Business Electronics Corporation v. Sharp Electronics Corporation

PETITIONER: Business Electronics Corporation
RESPONDENT: Sharp Electronics Corporation
LOCATION: New Jersey Office of Legislative Services

DOCKET NO.: 85-1910
DECIDED BY: Rehnquist Court (1988-1990)
LOWER COURT: United States Court of Appeals for the Fifth Circuit

CITATION: 485 US 717 (1988)
ARGUED: Jan 19, 1988
DECIDED: May 02, 1988

ADVOCATES:
Gary V. McGowan - on behalf of the Petitioner
Harold R. Tyler, Jr. - on behalf of the Respondent

Facts of the case

Question

Media for Business Electronics Corporation v. Sharp Electronics Corporation

Audio Transcription for Oral Argument - January 19, 1988 in Business Electronics Corporation v. Sharp Electronics Corporation

Audio Transcription for Opinion Announcement - May 02, 1988 in Business Electronics Corporation v. Sharp Electronics Corporation

William H. Rehnquist:

The opinion of the -- opinions of the Court in two cases, No. 85-1910, Business Electronics Corporation against Sharp Electronics Corporation, and No. 86-228, Kungys against the United States will be announced by Justice Scalia.

Antonin Scalia:

The first of this case is Business Electronics versus Sharp comes to us on a petition for writ of certiorari to the Fifth Circuit.

The petitioner is a former dealer in the Houston area of electronic calculators manufactured by the respondent.

Petitioner brought suit alleging violation of Section 1 of the Sherman Act after respondent terminated petitioner's dealership in response to another dealer's complaints about petitioner's lower prices.

In the opinion we announced today, we affirmed the Fifth Circuit and hold it in agreement by a manufacturer with one dealer to terminate another dealer because of the latter's price cutting is not illegal per se under Section 1, unless there is some agreement on the price or price levels to be charged by the remaining dealer.

As is more fully explained in the opinion, we reached this conclusion because the contrary interpretation is inconsistent with the doctrine of our prior case, Continental T.V., Incorporated versus GTE Sylvania.

That vertical nonprice agreements are not illegal per se.

Like the exclusive territory agreement held to be not illegal per se in GTE Sylvania, vertical agreements to terminate price cutting dealers have the quite plausible beneficial purpose of allowing the remaining dealers to provide better services thereby stimulating interbrand competition and have not been shown significantly to facilitate cartels that reduce interbrand competition.

Justice Kennedy took no part in the consideration or decision of this case.

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