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SOUTH-WESTERN LEGAL STUDIES IN BUSINESS CASE UPDATES—ANTITRUST
SW Legal's Case Updates is a SW Legal Studies service to provide briefs of the latest state and federal court cases. Review the summaries and, for cases of interest, select the case brief. If you cannot find a case of interest, return to Topic Index . State Gasoline Price Mark-Up Law Violates Sherman Act and Is Unconstitutional
Title
Summary
SFirm Has No Obligation to Sell to Rivals at Price they Demand
Briefed Case
Supreme Court threw out a claim by Internet service providers who leased phone line space from AT&T that the price charged by AT&T squeezed their profits too much. AT&T followed federal regulations in its pricing policy and had no obligation to offer competitors a service at a price that would guarantee them a profit.
(Updated April 2009)
State Gasoline Price Mark-Up Law Violates Sherman Act and Is Unconstitutional
Briefed Case
A Wisconsin statute that forced retailers to mark-up gas and diesel by at least a certain percent is a per se violation of the Sherman Act. As such, the statute is unconstitutional and may not be enforced.
(Updated April 2009)
Selling Below-Cost Gas Allowed When Tied to Sale of Above-Cost Goods
Briefed Case
Appeals court held that it was legal for a grocery store to sell gasoline below cost as long as the sale was tied to the volume of groceries a customer purchased. The value of the bundle of groceries and gas together was above cost, so was not anticompetitive.
(Updated January 2009)
Claim Failed to Establish Relevant Geographic Market
Briefed Case
Appeals court held that a claim against each cemetery in Michigan for tying the sale of burial plots to headstones failed because each cemetery is not the relevant geographic market; while each cemetery has some power, there is competition in the market as a whole.
(Updated June 2008)
No Antitrust Suit May Be Filed in Areas Regulated by Securities Laws
Briefed Case
Supreme Court held that for an antitrust suit attacking practices in the securities industry regulated by the SEC to succeed would undermine regulation of the securities industry and weaken the structure of the industry. Securities laws preclude the bringing of such antitrust cases.
(Updated September 2007)
Claim of Conspiracy Must Present Plausible Facts to Support Assertion
Briefed Case
Supreme Court held that for a claim of a conspiracy in restraint of trade to proceed, the plaintiff must present sufficient evidence which, if believed, could make a case. A naked claim of conspiracy is not sufficient for a trial to occur.
(Updated September 2007)
Predatory Bidding Due Same Test as Predatory Pricing
Briefed Case
Supreme Court held that to win in a predatory bidding case a plaintiff must show that the predator bid up input prices and incurred short run losses so as to capture more of the market and higher prices later.
(Updated May 2007)
Existence of Patent Not Relevant in Tying Cases; Market Power Must Always Be Shown
Briefed Case
Supreme Court, overturning a number of older cases, held that just because a seller has a patent on a product tied to other products, there is no presumption of monopoly power in the market. Plaintiff must give evidence of market power and monopolization.
(Updated October 2006)
Joint Venture by Competitors Not Per Se Illegal
Briefed Case
Supreme Court held that for two competitors to form a joint venture to produce a product sold at one price was not per se illegal. Since the companies did not compete directly with each other in the market affected by the joint venture, there was no violation of the Sherman Act under a rule of reason analysis.
(Updated October 2006)
Claim of Predatory Pricing by Dominant Airline May Proceed
Briefed Case
Appeals court held that a new entrant into a market dominated by an existing airline may proceed with a claim that the dominant airline at an airport engaged in predatory pricing to drive the new entrant from the market in violation of the Sherman Act.
(Updated March 2006)
Exclusive Deal between Health Insurer and Pharmacies Provides Economic Benefits
Briefed Case
Appeals court held that when a health insurer agreed to send most of its subscribers to a limited number of pharmacies in exchange for lower prescription drug prices, the pharmacies cut out of the deal did not have a suit for violation of the Sherman Act.
(Updated October 2004)
Actions by Sellers that Injure Foreign Consumers, Not Domestic Consumers, Not Subject to U.S. Jurisdiction
Briefed Case
Supreme Court held that the Sherman Act or Foreign Trade Antitrust Improvements Act do not create jurisdiction for U.S. courts over price fixing by U.S. sellers that occurs in foreign countries that does not directly injure the domestic market in the U.S.
(Updated October 2004)
Professional Football Rule Restricting Draft Eligibility Exempt from Antitrust Review
Briefed Case
Appeals court held that a former college football player was not eligible to participate in the NFL draft until he was at least three years out of high school, as the NFL requires. Since the NFL players have union representation, the NFL is generally exempt from antitrust review on matters of labor policy.
(Updated October 2004)
3M's Exclusionary Practices Illegally Drove Competitor from Market
Briefed Case
Appeals court upheld the conviction of 3M for monopolization of the transparent tape market. 3M used its monopoly position in that market to drive out a new competitor by engaging in exclusive dealing with customers and by offering rebates that were larger if customers did not buy competitor products.
(Updated January 2004)
Foreign Buyers of U.S. Products May Assert Price Fixing Action in U.S. Court
Briefed Case
Appeals court held that foreign buyers of vitamin products had standing to bring suit in U.S. court against U.S. vitamin manufacturers that were accused of being involved in an international price-fixing conspiracy.
(Updated April 2003)
Securities Firms Immune from Antitrust Action when Subject to SEC Oversight
Briefed Case
Appeals court affirmed that firms that underwrite and distribute new securities are immune from antitrust attack for certain restrictions the firms put on the resale of new securities. The SEC regulates the industry and has antitrust authority over this matter and has decided to let the practices stand, so private action may not proceed.
(Updated April 2003)
Coke's Loyalty Requirements for Distributors Not Restraint of Trade
Briefed Case
Appeals court affirmed that Pepsi failed to show that Coke's exclusive dealing requirement for food service distributors who handle Coke fountain syrup products was an illegal restraint of trade as the market is highly competitive.
(Updated April 2003)
Antitrust Claims by Physician Should Be Considered by Trial Court
Briefed Case
Appeals court held that a trial court should not have dismissed claims of exclusive dealing and boycott brought by a physician denied the right to practice in two hospitals that obtained all their services from a group she used to work for. The trial court should consider the geographic extent of the market.
(Updated April 2003)
Company Monopolized Pay Phone Locations
Briefed Case
Appeals court upheld a judgment against Southwestern Bell for monopolization of pay phone locations by use of various anticompetitive tactics. Cell phones do not compete with pay phones with respect to the value of pay phone locations, so the relevant market was pay phone locations.
(Updated January 2003)
Injury to Competition Outside the U.S. Not Subject to Antitrust Laws
Briefed Case
Appeals court held that U.S. courts do not have jurisdiction to hear antitrust cases where the alleged violation by U.S. firms took place outside of the U.S. The Foreign Trade Antitrust Improvements Act denies standing to plaintiffs when the actions take place entirely outside of the U.S.
(Updated January 2003)
Federal Regulation of Telecommunications Does Not Eliminate Antitrust Actions
Briefed Case
Appeals court held that an antitrust suit by a DSL Internet provider against a regional telephone company could proceed. The provider had presented sufficient evidence to show the possibility of monopolization activities by the telephone company, which is not protected against such suit by federal regulation of telecommunications.
(Updated November 2002)
Retailer Failed to Establish that Competitor Had Market Power
Briefed Case
Appeals court affirmed the dismissal of a claim of antitrust violations. The plaintiff failed to establish that its competitor retailer had damaged either inter-brand or intra-brand competition. The fact that the plaintiff suffered losses is not evidence of illegal market power by its competitor.
(Updated July 2002)
Firm Lacked Standing to Sue Competitor That Controlled Most of Market
Briefed Case
Appeals court affirmed the dismissal of a suit brought by a new competitor in the billboard market in Boston. One firm dominated the market because of the regulatory scheme that controlled the market. That did not give standing for the new competitor to attack the dominant position of that firm.
(Updated March 2002)
Potential Competition Between Telephone Companies Irrelevant Under Clayton Act
Briefed Case
Appeals court held that a private challenge to the merger of two Baby Bell telephone companies on the grounds that they are potential competitors in the local phone service market fails because of an exemption carved out of the Clayton Act for mergers of regulated common carriers that operate in separate markets.
(Updated February 2002)
Limits on Transfers by College Athletes Not Anticompetitive
Briefed Case
Appeals court affirmed the dismissal of a suit brought by a college soccer player who wished to transfer from one college to another in the same conference. NCAA rules would make her sit out of competition for one year and lose one year of eligibility. The court held that this rule has a logical basis to enhance competition that outweighs the negative effects.
(Updated January 1, 2002)
Broadcaster's Claim of Conspiracy Between PGA and Major Advertisers May Proceed
Briefed Case
Appeals court held that an on-site radio broadcaster that operated at professional golf tournaments, and claims it was frozen out of the market by a conspiracy between the PGA and major advertisers, showed sufficient facts for the restraint of trade allegation to go to trial.
(Updated August 1, 2001)
Appeals Court Modifies Microsoft Judgment
Briefed Case
Appeals court reversed part of the findings of the trial court in the Microsoft case but remanded the case to another lower court for reconsideration of the issue of monopolization of the PC operating system market and of the tying of Windows and Internet Explorer.
(Updated August 1, 2001)
Sale of Subsidiary Could Restrict Hiring of Subsidiary Employees by Selling Parent Company
Briefed Case
Appeals court affirmed that when a parent company sells a subsidiary to another company, as a term of the sale, it could agree not to recruit away key employees of the subsidiary for a reasonable period of time so as to make the sale more attractive to the buyer. No illegal boycott of the workers in violation of the Sherman Act occurred.
(Updated June 1, 2001)
High Price for City Toll Bridge Does Not Violate Sherman Act
Briefed Case
Appeals court affirmed dismissal of a suit brought against the City of Chicago for the high toll it charges for its toll bridge. The Sherman Act was not violated because the City did not have monopoly power over the route in question. Other roads are available. It has the right to charge a toll greater than is needed to pay for the bridge alone.
(Updated November 1, 2000)
Microsoft Maintained Monopoly Power by Anticompetitive Practices
Briefed Case
District court held that Microsoft violated the Sherman Act by anticompetitive practices that limited the ability of would-be competitors to develop products that would be compatible with the dominant Microsoft operating system. Bundling Microsoft's browser with its operating system was found to be an illegal tying arrangement.
(Updated June 1, 2000)
High Prices Alone for a Service Is Not an Antitrust Violation
Briefed Case
Appeals court upheld dismissal of an antitrust suit brought by a real estate broker against the operator of a countywide real estate multiple listing service. For there to be an antitrust violation, there must be more than a claim that the price charged by the service is "excessive."
(Updated May 1, 2000)
Plaintiff Must Clearly Define Relevant Market to Establish Antitrust Claim
Briefed Case
Federal district court dismissed a suit filed by Adidas against the NCAA for restricting advertising on college uniforms and equipment used in NCAA competition. Adidas failed in its allegations to show that there was a relevant market, so the suit must be dismissed.
(Updated January 1, 2000)
State Monopolization of a Market Immune from Antitrust Attack
Briefed Case
Regulations of the state of Massachusetts monopolized the provision of certain medical services. The appeals court rejected a challenge by a private provider to this monopoly, as the state is immune from antitrust law unless otherwise restricted by Congress.
(Updated November 1, 1999)
Buyers of Products Alleged to Be Sold in Vertical Price Fixing Scheme Have Standing to Sue
Briefed Case
Appeals court reversed the trial court decision to dismiss a suit brought by farmers against American Cyanamid, which sold products through dealers to farmers. The dealers got rebates from the maker if they sold the product for more than the suggested resale price. The farmers, as direct purchasers, had standing to sue for their claim of vertical price fixing.
(Updated October 1, 1999)
No Standing to Sue Former Employer or Hospital for Failure to Fund Physician Practice
Briefed Case
Appeals court upheld dismissal of suit by physician against former employing physician and hospital that refused to bankroll a new practice she wished to start in competition with her former employer. There were no interference with her right to open a practice, so no standing under the Sherman Act.
(Updated April 1, 1999)
Depositions in Antitrust Cases Must Be Made Public
Briefed Case
Relying on a 1913 statute, the appeals court held that depositions taken of executives in the government antitrust case against Microsoft must be made public. The law was not superseded by the Federal Rules of Civil Procedure.
(Updated April 1, 1999)
Per Se Rule Against Group Boycotts Does Not Apply to Single Seller-Single Buyer
Briefed Case
Supplier to NYNEX was cut out in favor of another supplier, who allegedly charged a higher price and gave the buyer, a regulated firm, a rebate at the end of the year. Supreme Court held that the per se rule against horizontal group boycotts does not apply in vertical relationships involving single parties.
(Updated March 1, 1999)
Airline Passengers' Post-Merger Challenge Dismissed
Briefed Case
Customers of Northwest Airlines in Minneapolis sued, contending that the 1986 merger of Republic into Northwest had lessened competition resulting in higher than average fares. Court dismissed suit because no post-acquisition anticompetitive activity was shown.
(Updated May 29, 1998)
Vertical Maximum Price Fixing Not Per Se Illegal; Albrecht Overruled
Briefed Case
Gasoline retailer sued gasoline distributor for controlling maximum retail price. Court overruled Albrecht decision that had held such practice to be per se illegal price fixing, noting that in most cases consumers benefit from such price restrictions, so long as the practices are not predatory.
(Updated May 29, 1998)
Microsoft May Not Require Internet Explorer To Be Tied To Operating System
Briefed Case
Justice Department request that Microsoft be held in contempt of 1995 consent decree with Microsoft that restricted anticompetitive practices denied. The bundling of Internet Explorer with the operating systems does not expressly violate the consent decree. A trial will be held on the merits; preliminary injunction against tying the products issued.
(Updated January 16, 1998)
Pizza Franchisees' Claims Fall Like Dominos
Briefed Case
Appeals court upheld dismissal of suit by Domino's Pizza franchisees against parent company for monopolization of pizza ingredients sold to franchisees.
(Updated October 3, 1997)
California Supreme Court Deems Unearned Discounts an Unfair Trade Practice
Briefed Case
California Supreme Court disallowed the granting of "unearned discounts"" by manufacturers to buyer and labeled it an "unfair trade practice" under the state Unfair Practices Act because it injures competitors and destroys competition.
(Updated September 12, 1997)

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