White Motor Co. v. United States, 372 U.S. 253 (1963)

Topics:  White

From the U.S. Government Printing Office via GPO Access
 
Case:   WHITE MOTOR CO. V. UNITED STATES 

Case #: 372US253


NO. 54.  ARGUED JANUARY 14-15, 1963.  - DECIDED MARCH 4, 1963.  - 194 F.
SUPP. 562, REVERSED. 


THE UNITED STATES BROUGHT THIS CIVIL SUIT TO RESTRAIN ALLEGED
VIOLATIONS OF THE SHERMAN ACT BY APPELLANT, A MANUFACTURER OF TRUCKS,
AND MOVED FOR A SUMMARY JUDGMENT, CONTENDING THAT APPELLANT'S FRANCHISE
CONTRACTS CONSTITUTED PER SE VIOLATIONS OF SECS. 1 AND 3.  SUCH
CONTRACTS RESTRICTED THE GEOGRAPHIC AREAS WITHIN WHICH DISTRIBUTORS AND
DEALERS WERE PERMITTED TO SELL TRUCKS AND PARTS, RESTRICTED THE PERSONS
TO WHOM DISTRIBUTORS AND DEALERS WERE PERMITTED TO SELL TRUCKS FOR
RESALE, PRECLUDED DISTRIBUTORS AND DEALERS FROM SELLING TRUCKS TO ANY
FEDERAL OR STATE GOVERNMENT OR SUBDIVISION THEREOF AND OTHER LARGE
CUSTOMERS WITHOUT PERMISSION OF APPELLANT, FIXED THE RESALE PRICE FOR
TRUCKS AND PARTS SOLD BY DISTRIBUTORS TO DEALERS FOR RETAIL SALE, AND
FIXED THE RETAIL PRICE OF PARTS AND ACCESSORIES SOLD BY DISTRIBUTORS
AND DEALERS TO CERTAIN DESIGNATED CUSTOMERS.  APPELLANT DID NOT FILE
ANY AFFIDAVIT DENYING THE GOVERNMENT'S ALLEGATIONS; BUT IT DID FILE A
BRIEF CONTAINING ALLEGATIONS OF FACT, DENYING THAT ITS AGREEMENTS WERE
ILLEGAL, AND CONTENDING THAT IT SHOULD BE ALLOWED TO PRESENT, AT TRIAL,
EVIDENCE OF THE REASONABLENESS OF ITS CONTRACTS WHEN CONSIDERED IN
THEIR OWN UNIQUE BUSINESS AND ECONOMIC CONTEXT.  THE DISTRICT COURT
GRANTED SUMMARY JUDGMENT FOR THE GOVERNMENT.  APPELLANT APPEALED
DIRECTLY TO THIS COURT FROM ALL BUT THE PRICE-FIXING ASPECTS OF THE
JUDGMENT.  HELD:  APART FROM THE PRICE-FIXING ASPECTS OF THE CASE,
SUMMARY JUDGMENT WAS IMPROPERLY GRANTED, AND THE LEGALITY OF THE
TERRITORIAL AND CUSTOMER LIMITATIONS OF APPELLANT'S FRANCHISE CONTRACTS
SHOULD BE DETERMINED ONLY AFTER A TRAIL.  PP. 254-264. 

(A)  SUMMARY JUDGMENTS HAVE A PLACE IN THE ANTITRUST FIELD; BUT THEY
ARE NOT APPROPRIATE "WHERE MOTIVE AND INTENT PLAY LEADING ROLES." 
POLLER V. COLUMBIA BROADCASTING SYSTEM, 368 U.S. 464.  PP. 259-261. 

(B)  THIS IS THE FIRST CASE INVOLVING A TERRITORIAL RESTRICTION IN A
VERTICAL ARRANGEMENT; AND THIS COURT KNOWS TOO LITTLE OF THE ACTUAL
IMPACT OF THAT RESTRICTION AND THE ONE RESPECTING CUSTOMERS TO REACH A
CONCLUSION ON THE BARE BONES OF THE DOCUMENTARY EVIDENCE BEFORE IT.
PP. 261-264. 

WHITE MOTOR CO. V. UNITED STATES. 

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF OHIO. 

MR. JUSTICE DOUGLAS DELIVERED THE OPINION OF THE COURT. 

THIS IS A CIVIL SUIT UNDER THE ANTITRUST LAWS THAT WAS DECIDED BELOW
ON A MOTION FOR SUMMARY JUDGMENT.  RULE 56 OF THE RULES OF CIVIL
PROCEDURE AT THE TIME OF THE HEARING BELOW PERMITTED SUMMARY JUDGMENT
TO BE ENTERED "IF THE PLEADINGS, DEPOSITIONS, AND ADMISSIONS ON FILE,
TOGETHER WITH THE AFFIDAVITS, IF ANY, SHOW THAT THERE IS NO GENUINE
ISSUE AS TO ANY MATERIAL FACT AND THAT THE MOVING PARTY IS ENTITLED TO
A JUDGMENT AS A MATTER OF LAW."  SINCE THAT TIME, AN AMENDMENT TO RULE
56, WHICH IS INCLUDED IN PROPOSED CHANGES SUBMITTED TO CONGRESS
PURSUANT TO 28 U.S.C. SEC. 2072, WOULD ADD THE FOLLOWING REQUIREMENT: 

"WHEN A MOTION FOR SUMMARY JUDGMENT IS MADE AND SUPPORTED AS PROVIDED
IN THIS RULE, AN ADVERSE PARTY MAY NOT REST UPON THE MERE ALLEGATIONS
OR DENIALS OF HIS PLEADING, BUT HIS RESPONSE, BY AFFIDAVITS OR AS
OTHERWISE PROVIDED IN THIS RULE, MUST SET FORTH SPECIFIC FACTS SHOWING
THAT THERE IS A GENUINE ISSUE FOR TRIAL.  IF HE DOES NOT SO RESPOND,
SUMMARY JUDGMENT, IF APPROPRIATE, SHALL BE ENTERED AGAINST HIM." 

BUT NO SUCH REQUIREMENT WAS PRESENT WHEN THE PRESENT CASE WAS
DECIDED; AND APPELLANT, THOUGH STRENUOUSLY OPPOSING SUMMARY JUDGMENT
AND DEMANDING A TRIAL, SUBMITTED NO SUCH AFFIDAVITS.  IT DID, HOWEVER,
IN ITS BRIEF IN OPPOSITION TO THE MOTION FOR SUMMARY JUDGMENT, MAKE
ALLEGATIONS CONCERNING FACTUAL MATTERS WHICH THE DISTRICT COURT THOUGHT
WERE PROPERLY RAISED AND WHICH WE THINK WERE RELEVANT TO A DECISION ON
THE MERITS. 

APPELLANT MANUFACTURES TRUCKS AND SELLS THEM (AND PARTS) TO
DISTRIBUTORS, (FN1) TO DEALERS, AND TO VARIOUS LARGE USERS.  BOTH THE
DISTRIBUTORS AND DEALERS SELL TRUCKS (AND PARTS) TO USERS.  MOREOVER,
SOME DISTRIBUTORS RESELL TRUCKS (AND PARTS) TO DEALERS, SELECTED WITH
APPELLANT'S CONSENT.  ALL OF THE DEALERS SELL TRUCKS (AND PARTS) ONLY
TO USERS.  THE PRINCIPAL PRACTICES CHARGED AS VIOLATIONS OF SECS. 1 AND
3 OF THE SHERMAN ACT, 26 STAT. 209, 15 U.S.C. SECS. 1, 3, CONCERN
LIMITATIONS OR RESTRICTIONS ON THE TERRITORIES WITHIN WHICH
DISTRIBUTORS OR DEALERS MAY SELL AND LIMITATIONS OR RESTRICTIONS ON THE
PERSONS OR CLASSES OF PERSONS TO WHOM THEY MAY SELL.  TYPICAL OF THE
TERRITORIAL CLAUSE IS THE FOLLOWING: 

"DISTRIBUTOR IS HEREBY GRANTED THE EXCLUSIVE RIGHT, EXCEPT AS
HEREINAFTER PROVIDED, TO SELL DURING THE LIFE OF THIS AGREEMENT, IN THE
TERRITORY DESCRIBED BELOW, WHITE AND AUTOCAR TRUCKS PURCHASED FROM
COMPANY HEREUNDER. 

"STATE OF CALIFORNIA:  TERRITORY TO CONSIST OF ALL OF SONOMA COUNTY,
SOUTH OF A LINE STARTING AT THE WESTERN BOUNDARY, OR PACIFIC COAST,
PASSING THROUGH THE CITY OF BODEGA, AND EXTENDING DUE EAST TO THE EAST
BOUNDARY LINE OF SONOMA COUNTY, WITH THE EXCEPTION OF THE SALE OF FIRE
TRUCK CHASSIS TO THE STATE OF CALIFORNIA AND ALL POLITICAL SUBDIVISIONS
THEREOF. 

"DISTRIBUTOR AGREES TO DEVELOP THE AFOREMENTIONED TERRITORY TO THE
SATISFACTION OF COMPANY, AND NOT TO SELL ANY TRUCKS PURCHASED HEREUNDER
EXCEPT IN ACCORDANCE WITH THIS AGREEMENT, AND NOT TO SELL SUCH TRUCKS
EXCEPT TO INDIVIDUALS, FIRMS, OR CORPORATIONS HAVING A PLACE OF
BUSINESS AND/OR PURCHASING HEADQUARTERS IN SAID TERRITORY." 

TYPICAL OF THE CUSTOMER CLAUSE IS THE FOLLOWING: 

"DISTRIBUTOR FURTHER AGREES NOT TO SELL NOR TO AUTHORIZE HIS DEALERS
TO SELL SUCH TRUCKS TO ANY FEDERAL OR STATE GOVERNMENT OR ANY
DEPARTMENT OR POLITICAL SUBDIVISION THEREOF, UNLESS THE RIGHT TO DO SO
IS SPECIFICALLY GRANTED BY COMPANY IN WRITING." 

THESE PROVISIONS, APPLICABLE TO DISTRIBUTORS AND DEALERS ALIKE, ARE
CLAIMED BY APPELLEE TO BE PER SE VIOLATIONS OF THE SHERMAN ACT.  (FN2)
THE DISTRICT COURT ADOPTED THAT VIEW AND GRANTED SUMMARY JUDGMENT
ACCORDINGLY.  194 F. SUPP. 562.  WE NOTED PROBABLE JURISDICTION.  369
U.S. 858.  SEE 15 U.S.C. SEC. 29. 

APPELLANT, IN ARGUING FOR A TRIAL OF THE CASE ON THE MERITS, MADE THE
FOLLOWING REPRESENTATIONS TO THE DISTRICT COURT:  THE TERRITORIAL
CLAUSES ARE NECESSARY IN ORDER FOR APPELLANT TO COMPETE WITH THOSE WHO
MAKE OTHER COMPETITORY KINDS OF TRUCKS; APPELLANT COULD THEORETICALLY
HAVE ITS OWN RETAIL OUTLETS THROUGHOUT THE COUNTRY AND SELL TO USERS
DIRECTLY; THAT METHOD, HOWEVER, IS NOT FEASIBLE AS IT ENTAILS A COSTLY
AND EXTENSIVE SALES ORGANIZATION; THE ONLY FEASIBLE METHOD IS THE
DISTRIBUTOR OR DEALER SYSTEM; FOR THAT SYSTEM TO BE EFFECTIVE AGAINST
THE EXISTING COMPETITION OF THE LARGER COMPANIES, A DISTRIBUTOR OR
DEALER MUST MAKE VIGOROUS AND INTENSIVE EFFORTS IN A RESTRICTED
TERRITORY, AND IF HE IS TO BE HELD RESPONSIBLE FOR ENERGETIC
PERFORMANCE, IT IS FAIR, REASONABLE, AND NECESSARY THAT APPELLANT
PROTECT HIM AGAINST INVASIONS OF HIS TERRITORY BY OTHER DISTRIBUTORS OR
DEALERS OF APPELLANT; THAT APPELLANT IN ORDER TO OBTAIN MAXIMUM SALES
IN A GIVEN AREA MUST INSIST THAT ITS DISTRIBUTORS AND DEALERS
CONCENTRATE ON TRYING TO TAKE SALES AWAY FROM OTHER COMPETING TRUCK
MANUFACTURERS RATHER THAN FROM EACH OTHER.  APPELLANT WENT ON TO SAY: 

"THE PLAIN FACT IS, AS WE EXPECT TO BE ABLE TO SHOW TO THE
SATISFACTION OF THE COURT AT A TRIAL OF THIS CASE ON THE MERITS, THAT
THE OUTLAWING OF EXCLUSIVE DISTRIBUTORSHIPS AND DEALERSHIPS IN
SPECIFIED TERRITORIES WOULD REDUCE COMPETITION IN THE SALE OF MOTOR
TRUCKS AND NOT FOSTER SUCH COMPETITION." 

AS TO THE CUSTOMER CLAUSES, APPELLANT REPRESENTED TO THE DISTRICT
COURT THAT ONE OF THEIR PURPOSES WAS TO ASSURE APPELLANT "THAT
'NATIONAL ACCOUNTS,' 'FLEET ACCOUNTS' AND FEDERAL AND STATE GOVERNMENTS
AND DEPARTMENTS AND POLITICAL SUBDIVISIONS THEREOF, WHICH ARE CLASSES
OF CUSTOMERS WITH RESPECT TO WHICH THE DEFENDANT IS IN ESPECIALLY
SEVERE COMPETITION WITH THE MANUFACTURERS OF OTHER MAKES OF TRUCKS AND
WHICH ARE LIKELY TO HAVE A CONTINUING VOLUME OF ORDERS TO PLACE, SHALL
NOT BE DEPRIVED OF THEIR APPROPRIATE DISCOUNTS ON THEIR PURCHASES OF
REPAIR PARTS AND ACCESSORIES FROM ANY DISTRIBUTOR OR DEALER, WITH THE
RESULT OF BECOMING DISCONTENTED WITH THE WHITE MOTOR COMPANY AND THE
TREATMENT THEY RECEIVE WITH REFERENCE TO THE PRICES OF REPAIR PARTS AND
ACCESSORIES FOR WHITE TRUCKS." 

THE AGREEMENTS FIXING PRICES OF PARTS AND ACCESSORIES TO THESE
CUSTOMERS (FN3) WERE, ACCORDING TO APPELLANT, ONLY AN ADJUNCT TO THE
CUSTOMER RESTRICTION CLAUSES AND AMOUNTED MERELY TO AN AGREEMENT TO
GIVE THESE CLASSES OF CUSTOMERS THEIR PROPER DISCOUNTS.  "IN A WAY THIS
AFFECTS THE PRICES WHICH THESE CLASSES OF CUSTOMERS HAVE TO PAY FOR
SUCH PARTS AND ACCESSORIES, BUT IT AFFECTS, AS A PRACTICAL MATTER, ONLY
SPARE AND REPAIR PARTS AND ACCESSORIES AND IT AFFECTS ONLY THE
DISCOUNTS TO BE GIVEN TO THESE PARTICULAR CLASSES OF CUSTOMERS.  THE
PROVISIONS ARE NECESSARY IF THE DEFENDANT'S FUTURE SALES TO 'NATIONAL
ACCOUNTS,' 'FLEET ACCOUNTS' AND FEDERAL AND STATE GOVERNMENTS AND
DEPARTMENTS AND POLITICAL SUBDIVISIONS THEREOF, IN COMPETITION WITH
OTHER TRUCK MANUFACTURERS, ARE NOT TO BE SERIOUSLY JEOPARDIZED." 

WHITE ALSO ARGUED BELOW: 

"ON PRINCIPLE, THERE IS NO REASON WHATSOEVER WHY A MANUFACTURER
SHOULD NOT HAVE ONE DISTRIBUTOR WHO IS LIMITED TO SELLING TO ONE CLASS
OF CUSTOMERS AND ANOTHER DISTRIBUTOR WHO IS LIMITED TO SELLING TO
ANOTHER CLASS OF CUSTOMERS OR WHY A DISTRIBUTOR SHOULD NOT BE LIMITED
TO ONE CLASS OF CUSTOMERS AND THE MANUFACTURER RESERVE THE RIGHT TO
SELL TO ANOTHER CLASS OF CUSTOMERS.  THERE ARE MANY CIRCUMSTANCES UNDER
WHICH THERE COULD BE NO POSSIBLE OBJECTION TO LIMITING THE CLASS OF
CUSTOMERS TO WHICH DISTRIBUTORS OR DEALERS RESELL GOODS, AND THERE ARE
MANY REASONS WHY IT WOULD BE REASONABLE AND FOR THE PUBLIC INTEREST
THAT DISTRIBUTORS OR DEALERS SHOULD BE LIMITED TO RESELLING TO CERTAIN
CLASSES OF CUSTOMERS. 

"IN THE INSTANT CASE, IT IS BOTH REASONABLE AND NECESSARY THAT THE
DISTRIBUTORS (EXCEPT FOR SALES TO APPROVED DEALERS) AND DIRECT DEALERS
AND DEALERS BE LIMITED TO SELLING TO THE PURCHASING PUBLIC, IN ORDER
THAT THEY MAY BE COMPELLED TO DEVELOP PROPERLY THE FULL POTENTIAL OF
SALES OF WHITE TRUCKS IN THEIR RESPECTIVE TERRITORIES, AND TO ASSURE
THE WHITE MOTOR COMPANY THAT THE PERSONS SELLING WHITE TRUCKS TO THE
PURCHASING PUBLIC SHALL BE FAIR AND HONEST, TO THE END OF INCREASING
AND PERPETUATING SALES OF WHITE TRUCKS IN COMPETITION WITH OTHER MAKES
OF TRUCKS; AND IT IS REASONABLE AND NECESSARY THAT THE WHITE MOTOR
COMPANY RESERVE TO ITSELF THE EXCLUSIVE RIGHT TO SELL WHITE TRUCKS TO
FEDERAL AND STATE GOVERNMENTS OR ANY DEPARTMENT OR POLITICAL
SUBDIVISION THEREOF RATHER THAN TO SELL SUCH TRUCKS TO SUCH GOVERNMENTS
OR DEPARTMENTS OR POLITICAL SUBDIVISIONS THEREOF THROUGH DISTRIBUTORS
OR DEALERS, AND THE WHITE MOTOR COMPANY SHOULD HAVE A PERFECT RIGHT SO
TO DO. 

"THEREFORE, BASED BOTH ON THE DECISIONS OF THE FEDERAL COURTS AND ON
PRINCIPLE, THE LIMITATIONS ON THE CLASSES OF CUSTOMERS TO SHOM
DISTRIBUTORS OR DEALERS MAY SELL WHITE TRUCKS ARE NOT ONLY NOT ILLEGAL
PER SE, AS THE PLAINTIFF MUST PROVE TO SUCCEED ON ITS MOTION FOR
SUMMARY JUDGMENT, BUT THESE LIMITATIONS HAVE PROPER PURPOSES AND
EFFECTS AND ARE FAIR AND REASONABLE AND NOT VIOLATIVE OF THE ANTITRUST
LAWS AS BEING IN UNREASONABLE RESTRAINT OF COMPETITION OR TRADE AND
COMMERCE." 

IN THIS COURT APPELLANT DEFENDS THE CUSTOMER CLAUSES ON THE GROUND
THAT "THE ONLY SURE WAY TO MAKE CERTAIN THAT SOMETHING REALLY IMPORTANT
IS DONE RIGHT, IS TO DO IT FOR ONESELF.  THE SIZE OF THE ORDERS, THE
TECHNICALITIES OF BIDDING AND DELIVERY, AND OTHER FACTORS ALL PLAY A
PART IN THIS DECISION." 

SUMMARY JUDGMENTS HAVE A PLACE IN THE ANTITRUST FIELD, AS ELSEWHERE,
THOUGH, AS WE WARNED IN POLLER V. COLUMBIA BROADCASTING SYSTEM, 368
U.S. 464, 473, THEY ARE NOT APPROPRIATE "WHERE MOTIVE AND INTENT PLAY
LEADING ROLES."  SOME OF THE LAW IN THIS AREA IS SO WELL DEVELOPED THAT
WHERE, AS HERE, THE GIST OF THE CASE TURNS ON DOCUMENTARY EVIDENCE, THE
RULE AT TIMES CAN BE DIVINED WITHOUT A TRIAL. 

WHERE THE SALE OF AN UNPATENTED PRODUCT IS TIED TO A PATENTED
ARTICLE, THAT IS A PER SE VIOLATION SINCE IT IS A BALD EFFORT TO
ENLARGE THE MONOPOLY OF THE PATENT BEYOND ITS TERMS.  MERCOID CORP. V.
HONEYWELL CO., 320 U.S. 680, 684; INTERNATIONAL SALT CO. V. UNITED
STATES, 332 U.S. 392, 395-396.  AND SEE ETHYL GASOLINE CORP. V. UNITED
STATES, 309 U.S. 436.  IF COMPETITORS AGREE TO DIVIDE MARKETS, THEY RUN
AFOUL OF THE ANTITRUST LAWS.  TIMKEN ROLLER BEARING CO. V. UNITED
STATES, 341 U.S. 593.  GROUP BOYCOTTS ARE ANOTHER EXAMPLE OF A PER SE
VIOLATION.  FASHION ORIGINATORS' GUILD V. FEDERAL TRADE COMM'N, 312
U.S. 457; KLOR'S V. BROADWAY-HALE STORES, 359 U.S. 207.  PRICE-FIXING
ARRANGEMENTS, BOTH VERTICAL (UNITED STATES V. PARKE, DAVIS & CO., 362
U.S. 29; DR. MILES MEDICAL CO. V. PARK & SONS, 220 U.S. 373) AND
HORIZONTAL (UNITED STATES V. SOCONY-VACUUM OIL CO., 310 U.S. 150;
KIEFER-STEWART CO. V. SEAGRAM & SONS, 340 U.S. 211), HAVE ALSO BEEN
HELD TO BE PER SE VIOLATIONS OF THE ANTITRUST LAWS; AND A TRIAL TO SHOW
THEIR NATURE, EXTENT, AND DEGREE IS NO LONGER NECESSARY. 

AS ALREADY STATED, THERE WAS PRICE FIXING HERE AND THAT PART OF THE
INJUNCTION ISSUED BY THE DISTRICT COURT IS NOT NOW CHALLENGED.  IN ANY
PRICE-FIXING CASE RESTRICTIVE PRACTICES ANCILLARY TO THE PRICE-FIXING
SCHEME ARE ALSO QUITE PROPERLY RESTRAINED.  SUCH WAS UNITED STATES V.
BAUSCH & LOMB CO., 321 U.S. 707, WHERE PRICE FIXING WAS "AN INTEGRAL
PART OF THE WHOLE DISTRIBUTING SYSTEM" (ID., 720) INCLUDING CUSTOMER
RESTRICTIONS.  NO SUCH FINDING WAS MADE IN THIS CASE; AND WHETHER OR
NOT THE FACTS WOULD PERMIT ONE WE DO NOT STOP TO INQUIRE. 

APPELLANT APPARENTLY MAINTAINED TWO TYPES OF PRICE-FIXING
AGREEMENTS.  UNDER THE FIRST, A DISTRIBUTOR WAS ALLOWED TO APPOINT
DEALERS UNDER HIM, BUT EACH DISTRIBUTOR HAD TO AGREE WITH APPELLANT
THAT HE WOULD CHARGE THE DEALERS THE SAME PRICE FOR TRUCKS THAT
APPELLANT CHARGED ITS DIRECT DEALERS.  THE AGREEMENT AFFECTED ONLY FIVE
PERCENT OF THE TRUCKS SOLD BY APPELLANT.  AND THERE WERE NO PRICE
FIXING PROVISIONS PERTAINING TO TRUCK SALES TO ULTIMATE PURCHASERS. 
THE OTHER PRICE-FIXING ARRANGEMENT REQUIRED ALL DISTRIBUTORS AND
DEALERS TO GIVE "NATIONAL ACCOUNTS," "FLEET ACCOUNTS," AND GOVERNMENTAL
AGENCIES THE SAME DISCOUNT ON PARTS AND ACCESSORIES AS WHITE GAVE
THEM.  NO FIGURES ARE GIVEN, BUT IT WAS ASSUMED BY THE DISTRICT COURT
THAT THE AMOUNT OF COMMERCE INVOLVED UNDER THIS AGREEMENT WAS
RELATIVELY SMALL.  WITHOUT MORE DETAILED FINDINGS WE THEREFORE CANNOT
SAY THAT THE CASE IS GOVERNED BY UNITED STATES V. BAUSCH & LOMB CO.,
SUPRA. 

WE ARE ASKED TO EXTEND THE HOLDING IN TIMKEN ROLLER BEARING CO. V.
UNITED STATES, SUPRA (WHICH BANNED HORIZONTAL ARRANGEMENTS AMONG
COMPETITORS TO DIVIDE TERRITORY), TO A VERTICAL ARRANGEMENT BY ONE
MANUFACTURER RESTRICTING THE TERRITORY OF HIS DISTRIBUTORS OR DEALERS. 
WE INTIMATE NO VIEW ONE WAY OR THE OTHER ON THE LEGALITY OF SUCH AN
ARRANGEMENT, FOR WE BELIEVE THAT THE APPLICABLE RULE OF LAW SHOULD BE
DESIGNED AFTER A TRIAL. 

THIS IS THE FIRST CASE INVOLVING A TERRITORIAL RESTRICTION IN A
VERTICAL ARRANGEMENT; AND WE KNOW TOO LITTLE OF THE ACTUAL IMPACT OF
BOTH THAT RESTRICTION AND THE ONE RESPECTING CUSTOMERS TO REACH A
CONCLUSION ON THE BARE BONES OF THE DOCUMENTARY EVIDENCE BEFORE US. 
STANDARD OIL CO. V. UNITED STATES, 221 U.S. 1, 62, READ INTO THE
SHERMAN ACT THE "RULE OF REASON."  THAT "RULE OF REASON" NORMALLY
REQUIRES AN ASCERTAINMENT OF THE FACTS PECULIAR TO THE PARTICULAR
BUSINESS.  AS STATED IN CHICAGO BOARD OF TRADE V. UNITED STATES, 246
U.S. 231, 238: 

"EVERY AGREEMENT CONCERNING TRADE, EVERY REGULATION OF TRADE,
RESTRAINS.  TO BIND, TO RESTRAIN, IS OF THEIR VERY ESSENCE.  THE TRUE
TEST OF LEGALITY IS WHETHER THE RESTRAINT IMPOSED IS SUCH AS MERELY
REGULATES AND PERHAPS THEREBY PROMOTES COMPETITION OR WHETHER IT IS
SUCH AS MAY SUPPRESS OR EVEN DESTROY COMPETITION.  TO DETERMINE THAT
QUESTION THE COURT MUST ORDINARILY CONSIDER THE FACTS PECULIAR TO THE
BUSINESS TO WHICH THE RESTRAINT IS APPLIED; ITS CONDITION BEFORE AND
AFTER THE RESTRAINT WAS IMPOSED; THE NATURE OF THE RESTRAINT AND ITS
EFFECT, ACTUAL OR PROBABLE.  THE HISTORY OF THE RESTRAINT, THE EVIL
BELIEVED TO EXIST, THE REASON FOR ADOPTING THE PARTICULAR REMEDY, THE
PURPOSE OR END SOUGHT TO BE ATTAINED, ARE ALL RELEVANT FACTS.  THIS IS
NOT BECAUSE A GOOD INTENTION WILL SAVE AN OTHERWISE OBJECTIONABLE
REGULATION OR THE REVERSE; BUT BECAUSE KNOWLEDGE OF INTENT MAY HELP THE
COURT TO INTERPRET FACTS AND TO PREDICT CONSEQUENCES." 

WE RECENTLY REVIEWED PER SE VIOLATIONS OF THE ANTITRUST LAWS IN
NORTHERN PAC. R. CO. V. UNITED STATES, 356 U.S. 1.  THAT CATEGORY OF
ANTITRUST VIOLATIONS IS MADE UP OF "AGREEMENTS OR PRACTICES WHICH
BECAUSE OF THEIR PERNICIOUS EFFECT ON COMPETITION AND LACK OF ANY
REDEEMING VIRTUE ARE CONCLUSIVELY PRESUMED TO BE UNREASONABLE AND
THEREFORE ILLEGAL WITHOUT ELABORATE INQUIRY AS TO THE PRECISE HARM THEY
HAVE CAUSED OR THE BUSINESS EXCUSE FOR THEIR USE."  ID., P. 5.  TYING
ARRANGEMENTS OR AGREEMENTS BY A PARTY "TO SELL ONE PRODUCT BUT ONLY ON
THE CONDITION THAT THE BUYER ALSO PURCHASES A DIFFERENT (OR TIED)
PRODUCT, OR AT LEAST AGREES THAT HE WILL NOT PURCHASE THAT PRODUCT FROM
ANY OTHER SUPPLIER" (ID., PP. 5-6) MAY FALL IN THAT CATEGORY, THOUGH
NOT NECESSARILY SO. 

"THEY ARE UNREASONABLE IN AND OF THEMSELVES WHENEVER A PARTY HAS
SUFFICIENT ECONOMIC POWER WITH RESPECT TO THE TYING PRODUCT TO
APPRECIABLY RESTRAIN FREE COMPETITION IN THE MARKET FOR THE TIED
PRODUCT AND A 'NOT INSUBSTANTIAL' AMOUNT OF INTERSTATE COMMERCE IS
AFFECTED  ..  .   OF COURSE WHERE THE SELLER HAS NO CONTROL OR
DOMINANCE OVER THE TYING PRODUCT SO THAT IT DOES NOT REPRESENT AN
EFFECTUAL WEAPON TO PRESSURE BUYERS INTO TAKING THE TIED ITEM ANY
RESTRAINT OF TRADE ATTRIBUTABLE TO SUCH TYING ARRANGEMENTS WOULD
OBVIOUSLY BE INSIGNIFICANT AT MOST.  AS A SINGLE EXAMPLE, IF ONE OF A
DOZEN FOOD STORES IN A COMMUNITY WERE TO REFUSE TO SELL FLOUR UNLESS
THE BUYER ALSO TOOK SUGAR IT WOULD HARDLY TEND TO RESTRAIN COMPETITION
IN SUGAR IF ITS COMPETITORS WERE READY AND ABLE TO SELL FLOUR BY
ITSELF."  ID., PP. 6-7. 

WE RECENTLY NOTED THE IMPORTANCE OF THE NATURE OF THE TYING
ARRANGEMENTS IN ITS FACTUAL SETTING: 

"THUS, UNLESS THE TYING DEVICE IS EMPLOYED BY A SMALL COMPANY IN AN
ATTEMPT TO BREAK INTO A MARKET, CF. HARLEY-DAVIDSON MOTOR CO., 50
F.T.C. 1047, 1066, THE USE OF A TYING DEVICE CAN RARELY BE HARMONIZED
WITH THE STRICTURES OF THE ANTITRUST LAWS, WHICH ARE INTENDED PRIMARILY
TO PRESERVE AND STIMULATE COMPETITION."  BROWN SHOE CO. V. UNITED
STATES, 370 U.S. 294, 330. 

HORIZONTAL TERRITORIAL LIMITATIONS, LIKE "GROUP BOYCOTTS, OR
CONCERTED REFUSALS BY TRADERS TO DEAL WITH OTHER TRADERS" (KLOR'S V.
BROADWAY-HALE STORES, SUPRA, 212), ARE NAKED RESTRAINTS OF TRADE WITH
NO PURPOSE EXCEPT STIFLING OF COMPETITION.  A VERTICAL TERRITORIAL
LIMITATION MAY OR MAY NOT HAVE THAT PURPOSE OR EFFECT.  WE DO NOT KNOW
ENOUGH OF THE ECONOMIC AND BUSINESS STUFF OUT OF WHICH THESE
ARRANGEMENTS EMERGE TO BE CERTAIN.  THEY MAY BE TOO DANGEROUS TO
SANCTION OR THEY MAY BE ALLOWABLE PROTECTIONS AGAINST AGGRESSIVE
COMPETITORS OR THE ONLY PRACTICABLE MEANS A SMALL COMPANY HAS FOR
BREAKING INTO OR STAYING IN BUSINESS (CF. BROWN SHOE, SUPRA, AT 330;
UNITED STATES V. JERROLD ELECTRONICS CORP., 187 F. SUPP. 545, 560-561,
AFF'D, 365 U.S. 567) AND WITHIN THE "RULE OF REASON."  WE NEED TO KNOW
MORE THAN WE DO ABOUT THE ACTUAL IMPACT OF THESE ARRANGEMENTS ON
COMPETITION TO DECIDE WHETHER THEY HAVE SUCH A "PERNICIOUS EFFECT ON
COMPETITION AND LACK  ..  ANNY REDEEMING VIRTUE" (NORTHERN PAC. R. CO.
V. UNITED STATES, SUPRA, P. 5) AND THEREFORE SHOULD BE CLASSIFIED AS
PER SE VIOLATIONS OF THE SHERMAN ACT. 

THERE IS AN ANALOGY FROM THE MERGER FIELD THAT LEADS US TO CONCLUDE
THAT A TRIAL SHOULD BE HAD.  A MERGER THAT WOULD OTHERWISE OFFEND THE
ANTITRUST LAWS BECAUSE OF A SUBSTANTIAL LESSENING OF COMPETITION HAS
BEEN GIVEN IMMUNITY WHERE THE ACQUIRED COMPANY WAS A FAILING ONE.  SEE
INTERNATIONAL SHOE CO. V. COMMISSION, 280 U.S. 291, 302-303.  BUT IN
SUCH A CASE, AS IN CASES INVOLVING THE QUESTION WHETHER A PARTICULAR
MERGER WILL TEND "SUBSTANTIALLY TO LESSEN COMPETITION" (BROWN SHOE CO.
V. UNITED STATES, SUPRA, PP. 328-329), A TRIAL RATHER THAN THE USE OF
THE SUMMARY JUDGMENT IS NORMALLY NECESSARY.  UNITED STATES V. DIEBOLD,
INC., 369 U.S. 654. 

WE CONCLUDE THAT THE SUMMARY JUDGMENT, APART FROM THE PRICE-FIXING
PHASE OF THE CASE, WAS IMPROPERLY EMPLOYED IN THIS SUIT.  APART FROM
PRICE FIXING, WE DO NOT INTIMATE ANY VIEW ON THE MERITS.  WE ONLY HOLD
THAT THE LEGALITY OF THE TERRITORIAL AND CUSTOMER LIMITATIONS SHOULD BE
DETERMINED ONLY AFTER A TRIAL.  REVERSED. 

FN1  WE ARE ADVISED BY APPELLANT THAT SINCE THE JUDGMENT BELOW, WHITE
"NO LONGER USES DISTRIBUTORS AS A SEPARATE TIER IN ITS SYSTEM, BUT
SELLS DIRECTLY TO DEALERS INSTEAD." 

FN2  APPELLANT DOES NOT APPEAL FROM THE DISTRICT COURT'S RULING THAT
THE PROVISIONS OF THE CONTRACTS FIXING RESALE PRICES WERE UNLAWFUL. 

FN3  SEE NOTE 2, SUPRA. 

MR. JUSTICE WHITE TOOK NO PART IN THE CONSIDERATION OR DECISION OF
THIS CASE. 

MR. JUSTICE BRENNAN, CONCURRING. 

WHILE I JOIN THE OPINION OF THE COURT, THE NOVELTY OF THE ANTITRUST
QUESTIONS PROMPTS ME TO ADD A FEW WORDS.  I FULLY AGREE THAT IT WOULD
BE PREMATURE TO DECLARE EITHER THE TERRITORIAL OR THE CUSTOMER
RESTRICTIONS ILLEGAL PER SE, SINCE "WE KNOW TOO LITTLE OF THE ACTUAL
IMPACT (OF EITHER FORM OF RESTRAINT)  ..  TOO REACH A CONCLUSION ON THE
BARE BONES OF THE  ..  EVVIDENCE BEFORE US."  BUT IT SEEMS TO ME THAT
DISTINCT PROBLEMS ARE RAISED BY THE TWO TYPES OF RESTRICTIONS AND THAT
THE DISTRICT COURT WILL WISH TO HAVE THIS DISTINCTION IN MIND AT THE
TRIAL. 

                                   I. 

I DISCUSS FIRST THE TERRITORIAL LIMITATIONS.  THE INSULATION OF A
DEALER OR DISTRIBUTOR THROUGH TERRITORIAL RESTRAINTS AGAINST SALES BY
NEIGHBORING DEALERS WHO WOULD OTHERWISE BE HIS COMPETITIORS INVOLVES A
FORM OF RESTRAINT UPON ALIENATION, WHICH IS THEREFORE HISTORICALLY AND
INHERENTLY SUSPECT UNDER THE ANTITRUST LAWS.  (FN1)  SEE DR. MILES
MEDICAL CO. V. JOHN D. PARK & SONS CO., 220 U.S. 373, 404-408.  THAT
PROPOSITION DOES NOT, HOWEVER, TELL US THAT EVERY FORM OF SUCH
RESTRAINT IS UTTERLY WITHOUT JUSTIFICATION AND IS THEREFORE TO BE
DEEMED UNLAWFUL PER SE.  THAT IS TRUE ONLY OF THOSE "AGREEMENTS OR
PRACTICES WHICH BECAUSE OF THEIR PERNICIOUS EFFECT ON COMPETITION AND
LACK OF ANY REDEEMING VIRTUE ARE CONCLUSIVELY PRESUMED TO BE
UNREASONABLE AND THEREFORE ILLEGAL WITHOUT ELABORATE INQUIRY AS TO THE
PRECISE HARM THEY HAVE CAUSED OR THE BUSINESS EXCUSE FOR THEIR USE." 
NORTHERN PAC. R. CO. V. UNITED STATES, 356 U.S. 1, 5.  SPECIFICALLY,
THE PER SE RULE OF PROHIBITION HAS BEEN APPLIED TO PRICE-FIXING
AGREEMENTS, GROUP BOYCOTTS, TYING ARRANGEMENTS, AND HORIZONTAL
DIVISIONS OF MARKETS.  AS TO EACH OF THESE PRACTICES, EXPERIENCE AND
ANALYSIS HAVE ESTABLISHED THE UTTER LACK OF JUSTIFICATION TO EXCUSE ITS
INHERENT THREAT TO COMPETITION.  (FN2)  TO GAUGE THE APPROPRIATENESS OF
A PER SE TEST FOR THE FORMS OF RESTRAINT INVOLVED IN THIS CASE, THEN,
WE MUST DETERMINE WHETHER EXPERIENCE WARRANTS, AT THIS STAGE, A
CONCLUSION THAT INQUIRY INTO EFFECT UPON COMPETITION AND ECONOMIC
JUSTIFICATION WOULD BE SIMILARLY IRRELEVANT.  (FN3)  WITH RESPECT TO
THE TERRITORIAL LIMITATIONS OF THE TYPE AT BAR, I AGREE THAT THE COURTS
HAVE AS YET BEEN SHOWN NO SUFFICIENT EXPERIENCE TO WARRANT SUCH A
CONCLUSION. 

THE GOVERNMENT URGES, AND THE DISTRICT COURT FOUND, THAT THESE
RESTRICTIONS SO CLOSELY RESEMBLE TWO TRADITIONALLY OUTLAWED FORMS OF
RESTRAINT - HORIZONTAL MARKET DIVISION AND RESALE PRICE MAINTENANCE -
THAT THEY OUGHT TO BE GOVERNED BY THE SAME ABSOLUTE LEGAL TEST.  BOTH
ANALOGIES ARE SURELY INSTRUCTIVE, AND ALL THE MORE SO BECAUSE THE
PRACTICES AT BAR ARE SUI GENERIS; BUT BOTH ARE, AT THE SAME TIME,
MISLEADING.  IT SEEMS TO ME THAT CONSIDERATION OF THE SIMILARITIES HAS
THUS FAR OBSCURED CONSIDERATION OF THE EQUALLY IMPORTANT DIFFERENCES,
WHICH SERVE IN MY VIEW TO DISTINGUISH THE PRACTICE HERE FROM OTHERS AS
TO WHICH WE HAVE HELD A PER SE TEST CLEARLY APPROPRAITE. 

TERRITORIAL LIMITATIONS BEAR AT LEAST A SUPERFICIAL RESEMBLANCE TO
HORIZONTAL DIVISIONS OF MARKETS AMONG COMPETITIORS, WHICH WE HAVE HELD
TO BE TANTAMOUNT TO AGREEMENTS NOT TO COMPETE, AND HENCE INEVITABLY
VIOLATIVE OF THE SHERMAN ACT, (FN4) TIMKEN ROLLER BEARING CO. V. UNITED
STATES, 341 U.S. 593.  IF IT WERE CLEAR THAT THE TERRITORIAL
RESTRICTIONS INVOLVED IN THIS CASE HAD BEEN INDUCED SOLELY OR EVEN
PRIMARILY BY APPELLANT'S DEALERS AND DISTRIBUTORS, IT WOULD MAKE NO
DIFFERENCE TO THEIR LEGALITY THAT THE RESTRICTIONS WERE FORMALLY
IMPOSED BY THE MANUFACTURER RATHER THAN THROUGH INTER-DEALER
AGREEMENT.  (FN5)  CF. INTERSTATE CIRCUIT, INC., V. UNITED STATES, 306
U.S. 208; UNITED STATES V. MASONITE CORP., 316 U.S. 265, 275-276.  BUT
FOR AUGHT THAT THE PRESENT RECORD DISCLOSES, AN EQUALLY PLAUSIBLE
INFERENCE IS THAT THE TERRITORIAL RESTRAINTS WERE IMPOSED UPON
UNWILLING DISTRIBUTORS BY THE MANUFACTURER TO SERVE EXCLUSIVELY HIS OWN
INTERESTS.  THAT INFERENCE GAINS SOME CREDIBILITY FROM THE FACT THAT
THESE LIMITATIONS - UNLIKE, FOR EXAMPLE, EXCLUSIVE FRANCHISE AGREEMENTS
- BIND THE DEALERS TO A RATHER HARSH BARGAIN WHILE LEAVING THE
MANUFACTURER UNFETTERED.  IN ANY EVENT, NEITHER THE SOURCE NOR THE
PURPOSE OF THESE RESTRAINTS CAN BE CONCLUSIVELY DETERMINED ON THE
PLEADINGS OR THE SUPPORTING AFFIDAVITS.  THE CRUCIAL QUESTION WHETHER,
DESPITE THE DIFFERENCES IN FORM, THESE RESTRAINTS SERVE THE SAME
PERNICIOUS PURPOSE AND HAVE THE SAME INHIBITORY EFFECTS UPON
COMPETITION AS HORIZONTAL DIVISIONS OF MARKETS, IS ONE WHICH CANNOT BE
ANSWERED WITHOUT A TRIAL.  (FN6) 

THE ANALOGY TO RESALE PRICE MAINTENANCE AGREEMENTS IS ALSO APPEALING,
BUT IS NO LESS DECEPTIVE.  RESALE PRICE MAINTENANCE IS NOT ONLY
DESIGNED TO, BUT ALMOST INVARIABLY DOES IN FACT, REDUCE PRICE
COMPETITION NOT ONLY AMONG SELLERS OF THE AFFECTED PRODUCT, BUT QUITE
AS MUCH BETWEEN THAT PRODUCT AND COMPETING BRANDS.  SEE UNITED STATES
V. PARKE, DAVIS & CO., 362 U.S. 29, 45-47.  WHILE TERRITORIAL
RESTRICTIONS MAY INDIRECTLY HAVE A SIMILAR EFFECT UPON INTRA-BRAND
COMPETITION, THE EFFECT UPON INTER-BRAND COMPETITION IS NOT NECESSARILY
THE SAME AS THAT OF RESALE PRICE MAINTENANCE.   (FN7) 

INDEED, THE PRINCIPAL JUSTIFICATION WHICH THE APPELLANT OFFERS FOR
THE USE OF THESE LIMITATIONS IS THAT THEY FOSTER A VIGOROUS INTER-BRAND
COMPETITION WHICH MIGHT OTHERWISE BE ABSENT.  THUS, IN ORDER TO
DETERMINE THE LAWFULNESS OF THIS FORM OF RESTRAINT, IT BECOMES
NECESSARY TO ASSESS THE MERIT OF THIS AND OTHER EXTENUATIONS OFFERED BY
THE APPELLANT.  SURELY IT WOULD BE SIGNIFICANT TO THE DISPOSITION OF
THIS CASE IF, AS APPELLANT CLAIMS, SOME SUCH ARRANGEMENT WERE A
PREREQUISITE FOR EFFECTIVE COMPETITION ON THE PART OF INDEPENDENT
MANUFACTURERS OF TRUCKS.  WHATEVER RELATIONSHIP SUCH RESTRAINTS MAY
BEAR TO THE ULTIMATE SURVIVAL OF PRODUCERS LIKE WHITE SHOULD BE FULLY
EXPLORED BY THE DISTRICT COURT IF WE ARE PROPERLY TO APPRAISE THIS
EXCUSE FOR RESORT TO THESE PRACTICES. 

THERE ARE OTHER SITUATIONS, NOT PRESENTED DIRECTLY BY THIS CASE, IN
WHICH THE POSSIBILITY OF JUSTIFICATION CAUTIONS AGAINST A TOO HASTY
CONCLUSION THAT TERRITORIAL LIMITATIONS ARE INVARIABLY UNLAWFUL. 
ARGUMENTS HAVE BEEN SUGGESTED AGAINST THAT CONCLUSION, FOR EXAMPLE, IN
THE CASE OF A MANUFACTURER STARTING OUT IN BUSINESS OR MARKETING A NEW
AND RISKY PRODUCT; THE SUGGESTION IS THAT SUCH A MANUFACTURER MAY FIND
IT ESSENTIAL, SIMPLY IN ORDER TO ACQUIRE AND RETAIN OUTLETS, TO
GUARANTEE HIS DISTRIBUTORS SOME DEGREE OF TERRITORIAL INSULATION AS
WELL AS EXCLUSIVE FRANCHISES.  IT HAS ALSO BEEN SUGGESTED THAT IT MAY
REASONABLY APPEAR NECESSARY FOR A MANUFACTURER TO SUBDIVIDE HIS SALES
TERRITORY IN ORDER TO ENSURE THAT HIS PRODUCT WILL BE ADEQUATELY
ADVERTISED, PROMOTED, AND SERVICED.  (FN8)  IT IS, I THINK, THE
INAPPROPRIATENESS OR IRRELEVANCE OF SUCH JUSTIFICATIONS AS THESE TO THE
PRACTICES TRADITIONALLY CONDEMNED UNDER THE PER SE TEST THAT
PRINCIPALLY DISTINGUISHES THE TERRITORIAL RESTRAINTS INVOLVED IN THE
PRESENT CASE FROM HORIZONTAL MARKET DIVISIONS AND RESALE PRICE
MAINTENANCE. 

ANOTHER ISSUE WHICH SEEMS TO ME PARTICULARLY TO REQUIRE A FULL
INQUIRY INTO THE PROS AND CONS OF THESE TERRITORIAL RESTRICTIONS IS
WHETHER, ASSUMING THAT SOME JUSTIFICATION FOR THESE LIMITATIONS CAN BE
SHOWN, THEIR OPERATION IS REASONABLY RELATED TO THE NEEDS WHICH BROUGHT
THEM INTO BEING.  TO PUT THE QUESTION ANOTHER WAY, THE PROBLEM IS NOT
SIMPLY WHETHER SOME JUSTIFICATION CAN BE FOUND, BUT WHETHER THE
RESTRAINT SO JUSTIFIED IS MORE RESTRICTIVE THAN NECESSARY, OR
EXCESSIVELY ANTICOMPETITIVE, WHEN VIEWED IN LIGHT OF THE EXTENUATING
INTERESTS.  (FN9)  THAT QUESTION IS ONE WHICH CAN BE ADEQUATELY TREATED
ONLY BY EXAMINING THE OPERATION AND PRACTICAL EFFECT OF THE RESTRAINTS,
WHATEVER MAY BE THEIR FORM.  AND IN ORDER TO APPRAISE THAT EFFECT, IT
IS NECESSARY TO KNOW WHAT SANCTIONS ARE IMPOSED AGAINST DISTRIBUTORS
WHO "RAID," OR SELL ACROSS TERRITORIAL BOUNDARIES IN VIOLATION OF THE
AGREEMENTS.  IF, FOR EXAMPLE, SUCH A CROSS-SALE INCURS ONLY AN
OBLIGATION TO SHARE (OR "PASS OVER") THE PROFIT WITH THE DEALER WHOSE
TERRITORY HAS BEEN INVADED - AS IS MOST OFTEN, AND APPARENTLY HERE, THE
CASE (FN10) - THEN THE PRACTICAL EFFECT UPON COMPETITION OF A
TERRITORIAL LIMITATION MAY BE NO MORE HARMFUL THAN THAT OF THE TYPICAL
EXCLUSIVE FRANCHISE - THE LAWFULNESS OF WHICH THE GOVERNMENT DOES NOT
DISPUTE HERE.  IF, ON THE OTHER HAND, THE DEALER WHO CROSS-SELLS RUNS
THE RISK UNDER THE AGREEMENT OF LOSING HIS FRANCHISE ALTOGETHER, INTRA
BRAND COMPETITION ACROSS TERRITORIAL BOUNDARIES INVOLVES SERIOUS
HAZARDS WHICH MIGHT WELL DETER ANY EFFORT TO COMPETE.    ANOTHER
PERTINENT INQUIRY WOULD EXPLORE THE AVAILABILITY OF LESS RESTRICTIVE
ALTERNATIVES.  IN THE PRESENT CASE, FOR EXAMPLE, AS THE GOVERNMENT
SUGGESTS, IT MAY APPEAR AT THE TRIAL THAT WHATEVER LEGITIMATE BUSINESS
NEEDS WHITE ADVANCES FOR TERRITORIAL LIMITATIONS COULD BE ADEQUATELY
SERVED, WITH LESS DAMAGE TO COMPETITION, THROUGH OTHER DEVICES - FOR
EXAMPLE, AN EXCLUSIVE FRANCHISE, (FN11) AN ASSIGNMENT OF AREAS OF
PRIMARY RESPONSIBILITY TO EACH DISTRIBUTOR, (FN12) OR A REVISION OF THE
LEVELS OF PROFIT PASS-OVER SO AS TO MINIMIZE THE DETERRENCE TO CROSS
SELLING BY NEIGHBORING DEALERS WHERE COMPETITION IS FEASIBLE.  (FN13)
BUT NO SUCH INQUIRY AS THIS INTO THE QUESTION OF ALTERNATIVES COULD
MEANINGFULLY BE UNDERTAKEN UNTIL THE DISTRICT COURT HAS ASCERTAINED THE
EFFECT UPON COMPETITION OF THE PARTICULAR TERRITORIAL RESTRAINTS IN
SUIT, AND OF THE PARTICULAR SANCTIONS BY WHICH THEY ARE ENFORCED. 

                         II. 

I TURN NEXT TO THE CUSTOMER RESTRICTIONS.  THESE PRESENT A PROBLEM
QUITE DISTINCT FROM THAT OF THE TERRITORIAL LIMITATIONS.  THE CUSTOMER
RESTRAINTS WOULD SEEM INHERENTLY THE MORE DANGEROUS OF THE TWO, FOR
THEY SERVE TO SUPPRESS ALL COMPETITION BETWEEN MANUFACTURER AND
DISTRIBUTORS FOR THE CUSTOM OF THE MOST DESIRABLE ACCOUNTS.  AT THE
SAME TIME THEY SEEM TO LACK ANY OF THE COUNTERVAILING TENDENCIES TO
FOSTER COMPETITION BETWEEN BRANDS WHICH MAY ACCOMPANY THE TERRITORIAL
LIMITATIONS.  IN SHORT, THERE IS FAR MORE DIFFICULTY IN SUPPOSING THAT
SUCH CUSTOMER RESTRICTIONS CAN BE JUSTIFIED. 

THE CRUCIAL QUESTION TO ME IS WHETHER, IN ANY MEANINGFUL SENSE, THE
DISTRIBUTORS COULD, BUT FOR THE RESTRICTIONS, COMPETE WITH THE
MANUFACTURER FOR THE RESERVED OUTLETS.  (FN14)  IF THEY COULD, BUT ARE
PREVENTED FROM DOING SO ONLY BY THE RESTRICTIONS, THEN IN THE ABSENCE
OF SOME JUSTIFICATION NEITHER PRESENTED NOR SUGGESTED BY THIS RECORD,
THEIR INVALIDITY WOULD SEEM TO BE APPARENT.  CF. UNITED STATES V.
MCKESSON & ROBBINS, INC., 351 U.S. 305, 312; UNITED STATES V. KLEARFLAX
LINEN LOOMS, INC., 63 F. SUPP. 32.  IF, ON THE OTHER HAND, IT TURNS OUT
THAT AS A PRACTICAL MATTER THE RESTRICTED DEALERS COULD NEITHER FILL
THE ORDERS NOR SERVICE THE FLEETS OF THE GOVERNMENTAL AND FLEET
CUSTOMERS, THEN THE DISTRICT COURT MIGHT CONCLUDE THAT BECAUSE THERE
WOULD OTHERWISE BE NO MEANINGFUL COMPETITION, THE RESTRICTIVE
AGREEMENTS DO NO MORE THAN CODIFY THE ECONOMICALLY OBVIOUS.  IT MIGHT
EVEN BE THAT SUCH RESTRICTIONS WERE ORIGINALLY DESIGNED TO FORECLOSE
THE DISTRIBUTORS FROM SOLICITING THE RESERVED ACCOUNTS, BUT THAT NOW
THE RESTRICTIONS HAVE BECOME MEANINGLESS BECAUSE THE DISTRIBUTORS WOULD
IN ANY EVENT BE UNABLE TO COMPETE. 

THE REASONS GIVEN BY WHITE FOR THE USE OF CUSTOMER RESTRICTIONS
STRIKE ME AS UNTENABLE IF IN OPERATION AND EFFECT THE RESTRICTIONS ARE
FOUND TO STIFLE COMPETITION.  THESE JUSTIFICATIONS ARE OF THREE TYPES. 
FIRST, WHITE ARGUES THAT SUCH RESTRICTIONS ARE REQUIRED BECAUSE "A
DISTRIBUTOR OR DEALER IS NOT COMPETENT TO HANDLE THIS INTRICATE PROCESS
(OF SERVICING LARGE ACCOUNTS) UNTIL HE HAS HAD MANY MONTHS OF
SPECIALIZED WHITE TRAINING"; AND THAT THERE IS A CONSEQUENT DANGER OF
"UNAUTHORIZED DEALERS" WHO "WILL BE UNQUALIFIED TO WORK OUT
SPECIFICATIONS FOR TRUCKS TO MEET CUSTOMERS' PECULIAR REQUIREMENTS." 
TO THE EXTENT THAT THESE FEARS ARE WELL FOUNDED, THEY REPRESENT THE
CONCERNS WHICH ANY MANUFACTURER MAY LEGITIMATELY HAVE ABOUT HIS
DISTRIBUTORS' ABILITY TO DEAL EFFECTIVELY WITH LARGE OR DEMANDING
CUSTOMERS.  BY THEIR VERY TERMS, HOWEVER, THESE CONCERNS SEEM TO CALL
NOT FOR CUTTING THE DISTRIBUTORS COMPLETELY OUT OF THIS SEGMENT OF THE
MARKET, BUT RATHER FOR SUCH LESS DRASTIC MEASURES AS, FOR EXAMPLE,
IMPROVED SUPERVISION AND TRAINING, OR PERHAPS A SPECIAL FORM OF
MANUFACTURER'S WARRANTY TO THE GOVERNMENTAL AND FLEET PURCHASERS TO
PROTECT AGAINST UNSATISFACTORY DISTRIBUTOR SERVICING. 

THE SECOND JUSTIFICATION WHITE OFFERS IS THAT "THE ONLY SURE WAY TO
MAKE CERTAIN THAT SOMETHING REALLY IMPORTANT IS DONE RIGHT, IS TO DO IT
FOR ONESELF."  THIS ARGUMENT SEEMS TO ME TO PROVE TOO MUCH, FOR IF THE
DISTRIBUTORS TRULY CANNOT BE COUNTED ON TO SOLICIT AND SERVICE THE
GOVERNMENTAL AND FLEET ACCOUNTS - NOT ALL OF WHICH ARE, IN FACT, LARGE
OR DEMANDING - THEN THIS SUGGESTS THAT THE ONLY ADEQUATE SOLUTION MAY
BE VERTICAL INTEGRATION, THE ELIMINATION OF ALL INDEPENDENT OR
FRANCHISED DISTRIBUTION.  BUT THAT WHITE IS EITHER UNWILLING OR UNABLE
TO DO.  INSTEAD, IT SEEKS THE BEST OF BOTH WORLDS - TO RETAIN A
DISTRIBUTION SYSTEM FOR THE GENERAL RUN OF ITS CUSTOMERS, WHILE
SKIMMING OFF THE CREAM OF THE TRADE FOR ITS OWN DIRECT SALES.  THAT, IT
SEEMS TO ME, THE ANTITRUST LAWS WOULD NOT PERMIT, CF. EASTMAN KODAK CO.
V. SOUTHERN PHOTO MATERIALS CO., 273 U.S. 359, 375, IF IN FACT THE
DISTRIBUTORS COULD COMPETE FOR THE RESERVED ACCOUNTS WITHOUT THE
RESTRICTIONS. 

THE THIRD JUSTIFICATION, WHICH WHITE OFFERED IN ITS JURISDICTIONAL
STATEMENT, IS THAT CUSTOMER LIMITATIONS ARE ESSENTIAL TO ENABLE IT TO
"MORE EFFECTIVELY COMPETE AGAINST ITS COMPETITORS BY SELLING TRUCKS
DIRECTLY" TO THE RESERVED CUSTOMERS RATHER THAN "THROUGH THE
INTERPOSITION OF DISTRIBUTORS OR DEALERS."  THIS ARGUMENT INVITES
CONSIDERATION OF WHAT TO ME IS THE ESSENTIAL VICE OF THE CUSTOMER
RESTRICTIONS.  THE MANUFACTURER'S VERY POSITION IN THE CHANNELS OF
DISTRIBUTION SHOULD AFFORD HIM AN INHERENT COST ADVANTAGE OVER HIS
DISTRIBUTORS.  IN THE NATURE OF THINGS, IT WOULD SEEM THAT THE LARGE
PURCHASERS WOULD BUY FROM WHICHEVER OUTLET GAVE THEM THE LOWEST
PRICES.  THUS, IF THE MANUFACTURER ALWAYS DID GRANT DISCOUNTS WHICH THE
DISTRIBUTORS WERE UNABLE TO GRANT, THERE WOULD SEEM TO BE NO REASON
WHATEVER FOR DENYING THE DISTRIBUTORS ABLE TO OVERCOME THAT ADVANTAGE
ACCESS TO THE PREFERRED CUSTOMERS.  CONVERSELY, THE PRESENCE OF SUCH
RESTRICTIONS IN THE AGREEMENTS BETWEEN WHITE AND ITS DISTRIBUTORS
SUGGESTS THAT THEY ARE DESIGNED, AT LEAST IN PART, TO PROTECT A
NONCOMPETITIVE PRICING STRUCTURE, IN WHICH THE MANUFACTURER IN FACT
DOES NOT ALWAYS CHARGE THE LOWEST PRICES. 

IN SUM, THE PROFFERED JUSTIFICATIONS DO NOT SEEM TO ME TO SANCTION
CUSTOMER RESTRICTIONS WHICH SUPPRESS ALL COMPETITION BETWEEN THE
MANUFACTURER AND HIS DISTRIBUTORS FOR THE MOST DESIRABLE CUSTOMERS.  ON
TRIAL, AS I SEE IT, THE GOVERNMENT WILL NECESSARILY PREVAIL UNLESS THE
PROOF WARRANTS A FINDING THAT, EVEN IN THE ABSENCE OF THE RESTRICTIONS,
THE ECONOMICS OF THE TRADE ARE SUCH THAT THE DISTRIBUTORS CANNOT
COMPETE FOR THE RESERVED ACCOUNTS. 

FN1  FOR A GENERAL CONSIDERATION OF THE HISTORY AND LEGALITY OF
RESTRAINTS UPON ALIENATION, BOTH AT COMMON LAW AND UNDER THE SHERMAN
ACT, SEE LEVI, THE PARKE, DAVIS-COLGATE DOCTRINE: THE BAN ON RESALE
PRICE MAINTENANCE, SUPREME COURT REVIEW (KURLAND ED. 1960), 258, 270
278. 

FN2  THE GENERAL PRINCIPLE WHICH THE COURT HAS STATED WITH RESPECT TO
PRICE-FIXING AGREEMENTS IS APPLICABLE ALIKE TO BOYCOTTS, DIVISIONS OF
MARKETS, AND TYING ARRANGEMENTS: "WHATEVER ECONOMIC JUSTIFICATION
PARTICULAR  ..  AGGREEMENTS MAY BE THOUGHT TO HAVE, THE LAW DOES NOT
PERMIT AN INQUIRY INTO THEIR REASONABLENESS.  THEY ARE ALL BANNED
BECAUSE OF THEIR ACTUAL OR POTENTIAL THREAT TO THE CENTRAL NERVOUS
SYSTEM OF THE ECONOMY."  UNITED STATES V. SOCONY-VACUUM OIL CO., 310
U.S. 150, 224, N. 59, AT 226. 

FN3  OUTSIDE THE CATEGORIES OF RESTRAINT WHICH ARE PER SE UNLAWFUL,
THIS COURT HAS SAID THAT THE QUESTION TO BE ANSWERED IS "WHETHER THE
RESTRAINT IMPOSED IS SUCH AS MERELY REGULATES AND PERHAPS THEREBY
PROMOTES COMPETITION OR WHETHER IT IS SUCH AS MAY SUPPRESS OR EVEN
DESTROY COMPETITION.  TO DETERMINE THAT QUESTION THE COURT MUST
ORDINARILY CONSIDER THE FACTS PECULIAR TO THE BUSINESS TO WHICH THE
RESTRAINT IS APPLIED; ITS CONDITION BEFORE AND AFTER THE RESTRAINT WAS
IMPOSED; THE NATURE OF THE RESTRAINT AND ITS EFFECT, ACTUAL OR
PROBABLE.  THE HISTORY OF THE RESTRAINT, THE EVIL BELIEVED TO EXIST,
THE REASON FOR ADOPTING THE PARTICULAR REMEDY, THE PURPOSE OR END
SOUGHT TO BE ATTAINED, ARE ALL RELEVANT FACTS."  CHICAGO BOARD OF TRADE
V. UNITED STATES, 246 U.S. 231, 238. 

WHILE THE GOVERNMENT URGES UPON US THE ADOPTION OF A PER SE RULE OF
ILLEGALITY, IT NONETHELESS RECOGNIZES THAT NOT ALL THE CONSIDERATIONS
RELEVANT TO THE VALIDITY OF THIS PARTICULAR FORM OF RESTRAINT ARE OR
COULD BE PRESENTED BY THE PRESENT CASE:  "WHAT IS THE IMPORTANCE OF
INTERBRAND AS OPPOSED TO INTRABRAND COMPETITION?  ..  WIILL WHITE'S
RESTRICTIONS REMAIN REASONABLE IF ITS SHARE OF THE MARKET INCREASES? 
..  THHESE ARE ONLY A FEW OF THE ISSUES RELEVANT TO A TRIAL OF THE
'REASONABLENESS' OF ANY PARTICULAR SET OF TERRITORIAL RESTRICTIONS. 
NOR COULD ONE BE CONTENT WITH A SINGLE INVESTIGATION.  BUSINESS
CONDITIONS CHANGE.  THE EFFECT OF RESTRICTING COMPETITION AMONG DEALERS
TODAY MAY BE DIFFERENT TOMORROW."  BRIEF FOR THE UNITED STATES, PP. 31
32. 

FN4  SEE ADDYSTON PIPE & STEEL CO. V. UNITED STATES, 175 U.S. 211,
240-245; UNITED STATES V. NATIONAL LEAD CO., 63 F. SUPP. 513, AFF'D,
332 U.S. 319.  SEE ALSO REPORT OF THE ATTORNEY GENERAL'S NATIONAL
COMMITTEE TO STUDY THE ANTITRUST LAWS (1955), 26. 

FN5  FOR CONTRASTING VIEWS ON THIS QUESTION, COMPARE KESSLER AND
STERN, COMPETITION, CONTRACT, AND VERTICAL INTEGRATION, 69 YALE L.J. 1,
113 (1959), WITH ROBINSON, RESTRAINTS ON TRADE AND THE ORDERLY
MARKETING OF GOODS, 45 CORNELL L.Q. 254, 267-268 (1960). 

FN6  SEE, FOR AN ELABORATION AND DISCUSSION OF SOME OF THE FACTORS
WHICH MIGHT ENTER SUCH AN INQUIRY, SNAP-ON TOOLS CORP., FTC DOCKET
7116, 3 CCH TRADE REG. REP. PARA. 15,546; JORDAN, EXCLUSIVE AND
RESTRICTED SALES AREAS UNDER THE ANTITRUST LAWS, 9 U.C.L.A.L.  REV.
111, 125-129 (1962).  FOR FURTHER DISCUSSION OF THE REASONS WHICH MAKE
SUCH AN INQUIRY DESIRABLE WITH RESPECT TO RESTRAINTS OF THIS VERY KIND,
SEE TURNER, THE DEFINITION OF AGREEMENT UNDER THE SHERMAN ACT:
CONSCIOUS PARALLELISM AND REFUSALS TO DEAL, 75 HARV.  L. REV. 655, 698
699 (1962). 

FN7  SEE NOTE, RESTRICTED CHANNELS OF DISTRIBUTION UNDER THE SHERMAN
ACT, 75 HARV.  L. REV. 795, 800-801 (1962).  IT MAY BE RELEVANT TO THE
QUESTION WHETHER THE TERRITORIAL RESTRICTIONS WERE INTENDED TO SUPPRESS
PRICE COMPETITION THAT APPELLANT ALSO MAINTAINED A SCHEDULE OF RESALE
PRICES IN ITS DISTRIBUTOR AGREEMENTS, THOUGH THERE HAS BEEN NO
CHALLENGE HERE TO THE DISTRICT COURT'S FINDING THAT THOSE PROVISIONS
WERE UNLAWFUL PER SE. 

FN8  FOR SITUATIONS IN WHICH SUCH EXTENUATIONS MIGHT BE RELEVANT,
COMPARE, E.G., PACKARD MOTOR CAR CO. V. WEBSTER MOTOR CAR CO., 100 U.S.
APP. D.C. 161, 243 F.2D 418; SCHWING MOTOR CO. V. HUDSON SALES CORP.,
138 F. SUPP. 899 (D.C.D. MD.), AFF'D, 239 F.2D 176 (C.A. 4TH CIR.).  IN
THE FORMER CASE THE COURT OBSERVED, IN HOLDING AN EXCLUSIVE FRANCHISE
ARRANGEMENT NOT VIOLATIVE OF THE SHERMAN ACT: 

"THE SHORT OF IT IS THAT A RELATIVELY SMALL MANUFACTURER, COMPETING
WITH LARGE MANUFACTURERS, THOUGHT IT ADVANTAGEOUS TO RETAIN ITS LARGEST
DEALER IN BALTIMORE, AND COULD NOT DO SO WITHOUT AGREEING TO DROP ITS
OTHER BALTIMORE DEALERS.  TO PENALIZE THE SMALL MANUFACTURER FOR
COMPETING IN THIS WAY NOT ONLY FAILS TO PROMOTE THE POLICY OF THE
ANTITRUST LAWS BUT DEFEATS IT."  100 U.S. APP. D.C., AT 164, 243 F.2D,
AT 421.  THE DOCTRINE OF THE PACKARD AND SCHWING CASES IS, HOWEVER, OF
NECESSARILY LIMITED SCOPE; NOT ONLY WERE THE MANUFACTURERS INVOLVED
MUCH SMALLER THAN THE "BIG THREE" OF THE AUTOMOBILE INDUSTRY AGAINST
WHOM THEY COMPETED, BUT BOTH HAD EXPERIENCED DECLINES IN THEIR
RESPECTIVE MARKET SHARES.  AND THE EXCLUSIVE FRANCHISES INVOLVED IN
THOSE CASES APPARENTLY WERE NOT ACCOMPANIED BY TERRITORIAL
LIMITATIONS.  SEE JORDAN, SUPRA, NOTE 6, AT 135-139.  SEE, FOR
CONSIDERATION OF A SIMILAR PROBLEM BY THE FEDERAL TRADE COMMISSION,
COLUMBUS COATED FABRICS CORP., 55 F.T.C. 1500, 1503-1504. 

FN9  IF THE RESTRAINT IS SHOWN TO BE EXCESSIVE FOR THE MANUFACTURER'S
NEEDS, THEN ITS PRESENCE INVITES SUSPICION EITHER THAT DEALER PRESSURES
RATHER THAN MANUFACTURER INTERESTS BROUGHT IT ABOUT, OR THAT THE REAL
PURPOSE OF ITS ADOPTION WAS TO RESTRICT PRICE COMPETITION, CF. ETHYL
GASOLINE CORP. V. UNITED STATES, 309 U.S. 436, 457-459; UNITED STATES
V. MASONITE CORP., SUPRA.  SEE TURNER, SUPRA, NOTE 6, AT 698-699, 704
705. 

FN10  IN ITS COMPLAINT, THE GOVERNMENT CHARGED THAT ANY DEALER OR
DISTRIBUTOR WHO SELLS IN ANOTHER'S RESERVED TERRITORY MUST PAY TO THE
INJURED DISTRIBUTOR "A SPECIFIED AMOUNT OF MONEY FOR VIOLATION OF SAID
EXCLUSIVE TERRITORY  ..  .""  THERE HAS BEEN NO SUGGESTION IN THIS CASE
THAT MORE DRASTIC SANCTIONS, SUCH AS WITHDRAWAL OR CANCELLATION OF A
FRANCHISE, HAVE EVER BEEN INVOKED BY THE APPELLANT TO CHECK CROSS
SELLING.  THE PASS-OVER PROVISIONS CONTAINED IN THE TYPICAL WHITE
CONTRACT (IN A PROVISION GOVERNING "ADJUSTMENT ON OUTSIDE DELIVERIES")
SEEM REPRESENTATIVE OF EXCLUSIVE TERRITORY SANCTIONS GENERALLY
EMPLOYED.  SEE NOTE, RESTRICTED CHANNELS OF DISTRIBUTION UNDER THE
SHERMAN ACT, 75 HARV. L. REV. 795, 814-816 (1962). 

FN11  THE DISTRICT COURT SUGGESTED, 194 F. SUPP., AT 585-586, AND THE
GOVERNMENT SEEMS TO CONCEDE, THAT CERTAIN TYPES OF EXCLUSIVE FRANCHISES
WOULD NOT VIOLATE THE SHERMAN ACT, ALTHOUGH A DETERMINATION OF THE
LEGALITY OF SUCH ARRANGEMENTS WOULD SEEM ALSO TO REQUIRE AN EXAMINATION
OF THEIR OPERATION AND EFFECT.    FN12  SEE SNAP-ON TOOLS CORP., FTC
DOCKET NO. 7116, 3 CCH TRADE REG. REP. PARA. 15,546, P. 20,414.   A
NUMBER OF CONSENT DECREES HAVE RECENTLY RECOGNIZED THE LAWFULNESS OF
AREA-OF-PRIMARY-RESPONSIBILITY COVENANTS AS SUBSTITUTES FOR THE MORE
RESTRICTIVE EXCLUSIVE ARRANGEMENTS.  SEE, E.G., UNITED STATES V.
BOSTITCH, INC., CCH 1958 TRADE CASES PARA. 69,207 (D.C.D.R.I.); UNITED
STATES V. RUDOLPH WURLITZER CO., CCH 1958 TRADE CASES PARA. 69,011
(D.C.W.D.N.Y.).  THE THRUST OF SUCH PROVISIONS IS, HOWEVER, ONLY THAT
THE DEALER MUST ADEQUATELY REPRESENT THE MANUFACTURER IN THE ASSIGNED
AREA, NOT THAT HE MUST STAY OUT OF OTHER AREAS.  SEE GENERALLY 60 MICH.
L. REV. 1008 (1962). 

FN13  THE ESSENTIAL QUESTION WHETHER SUCH RESTRAINTS EXCEED THE
APPELLANT'S COMPETITIVE NEEDS CANNOT BE ANSWERED, AS THE GOVERNMENT
SUGGESTS, SIMPLY BY REFERENCE TO THE VIEWS OF MAJOR AUTOMOBILE
MANUFACTURERS THAT TERRITORIAL LIMITATIONS ARE UNNECESSARY TO ENSURE
EFFECTIVE PROMOTION AND SERVICING FOR THEIR PRODUCTS.  SEE HEARINGS
BEFORE A SUBCOMMITTEE OF THE HOUSE COMMITTEE ON INTERSTATE AND FOREIGN
COMMERCE ON AUTOMOBILE MARKETING LEGISLATION, 84TH CONG., PP. 160, 248,
285, 323. 

FN14  IN AN ANALOGOUS CASE, BROUGHT UNDER SEC. 5 OF THE FEDERAL TRADE
COMMISSION ACT, THE COMMISSION DISMISSED THE COMPLAINT BECAUSE OF
INSUFFICIENT EVIDENCE THAT CUSTOMER LIMITATIONS HAD FORECLOSED
MEANINGFUL COMPETITION.  IN THE MATTER OF ROUX DISTRIBUTING CO., 55
F.T.C. 1386.  THE FINDING THAT NON-CONTRACTUAL CUSTOMER RESTRICTIONS
HAD A CLEARLY ANTICOMPETITIVE EFFECT IN UNITED STATES V. KLEARFLAX
LINEN LOOMS, INC., 63 F. SUPP. 32, WAS ONE WHICH COULD SEEMINGLY NOT
HAVE BEEN MADE WITHOUT A TRIAL ON THE MERITS, EVEN THOUGH THE
MANUFACTURER INVOLVED HELD A POSITION OF VIRTUAL MONOPOLY.  SEE NOTE,
RESTRICTED CHANNELS OF DISTRIBUTION UNDER THE SHERMAN ACT, 75 HARV. L.
REV. 795, 817-818 (1962). 

MR. JUSTICE CLARK, WITH WHOM THE CHIEF JUSTICE AND MR. JUSTICE BLACK
JOIN, DISSENTING. 

THE COURT IS RELUCTANT TO DECLARE VERTICAL TERRITORIAL ARRANGEMENTS
ILLEGAL PER SE BECAUSE "THIS IS THE FIRST CASE INVOLVING A TERRITORIAL
RESTRICTION IN A VERTICAL ARRANGEMENT; AND WE KNOW TOO LITTLE OF THE
ACTUAL IMPACT  ..  OFF THAT RESTRICTION  ..  TOO REACH A CONCLUSION ON
THE BARE BONES OF THE DOCUMENTARY EVIDENCE BEFORE US."  THE "BARE
BONES" CONSIST OF THE COMPLAINT AND ANSWER, EXCERPTS FROM
INTERROGATORIES, EXHIBITS AND DEPOSITION OF THE SECRETARY OF WHITE
MOTOR ON BEHALF OF THE GOVERNMENT, TAKEN IN 1959, THE FORMAL MOTION OF
THE GOVERNMENT FOR SUMMARY JUDGMENT AND AN EXCERPT ENTITLED "ARGUMENT"
FROM THE BRIEF OF WHITE MOTOR IN OPPOSITION THERETO.  I BELIEVE THAT
THESE "BARE BONES" REALLY LAY BARE ONE OF THE MOST BRAZEN VIOLATIONS OF
THE SHERMAN ACT THAT I HAVE EXPERIENCED IN A QUARTER OF A CENTURY. 

THIS "ARGUMENT," WHICH THE APPELLANT HAS CONVINCED THE COURT RAISES A
FACTUAL ISSUE REQUIRING A TRIAL, POINTS OUT THAT EACH DISTRIBUTOR IS
REQUIRED TO MAINTAIN A SALES ROOM, SERVICE STATION AND A REPRESENTATIVE
NUMBER OF WHITE TRUCKS.  "IN RETURN FOR THESE AGREEMENTS OF THE
DISTRIBUTOR ..  ITT IS ONLY FAIR AND REASONABLE AND, IN FACT, NECESSARY
..  THHAT THE DISTRIBUTOR SHALL BE PROTECTED IN SAID DISTRIBUTOR'S
TERRITORY AGAINST SELLING THEREIN BY DEFENDANT'S OTHER DISTRIBUTORS ..
WHOO HAVE NOT MADE THE INVESTMENT OF MONEY AND EFFORT  .. IN  THE SAID
TERRITORY."  LIKEWISE, APPELLANT'S ARGUMENT CONTINUES, "SIMILAR
PROVISIONS IN DIRECT DEALERS' CONTRACTS AND IN CONTRACTS BETWEEN THE
DISTRIBUTORS AND THEIR RESPECTIVE DEALERS HAVE THE SAME PURPOSES AND
THE SAME EFFECTS."  THESE LIMITATIONS HAVE "THE PURPOSE AND EFFECT OF
PROMOTING THE BUSINESS AND INCREASING THE SALES OF WHITE TRUCKS IN
COMPETITION WITH THE WHITE MOTOR COMPANY'S POWERFUL COMPETITORS." 
EMPHASIZING THAT THE MOTOR-TRUCK MANUFACTURING INDUSTRY IS ONE OF "THE
MOST HIGHLY COMPETITIVE INDUSTRIES IN THIS COUNTRY," APPELLANT POINTS
UP THAT ITS SHARE "IS VERY SMALL" AND "BY NO STRETCH OF THE
IMAGINATION, COULD BE SAID TO DOMINATE THE MARKET IN TRUCKS."  IT
INSISTS THAT THERE ARE BUT TWO WAYS TO MARKET TRUCKS: (1) SELLING TO
THE PUBLIC THROUGH ITS OWN SALES AND SERVICE STATIONS, AND (2) THROUGH
THE DISTRIBUTOR-DEALER DISTRIBUTION SYSTEM WHICH IT PRESENTLY FOLLOWS. 
IT DISCARDS THE FIRST AS BEING "FEASIBLE ONLY FOR A VERY LARGE
COMPANY."  AS TO THE SECOND, THE DISTRUBUTORS AND DEALERS MUST NOT BE
ALLOWED TO SPREAD THEIR EFFORTS "TOO THINLY OVER MORE TERRITORY THAN
THEY CAN VIGOROUSLY AND INTENSIVELY WORK."  IT IS THEREFORE NECESSARY,
APPELLANT SAYS, "TO CONFINE THEIR EFFORTS TO A TERRITORY NO LARGER THAN
THEY HAVE THE FINANCIAL MEANS AND SALES AND SERVICE FACILITIES AND
CAPABILITIES TO INTENSIVELY CULTIVATE  ..  .""  IN RETURN "IT IS ONLY
FAIR AND REASONABLE, AND INDEED NECESSARY, THAT THE WHITE MOTOR COMPANY
PROTECT ITS DEALERS AND DISTRIBUTORS IN THEIR RESPECTIVE ALLOTTED
TERRITORIES AGAINST THE EXPLOITATION BY OTHER WHITE DISTRIBUTORS OR
DEALERS, AND INDEED BY THE COMPANY ITSELF  ..  .""  IN ORDER TO PROCURE
"DISTRIBUTORS AND DEALERS THAT WILL ADEQUATELY REPRESENT THE WHITE
MOTOR COMPANY'S LINE OF MOTOR TRUCKS, IT HAS TO AGREE THAT THESE MEN
SHALL BE EXCLUSIVE SALES REPRESENTATIVES IN A GIVEN TERRITORY."  FOR
THIS REASON APPELLANT "WILL NOT ALLOW ANY OTHER OF ITS DISTRIBUTORS OR
DEALERS TO COME INTO THE TERRITORY AND SCALP THE MARKET FOR WHITE
TRUCKS THEREIN."  RATHER THAN "CUTTING EACH OTHER'S THROATS" WHITE
MOTOR INSISTS THAT THEY "CONCENTRATE ON TRYING TO TAKE SALES AWAY FROM
OTHER COMPETING TRUCK MANUFACTURERS  ..  .""  THE NET EFFECT OF ITS
JUSTIFICATION FOR THE TERRITORIAL ALLOCATION IS THAT "THESE LIMITATIONS
HAVE PROPER PURPOSES AND EFFECTS AND ARE FAIR AND REASONABLE  ..  ."" 

ON THE PRICE-FIXING REQUIREMENT IN THE CONTRACTS, WHICH WHITE MOTOR
HAS ABANDONED ON APPEAL, THE "ARGUMENT" POINTS OUT THAT THIS
REQUIREMENT WAS LIMITED TO ABOUT 5% OF ITS SALES AND WAS NOT FOLLOWED
IN SALES TO THE PUBLIC.  JUSTIFICATION FOR ITS USE OTHERWISE WAS THAT
IT INSURED THAT ALL OF ITS AGENTS "GET AN EQUAL BREAK PRICEWISE," WHICH
WAS A NECESSARY STEP TO HAVING "SATISFIED AND EFFICIENT DEALER
ORGANIZATIONS."  AS TO THE REQUIRED DISCOUNTS PROVISION ON REPAIR PARTS
AND ACCESSORIES, IT SAYS THAT THESE ARE NECESSARY "IF THE DEFENDANT'S
FUTURE SALES TO 'NATIONAL ACCOUNTS,' 'FLEET ACCOUNTS' AND FEDERAL AND
STATE GOVERNMENTS  ..  ANND POLITICAL SUBDIVISIONS  .. AREE NOT TO BE
SERIOUSLY JEOPARDIZED."  AFTER ALL, IT SAYS, "PROBABLY NOTHING WILL
MAKE THE OWNER OF A MOTOR VEHICLE SO PEEVED AS TO BE OVERCHARGED FOR
REPAIR PARTS AND ACCESSORIES." 

THE SITUATION IN WHICH WHITE MOTOR FINDS ITSELF MAY BE SUMMED UP IN
ITS OWN WORDS, I.E., THAT ITS CONTRACTS ARE "THE ONLY FEASIBLE WAY FOR
(IT) TO COMPETE EFFECTIVELY WITH ITS BIGGER AND MORE POWERFUL
COMPETITORS  ..  .""  IN THIS JUSTIFICATION IT ATTEMPTS BUT TO MAKE A
VIRTUE OF BUSINESS NECESSITY, WHICH HAS LONG BEEN REJECTED AS A DEFENSE
IN SUCH CASES.  SEE DR. MILES MEDICAL CO. V. JOHN D. PARK & SONS CO.,
220 U.S. 373, 407-408 (1911); FASHION ORIGINATORS' GUILD V. FEDERAL
TRADE COMM'N, 312 U.S. 457, 467-468 (1941), AND NORTHERN PAC. R. CO. V.
UNITED STATES, 356 U.S. 1, 5 (1958).  THIS IS TRUE BECAUSE THE PURPOSE
OF THESE PROVISIONS IN ITS CONTRACTS AS SHOWN BY WHITE MOTOR'S OWN
"ARGUMENT" IS TO ENABLE IT TO COMPETE WITH ITS "POWERFUL COMPETITORS"
AND "PROTECT ITS DEALERS AND DISTRIBUTORS IN THEIR RESPECTIVE ALLOTTED
TERRITORIES AGAINST THE EXPLOITATION BY OTHER WHITE DISTRIBUTORS OR
DEALERS" AND THUS PREVENT THEM FROM "CUTTING EACH OTHER'S THROATS." 
THESE GROUNDS FOR ITS ACTION MAY BE GOOD FOR WHITE MOTOR BUT THEY ARE
DISASTROUS FOR FREE COMPETITIVE ENTERPRISE AND, IF PERMITTED, WILL
DESTROY THE EFFECTIVENESS OF THE SHERMAN ACT.  FOR UNDER THESE
CONTRACTS A PERSON WISHING TO BUY A WHITE TRUCK MUST DEAL WITH ONLY ONE
SELLER WHO BY VIRTUE OF HIS AGREEMENTS WITH DEALER COMPETITORS HAS THE
SOLE POWER AS TO THE PUBLIC TO SET PRICES, DETERMINE TERMS AND EVEN TO
REFUSE TO SELL TO A PARTICULAR CUSTOMER.  IN THE LATTER EVENT THE
CUSTOMER COULD NOT BUY A WHITE TRUCK BECAUSE A NEIGHBORING DEALER MUST
REJECT HIM UNDER THE WHITE MOTOR CONTRACT UNLESS HE HAS "A PLACE OF
BUSINESS AND/OR PURCHASING HEADQUARTERS" IN THE LATTER'S TERRITORY.  HE
MIGHT BUT ANOTHER BRAND OF TURCK, IT IS TRUE, BUT THE EXISTENCE OF
INTERBRAND COMPETITION HAS NEVER BEEN A JUSTIFICATION FOR AN EXPLICIT
AGREEMENT TO ELIMINATE COMPETITION.  SEE UNITED STATES V. MCKESSON &
ROBBINS, INC., 351 U.S. 305 (1956).  LIKEWISE EACH WHITE MOTOR DEALER
IS ISOLATED FROM ALL COMPETITION WITH OTHER WHITE MOTOR DEALERS.  ONE
CANNOT MAKE A SALE OR PURCHASE OF A WHITE MOTOR TRUCK OUTSIDE OF HIS
OWN TERRITORY.  HE IS CONFINED TO HIS OWN ECONOMIC ISLAND. 

I HAVE DILIGENTLY SEARCHED APPELLANT'S OFFER OF PROOF BUT FAIL TO
FIND ANY ALLEGATION BY IT THAT RAISES AN ISSUE OF FACT.  ALL OF ITS
STATEMENTS ARE ECONOMIC ARGUMENTS OR BUSINESS NECESSITIES NONE OF WHICH
HAVE ANY BEARING ON THE LEGAL ISSUE.  IT CLEARLY APPEARS FROM ITS
CONTRACTS THAT "ALL ROOM FOR COMPETITION BETWEEN RETAILERS (DEALERS),
WHO SUPPLY THE PUBLIC, IS MADE IMPOSSIBLE."  JOHN D. PARK & SONS CO. V.
HARTMAN, 153 F. 24, 42 (C.A. 6TH CIR.), OPINION BY MR. JUSTICE LURTON,
THEN CIRCUIT JUDGE, AND ADOPTED BY MR. JUSTICE HUGHES, LATER CHIEF
JUSTICE, IN DR. MILES MEDICAL CO. V. JOHN D. PARK & SONS CO., SUPRA, AT
400 (1911).  I HAVE READ AND RE-READ APPELLANT'S "ARGUMENT" AND EVEN
THOUGH I GIVE IT THE DIGNITY OF PROOF I RETURN TO THE CONCLUSION, AS
DID MR. JUSTICE LURTON, THAT "IF THESE CONTRACTS LEAVE ANY ROOM AT ANY
POINT OF THE LINE FOR THE USUAL PLAY OF COMPETITION BETWEEN THE DEALERS
..  ITT IS NOT DISCOVERABLE."  IBID. 

THIS COURT, IT IS TRUE, HAS NEVER HELD WHETHER THERE IS A DIFFERENCE
BETWEEN MARKET DIVISIONS VOLUNTARILY UNDERTAKEN BY A MANUFACTURER SUCH
AS WHITE MOTOR AND THOSE OF DEALERS IN A COMMODITY, AGREED UPON BY
THEMSELVES, SUCH AS WERE CONDEMNED IN TIMKEN ROLLER BEARING CO. V.
UNITED STATES, 341 U.S. 593 (1951).  WHITE DOES NOT CONTEND THAT ITS
DISTRIBUTION SYSTEM HAS ANY LESS TENDENCY TO RESTRAIN COMPETITION AMONG
ITS DISTRIBUTORS AND DEALERS THAN A HORIZONTAL AGREEMENT AMONG SUCH
DISTRIBUTORS AND DEALERS THEMSELVES.  IT SEEMS TO PLACE SOME HALO
AROUND ITS AGREEMENTS BECAUSE THEY ARE VERTICAL.  BUT THE INTENDED AND
ACTUAL EFFECT IS THE SAME AS, IF NOT EVEN MORE DESTRUCTIVE THAN, A
PRICE-FIXING AGREEMENT OR ANY OF ITS PER SE COUNTERPARTS.  THIS IS TRUE
BECAUSE PRICE-FIXING AGREEMENTS, BEING MORE EASILY BREACHED, MUST BE
CONTINUALLY POLICED BY THOSE FORMING THE COMBINATION, WHILE CONTRACTS
FOR A DIVISION OF TERRITORY, BEING EASILY DETECTED, ARE PRACTICALLY
SELF-ENFORCING.  MOREOVER, WHITE MOTOR HAS ADMITTED THAT EACH OF ITS
DISTRIBUTORS AND DEALERS, NUMBERING SOME 300, HAS ENTERED INTO
IDENTICAL CONTRACTS.  IN ITS "ARGUMENT" IT SAYS THAT "IT HAS TO" AGREE
TO THESE EXCLUSIVE TERRITORIAL ARRANGEMENTS IN ORDER TO GET FINANCIALLY
ABLE AND CAPABLE DISTRIBUTORS AND DEALERS.  IT HAS NOWISE DENIED THAT
IT HAS BEEN REQUIRED BY THE DISTRIBUTORS OR DEALERS TO ENTER INTO THE
CONTRACTS.  INDEED THE CLEAR INFERENCE IS TO THE CONTRARY.  THE
MOTIVATIONS OF WHITE MOTOR AND ITS DISTRIBUTORS AND DEALERS ARE
INEXTRICABLY INTERTWINED; THE DISTRIBUTORS AND DEALERS ARE EACH
ACQUAINTED WITH THE CONTRACTS AND HAVE READILY COMPLIED WITH THEIR
REQUIREMENTS, WITHOUT WHICH THE CONTRACTS WOULD BE OF NO EFFECT.  IT IS
HARD FOR ME TO DRAW A DISTINCTION ON THE BASIS OF WHO INITIATES SUCH A
PLAN.  INDEED, UNDER INTERSTATE CIRCUIT, INC., V. UNITED STATES, 306
U.S. 208, 223 (1939), THE UNANIMITY OF ACTION BY SOME 300 PARTIES HERE
FORMS THE BASIS OF AN "UNDERSTANDING THAT ALL WERE TO JOIN" AND THE
ECONOMICS OF THE SITUATION WOULD CERTAINLY REQUIRE AS MUCH.  THERE THIS
COURT ON A MUCH WEAKER FACTUAL BASIS HELD: 

"IT TAXES CREDULITY TO BELIEVE THAT THE SEVERAL DISTRIBUTORS WOULD,
IN THE CIRCUMSTANCES, HAVE ACCEPTED AND PUT INTO OPERATION WITH
SUBSTANTIAL UNANIMITY SUCH  ..  MEETHODS WITHOUT SOME UNDERSTANDING
THAT ALL WERE TO JOIN, AND WE REJECT AS BEYOND THE RANGE OF PROBABILITY
THAT IT WAS THE RESULT OF MERE CHANCE." 

LIKEWISE, THE OTHER RESTRICTIONS IN THE CONTRACTS RUN COUNTER TO THE
SHERMAN ACT.  THIS COURT HAS HELD THE RESTRICTION ON THE WITHHOLDING OF
CUSTOMERS TO BE ILLEGAL AS A CONTRACT BETWEEN POTENTIAL COMPETITORS NOT
TO COMPETE, UNITED STATES V. MCKESSON & ROBBINS, INC., SUPRA, AT 312
(1956), AND WHITE MOTOR'S PROHIBITION ON RESALES WITHOUT ITS APPROVAL
IS CONDEMNED BY UNITED STATES V. BAUSCH & LOMB CO., 321 U.S. 707, 721
(1944).  EXPERIENCE, AS WELL AS OUR CASES, HAS SHOWN THAT THESE
RESTRICTIONS HAVE A "PERNICIOUS EFFECT ON COMPETITION AND LACK  ..
ANYY REDEEMING VIRTUE  ..  .""  NORTHERN PAC. R. CO. V. UNITED STATES,
SUPRA, AT 5. 

THE COURT SAYS THAT PERHAPS THE REASONABLENESS OR THE EFFECT OF SUCH
ARRANGEMENTS MIGHT BE SUBJECT TO INQUIRY.  BUT THE RULE OF REASON IS
INAPPLICABLE TO AGREEMENTS MADE SOLELY FOR THE PURPOSE OF ELIMINATING
COMPETITION.  UNITED STATES V. SOCONY-VACUUM OIL CO., 310 U.S. 150
(1940)(PRICE FIXING); FASHION ORIGINATORS' GUILD V. FEDERAL TRADE
COMM'N, SUPRA (GROUP BOYCOTTS); INTERNATIONAL SALT CO. V. UNITED
STATES, 332 U.S. 392 (1947), AND UNITED STATES V. NATIONAL LEAD CO.,
332 U.S. 319 (1947)(TYING ARRANGEMENTS); TIMKEN ROLLER BEARING CO. V.
UNITED STATES, SUPRA; NATIONWIDE TRAILER RENTAL SYSTEM V. UNITED
STATES, 355 U.S. 10 (1957), AFFIRMING 156 F. SUPP. 800 (D.C.D. KAN.
1957), AND UNITED STATES V. NATIONAL LEAD CO., SUPRA (DIVISION OF
MARKETS).  THE SAME RULE APPLIES TO THE CONTRACTS HERE.  THE OFFERED
JUSTIFICATION MUST FAIL BECAUSE IT INVOLVES A CONTENTION CONTRARY TO
THE PUBLIC POLICY OF THE SHERMAN ACT, WHICH IS THAT THE SUPPRESSION OF
COMPETITION IS IN AND OF ITSELF A PUBLIC INJURY.  TO ADMIT, AS DOES THE
PETITIONER, THAT COMPETITION IS ELIMINATED UNDER ITS CONTRACTS IS,
UNDER OUR CASES, TO ADMIT A VIOLATION OF THE SHERMAN ACT.  NO
JUSTIFICATION, NO MATTER HOW BENEFICIAL, CAN SAVE IT FROM THAT
INTERDICTION.    THE THRUST OF APPELLANT'S CONTENTION SEEMS TO BE IN
ESSENCE THAT IT CANNOT MARKET ITS TRUCKS PROFITABLY WITHOUT THE
ADVANTAGE OF THE RESTRICTIVE COVENANTS.  I NOTE THAT OTHER MOTOR CAR
MANUFACTURERS - INCLUDING THE "BIG THREE" - ABANDONED THE PRACTICE OVER
A DECADE AGO.  ONE OF THESE, AMERICAN MOTORS, TOLD THE EIGHTY-FOURTH
CONGRESS, BEFORE WHICH LEGISLATION WAS PENDING TO PERMIT DIVISION OF
TERRITORY, (FN1) THAT IS WAS "NOT IN FAVOR OF ANY LEGISLATION,
PERMISSIVE OR OTHERWISE, THAT RESTRICTS THE RIGHT OF THE CUSTOMER TO
CHOOSE ANY DEALERS FROM WHOM HE DESIRES TO PURCHASE."  HEARINGS BEFORE
A SUBCOMMITTEE OF THE HOUSE COMMITTEE ON INTERSTATE AND FOREIGN
COMMERCE ON AUTOMOBILE MARKETING LEGISLATION, 84TH CONG., P. 285. 
AMERICAN MOTORS SEEMS TO HAVE BEEN ABLE TO SURVIVE AND PROSPER AGAINST
"BIG THREE" COMPETITION.  BUT EVEN THOUGH WHITE MOTOR GAINS AN
ADVANTAGE THROUGH THE USE OF THE RESTRICTIONS, "THE QUESTION REMAINS
WHETHER IT IS ONE WHICH IT IS ENTITLED TO SECURE BY AGREEMENTS
RESTRICTING THE FREEDOM OF TRADE ON THE PART OF DEALERS WHO OWN WHAT
THEY SELL."  DR. MILES MEDICAL CO., SUPRA, AT 407-408.  AND, MR.
JUSTICE HUGHES CONTINUED: 

"AS TO THIS, THE COMPLAINANT CAN FARE NO BETTER WITH ITS PLAN OF
IDENTICAL CONTRACTS THEN COULD THE DEALERS THEMSELVES IF THEY FORMED A
COMBINATION AND ENDEAVORED TO ESTABLISH THE SAME RESTRICTIONS, AND THUS
TO ACHIEVE THE SAME RESULT, BY AGREEMENT WITH EACH OTHER.  IF THE
IMMEDIATE ADVANTAGE THEY WOULD THUS OBTAIN WOULD NOT BE SUFFICIENT TO
SUSTAIN SUCH A DIRECT AGREEMENT, THE ASSERTED ULTERIOR BENEFIT TO THE
COMPLAINANT CANNOT BE REGARDED AS SUFFICIENT TO SUPPORT ITS SYSTEM." 
ID., AT 408. 

THE MILK IN THE COCONUT IS THAT WHITE MOTOR "HAVING SOLD ITS PRODUCT
AT PRICES SATISFACTORY TO ITSELF, THE PUBLIC IS ENTITLED TO WHATEVER
ADVANTAGE MAY BE DERIVED FROM COMPETITION IN THE SUBSEQUENT TRAFFIC." 
ID., AT 409. 

TODAY THE COURT DOES A FUTILE ACT IN REMANDING THIS CASE FOR TRIAL. 
IN MY VIEW APPELLANT CANNOT PLEAD NOR PROVE AN ISSUE UPON WHICH A
SUCCESSFUL DEFENSE OF ITS CONTRACTS CAN BE PREDICATED.  NEITHER TIME (I
NOTE THE CASE IS NOW IN ITS SIXTH YEAR) NOR ALL OF THE ECONOMIC
ANALYSTS, THE STATISTICIANS, THE EXPERTS IN MARKETING, OR FOR THAT
MATTER THE INGENUITY OF LAWYERS, CAN ESCAPE THE UNALTERABLE FACT THAT
THESE CONTRACTS ELIMINATE COMPETITION AND UNDER OUR CASES ARE VOID. 
THE NET EFFECT OF THE REMAND IS THEREFORE BUT TO EXTEND FOR PERHAPS AN
ADDITIONAL FIVE YEARS WHITE MOTOR'S ENJOYMENT OF THE FRUITS OF ITS
ILLEGAL ACTION.  CERTAINLY THE DECISION HAS NO PRECEDENTIAL VALUE (FN2)
IN SUBSTANTIVE ANTITRUST LAW. 

FN1  H.R. 6544, 84TH CONG., 1ST SESS.  THE BILL WAS NEVER REPORTED
FROM THE COMMITTEE. 

FN2  OUR RECENT CERTIFICATION OF THE AMENDMENT TO THE SUMMARY
JUDGMENT PROCEDURE UNDER RULE 56, QUOTED IN THE COURT'S OPINION, WILL
ELIMINATE THE PROBLEM POSED HERE, I.E., THE SUFFICIENCY OF THE RECORD.