Friday, November 16, 2012

Texaco v. Dagher case brief

Texaco v. Dagher case brief summary
547 U.S. 1 (2006)

FACTS
-Texaco and Shell together created a joint venture, Equilon.
-Equilon was created to refine and sell gas under original brand names.
-Equilon also set the prices for gasoline.
-The trial court used ancillary restraints doctrine:

-Is non-venture restriction a naked restraint on trade? Yes, as such it is invalid.
-Is restrict ancillary to the legitimate & competitive purposes of the business association?  Yes, it is valid.

ISSUE
-was the price fixing per se illegal under § 1?

HOLDING
-Yes.  When persons who would otherwise compete with each other pool capital and share risks of loss, such joint ventures are regarded as a single firm competing with other sellers in the market.  

RULES
-Price-fixing agreements between two or more competitors, otherwise known as horizontal price-fixing agreements, fall into the category of arrangements that are per se unlawful.

ANALYSIS
-Joint venture sold the gasoline, T & S were not competing, but sharing in profits as investors of the venture, so not per se illegal
-Joint venture has discretion just as any other firm to determine the prices of its product
-Do not apply ancillary restraint doctrine.

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