United States v. Trans-Missouri Freight Association
United States Supreme Court
166 U.S. 290, 17 S.Ct. 540, 41 L.Ed. 1007 (1897)
A group of 18 railroad companies operating west of the Mississippi River established the Trans-Missouri Freight Association (TMFA) (defendant) to set freight schedules and rates for members. These railroad companies adhered to the prices and schedules set by the TMFA, which meant that prices for rail services were fixed between the 18 members. The United States (plaintiff) brought a complaint against the TMFA, alleging that the association was a restraint of trade in violation of the Sherman Act. The railroad companies argued that the rates fixed by the TMFA were reasonable and that the arrangement was not unlawful under the Sherman Act, because the arrangement would not have been unlawful under common law. The district court found in favor of the railroad companies, and the court of appeals affirmed. The United States Supreme Court granted certiorari on the issue of whether a trade restraint must be unreasonable in order to violate the Sherman Act.
Rule of Law
Holding and Reasoning (Peckham, J.)
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