Friday, January 17, 2014

Northwest Wholesale Stationers, Inc. v. Pacific Stationery & Printing Co. case brief summary

Northwest Wholesale Stationers, Inc. v. Pacific Stationery & Printing Co. case brief summary

DISCUSSION
Northwest was a cooperative buying group which purchases supplies wholesale and sells to members and non-members at the same prices, but distributes profits to members in the form of a percentage rebate on purchases. Pacific was a member who was both a wholesaler and retailer, permitted to operate as both through a grandfather clause, until Pacific failed to notify Northwest of a 1977 change of control and was expelled by vote in 1978 without any due process. Pacific alleged that this was a concerted refusal to deal that was per se illegal under Sherman § 1.

DISCUSSION
The Court ruled that “group boycotts” are actually a category likely to have predominantly anticompetitive effects and procedural protections or the lack thereof are irrelevant to anticompetitive effects. Without market power, no plausible efficiency justification, or exclusive access to essential elements, mere allegation of a concerted refusal to deal is not per se illegal.
  • The Court notes that Northwest did not cut off access to supply or essential facilities, did not dominate the market, and did not lack plausible efficiency justification.
NOTES

  • The Court’s holding looks extremely similar to a rule of reason; this new “per se” rule is quite involved and the “structural” elements are the first two elements.

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