Washington Law Review


S. John Goodwin


In Copperweld Corp. v. Independence Tube Corp. the United States Supreme Court held that corporations and their wholly owned subsidiaries cannot conspire and, thus, cannot violate section 1 of the Sherman Act. The decision signals an important shift in interpretation of the Sherman Act. Before Copperweld, corporations and their wholly owned subsidiaries were subject to conspiratorial liability under the Act. The Supreme Court had recognized intra-enterprise conspiracies on at least six occasions. Despite their diverging views on how broadly the doctrine was to be interpreted, the federal courts of appeals had unanimously applied the doctrine. The Court implicitly addressed the two fundamental questions underlying section 1 analysis, however, by rejecting alternative ways of resolving the intra-enterprise inconsistency. This Note suggests that the Copperweld Court implicitly concluded that it is desirable to police single-firm conduct only when such conduct violates the monopoly provisions of section 2. The Note examines the assumptions and rationales that underlie this conclusion, and challenges the persuasiveness of such assumptions in light of the specific fact pattern presented in Copperweld. Specifically, this Note challenges the "efficiency" interpretation of the Sherman Act adopted by the Court. Additionally, this Note questions whether a narrow interpretation of the "restraint of trade" provision remains faithful to the broad and flexible nature of section 1 as previously interpreted by the Supreme Court. The Note suggests that the complex philosophical and political presumptions that underlie antitrust analysis are essentially concerns for the legislature and not the courts. The Court, therefore, must make these critical presumptions explicitly and not disguise them in a circuitous maze of economic certainty. The Note proposes, in conclusion, that a rule of reason test, incorporating an open balancing of policy objectives, is a more appropriate tool for assessing the reasonableness of restraints of trade by corporations and their subsidiaries or divisions. Congress should prescribe a flexible rule of reason test to preserve legislative review of these crucial policy choices

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