Atlantic Richfield Co. v. USA Petroleum Co.

495 U.S. 328 (1990)

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Atlantic Richfield Co. v. USA Petroleum Co.

United States Supreme Court
495 U.S. 328 (1990)

Facts

Atlantic Richfield Company (ARCO) (defendant) was in the gasoline business. ARCO’s gas stations sold gasoline directly to consumers, but ARCO also made sales through dealers authorized to sell the ARCO brand. USA Petroleum Co. (USA) (plaintiff) was one of ARCO’s competitors. USA’s gas stations had low overhead, thus enabling them to sell the gas at a discount. ARCO decided to compete more directly with USA by reducing its prices to those of USA. ARCO enabled its dealers to do this by reducing their costs, including eliminating credit card sales. ARCO also provided its distributors and dealers with various short-term discounts to enable its prices to match those of USA. This worked, resulting in ARCO’s sales and market share increasing. But it was undisputed by USA that the price that ARCO set for its sales matched that of USA and was not predatory. USA brought suit against ARCO in the district court under § 4 of the Clayton Act, alleging ARCO had violated § 1 of the Sherman Act by engaging in an unlawful vertical, maximum-price-fixing scheme. The district court granted summary judgment to ARCO. It found that even if ARCO had engaged in an unlawful vertical, maximum-price-fixing scheme, USA could not demonstrate it had suffered any injury absent the existence of predatory pricing. Consequently, USA lacked standing to bring the lawsuit. The United States Court of Appeals for the Ninth Circuit reversed, concluding that any type of price-fixing necessarily disrupted the market and resulted in an injury that gave a competitor standing. ARCO petitioned the United States Supreme Court for review.

Rule of Law

Issue

Holding and Reasoning (Brennan, J.)

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