Am. Socy of Mech. Engrs, Inc. v. Hydrolevel Corp. (ASME)

In Am. Socy of Mech. Engrs, Inc. v. Hydrolevel Corp. (ASME), 456 U.S. 556 (1982), the Court addressed whether ASME, a non-profit engineering standard-setting body, could be held liable under the Sherman Antitrust Act for the fraudulent activity of members of one of its subcommittees, performed with apparent authority. The Court reiterated that under general rules of agency law, principals are liable when their agents act with apparent authority and commit torts analogous to the antitrust violation presented by this case, including when the agent acts solely to benefit himself. Id. at 565-66; see also id. at 567 (The apparent authority theory has long been the settled rule in the federal system.). Turning to the antitrust laws statutory purpose, the Court found that the apparent authority theory is consistent with the congressional intent to encourage competition. Id. at 570. It also noted that requiring an employee act to benefit the employer before imputing liability would stymie the laws purpose. Id. at 573-74. The Court further rejected the petitioners reliance on Ridglea to argue the antitrust statutes treble damages remedy was punitive such that it triggered more restrictive vicarious liability rules. Id. at 574-76 & n.14. The Court acknowledged that the treble damages provision was designed in part to punish past violations, but stated that it functioned primarily as a remedy for the victims and also as a deterrent. Id. at 575. It concluded: Since treble damages serve as a means of deterring antitrust violations and of compensating victims, it is in accord with both the purposes of the antitrust laws and principles of agency law to hold ASME liable for the acts of agents committed with apparent authority. Id. at 575-76.