''State Oil Co. v. Khan'', 522 U.S. 3 (1997), was a decision by the
United States Supreme Court
The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that turn on question ...
,
[. ] which held that vertical maximum
price fixing
Price fixing is an anticompetitive agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given ...
was not inherently unlawful, thereby overruling a previous Supreme Court decision, ''
Albrecht v. Herald Co.'', 390 U.S. 145 (1968).
[.] However, the Court concluded that "
overruling ''Albrecht'', the Court does not hold that all vertical maximum price fixing is per se lawful, but simply that it should be evaluated under the
rule of reason
The rule of reason is a legal doctrine used to interpret the Sherman Antitrust Act, one of the cornerstones of United States antitrust law. While some actions like price-fixing are considered illegal ''per se', ''other actions, such as pos ...
, which can effectively identify those situations in which it amounts to anticompetitive conduct."
Background
The 1968 decision in ''Albrecht v. Herald Co.'' held that wholesalers could not require franchisees and retailers of their products to sell items at a certain price.
[ Advertisements regarding sales, therefore, always included the language "available at participating retailers only."]
The case before the court in 1997 involved a gasoline
Gasoline ( North American English) or petrol ( Commonwealth English) is a petrochemical product characterized as a transparent, yellowish, and flammable liquid normally used as a fuel for spark-ignited internal combustion engines. When for ...
wholesaler and Chicago service station. State Oil Co. attempted to force the gasoline station owner, Barkat Khan, to sell State Oil's product at certain prices. Khan resisted and filed suit, claiming a violation of anti-trust law.
Khan won his case in the United States Court of Appeals in Chicago
Chicago is the List of municipalities in Illinois, most populous city in the U.S. state of Illinois and in the Midwestern United States. With a population of 2,746,388, as of the 2020 United States census, 2020 census, it is the List of Unite ...
, presided over by Judge Richard Posner
Richard Allen Posner (; born January 11, 1939) is an American legal scholar and retired United States circuit judge who served on the U.S. Court of Appeals for the Seventh Circuit from 1981 to 2017. A senior lecturer at the University of Chicag ...
. Posner, however, mocked the Supreme Court's 1968 ruling on the matter in his decision, calling it "unsound when decided," "moth-eaten," and "increasingly wobbly" in application. Posner nevertheless abided by the Supreme Court's earlier decision, saying that it was the law until the Court overruled it.
Decision
Justice Sandra Day O'Connor
Sandra Day O'Connor (March 26, 1930 – December 1, 2023) was an American attorney, politician, and jurist who served as an associate justice of the Supreme Court of the United States from 1981 to 2006. Nominated by President Ronald Reagan, O' ...
wrote the unanimous opinion for the Court, overturning the previous case. She noted Posner was correct to rule for ''stare decisis'', writing "it is this Court’s prerogative alone to overrule one
of its precedents." However, she wrote that she agreed with Posner: "Chief Judge Posner aptly described ''Albrechts infirmities." Although she noted that the Court was cautious in overturning precedents, the "great weight" of scholarly opinion had held that the Court's 1968 decision was incorrect.
See also
* List of United States Supreme Court cases, volume 522
* List of United States Supreme Court cases
This page serves as an index of lists of United States Supreme Court cases. The United States Supreme Court is the highest federal court of the United States.
By chief justice
Court historians and other legal scholars consider each chief j ...
* Lists of United States Supreme Court cases by volume
The following is a list of cases decided by the United States Supreme Court organized by volume of the ''United States Reports'' in which they appear. This is a list of volumes of ''U.S. Reports'', and the links point to the contents of each indiv ...
*'' Leegin Creative Leather Products, Inc. v. PSKS, Inc.'' (2007)
References
Further reading
*
External links
*
{{United States antitrust law, state=collapsed
United States antitrust case law
United States energy case law
United States Supreme Court cases
United States Supreme Court cases of the Rehnquist Court
United States Supreme Court decisions that overrule a prior Supreme Court decision
1997 in United States case law