Question

Representatives of hotels, restaurants, hotel and restaurant supply companies, and other businesses located in Portland, Oregon, organized an association to attract conventions to their city. Members were asked to make contributions equal to 1 percent of their sales to finance the association. To aid collections, hotel members, including Hilton Hotels Corporation, agreed to give preferential treatment to suppliers who paid their assessments and to curtail purchases from those who did not. This agreement violated federal antitrust laws. The United States sued the members of the association, including Hilton Hotels, for the crime of violating federal antitrust laws. Can a corporation be held criminally liable for the acts of its representatives? If so, what criminal penalties can be assessed against the corporation? United States v. Hilton Hotels Corp., 467 F.2d 1000, Web 1972 U.S. App. Lexis 7414 (United States Court of Appeals for the Ninth Circuit)

Answer 1

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The lawsuit concerns corporate criminal responsibility. There was an conference in Portland, Oregon, founded by members of hospitality industry hotels, restaurants and supply chain companies. The goal of this association was to attract town conventions. The association was to be funded by each member's contribution to the tune of 1 per cent of their overall sales. In an effort to increase the collection for the meeting HHC and other members agreed to offer favorable treatment to supplier who would pay for their appraisals. They agreed to raise purchasing from those making payment and decreasing from others. That decision

The issue is whether HHC can be held criminally liable in this case.

Findings and Decision of the Court

The district court “held that HHC violated section 1 of the Sherman Act, 15 U.S.C. § 1”.The court that in this case the representatives were nothing but acting in the capacity of the company and it was company which was supposed to get pay back amount not the representatives themselves. The representatives were leveraging the bargaining power of the company to put the buying power into force. Lastly the court stated that the business structures of these corporations have been developed so complex that accountability of any agent with respect to wrong doing is difficult to assess, so the company is at fault for creating such a mess.

The Court of Appeals “affirmed the judgment of District Court”.