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The Supreme Court held: “the District Court had the power to
divest American of any part of its ownership interests in the
acquired Lucky Stores, either by forbidding the exercise of the
owner’s normal right to integrate the operations of the two
previously separate companies, or by requiring it to sell certain
assets located in California” under section 16 of the Clayton
Act. Id. at 296.
The claim of the State of California that gave rise to
petitioner’s legal fees was an alleged violation of section 7 of
the Clayton Act. That section prohibits the acquisition of stock
or assets in another company if “the effect of such acquisition
may be substantially to lessen competition, or tend to create a
monopoly.” 15 U.S.C. sec. 18. The antitrust claim in the
instant case involved American Stores’ right to acquire Lucky
Stores. The legal fees incurred in the antitrust action arose
out of, and were incurred in connection with, petitioner’s
acquisition of Lucky Stores.
Petitioner places great emphasis on the fact that legal
title to all the Lucky Stores shares had passed before the
antitrust litigation was commenced. In United States v. Hilton
Hotels Corp., supra at 584, the Supreme Court noted that the
prior passage of title in the underlying stock acquisition in
question was “a distinction without a difference” in deciding
whether costs of litigation arose out of the process of
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