May manufacturers, consistently with section 1 of the Sherman Act, instruct distributors that they must charge their customers no less than $X for the manufacturers' products?
They can, the Fourth Circuit held today, if the makers and distributors stand in a "genuine principal-agent relationship". Valuepest.com of Charlotte, Inc. v. Bayer Corp., No. 07-1760 (4th Cir. Mar. 24, 2009).
The court explained that a true agent simply does the will of its principal and that, therefore, an agreement requiring the agent to mind the principal when the former goes to set prices doesn't count as a contract, combination, or conspiracy to restrain trade. The court accordingly affirmed summary judgment for pesticide producers Bayer and Aventis CropScience on the strength of their "agency defense" to the section 1 claim.