Price Fixing : The State Wins

Becky Price replaced her oil furnace with a propane furnace back in 2006, but the oil furnace’s pipes were still in place. Price canceled her contract for oil refills with High Pointe Oil Company, but there was a problem on November 2007, in which Price’s address was added to the list of oil fill ups and the truck driver filled up the oil pipes with 400 gallons of fuel oil which caused the destruction of Price’s house and her belongings. So, Price sued the company for the failure of not removing the oil furnace’s pipes, including for non-economic damages such as emotions and feelings.

Disregard the new tax from number three. Now assume the government imposes a price ceiling of $100 in this market, as the result of protest of price gouging by sellers. What would happen to the price and quantity in this market?

The railroad monopolies were the first to be targeted by the government. Small customers and businesses were taking huge hits from the outrageous overcharge and prices set by the monopolies. State legislatures attempted to fix this issue creating maximum rate laws, however the Supreme Court would later rule these state laws as unconstitutional in Munn v. Illinois. This ruling further enraged the public as many of these railroad monopolies were giving

and the wealth it brought, when any other competitor tried even to step foot into the oiling industry, Rockefeller dropped his prices until the rookie industry was forced out. After he ! regained monopoly, he then jacked up the prices. Sure, the people were

Procedural History: Rudy Stanko first appeared in the Montana Justice Court. There they ruled that Stanko was guilty. He then appealed and the case went to the Montana District Court and they concurred with the previous court’s decision. His last appeal lead his case to the Montana Supreme Court.

Furthermore, in Standard Oil Co., the Supreme Court stated that “The term "monopoly,"… as used in the Sherman Act was intended to cover such monopolies or attempts to monopolize as were known to exist in this country; those which were defined as illegal at common law by the States, when applied to intrastate commerce.” The Supreme Court went on to further state that “the principles of the common law applied to interstate as well as to intrastate commerce.”

In the period of 1954 to 1978 cooperative federalism was being used in the United States. This type of federalism wished to achieve fairness all round, which at the time was a practical response to the policy challenges during this time. Cooperative federalism responded to these challenges of the market failure, postwar affluence, racism, urban poverty, environmentalism, and individual rights (140). Within each of these challenges, cooperation gained legitimacy for example in the market failure of 1929, the Depression, the citizens need the federal government to step up and help aid the state and local governments in order to help persons and places from the ills of capitalism (140-141).The obstacles that were in the way of this type of federalism was that the state and the localities must work with one another to pursue the national goals.

The facts of this case are that Congress has enacted the Emergency Bubblegum Price Control Act. Under it, the Price Administrator was given the authority to “establish such maximum price or prices that in his judgment will be generally fair and equitable and will effectuate the purposes of the act,” at any time when, in the Price Administrator’s judgment, bubblegum prices rise or threatened to rise to an extent or in a manner inconsistent with the purposes of the Act. The issue at hand is whether the Act articulates an “intelligible principle” sufficient to constitute a valid delegation of power.

State governments are generally immune from antitrust lawsuits. The United States Supreme Court in a landmark case, Parker v. Brown, decided that antitrust laws are not meant to stop state governments from regulating the industries and markets in their states. The Court held that as long as the antitrust conduct was the result of the State exercising its power as a sovereign, then the state would receive immunity from antitrust law. Thus, after Parker, the test for immunity centered on whether the government action could be characterized as deriving from the sovereign power of the state. The Court has interpreted this to mean actions that arise directly from state legislation or state elected officials. Thus, in general, actions taken by state governments are immune from antitrust law.

On Monday October 31st, 2016, a pipeline exploded and shutdown the flow of gasoline and diesel on the East Coast which could effect pump prices for a couple of weeks. The explosion took place near the site of a gas spill that happened back in September that caused supply shortages and also an increase of prices in the Southeast. The Colonial Pipeline was forced to shutdown both of their mainlines. The New York Harbor’s gasoline soared from anywhere from 15% up to $1.64 a gallon. A little before 3 pm, the explosion occurred. Gasoline was lit and set off a huge fire that was not controlled and it continued to burn for almost the rest of the evening. Anyone who drives should expect price increases. The fire and emergency persons allowed the fire

From the recent case data, ExxonMobil has not acted irresponsibility in pricing its gasoline products. Outside of the grocery industry, I have not heard of any business segments surviving on less than a 5% profit margin. In reading that ExxonMobil reported only a net profit of 8.5%3, it is difficult to state that the firm over priced its products to reap abnormal profits. Although Mr. Lee Raymond’s $400 million retirement seems grossly out of proportion in utilitarian terms, adding these funds back into the firm’s bottom line would not change the profit results. With profit margins of less than 10%, it is unlikely that ExxonMobil would be able to keep the price of gasoline fixed if sweet crude oil were to increase from $80 per barrel to $88. This 10% increase in raw material cost would have to be passed through to the customer in the form of higher prices for the firm to survive.

"Which will effectuate the purposes of the Act" has circular logic as the price setting is both the means and the purpose in itself. The only meaningful instruction is "in his [the Price Administrator's] judgment", which effectively gives the Administrator a free hand in setting the price maximums.

I think that it was fair for the Commerce Department to establish a new minimum floor price. It showed that the department realized that Mexico had a competitive advantage against Florida and they tried to make the best out of the situation. This price floor had been in for 16 years prior to be changed and I think it was a necessary change. If they would've filed an antidumping suit it would have disarranged the whole agreement. Tomato producers all over the United States would've benefitted from an antidumping suit since it could have possible deterred Mexican farmers from wanting to export to the United States of America. An important fact to note is that states like Florida and California would have been able to capture some of the tomato market share within the United States of

BACKGROUND: The case revolved around Pearl Jam, a famous Seattle based rock band, and Ticket master Corporation, nation’s premier ticket distribution company. The case described the conflict between the two parties that led to an antitrust violation case against Ticketmaster. The band advocated low priced tickets for its concerts and insisted Ticketmaster to lower their service charges, thereby bringing down the ticket cost for its fans. ISSUE: As indicated from the case, Pearl Jam filed a complaint alleging that Ticket Master was intending to monopolize the ticket service industry, using its market dominance and power to charge exorbitant service charges.

5. Was the Commerce Department right to establish a new minimum floor price, rather than scrap the agreement and file an antidumping suit against Mexican tomato producers? Who would have suffered?