State Oil Co. v. Khan, 522 U.S. 3 (1997), was a decision by the United States Supreme Court,[1] which held that vertical maximum price fixing was not inherently unlawful, thereby overruling a previous Supreme Court decision, Albrecht v. Herald Co., 390 U.S. 145 (1968).[2] However, the Court concluded that "[i]n 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, which can effectively identify those situations in which it amounts to anticompetitive conduct."
| State Oil Co. v. Khan | |
|---|---|
 | |
| Argued October 7, 1997 Decided November 4, 1997 | |
| Full case name | State Oil Company v. Barkat U. Khan |
| Citations | 522 U.S. 3 (more) 118 S. Ct. 275; 139 L. Ed. 2d 199; 1997 U.S. LEXIS 6705 |
| Case history | |
| Prior | Summary judgment granted in favor of defendant, Khan v. State Oil Co., 907 F. Supp. 1202 (N.D. Ill. 1995); affirmed in part, reversed in part, 93 F.3d 1358 (7th Cir. 1996); cert. granted, 519 U.S. 1107 (1997). |
| Holding | |
| Vertical maximum price fixing should be evaluated under the rule of reason, which can effectively identify those situations in which it amounts to anticompetitive conduct. | |
| Court membership | |
| |
| Case opinion | |
| Majority | O'Connor, joined by unanimous |
| Laws applied | |
| Sherman Antitrust Act, 15 U.S.C. § 1 Clayton Antitrust Act, 15 U.S.C. § 15 | |
This case overturned a previous ruling or rulings | |
| Albrecht v. Herald Co. (1968) | |
Background
editThe 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.[2] Advertisements regarding sales, therefore, always included the language "available at participating retailers only."[3]
The case before the court in 1997 involved a gasoline wholesaler and Chicago service station.[3] 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.[3]
Khan won his case in the United States Court of Appeals in Chicago, presided over by Judge Richard Posner.[4] 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.[3] Posner nevertheless abided by the Supreme Court's earlier decision, saying that it was the law until the Court overruled it.[3]
Decision
editJustice Sandra Day O'Connor 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."[5] However, she wrote that she agreed with Posner: "Chief Judge Posner aptly described Albrecht's infirmities."[1][3] 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.[1][3]
See also
editReferences
edit- ^ a b c State Oil Co. v. Khan, 522 U.S. 3 (1997).
This article incorporates public domain material from this U.S government document.
- ^ a b Albrecht v. Herald Co., 390 U.S. 145 (1968).
- ^ a b c d e f g "High Court Approves Retail Price Ceilings". The Los Angeles Times. November 5, 1997. Retrieved October 17, 2008.
- ^ Khan v. State Oil Co., 93 F.3d 1358 (7th Cir. 1996).
- ^ "STATE OIL CO. v. KHAN et al, 522 U.S. 3 (1997)" (PDF). SUPREME COURT OF THE UNITED STATES. November 4, 1997. p. 20. Retrieved November 10, 2019.
The Court of Appeals was correct in applying that principle despite disagreement with Albrecht, for it is this Court's prerogative alone to overrule one of its precedents.
Further reading
edit- Klein, Benjamin (1999). "Distribution Restrictions Operate by Creating Dealer Profits: Explaining the Use of Maximum Resale Price Maintenance in State Oil v. Khan". Supreme Court Economic Review. 7. Supreme Court Economic Review, Vol. 7: 1–58. doi:10.1086/scer.7.1147086. JSTOR 1147086. S2CID 155736245.
External links
edit- Text of State Oil Co. v. Khan, 522 U.S. 3 (1997) is available from: Cornell CourtListener Findlaw Google Scholar Justia Library of Congress Oyez (oral argument audio)