BURKE, DBA RANCH ACRES LIQUORS, ET AL.
v.
FORD ET AL., DBA ALL BRANDS SALES CO., ET AL.
AI-generated. These summaries, headnotes, and key points are machine-generated and may contain errors or omissions. Always verify against the full opinion text below. Not legal advice.
A state-wide market division among liquor wholesalers substantially affects interstate commerce, even if the goods have 'come to rest' within the state, and thus falls within the Sherman Act's scope.
Oklahoma liquor retailers sued wholesalers, alleging a state-wide market division. The lower courts found a market division occurred but held it did n…
The full statement of facts, procedural history, and disposition for this case are member content.
Join FLexlaw to unlock all legal intelligence© FLexlaw, Inc. — AI-generated enrichments are proprietary. All rights reserved.
Explore caselaw by topic → Browse Market Division cases and more on FLexlaw
Per Curiam.
Petitioners, Oklahoma liquor retailers, brought this action under § 1 of the Sherman Act, 26 Stat. 209, 15 U. S. C. § 1, to enjoin an alleged state-wide market division by all Oklahoma liquor wholesalers. The trial judge, sitting without a jury, found that there had in fact been a division of markets — both by territories and by brands. The court nevertheless entered judgment for the wholesalers because, among other reasons, it found that the interstate commerce prerequisite of the Sherman Act was not satisfied. The Court of Appeals affirmed upon the sole ground that “the proof was entirely insufficient to show that the activities complained of were in or adversely affected interstate commerce.” 377 F. 2d 901, 903.
There are no liquor distilleries in Oklahoma. Liquor is shipped in from other States to the warehouses of the wholesalers, where it is inventoried and held until purchased by retailers. The District Court and the Court of Appeals found that the liquor “came to rest” in the wholesalers’ warehouses and that interstate commerce ceased at that point.
Hence, they concluded that the wholesalers’ division of the Oklahoma market did not take place “in interstate commerce.” But whatever the validity of that conclusion, it does not end the matter. For it is well established that an activity which does not itself occur in interstate commerce comes within the scope of the Sherman Act if it substantially affects interstate commerce. United States v. Employing Plasterers Association, 347 U. S. 186; Mandeville Island Farms, Inc. v. American Crystal Sugar Co., 334 U. S. 219.
Recognizing this, the District Court went on to find that the wholesalers’ market division had no effect on interstate commerce, and the Court of Appeals agreed. The Court of Appeals held that proof of a state-wide wholesalers’ market division in the distribution of goods retailed in substantial volume1 within the State but produced entirely out of the State was not by itself sufficient proof of an effect on interstate commerce.
We disagree. Horizontal territorial divisions almost invariably reduce competition among the participants. Addyston Pipe & Steel Co. v. United States, 175 U. S. 211; United States v. Sealy, Inc., 388 U. S.
350. When competition is reduced, prices increase and unit sales decrease. The wholesalers’ territorial division here almost surely resulted in fewer sales to retailers — hence fewer purchases from out-of-state distillers — than would have occurred had free competition prevailed among the wholesalers.2 In addition the wholesalers’ division of brands meant fewer wholesale outlets available to any one out-of-state distiller.
Thus the state-wide wholesalers’ market division inevitably affected interstate commerce.
The petition for certiorari is granted and the judgment of the Court of Appeals is reversed. The case is remanded to that court for further proceedings consistent with this opinion.
Mr. Justice Harlan concurs in the result.
Between $44 and $45 million in wholesale purchases in 1964.
The Court of Appeals stressed the fact that unit sales to the wholesalers increased (885,976 cases to 891,176 cases) from 1963 to 1964 while the market division was in effect. But if there had been free competition among the wholesalers — all other things being equal — presumably sales to them would have increased even more.
The increase in liquor sales noted by the Court of Appeals was 0.6%; during the same period total personal income in Oklahoma increased from $4,880 million to $5,220 million, an increase of 7.0%. Table 1, Survey of Current Business, p. 30, Office of Business Economics, Department of Commerce (August 1967). Adjusting for concurrent price inflation (see Table 8.1, Survey of Current Business, p. 42 (July 1967)), the increase in real personal income was approximately 5.7%.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Cited By (46 total)
-
California Retail Liquor Dealers Assn. v. Midcal Aluminum, Inc., 445 U.S. 97 (U.S. 1980)…ions ... by agreement with each other.” 220 U. S., at 408.7 Moreover, there can be no claim that the California program is simply intrastate regulation beyond the reach of the Sherman Act. See Sehwegmann Bros. v. Calvert Corp., supra; Burke v. Ford, 389 U. S. 320 (1967) (per curiam). Thus, we must consider whether the State’s involvement in the price-setting program is sufficient to establish antitrust immunity under Parker v. Brown, 317 U. S. 341 (1943). That immunity for state regulatory programs is groun…1 / 2
-
Hosp. Bldg. Co. v. Trs. of Rex Hosp., 425 U.S. 738 (U.S. 1976)…merce might be termed “indirect” because the conduct producing it is not “purposely directed” toward interstate commerce does not lead to a conclusion that the conduct at issue is outside the scope of the Sherman Act. For instance, in Burke v. Ford, 389 U. S. 320 (1967), Oklahoma liquor retailers brought a Sherman Act action against liquor wholesalers in the State, alleging that the wholesalers [*745] had restrained commerce by dividing up the state market into exclusive territories. While the market divisio…
-
Jefferson Parish Hosp. Dist. NO. 2 v. Hyde, 466 U.S. 2 (U.S. 1984)…rimination is alleged. Wholly apart from market characteristics, a prerequisite to application of the Sherman Act is an effect on interstate commerce. See, e. g., McLain v. Real Estate Board of New Orleans, 444 U. S. 232, 246 (1980); Burke v. Ford, 389 U. S. 320, 322 (1967). It is not disputed that such an impact is present here. The Court has failed in the past to define how much market power is necessary, but in the context of this case it is inappropriate to attempt to resolve that question. In Internat…
Previewing 3 of 46 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Addyston Pipe & Steel Co. v. United States, 175 U.S. 211 (U.S. 1899)
- Mandeville Island Farms, Inc. v. Am. Crystal Sugar Co., 334 U.S. 219 (U.S. 1948)
- United States v. Employing Plasterers Ass'n of Chicago, 347 U.S. 186 (U.S. 1954)
- United States v. Sealy, Inc., 388 U.S. 350 (U.S. 1967)
- Burke v. Ford, 377 F.2d 901 (10th Cir. 1967)