|
A Missed Opportunity: Nonprofit Antitrust Liability in Virginia Vermiculite, Ltd. v. Historic Green Springs, Inc. |
|
|
|
|
Olivia S. Choe [View as PDF]
|
113 Yale L.J. 533 (2003)
The antitrust laws are meant to govern and promote competition. But how antitrust law should treat nonprofit organizations, whose objectives lie outside the commercial sphere but whose actions nevertheless have economic consequences, is not settled. The Fourth Circuit recently confronted this issue in Virginia Vermiculite, Ltd. v. Historic Green Springs, Inc., in which Virginia Vermiculite, Ltd. (VVL) sued both a competing vermiculite mining company, W.R. Grace & Co. (Grace), and Historic Green Springs, Inc. (HGSI), a nonprofit dedicated to land preservation, under federal and state antitrust and unfair trade laws. Grace had made a series of land donations to HGSI, which VVL claimed had been intended to exclude it from vermiculite reserves in Virginia. In upholding the district court's summary judgment for HGSI, the Fourth Circuit characterized the transactions as unilateral "gift[s]" that HGSI had passively accepted without exercising any "right or economic power."
This Comment argues that the court's approach was mistaken. Although the court may not have wanted to expose a nonprofit to liability, its decision did little to clarify how antitrust law should treat such an entity. Had the court engaged in more complete analysis, rather than focusing on a formal category ("gift"), it would have recognized that Grace's donations constituted concerted action, and not merely a gift. Such analysis would have allowed the court to address more directly whether and how nonprofits may be liable under the antitrust laws. Or, if the court wished to avoid these questions, it should have relied on the facts of the case, which showed that VVL had proven neither anticompetitive effect nor antitrust injury, as required under section 1 of the Sherman Act. Instead, the court's decision both failed to recognize the defendants' concerted action and overlooked the question of competitive effect, thereby missing an opportunity to guide courts and businesses as to the proper scope of the antitrust laws.
|
