Palmer v. BRG of Georgia, Inc.
Headline: Court reverses and rules a 1980 agreement between two bar-review companies unlawful, blocking territorial split and revenue-sharing that sharply raised student course prices in Georgia.
Holding:
- Limits companies’ ability to divide territories and share revenues to raise prices.
- Supports challenges to sudden price hikes after anti-competitive agreements.
- Gives consumers grounds to contest higher prices for professional prep courses.
Summary
Background
A group of people who bought a bar review course from BRG in Georgia sued, saying BRG and another firm, HBJ, agreed in 1980 to stop competing. The agreement gave BRG an exclusive license to use HBJ’s materials in Georgia. HBJ agreed not to compete in Georgia and BRG agreed not to compete where HBJ operated. HBJ was paid per student and a share of revenues. After the deal, BRG’s course price rose from $150 to over $400. Lower courts had ruled the agreement lawful on summary judgment, but the United States supported rehearing.
Reasoning
The Court asked whether that 1980 deal violated the federal antitrust law called the Sherman Act. Relying on older decisions about price-fixing and territorial divisions, the Court said agreements formed to raise prices or to allocate markets are illegal on their face. The revenue-sharing formula plus the immediate price increase showed the agreement had the purpose and effect of raising prices. The Court concluded the agreement was per se unlawful, reversed the appeals court, and sent the case back for further proceedings. Justice Souter did not participate.
Real world impact
The ruling means the companies must face further proceedings and cannot rely on summary rulings to end the case now. It signals that competitors cannot divide territories and use revenue-sharing to raise prices without risking antitrust liability. The Court did not decide other claims in the multi-count complaint, and factual questions remain about later changes made in 1982.
Dissents or concurrances
Justice Marshall dissented from the summary reversal. He warned that deciding cases summarily can deny parties a full hearing and increase the risk of error.
Opinions in this case:
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