The United States brought this civil suit to restrain alleged
violations of the Sherman Act by appellant, a manufacturer of
trucks, and moved for a summary judgment, contending that
appellant's franchise contracts constituted per se violations of
§§1 and 3. Such contracts restricted the geographic areas
within which distributors and dealers were permitted to sell trucks
and parts, restricted the persons to whom distributors and dealers
were permitted to sell trucks for resale, precluded distributors
and dealers from selling trucks to any federal or state government
or subdivision thereof and other large customers without permission
of appellant, fixed the resale price for trucks and parts sold by
distributors to dealers for retail sale, and fixed the retail price
of parts and accessories sold by distributors and dealers to
certain designated customers. Appellant did not file any affidavit
denying the Government's allegations; but it did file a brief
containing allegations of fact, denying that its agreements were
illegal, and contending that it should be allowed to present, at
trial, evidence of the reasonableness of its contracts when
considered in their own unique business and economic context. The
District Court granted summary judgment for the Government.
Appellant appealed directly to this Court from all but the
price-fixing aspects of the judgment.
Held: Apart from the price-fixing aspects of the case,
summary judgment was improperly granted, and the legality of the
territorial and customer limitations of appellant's franchise
contracts should be determined only after a trial. Pp.
372 U. S.
254-264.
(a) Summary judgments have a place in the antitrust field, but
they are not appropriate "where motive and intent play leading
roles."
Poller v. Columbia Broadcasting System,
368 U. S. 464. Pp.
372 U. S.
259-261.
(b) This is the first case involving a territorial restriction
in a
vertical arrangement; and this Court knows too little
of the actual impact of that restriction and the one respecting
customers to reach a conclusion on the bare bones of the
documentary evidence before it. Pp.
372 U. S.
261-264.
194 F.
Supp. 562, reversed.
Page 372 U. S. 254
MR. JUSTICE DOUGLAS delivered the opinion of the Court.
This is a civil suit under the antitrust laws that was decided
below on a motion for summary judgment. Rule 56 of the Rules of
Civil Procedure at the time of the hearing below permitted summary
judgment to be entered
"if the pleadings, depositions, and admissions on file, together
with the affidavits, if any, show that there is no genuine issue as
to any material fact and that the moving party is entitled to a
judgment as a matter of law."
Since that time, an amendment to Rule 56, which is included in
proposed changes submitted to Congress pursuant to 28 U.S.C. §
2072, would add the following requirement:
"When a motion for summary judgment is made and supported as
provided in this rule, an adverse party may not rest upon the mere
allegations or denials of his pleading, but his response, by
affidavits or as otherwise provided in this rule, must set forth
specific facts showing that there is a genuine issue for trial. If
he does not so respond, summary judgment, if appropriate, shall be
entered against him."
But no such requirement was present when the present case was
decided, and appellant, though strenuously opposing summary
judgment and demanding a trial, submitted no such affidavits. It
did, however, in its brief in
Page 372 U. S. 255
opposition to the motion for summary judgment, make allegations
concerning factual matters which the District Court thought were
properly raised and which we think were relevant to a decision on
the merits.
Appellant manufactures trucks and sells them (and parts) to
distributors, [
Footnote 1] to
dealers, and to various large users. Both the distributors and
dealers sell trucks (and parts) to users. Moreover, some
distributors resell trucks (and parts) to dealers, selected with
appellant's consent. All of the dealers sell trucks (and parts)
only to users. The principal practices charged as violations of
§§ 1 and 3 of the Sherman Act, 26 Stat. 209, 15 U.S.C.
§§ 1, 3, concern limitations or restrictions on the
territories within which distributors or dealers may sell and
limitations or restrictions on the persons or classes of persons to
whom they may sell. Typical of the
territorial clause is
the following:
"Distributor is hereby granted the exclusive right, except as
hereinafter provided, to sell during the life of this agreement, in
the territory described below, White and Autocar trucks purchased
from Company hereunder."
"STATE OF CALIFORNIA: Territory to consist of all of Sonoma
County, south of a line starting at the western boundary, or
Pacific Coast, passing through the City of Bodega, and extending
due east to the east boundary line of Sonoma County, with the
exception of the sale of fire truck chassis to the State of
California and all political subdivisions thereof."
"Distributor agrees to develop the aforementioned territory to
the satisfaction of Company, and not to
Page 372 U. S. 256
sell any trucks purchased hereunder except in accordance with
this agreement, and not to sell such trucks except to individuals,
firms, or corporations having a place of business and/or purchasing
headquarters in said territory."
Typical of the customer clause is the following:
"Distributor further agrees not to sell nor to authorize his
dealers to sell such trucks to any Federal or State government or
any department or political subdivision thereof, unless the right
to do so is specifically granted by Company in writing."
These provisions, applicable to distributors and dealers alike,
are claimed by appellee to be
per se violations of the
Sherman Act. [
Footnote 2] The
District Court adopted that view, and granted summary judgment
accordingly.
194 F.
Supp. 562. We noted probable jurisdiction. 369 U.S. 858.
Appellant, in arguing for a trial of the case on the merits,
made the following representations to the District Court: the
territorial clauses are necessary in order for appellant to compete
with those who make other competitory kinds of trucks; appellant
could theoretically have its own retail outlets throughout the
country and sell to users directly; that method, however, is not
feasible, as it entails a costly and extensive sales organization;
the only feasible method is the distributor or dealer system; for
that system to be effective against the existing competition of the
larger companies, a distributor or dealer must make vigorous and
intensive efforts in a restricted territory, and if he is to be
held responsible for energetic performance, it is fair, reasonable,
and necessary that appellant protect him against invasions of his
territory by other distributors or dealers of appellant; that
appellant in order to obtain
Page 372 U. S. 257
maximum sales in a given area must insist that its distributors
and dealers concentrate on trying to take sales away from other
competing truck manufacturers, rather than from each other.
Appellant went on to say:
"The plain fact is, as we expect to be able to show to the
satisfaction of the Court at a trial of this case on the merits,
that the outlawing of exclusive distributorships and dealerships in
specified territories would reduce competition in the sale of motor
trucks, and not foster such competition."
As to the customer clauses, appellant represented to the
District Court that one of their purposes was to assure
appellant
"that 'national accounts,' 'fleet accounts' and Federal and
State governments and departments and political subdivisions
thereof, which are classes of customers with respect to which the
defendant is in especially severe competition with the
manufacturers of other makes of trucks and which are likely to have
a continuing volume of orders to place, shall not be deprived of
their appropriate discounts on their purchases of repair parts and
accessories from any distributor or dealer, with the result of
becoming discontented with The White Motor Company and the
treatment they receive with reference to the prices of repair parts
and accessories for White trucks."
The agreements fixing prices of parts and accessories to these
customers [
Footnote 3] were,
according to appellant, only an adjunct to the customer restriction
clauses, and amounted merely to an agreement to give these classes
of customers their proper discounts.
"In a way, this affects the prices which these classes of
customers have to pay for such parts and accessories, but it
affects, as a practical matter, only spare and repair parts and
accessories, and it affects only the discounts to be given to these
particular classes of customers. The provisions are necessary if
the defendant's
Page 372 U. S. 258
future sales to 'National Accounts,' 'Fleet Accounts' and
Federal and State governments and departments and political
subdivisions thereof, in competition with other truck
manufacturers, are not to be seriously jeopardized."
White also argued below:
"On principle, there is no reason whatsoever why a manufacturer
should not have one distributor who is limited to selling to one
class of customers and another distributor who is limited to
selling to another class of customers, or why a distributor should
not be limited to one class of customers and the manufacturer
reserve the right to sell to another class of customers. There are
many circumstances under which there could be no possible objection
to limiting the class of customers to which distributors or dealers
resell goods, and there are many reasons why it would be reasonable
and for the public interest that distributors or dealers should be
limited to reselling to certain classes of customers."
"In the instant case, it is both reasonable and necessary that
the distributors (except for sales to approved dealers) and direct
dealers and dealers be limited to selling to the purchasing public,
in order that they may be compelled to develop properly the full
potential of sales of White trucks in their respective territories,
and to assure The White Motor Company that the persons selling
White trucks to the purchasing public shall be fair and honest, to
the end of increasing and perpetuating sales of White trucks in
competition with other makes of trucks; and it is reasonable and
necessary that The White Motor Company reserve to itself the
exclusive right to sell White trucks to Federal and State
governments or any department or political subdivision thereof,
rather than to sell such trucks to such governments or
Page 372 U. S. 259
departments or political subdivisions thereof through
distributors or dealers, and The White Motor Company should have a
perfect right so to do."
"Therefore, based both on the decisions of the Federal Courts
and on principle, the limitations on the classes of customers to
whom distributors or dealers may sell White trucks are not only not
illegal
per se, as the plaintiff must prove to succeed on
its motion for summary judgment, but these limitations have proper
purposes and effects and are fair and reasonable, and not violative
of the antitrust laws as being in unreasonable restraint of
competition or trade and commerce."
In this Court, appellant defends the customer clauses on the
ground that
"the only sure way to make certain that something really
important is done right, is to do it for oneself. The size of the
orders, the technicalities of bidding and delivery, and other
factors all play a part in this decision."
Summary judgments have a place in the antitrust field, as
elsewhere, though, as we warned in
Poller v. Columbia
Broadcasting System, 368 U. S. 464,
368 U. S. 473,
they are not appropriate "where motive and intent play leading
roles." Some of the law in this area is so well developed that
where, as here, the gist of the case turns on documentary evidence,
the rule at times can be divined without a trial.
Where the sale of an unpatented product is tied to a patented
article, that is a
per se violation, since it is a bald
effort to enlarge the monopoly of the patent beyond its terms.
Mercoid Corp. v. Minneapolis Honeywell Regulator Co.,
320 U. S. 680,
320 U. S. 684;
International Salt Co. v. United States, 332 U.
S. 392,
332 U. S.
395-396.
And see Ethyl Gasoline Corp. v. United
States, 309 U. S. 436. If
competitors agree to divide markets, they run afoul of the
antitrust laws.
Timken Roller Bearing Co. v. United
States, 341 U. S. 593.
Group boycotts
Page 372 U. S. 260
are another example of a
per se violation.
Fashion
Originators' Guild of America v. Federal Trade Comm.,
312 U. S. 457;
Klor's, Inc. v. Broadway-Hale Stores, Inc., 359 U.
S. 207. Price-fixing arrangements, both vertical
(
United States v. Parke, Davis & Co., 362 U. S.
29,;
Dr. Miles Medical Co. v. Park & Sons
Co., 220 U. S. 373) and
horizontal (
United States v. Socony-Vacuum Oil Co.,
310 U. S. 150;
Kiefer-Stewart Co. v. Seagram & Sons, 340 U.
S. 211), have also been held to be
per se
violations of the antitrust laws; and a trial to show their nature,
extent, and degree is no longer necessary.
As already stated, there was price-fixing here, and that part of
the injunction issued by the District Court is not now challenged.
In any price-fixing case, restrictive practices ancillary to the
price-fixing scheme are also quite properly restrained. Such was
United States v. Bausch & Lomb Co., 321 U.
S. 707, where price fixing was "an integral part of the
whole distribution system" (
id., 321 U. S. 720)
including customer restrictions. No such finding was made in this
case, and whether or not the facts would permit one we do not stop
to inquire.
Appellant apparently maintained two types of price-fixing
agreements. Under the first, a distributor was allowed to appoint
dealers under him, but each distributor had to agree with appellant
that he would charge the dealers the same price for trucks that
appellant charged its direct dealers. The agreement affected only
five percent of the trucks sold by appellant. And there were no
price-fixing provisions pertaining to truck sales to ultimate
purchasers. The other price-fixing arrangement required all
distributors and dealers to give "national accounts," "fleet
accounts," and governmental agencies the same discount on parts and
accessories as White gave them. No figures are given, but it was
assumed by the District Court that the amount of commerce involved
under this agreement was relatively small. Without more
Page 372 U. S. 261
detailed findings, we therefore cannot say that the case is
governed by
United States v. Bausch & Lomb Co.,
supra.
We are asked to extend the holding in
Timken Roller Bearing
Co. v. United States, supra (which banned horizontal
arrangements among competitors to divide territory), to a
vertical arrangement by one manufacturer restricting the
territory of his distributors or dealers. We intimate no view one
way or the other on the legality of such an arrangement, for we
believe that the applicable rule of law should be designed after a
trial.
This is the first case involving a territorial restriction in a
vertical arrangement, and we know too little of the actual
impact of both that restriction and the one respecting customers to
reach a conclusion on the bare bones of the documentary evidence
before us.
Standard Oil Co. v. United States, 221 U. S.
1,
221 U. S. 62,
read into the Sherman Act the "rule of reason." That "rule of
reason" normally requires an ascertainment of the facts peculiar to
the particular business. As stated in
Chicago Board of Trade v.
United States, 246 U. S. 231,
246 U. S.
238:
"Every agreement concerning trade, every regulation of trade,
restrains. To bind, to restrain, is of their very essence. The true
test of legality is whether the restraint imposed is such as merely
regulates, and perhaps thereby promotes competition, or whether it
is such as may suppress or even destroy competition. To determine
that question, the court must ordinarily consider the facts
peculiar to the business to which the restraint is applied; its
condition before and after the restraint was imposed; the nature of
the restraint and its effect, actual or probable. The history of
the restraint, the evil believed to exist, the reason for adopting
the particular remedy, the purpose or end sought to be attained,
are all relevant facts. This is not because a good intention
Page 372 U. S. 262
will save an otherwise objectionable regulation or the reverse,
but because knowledge of intent may help the court to interpret
facts and to predict consequences."
We recently reviewed
per se violations of the antitrust
laws in
Northern Pac. R. Co. v. United States,
356 U. S. 1. That
category of antitrust violations is made up of
"agreements or practices which, because of their pernicious
effect on competition and lack of any redeeming virtue, are
conclusively presumed to be unreasonable, and therefore illegal,
without elaborate inquiry as to the precise harm they have caused
or the business excuse for their use."
Id., p. 5. Tying arrangements or agreements by a
party
"to sell one product but only on the condition that the buyer
also purchases a different (or tied) product, or at least agrees
that he will not purchase that product from any other supplier"
(
Id., pp. 5-6) may fall in that category, though not
necessarily so.
"They are unreasonable in and of themselves whenever a party has
sufficient economic power with respect to the tying product to
appreciably restrain free competition in the market for the tied
product and a 'not insubstantial' amount of interstate commerce is
affected. . . . Of course, where the seller has no control or
dominance over the tying product, so that it does not represent an
effectual weapon to pressure buyers into taking the tied item, any
restraint of trade attributable to such tying arrangements would
obviously be insignificant, at most. As a simple example, if one of
a dozen food stores in a community were to refuse to sell flour
unless the buyer also took sugar, it would hardly tend to restrain
competition in sugar if its competitors were ready and able to sell
flour by itself."
Id., pp. 6-7.
Page 372 U. S. 263
We recently noted the importance of the nature of the tying
arrangement in its factual setting:
"Thus, unless the tying device is employed by a small company in
an attempt to break into a market,
cf. Harley-Davidson Motor
Co., 50 F.T.C. 1047, 1066, the use of a tying device can
rarely be harmonized with the strictures of the antitrust laws,
which are intended primarily to preserve and stimulate
competition."
Brown Shoe Co. v. United States, 370 U.
S. 294,
370 U. S.
330.
Horizontal territorial limitations, like "[g]roup boycotts, or
concerted refusals by traders to deal with other traders"
(
Klor's, Inc. v. Broadway-Hale Stores, Inc., supra,
359 U. S.
212), are naked restraints of trade with no purpose
except stifling of competition. A vertical territorial limitation
may or may not have that purpose or effect. We do not know enough
of the economic and business stuff out of which these arrangements
emerge to be certain. They may be too dangerous to sanction, or
they may be allowable protections against aggressive competitors or
the only practicable means a small company has for breaking into or
staying in business (
cf. Brown Shoe, supra, at
370 U. S. 330;
United States v. Jerrold Electronics Corp., 187 F.
Supp. 545, 560-561,
aff'd, 365 U.
S. 567) and within the "rule of reason." We need to know
more than we do about the actual impact of these arrangements on
competition to decide whether they have such a "pernicious effect
on competition and lack . . . any redeeming virtue" (
Northern
Pac. R. Co. v. United States, supra, p.
356 U. S. 5), and
therefore should be classified as
per se violations of the
Sherman Act.
There is an analogy from the merger field that leads us to
conclude that a trial should be had. A merger that would otherwise
offend the antitrust laws because of a
Page 372 U. S. 264
substantial lessening of competition has been given immunity
where the acquired company was a failing one.
See International
Shoe Co. v. Federal Trade Commission, 280 U.
S. 291,
280 U. S.
302-303. But in such a case, as in cases involving the
question whether a particular merger will tend "substantially to
lessen competition" (
Brown Shoe Co. v. United States,
supra, pp.
370 U. S.
328-329), a trial, rather than the use of the summary
judgment, is normally necessary.
United States v. Diebold,
Inc., 369 U. S. 654.
We conclude that the summary judgment, apart from the
price-fixing phase of the case, was improperly employed in this
suit. Apart from price fixing, we do not intimate any view on the
merits. We only hold that the legality of the territorial and
customer limitations should be determined only after a trial.
Reversed.
MR. JUSTICE WHITE took no part in the consideration or decision
of this case.
[
Footnote 1]
We are advised by appellant that, since the judgment below,
White "no longer uses distributors as a separate tier in its
system, but sells directly to dealers instead."
[
Footnote 2]
Appellant does not appeal from the District Court's ruling that
the provisions of the contracts fixing resale prices were
unlawful.
[
Footnote 3]
See note 2
supra.
MR. JUSTICE BRENNAN, concurring.
While I join the opinion of the Court, the novelty of the
antitrust questions prompts me to add a few words. I fully agree
that it would be premature to declare either the territorial or the
customer restrictions illegal
per se, since "we know too
little of the actual impact (of either form of restraint) . . . to
reach a conclusion on the bare bones of the . . . evidence before
us." But it seems to me that distinct problems are raised by the
two types of restrictions and that the District Court will wish to
have this distinction in mind at the trial.
I
I discuss first the territorial limitations. The insulation of a
dealer or distributor through territorial restraints against sales
by neighboring dealers who would otherwise
Page 372 U. S. 265
be his competitors involves a form of restraint upon alienation,
which is therefore historically and inherently suspect under the
antitrust laws. [
Footnote 2/1]
See Dr. Miles Medical Co. v. Park & Sons Co.,
220 U. S. 373,
220 U. S.
404-408. That proposition does not, however, tell us
that every form of such restraint is utterly without justification,
and is therefore to be deemed unlawful
per se. That is
true only of those
"agreements or practices which because of their pernicious
effect on competition and lack of any redeeming virtue are
conclusively presumed to be unreasonable, and therefore illegal
without elaborate inquiry as to the precise harm they have caused
or the business excuse for their use."
Northern Pac. R. Co. v. United States, 356 U. S.
1,
356 U. S. 5.
Specifically, the
per se rule of prohibition has been
applied to price-fixing agreements, group boycotts, tying
arrangements, and horizontal divisions of markets. As to each of
these practices, experience and analysis have established the utter
lack of justification to excuse its inherent threat to competition.
[
Footnote 2/2] To gauge the
appropriateness of a
per se test for the forms of
restraint involved in this case, then, we must determine whether
experience warrants, at this stage, a conclusion that inquiry into
effect upon competition and economic justification
Page 372 U. S. 266
would be similarly irrelevant. [
Footnote 2/3] With respect to the territorial
limitations of the type at bar, I agree that the courts have as yet
been shown no sufficient experience to warrant such a
conclusion.
The Government urges, and the District Court found, that these
restrictions so closely resemble two traditionally outlawed forms
of restraint -- horizontal market division and resale price
maintenance -- that they ought to be governed by the same absolute
legal test. Both analogies are surely instructive, and all the more
so because the practices at bar are
sui generis; but both
are, at the same time, misleading. It seems to me that
consideration of the similarities has thus far obscured
consideration of the equally important differences, which serve in
my
Page 372 U. S. 267
view to distinguish the practice here from others as to which we
have held a
per se test clearly appropriate.
Territorial limitations bear at least a superficial resemblance
to horizontal divisions of markets among competitors, which we have
held to be tantamount to agreements not to compete, and hence
inevitably violative of the Sherman Act, [
Footnote 2/4]
Timken Roller Bearing Co. v. United
States, 341 U. S. 593. If
it were clear that the territorial restrictions involved in this
case had been induced solely or even primarily by appellant's
dealers and distributors, it would make no difference to their
legality that the restrictions were formally imposed by the
manufacturer, rather than through inter-dealer agreement. [
Footnote 2/5]
Cf. Interstate Circuit,
Inc. v. United States, 306 U. S. 208;
United States v. Masonite Corp., 316 U.
S. 265,
316 U. S.
275-276. But for aught that the present record
discloses, an equally plausible inference is that the territorial
restraints were imposed upon unwilling distributors by the
manufacturer to serve exclusively his own interests. That inference
gains some credibility from the fact that these limitations --
unlike, for example, exclusive franchise agreements -- bind the
dealers to a rather harsh bargain, while leaving the manufacturer
unfettered. In any event, neither the source nor the purpose of
these restraints can be conclusively determined on the pleadings or
the supporting affidavits. The crucial question whether, despite
the differences in form, these restraints serve the same pernicious
purpose and have the same
Page 372 U. S. 268
inhibitory effects upon competition as horizontal divisions of
markets, is one which cannot be answered without a trial. [
Footnote 2/6]
The analogy to resale price maintenance agreements is also
appealing, but is no less deceptive. Resale price maintenance is
not only designed to, but almost invariably does in fact, reduce
price competition not only among sellers of the affected product,
but quite as much between that product and competing brands.
See United States v. Parke, Davis & Co., 362 U. S.
29,
362 U. S. 45-47.
While territorial restrictions may indirectly have a similar effect
upon
intra-brand competition, the effect upon
inter-brand competition is not necessarily the same as
that of resale price maintenance. [
Footnote 2/7]
Indeed, the principal justification which the appellant offers
for the use of these limitations is that they foster a vigorous
inter-brand competition which might otherwise be absent. Thus, in
order to determine the lawfulness of this form of restraint, it
becomes necessary to assess the merit of this and other
extenuations offered by the appellant. Surely it would be
significant to the disposition of
Page 372 U. S. 269
this case if, as appellant claims, some such arrangement were a
prerequisite for effective competition on the part of independent
manufacturers of trucks. Whatever relationship such restraints may
bear to the ultimate survival of producers like White should be
fully explored by the District Court if we are properly to appraise
this excuse for resort to these practices.
There are other situations, not presented directly by this case,
in which the possibility of justification cautions against a too
hasty conclusion that territorial limitations are invariably
unlawful. Arguments have been suggested against that conclusion,
for example, in the case of a manufacturer starting out in business
or marketing a new and risky product; the suggestion is that such a
manufacturer may find it essential, simply in order to acquire and
retain outlets, to guarantee his distributors some degree of
territorial insulation as well as exclusive franchises. It has also
been suggested that it may reasonably appear necessary for a
manufacturer to subdivide his sales territory in order to ensure
that his product will be adequately advertised, promoted, and
serviced. [
Footnote 2/8] It is, I
think, the
Page 372 U. S. 270
inappropriateness or irrelevance of such justifications as these
to the practices traditionally condemned under the
per se
test that principally distinguishes the territorial restraints
involved in the present case from horizontal market divisions and
resale price maintenance.
Another issue which seems to me particularly to require a full
inquiry into the pros and cons of these territorial restrictions is
whether, assuming that some justification for these limitations can
be shown, their operation is reasonably related to the needs which
brought them into being. To put the question another way, the
problem is not simply whether some justification can be found, but
whether the restraint so justified is more restrictive than
necessary, or excessively anticompetitive, when viewed in light of
the extenuating interests. [
Footnote
2/9] That question is one which can be adequately treated only
by examining the operation and practical effect of the restraints,
whatever may be their form. And in order to appraise that effect,
it is necessary to know what sanctions are imposed against
distributors who "raid," or sell across territorial boundaries in
violation of the agreements. If, for example, such a cross-sale
incurs only an obligation to share (or "pass over") the profit with
the dealer whose territory has been invaded-as is most often, and
apparently
Page 372 U. S. 271
here, the case [
Footnote 2/10]
-- then the practical effect upon competition of a territorial
limitation may be no more harmful than that of the typical
exclusive franchise -- the lawfulness of which the Government does
not dispute here. If, on the other hand, the dealer who cross-sells
runs the risk under the agreement of losing his franchise
altogether, intra-brand competition across territorial boundaries
involves serious hazards which might well deter any effort to
compete.
Another pertinent inquiry would explore the availability of less
restrictive alternatives. In the present case, for example, as the
Government suggests, it may appear at the trial that whatever
legitimate business needs White advances for territorial
limitations could be adequately served, with less damage to
competition, through other devices -- for example, an exclusive
franchise, [
Footnote 2/11] an
assignment of areas of primary responsibility to each distributor,
[
Footnote 2/12] or a revision of
the levels of profit pass-over so
Page 372 U. S. 272
as to minimize the deterrence to cross-selling by neighboring
dealers where competition is feasible. [
Footnote 2/13] But no such inquiry as this into the
question of alternatives could meaningfully be undertaken until the
District Court has ascertained the effect upon competition of the
particular territorial restraints in suit, and of the particular
sanctions by which they are enforced.
II
I turn next to the customer restrictions. These present a
problem quite distinct from that of the territorial limitations.
The customer restraints would seem inherently the more dangerous of
the two, for they serve to suppress all competition between
manufacturer and distributors for the custom of the most desirable
accounts. At the same time, they seem to lack any of the
countervailing tendencies to foster competition between brands
which may accompany the territorial limitations. In short, there is
far more difficulty in supposing that such customer restrictions
can be justified.
The crucial question to me is whether, in any meaningful sense,
the distributors could, but for the restrictions,
Page 372 U. S. 273
compete with the manufacturer for the reserved outlets.
[
Footnote 2/14] If they could,
but are prevented from doing so only by the restrictions, then, in
the absence of some justification neither presented nor suggested
by this record, their invalidity would seem to be apparent.
Cf.
United States v. McKesson & Robbins, Inc., 351 U.
S. 305,
351 U. S. 312;
United States v. Klearflax Linen Looms,
Inc., 63 F. Supp.
32. If, on the other hand, it turns out that, as a practical
matter, the restricted dealers could neither fill the orders nor
service the fleets of the governmental and fleet customers, then
the District Court might conclude that, because there would
otherwise be no meaningful competition, the restrictive agreements
do no more than codify the economically obvious. It might even be
that such restrictions were originally designed to foreclose the
distributors from soliciting the reserved accounts, but that now
the restrictions have become meaningless because the distributors
would in any event be unable to compete.
The reasons given by White for the use of customer restrictions
strike me as untenable if in operation and effect the restrictions
are found to stifle competition. These justifications are of three
types. First, White argues that such restrictions are required
because
"(a) distributor or dealer is not competent to handle this
intricate process (of servicing large accounts) until he has
had
Page 372 U. S. 274
many months of specialized White training,"
and that there is a consequent danger of "unauthorized dealers"
who "will be unqualified to work out specifications for trucks to
meet customers' peculiar requirements." To the extent that these
fears are well founded, they represent the concerns which any
manufacturer may legitimately have about his distributors' ability
to deal effectively with large or demanding customers. By their
very terms, however, these concerns seem to call not for cutting
the distributors completely out of this segment of the market, but
rather for such less drastic measures as, for example, improved
supervision and training, or perhaps a special form of
manufacturer's warranty to the governmental and fleet purchasers to
protect against unsatisfactory distributor servicing.
The second justification White offers is that "the only sure way
to make certain that something really important is done right is to
do it for oneself." This argument seems to me to prove too much,
for if the distributors truly cannot be counted on to solicit and
service the governmental and fleet accounts -- not all of which
are, in fact, large or demanding -- then this suggests that the
only adequate solution may be vertical integration, the elimination
of all independent or franchised distribution. But that White is
either unwilling or unable to do. Instead, it seeks the best of
both worlds -- to retain a distribution system for the general run
of its customers, while skimming off the cream of the trade for its
own direct sales. That, it seems to me, the antitrust laws would
not permit,
cf. Eastman Kodak Co. v. Southern Photo Materials
Co., 273 U. S. 359,
273 U. S. 375,
if in fact the distributors could compete for the reserved accounts
without the restrictions.
The third justification, which White offered in its
jurisdictional statement is that customer limitations are essential
to enable it to "more effectively compete against its competitors
by selling trucks directly" to the reserved
Page 372 U. S. 275
customers, rather than "through the interposition of
distributors or dealers." This argument invites consideration of
what to me is the essential vice of the customer restrictions. The
manufacturer's very position in the channels of distribution should
afford him an inherent cost advantage over his distributors. In the
nature of things, it would seem that the large purchasers would buy
from whichever outlet gave them the lowest prices. Thus, if the
manufacturer always did grant discounts which the distributors were
unable to grant, there would seem to be no reason whatever for
denying the distributors able to overcome that advantage access to
the preferred customers. Conversely, the presence of such
restrictions in the agreements between White and its distributors
suggests that they are designed, at least in part, to protect a
noncompetitive pricing structure, in which the manufacturer in fact
does not always charge the lowest prices.
In sum, the proffered justifications do not seem to me to
sanction customer restrictions which suppress all competition
between the manufacturer and his distributors for the most
desirable customers. On trial, as I see it, the Government will
necessarily prevail unless the proof warrants a finding that, even
in the absence of the restrictions, the economics of the trade are
such that the distributors cannot compete for the reserved
accounts.
[
Footnote 2/1]
For a general consideration of the history and legality of
restraints upon alienation, both at common law and under the
Sherman Act,
see Levi, The
Parke, Davis-Colgate
Doctrine: The Ban on Resale Price Maintenance, Supreme Court Review
(Kurland ed. 1960), 258, 270-278.
[
Footnote 2/2]
The general principle which the Court has stated with respect to
price-fixing agreements is applicable alike to boycotts, divisions
of markets, and tying arrangements:
"Whatever economic justification particular . . . agreements may
be thought to have, the law does not permit an inquiry into their
reasonableness. They are all banned because of their actual or
potential threat to the central nervous system of the economy."
United States v. Socony-Vacuum Oil Co., 310 U.
S. 150,
310 U. S. 224,
n. 59.
[
Footnote 2/3]
Outside the categories of restraint which are
per se
unlawful, this Court has said that the question to be answered
is
"whether the restraint imposed is such as merely regulates, and
perhaps thereby promotes competition, or whether it is such as may
suppress or even destroy competition. To determine that question,
the court must ordinarily consider the facts peculiar to the
business to which the restraint is applied; its condition before
and after the restraint was imposed; the nature of the restraint
and its effect, actual or probable. The history of the restraint,
the evil believed to exist, the reason for adopting the particular
remedy, the purpose or end sought to be attained, are all relevant
facts."
Chicago Board of Trade v. United States, 246 U.
S. 231,
246 U. S.
238.
While the Government urges upon us the adoption of a
per
se rule of illegality, it nonetheless recognizes that not all
the considerations relevant to the validity of this particular form
of restraint are or could be presented by the present case:
"What is the importance of
interbrand, as opposed to
intrabrand, competition? . . . Will White's restrictions
remain reasonable if its share of the market increases? . . . These
are only a few of the issues relevant to a trial of the
'reasonableness' of any particular set of territorial restrictions.
Nor could one be content with a single investigation. Business
conditions change. The effect of restricting competition among
dealers today may be different tomorrow."
Brief for the United States, pp. 31-32.
[
Footnote 2/4]
See Addyston Pipe & Steel Co. v. United States,
175 U. S. 211,
175 U. S.
240-245;
United States v. National Lead
Co., 63 F. Supp.
513,
aff'd, 332 U. S. 332 U.S.
319.
See also Report of the Attorney General's National
Committee to Study the Antitrust Laws (1955), 26.
[
Footnote 2/5]
For contrasting views on this question,
compare Kessler
and Stern, Competition, Contract, and Vertical Integration, 69 Yale
L.J. 1, 113 (1959),
with Robinson, Restraints on Trade and
the Orderly Marketing of Goods, 45 Cornell L.Q. 254, 267-268
(1960).
[
Footnote 2/6]
See, for an elaboration and discussion of some of the
factors which might enter such an inquiry,
Snap-On Tools
Corp., FTC Docket 7116, 3 CCH Trade Reg. Rep. 15,546; Jordan,
Exclusive and Restricted Sales Areas Under the Antitrust Laws, 9
U.C.L.A.L.Rev. 111, 125-129 (1962). For further discussion of the
reasons which make such an inquiry desirable with respect to
restraints of this very kind,
see Turner, The Definition
of Agreement Under the Sherman Act: Conscious Parallelism and
Refusals to Deal, 75 Harv.L.Rev. 655, 698-699 (1962).
[
Footnote 2/7]
See Note, Restricted Channels of Distribution Under the
Sherman Act, 75 Harv.L.Rev. 795, 800-801 (1962). It may be relevant
to the question whether the territorial restrictions were intended
to suppress price competition that appellant also maintained a
schedule of resale prices in its distributor agreements, though
there has been no challenge here to the District Court's finding
that those provisions were unlawful
per se.
[
Footnote 2/8]
For situations in which such extenuations might be relevant,
compare, e.g., Packard Motor Car Co. v. Webster Motor Car
Co., 100 U.S.App.D.C. 161, 243 F.2d 418;
Schwing Motor Co.
v. Hudson Sales Corp., 138 F.
Supp. 899 (D.C.D.Md.),
aff'd, 239 F.2d 176 (C.A.4th
Cir.). In the former case, the court observed, in holding an
exclusive franchise arrangement not violative of the Sherman
Act:
"The short of it is that a relatively small manufacturer,
competing with large manufacturers, thought it advantageous to
retain its largest dealer in Baltimore, and could not do so without
agreeing to drop its other Baltimore dealers. To penalize the small
manufacturer for competing in this way not only fails to promote
the policy of the antitrust laws, but defeats it."
100 U.S.App.D.C. at 164, 243 F.2d at 421. The doctrine of the
Packard and
Schwing cases is, however, of
necessarily limited scope; not only were the manufacturers involved
much smaller than the "big three" of the automobile industry
against whom they competed, but both had experienced declines in
their respective market shares. And the exclusive franchises
involved in those cases apparently were not accompanied by
territorial limitations.
See Jordan,
supra,
372
U.S. 253fn2/6|>note 6, at 135-139.
See, for
consideration of a similar problem by the Federal Trade Commission,
Columbus Coated Fabrics Corp., 55 F.T.C. 1500,
1503-1504.
[
Footnote 2/9]
If the restraint is shown to be excessive for the manufacturer's
needs, then its presence invites suspicion either that dealer
pressures rather than manufacturer interests brought it about, or
that the real purpose of its adoption was to restrict price
competition,
cf. Ethyl Gasoline Corp. v. United States,
309 U. S. 436,
309 U. S.
457-459;
United States v. Masonite Corp.,
supra. See Turner,
supra, 372
U.S. 253fn2/6|>note 6, at 698-699, 704-705.
[
Footnote 2/10]
In its complaint, the Government charged that any dealer or
distributor who sells in another's reserved territory must pay to
the injured distributor "a specified amount of money for violation
of said exclusive territory. . . ." There has been no suggestion in
this case that more drastic sanctions, such as withdrawal or
cancellation of a franchise, have ever been invoked by the
appellant to check cross-selling. The pass-over provisions
contained in the typical White contract (in a provision governing
"adjustment on outside deliveries") seem representative of
exclusive territory sanctions generally employed.
See
Note, Restricted Channels of Distribution Under the Sherman Act, 75
Harv.L.Rev. 795, 814-816 (1962).
[
Footnote 2/11]
The District Court suggested, 194 F. Supp. at 585-586, and the
Government seems to concede, that certain types of exclusive
franchises would not violate the Sherman Act, although a
determination of the legality of such arrangements would seem also
to require an examination of their operation and effect.
[
Footnote 2/12]
See Snap-On Tools Corp., FTC Docket No. 7116, 3 CCH
Trade Reg.Rep. 15,546, p. 20,414. A number of consent decrees have
recently recognized the lawfulness of "area of primary
responsibility" covenants as substitutes for the more restrictive
exclusive arrangements.
See, e.g., United States v. Bostitch,
Inc., CCH 1958 Trade Cases 69,207 (D.C.D.R.I.);
United
States v. Rudolph Wurlitzer Co., CCH 1958 Trade Cases 69,011
(D.C.W.D.N.Y.). The thrust of such provisions is, however, only
that the dealer must adequately represent the manufacturer in the
assigned area, not that he must stay out of other areas.
See
generally 60 Mich.L.Rev. 1008 (1962).
[
Footnote 2/13]
The essential question whether such restraints exceed the
appellant's competitive needs cannot be answered, as the Government
suggests simply by reference to the views of major automobile
manufacturers that territorial limitations are unnecessary to
ensure effective promotion and servicing for their products.
See Hearings Before a Subcommittee of the House Committee
on Interstate and Foreign Commerce on Automobile Marketing
Legislation, 84th Cong., pp. 160, 248, 285, 323.
[
Footnote 2/14]
In an analogous case, brought under § 5 of the Federal
Trade Commission Act, the Commission dismissed the complaint
because of insufficient evidence that customer limitations had
foreclosed meaningful competition.
In the Matter of Roux
Distributing Co., 55 F.T.C. 1386. The finding that
noncontractual customer restrictions had a clearly anticompetitive
effect in
United States v. Klearflax Linen Looms,
Inc., 63 F. Supp.
32, was one which could seemingly not have been made without a
trial on the merits, even though the manufacturer involved held a
position of virtual monopoly.
See Note, Restricted
Channels of Distribution Under the Sherman Act, 75 Harv.L.Rev. 795,
817-818 (1962).
MR. JUSTICE CLARK, with whom THE CHIEF JUSTICE and MR. JUSTICE
BLACK join, dissenting.
The Court is reluctant to declare vertical territorial
arrangements illegal
per se because
"This is the first case involving a territorial restriction in a
vertical arrangement; and we know too little of the actual impact .
. . of that restriction . . . to reach a conclusion on the bare
bones of the documentary evidence before us."
The "bare bones" consist of the complaint and answer, excerpts
from interrogatories, exhibits and deposition of the secretary
Page 372 U. S. 276
of White Motor on behalf of the Government, taken in 1959, the
formal motion of the Government for summary judgment, and an
excerpt entitled "Argument" from the brief of White Motor in
opposition thereto. I believe that these "bare bones" really lay
bare one of the most brazen violations of the Sherman Act that I
have experienced in a quarter of a century.
This "argument," which the appellant has convinced the Court
raises a factual issue requiring a trial, points out that each
distributor is required to maintain a sales room, service station
and a representative number of White trucks.
"In return for these agreements of the distributor . . . it is
only fair and reasonable and, in fact, necessary . . . that the
distributor shall be protected in said distributor's territory
against selling therein by defendant's other distributors . . . who
have not made the investment of money and effort . . . in the said
territory."
Likewise, appellant's argument continues,
"similar provisions in direct dealers' contracts and in
contracts between the distributors and their respective dealers
have the same purposes and the same effects."
These limitations have
"the purpose and effect of promoting the business and increasing
the sales of White trucks in competition with The White Motor
Company's powerful competitors."
Emphasizing that the motor-truck manufacturing industry is one
of "the most highly competitive industries in this country,"
appellant points up that its share "is very small," and "by no
stretch of the imagination could be said to dominate the market in
trucks." It insists that there are but two ways to market trucks:
(1) selling to the public through its own sales and service
stations, and (2) through the distributor-dealer distribution
system which it presently follows. It discards the first as being
"feasible only for a very large company." As to the second, the
distributors and dealers must not be allowed to spread their
efforts "too thinly over more territory
Page 372 U. S. 277
than they can vigorously and intensively work." It is therefore
necessary, appellant says,
"to confine their efforts to a territory no larger than they
have the financial means and sales and service facilities and
capabilities to intensively cultivate. . . ."
In return,
"it is only fair and reasonable, and indeed necessary, that The
White Motor Company protect its dealers and distributors in their
respective allotted territories against the exploitation by other
White distributors or dealers, and indeed by the Company itself. .
. ."
In order to procure
"distributors and dealers that will adequately represent The
White Motor Company's line of motor trucks, [it] has to agree that
these men shall be exclusive sales representatives in a given
territory."
For this reason, appellant "will not allow any other of its
distributors or dealers to come into the territory and scalp the
market for White trucks therein." Rather than "cutting each other's
throats," White Motor insists that they "concentrate on trying to
take sales away from other competing truck manufacturers. . . ."
The net effect of its justification for the territorial allocation
is that "these limitations have proper purposes and effects and are
fair and reasonable. . . ." (Italicized in original.)
On the price-fixing requirement in the contracts, which White
Motor has abandoned on appeal, the "argument" points out that this
requirement was limited to about 5% of its sales, and was not
followed in sales to the public. Justification for its use
otherwise was that it insured that all of its agents "get an equal
break price-wise," which was a necessary step to having "satisfied
and efficient dealer organizations." As to the required discounts
provision on repair parts and accessories, it says that these are
necessary
"if the defendant's future sales to 'National Accounts,' 'Fleet
Accounts' and Federal and State governments . . . and political
subdivisions . . . are not to be seriously jeopardized."
After all, it says, "probably
Page 372 U. S. 278
nothing will make the owner of a motor vehicle so peeved as to
be overcharged for repair parts and accessories."
The situation in which White Motor finds itself may be summed up
in its own words,
i.e., that its contracts are "the only
feasible way for [it] to compete effectively with its bigger and
more powerful competitors. . . ." In this justification, it
attempts but to make a virtue of business necessity, which has long
been rejected as a defense in such cases.
See Dr. Miles Medical
Co. v. Park & Sons Co., 220 U. S. 373,
220 U. S.
407-408;
Fashion Originators' Guild of America v.
Federal Trade Comm'n, 312 U. S. 457,
312 U. S.
467-468 (1941), and
Northern Pac. R. Co. v. United
States, 356 U. S. 1,
356 U. S. 5
(1958). This is true because the purpose of these provisions in its
contracts, as shown by White Motor's own "argument," is to enable
it to compete with its "powerful competitors" and "protect its
dealers and distributors in their respective allotted territories
against the exploitation by other White distributors or dealers,"
and thus prevent them from "cutting each other's throats." These
grounds for its action may be good for White Motor, but they are
disastrous for free competitive enterprise and, if permitted, will
destroy the effectiveness of the Sherman Act. For, under these
contracts, a person wishing to buy a White truck must deal with
only one seller, who, by virtue of his agreements with dealer
competitors, has the sole power as to the public to set prices,
determine terms, and even to refuse to sell to a particular
customer. In the latter event, the customer could not buy a White
truck, because a neighboring dealer must reject him under the White
Motor contract unless he has "a place of business and/or purchasing
headquarters" in the latter's territory. He might buy another brand
of truck, it is true, but the existence of inter-brand competition
has never been a justification for an explicit agreement to
eliminate competition.
See United States v. McKesson &
Robbins, Inc., 351 U. S. 305
(1956). Likewise,
Page 372 U. S. 279
each White Motor dealer is isolated from all competition with
other White Motor dealers. One cannot make a sale or purchase of a
White Motor truck outside of his own territory. He is confined to
his own economic island.
I have diligently searched appellant's offer of proof, but fail
to find any allegation by it that raises an issue of fact. All of
its statements are economic arguments or business necessities, none
of which have any bearing on the legal issue. It clearly appears
from its contracts that "all room for competition between retailers
[dealers], who supply the public, is made impossible."
John D.
Park & Sons Co. v. Hartman, 153 F. 24, 42 (C.A.6th Cir.),
opinion by Mr. Justice Lurton, then circuit judge, and adopted by
Mr. Justice Hughes, later Chief Justice, in
Dr. Miles Medical
Co. v. Park & Sons Co., supra, 220 U.S. at
220 U. S. 400
(1911). I have read and re-read appellant's "argument," and even
though I give it the dignity of proof, I return to the conclusion,
as did Mr. Justice Lurton, that, "If these contracts leave any room
at any point of the line for the usual play of competition between
the dealers . . . , it is not discoverable."
Ibid.
This Court, it is true, has never held whether there is a
difference between market divisions voluntarily undertaken by a
manufacturer such as White Motor and those of dealers in a
commodity, agreed upon by themselves, such as were condemned in
Timken Roller Bearing Co. v. United States, 341 U.
S. 593 (1951). White does not contend that its
distribution system has any less tendency to restrain competition
among its distributors and dealers than a horizontal agreement
among such distributors and dealers themselves. It seems to place
some halo around its agreements because they are vertical. But the
intended and actual effect is the same as, if not even more
destructive than, a price-fixing agreement or any of its
per
se counterparts. This is true because price-fixing
Page 372 U. S. 280
agreements, being more easily breached, must be continually
policed by those forming the combination, while contracts for a
division of territory, being easily detected, are practically
self-enforcing. Moreover, White Motor has admitted that each of its
distributors and dealers, numbering some 300, has entered into
identical contracts. In its "argument" it says that "it has to"
agree to these exclusive territorial arrangements in order to get
financially able and capable distributors and dealers. It has
nowise denied that it has been required by the distributors or
dealers to enter into the contracts. Indeed, the clear inference is
to the contrary. The motivations of White Motor and its
distributors and dealers are inextricably intertwined; the
distributors and dealers are each acquainted with the contracts,
and have readily complied with their requirements, without which
the contracts would be of no effect. It is hard for me to draw a
distinction on the basis of who initiates such a plan. Indeed under
Interstate Circuit, Inc., v. United States, 306 U.
S. 208,
306 U. S. 223
(1939), the unanimity of action by some 300 parties here forms the
basis of an "understanding that all were to join," and the
economics of the situation would certainly require as much. There,
this Court, on a much weaker factual basis, held:
"It taxes credulity to believe that the several distributors
would, in the circumstances, have accepted and put into operation
with substantial unanimity such . . . methods without some
understanding that all were to join, and we reject as beyond the
range of probability that it was the result of mere chance."
Likewise, the other restrictions in the contracts run counter to
the Sherman Act. This Court has held the restriction on the
withholding of customers to be illegal as a contract between
potential competitors not to compete,
United States v. McKesson
& Robbins, Inc., supra, 351 U.S. at
Page 372 U. S. 281
351 U. S. 312
(1956), and White Motor's prohibition on resales without its
approval is condemned by
United States v. Bausch & Lomb
Co., 321 U. S. 707,
321 U. S. 721
(1944). Experience, as well as our cases, have shown that these
restrictions have a "pernicious effect on competition and lack . .
. any redeeming virtue. . . ."
Northern Pac. R. Co. v. United
States, supra, 356 U.S. at
356 U. S. 5.
The Court says that perhaps the reasonableness or the effect of
such arrangements might be subject to inquiry. But the rule of
reason is inapplicable to agreements made solely for the purpose of
eliminating competition.
United States v. Socony-Vacuum Oil
Co., 310 U. S. 150
(1940) (price fixing);
Fashion Originators' Guild v. Federal
Trade Comm'n, supra (group boycotts);
International Salt
Co. v. United States, 332 U. S. 392
(1947), and
United States v. National Lead Co.,
332 U. S. 319
(1947) (tying arrangements);
Timken Roller Bearing Co. v.
United States, supra; Nationwide Trailer Rental System v. United
States, 355 U. S. 10
(1957),
affirming 156 F.
Supp. 800 (D.C.D.Kan.1957), and
United States v. National
Lead Co., supra (division of markets). The same rule applies
to the contracts here. The offered justification must fail because
it involves a contention contrary to the public policy of the
Sherman Act, which is that the suppression of competition is, in
and of itself, a public injury. To admit, as does the petitioner,
that competition is eliminated under its contracts is, under our
cases, to admit a violation of the Sherman Act. No justification,
no matter how beneficial, can save it from that interdiction.
The thrust of appellant's contention seems to be, in essence,
that it cannot market its trucks profitably without the advantage
of the restrictive covenants. I note that other motor car
manufacturers -- including the "big three" -- abandoned the
practice over a decade ago. One of these, American Motors, told the
Eighty-fourth Congress, before which legislation was pending to
permit division
Page 372 U. S. 282
of territory, [
Footnote 3/1]
that it was
"not in favor of any legislation, permissive or otherwise, that
restricts the right of the customer to choose any dealers from whom
he desires to purchase."
Hearings before a Subcommittee of the House Committee on
Interstate and Foreign Commerce on Automobile Marketing
Legislation, 84th Cong., p. 285. American Motors seems to have been
able to survive and prosper against "big three" competition. But
even though White Motor gains an advantage through the use of the
restrictions,
"the question remains whether it is one which [it] is entitled
to secure by agreements restricting the freedom of trade on the
part of dealers who own what they sell."
Dr. Miles Medical Co., supra, 220 U.S. at
220 U. S.
407-408. And, Mr. Justice Hughes continued:
"As to this, the complainant can fare no better with its plan of
identical contracts than could the dealers themselves if they
formed a combination and endeavored to establish the same
restrictions, and thus to achieve the same result, by agreement
with each other. If the immediate advantage they would thus obtain
would not be sufficient to sustain such a direct agreement, the
asserted ulterior benefit to the complainant cannot be regarded as
sufficient to support its system."
Id. at
220 U. S.
408.
The milk in the coconut is that White Motor,
"having sold its product at prices satisfactory to itself, the
public is entitled to whatever advantage may be derived from
competition in the subsequent traffic."
Id. at
220 U. S.
409.
Today the Court does a futile act in remanding this case for
trial. In my view, appellant cannot plead nor prove an issue upon
which a successful defense of its contracts can be predicated.
Neither time (I note the case is
Page 372 U. S. 283
now in its sixth year) nor all of the economic analysts, the
statisticians, the experts in marketing, or for that matter the
ingenuity of lawyers, can escape the unalterable fact that these
contracts eliminate competition, and, under our cases, are void.
The net effect of the remand is therefore but to extend for perhaps
an additional five years White Motor's enjoyment of the fruits of
its illegal action. Certainly the decision has no precedential
value [
Footnote 3/2] in substantive
antitrust law.
[
Footnote 3/1]
H.R. 6544, 84th Cong., 1st Sess. The bill was never reported
from the Committee.
[
Footnote 3/2]
Our recent certification of the amendment to the summary
judgment procedure under Rule 56, quoted in the Court's opinion,
will eliminate the problem posed here,
i.e., the
sufficiency of the record.