In the United States v. Wallace & Tiernan Co. et al., 1948, the Supreme Court examined whether a company could be held liable for antitrust violations if it had not directly participated in setting prices but was aware of and benefited from them. The case involved two companies that manufactured chlorinating equipment used to purify water supplies: Wallace & Tiernan Company and Fischer & Porter Company. They were accused of conspiring with other manufacturers to fix prices, which is illegal under the Sherman Antitrust Act. The court found both companies guilty even though Fischer & Porter did not actively participate in price-fixing meetings because they knew about these meetings and profited from the fixed prices set by others. This ruling expanded liability for antitrust violations beyond direct participants, establishing that those who knowingly benefit can also be held accountable.

In the dissenting opinion for United States v. Wallace & Tiernan Co., Justice Robert H. Jackson argued that the majority's decision to uphold a conviction under the Sherman Act was incorrect because it misinterpreted and overextended the law's scope. He contended that, while price-fixing is indeed illegal, not all forms of business collaboration should be considered as such. In this case, he believed that two companies agreeing to bid separately on different parts of a contract did not constitute an attempt to manipulate prices or restrict competition but rather represented a legitimate business strategy in response to unique market conditions (i.e., wartime scarcity). Therefore, he felt these actions fell outside of what should be punishable under antitrust laws and warned against using broad interpretations of these laws which could stifle innovation and cooperation among businesses.