1.Division of Markets

Law school students, after they graduate from law school, must take and pass a bar exam before they can become a lawyer in a state. Most law students take a preparatory bar exam course before they take the bar exam. Harcourt Brace Jovanovich Legal (HBJ) was the nation's largest provider of bar review materials and preparatory services. HBJ began offering a Georgia bar review course in direct competition with BRG of Georgia, Inc. (BRG), which was the only other main provider of a bar review preparatory course in the state of Georgia. Subsequently, HBJ and BRG entered into an agreement whereby BRG was granted an exclusive license to market HBJ bar review materials in Georgia in exchange for paying HBJ $100 per student enrolled by BRG in the course. Thus, HBJ agreed not to compete with BRG in Georgia, and BRG agreed not to compete with HBJ outside Georgia. Immediately after the agreement was struck, the price of BRG's course in the state of Georgia was increased from $150 to $400. Jay Palmer and other law school graduates who took the BRG bar review course in preparation for the Georgia bar exam sued BRG and HBJ, alleging a geographical division of markets, in violation of Section1of the Sherman Act.

Q1: Are BRG and HBJ liable for violating Section1 of the Sherman Act?

2.Price Fixing

Maricopa County Medical Society (Society) is a professional association that represents doctors of medicine, osteopathy, and podiatry in Maricopa County, Arizona. The society formed the Maricopa Foundation for Medical Care (Foundation), a nonprofit Arizona corporation. Approximately 70 percent of the doctors in the county belong to Foundation. Foundation acts as an insurance administrator between its member doctors and insurance companies that pay patients' medical bills.

Foundation established a maximum fee schedule for various medical services. The member doctors agreed to abide by this fee schedule when providing services to patients. The state of Arizona brought this action against Society and Foundation and its members, alleging price-fixing, in violation of Section1of the Sherman Act.

Q2: Who wins and why?

3.Tying Arrangement

Mercedes-Benz of North America (MBNA) was the exclusive franchiser of Mercedes-Benz dealerships in the United States. MBNA's franchise agreements required each dealer to establish a customer service department for the repair of Mercedes-Benz automobiles and required dealers to purchase Mercedes-Benz replacement parts from MBNA. At least eight independent wholesale distributors, including Metrix Warehouse, Inc. (Metrix), sold replacement parts for Mercedes-Benz automobiles. Because they were precluded from selling parts to Mercedes-Benz dealers, these parts distributors sold their replacement parts to independent garages that specialized in the repair of Mercedes-Benz automobiles. Evidence showed that Metrix sold replacement parts for Mercedes-Benz automobiles of equal quality and at a lower price than those sold by MBNA. Metrix sued MBNA, alleging a tying arrangement, in violation ofSection1of the Sherman Act.

Q3. Who wins and why?

4.Merger

Lipton Tea Co. (Lipton) was the second-largest U.S. producer of herbal teas, controlling 32 percent of the national market. Lipton announced that it would acquire Celestial Seasonings, the largest U.S. producer of herbal teas, which controlled 52 percent of the national market. R.C. Bigelow, Inc., the third-largest producer of herbal teas, with 13 percent of the national market, brought an action, alleging that the merger would violate Section 7 of the Clayton Act, and sought an injunction against the merger.

Q4: What type of merger is proposed in this case? What is the relevant market? Should the merger be enjoined?