Narrative Opinion Summary
This case involves antitrust claims by Rebel Oil Co. Inc. against Atlantic Richfield Co. (ARCO) regarding alleged predatory pricing practices in the Las Vegas gasoline market from 1985 to 1989. Rebel asserts that ARCO engaged in below-cost pricing to monopolize the market, violating Sherman Act § 2, conspired to restrain trade under Sherman Act § 1, and engaged in price discrimination under Clayton Act § 2 as amended by the Robinson-Patman Act. The district court granted summary judgment for ARCO, finding insufficient market power to sustain a predatory pricing claim and no legally cognizable injury to Rebel. On appeal, the court affirmed in part and reversed and remanded in part, addressing whether Rebel provided sufficient evidence of ARCO's market power to support its claims. Central to the appeal was the definition of the relevant market, the existence of market power, and the presence of barriers to entry that could enable ARCO to exercise control over prices. Rebel's arguments focused on ARCO's alleged predatory conduct, the subsequent exit of competitors, and ARCO's pricing strategies post-predation. The court concluded that while Rebel failed to prove ARCO's market power necessary for claims under the Sherman Act, there remained sufficient evidence to raise a material factual dispute regarding price discrimination under the Clayton Act, warranting further proceedings on that matter.
Legal Issues Addressed
Clayton Act § 2 - Primary-Line Price Discriminationsubscribe to see similar legal issues
Application: Rebel's claim of price discrimination under the Clayton Act focused on ARCO's alleged pricing below cost in Las Vegas compared to Los Angeles, asserting this was intended to eliminate competition and later recoup losses.
Reasoning: Rebel's claim centers on primary-line discrimination, supported by expert testimony indicating that from 1985 to 1989, ARCO charged prices in Las Vegas significantly below those in Los Angeles, followed by higher prices in Las Vegas from 1989 to 1991.
Market Power and Antitrust Injurysubscribe to see similar legal issues
Application: The court determined that Rebel's evidence was insufficient to prove ARCO's market power under the Sherman Act, which is necessary for asserting antitrust injury.
Reasoning: Rebel failed to demonstrate a genuine issue of material fact regarding market power necessary to support its attempted monopolization claim against ARCO.
Sherman Act § 1 - Collusion and Price Fixingsubscribe to see similar legal issues
Application: Rebel alleged that ARCO and Terrible Herbst colluded to fix gasoline prices at predatory levels. The court required Rebel to prove both collusion and causal antitrust injury to succeed.
Reasoning: Rebel's Sherman Act Section 1 claim alleged collusion between ARCO and Terrible Herbst to fix retail gasoline prices at predatory levels. To succeed, Rebel needed to show both collusion to fix prices and causal antitrust injury.
Sherman Act § 2 - Attempted Monopolizationsubscribe to see similar legal issues
Application: The court evaluates whether ARCO's pricing strategies constituted an 'attempted monopolization' by assessing if ARCO had a dangerous probability of achieving monopoly power through predatory pricing.
Reasoning: Rebel's attempted monopolization claim alleges that ARCO colluded with dealers to set predatory prices to gain monopoly power. To prove a violation under Sherman Act Section 2, a plaintiff must establish four elements: (1) specific intent to control prices or eliminate competition, (2) predatory conduct aimed at that intent, (3) a dangerous probability of achieving monopoly power, and (4) causal antitrust injury.