Citizen Publishing Co. v. United States
United States Supreme Court
394 U.S. 131 (1969)
Tucson had two competing daily newspapers, the profitable Star and the perennially deficit-running Citizen (defendant); when new owners took over the Citizen in 1936, they invested in and intended to keep it running competitively rather than sell it, and never sought a market appraisal of its value. In 1940, the Citizen and Star merged their printing operations, shared profits equally, and eliminated competition between them through a joint entity, after which both papers' profits soared for the next 24 years. The United States (plaintiff) sued under the Clayton Act's merger provisions; the Citizen's only defense was the failing-company doctrine, and the district court rejected it and found an antitrust violation, which the Citizen appealed.
Whether the failing-company doctrine immunizes a merger from antitrust liability if the merger was not the only means of keeping the allegedly failing company from going out of business.