Standard Oil Co. of New Jersey v. United States

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At the end of the 19th century and the beginning of the 20th, John D. Rockefellers Standard Oil empire set oil prices and engaged in other anti-competition tactics that ultimately led to its control of almost 90% of the refined oil flows in the United States. 

As this was happening, Congress passed the Sherman Antitrust Act, which outlawed monopolistic business practices. In 1909, the government sued Standard Oil for violating the Act.

Standard Oil appealed to the Supreme Court, which ruled against it, finding that the company had engaged in practices that constituted a restraint of trade and also an attempt to monopolize. The Court ordered Standard Oil to divide into 34 independent companies.

 

 Standard Oil Co. of New Jersey v. United States

 

221 U.S. 1 (1911)

APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE EASTERN DISTRICT OF MISSOURI

Syllabus

The Anti-Trust Act of July 2, 1890, c. 647, 26 Stat. 209, should be construed in the light of reason; and, as so construed, it prohibits all contracts and combination which amount to an unreasonable or undue restraint of trade in interstate commerce.

The combination of the defendants in this case is an unreasonable and undue restraint of trade in petroleum and its products moving in interstate commerce, and falls within the prohibitions of the act as so construed.

Where one of the defendants in a suit, brought by the Government in a Circuit Court of the United States under the authority of § 4 of the Anti-Trust Act of July 2, 1890, is within the district, the court, under the authority of § 5 of that act, can take jurisdiction and order notice to be served upon the nonresident defendants.

Allegations as to facts occurring prior to the passage of the Anti-Trust Act may be considered solely to throw light on acts done after the passage of the act.

The debates in Congress on the Anti-Trust Act of 1890 show that one of the influences leading to the enactment of the statute was doubt as to whether there is a common law of the United States governing the making of contracts in restraint of trade and the creation and maintenance of monopolies in the absence of legislation.

To read the rest of the opinion in Standard Oil Co. of New Jersey v. United States, go to Nolos US Supreme Court Center.

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