## Facts

- Union Oil supplied gasoline to independent retailers through paired one-year agreements: a lease of the service-station premises and a “consignment” agreement for gasoline sales.
- Under the consignment agreement, Union Oil retained title to gasoline until sale, paid certain taxes, and set the retail selling price.
- The retailer received a minimum per-gallon commission but bore operating costs, carried insurance, and assumed most losses.
- Lease renewal was conditioned on compliance with Union Oil’s prescribed terms, including charging the company-set retail prices.
- Simpson sold gasoline below Union Oil’s set price to meet competition.
- Union Oil refused to renew Simpson’s lease and terminated the consignment agreement solely because he cut prices.
- Simpson sued for treble damages under Clayton Act § 4, alleging violations of Sherman Act §§ 1 and 2.

## Issues

1. Whether a lease-plus-“consignment” arrangement used to compel multiple independent dealers to charge company-set retail prices constitutes unlawful resale price maintenance under the Sherman Act.
2. Whether a single dealer whose lease was not renewed for price cutting suffered an “actionable wrong or damage” sufficient to sue for treble damages under Clayton Act § 4.

## Decision

- The Supreme Court reversed the Ninth Circuit and remanded.
- The Court held that resale price maintenance accomplished through this coercive “consignment” device violated the antitrust laws.
- The Court held Simpson adequately alleged actionable injury from the unlawful scheme, making summary judgment improper.
- The Court left remaining defenses and damages issues for further proceedings on remand.

## Legal Principles

- Antitrust analysis turns on economic substance; contractual labels such as “consignment” and retention of title do not immunize price-fixing conduct.
- A supplier may not use coercive devices (including lease control and termination threats) to impose resale price maintenance on independent dealers.
- The ability of a dealer to refuse to deal does not, in these circumstances, shield a supplier from Sherman Act liability when coercion is used to maintain fixed retail prices.
- An actionable private antitrust injury exists when a restraint has market impact; it is not defeated because the plaintiff is a single merchant or could be replaced by another dealer.
- The rule permitting certain patent-related price restrictions does not authorize non-patent, multi-outlet retail price control via consignment arrangements.

## Conclusion

The Court treated Union Oil’s lease-and-consignment structure as a unified scheme to compel adherence to company-set retail gasoline prices, held it unlawful resale price maintenance under the Sherman Act, and ruled that the terminated dealer stated a compensable injury under Clayton Act § 4, requiring reversal of summary judgment and remand.


Simpson v. Union Oil Co. of Cal., 377 U.S. 13 (1964)