United States v. Terminal Railroad Association

[1] The Terminal Railroad Association (TRA) of St. Louis, the principal one of the 38 defendants in this case, was organized in 1889 by Jay Gould and a number of the defendant railroad companies to acquire several independent terminal companies at St. Louis, Missouri, in order to combine and operate them as a unified system.

[4] The United States filed an antitrust suit in the circuit court for the Eastern District of Missouri under sections 1 and 2 of the Sherman Act (15 U.S.C.

Justice Lurton began his legal analysis by stating that "the question upon which the case must turn [is]: has the unification of substantially every terminal facility by which the traffic of St. Louis is served resulted in a combination which is in restraint of trade within the meaning and purpose of the Anti-Trust Act?

"[6] The Court explained: It is not contended that the unification of the terminal facilities of a great city where many railroad systems center is, under all circumstances and conditions, a combination in restraint of trade or commerce.

[7]The Court concluded that the fourteen defendant railroads had deliberately brought about a monopoly at the St. Louis bottleneck by purchasing control of all competing alternate means of crossing the river: The independent existence of these three terminal systems was therefore a menace to complete domination, as keeping open the way for greater competition.

It becomes, therefore, of the utmost importance to know the character and purpose of the corporation which has combined all of the terminal instrumentalities upon which the commerce of a great city and gateway between the East and West must depend.

The effect is to guarantee against any competitive system coming into existence, "since the companies to the agreement now control about one third of the railroad mileage of the United States.

"[4] The TRA has engaged in practices that "operate to the disadvantage of the commerce which must cross the river at St. Louis, and of nonproprietary railroad lines compelled to use its facilities."

[9] The Court concluded that "when, as here, the inherent conditions are such as to prohibit any other reasonable means of entering the city, the combination of every such facility under the exclusive ownership and control of less than all of the companies under compulsion to use them violates both the first and second sections" of the Sherman Act.

The Court recognized that the fourteen proprietary companies have obtained power: of dominating commerce among the states, carried on by other railroads entering or seeking to enter the City of St. Louis, and by which such railroads are compelled either to desist from carrying on interstate commerce or to do so upon the terms imposed by the proprietary companies.

In Associated Press v. United States,[11] the Supreme Court considered the operating methods of the Associated Press (AP), an organization that gathered new stories from its members (newspaper publishers) and distributed the news stories to its members, on a nationwide and international basis.

The Supreme Court held that the by-laws and the contract, together with the admitted facts, justified summary judgment; that the First Amendment does not immunize newspaper publishers from the Sherman Act; that the by-laws, on their face, constituted restraints of trade; that the fact that AP had not achieved a complete monopoly was irrelevant; and that the fact that there are other news agencies that sell news, and that AP's reports are not "indispensable," give AP's restrictive by-laws no exemption under the Sherman Act's prohibition of agreements in restraint of trade.

saying: Hecht requested an instruction that if the jury found (1) that use of RFK stadium was essential to the operation of a professional football team in Washington; (2) that such stadium facilities could not practicably be duplicated by potential competitors; (3) that another team could use RFK stadium in the Redskins' absence without interfering with the Redskins' use; and (4) that the [exclusivity provision] prevented equitable sharing of the stadium by potential competitors, then the jury must find the [provision] to constitute a contract in unreasonable restraint of trade.In Otter Tail Power Co. v. United States,[15] Eastman Kodak Co. v. Image Technical Services, Inc.,[16] is a 1992 Supreme Court decision holding that a lack of market power in the primary (photocopier) equipment market does not necessarily preclude antitrust liability for exclusionary conduct in the repair parts secondary (photocopier) market where the defendant seller of patented and unpatented repair parts had market power.

Accordingly, an antitrust treble damages action could be based on the defendant's refusal to sell parts to independent service providers.

The Court acknowledged that "under certain [limited] circumstances, a refusal to cooperate with rivals can constitute anticompetitive conduct and violate § 2."

Bridge across Mississippi River controlled by Terminal Railroad Association
Justice Lurton delivered the opinion of the Court