## Facts

- Canadian mining/smelting companies produced sulfuric acid as a byproduct and faced environmental and cost pressures to capture and dispose of sulfur.
- U.S. sulfuric acid producers had higher costs and feared low-cost Canadian supply would depress U.S. prices.
- Canadian producers entered arrangements with U.S. producers/distributors under which certain U.S. firms would stop producing sulfuric acid (“shutdown” agreements) and instead distribute Canadian sulfuric acid.
- A class of sulfuric acid purchasers alleged the agreements reduced U.S. output and raised U.S. sulfuric acid prices, constituting a § 1 Sherman Act price-fixing conspiracy.
- The district court certified a purchaser class, later ruled plaintiffs could not proceed on a per se theory, and dismissed the case after plaintiffs declined to try it under the rule of reason.
- Plaintiffs appealed the per se ruling; defendants cross-appealed seeking class decertification only if the dismissal were reversed.

## Issues

1. Whether the shutdown and distribution arrangements constituted per se unlawful price fixing under § 1 of the Sherman Act.
2. If per se treatment was unavailable, whether dismissal was proper where plaintiffs refused to proceed under a rule-of-reason theory.
3. Whether class decertification should occur contingent on reversal of the merits dismissal.

## Decision

- The court of appeals affirmed the dismissal.
- The alleged conduct was not subject to per se condemnation; any challenge had to proceed under the rule of reason.
- Because plaintiffs elected not to pursue a rule-of-reason trial, the case properly ended in dismissal.
- The defendants’ contingent cross-appeal seeking class decertification was moot given affirmance.

## Legal Principles

- Per se treatment under Sherman Act § 1 is limited to restraints that are plainly anticompetitive and lack plausible legitimate or efficiency justifications.
- When alleged price and output effects are bound up with vertical distribution restraints or joint-venture-like cooperation, courts generally require rule-of-reason analysis rather than per se condemnation.
- A supplier may, in appropriate circumstances, impose distributor restrictions (including exclusivity or limits on carrying competing lines), and such restraints typically require an effects-based assessment.
- If a court restricts a plaintiff to a rule-of-reason theory and the plaintiff declines to proceed on that basis, dismissal on the merits may follow.

## Conclusion

The Seventh Circuit held that the shutdown/distribution arrangements had plausible legitimate business explanations and potential efficiency justifications, so they could not be treated as per se illegal price fixing; plaintiffs’ choice not to proceed under the rule of reason supported dismissal, rendering the class-decertain contingent cross-appeal moot.


In re Sulfuric Acid Antitrust Litig., 703 F.3d 1004 (7th Cir. 2012)