Supreme Court Reverses Ninth Circuit in Antitrust Case Challenging Joint Venture Pricing

By an 8-0 vote (Justice Alito not participating), the Supreme Court today reversed the decision of the Ninth Circuit in two related cases that had found per se unlawful the decision of an economically integrated joint venture to set the same price for different brands of gasoline it sold. In an opinion by Justice Thomas, the Supreme Court in Texaco Inc. v. Dagher, et al. found that "[T]he pricing policy challenged here amounts to little more than price setting by a single entity--albeit within the context of a joint venture--and not a pricing agreement between competing entities with respect to their competing products." As a result, the Court held that the "joint venture, like any other firm, must have the discretion to determine the prices of the products it sells, including the discretion to sell a product under two different brands at a single unified price." The reasoning of the Court in this case would apply to health care joint ventures, such as hospital-physician joint ventures to operate imaging centers or ambulatory surgery centers. This opinion, which was widely anticipated by the antitrust bar, removes the uncertainty produced by the Ninth Circuit about the pricing activities of joint ventures. Jones Day successfully represented the petitioners in this case.

For additional information about this Antitrust Development, please contact Toby G. Singer, leader of the Health Care Antitrust Practice.

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