United States v. General Dynamics Corporation

Material Services Corporation (defendant), a coal-mining and building-materials supplier, gradually acquired a controlling stake in United Electric Coal Companies (defendant), a strip-mining operator. General Dynamics Corporation (defendant) then acquired Material Services, becoming the fifth-largest U.S. coal producer. The United States (plaintiff) sued, arguing the acquisition of United violated § 7 of the Clayton Act, relying on undisputed statistics showing a highly concentrated and increasingly concentrated coal market. The district court found that despite this concentration data, United lacked the coal reserves needed to compete for the long-term supply contracts that actually determined competitive strength in the industry, and so the merger did not substantially lessen competition. The government appealed directly to the Supreme Court.