UNITED STATES V. HILTON HOTELS CORP. 467 F.2d 1000 (9th Cir. 1972) CASE BRIEF

UNITED STATES V. HILTON HOTELS CORP

467 F.2d 1000 (9th Cir. 1972)

NATURE OF THE CASE: Hilton (D) sought reversal of their conviction for violating the Sherman Act, 15 U.S.C.S. 1, by agreeing with other hotels to give preferential treatment to suppliers who paid assessments while curtailing purchases from those who refused. The trial court held that these were per se violations of the Sherman Act's provisions against refusals to deal as unreasonable restraints on trade.

FACTS: Hotels, restaurants, hotel and restaurant supply companies, and other businesses in Portland, Oregon, organized an association to attract conventions to their city. Members were asked to make contributions in predetermined amounts. Companies selling supplies to hotels were asked to contribute an amount equal to one per cent of their sales to hotel members. To aid collections, hotel members, including D, agreed to give preferential treatment to suppliers who paid their assessments, and to curtail purchases from those who did not. The jury was instructed that such an agreement by the hotel members, if proven, would be a per se violation of the Sherman Act. D's president testified that it would be contrary to the policy of the corporation for the manager of one of its hotels to condition purchases upon payment of a contribution to a local association by the supplier. D's manager and assistant in Portland testified that it was the hotel's policy to purchase supplies solely on the basis of price, quality, and service. On two occasions they told the hotel's purchasing agent that he was to take no part in the boycott. The purchasing agent confirmed the receipt of these instructions, but threatened a supplier with loss of the hotel's business unless the supplier paid the association assessment. He testified that he violated his instructions because of anger and personal pique toward the individual representing the supplier. The court instructed the jury that a corporation is liable for the acts and statements of its agents 'within the scope of their employment,' defined to mean 'in the corporation's behalf in performance of the agent's general line of work,' including 'not only that which has been authorized by the corporation, but also that which outsiders could reasonably assume the agent would have authority to do.' The court added: 'A corporation is responsible for acts and statements of its agents, done or made within the scope of their employment, even though their conduct may be contrary to their actual instructions or contrary to the corporation's stated policies.' D was convicted and appealed claiming that it was not responsible, since its agent had ignored specific orders.

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LEGAL ANALYSIS:

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