Albrecht v. Herald Co.

Background

Respondent is the Globe-Democrat, a newspaper publisher that sold papers to about 172 independent home-delivery carriers. Petitioner ran Route 99 with about 1,200 subscribers and for a time charged more than the publisher’s advertised suggested price. The publisher warned him, sent letters to his customers, hired Milne Circulation Sales to solicit his route, and helped another carrier, George Kroner, take over service; about 300 customers switched and petitioner later sold his route for $12,000.

Reasoning

The Court examined whether those steps were unilateral business decisions or a forbidden combination under Section 1 of the Sherman Act. Relying on earlier decisions, the Court concluded that hiring Milne and placing Kroner to obtain customers went beyond mere refusal to deal and produced a combination to enforce the publisher’s price ceiling. The Court reaffirmed that agreements to fix resale prices, including maximum prices, may be an illegal restraint of trade. It reversed the Court of Appeals and remanded for further proceedings.

Real world impact

Publishers and other suppliers can be exposed to antitrust liability when they use third parties or other dealers to enforce resale price limits. Independent carriers who lose customers or routes through such coordinated campaigns may have a legal claim. The ruling was reversed and remanded, so further court steps will follow.

Dissents or concurrances

Justice Douglas concurred but noted territorial franchise legality depends on market facts. Justices Stewart and Harlan dissented, arguing price ceilings differ economically from price floors and disputing the combination finding.