## Facts

- HBJ, a national bar review provider operating “Bar/Bri,” offered a Georgia bar review course beginning in 1976 and competed directly with BRG in Georgia from 1977 to 1979.
- In 1980, BRG and HBJ executed an agreement granting BRG an exclusive license to market HBJ’s bar review materials in Georgia and to use the “Bar/Bri” name.
- The agreement required HBJ not to compete with BRG in Georgia and required BRG not to compete with HBJ outside Georgia.
- The agreement used a revenue-sharing arrangement under which HBJ received $100 per enrolled student plus 40% of revenues above $350.
- After the agreement, BRG increased its course price from $150 to over $400.
- Law-student purchasers who contracted for BRG’s 1985 bar review course sued, alleging the agreement unlawfully increased prices in violation of Sherman Act § 1.

## Issues

1. Whether an agreement between competitors under which each party agreed not to compete in the other’s territory is per se unlawful market allocation under Sherman Act § 1.
2. Whether the arrangement avoided per se condemnation because it lacked an explicit price term and because HBJ withdrew from Georgia rather than continuing to compete there.

## Decision

- The Supreme Court reversed the Eleventh Circuit and remanded.
- The Court held the agreement was unlawful on its face under § 1.
- The Court treated the arrangement as a classic horizontal agreement to allocate territories and as a price-raising scheme supported by revenue sharing and a sharp post-agreement price increase.
- The Court rejected the view that per se market-allocation liability requires proof the parties continued competing in the same market after the agreement or that the agreement contained an express price-fixing clause.

## Legal Principles

- Horizontal agreements between competitors to allocate territories and eliminate competition are per se unlawful under Sherman Act § 1, whether the parties divide a market they both serve or reserve separate markets for each.
- A per se unlawful price-related combination does not require an express agreement on a specific price; it is enough that the arrangement is formed for the purpose and has the effect of raising or stabilizing prices.
- When a restraint is per se unlawful, courts do not apply rule-of-reason balancing or consider claimed competitive justifications.

## Conclusion

The Court held that competitors’ agreement to withdraw from each other’s territories, coupled with revenue sharing and a rapid price increase, constituted per se unlawful market allocation and price raising under Sherman Act § 1, requiring reversal and remand.


Palmer v. BRG of Ga., Inc., 498 U.S. 46 (1990)