Atlantic Richfield Company v. USA Petroleum Company

PETITIONER:Atlantic Richfield Company
RESPONDENT:USA Petroleum Company
LOCATION:State Highway 55, LaGrange, NY

DOCKET NO.: 88-1668
DECIDED BY: Rehnquist Court (1988-1990)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 495 US 328 (1990)
ARGUED: Dec 05, 1989
DECIDED: May 14, 1990

John G. Roberts, Jr. – on behalf of united states and ftc as amici curiae, supporting the petitioner
Maxwell M. Blecher – on behalf of the Respondent
Ronald C. Redcay – on behalf of the Petitioner

Facts of the case

Atlantic Richfield Company (ARCO) is an integrated oil company that sells gasoline to consumers through its own retail stations as well as independent ARCO-brand stations. USA Petroleum (USA), a competitor of ARCO, is an independent retail marketer that purchases gasoline from major petroleum companies and resells it under its own brand name. USA sued ARCO under the Clayton Act in the U.S. District Court for the Central District of California, alleging that ARCO had violated Section 1 of the Sherman Act by conspiring with the independent ARCO-brand stations to sell gasoline at below-market prices (the Clayton Act allows private parties to bring suit when they have been harmed by anticompetitive practices that violate the Sherman Act).

The District Court ruled for ARCO, finding that even if USA could prove the conspiracy, it would not be an “antitrust injury” to USA under the Clayton Act unless it could also prove that the pricing was predatory (that is, that it was intended to drive USA and other competitors out of business). It would be impossible to prove this, the District Court concluded, because ARCO was not dominant enough in the market to exert that sort of power.

A divided panel of the 9th Circuit Court of Appeals reversed, finding that it was not necessary to show predatory intent to prove an “antitrust inquiry.” All that was necessary was a showing that the party bringing the suit had been harmed by price fixing carried out by the party being sued.


Must a competitor alleging an “antitrust injury” under the Clayton Act prove predatory intent in addition to showing that the defendant conspired to fix prices in violation of the Sherman Act?

Media for Atlantic Richfield Company v. USA Petroleum Company

Audio Transcription for Oral Argument – December 05, 1989 in Atlantic Richfield Company v. USA Petroleum Company

Audio Transcription for Opinion Announcement – May 14, 1990 in Atlantic Richfield Company v. USA Petroleum Company

William H. Rehnquist:

The opinion of the Court in No. 88-1668, Atlantic Richfield Company versus USA Petroleum Company will be announced by Justice Brennan.

William J. Brennan, Jr.:

This case is here on certiorari to the Court of Appeals for the Ninth Circuit.

Petitioner, Atlantic Richfield Company an integrated oil company, increased its retail gasoline sales and market share by encouraging the dealers to match the prices of independents such as respondent, USA Petroleum Company which competes directly with the dealers of petitioner at the retail.

When USA’s sales dropped, USA sued the petitioner, Atlantic, in the District Court charging that this was a vertical maximum price fixing scheme that constituted a conspiracy in restraint of trade in violation of Section 1 of the Sherman Act.

The District Court, however, granted summary judgment to ARCO holding that USA could not satisfy the anti-trust injury requirement for purposes of a private damages suit under Section 4 of the Clayton Act because it was unable to show what ARCO’s prices were predatory.

The Court of Appeals reversed holding that injuries resulting from a vertical non-predatory maximum price fixing agreement could constitute anti-trust injury.

We reverse.

We hold that a vertical maximum price fixing conspiracy to be in violation of Section 1 of the Sherman Act must result in predatory pricing to cause a competitor anti-trust injury.

Justice Stevens joined by Justice White has filed a dissenting opinion.