United States v. W.T. Grant Co.

Supreme Court of the United States · 1953 · Federal Courts

Federal Courtsmootnessvoluntary cessationinjunctionequitable discretionClayton ActSection 8interlocking directorates

Facts

The Government sued Hancock and three pairs of corporations on the theory that Hancock's service on each pair of boards created interlocking directorates prohibited by § 8 of the Clayton Act. The complaints sought orders ending the interlocks and injunctions against future § 8 violations by both the individual and corporate defendants. Soon after suit was filed, Hancock resigned from the boards of Kress, Kroger, and Bond, and defendants submitted affidavits disclosing the resignations and disclaiming any intent to revive the interlocks. The Government did not file counteraffidavits, did not amend the complaint, and stated at oral argument that it did not question the truth of defendants' affidavits.

Issue

Did Hancock's post-suit resignations render the cases moot? If not, did the district court abuse its discretion in refusing injunctive relief after the challenged interlocks had been terminated and defendants denied any intent to resume them?

Rule

Voluntary cessation of allegedly illegal conduct does not deprive a court of power to hear and determine the case, because the defendant remains free to return to the challenged conduct. A case may become moot only if the defendant carries the heavy burden of showing there is no reasonable expectation that the wrong will be repeated. Even when a case is not moot, injunctive relief after discontinuance requires a showing of some cognizable danger of recurrent violation, something more than the mere possibility sufficient to keep the case alive; the trial court's equitable judgment is reviewed deferentially for abuse of discretion.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

The United States sues Nolan Pike and two fictional manufacturing firms in federal district court in Chicago, alleging an unlawful arrangement under a federal competition statute and seeking an injunction barring future violations. Two weeks after the complaint is filed, Pike resigns from one board seat and submits a sworn statement that he has no present plan to resume the arrangement.

What is the strongest argument against dismissal for mootness?

Explanation. Voluntary cessation does not ordinarily deprive a court of power to decide the case. The defendant remains free to return to the old ways, so mootness follows only if the defendant carries the heavy burden of showing there is no reasonable expectation that the wrong will be repeated. A disclaimer is relevant but not automatically conclusive.