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delivered the opinion of the U.S. Supreme Court, in which the other seven participating justices joined in reversing the Ninth
Circuit. Significant to the outcome of the case was the Court's presumption that the joint venture itself was legal, which it based on the prior approval by the FTC and the
435:
Contrary to the Ninth
Circuit's ruling, the Court did not believe that the ancillary restraints doctrine applied because the challenged business practice involved the "core activity" of the joint venture—the pricing of the goods it produced and sold. Even if the doctrine applied, pricing was
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against price fixing instead applied, which conclusively presumed that the arrangement was illegal. The Ninth
Circuit reached that decision by applying the ancillary restraints doctrine, which provided an exception from the rule of reason whenever a restraint on trade was not ancillary to the main
431:
The Court ruled that the
Equilon joint venture pricing decisions were not illegal price-fixing between competitors. Texaco and Shell did not compete with one another in the relevant market, but instead participated in that market jointly through their investments in Equilon. The two companies
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purpose of an agreement. The court did not believe the oil companies had explained why the unified pricing for their two brands of gasoline was necessary to further the legitimate goals of the joint venture, and so reversed summary judgment. Texaco and Shell both petitioned for
306:, which ended competition between the two companies in the domestic refining and marketing of gasoline. Under the joint venture agreement, Texaco and Shell agreed to pool their resources and share the risks of and profits from Equilon's activities. Equilon's
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governed the plaintiffs' claim, under which only "unreasonable restraints of trade" were prohibited by the
Sherman Act. Because they had eschewed rule of reason analysis, the plaintiffs had failed to raise a triable issue of fact.
432:
shared in
Equilon's profits, and should be regarded as a single entity competing with other sellers in the market, regardless of the decision to market their gasoline under two brands instead of one.
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The pricing decisions of a legitimate joint venture between oil companies to sell gasoline to service stations did not violate the
Sherman Antitrust Act. Ninth Circuit Court of Appeals reversed.
364:
109:
599:
302:, historically competitors in the national and international oil and gasoline markets, formed a joint venture in 1998 called "Equilon" to consolidate their operations in the
287:. The Court instead considered the joint venture a single entity that made pricing decisions, in which the oil companies participated as cooperative investors.
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would comprise representatives of Texaco and Shell Oil, and
Equilon gasoline would be sold to gas stations under the original Texaco and Shell Oil
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279:. The Court ruled unanimously that the joint venture's unified price for the two companies' brands of gasoline was not a
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35:
576:
54:
Texaco
Incorporated, Petitioner v. Fouad N. Dagher, et al.; Shell Oil Company, Petitioner v. Fouad N. Dagher, et al.
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to the
Supreme Court, which consolidated the petitions and granted certiorari to determine the extent to which the
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that the Supreme Court had long recognized under § 1 of the Sherman Act. The District Court awarded
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342:. The consent decrees did not impose any restrictions on the prices Equilon charged.
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Thomas, joined by Roberts, Stevens, Scalia, Kennedy, Souter, Ginsburg, Breyer
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filed a separate decision concurring in part and dissenting in part.
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United States District Court for the Central District of California
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After Equilon began to operate, a class of 23,000 Texaco and Shell
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318:, subject to certain divestments and other modifications, by the
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Alito took no part in the consideration or decision of the case.
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certainly integral to a business that produced and sold goods.
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on January 10, and so did not participate in the decision.
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United States Supreme Court cases of the Roberts Court
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List of United States Supreme Court cases, volume 547
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rule against price fixing applies to joint ventures.
382:to Texaco and Shell Oil. It determined that the
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283:scheme between competitors in violation of the
112:; affirmed in part, reversed and remanded, 369
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314:. The formation of Equilon was approved by
259:, 547 U.S. 1 (2006), was a decision by the
86:2023; 74 U.S.L.W. 4147; 2006-1 Trade Cas. (
513:wrote the court's opinion, in which Judge
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104:Summary judgment granted to defendants,
577:Supreme Court (slip opinion) (archived)
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468:The vote was 8-0; the ninth justice,
18:2006 United States Supreme Court case
13:
263:involving the application of U.S.
261:Supreme Court of the United States
36:Supreme Court of the United States
14:
636:
595:United States Supreme Court cases
527:
605:United States antitrust case law
418:
271:between oil companies to market
29:
545:1 (2006) is available from:
620:2006 in United States case law
503:Dagher v. Saudi Refining, Inc.
496:
479:
462:
106:Dagher v. Saudi Refining, Inc.
1:
610:United States energy case law
625:Royal Dutch Shell litigation
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568:Oyez (oral argument audio)
399:reversed, ruling that the
351:District Court proceedings
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320:Federal Trade Commission
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128:, 125 S. Ct. 2957 (2005)
43:Argued January 10, 2006
519:Ferdinand F. Fernandez
391:Ninth Circuit decision
535:Texaco Inc. v. Dagher
304:western United States
285:Sherman Antitrust Act
256:Texaco Inc. v. Dagher
246:Sherman Antitrust Act
126:Texaco Inc. v. Dagher
78:126 S. Ct. 1276; 164
24:Texaco Inc. v. Dagher
515:Johnnie B. Rawlinson
509:1108 (2004). Judge
487:In re Shell Oil Co.
194:Ruth Bader Ginsburg
308:board of directors
158:Associate Justices
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232:Laws applied
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154:John Roberts
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96:Case history
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493:769 (1998).
357:gas station
312:brand names
589:Categories
409:certiorari
340:Washington
328:California
90:) ¶ 75,143
84:U.S. LEXIS
300:Shell Oil
110:C.D. Cal.
80:L. Ed. 2d
60:Citations
533:Text of
440:See also
423:Justice
374:against
346:Judgment
273:gasoline
242:§ 1
219:Majority
118:9th Cir.
82:1; 2006
133:Holding
120:2004);
615:Texaco
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559:Justia
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505:, 369
491:F.T.C.
489:, 125
413:per se
402:per se
370:per se
338:, and
336:Oregon
332:Hawaii
296:Texaco
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116:1108 (
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291:Facts
267:to a
122:cert.
101:Prior
543:U.S.
507:F.3d
485:See
404:rule
395:The
372:rule
298:and
114:F.3d
73:more
65:U.S.
63:547
539:547
326:of
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88:CCH
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68:1
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