United States v. General Motors Corp.
Annotate this Case
384 U.S. 127 (1966)
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U.S. Supreme Court
United States v. General Motors Corp., 384 U.S. 127 (1966)
United States v. General Motors Corp.
Argued December 9, 1965
Decided April 28, 1966
384 U.S. 127
This is a civil action to enjoin General Motors Corporation (GM) and three associations of Chevrolet dealers in the Los Angeles area from participating in an alleged conspiracy to restrain in violation of § 1 of the Sherman Act by eliminating sales of new Chevrolets through "discount houses" and "referral services." The District Court found, among other things, that the Losor Chevrolet Dealers Association, in the summer of 1960, complained to GM personnel about sales to discounters; that at a Losor meeting in November, 1960, member dealers agreed to embark on a letter-writing campaign to enlist GM's aid; that, in December and January, GM personnel talked to every dealer in the area and obtained promises not to deal with discounters; that representatives of the three dealer associations met on December 15, 1960, and created a joint investigating committee; that the associations then undertook to police the agreements so obtained by GM; that the associations supplied information to GM for use in bringing wayward dealers into line, and that the Chevrolet zone manager asked them to do so; that, as a result, a number of dealers were induced to repurchase cars they had sold to discounters, and agreed to refrain from making such sales in the future; and that, by spring, 1961, sales through discounters seem to have ended. However, the District Court found no conspiracy in violation of the Sherman Act, holding that each alleged conspirator acted to promote its own self-interest, and that, in seeking to vindicate these interests, the alleged conspirators entered into no "agreements" among themselves, although they may have engaged in "parallel action."
Held: this is a classic conspiracy in restraint of trade: joint, collaborative action by dealers, associations, and GM to eliminate a class of competitors by terminating dealings between them and a minority of Chevrolet dealers and to deprive franchised dealers of their freedom to deal through discounters if they so choose. Pp. 384 U. S. 138-148.
(a) The District Court's conclusion that appellees' conduct did not amount to a conspiracy within the meaning of the Act was
not the kind of factfinding shielded from review by the "clearly erroneous" test embodied in Rule 52(a) of the Federal Rules of Civil Procedure, since the question involved the application of a legal standard to undisputed facts, and since the bulk of the case was presented to the trial judge in the form of documents, depositions, and written statements. P. 384 U. S. 141, n. 16.
(b) In determining whether there has been a conspiracy or combination under § 1 of the Sherman Act, it is of no consequence that each party acted in its own lawful interest or whether the franchise system is lawful or economically desirable. P. 384 U. S. 142.
(c) Even if it were assumed that there had been no explicit agreement among the appellees and their alleged co-conspirators, such an agreement is not a necessary part of a Sherman Act conspiracy -- certainly not where, as here, joint and collaborative action was pervasive in the initiation, execution, and fulfillment of the plan. United States v. Parke, Davis & Co., 362 U. S. 29, 362 U. S. 43. Pp. 384 U. S. 142-143.
(d) The joint and interrelated activities of GM and the co-conspirators in obtaining the agreements not to deal with discounters and in policing such agreements cannot be described as "unilateral" or merely "parallel." Pp. 384 U. S. 144-145.
(e) The elimination, by joint collaborative action, of businessmen from access to the market is a per se violation of the Act. Klor's, Inc. v. Broadway-Hale Stores, Inc., 359 U. S. 207. Pp. 384 U. S. 145-146.
(f) The economic motivation of those who, by concerted action, seek to keep others from trading in the market is irrelevant. Pp. 384 U. S. 146-147.
(g) Inherent in the success of the combination in this case was a substantial restraint upon price competition, a goal unlawful per se when sought to be effected by combination or conspiracy. United States v. Parke, Davis & Co., supra. P. 384 U. S. 147.
234 F.Supp. 85, reversed and remanded.