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Abstract:
This paper, which will be published as a chapter in Foundation Press's forthcoming volume of antitrust stories, reviews United States v. Topco Associates, the Supreme Court's 1972 decision holding that horizontal territorial divisions are per se unlawful under Section 1 of the Sherman Act. Most commentators believe the decision was ill-considered - one of the most telling exemplars of Populist era jurisprudence, wrote one commentator; one of the most infamous antitrust cases ever, a case founded on judicial expediency, not economics and one now appropriately viewed as outside the antitrust mainstream, wrote another. We disagree.

Drawing on the transcript of the oral argument, Justice Department documents, the trial record, participant recollections, and the economic background of the supermarket industry, we show how Donald Turner successfully framed the case to solidify the per se rule. We also show that the case was correctly viewed as an attack on a cartel effort by medium-sized supermarket chains to exclude each other from their respective core geographic markets. We also argue that the Court was actually not indifferent to the factual issues the case presented and that at least some members were likely skeptical of Topco's purported justifications. The Court's decision was thus not made on a completely doctrinal basis. Indeed, its below-the-surface consideration of the facts was at least a closer look, even if not the deliberate one today's Supreme Court would require.

Clear rules have their rewards. Donald Turner was right to bring Topco and the Court was right to favor free entry over territorial treaties among competitors. There are complicated areas in antitrust, but the Topco agreement, on closer look, turns out not to be one of them.

Topco, per se, rule of reason, horizontal, territorial, supreme court, supermarket

Abstract:
Cartels are generally per se illegal, but the Supreme Court has rejected the per se label for cartels involving various kinds of private regulatory organizations and instead applied a "rule of reason." This suggests that traditional analysis of conspiracies is inconsistent or illogical because there is no clear or coherent statement of when or why some cartels get the benefit of a different rule nor is the standard of reasonableness articulated with any precision. This article offers a positive analysis of this apparent conflict. It advances the thesis that assumes the courts are concerned with the function of a restraint in the sense that Taft used the concept. This approach would condemn all naked restraints (cartels) as per se illegal unless an appropriate level of government has expressly or implicitly authorized the conduct. Such authorized restraints are "per se legal." The cases suggest a three step analysis of any restraint seeking per se legality: are the parties authorized to impose some restraints on competition, is the particular restraint within the scope of that authorization, is the process used to adopt and implement the restraint appropriate in the circumstances. This framework both explains the decisions in a variety of apparently unrelated cases and provides a consistent explanation for a variety of doctrinal areas including state action, express and implied exclusive jurisdiction, constitutional immunity, professional self regulation, private safety standard setting and regulation of amateur sports. A brief Postscript discusses the implications for this thesis of the California Dental Association decision which on its face is inconsistent with the framework advanced, but which may not in fact be entirely inconsistent.

Abstract:
This essay reviews the dramatic changes in the structure of the markets in which farmers and ranchers sell their products as well as those that provide them with essential goods and services. These changes involve dramatic increases in concentration within the markets, substantially greater vertical integration, and increased concentration on a sector basis. These structural changes have in turn made feasible a number of practices that have or have the potential to have adverse competitive effect on both producers and consumers. The essay argues that antitrust has lost its appreciation of its fundamental goals and failed to take adequate account of many of the potential risks arising from the dramatic transformation of agricultural markets. The essay concludes with suggestions for reversing the trend toward concentration by more vigorous antitrust enforcement and for adopting new legislation to provide greater protection to farmers and ranchers in their dealings with powerful customers and suppliers.