## Facts

- Parke, Davis & Co., a pharmaceutical manufacturer, distributed hundreds of products through wholesalers and retailers, and also sold directly to some retailers in large quantities.
- It published schedules of suggested minimum resale prices and stated it would deal only with wholesalers observing the wholesale schedule; it also suggested minimum retail prices even in jurisdictions without Fair Trade laws.
- In Washington, D.C., and Richmond, Virginia (without Fair Trade laws), Parke Davis targeted discounting retailers who advertised or sold below suggested prices.
- Parke Davis representatives met individually with wholesalers and retailers, warning that Parke Davis would refuse to sell to wholesalers who failed to follow the schedule and would refuse to sell to wholesalers supplying noncomplying retailers; wholesalers indicated willingness to cooperate.
- Parke Davis told retailers it would refuse to deal with noncomplying retailers and that wholesalers would be instructed not to sell to them; it also communicated that competitors were being contacted.
- Parke Davis furnished wholesalers with lists of noncomplying retailers; Parke Davis refused to fill direct orders from those retailers, and wholesalers likewise refused to supply them, including for other Parke Davis products.
- Parke Davis permitted retailers to resume purchasing only after they gave assurances they would comply with the pricing policy.
- After learning of a federal investigation, Parke Davis stopped the program; the government nonetheless sought injunctive relief under the Sherman Act.

## Issues

1. Whether Parke Davis’s conduct was a lawful unilateral refusal to deal, or an unlawful “combination” or “conspiracy” restraining trade under the Sherman Act.
2. Whether the District Court’s conclusion of “no violation” was insulated from reversal as a factual finding, where it rested on an erroneous legal standard.
3. Whether voluntary cessation after learning of a government investigation justified dismissal without injunctive relief.

## Decision

- The Supreme Court reversed the dismissal and remanded.
- The Court held Parke Davis’s actions exceeded unilateral conduct and constituted concerted action to maintain resale prices, violating the Sherman Act, even without an express or implied contract.
- The Court held the District Court’s “no violation” determination was not binding because it rested on an erroneous interpretation of law.
- The Court held voluntary abandonment in response to government investigation did not moot the case and did not justify denying injunctive relief.
- The case was remanded with directions to enter appropriate injunctive relief unless Parke Davis presented evidence and successfully rebutted the government’s prima facie showing.

## Legal Principles

- A seller may announce resale terms and unilaterally refuse to deal with noncomplying customers, but only within the limits of unilateral conduct.
- When a manufacturer takes affirmative steps to secure adherence—by enlisting wholesalers and other retailers, coordinating refusals to deal, and reinstating supply conditional on compliance—it creates a “combination” or “conspiracy” restraining trade under the Sherman Act.
- Concerted price-maintenance conduct can violate the Sherman Act even absent a formal agreement; coordinated action and induced participation can suffice.
- A trial court’s ultimate conclusion is reversible when it is based on an erroneous legal standard, notwithstanding deference to factual findings.
- Voluntary cessation prompted by pending investigation or anticipated enforcement does not moot antitrust claims and does not, by itself, justify denying an injunction.

## Conclusion

The Court held that Parke Davis’s coordinated enforcement of suggested resale prices—using wholesalers and retailer cooperation and conditional reinstatement—constituted unlawful concerted action under the Sherman Act, and that cessation after investigation did not bar injunctive relief.


United States v. Parke, Davis & Co., 362 U.S. 29 (1960)