Document: 390 U.S. 145 88 S.Ct. 869 19 L.Ed.2d 998 Lester J. ALBRECHT, Petitioner,v.The HERALD COMPANY, d/b/a Globe-Democrat Publishing Co. No. 43. Argued Nov. 9, 1967. Decided March 4, 1968. Rehearing Denied April 8, See 1018, 1258. Gray L. Dorsey, Chesterfield, Mo., for petitioner. Lon Hocker, St. Louis, respondent. Mr. Justice WHITE delivered the opinion of Court. 1 A jury returned a verdict respondent in petitioner's suit treble damages violation § Sherman Act.1 Judgment was entered on and Court Appeals Eighth Circuit affirmed. 367 F.2d 517 (1966). The question is whether denial motion judgment notwithstanding correctly affirmed by Appeals. Because this case presents important issues under antitrust laws, we granted certiorari. 386 941, 87 976, 17 872 (1967). 2 We take facts from those stated Respondent publishes Globe-Democrat, morning newspaper distributed Louis metropolitan area independent carriers who buy papers at wholesale sell them retail. There are 172 home delivery routes. advertises suggested retail price its newspaper. Carriers have exclusive territories which subject to termination if prices exceed maximum. Petitioner, had Route 99, adhered advertised some time but 1961 raised customers.2 After more than once objecting practice, wrote petitioner May 20, 1964, that because he overcharging reserved right compete should happen, subscribers 99 were being informed letter would itself deliver paper wanted it lower price. In addition sending these letters customers, hired Milne Circulation Sales, Inc., solicited readers newspapers, engage telephone house-to-house solicitation all residents 99. As result, about 300 1,200 customers switched direct Meanwhile continued warned him continue overcharge, not do business with him. Since did want delivery, new route 314 as available without cost. Another carrier, George Kroner, took over knowing tolerate understanding might return discontinued his pricing practice.3 On July 27 told interested carrier could back long charged Petitioner brought lawsuit August 12. response, appointment terminated given 60 days arrange sale satisfactory replacement. sold $12,000, $1,000 paid less gotten been able turn instead 900.4 3 Petitioner's complaint combination or conspiracy restraint trade Act.5 At close evidence amended charge only between 'plaintiff's and/or Inc. Kroner.' went theory, found respondent, favor verdict. court denied verdict, asserted United States v. Parke, Davis & Co., 362 29, 80 503, 4 505 (1960), like cases, undisputed showed matter law fix resale newspapers per se illegal Act. view 'the fail(ed) show Act violation,' respondent's conduct wholly unilateral there no trade. previous decisions deemed inapposite situation seller establishes maximum be retailer enjoying an territory seller, entitled refuse deal, simply engages competition offending retailer. disagree reverse judgment. recited cannot beyond reach That section covers combinations contracts conspiracies, express implied. made quite clear where held results suggests secures compliance means 'mere announcement policy simple refusal deal * *.' Id., 44, 512. specified both wholesalers retailers required noncomplying retailers. It created 'with maintain 45, arose their acquiescence secured threats termination; they cooperated terminating price-cutting 5 If when threatened unless put pressure then can doubt Milne, Kroner force conform When learned overcharging, solicit away order get reduce through efforts well obtained Kroner. Milne's purpose undoubtedly earn fee, aware aim campaign knew giving customer list part program price, ultimately complied demands. He undertook materially aided accomplishment plan. Given uncontradicted Appeals, within meaning erred holding contrary.6 6 also trade, despite long-accepted rule cases fixing done agreement combination.7 Trenton Potteries 273 392, 47 377, 71 L.Ed. 700 (1927); Socony-Vacuum Oil 310 150, 811, 84 1129 (1940); Kiefer-Stewart Joseph E. Seagram Sons, 340 211, 259, 95 219 (1951); McKesson Robbins, 351 305, 76 937, 100 1209 (1956). 7 Kiefer-Stewart, supra, liquor distributors combined set prices. legal setting '* constituted interference plaintiff's desired.' 182 228, 235 (C.A.7th Cir.1950). This rejected reversed agreements 'no minimum prices, cripple freedom traders thereby restrain ability accordance own judgment.'8 213, 260. 8 think decided adhere it. Maximum may different consequences many situations. But schemes substituting perhaps erroneous forces competitive market, severely intrude upon buyers survive market. Competition, even single product, cast mold. fixed too low dealer furnish services essential value goods consumer conveniences consumers desire willing pay. channel distribution few large specifically advantaged dealers otherwise significant nonprice competition. Moreover, actual scheme nearly always increasingly likely approaches cost dealer, tends acquire attributes arrangement prices.9 our view, therefore, formed purchased constituted, more, 9 reject suggestion permissible case. reasoned since territories, ceiling necessary protect public gouging monopoly power territories. neither existence nor economic place hands issue before jury. Likewise, taken directed imposed result laws. Certainly record us assume, reasoning necessarily did, rights valid Act, either alone conjunction price-fixing scheme. Arnold, Schwinn 388 365, 373, 379, 1856, 1862, 1865, 18 1249 assertion justified blunts pernicious another practice unpersuasive. If, said, impact territorial exclusivity such protected injurious public, entire must fall 10 sum, cited makes existed. Accordingly, error affirm District remanded further proceedings consistent opinion. 11 Reversed remanded. 12 DOUGLAS, concurring. 13 While I join Court, word add. 'rule reason' stemming Standard New Jersey States, 221 1, 62, 31 502, 516, 55 619. Whether franchise vertical unreasonable laws much mooted question. conspicuously great leverage has 221, 843, 1129. properly refuses say illegal. 14 traditional distributing agency neighborhood boy. time, acumen, experience, financial resources wage warfare protection least doubtful. Here, however, system characteristics enterprise. requires practically full time. $11,000, receiving subscribers, used truck, newspapertying machine. dispute arose, route, covered whole northeast section' 'big city.' Deliveries motor vehicle although usually completed o'clock morning, rest workday spent billing, phone calls, arranging service, placing 'stop' 'start' orders existing service. times staff tie wrap newspapers. 15 Under decisions* legality franchises tried factual issue; here. 16 therefore White Motor 372 253, 83 696, 738, ruling restriction arrangement, findings arrangements competition.' 263, S.Ct., 702. HARLAN, dissenting. entirely agree views expressed my Brother STEWART joined dissenting opinion, Court's disregard certain considerations underlying warrants additional comment. I. genuine 'ceilings,' differs accumulation pronouncements opinions render two economically equivalent. 20 allegation persons states cause action. plaintiff win case, prove alleged combination, defendant unable, virtue failure proof trial, adequate justification. points ceilings differ floors: hold inferred dictation infer ignores reality; conclude acceptable justification substitute blindness analysis. 21 Resale maintenance, involved here, lessens horizontal intrabrand effects, higher efficient use resources, easier life resellers, same maintenance takes form among resellers manufacturer plus reseller acquiescence. things. First, frequently possible behind what presented world policy, reap benefits policy. Second, floors considered restraints, sense create demonstrated, proffered defense. Following reason, invariably unreasonable: extent achieve objective, act detriment interest viewed absence countervailing fair justifications are, examination, wanting, trivial elusive warrant expense trial (as example, defense prestige product) run counter premises enables inefficient sellers stay business). 22 Vertically fact words change, altogether matter. Other things equal, restrict product lowest feasible profit margin, way achieves overall largest volume. dictates responding treat better secure high margin profits. ceiling, acting directly interest, room inference merely mechanism accomplishing anticompetitive purposes customers.1 23 Furthermore, floors. present uses again fallacious argument equally 'cripple judgment.'2 statement does justify real minimums shown exist maximums. 24 recognized one objectives preserve, social rather reasons, degree independence, multiplicity, variety system. Recognition objective not, require every commercial fetters trader proper provable See, e.g., 738. treatment analysis alone, burden each individual demonstrates harmful balance.3 Price matter: lessen competition; drive toward level intense competition, go below accepts miscalculated. ceilings, reflect manufacturer's insufficient down level, arguable prevent reaping supercompetitive 25 placed side side, then, asked each, 'Does no-trial rule?' answers different. Both practices share negative attribute discretion area, former imposes evil lessened and, just seen, latter possess. partially inexplicitly recognizes, met merits, incantation developed situation.4 II. 26 discovery (a) (b) beset pitfalls. relies third parties telephoning jobs effectively itself. Neither any special ceiling. critical company pays employees perform routine task, hires outsider thing, requirement 'combination' lost meaning. point statute ought mean something substance. premise adjudication firm determine so which, generate market have. 'combining' outside accountants, analysts, advertisers otherwise, boys. Once whatever forcing competitor job itself, activity essence unilateral. evidently dissatisfied theories goes suggest others claimed. other accepted difficulty thesis irrelevant situation, distributor preventing breaking line driving everyone's down, thus symphony interests exerted However, contrast, effectiveness depend imposition distributors, not. Each distributor's is, reasons already discussed, only, dealers. Hence theory here make coincidental unrelated similar agreements, base recover activities harm suffered. 28 that, Davis, 'petitioner claimed himself, day unwillingly price.' intriguing, unsound face, ring familiar. Obviously deny recovery pressured resists temptation last grant momentarily yields restored vision damages. momentary punishment refusing acquiesce damage based. 29 difficulties stem unwillingness face ultimate conclusion actually arrived: unlawful person dictate another; bear support renders dictator liable dictatee damaged. reason reluctance state bluntly transparent: account conspiracy. 30 mean, ever ostensibly situation. often infer, situations reretailer, enforcing very combinatorial competing horizontally.5 Instead undertaking analyze proper, past followed rough approximation adopted Davis:6 announces will depart it; inch further. magical quality transformation apparent real, failed is.7 approach yield answer '(I)s combination?' For purports unilaterally dictating really unilaterally. No squeeze himself. Had habit analyzing economics based, seen circumstances imply keep up. 32 1129, unlawful, kep manufacturers impose refused insisted upon, found, manufacturers, common condition doing demand individually. 33 Kiefer-Stewart's instructive. Any perfect liberty retailers, maximize profits while lessening theirs. threat purchasing manufacturer, prevents raising point. combine raise together, rendering wholesaler nowhere else turn. From viewpoint, putting alternative end maximizing costs: squeezing bottom squeezes top. top, bottom, lawful whom limited direction. kind exists sensible combination. 34 second why restraint. offered contention public. recognizing scattered dicta faced attempts disposed hearing 35 persuasive. illegal, seeking, now receives, best unfortunate Then, rejecting affirmative says, 'The unpersuasive.' Ante, 154. shall ignore insertion 'illegal,' assumes conclusion. understand why, deciding finds 'unpersuasive' 36 courts consider assuming conceivably penalized system, unchallenged petitioner, lawful, falls short. consequent never sometimes unlawful. demonstrated 37 mechanics city naturally divides into relatively (sometimes called 'paper routes'), power. hardly farfetched assume jight (if opportunity today denied) business, nature enterprise compactness routes number particular sustain small oligopolistic respect other's pattern leadership. 38 ideal publisher intensely vying impossible some, all, cities. seems live consequently undesirable behavior—price leadership exclusivity. 39 Confronted publisher, publishers in, things, service seek provide These realized publisher's interference, steps own. 40 steps. approve distributor. Naturally, newspapermen notoriously realistic, referred acquisition distributorship purchase 'route.' enforced out defeating objective. supposed unreasonable.8 need extreme cutting off preferring high-profit, low-volume so. observing Today's decision leaves trucks. 41 STEWART'S below. 42 STEWART, HARLAN joins, 43 daily Louis. 170 bought copies householders. maximum, allowed indeed actively assisted enter holds subjected liability why. 44 litigated throughout granting perfectly practice. Upon obviously correct. furtherance of, contrary to, monopolist territory; city's provided above householders totally position. 45 505, involve products inapplicable thrust free determination. monopolist.1 To prevented prevailed actions fully compatible laws.2 46 But, says original violated Putting aside briefed argued below, fail how illegality help enjoyed introducing territory. first enjoy conditional monopoly, am loss permitting complete monopoly. think, reason.3 stands head.4 Section Stat. 209, U.S.C. provides 'Every contract, trust conspiracy, commerce several foreign nations, declared indicates cents month. shows lowered Although notified apparently remained unaware testified vendee $3,600. tortious relations law, count dismissed trial. broadly successfully firmly applied carriers, most acquiesced 372, claims, appear abandoned court. allege customers. disposition unnecessary pass claim. frivolous contention. Federal Trade Commission Beech-Nut Packing 257 441, 66 307 (1922); Girardi Gates Rubber Sales Div., 325 196 (C.A.9th Cir. 1963); Graham Triangle Publications, 233 F.Supp. 825 (D.C.E.D.Pa.1964), aff'd curiam, 344 775 (C.A.3d 1965). Our suppliers programs hence 'essentially' individually supplier empirical basis determining benefit appears inconclusive, substantial formulate enforce complicated plans deem advantageous. Grether, Control Fair Legislation, c. X (1939); Commission, Report Maintenance 5—11, 59 (1945); Select Committee Small Business, Trade: Problem Issues, H.R.Rep. 1292, 82d Cong., 2d Sess. (1952); Bowman, Prerequisites Effects Maintenance, U.Chi.L.Rev. 825, 832—843 (1955); Corey, Pricing: Reappraisal, Harv.Bus.Rev. 5. p. Fulda, 175, 184 186 (1954). theoretical matter, difficult conceive rightly regard interest. Maintaining total increased nonprice, demand-creating activity. particular, (at range marked manufacture top highest price-maintenance operate effectively) affected outlets availability services, advertising promotion, squelch concentrate Finally, group stabilized manufacturer-imposed schemes, danger severe interbrand apt alleviated. read prohibiting scarcely derivable signed violate With deference, notion violative accrues parties, determined priori model. Cf. Comment, Per Se Illegality Price-Fixing—Sans Power, Purpose, Effect, 837 (1952). after established sold, fairtraded legally minimum. F.2d, 230—231. concerning regulation restrains. bind, restrain, essence. true test regulates promotes suppress destroy ordinarily peculiar applied; imposed; effect probable. history restraint, believed exist, adopting remedy, sought attained, relevant facts. good intention save objectionable reverse; knowledge intent interpret predict consequences.' Chicago Board 246 231, 238, 242, 244, 62 683. (economics drug business); bicycle noted 'elaborately sets forth information interaction practices.' U.S., 367, 1859. Judge Coffin Quinn Mobil Cir., 375 273, 276. 260, 219. leading 395—402, 378 381, 700. floors, cutting, inevitably reference purely collateral limiting discretion, still inhibit cutting. perspective dictation. ambitious object restrictions, lazier welcome protection. Assuming enough permit enable imperfections permit. stark contrast insisting competitors; worried Thus equivalent sellers, establish series distinct relationships relationship seller. Turner, Definition Agreement Act: Conscious Parallelism Refusals Deal, 75 Harv.L.Rev. 655. Professor Turner was) overruling Colgate 250 300, 465, 63 992, arguing, inter alia, behavior produce tacit implied 'it cutters invitation (to retailers) (with manufacturer) 689. (Emphasis added.) 505. thought (see 49, 514) believe, reached supported majority's reasoning. frank say, Turner's rationale. n. 5, 684 691. Further reflection leads me dissent overruled overdrawn, yet prepared rationale carries discard Colgate. Reasonableness evidenced abundance distribute ceilings. accept conditions buying monopolies. principal super-competitive proved attract accompanied Elman, 'Petrified Opinions' Competitive Realities, Col.L.Rev. 625, 633 major portion income derives sales self-interest keeping increase circulation revenues. distributors. generally 625 'It plain abuse principle predisposed offer mechanical dogmatic solutions problems. finding illegality: critically effects challenged practice; subsuming rules. tempting; classify forbidden category demonstrate ground up, were, against forbidden.' 627. Supreme growing determination convert designed promote regulate hamper process.' Restraint Court: Utah Pie Case, 77 Yale L.J. 70

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