## Facts

- Copperweld Corporation bought the Regal Tube business from Lear Siegler, which agreed not to compete with Regal for five years.
- Copperweld transferred Regal’s assets to a newly formed, wholly owned subsidiary, Regal Tube Co.
- David Grohne, a former Regal officer, helped form Independence Tube Corporation to compete in steel tubing.
- Independence Tube ordered a tubing mill from Yoder Company.
- After receiving a letter from Copperweld asserting concern about competition and stating it would protect its rights under the Lear Siegler noncompetition agreement, Yoder voided Independence Tube’s order.
- Independence Tube later obtained a mill from another supplier, but its market entry was delayed about nine months, which it alleged caused injury.

## Issues

1. Whether a parent corporation and its wholly owned subsidiary are legally capable of conspiring with each other under § 1 of the Sherman Act.

## Decision

- The Supreme Court reversed the Seventh Circuit.
- The Court held that Copperweld and its wholly owned subsidiary, Regal, were incapable of conspiring with each other for purposes of Sherman Act § 1.
- The Court rejected using separate incorporation alone to treat a corporate parent and wholly owned subsidiary as distinct conspirators.
- The Court reasoned that coordination within a wholly owned corporate family reflects a single economic unit, not the concerted action § 1 targets.
- A dissent would have allowed § 1 scrutiny when affiliated entities function as separate decision-making centers or pursue divergent interests.

## Legal Principles

- Sherman Act § 1 requires concerted action among separate economic actors; it does not reach purely unilateral conduct.
- A parent corporation and its wholly owned subsidiary have a complete unity of interest and constitute a single entity for § 1 purposes.
- Conduct coordinated within a wholly owned corporate family is not actionable as a § 1 conspiracy and is assessed, if at all, under doctrines addressing unilateral conduct (including § 2).
- The holding is limited to wholly owned subsidiaries; it does not necessarily apply to partially owned affiliates where interests may diverge.

## Conclusion

The Court established that a parent and its wholly owned subsidiary cannot “conspire” under Sherman Act § 1 because they operate as a single economic unit, making intra-corporate coordination outside § 1’s conspiracy requirement.


Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752 (1984)