Monsanto: Great Expectations Unfulfilled

• Date: 01 March 1985
• DOI: 10.1177/0003603X8503000103
• Author: Barry J. Brett
• Published date: 01 March 1985
• Subject Matter: Article

The Antitrust Bulletin/Spring 1985

Monsanto: great expectations

unfulfilled

BY BARRY J. BRETT*

39

One year and 19 days elapsed between the grant of certiorari in

Monsanto' and the issuance

of

the Supreme

Court's

opinion.'

This was a time of conjecture about the outcome and anticipation

of

much-needed clarification of the muddled issues of product

distribution. The case presented the Supreme Court with the

opportunity to help business executives and their lawyers vexed

by problems

of

resale price maintenance and distributorship

terminations and the related expense, uncertainty, and exposure

of

treble-damage litigation. The opinion, however, was a disap-

pointment to those who sought either stability or a meaningful

change in the law. Vertical resale price maintenance remains

unchanged as per se illegal. The rules remain easy to enunciate

but

difficult and risky to apply. Litigation remains plentiful but

neither particularly predictable nor avoidable. I will leave norma-

tive judgments and economic considerations to others and instead

Partner, Parker Chapin Flattau &Klimpl; member of the New

York Bar.

AUTHOR'S

NOTE: Lynn

P.

Harrison

III

and William A. Hohauser,

associates at the firm

of

Parker Chapin F/attau &KUmpf, participated

in the preparation

of

this article.

Monsanto Company v. Spray-Rite Service

Corp.,

684 F.2d 1226

(7th Cir. 1982), cert. granted, _U.S.

__

, 75 L. Ed. 2d 479 (1983).

2Monsanto Company v. Spray-Rite Service

Corp.,

465 U.S.

__

,

79 L. Ed. 2d 775 (1984).

©1985 by Federal Legal Publications, Inc.

40 The antitrust bulletin

address the difficulties this debate has created for the business

and legal community and the related issues

of

whether the end

justifies the means, i.e., Is it appropriate for those with great

power and influence to do all they can to bring about what they

view as the inexorably "right" result without regard for the

effects of their posturing?

This article will summarize the forces behind adilemma for

practitioners and executives and note how the post-Monsanto era

has begun with the same opportunities for creativity and litiga-

tion that characterized the earlier period. Without overtly taking

sides in the debate over where the law should be, I will argue that

the important values

of

predictability and certainty have largely

been ignored by the various combatants.

Sylvania to Monsanto: crystallizing the puzzle

In Continental T.

V.

v. GTE Sylvania' the Supreme Court

enunciated the deceptively easily stated rule

that

the rule of

reason, rather than per se analysis, would be applied to test the

lawfulness

of

non-price vertical restraints. Sylvania explicitly

overruled the only ten year old United States v. Schwinn deci-

sion;' which represents the only major Supreme Court antitrust

precedent to suffer that fate.'

It

also marks the point at which the

3Continental

T.V.,

Inc. v. GTE Sylvania, Inc., 433 U.S. 36 (1977).

4United States v. Arnold, Schwinn &Co., 388 U.S. 365 (1967).

5By contrast, just a few years earlier in Flood v. Kuhn, 407 U.S.

258, 284 (1972), the Supreme Court took a more reserved approach to

what the Court viewed as another earlier incorrect antitrust opinion

(Toolson v. New York Yankees, Inc., 346 U.S. 357 (1953)). In Flood, the

Court was asked to decide that baseball's reserve system was subject to

and violative

of

federal antitrust laws and thereby treat professional

baseball in the same manner as other professional sports. The Court

concluded that any change in the judicial exemption

of

professional

baseball was an "inconsistency and illogic . . . to be remedied by the

Congress and not by this Court." See a/so Handler, Changing Trends in

Antitrust Doctrines:

An

Unprecedented Supreme Court Term-1977, 77

COLUM.

L. REV. 979, 981-82 (1977); Masterson, Antitrust Law Commen-