Refusals to Deal

Refusals to Deal - Refusals to Deal Basic...

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Refusals to Deal Basic Rules In the absence of a purpose to create or maintain a monopoly, a single firm can “freely exercise his own independent discretion as to parties w/ whom he will deal” o Cite US v. Colgate (1919) Exceptions o Concerted refusals to deal o Refusals to deal as monopolization or attempted monopolization Concerted Refusals to Deal In name, concerted refusals to deal are per se illegal, BUT…this rule has MANY exceptions and, in practice, most concerted refusal to deal cases are ROR cases Concerted refusals to deal which are used to enforce a naked price fixing agreement will be per se illegal o Cite FTC v. Superior Court Trial Lawyers Association (1990) ROR Cases o Typically, ROR analysis will be employed when the refusal to deal is ancillary to the operation of a legitimate joint venture o Northwest Wholesale Stationers v. Pacific Stationary (1985) s Facts: a member of a buying cooperative was expelled from the group s Held b claims of expulsion should be analyzed under ROR Reasoning b the buying cooperative had no mkt power o BUT…mkt power is NOT the prevailing requirement b/c it would also come w/ a number or exceptions o FTC v. Indiana Federation of Dentists (1986) s Facts: agreement among dentists not to provide x-rays to a health insurer so that the insurer could verify claims submitted by the dentist s Held b the agreement is illegal under a ROR analysis Reasoning b no market power BUT…the court’s reasoning (especially its very limited inquiry into market power) seemed more consistent w/ a per se rule s This is a somewhat AMBIGUOUS case A refusal to deal is often a method of facilitating cartelization of a market o In cases where the only justification for the refusal to deal is to facilitate cartel behavior
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This note was uploaded on 02/14/2008 for the course LAW 7557 taught by Professor Crane during the Fall '07 term at Yeshiva.

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Refusals to Deal - Refusals to Deal Basic...

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