Refusal to deal

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A refusal to deal, also known as a "group boycott," is an agreement by competitors not to do business with another company. This is generally illegal in United States under the antitrust laws.

In the case of a horizontal concerted refusal to deal, the jury instructions include the following:[1]

The Sherman Act prohibits two or more persons or businesses from agreeing with each other not to [state allegation of refusal to deal] where certain circumstances are shown to exist, a situation sometimes referred to as a "group boycott."
To prevail on this claim against a defendant, plaintiff must prove as to that defendant each of the following elements by a preponderance of the evidence:
First, that the defendant and one or more other persons refused to deal with the plaintiff by [state allegations here];
Second, that the refusal to deal was pursuant to an agreement between that defendant and one or more other persons or businesses;
Third, that at least two of the parties to the agreement are direct competitors;
Fourth, that the refusal to deal disadvantaged plaintiff by denying plaintiff access to a supply of product, a facility, or a market or service necessary for plaintiff to compete effectively;
Fifth, that the refusal to deal occurred in or affected interstate commerce; and
Sixth, that plaintiff was injured in its business or property because of the refusal to deal.
If you find that the evidence is insufficient to prove any one or more of these elements as to a defendant, then you must find for that defendant and against plaintiff on plaintiff's concerted refusal to deal claim. If you find that the evidence is sufficient to prove all six elements as to a defendant, then you must find for the plaintiff and against that defendant on plaintiff's concerted refusal to deal claim.


History

The term boycott is a reference to Charles Cunningham Boycott (1832-1897). Boycott was a British land agent working in County Mayo in Ireland. In 1880, the Irish Land League undertook a campaign to eliminate exploitation of tenant farmers based on "the three Fs": fair rent, fixity of tenure, and free sale. Laborers refused to harvest crops on the estate of Lord Erne, Boycott's employer. When Boycott attempted to intervene to stop the campaign, he was ostracized by the local community. Boycott left Ireland the same year, but his name lives on as the source of the verb boycott, meaning "to ostracize."


Sources:
  1. ABA Model Jury Instructions in Civil Antitrust Cases B-50 to -51 (2005 Ed.)
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