USA Petroleum Company v. Atlantic Richfield Company

ALARCON, Circuit Judge,

dissenting:

I.

In this antitrust action, plaintiff/appellant USA Petroleum Company (“USA”) appeals from the district court’s order granting summary judgment in favor of defendant/appellee Atlantic Richfield Company (“ARCO”) for . USA’s failure to demon*698strate “antitrust injury.” I respectfully disagree with the majority’s conclusion that the district court erred. Because USA failed to present any facts showing antitrust injury, I would affirm.

II.

USA, a gasoline retailer, brought this action to challenge ARCO’s marketing program in which ARCO discontinued its credit cards and offered lower gasoline prices to consumers. USA claimed ARCO, a major integrated oil company, violated section 1 of the Sherman Act, 15 U.S.C. § 1 (1982), by conspiring with certain retail dealers to set retail prices for ARCO-brand gasoline at levels USA could not match. USA claimed ARCO violated section 2 of the Sherman Act, 15 U.S.C. § 2 (1982), by attempting to monopolize the retail gasoline market through the “predatory pricing” of its ARCO-brand gasoline. USA also asserted claims for violations of the Robinson-Patman Act, the Cartwright Act and various state laws.

USA claimed ARCO’s increased price competition resulted in it having “lost sales it otherwise would have made.” USA sought compensation for these lost sales under section 4 of the Clayton Act, 15 U.S.C. § 15 (1982), which provides, in part, “[a]ny person who shall be injured ... by reason of anything forbidden in the antitrust laws may sue ... and shall recover threefold the damages by him sustained.”

ARCO moved for summary judgment on USA’s sections 1 and 2 claims. ARCO contended USA’s section 2 claim failed for no “dangerous probability” existed that ARCO-brand sellers would monopolize the market. ARCO contended USA’s section 1 claim failed for want of antitrust injury. ARCO contended the injury USA described in its complaint was not antitrust injury because it resulted solely from non-predatory price competition.

In response to this motion, USA voluntarily dismissed its section 2 claim. Thereafter, ARCO renewed its motion concerning USA’s section 1 claim. The district court held that, even assuming a vertical conspiracy to fix maximum prices, USA “cannot satisfy the ‘antitrust injury’ requirement of Clayton Act § 4, without showing ... [the prices charged for ARCO gasoline] to be predatory.” The court found those prices were not predatory. Accordingly, it granted ARCO’s motion and dismissed USA’s complaint with prejudice.

III.

USA claims the district court misapplied the substantive law when it concluded the injury USA suffered as a result of the alleged price-fixing conspiracy was not antitrust injury, i.e. “injury of the type the antitrust laws were intended to prevent.” Brunswick Corp. v. Pueblo Bowl-O-Mat, 429 U.S. 477, 489, 97 S.Ct. 690, 697, 50 L.Ed.2d 701 (1977). USA contends it suffered antitrust injury because its injury resulted from an illegal price-fixing conspiracy.

We review independently and non-deferentially a contention that the district court misapplied the substantive law in its order granting summary judgment. Ashton v. Cory, 780 F.2d 816, 818 (9th Cir.1986). We view the evidence in the light most favorable to USA, the non-moving party. Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986); Baker v. Department of Navy, 814 F.2d 1381, 1382 (9th Cir.) cert. denied, — U.S. -, 108 S.Ct. 450, 98 S.Ct. 390 (1987).

IY.

The issue presented on this appeal is a difficult question of first impression. We are asked to determine whether a retail competitor suffers antitrust injury in the form of lost profits as a result of a non-predatory maximum vertical price fixing agreement. We must assume for purposes of this appeal that USA could prove a per se violation of Sherman Act § 1 for maximum vertical price fixing. However, as the Supreme Court in Matsushita instructs, “... [USA] must show more than a conspiracy in violation of the antitrust laws; they must show an injury to them *699resulting from the illegal conduct.” 475 U.S. at 586, 106 S.Ct. at 1356.

The concept of antitrust injury had its origins in the Supreme Court’s decision in Brunswick, 429 U.S. 477, 97 S.Ct. 690. In Brunswick, the plaintiff bowling alley operators brought a treble damage action under section 4 of the Clayton Act against a competing bowling alley operator. Plaintiffs claimed their competitor’s acquisition of several bowling alleys in the proximity of their operation violated section 7 of the Clayton Act inasmuch as it threatened to “create a monopoly.” Id. at 480, 97 S.Ct. at 693. To establish damages, the plaintiffs demonstrated that had the competitor not acquired the alleys, those alleys would have closed and plaintiffs’ profits would have increased from the resultant reduction in competition.

The Supreme Court held that plaintiffs seeking treble damages under section 4

must prove more than injury causally linked to an illegal presence in the market. Plaintiffs must prove antitrust injury, which is to say injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants’ acts unlawful. The injury should reflect the anticompetitive effect either of the violation or of anti-competitive acts made possible by the violation.

Id. at 488-89, 97 S.Ct. at 697 (emphasis in original). Applying this principle, the Court held the plaintiffs’ claim failed for their injury resulted solely from preservation of competition. An injury suffered on account of preservation of competition, according to the Court, is not one the “antitrust laws were intended to prevent.” Id. at 488, 97 S.Ct. at 697.

V.

Section 1 of the Sherman Act, 15 U.S.C. § 1 (1982) provides in relevant part, “Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several states, or with foreign nations, is declared to be illegal.” Price fixing agreements, whether they set minimum or maximum prices or whether they are horizontal or vertical agreements, are all deemed per se violations of Sherman Act § 1 despite the fact that some types of price fixing agreements may have competitive benefits. See e.g., 324 Liquor Corp. v. Duffy, 479 U.S. 335, 107 S.Ct. 720, 724, 93 L.Ed.2d 667 (1987) (minimum vertical price fixing); Arizona v. Maricopa County Medical Society, 457 U.S. 332, 102 S.Ct. 2466, 73 L.Ed.2d 48 (1982) (horizontal maximum price fixing); Albrecht v. Herald Co., 390 U.S. 145, 88 S.Ct. 869, 19 L.Ed.2d 998 (1968) (maximum vertical price fixing); Kiefer-Stewart Co. v. Joseph E. Seagram & Sons, 340 U.S. 211, 71 S.Ct. 259, 95 L.Ed. 219 (1951) (vertical and horizontal maximum price fixing); United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129 (1940) (horizontal minimum price fixing). The per se rule is based in part on “economic prediction, judicial convenience, and business certainty.” 457 U.S. at 354, 102 S.Ct. at 2478. Thus, “[a]s in every rule of general application, the match between the presumed and the actual is imperfect.” Id. at 344, 102 S.Ct. at 2473. See also Continental T.V., Inc. v. GTE Sylvania, Inc., 433 U.S. 36, 50 n. 16, 97 S.Ct. 2549, 2557 n. 16 53 L.Ed.2d 568 (1977) (“cases that do not fit the generalization may arise”). Because the match between the conduct and the rule may be imperfect, it follows that some conduct which does not fit the reason for finding an antitrust violation may not result in antitrust injury or may result in only limited antitrust injury.1

The majority states that the proper question is not “what type of injuries a rule *700against maximum resale price maintenance was meant to prevent, but what kind of injuries rules against price fixing were meant to prevent.” Maj. op. at 694. This inquiry ignores the Brunswick requirement that the injury reflect the anticompet-itive effect of the violation. The anticom-petitive effects will be different depending on the type of price fixing agreement. Thus, the Supreme Court instructs us that:

The term “restraint of trade” in [Sherman Act § 1], like the term at common law, refers not to a particular list of agreements, but to a particular economic consequence, which may be produced by quite different sorts of agreements in varying times and circumstances.

Business Electronic Corp. v. Sharp Electronics Corp., — U.S. -, 108 S.Ct. 1515, 1523, 99 L.Ed.2d 808 (1988). Therefore, we must analyze “illegal price fixing agreements” to determine whether the agreement is horizontal or vertical and whether it sets maximum or minimum prices so we can properly determine the economic consequences and anticompetitive effects. This inquiry is necessary to determine whether an injury allegedly caused by “illegal price fixing” is of the type the antitrust laws were meant to prevent.

In general, horizontal price fixing agreements are illegal because they create market power that did not previously exist and this cooperative action among competitors creates a restraint that is otherwise not possible. 7 P. Areeda, Antitrust Law, 111437 (1986). In contrast, a vertical price restraint ordinarily does not increase anyone’s market power but merely reflects existing power of one party in the marketplace. 7 P. Areeda, Antitrust Law, ¶ 1437 (1986). The impact of vertical price restrictions is to reduce or eliminate intrabrand competition2 without necessarily impacting interbrand competition.3 See Continental T.V., Inc., 433 U.S. at 51-52, 97 S.Ct. at 2558 (1977); Shores, Vertical Price-Fixing And The Contract Conundrum: Beyond Monsanto, 54 Fordham L.Rev. 377, 379 (1985). In contrast, horizontal price restraints drastically reduce interbrand competition. See White Motor Co. v. United States, 372 U.S. 253, 267, 83 S.Ct. 696, 704, 9 L.Ed.2d 738 (1963) (Brennan, J., concurring); see also, Arizona v. Maricopa County Medical Society, 457 U.S. 332, 348 n. 18, 102 S.Ct. 2466, n. 18, 73 L.Ed.2d 48 (1982) (“horizontal restraints are generally less defensible than vertical restraints”); Shores, supra, at 401. A reduction in in-terbrand competition causes more concern under the antitrust law, because interbrand competition is seen as the primary concern of the antitrust law. Continental T.V., Inc., 433 U.S. at 52 n. 19, 97 S.Ct. at 2558 n. 19.

The effect of minimum price fixing, whether horizontal or vertical, is generally higher prices. Pitofsky, In Defense of Discounters: The No-Frills Case for A Per Se Rule Against Vertical Price Fixing, 71 Geo.L.J. 1487, 1488 (1983); 324 Liquors, 475 U.S. 335, 107 S.Ct. at 723. In addition, minimum vertical price fixing, unlike some other types of vertical restraints, is similar to horizontal price fixing because it restricts interbrand competition. Continental T.V., Inc., 433 U.S. at 51 n. 18, 97 S.Ct. at 2558 n. 18 (citing White Motor Co., 372 U.S. at 268, 83 S.Ct. at 704-05 (Brennan, J., concurring)).

Maximum price fixing, whether vertical or horizontal, is not viewed as being as destructive as minimum price fixing principally because it generally results in lower prices to consumers. Northwest Publications, Inc. v. Crumb, 752 F.2d 473, 475 (9th Cir.1985); accord Jack Walters & Sons Corp. v. Morton Building, Inc., 737 F.2d 698, 708-09 (7th Cir.) cert. denied, 469 U.S. 1018, 105 S.Ct. 432, 83 L.Ed.2d 359 *701(1984). Maximum horizontal price fixing is viewed as more anticompetitive than maximum vertical price fixing because of its potential to eliminate interbrand competition.4 Maximum vertical price fixing lacks the potential anticompetitive effects that maximum horizontal price fixing has, and in contrast has the potential for creating a competitive benefit. See Easterbrook, supra, at 890 n. 20.5 Indeed, maximum vertical price fixing by a single manufacturer may stimulate interbrand competition.6 See 324 Liquor Corp., 479 U.S. 335, 107 S.Ct. at 724 (“a vertical restraint imposed by a single manufacturer or wholesaler may stimulate interbrand competition even as it reduces intrabrand competition”) (emphasis in original). Maximum vertical price fixing is destructive when the prices set are predatory. See Matsushita, 475 U.S. at 584, 106 S.Ct. at 1354-55. Below cost prices are seen as predatory “chiefly in cases in which a single firm having a dominant share of the market, cuts its prices in order to force competition out of the market, or perhaps to deter potential entrants from coming in.” Id. at 584 n. 8, 106 S.Ct. at 1355 n. 8. Thus, USA’s injury must be viewed in the context of the alleged antitrust violation to determine whether the alleged injury results from the anticom-petitive aspects of the maximum vertical price fixing agreement.

VI.

The antitrust injury analysis in a maximum vertical price fixing agreement is difficult because, as one commentator states, “[sjupplier regulation of the maximum prices charged by dealers is virtually never anticompetitive.” P. Areeda & H. Hoven-kamp, Antitrust Law 11335.2h, n. 56 (Supp. 1987); see also Page, The Scope of Liability for Antitrust Violations, 37 Stan.L. Rev. 1445, 1469-70 (1985) (when price fixing agreements reduce prices and increase output, no harm from the practice can be antitrust injury); Page, Antitrust Damages and Economic Efficiency: An Approach to Antitrust Injury, 47 U.Chi.L. *702Rev. 467, 490-492 (1980). If the conduct is not anticompetitive, it follows that no antitrust injury exists.

The most common scenario involving a maximum vertical price fixing agreement involves a suit by dealers or distributors against their suppliers. The “restraint of trade” involved in a maximum vertical price fixing agreement between a supplier and its dealers is the elimination or drastic reduction of competition in the intrabrand market. Whether a coerced dealer in fact suffers antitrust injury by such an agreement would depend on the particular circumstances. 1 P. Areeda & D. Turner, Antitrust Law ¶ 346c (1978); see e.g. Jack Walters & Sons Corp. v. Morton Building, Inc., 737 F.2d 698, 708-09 (7th Cir.1984), cert. denied, 469 U.S. 1018, 105 S.Ct. 432, 83 L.Ed.2d 359 (maximum vertical price fixing agreement did not result in antitrust injury to dealer); cf. Knutson v. Daily Review, Inc., 548 F.2d 795 (9th Cir.1976) cert. denied, 433 U.S. 910, 97 S.Ct. 2977, 53 L.Ed.2d 1094 (1977) (pre Brunswick case awarding terminated dealers lost profits).

A case like the one before us invoking an action by one competitor against its rival’s supplier cannot be satisfactorily resolved by adopting the analysis of the dealer versus supplier cases. Although a plaintiff does not have to “prove an actual lessening of competition in order to recover, ... the case for relief will be strongest where competition has been diminished.” Brunswick, 429 U.S. at 489 n. 14, 97 S.Ct. at 698 n. 14. Thus, the drastic reduction or elimination of competition in the intrabrand market suggests that antitrust injury is more likely to occur in the dealer-versus-supplier cases. Furthermore, the dealer-versus-supplier cases usually involve coercion and threats which impair a dealer’s “freedom” to set prices.7

The closest case to the facts presented here is Murphy Tugboat Co. v. Crowley, 658 F.2d 1256 (9th Cir.1981), cert. denied, 455 U.S. 1018, 102 S.Ct. 1713, 72 L.Ed.2d 135 (1982). In Murphy Tugboat, the plaintiff tugboat company sued a rival tugboat company for treble damages under section 4 of the Clayton Act. The plaintiff claimed that the rival tugboat company entered into a price fixing agreement with inland pilots which set the fees for the pilots’ services at a level that was lower than the fees otherwise charged by pilots in the San Francisco area. Id. at 1258. The plaintiff tugboat company claimed the pilot fee agreement was anticompetitive because the rival’s package price, which included the tugs and the pilot fees, was lower than it would have been absent the agreement. If the rival’s package price was lower, the plaintiff would have been able to charge a higher price or maintain price and increase market share. Id. at 1257-58. The plaintiff claimed these lost profits as damages.

We stated in Murphy Tugboat that the plaintiff did not and could not complain about the pilot fee agreement because the plaintiff was not operating in the pilot services market. We held that the rival’s package price did not violate Sherman Act § 1 because the package price, which was always higher than the plaintiff’s price, was not below cost. Therefore, the package price was not predatory and the rival did not violate Sherman Act § 1. In reaching this conclusion we stated, “[the antitrust laws] do not prohibit non-predatory conduct that results in a lower price to the consumer. The antitrust laws do not require the erection of a price umbrella for the benefit of inefficient competitors.” Id. at 1259.

Murphy Tugboat is instructive, but it is not controlling because it differs from the present case in several important respects. First, the alleged price fixing in Murphy Tugboat did not exist in the plaintiff’s tugboat market, it existed in the inland pilot market. Here, the alleged price fixing exists in USA’s retail gasoline market. Sec*703ond, in Murphy Tugboat the package price charged to customers was not fixed. Only one component cost of the package price (the pilot fee) was fixed. In contrast, USA alleges that ARCO fixed the gasoline price charged to retail customers, not that ARCO fixed some component cost of supplying gasoline.

My research has not disclosed a case in this circuit or in any other jurisdiction dealing with a competitor versus its rival's supplier which addresses the antitrust injury requirement of Clayton Act § 4 in the context of a maximum vertical price fixing agreement in violation of Sherman Act § l.8 Instead, I have found repeated affirmations of the principle that the Sherman Act was designed by Congress as a “consumer welfare prescription,” Reiter v. Sonotone Corp., 442 U.S. 330, 343, 99 S.Ct. 2326, 2333, 60 L.Ed.2d 931 (1979), and was not designed to insulate competitors from vigorous competition. See Brunswick, 429 U.S. at 488, 97 S.Ct. at 697 quoting Brown Shoe Co. v. United States, 370 U.S. 294, 320, 82 S.Ct. 1502, 1521, 8 L.Ed.2d 510 (1962) (“the antitrust laws ... were enacted for ‘the protection of competition not competitors' ”) (emphasis in original); accord Triple M Roofing Corp. v. Tremco., Inc., 753 F.2d 242, 243 (2d Cir.1985) (“[t]he antitrust laws were never intended to provide a balm for the hardships occasioned by vigorous competition”); U.S. at 594, 106 S.Ct. at 1360 (“cutting prices in order to increase business often is the very essence of competition”); cf. Cargill, Inc. v. Monfort of Colorado, Inc., 479 U.S. 104, 107 S.Ct. 484, 495, 93 L.Ed.2d 427 (1986) (“a plaintiff seeking injunctive relief under § 16 of the Clayton Act must show a threat of antitrust injury, and that a showing of loss or damage due merely to increased competition does not constitute such injury”).

VII.

Turning to the facts before us, USA has alleged that ARCO conspired with its dealers to engage in maximum vertical price fixing to set prices below the market level.9 The district court found ARCO’s prices were not predatory,10 and USA does not challenge this finding on appeal.

The impact of ARCO’s alleged maximum vertical price fixing scheme would be to reduce or eliminate intrabrand competition among ARCO brand dealers without necessarily impacting interbrand competition.11 Arguably, interbrand competition in the “discount gasoline” submarket12 would be stimulated by ARCO’s entry into the independent retailers’ market niche. At the same time those gasoline dealers in the interbrand market who already were sell*704ing at prices higher than USA and ARCO may not have been affected by ARCO’s alleged price fixing agreement. In any event, the essence of USA’s claim is that one of the major oil companies, ARCO, intruded upon the independent retailers’ market niche by under pricing the independent retailers. The result is lower prices to consumers, but less profit for USA. USA’s loss of profits from ARCO’s vigorous competition is not antitrust injury.13 The district court did not err in granting summary judgment in ARCO’s favor on the basis of USA’s failure to demonstrate antitrust injury-

USA attempts to avoid this result by reformulating the Brunswick test. USA misstates that test as inquiring whether ARCO’s alleged anticompetitive acts were of the type the antitrust laws were intended to prevent as opposed to whether its injury was of the type the antitrust laws were intended to prevent. After reformulating the test, USA devotes the bulk of its efforts to demonstrate ARCO’s alleged price-fixing activities were of the type the antitrust laws were intended to prevent. Having established this to its satisfaction, USA contends “[a]ll that remains ... is that USA show that its claimed damages flow from the presumed market distorting effects.” Since, according to USA, the question of “flow” is “necessarily a fact intensive inquiry,” USA concludes that this court must remand this issue for jury determination.

USA’s reformulation of the Brunswick test transforms it into a simple question of causation. This mistaken notion directly contravenes Brunswick. The Brunswick court held plaintiffs seeking treble damages “must prove more than injury causally linked to an illegal presence in the market.” Brunswick, 429 U.S. at 489, 97 S.Ct. at 697 (emphasis added). As one commentator has persuasively stated using an example similar to the facts presented here,

Even if causation is assumed, we must ask whether the plaintiff is entitled to be free of a rival product’s lowered price that is entirely lawful apart from the assumed vertical agreement.... [T]he plaintiff would rely on the assumed causation, but query whether protecting the plaintiff’s interest in higher prices serves the purposes of the antitrust laws.... So long as the price of the defendant’s product is itself lawful, the only reason for awarding the competitor treble damages is to encourage him to sue, but we have already seen that rationale to be insufficient. And the protection of the defendant’s rivals is not the reason for prohibiting maximum resale maintenance. Those more directly affected are fully capable of suing, if they feel themselves detrimentally affected. And if they do not, perhaps the social interest in forbidding the practice is weak to begin with.

(Footnote omitted) 2 P. Areeda, Antitrust Law ¶ 346c (1978).

Under the majority’s analysis price fixing “distorts the markets, and harms all the participants.” Maj. op. at 694. Thus, the majority implies that retail dealers, retail competitors and consumers all suffer antitrust injury as a result of any illegal price fixing agreement. The majority’s conclusion ignores the fact that consumers are not injured by maximum vertical price fixing, and retail competitors are not injured and cannot complain about minimum vertical price fixing. Matsushita, 475 U.S. at 582-83, 584 n. 8, 106 S.Ct. at 1354, 1355 n. 8. Market participants may all be harmed by different types of price fixing agreements, but they can only bring an action based on the type of agreement that injures them. The majority’s refusal to analyze this case in the context of a maximum vertical price fixing agreement,14 *705by relying instead on a generic illegal price fixing analysis, has resulted in a dissertation which is premised on “market distortions” that are never fully defined or explained.

I would affirm the district court’s order granting summary judgment because USA failed to demonstrate antitrust injury.

. USA asserts that the per se rule conclusively presumes that maximum vertical price fixing is anticompetitive so it can never have any pro-competitive consequences. On the contrary, the per se rule is a recognition that although price fixing agreements may have some procompeti-tive potential, the anticompetitive effects on balance outweigh the procompetitive aspects. See Continental T.V., Inc., 433 U.S. at 50 n. 16, 97 S.Ct. at 2557 n. 16. Antitrust injury analysis requires that the "injury” reflect the anticompet-itive effect of the violation, not any procompetitive effects. See Brunswick, 429 U.S. at 488-89, 97 S.Ct. at 697. For examples of antitrust violations without antitrust injury, see Local Beauty Supply, Inc. v. Lamaur, Inc., 787 F.2d 1197 (7th Cir.1986); Page, The Scope of Liability for Antitrust Violations, 37 Stan.L.Rev. 1445, 1469-70 *700(1985); 2 P. Areeda & D. Turner, Antitrust Law, ¶¶ 345 & 346.

. Intrabrand competition involves competition among sellers of the same brand of the same product. Continental T.V., Inc. v. GTE Sylvania, Inc., 433 U.S. 36, 52 n. 19, 97 S.Ct. 2549, 2558 n. 19, 53 L.Ed.2d 568 (1977).

. Interbrand competition involves competition between sellers of different brands of the same generic product. Continental T.V., Inc., 433 U.S. at 52 n. 19, 97 S.Ct. at 2558 n. 19.

. For a discussion of the potential anticompeti-tive effects of maximum horizontal price fixing, see Easterbrook, Maximum Price Fixing, 48 U.Chi.L.Rev. 886, 900-908 (1981). Despite the potential anticompetitive effects of maximum horizontal price fixing, Easterbrook argues that the per se rule should be abandoned in the maximum horizontal price fixing case. Id.

. Because maximum vertical price fixing is viewed as having some procompetitive benefits and because its economic effect is not very different from nonprice vertical restraints, Continental T.V., Inc., 43S U.S. at 69 & n. 10, 97 S.Ct. at 2567, n. 10, many commentators have argued that it should be analyzed under the rule of reason. Easterbrook, supra at 890 n. 20; Pitofsky, supra, at 1490 n. 17; cf. Vertical Price Fixing, 98 Harv.L.Rev. 983 (1985); see also, The Jeanery, Inc. v. James Jeans, Inc., 849 F.2d 1148, 1153 n. 3 (9th Cir.1988) (presenting, "[a]n abbreviated bibliography of this debate”). I also note that the Supreme Court was asked by the Solicitor General and other amici in Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752, 104 S.Ct. 1464, 79 L.Ed.2d 775 (1984), to reconsider whether vertical price restrictions should always be unlawful. The Supreme Court declined to reach the question because it had not been presented in the district court nor raised on appeal. 465 U.S. at 761 n. 7, 104 S.Ct. at n. 7. Similarly, this argument was not raised in the case before us, and I express no opinion as to the merits of this argument.

.I note that the Supreme Court in dictum in Business Electronic Corp., 108 S.Ct. at 1520 stated that “vertical price restraints reduce inter-brand price competition." From the Court’s citations it is clear that the Court was referring to minimum vertical price restraints. The Court cites Continental T.V., Inc., 433 U.S. at 51 n. 18, 97 S.Ct. at 2558 n. 18, which quotes Justice Brennan’s concurring opinion in White Motor Co. v. United States, 372 U.S. 253, 268, 83 S.Ct. 696, 9 L.Ed.2d 738 (1963) where he stated, ”[r]esale 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.” Resale price maintenance has traditionally been used to refer to minimum vertical price fixing and was used by Justice Brennan in the context of a minimum vertical price fixing case. Similarly, the Court relies on Posner, Antitrust Policy and the Supreme Court: An Analysis of the Restricted Distribution, Horizontal Merger and Potential Competition Decisions, 75 Colum.L.Rev. 282, 294 (1975) in support of its comment. Again, Pos-ner uses the term "resale price maintenance” to refer to minimum vertical price fixing. See id. at 292, n. 36. Furthermore, Posner uses Justice White’s quote to refer to the “rule of Dr. Miles” which was a minimum vertical price fixing case. Id. at 294. Posner criticizes the Court for not drawing a distinction between minimum and maximum vertical price fixing. Id. at 297.

. Although USA alleged that it was "forced” to match ARCO’s prices, it is difficult to see how ARCO with only 17% of the gasoline market during its most successful month "forced” USA to match ARCO’s prices when most of the market had set prices above those required by ARCO. It would appear instead that USA voluntarily chose to match ARCO’s reduced price to remain competitive.

. King & King Enterprises v. Champlin Petroleum Co., 657 F.2d 1147 (10th Cir.1981), cert. denied, 454 U.S. 1164, 102 S.Ct. 1038, 71 L.Ed. 320 (1982) contains facts similar to the facts presented here. However, I do not find King & King Enterprises helpful because it did not discuss the antitrust injury requirement and it involved a horizontal conspiracy to fix maximum prices.

. USA has not alleged and no facts exist in the record to suggest that any maximum horizontal price fixing agreement was also in existence. Vertical price fixing agreements which also have a horizontal element cause concern because not only do they reduce or eliminate intrabrand competition, but they have the potential to eliminate or drastically reduce inter-brand competition. See Keifer-Steward Co. v. Seagram & Sons, 340 U.S. 211, 71 S.Ct. 259, 95 L.Ed. 219 (1951).

. For a claim of a conspiracy to engage in predatory pricing the Supreme Court has stated that a plaintiff does not suffer “antitrust injury unless petitioners conspired to drive [plaintiff] out of the relevant markets by (i) pricing below the level necessary to sell their products, or (ii) pricing below some appropriate measure of cost.” Matsushita, 475 U.S. at 585 n. 8, 106 S.Ct. at 1355 n. 8. USA acknowledges that this standard is inapplicable to a conspiracy to engage in maximum vertical price fixing.

. See Allison, An Analysis of the Vertical Price-Nonprice Dichotomy, 21 Akron L.Rev. 131 (1987). Allison conducted a study of price and non-price vertical restraints. In ten out of the eleven cases he studied involving maximum vertical price fixing and no other restraints, only intrabrand competition was affected. Id. at 166, table 1.

. USA argued below that the discount gasoline submarket was a market separate from the retail gasoline market. The district court’s findings established that no separate discount gasoline market existed.

. According to the majority, as a result of price fixing, retail competitors are "harmed by the distorted market." Maj. op. at 694. However, the majority does not explain what the harm is or what the market distortion is.

. The majority does state that, “[ejven if [they] were to analyze the question at the more specific level of maximum resale price fixing, given the long term consequences of that practice [they] would reach the same result for similar reasons.” Maj. op. at 694. However, the long term consequences the majority notes are high*705er prices and reduced services to consumers. Maj. op. at 696. USA as a competitor would not suffer antitrust injury from either of these speculative long term consequences.