US SUPREME COURT DECISIONS

Petitioner, an independent newspaper carrier, bought from respondent at wholesale and sold at retail copies of respondent's morning newspaper under an exclusive territory arrangement which was terminable if a carrier exceeded the maximum retail price advertised by respondent. When petitioner exceeded that price, respondent protested to petitioner, and then informed petitioner's subscribers that it would itself deliver the paper at the lower price. Respondent engaged an agency (Milne) to solicit petitioner's customers. About 300 of petitioner's 1200 subscribers switched to direct delivery by respondent. Respondent later turned these customers over, without cost, to another carrier (Kroner), who was aware of respondent's purpose and who knew that he might have to return the route if petitioner discontinued his pricing practice. Respondent told petitioner that he could have his customers back if he adhered to the suggested price. Petitioner filed a treble damage complaint which, as later amended, charged a combination in restraint of trade in violation of § 1 of the Sherman Act, between respondent, petitioner's customers, Milne, and Kroner. Petitioner's appointment as carrier was terminated, and petitioner sold his route. The jury found for respondent and the trial court denied petitioner's motion for judgment n.o.v. which asserted that the undisputed facts showed, as a matter of law, a combination to fix a resale price which was per se illegal under United States v. Parke, Davis & Co., 362 U. S. 29 (1960), and like cases. The Court of Appeals affirmed, holding that respondent's conduct was wholly unilateral, and not in restraint of trade.

Held:

1. The uncontroverted facts showed a combination within § 1 of the Sherman Act between respondent, Milne, and Kroner, to force petitioner to conform to respondent's advertised retail price. United States v. Parke, Davis & Co., supra, followed. Pp. 390 U. S. 149-150.

2. Since fixing maximum, as well as minimum, resale prices by agreement or combination is a per se violation of § 1 of the chanrobles.com-red

Page 390 U. S. 146

Act, the Court of Appeals erred in holding that there was no restraint of trade. Kiefer-Stewart Co. v. Seagram & Sons, Inc., 340 U. S. 211 (1951), followed. Pp. 390 U. S. 151-153.

3. The Court of Appeals also erred in assuming on the record here that it was necessary to permit respondent to impose a price ceiling to prevent the price gouging made possible by exclusive territories, for neither the existence of exclusive territories nor the dealers' resultant economic power was in issue, and the court was not entitled to assume that the exclusive rights granted by respondent were valid under § 1 of the Act, either alone or in conjunction with a price-fixing scheme. Pp. 390 U. S. 153-154.

367 F.2d 517, reversed and remanded.