Intra-enterprise conspiracy doctrine
Who can contract, combine, or conspire under Section 1 as a matter of law? (yes = potentially subject to liability)
- Single entities and their agents: yes
- Corporations collaborating in a joint venture: yes (American Needle)
- Corporations with some common ownership: sometimes
- Novatel: 51% ownership is sufficient for no
- Persons within a single (legal) business enterprise: no
- Parent corporation and wholly-owned subsidiary: no (Copperweld)
- Subsidiaries wholly owned by the same parent: no (Advanced Healthcare)
Caselaw:
Copperweld Corp. v. Independent Tube Corp. (1984)
- Holding: a parent corporation and a wholly-owned subsidiary cannot, as a matter of law, conspire under Section 1
- Internal coordination within one economic unit is unilateral conduct, not Section 1 violation
- FRCP Rule 12(b)(6): defendant will prevail on a motion to dismiss for failure to state a claim on which relief can be granted
- Facts: Copperweld (D) alleged to have conspired with its wholly-owned subsidiary to exclude another firm
Advanced Healthcare Serv. v. Radford (1984)
- Copperweld precludes liability for conspiracy between two wholly-owned subsidiaries of the same parent corporation
Novatel Comm. v. Cellular Tel. Supply (1986)
- 51 percent ownership sufficient for full control so entities incapable of conspiring under Copperweld
American Needle v. National Football League (2010)
- Holding: joint ventures are not exempt from conspiracy law (remands for consideration under ROR)
- Rejected by the Court, this is an agreement between competitors (NFL teams are "independent centers of decision making"): NFL Properties argues that it is a single entity for the purpose of antitrust per Copperweld
- Basis of NFL's argument: NFL Properties was joint venture outside the scope of Section 1 like in Texaco
- Rejected by the Court, this is an agreement between competitors (NFL teams are "independent centers of decision making"): NFL Properties argues that it is a single entity for the purpose of antitrust per Copperweld
- Facts: NFL forms NFL Properties (joint venture) to develop, license and market NFL-owned property. American Needle's license (independent contractor) to make NFL apparel is not renewed, sues under Section 1.
- Note: NFL gets lots of protection for its activities since it organizes competition, hence remand