## Facts

- Rebel Oil Company, Inc. and Auto Flite Oil Company, Inc. (together, Rebel) operated discount gasoline stations in the Las Vegas area that sold self-serve, cash-only gasoline.
- Atlantic Richfield Company (ARCO) sold gasoline in Las Vegas through ARCO-branded outlets and also competed at retail with Rebel through self-serve, cash-only stations.
- Most gasoline sold in Las Vegas was refined in the Los Angeles area and transported roughly 250 miles to Las Vegas via the Cal-Nev Pipeline, then sold from Las Vegas-area terminals through wholesale and retail channels.
- Rebel alleged that, from 1985 to 1989, ARCO engaged in predatory pricing by selling self-serve gasoline below marginal cost (or an accepted proxy) to gain share, weaken discount competitors, and later obtain market power.
- The parties agreed the relevant geographic market was Las Vegas, but disputed the relevant product market:
  - Rebel argued for a narrower market limited to self-serve gasoline.
  - ARCO argued for a broader market that included both self-serve and full-serve gasoline, pointing to the ability of full-service stations to convert to self-service.
- The U.S. District Court for the District of Nevada accepted ARCO’s broader product-market definition, concluded ARCO lacked sufficient market power for a predatory scheme to succeed, and granted summary judgment to ARCO on Rebel’s claims for attempted monopolization (Sherman Act § 2), conspiracy/restraint of trade (Sherman Act § 1), and primary-line price discrimination (Robinson-Patman Act § 2(a)).

## Issues

1. Whether the evidence permitted a narrower relevant product market limited to self-serve gasoline, rather than a market including both self-serve and full-serve gasoline.
2. Whether Rebel produced sufficient evidence of market power (including entry conditions) and predatory-pricing elements to create a triable issue on attempted monopolization under Sherman Act § 2, including antitrust injury.
3. Whether Rebel presented evidence sufficient to reach a jury on (a) an agreement supporting a Sherman Act § 1 claim and (b) primary-line price discrimination under the Robinson-Patman Act applying predatory-pricing standards.

## Decision

- Affirmed in part and reversed and remanded in part.
- Affirmed summary judgment for ARCO on the Sherman Act § 1 claim because Rebel did not produce evidence from which a reasonable jury could find an actionable agreement (as opposed to unilateral conduct).
- Reversed summary judgment in part on Rebel’s predatory-pricing-based theories (including Sherman Act § 2 attempted monopolization and Robinson-Patman primary-line price discrimination) because the summary-judgment record, viewed in Rebel’s favor, raised genuine disputes of material fact bearing on the proper market analysis, market power/recoupment, and resulting competitive harm.
- Remanded for further proceedings consistent with the appellate court’s market-power and predatory-pricing analysis.

## Legal Principles

- A relevant antitrust market requires both a geographic market and a product market based on reasonable interchangeability; in appropriate circumstances, a narrower submarket may be shown using practical, real-world indicia (such as distinct customers, pricing, and competitive conditions).
- Market power is commonly evaluated through market share together with structural conditions, including barriers or conditions of entry; market share alone is generally not enough if entry is sufficiently easy.
- Attempted monopolization under Sherman Act § 2 requires (1) anticompetitive or exclusionary conduct, (2) specific intent to monopolize, and (3) a dangerous probability of achieving monopoly power, assessed in light of market structure and entry conditions.
- Predatory pricing requires pricing below an accepted measure of cost (with marginal cost often approximated by average variable cost) and a plausible ability to recoup losses through later supracompetitive pricing made possible by market power.
- Antitrust injury requires harm of the type the antitrust laws address and must flow from the anticompetitive aspect of the challenged conduct; in predatory-pricing cases, injury depends on whether the pricing strategy could realistically harm competition through later recoupment.
- Robinson-Patman primary-line price discrimination claims are analyzed using the same core predatory-pricing framework applied to Sherman Act predation theories, including below-cost pricing and a dangerous probability of recoupment.
- Sherman Act § 1 requires proof of concerted action; complaints, influence, or parallel conduct without evidence of an agreement does not establish a § 1 violation.

## Conclusion

Rebel Oil held that predatory-pricing claims rise or fall on proper market analysis and proof of market power and recoupment: the Ninth Circuit agreed that Rebel’s § 1 theory failed for lack of evidence of an agreement, but it reversed summary judgment in part on Rebel’s § 2 attempted-monopolization and Robinson-Patman primary-line theories because the record raised triable disputes on the market-power and competitive-harm questions necessary to determine whether ARCO’s alleged below-cost pricing could injure competition.


Rebel Oil Co. v. Atlantic Richfield Co., 51 F.3d 1421 (1995)