No. The lumber company did not break the law. The court explained that because Doman already had a monopoly, it could have raised prices all by itself without hiring an exclusive seller. The deal with Sherwood didn't give Doman any new power to hurt the market that it didn't already have. Antitrust laws are meant to protect the whole market from unfair practices, not to protect one specific business (like E & L) from losing a contract. E & L was just a competitor that lost out, which isn't illegal.

No, the special deal between Doman and Sherwood did not break the law, because E & L did not show how it really hurt competition. Doman already controls almost all of the green hem-fir wood, so letting Sherwood be the only seller doesn't give Doman any extra power it didn't already have. In fact, having just one seller might even be bad for a company like Doman that controls the whole supply. E & L complained that the deal led to fewer choices and higher prices for customers, but that's not enough to prove the deal itself is illegal. The law says these kinds of deals are usually okay unless someone can prove they're really harming competition overall. E & L didn't show that here. The other complaints E & L made about Doman and Sherwood breaking different competition laws also weren't explained well enough to count.

No. A manufacturer with pre-existing market power does not further harm competition by switching to an exclusive distributor. The court reasoned that exclusive distributorships are presumptively legal vertical restraints. A manufacturer with a monopoly on a product can only extract one monopoly profit; creating a monopoly at the distribution level provides no additional monopolistic benefit and may even be counterproductive by further restricting output, which would reduce the manufacturer's own sales. The alleged harm—higher prices—stems from Doman's pre-existing market power, not the exclusive distribution agreement itself. The complaint fails because it alleges harm to a competitor (E & L), not an 'actual adverse effect on competition as a whole.' The court also dismissed the tying claim for being impermissibly vague and the Robinson-Patman price discrimination claim because E & L, as a consignment agent who never purchased the goods, lacked standing.

No, the exclusive distributorship agreement between Doman Industries Limited and Sherwood Lumber Corp. does not violate Sections 1 and 2 of the Sherman Act because the plaintiffs failed to allege facts that, if proven, would demonstrate harm to competition. The agreement provides no monopolistic benefit to Doman that it does not already possess as the alleged monopoly manufacturer of green hem-fir lumber. A monopolist manufacturer's extension of its monopoly to the retail distribution level does not further harm competition, because the monopoly manufacturer can already control output and prices. In fact, using an exclusive distributor is likely counterproductive for a monopolist manufacturer, because the distributor will further reduce output to maximize its own profits. The only detriment to competition alleged by the plaintiffs is reduced options and higher prices for end-users, but this alone is insufficient to demonstrate harm to competition from the exclusive distributorship, as Doman can achieve this result without the aid of a distributor. Exclusive distributorship arrangements are presumptively legal and the plaintiffs have not alleged facts that would rebut that presumption. The complaint also fails to adequately allege antitrust injury, which requires a showing that the claimed injury flows from that which makes the conduct unlawful. Here, the alleged higher prices and reduced options flow from Doman's monopoly over green hem-fir lumber, not the exclusive distributorship. The plaintiffs' other antitrust claims, including monopolization, tying, and price discrimination, were also properly dismissed for failure to allege harm to competition or other required elements.

E & L Consulting, Ltd. v. Doman Industries Ltd.

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