk of uncertainty on the wrongdoer rather than the injured business.