The defendants were pipemakers who were operating in agreement. When municipalities offered projects available to the lowest bidder, all companies but the one designated would overbid, guaranteeing the success of the designated low bidder if no bidder outside the group submitted a bid.
The government argued that some antitrust violations, such as bid rigging, were such egregious anti-competitive acts that they were always illegal (the so-called "per se" rule). The defendants asserted that it was a reasonable restraint of trade and that the Sherman Act could not have meant to prevent such restraints.