*2
Judgе, and
POSNER, Chief
Before
RIPPLE,
Judges.
Circuit
FLAUM
Judge.
POSNER, Chief
“Khan”) operat-
(collectively
plaintiffs
Illinois,
County,
DuPage
gas station
a ed
under a contract with State
Company,
rebate the difference between
his new
distributor
products.
related
price times the number of
provided
The contract
for the
gallons
lease of the
sold at
price.
the new
The contract
(which
owned),
station
required
and the
thus
sup-
Khan to rebate
prof-
the entire
*3
ply
gasoline
of
ancillary
products
it
raising
from
price
for
his
without
supplier’s
his
resale, to
permission
Khan. Mr. Khan was the
price
actual
above the
suggested
retail
signatory
contract,
by
the
supplier.
rather
than his
the
corporation,
operated
station,
the
so it
provision
The
concеrning
charg
the
not appear
complaining
he is
about
ing by
price
Khan of a
suggested
below the
merely
injury
himself,
derivative
to
price
retail
price
neither
fixing nor is
which event he would not be a proper party.
germane to the price-fixing charge.
sup A
Transmissions,
Hammes v.
AAMCO
33 plier
obligation
is under no
to lower
price
his
(7th
Cir.1994).
to
just
his customer
because the customer
the
terminated
contract
wants to
supplier’s
because
resell
product
for less
pay
Khan failed to
than
agreed-upon
supplier
rent for
has suggested without sac
the station. The termination precipitated
rificing any
profit
margin.
his
The con
suit, which,
this
so
as
far
relevant
tract in
to
merely
any
disclaims
such
appeal, charges price fixing in
obligation,
unusual
violation of
obligation
since the
section 1
Act,
the Sherman
has
§
no basis in
U.S.C.
law the disclaimer
and breach of
has
significance
contract under
no antitrust
the common
either.
law of Illinois.
judge
granted
district
State Oil also denies
provision
that the
summary judgment
for
defendant on the contract pertaining to Khan’s charging a
both claims. He
legality
ruled
un-
price above
suggested
price
retail
is a
der the Sherman Act
alleged
price
price
form
fixing.
points
It
out that Khan
fixing was to
by
be tested
the rule of reason was free
charge
to
high
price
as he
rather
than
rule,
the wishes. This
is true
the sense that
it
plaintiff
presented
no evidence on essen- would not have been a breach of contract for
tial
(such
elements of a rule of reason case
as Khan to
price.
raise his
But the contract
power),
market
study
conducted
made it
so;
worthless for
and,
him to do
plaintiffs’
expert
economic
was inadmissi-
realistically,
just
this was
an alternative sanc-
ble, and that without
study
plaintiffs
tion
termination,
and probably
equally
could not
prove
even
injury.
effective one. Generally when a seller raises
price,
his
falls;
his volume
and if
profit
his
The contract between State Oil and Khan
each
frozen,
unit sold is
provided
effect
his
that State Oil would establish a
raising
price
his
will be that he loses reve-
suggested
price
(which
retail
gasoline
for nue:
units,
he will sell fewer
at the
was
same
76”)
sold under the brand name “Union
profit per
contract,
unit. The
incidentally,
gasoline
would sell the
to Khan for 3.25
required Khan
buy
all
gasoline
his
from
cents less
price.
than that
If Khan believed
Oil;
State
so he could
merely
switch to
high
was too
he could ask State Oil
another
brand
he wanted
charge
high-
to lower it and if State Oil complied Khan
price.
er
would be
purchase
entitled to
from State Oil at
margin,
is,
the same
Practices that have the same effect are not
the new
minus 3.25 cents.
If State Oil
always treated the same in law.
pre-
More
refused to
suggested
reduce the
retail
cisely,
practices
two
that have one effect in
Khan could still charge
price,
a lower
but his
may
common
differ in their other effects. A
margin would be smaller because he
merger
competitors
between
price-
and a
not be getting
a lower
from State Oil.
fixing agreement between competitors has
If Khan
believed the
the same effect in extinguishing price compe-
was too low he could
it,
ask State Oil to raise
tition
parties,
between the
merger
thus preserving
margin;
his
but if State Oil
likely
more
produce
offsetting
savings
cost
refused and Khan went ahead and raised his
and it is therefore treated
leniently
more
price anyway, the
required
contract
Khan the antitrust
laws. So the fact that State
It
distinguishable
be
not
if
easy
were a
one that
there
to defend in
class of
cases which maximum
fixing,
terms of
theory
economic
poli-
antitrust
though wholly vertical, wholly unilateral,
cy
did
may
also think that interfering
—the
injury,
cause antitrust
even Albrecht and with the freedom of a dealer to
raise
present
case were not members of that may cause
injury.
not,
suspect
We
Then,
class.
might
while Albrecht itself
but we cannot have sufficient confidence in
differently
decided
today, its principle that
our view to
declare decision of
such
illegal per
se would have Court that has not
expressly
overruled
some
application.
domain
In that event
defunct,
nevertheless
as wе would have to do
affirmance here would construe Albrecht nar-
in order
agree
with the district court’s
rowly
abrogate
but not
it. But State Oil is
ruling that the
price provision
maximum
identify any cases,
able to
real or hypo-
the contract between State Oil and Khan was
thetical, in
practice
which the
condemned in
illegal per
se.
Richfield,
Atlantic
injury
could cause an
to the inter-
despite the Court’s
skepticism
evident
about
*7
protected by
ests
antitrust
law.
If proof of
the continued
Albrecht,
soundness of
the
injury
antitrust
required
is
in
involving
cases
distinguished
it on
ground
the
that the
the sort
Albrecht,
involved in
subject
dealers
a
ceiling
imposed by
no such
brought,
could
be
a
supplier,
their
as distinct from their competi-
private plaintiff
Department
or
the
tors, werе the intended beneficiaries of Al-
Justice or the Federal Trade Commission. brecht.
336-37,
See 495 U.S. at
110 S.Ct. at
point,
More to
the
the
Court’s
implication
1890. The
is that the injury to a
conception of
injury may
antitrust
be broader
dealer like Khan from
being
not
able to raise
than State Oil’s. The Court has never re-
his
of a
because
imposed by
restriction
treated
the proposition
that vertical
supplier
his
is
injury.
antitrust
(resale
minimum price fixing
price mainte-
nance)
Khan,
But even if
believe,
as we
illegal per
See,
e.g.,
se.
not
Business
ruled out
of court
the concept
Corp.
Electronics
v.
Sharp
antitrust
Corp.,
Electronics
injury, he
supra,
prove
had to
725-26,
injury
485 U.S. at
in fact to
The only ground entirely on the bative value. The on which it report turns that “the was argued to operated onе could be be inadmissible would be who experience of one receiver although Be a in period.” expert, that the Ph.D. econom a five-month gas station over terminated, reputable university expe issued a ics from a and an Khan was fore economics, and, rienced consultant in antitrust ground of termination notice inventory qualified in and hence to offer economic selling expert which State was case, reim in this security without evidence had failed interest a- retained Oil, study professional from a state court that satisfied norms. As bursing obtained State emphasized involving in operate the we have cases scien appointing receiver an order (The testimony—and principle applies five months. tific did so for station. He happened at the the social sciences force that it not reveal what same record does scientist, does to the natural period. assume State sciences—a end of that We permitted operation reputable, however is not to offer took over the Oil either lessee.) generated by evidence that he has not or obtained another station itself methods he would use in his normal plaintiffs’ expert obtained the receiver’s academic work, professional say in from the which is to work financial and determined records figures expecta in without to or and revenue them undertaken reference cost litigation. disregarded possible have tion of in must use Braun v. receiver (7th Lorillard 84 F.3d ceiling with State Oil. The Cir. 1996); Ciba-Geigy Corp., figures that the receiver had realized Rosen F.3d showed (7th Cir.1996); margin gasoline in excess of on his sales of Bammerlin Nav Transportation way Corp., he have done istar cents. The could Int’l 3.25 (7th Cir.1994). judge charging price in The district identi bywas excess basis, none, rebating no point fied Oil can suggested retail price. generated by higher supposing expert’s report for higher mar-gin regarding expert had Khan been flunked this test. The inference inferred that profit margin, suggest drawn from the to raise his above the receiver’s allowed data, straight have price, he would station’s cost revenue was ed and, income, forward, pay appears, so enabling him to his rent and far made just way that an economist interestеd avert termination. therefore margins for unrelated profit a firm’s reasons may competitive have course conditions Of it; litigation would make and likewise changed during the time receiver enjoyed the that if Khan had free inference ability A dealer’s operating the station. evidently thought he dom that the receiver for price depends his on the demand his raise charged higher price, had he would have general, demand product; *8 money, If more than he did. made brands, may to other or for Union 76 relative overqualified was anything, the economist over. after the receiver took have increased easily give as have been evidence that could so, ability his a If maintain accountant; overqualification given by аn suggested retail would not than recognized disqualifica yet not a basis for ability. a similar prove that Khan had had tion. if could not have maintained a And Khan suggested simply price, retail price above the admissibility. Weight is different from permit- not have because report might admissible but expert’s An be so, by hurt him to then he wasn’t ted do lacking weight in as not to block so complains. provision of which he contractual judgment granting summary for other of a of the antitrust There would be violation Peters, F.3d side. v. Wittmer laws, injury. but no (7th Cir.1996); Fertilizer Co. Mid-State Bank, just say Nat’l 877 F.2d 1338- Exchange that the evi But this is (7th Cir.1989); Dynam Douglas Hayes presented by expert not con was dence Cir.1993). (1st ics, indeed, But subject injury—was, clusive on the of put being That did that is not the situation here. State very far conclusive. from contrаry diversity citizenship parties.) in In the absence of of no evidence. between evidence, Bamberger’s presumption relinquishment from his The Dr. inference favor of all experience that Khan when federal claims fall out study the receiver’s before trial of rebuttable, id., provi- lightly but it by hurt the maximum should had been abandoned, legitimate as it is based on gasoline supply was suffi- a sion of the contract summary minimizing substantial concern with judg- federal ciently plausible to defeat purely intrusion into areas of injury. state law. question ment on of supplemen- Since the absence of merit of claim should not have claim in tal this case is clear as a of matter turn to of been dismissed. We the breach elementary interpretation, contraсtual so Although primary contract claim. Khan’s jurisdiction purposes that the retention of for complaint prevented is that was he dismissing claim require of did not complains raising price, his he that there also judge speculate meaning district about the wanted lower were times when he his law, judge think right of state we nonpremium gasoline. As said jurisdiction upon retain rather than visit outset, standing this claim has no parties and state courts the burden of But an antitrust claim. State Oil concedes Bmzinski, litigation. further As we said obligated contract implicitly that cases, citing a slew of earlier the correct (and adjust prices suggest retail its wholesale disposition supplemental claim is so prices accordingly, maintain the 3.25 cents clear as a matter of state that it law can be margin suggested between wholesale and re determined without a trial and without en- guarantees) tail that the contract law, tanglement in difficult of issues state light competitive of condi were realistic judicial economy considerations of counsel facing tions Khan. The evidence Khan decision, prompt retention and rather than presented concerning competitive those con remission to state comet. Id. But we that on occa ditions was evidence sixteen presumption remind the district courts of the during operation sions his of the station he jurisdiction against retaining supplemental told had called other dealers state-law when claims the federal claims are рrices sug their retail were lower than the trial, dismissed before and of the concomitant ¡Jhis gested prices retail fixed State Oil. importance stating ground on which establishing gen falls far evidence short the court particular believes case that concerning uine fact issue material presumption has been rebutted. breach of contract. There is no evidence judgment of the district court is af- competitors the dealers were actual part firmed in part, and reversed in as ex- prices charged those plained opinion, and the ease is re- prices grades dealers were the same manded for proceedings further consistent Khan, gasoline which, remember, sold opinion. with well-recognized sold that hаs AFFIRMED PART, In REVERSED PART AND perfectly brand name. The evidence is con Remanded. sistent assumption State Oil’s competitively were RIPPLE, Judge, concurring. Circuit realistic. Today employs rigorous appli- court rightly claim So the contract cation of the rules stare prece- decisis and *9 law, dismissed as a contract matter of we in dent this antitrust matter. This methodol- any note the of the absence from record ogy is certainly, general proposition, as a a why judge, having indication of district the prudent approach to antitrust decision-mak- trial, the dismissed federal claims before re ing judicial in the context. Antitrust issues than, tained rather is the norm in such as pose crucial policy the choices for economic situations, jurisdiction relinquished and, indeed, over the Country. social life of the Nev- supplemental ertheless, claim. state law 28 U.S.C. Congress, content passage with the 1367(c)(3); § Brazinski v. Amoco generally statutes, Petroleum of great worded has left a Co., 1176, (7th Additives 6 policy-making 1182 Cir. deal through the courts 1993). (It appear process by does not that there is of case decision-making.
1367
(1990),
1884,
the re-
333
ensure,
109 L.Ed.2d
S.Ct.
circumstances,
ought to
we
In these
[price]
vigorous
to inhibit
decisis
“threatened
of stare
straint
application
through the strict
sufficiently
who
bound
by the dealers
were
law is
that
precedent,
and
to become
permit businesses
it
and because
“threatened
by
certain
it”
predictable
335,
under
a clear
Id. at
with
price-fixing
affairs
scheme.”
their
to order
minimum
agree,
requires.
I
law
stаnding of what
at 1889.1
S.Ct.
110
methodology em
therefore,
basic
factual context
arises in a
present case
The
reaching the
in
decision
by the court
ployed
in
at issue
from the one
far
removed
that
note
separately to
today.
I write
announced
case,
to the
presented
as
Albrecht. This
criti
my colleagues’ substantive
I share
that
appeal,2
this court on
and to
court
district
applied
been
as it has
per se rule
cism
single
single contract between a
involves
ques
fixing and to
maximum
to vertical
single
that sets
retailer
wholesaler
like
to eases
rule
of that
the extension
tion
price for the
of maximum resale
equivalent
hori
the threat
in which
one
present
plead-
Neither
commodity
question.
in
or,
very
at the
is absent
zontal cartelization
contract
ease nor the
between
ings in this
It is difficult
least,
diminished.
greatly
any
enti-
implicate
other
and State Oil
ef
“manifestly anticompetitive
discern
therefore,
confronted,
awith
ties. We are
T.V.,
Sylva
v. GTE
fect,”
Inc.
Continental
hint
is no
arrangement;
there
wholly vertical
2549, 2557,
36, 50,
nia, Inc.,
97 S.Ct.
U.S.
433
effect.
horizontal
concrete
(1977),
justifies invoca
that
568
L.Ed.2d
Co.,
Inc.
Video Industrial
Center
rule.
per se
tion
(7th
Media, Inc.,
Cir.
rule ef- anticompetitive in which identifiable
cases absence Although the present.
fects makes this implications horizontal concrete case, Oil’s
considerably closer outlined above for the reasons present, at least majority’s opinion, iden- effects anticompetitive
possibility Albrecht. On Supreme Court by the
tified therefore, in the court’s I concur ground,
decision. DISTRICT,
YANKTON SCHOOL
Appellant, SCHRAMM, Appellees. Angie
Harold 95-3343.
No. Appeals,
United States
Eighth Circuit. May 1996.
Submitted Aug. 1996.
Decided Rehearing Suggestion
Rehearing and 1, 1996. Denied Oct.
En Banc