Sunday, June 1, 2014

Case of Monopolies Case Brief

 Popham, Chief Justice, 1602 (limits on royal monopoly grants)
Parties, Statement of Case: This case, and its progeny, limited the granting of monopolies to those granted by acts of Parliament.
Facts: Edward Darcy was granted a monopoly to import and sell playing cards by Queen Elizabeth, and the grant was extended after 10 years for an additional 21 for 100 marks per annum. Defendant, knowing that plaintiff had been granted a monopoly, made and sold playing cards for a lower price, causing losses to plaintiff.
Procedural History & Outcome: Plaintiff sued for damages cause by defendant's sales of cards in violation of the monopoly.
Issue: Was the monopoly granted to plaintiff enforceable?
Holding: The court held that the monopoly was contrary to common law and to statute, and was not enforceable.
Reasoning: The court cited Dyer's Case to support the premise that restraint of trade was not permitted by the common law, and Schoolmaster's Case to support the premise that competition alone does not give rise to an action for damages. The court cited four reasons why the monopoly violated common law:
1)   Restraint of trade promotes idleness and is bad.
2)   Monopolies cause damages not just to competitors, but the consumers as well (higher prices, inferior quality, etc.).
3)   The Queen was deceived in her grant.
4)   The grant was a dangerous innovation, and the court did not want to create precedent supporting it.
The court also cited an act of Parliament that prohibited restraints on free trade and traffic that the monopoly violated.
Class Notes
Here, the situation is slightly different than in the Dyer's Case and the Schoolmaster's Case because the monopoly was initially granted by the Queen. Still, this does not change the outcome - again, consumers are protected by voiding the monopoly. [Other effects, too, see below.]
This case, and the subsequent Statute on Monopolies, gave the power to grant monopolies (with certain exceptions) solely to Parliament.
Unlike the previous two cases, though, this one does include language of competitor protection - one of the harms of monopolies is that they put people out of work and prevent them from pursuing their chosen livelihoods.
In a way, this case is one about separation of powers, holding that Parliament has the power to grant monopolies, not the Crown. Apparently, after this decision, Parliament granted a monopoly for the production and sale of playing cards.

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