United States v. Trans-Missouri Freight Ass’n case brief summary
United States v. Trans-Missouri Freight Ass’n
166 U.S. 290 (1897)
*This was a railroad price-fixing case in which the Supreme Court first considered the meaning of “restraint of trade.”
companies agreed to set rates for freight traffic. Government sued to
have agreement voided and the association dissolved.
Issue: Does the Sherman Act proscribe only contracts in unreasonable restraint of trade?
Holding: No. Court held that the “plain and ordinary meaning” of the statute prohibited ALL contracts in restraint of trade.
Peckham rejected proposed reasonable-price standard because it
contained an inherent lack of certitude and subjected market forces to
the caprices of the judiciary. Peckham’s argument required dissent to
specify what criteria were available for deciding how far above the
competitive level a price might be raised before it becomes
Bork: Bork lauded Peckham’s opinion in this case. Bork found that Peckham chose consumer welfare as the Sherman Act’s guiding policy, creating a category of agreements illegal per se, and began to work toward a formula for excepting efficiency-creating integrations from the statute’s interdiction.