What is the standard for determining whether a profit sharing agreement violates the Sherman Act?

MultiRegion, United States of America

The following excerpt is from State v. Safeway Inc., 11 Cal. Daily Op. Serv. 8655, 161 Lab.Cas. P 10396, 191 L.R.R.M. (BNA) 2038, 2011 Daily Journal D.A.R. 10469, 2011 Trade Cases P 77522, 651 F.3d 1118 (9th Cir. 2011):

The profit sharing agreement's indeterminate duration and less-than-total domination of the market are immaterial to an analysis of an agreement that inherently violates the antitrust laws. The correct method of analysis of a profit sharing agreement is either the simple per se rule or another intermediate standard such as quick look, by which we examine the anti-competitive effects of an agreement according to its particular circumstances, details, and logic, in light of the generally applicable antitrust law, fundamental principles of economics, and clear experience of the market. See Cal. Dental Ass'n v. FTC, 526 U.S. 756, 78081, 119 S.Ct. 1604, 143 L.Ed.2d 935 (1999). Because a battle royale of economic experts in the courts is unnecessary and because defendants' profit sharing agreement can readily be determined to violate the antitrust laws under the intermediate standard, I would reverse the district court's denial of summary judgment to plaintiff and hold that the profit sharing agreement violates section 1 of the Sherman Act. Accordingly, I dissent in part.2

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