Standard Oil v. United States

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221 U.S. 1 (1911), argued 14–16 Mar. 1910, reargued 12–17 Jan. 1911, decided 15 May 1911 by vote of 9 to 0; White for the Court, Harlan concurring. The Standard Oil case was decided at a time when the Sherman Antitrust Act was being increasingly challenged by big business. The Supreme Court remained divided over the appropriate approach to construing the statute; Congress repeatedly considered (and sometimes enacted) amendments; executive enforcement alternated between trust-busting and regulation.

Responding to a lower court's decree dissolving it under the Sherman Act, Standard Oil appealed to the Supreme Court. Chief Justice Edward D. White resorted to common law and statutory construction to define “restraints of trade” and “monopoly.” Emphasizing Congress's intent to protect the right to contract and freedom of commerce, White concluded that the law covered only “unreasonable” restraints of trade and that a common-law standard of reasonableness should be used to identify the actions that the act prohibited. Justice John Marshall Harlan concurred, but he denounced the new “rule of reason” as judicial legislation, imposing on the statute a construction rejected by Congress.

The Court upheld the order to dissolve the Oil Trust, but though its decision was popular, the Court was criticized by progressives for emasculating the law and by business leaders for generating new uncertainties for businesses. The debate over antitrust policy continued through the presidential campaign of 1912, leading to the Clayton Antitrust Act and the Federal Trade Commission Act. The rule of reason, however, remained the judicial standard for interpreting antitrust statutes, allowing considerable flexibility in later cases.

Barbara C. Steidle

Subjects: Law.

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