This section contains the nature of the case and procedural background.

A group of buyers (Ps) of newly issued securities filed an antitrust lawsuit against underwriting firms (Ds) that market and distribute those issues. Ps claim that the underwriters unlawfully agreed with one another that they would not sell shares of a popular new issue to a buyer unless that buyer committed (1) to buy additional shares of that security later at escalating prices (a practice called 'laddering'), (2) to pay unusually high commissions on subsequent security purchases from the underwriters, or (3) to purchase from the underwriters other less desirable securities (a practice called 'tying'). The underwriting practices at issue take place during the course of an initial public offering (IPO) of shares in a company. The IPO process is heavily regulated by the SEC every step of the way. Ps sought relief under § 1 of the Sherman Act. Ps allege that Ds 'abused the . . . practice of combining into underwriting syndicates' by agreeing among themselves to impose harmful conditions upon potential investors--conditions that the investors apparently were willing to accept in order to obtain an allocation of new shares that were in high demand. Ds moved to dismiss in that federal securities law impliedly precludes application of antitrust laws to the conduct in question. The Court dismissed, the court of appeals reversed, and the Supreme Court granted certiorari.

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