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Supreme Court of the United States
December 5, 1983, Argued ; March 20, 1984, Decided
[*755] [***780] [**1466] JUSTICE POWELL delivered the opinion of the Court.
This case presents a question as to the standard of proof required to find a vertical price-fixing conspiracy in violation of § 1 of the Sherman Act.
Petitioner Monsanto Co. manufactures chemical products, including agricultural herbicides. By the late 1960's, the [*756] time at issue in this case, its sales accounted for approximately 15% of the corn herbicide market and 3% of the soybean herbicide market. In the corn herbicide market, the market leader commanded a 70% share. In the soybean herbicide market, two other competitors each had between 30% and 40% of the market. Respondent Spray-Rite Service Corp. was engaged in the wholesale distribution of agricultural chemicals from 1955 to 1972. Spray-Rite was essentially a family business, whose owner and president, Donald Yapp, was also its sole salaried salesman. Spray-Rite was a [****7] discount [**1467] operation, buying in large quantities and selling at a low margin.
Spray-Rite was an authorized distributor of Monsanto herbicides from 1957 to 1968. In October 1967, Monsanto announced that it would appoint distributors for 1-year terms, and that it would renew distributorships [***781] according to several new criteria. Among the criteria were: (i) whether the distributor's primary activity was soliciting sales to retail dealers; (ii) whether the distributor employed trained salesmen capable of educating its customers on the technical aspects of Monsanto's herbicides; and (iii) whether the distributor could be expected "to exploit fully" the market in its geographical area of primary responsibility. Shortly thereafter, Monsanto also introduced a number of incentive programs, [*757] such as making cash payments to distributors that sent salesmen to training classes, and providing free deliveries of products to customers within a distributor's area of primary responsibility. 2
[****8] In October 1968, Monsanto declined to renew Spray-Rite's distributorship. At that time, Spray-Rite was the 10th largest out of approximately 100 distributors of Monsanto's primary corn herbicide. Ninety percent of Spray-Rite's sales volume was devoted to herbicide sales, and 16% of its sales were of Monsanto products. After Monsanto's termination, Spray-Rite continued as a herbicide dealer until 1972. It was able to purchase some of Monsanto's products from other distributors, but not as much as it desired or as early in the season as it needed. Monsanto introduced a new corn herbicide in 1969. By 1972, its share of the corn herbicide market had increased to approximately 28%. Its share of the soybean herbicide market had grown to approximately 19%.
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
465 U.S. 752 *; 104 S. Ct. 1464 **; 79 L. Ed. 2d 775 ***; 1984 U.S. LEXIS 39 ****; 52 U.S.L.W. 4341; 1984-1 Trade Cas. (CCH) P65,906
MONSANTO CO. v. SPRAY-RITE SERVICE CORP.
Prior History: [****1] CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT.
Disposition: 684 F.2d 1226, affirmed.
distributors, manufacturer, terminated, herbicide, prices, complaints, conspiracy, resale price, concerted action, retail, corn, distributorship, restrictions, newsletter, nonprice, products, sales
Antitrust & Trade Law, Sherman Act, Claims, Business & Corporate Law, Distributorships & Franchises, Causes of Action, Restraints of Trade, Monopolies & Monopolization, Conspiracy to Monopolize, Sherman Act, Price Fixing & Restraints of Trade, Per Se Rule & Rule of Reason, General Overview, Termination, Business & Corporate Compliance, Antitrust Issues, Vertical Restraints, Nonprice Restraints, Remedies, Damages, Evidence, Inferences & Presumptions, Burdens of Proof, Contract Formation, Acceptance, Meeting of Minds, Contracts Law