Aspen Skiing Company v. Aspen Highlands Skiing Corporation

PETITIONER: Aspen Skiing Company
RESPONDENT: Aspen Highlands Skiing Corporation
LOCATION: Elstad's Residence

DOCKET NO.: 84-510
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: United States Court of Appeals for the Tenth Circuit

CITATION: 472 US 585 (1985)
ARGUED: Mar 27, 1985
DECIDED: Jun 19, 1985

ADVOCATES:
Richard M. Cooper - on behalf of Petitioner
Richard Melvyn Cooper - on behalf of the petitioner
Tucker Karl Trautman - on behalf of Respondent

Facts of the case

Question

Media for Aspen Skiing Company v. Aspen Highlands Skiing Corporation

Audio Transcription for Oral Argument - March 27, 1985 in Aspen Skiing Company v. Aspen Highlands Skiing Corporation

Warren E. Burger:

Mr. Cooper, I think you may proceed whenever you're ready.

Richard Melvyn Cooper:

Thank you, Mr. Chief Justice, and may it please the Court:

The central question in this case is whether under Section 2 of the Sherman Act a firm with monopoly power has a duty to cooperate with a smaller rival by participating in a horizontal arrangement for joint marketing.

The question in the circumstances of this case is shaped by two additional material facts.

First, the firm with monopoly power here, Aspen Ski Company, was not vertically integrated, but rather operated at only one level of the skiing industry, and therefore cases such as Terminal Railroad, Kodak, and Otter Tail are readily distinguishable.

This case involves no vertical element.

Secondly, the conduct at issue here, Ski Company's refusal to cooperate with Aspen Highlands, was decided on and carried out by Ski Company independently and not as part of any group, contract, combination, or conspiracy, and thus, under the distinction between independent action and concerted action reaffirmed by this Court last term in Monsanto and in Copperweld, what we have here is clearly independent conduct, not concerted conduct.

In these circumstances, we submit the answer to the question presented is no, that no firm, not even one with monopoly power, has a duty under the antitrust laws to engage in horizontal joint marketing arrangements.

Although voluntary horizontal arrangements between competitors sometimes have pro-competitive aspects and are consistent with the goals of the antitrust laws and therefore pass muster under Section 1's rule of reason, mandatory horizontal arrangements imposed by law and enforced and administered by courts have never had any place in the jurisprudence of antitrust.

Byron R. White:

Well, the joint marketing arrangement would involve price-fixing, too, I suppose?

Richard Melvyn Cooper:

Price-fixing would be per se unlawful.

Byron R. White:

Well, I know, but isn't that part of the kind of a joint marketing arrangement you're talking about?

Richard Melvyn Cooper:

Well, some joint market... I said in some circumstances a joint marketing arrangement would be examined under the rule of reason.

Broadcast Music would be an example of that.

Other horizontal arrangements are plainly per se bad.

Cartels--

Byron R. White:

But this joint marketing arrangement involved here does involve an agreement on prices?

Richard Melvyn Cooper:

--It does indeed.

In the 95 years since the enactment of the Sherman Act, this Court has never held or suggested that any duty of horizontal cooperation exists or should exist, and until the decision by the Tenth Circuit below no Court of Appeals in the 95 years of the statute had ever so held.

Thus, the decision below is unprecedented, and we submit is unwarranted on the facts of this case and is indeed directly contrary to the central goals of the antitrust laws.

The principal facts are relatively straightforward.

The product market involved here is downhill skiing services.

The jury found two geographic markets, one embracing all of North America and including all of the firms that cater to destination skiers those who travel a substantial distance to a ski area, generally by airplane, at least in part, and who spend a substantial amount of time, generally at least a week.

The jury also found a sub-market consisting of the Aspen area in which the Petitioner and the Respondent conduct their businesses.

For a number of years, each of the two firms has offered single day lift tickets and a variety of multi-day lift tickets designed to meet the varying needs of different skiers.

And if you examine the exhibits, Exhibit 15 and 47 that show the history of the ticket offerings and prices of the two firms, you will see that there has been considerable experimentation.

The specific kinds of tickets offered have varied from year to year and the pricing interrelationships among the tickets have varied from year to year.

The court below placed some reliance on the fact that shortly before trial Ski Company announced a prospective increase in its daily lift ticket price from $18 to $22 per day.

That was a 22 percent increase.

That's not the largest one-year increase shown in the record of this case.