Texaco, Inc. v. Dagher, et al.

Whether it is per se illegal concerted action under Section 1 of the Sherman Act for an economically integrated joint venture to set the selling price of its own products.

NCLC filed twice in this case: once to support review and once on the merits.

NCLC urged the Supreme Court to reverse an erroneous Ninth Circuit decision which held that the pricing practices of an economically integrated joint venture could be a per se antitrust violation. NCLC argued that it is well-settled that bona fide joint venture conduct is subject to “rule of reason” analysis and that the Ninth Circuit’s decision – which represents a wholesale expansion of actionable conduct – compromises predictability and is detrimental to the business community and the U.S. economy.

The rights of joint-venture businesses to set prices for their products were protected when the Supreme Court reversed the Ninth Circuit's decision. The court unanimously rejected the plaintiffs’ claims that Texaco and Shell Oil Co. violated the per se rule against price fixing as recognized under the Sherman Antitrust Act, and held that under the “rule of reason” analysis, plaintiffs must prove that an action, such as price setting, taken by companies operating a joint venture is unreasonable and anti-competitive. Agreeing with NCLC, the justices said that the per se doctrine had no application in this case, as the pricing of products is an essential activity of joint ventures, and not anti-competitive in the unlawful sense.
 

Amicus brief in support of cert. filed 1/14/05. Cert. granted 6/27/05. Amicus brief on the merits filed 9/12/05. Oral argument held 1/10/06. Decided 2/28/06.