Atlantic Refining Co. v. Federal Trade Commission

381 U.S. 357, 85 S. Ct. 1498, 14 L. Ed. 2d 443, 1965 U.S. LEXIS 2446, 1965 Trade Cas. (CCH) 71,459
Supreme Court of the United States·Decided June 1, 1965·No. 292·Published·Cited by 120 cases

Opinions

Mr. Justice Clark

delivered the opinion of the Court.

The Federal Trade Commission has found that an agreement between the Atlantic Refining Company (Atlantic) and the Goodyear Tire & Rubber Company (Goodyear), under which the former “sponsors” the sale of the tires, batteries and accessory (TBA) products of the latter to its wholesale outlets and its retail service station dealers, is an unfair method of competition in violation of [360] § 5 of the Federal Trade Commission Act, 38 Stat. 719, as amended, 15 U. S. C. § 45 (1964 ed.).1 Under the plan Atlantic sponsors the sale of Goodyear products to its wholesale and retail outlets on an overall commission basis. Goodyear is responsible for its sales and sells at its own price to Atlantic wholesalers and dealers for resale; it bears all of the cost of distribution through its warehouses, stores and other supply points and carries on a joint sales promotion program with Atlantic. The lat[361] ter, however, is primarily responsible for promoting the sale of Goodyear products to its dealers and assisting them in their resale; for this it receives a commission on all sales made to its wholesalers and dealers. The hearing examiner, with the approval of the Commission and the Court of Appeals, enjoined the use of direct methods of coercion on the part of Atlantic upon its dealers in the inauguration and promotion of the plan. Atlantic does not seek review of this phase of the case. However, the Commission considered the coercive practices to be symptomatic of a more fundamental restraint of trade and found the sales-commission plan illegal in itself as “a classic example of the use of economic power in one market ... to destroy competition in another market . . . 58 F. T. C. 309, 367. It prohibited Atlantic from participating in any such commission arrangement.2 Similarly, it forbade [362] Goodyear from continuing the arrangement with Atlantic or any other oil company.3 Goodyear and Atlantic filed separate appeals. The Court of Appeals approved the findings of the Commission and affirmed its order. “Ap[363] praising the broader aspects of the system [used by Atlantic and Goodyear] as a tying arrangement,” it agreed with the Commission that it injured “competition in the distribution of TBA at the manufacturing, wholesale, and retail levels.” 331 F. 2d 394,402. We granted certiorari, 379 U. S. 943, because of the importance of the questions raised and especially in light of the holding of the Court of Appeals for the District of Columbia Circuit in Texaco, Inc. v. Federal Trade Comm’n, 118 U. S. App. D. C. 366, 336 F. 2d 754, which is in apparent conflict with these cases. We affirm the judgments of the Court of Appeals.

I.

Since Atlantic has not sought review of paragraphs 5 and 6 of the Commission’s order as to its use of overt acts of coercion on its wholesalers and retailers those portions of the order are final. We therefore do not set out in detail all of the facts which are so carefully examined in the opinion of the Court of Appeals.

Atlantic is a major producer, refiner and distributor of oil and its by-products. Its market is confined to portions of 17 States along the eastern seaboard.4 Its distribution system consists of wholesale distributors who purchase gasoline and lubricants in large quantities and retail service station operators who do business either as lessees of Atlantic or as contract dealers selling its products. In 1955 Atlantic had 2,493 lessee dealers, who purchased 39.1% of its gasoline sales, and 3,044 contract dealers, who bought 18.1 %.5 About half of the contract [364] dealers were service station operators; the remainder were operators of garages, grocery stores and other outlets which sell gasoline but do not handle tires, batteries and accessories.

Goodyear is the largest manufacturer of rubber products in the United States with sales of over $1,000,000,000 in 1954. It distributes tires, tubes and accessories through 57 warehouses located throughout the country. It doés not warehouse batteries; “Goodyear” batteries are tradenamed by it but manufactured and directly distributed to Goodyear outlets by the Electric Auto-Lite Company and Gould-National Batteries, Inc. Goodyear also sells its products at wholesale and retail through about 500 company-owned stores and through numerous independent dealers. These independent franchised dealers number more than 12,000, there being among them a number of Atlantic wholesale petroleum distributors and retail petroleum jobbers. Goodyear has also had a substantial number of nonfranchised dealers which includes most service station customers, including the Atlantic stations involved here.

Gasoline service stations are particularly well suited to sell tires, batteries and accessories. They constitute a large and important market for those products. Since at least 1932 Atlantic has been distributing such products to its dealers. In 1951 it inaugurated the sales-commission plan.6 Its contract with Goodyear covered three [365] regions: Philadelphia-New Jersey, New York State and New England.

Free access — add to your briefcase to read the full text and ask questions with AI

Atlantic Refining Co. v. Federal Trade Commission, 381 U.S. 357, 85 S. Ct. 1498, 14 L. Ed. 2d 443, 1965 U.S. LEXIS 2446, 1965 Trade Cas. (CCH) 71,459 (1965).

381 U.S. 357 (Atlantic Refining Co. v. Federal Trade Commission) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

LABMD, Inc. v. Federal Trade Commission
891 F.3d 1286 (Eleventh Circuit, 2018)
San Miguel v. HP Inc.
317 F. Supp. 3d 1075 (N.D. California, 2018)
Federal Trade Commission v. Wyndham Worldwide Corp.
799 F.3d 236 (Third Circuit, 2015)
Telebrands Corp. v. Federal Trade Commission
457 F.3d 354 (Fourth Circuit, 2006)
Tattered Cover, Inc. v. City of Thornton
44 P.3d 1044 (Supreme Court of Colorado, 2002)
Breaux Bros. Farms, Inc. v. Teche Sugar Co., Inc.
792 F. Supp. 1436 (W.D. Louisiana, 1992)
Pirozzi v. Penske Olds-Cadillac-GMC, Inc.
605 A.2d 373 (Superior Court of Pennsylvania, 1992)
Baskes v. Federal Sav. and Loan Ins. Corp.
649 F. Supp. 1358 (N.D. Illinois, 1986)
Amrep Corporation v. Federal Trade Commission
768 F.2d 1171 (Tenth Circuit, 1985)
A.I. Root Co. v. Computer Dynamics, Inc.
615 F. Supp. 727 (N.D. Ohio, 1985)
Jefferson Parish Hospital District No. 2 v. Hyde
466 U.S. 2 (Supreme Court, 1984)
Borden, Inc. v. Federal Trade Commission
674 F.2d 498 (Sixth Circuit, 1982)
Wawszkiewicz v. Department of the Treasury
670 F.2d 296 (D.C. Circuit, 1981)