United States v. Socony-Vacuum Oil Co.

In 1935, Socony-Vacuum Oil Company and other midwestern oil companies (defendants) agreed that whenever spot-market gasoline became available, a designated company would buy it at market price. This coordinated buying removed the unpredictability of the spot market as a factor in gasoline prices, stabilizing prices and letting the companies charge more at retail. The government (plaintiff) sued, alleging a Sherman Act violation. A jury found for the government, but the court of appeals reversed, ruling the arrangement should not automatically be treated as unlawful (a per se violation) without asking whether it was actually reasonable. The government appealed.