U.S. Supreme Court
Palmer v. BRG of Georgia, Inc., 498 U.S. 46 (1990)
Palmer v. BRG of Georgia, Inc.
Decided Nov. 26, 1990
498 U.S. 46
ON PETITION FOR WRIT OF CERTIORARI TO THE UNITED
STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT
Respondents, BRG of Georgia, Inc. (BRG), and Harcourt Brace Jovanovich Legal and Professional Publications (HBJ), entered into an agreement under which BRG was given an exclusive license to market HBJ's tradename; HBJ agreed not to compete with BRG in Georgia, and BRG agreed not to compete with HBJ outside the State; and HBJ was entitled to receive $100 per student enrolled by BRG and 40% of revenues over $350. Immediately after the parties entered into the agreement, the price for BRG's course increased from $150 to $400. Petitioners, who contracted to take BRG's course, filed suit, contending that BRG;s price was enhanced by reason of the agreement in violation of § 1 of the Sherman Act. The District Court held that the agreement was lawful, and the Court of Appeals affirmed.
Held: The agreement between HBJ and BRG was unlawful on its face. The agreement's revenue-sharing formula, coupled with the immediate price increase, indicate that the agreement was "formed for the purposes and with the effect of raising" the bar review course's prices in violation of the Sherman Act. See United States v. Socony-Vacuum Oil Co., 310 U. S. 150, 310 U. S. 223. Agreements between competitors to allocate territories to minimize competition are illegal, United States v. Topco Associates, Inc., 405 U. S. 596, regardless of whether the parties split a market within which they both do business or merely reserve one market for one and another for the other.