Friday, January 17, 2014

E & L Consulting, Ltd. v. Doman Industries Ltd. case brief summary

E & L Consulting, Ltd. v. Doman Industries Ltd. case brief summary

FACTS
E & L alleged that Doman had violated Sherman § 1 by dropping its distributor arrangement for green hem-fir lumber and giving Sherwood an exclusive distributorship arrangement.

HOLDING
The Court held that exclusive dealership agreements are presumptively legal and that E & L had failed to allege a violation.

DISCUSSION
  • A vertically structured monopoly can take only one monopoly product, thus allegations of a price increase do not allege harm to competition, because Doman could achieve monopolistic price increases without the aid of a distributor.
Analysis

  • In the wake of GTE Sylvania, the court does not really worry about intrabrand competition; if it does not harm interbrand competition, it is not a cognizable complaint under the Sherman Act.
  • There was only a single monopolistic seller and the exclusive distributor arrangement did create or engender any new monopolies.

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