In the 1967 case of Hanover Shoe, Inc. v. United Shoe Machinery Corp., the U.S Supreme Court ruled in favor of Hanover Shoe, Inc., a shoe manufacturer who accused United Shoe Machinery Corp. of monopolistic practices that violated antitrust laws. The court held that a plaintiff can recover damages for overcharges resulting from illegal monopoly even if it has passed on the overcharge to its customers by raising prices because proving injury becomes complex and speculative when considering whether those indirect consumers would have paid lower prices absent the violation or how much less they might have paid. The decision also established what is known as "the passing-on defense," which states that defendants cannot argue against paying full compensation to direct purchasers by claiming these purchasers had offset their losses by increasing their own sale prices (i.e., 'passing on' costs). This ruling was significant as it clarified aspects related to damage recovery under antitrust law and set important precedents regarding standing and pass-through issues in such cases.

In the dissenting opinion for Hanover Shoe, Inc. v. United Shoe Machinery Corp., Justice Harlan disagreed with the majority's decision to reject a "pass-on" defense in antitrust cases. He argued that this ruling could lead to unjust enrichment of plaintiffs who had passed on overcharges to their customers and were now able to recover damages from defendants as well. Moreover, he contended that it was not impossible or impractical for courts to determine whether an overcharge had been passed on, contrary to what the majority suggested; rather, such determinations were common in other areas of law like tax incidence theory and public utility regulation. Therefore, he believed that denying defendants the opportunity to prove pass-on would distort economic reality and undermine fairness in antitrust litigation.