Chevron prevails in U.S. Supreme Court antitrust case involving joint venture pricing
Clients Chevron Corporation
Jones Day represented Chevron Corporation's Texaco subsidiary in a widely-watched antitrust case decided in February 2006 by the U.S. Supreme Court, which held that it is not per se illegal under Section 1 of the Sherman Act, 15 U.S.C. § 1, for a lawful, economically integrated joint venture to set the prices at which the joint venture sells its products. The joint venture at issue was between Texaco and Shell Oil. It effectively merged Texaco's and Shell's domestic gasoline refining and marketing operations, thereby ending competition between the two companies in those lines of business. The plaintiffs in the case, dealers who purchased gasoline from the venture, argued that the joint venture had engaged in per se illegal price fixing when it decided to charge the same price for the two brands of gasoline it sold.
In a unanimous decision authored by Justice Thomas, the Supreme Court rejected that claim, concluding that, although the joint venture's "pricing policy may be price fixing in a literal sense, it is not price fixing in the antitrust sense," because the policy was "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." The Court also held that the ancillary restraints doctrine did not apply to the pricing decision, because it was a decision regarding the venture's own operation rather than a restriction on non-venture conduct.
Jones Day represented petitioner Texaco Inc. before the Supreme Court.
Texaco, Inc. v. Dagher, 547 U.S. 1 (2006)