Climate Change Project

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Standard Oil Co. of New Jersey v. U.S., 221 U.S. 1 (1911)

This is a long and difficult to read case because it is written in the older style. Read it carefully to get a better understanding of the economic considerations that lead to the case. It is a very important part of US history, beyond its value as a precedent case.

Who are the defendants?

What was the general charge against them?

How and when was Standard Oil originally formed?

How did incorporate other companies to gain market share?

How did Standard Oil use this market power to get an edge on the competition?

What three results were brought about?

What was the trust agreement used in the second period of the conspiracy?

What was the term of the trust agreement?

What were Standard Oil Trust certificates and why were they issued?

What were the New York and New Jersey and Standard Oil companies formed?

Were these really independent companies controlled by the market?

What did the New York courts rule in 1892?

What really happened to the stock when the trust was dissolved?

How did this transfer of stock actually increase the personal power of defendants?

What was the role of the Standard Oil Company of New Jersey in the third period of the conspiracy?

What were the different "heads" on the list of discriminatory practices?

What three forms of relief did the government seek?

What did the 4 judge panel find in its decree?

What injunction did the judges enter?

What are the two opposing characterizations of Standard Oil that the Supreme Court presents?

What is the exact text of the two provisions of the Anti-Trust Act that are at issue?

If they are read literally, why do they pose an enforcement problem?

What was the ancient English law on 'contract in restraint of trade'?

How did Lord Coke define monopolies?

How did Hawkins define them?

How are these English monopolies different from ones in the US?

How did problems arise with monopolies in England?

What were the three evils that monopolies lead to?

See if you can figure out "engrossing" from the quote by Pollexfen in the East India Company case.

What is the bottom line on the court's review of the history of the English law: did the English law ban private monopolies, and why?

Why was the economic situation fundamentally different in the US since the Revolutionary War?

Looking back at the history of the regulation of trade in the US, what did the court say about the consistency of interpretation of whether given types of contracts were in restraint of trade? (just before *59)

Interpretation of section 1.

What type of commerce was to be regulated?

Why this limitation?

Point a - What types of contracts were grouped together?

Point b - Which agreements were not regulated?

What was being protected?

Point c - Did the act specific the specific practices that were outlawed?

Why is the act so broad?

What standard did the court say it would apply to implement the law?

Who does section 2 apply to?

What does the court say is the logical reach of the act when sections 1 and 2 are harmonized (*62)?

What did the court say was the most efficient means of preventing monopoly?

What is the government's view of the proper interpretation of the act?

What did the court say were the two possible implications of the government's position?

Why do the two railroad cases undermine the court's promotion of the rule of reason standard?

What did the court say was the real rule of these cases?

What was it about the contracts in these cases that obviated the use of a rule of reason analysis?

In the Hopkins case, what did Justice Peckham say about the Freight Association case?

What does looking at the direct and indirect effects on trade of the contract reconcile the ruling in the railroad cases with this case?

What does this language from the opinion mean? (just before *68) [the rule of reason cannot be used to defend actions that are, on their face, restraints of trade] The confusion which gives rise to the question results from failing to distinguish between the want of power to take a case which, by its terms or the circumstances which surrounded it, considering among such circumstances the character of the parties, is plainly within the statute, out of the operation of the statute by resort to reason in effect to establish that the contract ought not to be treated as within the statute, and the duty in every case where it becomes necessary from the nature and character of the parties to decide whether it was within the statute, to pass upon that question by the light of reason.

What is the separation of powers challenge to the act? (just before *70)

Just past **523 the court discusses the defense to monopoly based on the control of the crude oil business. Why does the court reject this defense, and what type of monopoly does this show Standard Oil to have been? (contrary to the discussion in class)

What was the remedy from the Swift case?

Why is this remedy inappropriate for Standard Oil?

What did the court below order?

What did it enjoin the defendants from doing until this was accomplished?

How did the court modify the lower court's decree?

Justice Harlan's dissent

What did Justice Harlan object to in the majority's opinion?

What kind of slavery was the country afraid of in 1990?

What trade did Congress say it could not regulate?

What could it regulate?

At *88 Justice Harlan use a quote from the Missouri case to attack which part of the majority holding?

In the Traffic Association case, the court said what about the counsel's request that it modify the Trans Missouri holding?

Why is Harlan concerned about using a rule of reason? (at **531)

What procedural objection does Harlan bring just past *100?

How do Harlan and the defendants both claim that this law violates the separation of powers doctrine?

How do their recommended solutions differ?

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