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NOTE
United States v. Brewbaker, 87 F.4th 563 (4th Cir. 2023)
Andrew J. Durham*
I. Introduction
Bid rigging has long stood as one of the most clear-cut and universally condemned violations of antitrust law—an archetype of conduct so destructive to competition that it is unlawful per se, requiring no economic inquiry, no balancing of anti- and procompetitive effects, and no considerations of efficiency.[1] Yet in United States v. Brewbaker, the Fourth Circuit departed from that settled understanding.[2] Where prior courts saw collusion, the Fourth Circuit saw complexity. By searching for procompetitive efficiencies in a plainly collusive scheme, the court converted a straightforward antitrust violation into an abstract economic exercise.[3]
This Note argues that the Fourth Circuit’s approach in Brewbaker misconceives both the nature of bid rigging and the function of the per se rule.[4] The court’s economic analysis, while appearing sophisticated, rests on theoretical justifications inapplicable to the bid-rigging context, and its doctrinal shift threatens to erode the clarity that underpins effective antitrust enforcement.[5] Ultimately, Brewbaker illustrates what happens when courts allow abstract economic modeling to override legal and institutional realities, turning the Sherman Act’s bright-line prohibitions into shades of grey and reclassifying once universally condemned behavior as “potentially efficient.”[6]
Part II of this Note recounts the facts and holding of Brewbaker.[7] Part III traces the development of antitrust jurisprudence through the history of the per se and rule of reason frameworks, highlighting the Supreme Court’s gradual retreat from per se condemnation of vertical restraints in Sylvania, Khan, and Leegin.[8] Part IV examines the Fourth Circuit’s reasoning and economic analysis. Part V argues that (1) the court’s proffered economic justifications are inapplicable to the restraint at issue or, in the alternative, that they collapse under further scrutiny; (2) Koppers provides a sounder analytical framework;[9] and (3) Brewbaker’s logic endangers the administrability and deterrent purposes of the per se rule.
II. Facts and Holding
Contech Engineering Solutions (“Contech”) manufactured and sold corrugated steel and aluminum pipe and plate.[10] Beginning in 1988, Pomona Pipe Products (“Pomona”) began serving as Contech’s distributor and exclusive dealer in North Carolina.[11] Both companies regularly bid on North Carolina Department of Transportation (“NCDOT”) aluminum-structure projects.[12] NCDOT employed a policy mandating submission of at least three independent bids to ensure integrity in the procurement process.[13] Alongside Contech and Pomona, only one other company, Lane Enterprises (“Lane”), routinely bid on these projects.[14] However, Contech and Pomona’s bids were nearly always lower than Lane’s bids; thus, either Contech or Pomona typically won the projects.[15]
Although Contech and Pomona appeared to compete, their relationship was symbiotic.[16] When Pomona won a contract, it typically performed the installation work using Contech’s aluminum products; when Contech prevailed, it often subcontracted the same work back to Pomona while supplying the necessary aluminum.[17] To accomplish this win-win situation, Contech and Pomona had to communicate with one another to calculate their respective bids; neither company could submit a bid without knowing how much the other would charge for its services.[18] Until 2009, this type of communication was the norm.[19]
In 2009, Contech sales manager William Brewbaker began managing the company’s NCDOT bids.[20] Once elevated to this position, Brewbaker saw an opportunity to strengthen Contech’s relationship with Pomona by ensuring Pomona won the NCDOT projects.[21] Brewbaker began asking Pomona for not only the price they would charge for their services, but also Pomona’s total bid amount.[22] Brewbaker then calculated Contech’s bid by adding a nominal amount to the figure Pomona provided, ensuring that Pomona would submit a lower bid and secure the contract.[23] This pattern ensured that the same two firms—purported competitors—controlled the outcome of virtually every NCDOT aluminum-structure project.[24] In an effort to conceal his scheme, Brewbaker began deleting electronic messages, discussing sensitive information over the phone, and varying the markup added to Contech’s bids.[25] Meanwhile, Contech and Pomona submitted certifications with their bids, guaranteeing that their bids were “submitted competitively and without collusion.”[26]
In October 2020, after a joint investigation by the FBI and the Department of Justice’s Antitrust Division (“DOJ”), a federal grand jury indicted Brewbaker and Contech on six counts in the U.S. District Court for the Eastern District of North Carolina.[27] Count one alleged a per se violation of Section 1 of the Sherman Act, while counts two through six alleged federal mail and wire-fraud violations.[28] To support count one, the indictment alleged that Contech and Brewbaker “rigged bids,” which constituted an agreement with Pomona that “was a per se unlawful, and thus unreasonable, restraint of interstate trade.”[29]
In December 2020, Contech and Brewbaker moved to dismiss, urging the district court to apply the rule of reason instead of the per se rule.[30] They argued the indictment merely alleged that Contech submitted an additional direct bid that would not undercut its dealer’s price.[31] According to Contech, this was not a per se violation of Section 1 of the Sherman Act but a business practice that should be analyzed under the rule of reason.[32] Contech further argued that the indictment alleged a vertical restraint between a supplier and distributor rather than a horizontal conspiracy between direct competitors.[33] In support of the motion, Contech submitted an affidavit from antitrust economist Dr. Kenneth G. Elzinga, who characterized the relationship as a “dual-distribution” system—one in which a manufacturer competes with its own distributor to sell the same product.[34] Dr. Elzinga asserted that bid rigging within such arrangements can, in some cases, yield efficiencies and need not always harm competition.[35]
The district court rejected these arguments and declined to consider the affidavit, as it was extrinsic evidence.[36] Treating the motion as one to dismiss for failure to state an offense, the court held that the indictment alleged a horizontal bid-rigging scheme—a type of restraint long deemed per se unlawful—and consequently denied the motion.[37] Soon after, Contech pleaded guilty to the Sherman Act violation and one count of fraud, while Brewbaker proceeded to trial.[38] Since the district court classified the restraint as per se illegal, the jury was instructed that evidence of any procompetitive intent or effect was irrelevant.[39] The jury convicted Brewbaker on all counts, and he was sentenced to eighteen months in prison.[40]
On appeal, the United States Court of Appeals for the Fourth Circuit reversed Brewbaker’s antitrust conviction, holding that the indictment failed to allege a per se illegal restraint and that it should have been dismissed for failure to state an offense.[41]
III. Legal Background
Antitrust doctrine has long drawn a sharp line between restraints that require detailed economic scrutiny and those that are so predictably harmful that they warrant automatic condemnation. This section provides the legal framework necessary to evaluate whether the Fourth Circuit properly departed from settled precedent in United States v. Brewbaker. It first summarizes the basic requirements of a Sherman Act § 1 violation, then explains the distinction between the rule of reason and the per se rule and traces the Supreme Court’s gradual narrowing of per se treatment in vertical-restraint cases. Finally, it situates bid rigging within that framework as the paradigmatic per se offense and introduces the Second Circuit’s decision in Koppers as the leading case addressing bid rigging in the presence of a vertical relationship.
A. The Sherman Act Generally
Section 1 of the Sherman Act of 1890 provides that “[e]very contract, combination . . . or conspiracy, in restraint of trade . . . is declared to be illegal.”[42] Further, the Sherman Act imposes felony criminal liability for violations.[43] Although the statute’s text appears to prohibit all agreements “in restraint of trade,” courts have long declined to interpret it literally.[44] A purely textual reading would criminalize every contract because any agreement between parties necessarily restrains trade to some degree.[45] Instead, since Standard Oil Co. v. United States, the Supreme Court has interpreted Section 1 to reach only unreasonable restraints of trade—those restraints that suppress competition rather than promote it.[46] In a criminal context, to state an offense under Section 1 of the Sherman Act, an indictment must allege that the defendant: (1) knowingly entered (2) into an agreement (3) which imposed an unreasonable restraint on trade (4) that affected interstate commerce.[47]
B. Unreasonable Restraints of Trade: Per Se vs. the Rule of Reason
When deciding whether a restraint is “reasonable,” courts usually employ one of two analytical frameworks: (1) the rule of reason, which evaluates competitive effects on a case-by-case basis; or (2) the per se rule, which condemns certain categories of restraints automatically without a need to look at or analyze procompetitive justifications.[48] The distinction between these two tests and when they apply has defined the development of antitrust jurisprudence for over a century.[49]
1. The Rule of Reason
The rule of reason is the presumptive mode of analysis under Section 1 of the Sherman Act.[50] First articulated in Standard Oil Co. v. United States and expounded upon in Board of Trade of Chicago v. United States, the rule of reason requires courts to examine the purpose, structure, and effect of a challenged restraint in its individual market context.[51] This extensive inquiry requires the factfinder to weigh all the circumstances of a case, including investigations into the specific business and market, along with the restraint’s history, nature, and effect, to identify the restraint’s actual competitive impact.[52] In both its design and function, the rule of reason attempts to distinguish between restraints with anticompetitive effects that are harmful to consumers and restraints that stimulate competition and are in consumers’ best interests.[53]
The rule of reason serves an important role, as it requires a factfinder to determine the actual effects a particular restraint has on competition.[54] Without the rule of reason and the fact-intensive analysis that accompanies it, courts would be much more likely to erroneously condemn procompetitive behavior, which has an equally, if not greater, negative impact on social welfare than merely allowing questionable anticompetitive behavior to persist.[55]
2. The Per Se Rule
Although the rule of reason is the default rule for analyzing restraints of trade under Section 1 of the Sherman Act, the judiciary has long recognized that there are certain practices deemed to be per se unreasonable.[56] Examples include price-fixing, market allocation, bid rigging, and group boycotts among competitors.[57] These restraints are presumed illegal due to their “pernicious effect on competition and lack of any redeeming virtue” without the need for any “elaborate inquiry as to the precise harm they have caused or the business excuse for their use.”[58] However, courts will only classify certain business practices as per se violations once they have had substantial judicial experience with the restraint at issue and can predict with certainty that the restraint would be invalidated in all or almost all instances under the rule of reason.[59] Importantly, once a court deems a restraint to be subject to the per se rule, defendants are not permitted to come forward and proffer procompetitive justifications for the restraint, as this is an inquiry “so often wholly fruitless when undertaken.”[60]
The per se rule serves many important roles in antitrust jurisprudence. First, it substantially eases the judicial administration of cases.[61] Antitrust adjudications are costly and often become extremely complicated very quickly, necessitating the retention of expert witnesses who can discuss complex economic issues that laypersons—and oftentimes judges—are ill-equipped to understand.[62] Thus, the use of the per se rule can avoid “the necessity for an incredibly complicated and prolonged economic investigation into the entire history of the industry involved.”[63] Second, the per se rule allows businesses and individuals to have clear rules governing their conduct.[64] If every business practice was subject to the rule of reason, antitrust jurisprudence would operate in a permanent gray area, leading to confusion and uncertainty as to what conduct is allowed and what is forbidden.[65] If rules are clear and well-known, businesses can plan and act accordingly.[66] For clarity and fair enforcement, the DOJ has a longstanding policy of reserving criminal prosecutions only for per se unlawful restraints.[67]
3. The Judicial Retreat from Per Se Condemnation
Despite the per se rule’s longstanding history, courts have gradually moved away from and narrowed its formulaic application, instead embracing a more nuanced and economically informed approach. In the 1970s, the Supreme Court began to reexamine long-standing precedents and recognized that certain restraints once deemed per se illegal could, in some circumstances, promote competition and should be reevaluated in light of society’s modernized understanding of economics.[68] In 1976, the Court decided Continental T.V., Inc. v. GTE Sylvania, Inc., overruling United States v. Arnold, Schwinn & Co. and holding that vertical non-price restraints should be analyzed under the rule of reason rather than condemned per se.[69] This decision overruled a decade of precedent and marked a significant shift from formalistic antitrust analysis toward a more empirical, effects-based model that weighs the potential efficiencies of a restraint against its harms.[70]
Two decades later, the Court extended this economic pragmatism in State Oil Co. v. Khan, which overruled the long-standing Albrecht v. Herald Co. decision and abandoned the per se rule against maximum resale price maintenance.[71] The Court reconsidered the potential pro- and anticompetitive effects of such a restraint in light of recent court decisions as well as “a considerable body of scholarship discussing the effects of vertical restraints” and found that the application of the per se rule for the practice was no longer justified.[72] Sylvania and Khan collectively reflect a broader judicial retreat from per se illegality rules in favor of a market-sensitive analysis, laying the groundwork for the Court’s eventual reexamination of minimum resale price maintenance in Leegin Creative Leather Products, Inc. v. PSKS, Inc.[73]
4. The Leegin Decision
The Supreme Court’s decision in Leegin marked the culmination of the Court’s decades-long retreat from rigid per se condemnation and its embrace of nuanced economic analysis as the touchstone of antitrust adjudication.[74] In Leegin, the Court overruled the nearly century-old precedent of Dr. Miles Medical Co. v. John D. Park & Sons Co., which had declared the practice of minimum resale price maintenance (“RPM”) to be per se illegal.[75]
RPM is a business practice where the manufacturer of a product sets a minimum resale price that distributors of that product are not allowed to undercut.[76] For example, in Leegin, a manufacturer of high-end accessories (“Leegin”) refused to sell to retailers who would discount Leegin’s goods below the prices they suggested.[77] In turn, a retailer sued Leegin, alleging a per se violation of the Sherman Act.[78] After the district court applied the per se rule and the Fifth Circuit affirmed based on Dr. Miles precedent, the Supreme Court granted certiorari to reexamine RPM.[79]
As an initial matter, the Supreme Court found the reasoning underlying the Dr. Miles decision to be inadequate before turning to a full-fledged economic analysis of the competitive effects of RPM.[80] The Court acknowledged the existence of extensive scholarly literature that uniformly recognizes at least some procompetitive justifications for a manufacturer’s use of RPM.[81] The Court then evaluated the pro- and anticompetitive effects that RPM may have.[82]
Beginning with the procompetitive justifications for RPM, the Court first recognized that RPM can stimulate inter-brand competition by reducing intra-brand competition.[83] The theory essentially states that if competing retailers of the same brand are no longer able to compete on price, they will be incentivized to invest in additional services or promotional efforts to attract more customers to their store and thus, sell more products.[84] In turn, these promotional efforts aid the manufacturer’s position against rival manufacturers,[85] thereby sacrificing intra-brand price competition between retailers for increased inter-brand competition between manufacturers.[86] Absent this type of limitation, competing retailers would be disincentivized to offer these services due to “free-riding.”[87]
To illustrate free-riding, imagine that a retailer of high-end stereo systems provides customers with a knowledgeable sales staff and a fancy listening room to test the equipment, while a nearby competing retailer provides no such services and therefore can offer the same product at lower prices.[88] A customer would be incentivized to visit the former dealer to take advantage of the additional services before ultimately leaving and going to the latter dealer to purchase the product.[89] The latter dealer is essentially “free-riding” off the efforts of the former. If such free-riding is extensive, the former retailer will find that it cannot profitably continue to offer the extra services and will cease to do so.[90] This leaves both the manufacturer, who faces reduced demand for its products, and customers, who lose out on valuable services, worse off.[91] RPM helps alleviate this problem by preventing the free-rider from undercutting the service provider, thus promoting non-price competition between the two dealers.[92]
The Court recognized two other procompetitive justifications for RPM: (1) it can help facilitate entry of new brands into the market,[93] and (2) it can incentivize dealer services even absent free-riding.[94] Finally, the Court analyzed the anticompetitive harms that RPM can create before concluding that, notwithstanding these anticompetitive risks, a per se rule against RPM is unwarranted as “it cannot be stated with any degree of confidence that [RPM] ‘always or almost always tend[s] to restrict competition and decrease output.’”[95]
C. Bid Rigging as the Quintessential Per Se Offense
1. Generally
Few restraints on trade are as universally condemned as bid rigging.[96] In 1940, after discourse in the antitrust community questioned whether the per se rule was still alive, the Supreme Court decided United States v. Socony-Vacuum Oil Co., which reaffirmed that “price-fixing agreements are unlawful per se under the Sherman Act.”[97] The Court took it a step further, broadening the definition of per se price-fixing to include “[a]ny combination which tampers with price structures.”[98] Bid rigging clearly falls into this definition and thus, has been universally condemned as per se illegal.[99] The Fourth Circuit itself has defined bid rigging as “[a]ny agreement between competitors pursuant to which contract offers are to be submitted to or withheld from a third party.”[100]
In practice, bid rigging takes many forms, with most conspiracies falling into one of four basic schemes: bid rotation (where conspirators take turns being the low bidder on a series of contracts), complementary bidding (where co-conspirators submit intentionally high bids or bids that fail to meet all of the requirements to preserve the appearance of competition), bid suppression (where a firm agrees either not to bid or to withdraw a previously submitted bid), and bid allocation (where firms divide up territory or customers).[101] These schemes often involve subcontracting arrangements where the winning bidder will compensate the losing conspirators through lucrative subcontracts, which essentially serve as payoffs that divide illegally obtained profits among the conspirators.[102]
The anticompetitive effects of bid rigging are quite obvious, with courts going so far as to say that bid rigging may be “[e]ven more egregiously contrary to vital competition among businesses [than price-fixing]” because “[s]uch an [agreement] eliminates not only price competition, but also compensation in service and product quality.”[103] The universal effect of bid rigging is that contracting entities—frequently the government and taxpayers—are forced to pay more for the goods and services sought than they would if there was free competition in the open market.[104]
2. Koppers: The Second Circuit’s Approach
In 1981, the United States Court of Appeals for the Second Circuit was presented with the same issue in Brewbaker: whether an agreement to rig bids is per se illegal even where the parties’ relationship includes a vertical supplier element.[105] In short, Koppers involved two firms, Koppers and Dosch-King, that competed for bids in Connecticut for the sale and application of road tar.[106] The two firms agreed to divide the state between them, allowing each to be the lowest bidder in their respective regions.[107] However, one of the firms had started buying all of its road tar from the other, creating a vertical relationship.[108]
Koppers was convicted of a violation of Section 1 of the Sherman Act after the district court applied the per se rule to the restraint.[109] On appeal to the Second Circuit, Koppers argued that the restraint should have been adjudged under the rule of reason since Koppers was involved in a “vertical allocation of territories” as opposed to a “horizontal conspiracy to rig bids.”[110] Koppers pointed to the fact that, by 1973, Dosch-King was buying all of its road tar from Koppers, which made their relationship similar to the manufacturer-distributor relationship in Sylvania, which was found to be subject to the rule of reason.[111]
Judge Mansfield, writing for the court, rejected this argument outright, stating that “[t]here was no foundation in the evidence in this case to support Koppers’ theory that its behavior was the sort that Continental T.V. sought to protect.”[112] He went on to say that the Supreme Court’s refusal to impose a per se rule in Sylvania was based on the determination that the kind of vertical restraint under consideration held out some possibility of increased competition, while no such possibility existed in Koppers.[113] The court saw through the vertical arrangement argument, finding that “Koppers’ obvious and only motive for maintaining Dosch-King as a supplier and bidder was not to promote competition but to raise prices and deceive state and local officials into the belief that [they] were bona fide competitors when in fact . . . they were not.”[114] The court held that, notwithstanding the vertical relationship the parties shared, the agreement to rig bids was per se unlawful.[115]
IV. Instant Decision
In Brewbaker, the Fourth Circuit began by reaffirming that while Section 1 of the Sherman Act appears to prohibit all restraints of trade, only unreasonable restraints are unlawful, and the rule of reason is the default analytical framework.[116] The per se rule applies only to narrow categories of restraints—those that courts have had considerable experience with and have “confidence that it would be invalidated in all or almost all instances under the rule of reason.”[117] The court stressed that extending per se treatment to novel types of conduct requires “demonstrable economic evidence” showing that such restraints are invariably harmful.[118] Following Leegin, Khan, and Sylvania, the court decided that the first question to ask is whether the alleged restraint is horizontal or vertical, “[f]or if the restraint is horizontal, the per se rule will generally apply. And if the restraint is vertical, then the rule of reason will apply.”[119]
A. Classifying the Restraint: A Hybrid Relationship
The court found that Contech and Pomona’s relationship was neither purely horizontal nor purely vertical.[120] Instead, Contech and Pomona were in a form of hybrid arrangement known as “dual-distribution.”[121] On the one hand, both companies competed for the same NCDOT contracts, suggesting a horizontal relationship.[122] On the other hand, Contech supplied Pomona with aluminum used in those projects, reflecting a vertical link.[123] The Fourth Circuit applied a presumption in favor of the rule of reason, reasoning that per se condemnation could be justified only if economic theory demonstrated that this hybrid class of restraints would always, or almost always, reduce competition.[124] Before turning to an economic analysis, the court rejected three arguments advanced by the government to justify per se treatment without considering further economic analysis.[125]
B. The Economic Analysis: Potential Procompetitive Effects
The court then asked whether the restraint alleged in the indictment would always, or almost always, have manifestly anticompetitive effects.[126] Relying on Dr. Elzinga’s affidavit, academic literature, and prior precedent, the court determined that it would not.[127] The court framed the vertical-horizontal setup alleged as a “dual distribution” arrangement, in which a manufacturer both supplies its independent dealer with a product and competes directly against that dealer in selling it to consumers.[128] Here, Contech was both supplying Pomona with aluminum to sell to NCDOT and competing with Pomona to sell that aluminum to NCDOT.[129]
After classifying the arrangement, the court recognized that the alleged violation was not merely that Contech and Pomona had a dual distribution arrangement, but that they imposed a price-fixing restraint within it.[130] The court acknowledged that post-Leegin, if Contech were not also selling directly to NCDOT, any price restraint it imposed on its distributors would be adjudged under the rule of reason.[131] The court determined the correct inquiry to be “whether the fact that a manufacturer is also selling to consumers eliminates the potential interbrand procompetitive effects that supported the Supreme Court’s holding in Leegin.[132] Concluding that Leegin’s rationales still apply, the court proffered several potential procompetitive effects.[133]
The court began by explaining the general economic reasoning for dual distribution: increased distributive efficiency.[134] The court reasoned that more sellers means it is easier to find a product; if it is easier to find a product, then it is easier to buy.[135] And if it is easier to buy, then sales will increase.[136] Additionally, retailers can provide services that the manufacturer cannot or will not provide, which further increases consumer reach.[137] Also, if distributors fail to make their sales, the manufacturer’s sales serve as a stopgap to ensure the manufacturer still makes money.[138] The court reasoned that these principles are good for both intrabrand competition, because more outlets are selling the same goods, and for interbrand competition, because greater reach of a certain brand means greater competition between that brand and its competitors.[139]
Although dual distribution may provide benefits to the manufacturer, the court acknowledged that issues may arise that “undermine the economic efficiencies of the vertical relationship between them, harming manufacturers and interbrand competition alike.”[140] These issues are known to economists as “channel conflicts.”[141] To understand channel conflicts, imagine that a manufacturer cuts the price it charges consumers; the distributor may lose the incentive to provide additional services, or even sell product altogether.[142] Moreover, a distributor may become so upset with the manufacturer for undercutting it that it decides to stop distributing the manufacturer’s products entirely.[143] The court concluded that, in both scenarios, consumers and competition lose out.[144] When fewer distributors sell one manufacturer’s goods, other manufacturers’ goods face less interbrand competition.[145]
So the court recognized that manufacturers must find ways to mitigate these conflicts; one solution is to ensure their direct-sale prices are equal to, or higher than, the distributors’ prices by either fixing the distributors’ resale prices or the manufacturer’s own.[146] The court reasoned that the same potential boons to interbrand competition seen in Leegin do not disappear just because a manufacturer also acts as a distributor.[147] Specifically, the court stated that “[t]he price restraints still incentivize distributors to continue to vigorously sell the manufacturer’s product and to offer additional services, therefore increasing interbrand competition.”[148]
The court went on to state that the alleged bid rigging, a type of price-fixing, could allow Contech to maintain its relationship with Pomona by ensuring it never undercut its distributor.[149] Finally, the court analogized Brewbaker to Sylvania, Leegin, and Khan, stating that, “while the bid rigging had the effect of eliminating intrabrand competition between Contech and Pomona, it stimulated interbrand competition by increasing competition between Contech and other aluminum manufacturers through increasing Pomona’s sales of Contech’s aluminum.”[150]
The court ultimately determined that the potential interbrand procompetitive effects demonstrated that the restraint alleged would not invariably lead to anticompetitive effects.[151] Although the panel recognized that it may lead to some, the court explained that it is “exactly that economic uncertainty that shows the indictment did not allege a per se violation.”[152] The court emphasized that it could not “predict with confidence that the dual-distribution bid rigging alleged in the indictment would be invalidated in all or almost all instances under the rule of reason.”[153] The court held that the indictment alleged neither a restraint previously held subject to the per se rules nor one that economics showed would invariably lead to anticompetitive effects; accordingly, it reversed Brewbaker’s Sherman Act conviction.[154]
V. Comment
The Fourth Circuit’s decision in United States v. Brewbaker oversteps the developments seen in antitrust jurisprudence during the last forty years. The court’s reasoning, rooted in Leegin’sanalysis of RPM,[155] mistakenly treats a horizontal bid-rigging conspiracy as if it were a vertical coordination problem. In doing so, the court misapplied analytical tools designed for non-collusive distribution arrangements to a context that, by definition, eliminates competition altogether.
A. The Incorrect Inquiry
The decision rests on a subtle but critical misstep: conflating the presence of a vertical relationship with the operation of a vertical restraint. Contech’s role as Pomona’s supplier does nothing to change the nature of the conduct at issue. The scheme alleged in Brewbaker—firms coordinating bids to ensure predetermined winners—does not “regulate” competition along the chain of distribution; it eradicates it.[156] The Fourth Circuit’s error lies in treating the vertical context as economically meaningful when it merely provided the mechanism through which the conspiracy operated. Bid rigging is no less pernicious because one conspirator happens to sell inputs to another.
In framing the question before the court, the Fourth Circuit fundamentally engaged with the wrong inquiry. By asking “whether the fact that a manufacturer is also selling to consumers eliminates the potential interbrand procompetitive effects that supported the Supreme Court’s holding in Leegin,”[157] the court set itself up for a flawed analysis. This would have been the correct inquiry had Contech engaged in a practice like minimum RPM; however, the alleged bid rigging is a vastly different practice than what was seen in Leegin, in both form and effect. Leegin involved a manufacturer setting a minimum price that competing retailers were not allowed to undercut, thus promoting interbrand competition on non-price dimensions.[158] Here, the indictment alleged that Pomona, the retailer, would send Contech, the manufacturer, its finalized bid price before Contech would artificially raise and submit its own.[159] In effect, this allowed Pomona to raise its bid price to supracompetitive levels without actualizing the incentive to provide additional services or offerings whatsoever, a fundamentally different type of restraint. By treating bid rigging and RPM as economic counterparts, the court ignored the realities of bid rigging altogether.
B. The Fourth Circuit’s Misguided Economic Analysis
Even assuming, arguendo, that the court correctly framed the inquiry and analyzed the competitive effects of the bid-rigging restraint as alleged, the economic logic imported from Leegin and Sylvania simply does not withstand scrutiny in the bid-rigging context. The court identified three such efficiencies: distributive efficiency, incentivization of additional dealer services, and mitigation of channel conflict.[160] Each of these collapse upon further inspection.
First, the court analyzed efficiency rationales for a dual-distribution arrangement generally, stating that dual distribution enhances distributive efficiency by expanding consumer access to a product.[161] However, even this basic function of dual distribution fails to materialize in a bid-rigging context. Expansion of consumer access—and the efficiencies that come along with it—occurs only when multiple firms compete to sell the good. In a bid-rigging situation, however, there are not multiple sellers; there is only one disguised as several. Contech and Pomona’s prearranged bidding destroyed the very independence necessary for distributive efficiency to exist. As a result, NCDOT received fewer effective bids, not more. The process ceased to allocate contracts based on price or value; instead, outcomes were predetermined. The supposed benefit of “expanded distribution” becomes meaningless when the mechanism of allocation—the competitive bid—is itself corrupted. Far from promoting efficiency, the arrangement allowed Pomona to artificially raise the price supplied in its bid, all while passing along illegally enhanced profits to Contech through lucrative subcontracts, resulting in inflated prices to the detriment of taxpayers, while maintaining the façade of competition and subverting the very purpose of public procurement.
To describe this as a vertical restraint enhancing distribution is to ignore the bid rigging context altogether. In a consumer market, broader distribution may indeed serve efficiency goals. But in a public procurement market, “distribution” takes the form of independent bids. When those bids are coordinated, the market’s allocative function collapses. The result is not increased consumer access but the complete suspension of competition and choice altogether.
The second justification the court identified—preserving dealer incentives to offer additional services—fares no better.[162] In Leegin, this rationale made sense because competing dealers were independent actors whose efforts to provide enhanced service offerings could increase interbrand competition on non-price dimensions.[163] In the bid-rigging context, by contrast, the prearranged winner has no incentive to improve any aspect of its offering. The entire scheme guarantees the bid’s success regardless of quality, price, or service offerings. When a competing firm knows that a rival will deliberately overbid to ensure its victory, the need to compete on any dimension vanishes. Rather than encouraging Pomona to invest in additional sales or promotional services, the arrangement insulated it from market pressure, thus eliminating precisely the kind of rivalry that the Leegin Court assumed would remain intact under RPM. The resulting “efficiency” was not a more vibrant market but a more effective conspiracy.
Third, the court’s appeal to mitigation of “channel conflict” as a procompetitive justification is nothing more than a red herring.[164] The threat of conflict between vertically related firms arises when each competes freely for customers, creating a risk that the manufacturer’s pricing will undermine dealer incentives to promote or sell the product altogether.[165] Bid rigging solves this “problem” not by aligning incentives, but by extinguishing one side’s independence altogether. Undisputably, Contech’s willingness to rig bids would “please” Pomona,[166] but eliminating competition in this way is not an economic virtue; it is the very harm the Sherman Act was designed to prevent. If conflict avoidance qualified as a cognizable efficiency in a bid-rigging scheme, every collusive bidder could justify its conduct by claiming that coordinating bids preserves harmony among conspirators.[167] The per se rule exists precisely to foreclose that type of argument.
Of course, Contech remained free to abstain from the bidding process altogether, allowing Pomona to compete freely without the threat of channel conflict. That simple alternative underscores why the Fourth Circuit’s efficiency rationales ring hollow; any legitimate vertical concern could have been resolved through ordinary business choices rather than collusive bidding conduct. Contech’s decision to submit a sham bid was not an act of market discipline but a calculated effort to disguise coordination as competition. Treating such conduct as a potential source of efficiency blurs the line between coordination meant to manage distribution and collusion meant to manipulate price. The former may warrant nuanced economic analysis; the latter does not.
C. The Anticompetitive Realities of Bid Rigging
At its core, bid rigging destroys the mechanism of price discovery: the competitive bidding process itself. Government procurement markets, like NCDOT’s, typically require at least three independent bids to maintain integrity in the bidding process, a safeguard often referred to as the “rule of three.”[168] When conspirators collude to prearrange winners, this mechanism collapses. The illusion of competition replaces its substance, allowing the prearranged winner to extract supracompetitive prices while concealing collusion behind the façade of compliance. Unlike consumer-facing markets where prices fluctuate and demand can be stimulated through advertising and additional service offerings, public bidding markets are one-shot games in which each bid directly determines how taxpayer money is spent. Thus, even a single collusive agreement undermines not just economic efficiency but also public trust in the integrity of the process.
In practice, the economic harms mirror the theoretical ones.[169] Collusion leads to inflated prices, reduced output, and misallocation of public funds.[170] The “winning” contractor is not the most efficient or cost-effective firm, but the one chosen by its co-conspirators. Moreover, when competitors agree to allocate bids, entry barriers rise. New firms are deterred from entering a rigged market where facial competition remains and outcomes are predetermined, thus reducing long-term competition and innovation and producing enduring inefficiencies far beyond the life of any individual contract. The fact that Contech and Pomona shielded their collusion under the guise of dual distribution does not mitigate these harms; it exacerbates them by making detection more difficult.
D. Koppers and the Clarity of the Per Se Rule
The Second Circuit’s decision in United States v. Koppers Co. illustrates the correct analytical approach to such conduct. There, as in Brewbaker, the defendants attempted to invoke a vertical relationship to shield their horizontal agreement from per se condemnation.[171] The court, however, saw through this flawed argument.[172] It recognized that the presence of a vertical aspect did not alter the essential nature of the conduct—an agreement between competitors to suppress rivalry and deceive public officials.[173] Rather than indulging in speculative economic theory, the Koppers court grounded its reasoning in functional reality. The conspiracy was an agreement to rig bids among competitors and remained such despite the existence of vertical ties.
By refusing to engage in the “wholly fruitless” endeavor of searching for procompetitive justifications in a bid-rigging scheme,[174] Koppers preserved the clarity and purpose of the per se rule. The Second Circuit understood that once competitors have agreed to rig bids, no amount of economic creativity can transform that conduct into something benign. In contrast, the Fourth Circuit’s analysis in Brewbaker epitomizes the very type of inquiry the per se rule is designed to avoid—one that mistakes structural collusion for potential efficiency merely because the conspirators share a contractual link. The contrast between Koppers and Brewbaker underscores why the per se rule exists. The former applies antitrust law as a tool of deterrence and administrability; the latter transforms it into an academic exercise in economic speculation.
E. Policy Implications
The implications of Brewbaker reach far beyond its facts. By extending the logic of Leegin into the realm of bid rigging, the Fourth Circuit has weakened one of the DOJ’s most effective tools for prosecuting collusion. Under the DOJ’s longstanding policy, criminal prosecutions are reserved for per se unlawful restraints precisely because those categories obviate the need to prove anticompetitive effects.[175] If courts now require the government to prove the actual economic effects for every hybrid conspiracy, prosecutors will face an evidentiary burden inconsistent with over a century of antitrust enforcement for blatant anticompetitive behaviors.
Equally troubling is the precedent this sets for defendants. The Brewbaker decision provides a roadmap for future conspirators; by structuring their collusion through nominal supply relationships or subcontracting agreements, they can argue that their arrangement includes “vertical elements” which warrant rule of reason treatment. In practice, this would allow sophisticated actors to disguise horizontal conspiracies as dual-distribution arrangements, effectively immunizing classic bid-rigging schemes from criminal liability. Subcontracting—historically a telltale sign of collusive payoffs—would become a shield for defendants rather than a red flag for public officials.[176]
VI. Conclusion
The Fourth Circuit’s decision in United States v. Brewbaker exemplifies the dangers of extending economic nuance beyond its proper domain. By reframing a straightforward bid-rigging conspiracy as a hybrid restraint subject to the rule of reason, the court transformed an offense long considered the “supreme evil of antitrust” into an analytical experiment. The decision disregards both the settled consensus that bid rigging is per se unlawful and the institutional reasons that justify the rule: administrability, deterrence, and avoiding the pointless endeavor of probing for efficiencies where competition has been eliminated. The result is a rule that enables defendants to invoke nominal vertical ties as a shield against liability. If followed, Brewbaker invites sophisticated firms to disguise cartels as “dual distribution” systems, undermining both prosecutorial capacity and public confidence in competitive procurement.
The lesson of Brewbaker is not that antitrust should abandon economic reasoning, but that it must remember its limits. Efficiency analysis can illuminate ambiguous conduct, but it cannot redeem conspiracies that destroy competition itself. The per se rule endures precisely because some behaviors—bid rigging foremost among them—pose no plausible procompetitive benefit to markets or consumers. Courts should resist the temptation to overthink the obvious: when competitors agree to rig bids, no economic nuance can make the arrangement lawful.
* B.S., University of Missouri, 2024; J.D. Candidate, University of Missouri School of Law, 2027; Associate Member, Missouri Law Review, 2025–2026. I am incredibly grateful to all those who contributed to making this note happen. Namely, Professor Thom Lambert for his guidance and support, as well as the Missouri Law Review team for their hard work and invaluable feedback throughout the editing process.
[1] See United States v. Portsmouth Paving Corp., 694 F.2d 312, 317 (4th Cir. 1982); United States v. Bensinger Co., 430 F.2d 584, 589 (8th Cir. 1970). Bid rigging is an illegal practice where competitors conspire to manipulate the bidding process, ensuring a predetermined party wins a contract at an inflated price. See Bid Rigging, Fed. Trade Comm’n, https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/dealings-competitors/bid-rigging (last visited Mar. 26, 2026).
[2] United States v. Brewbaker, 87 F.4th 563, 581–83 (4thCir. 2023).
[3] Id.
[4] See generally id. (discussing the Fourth Circuit’s treatment of bid-rigging conspiracies and application of the per se rule).
[5] See generally id. (examining the court’s reliance on economic reasoning in assessing bid-rigging conduct and its implications for the per se rule and antitrust enforcement).
[6] Id. at 569–85.
[7] Id.
[8] See generally Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877 (2007); Cont’l T.V. Inc. v. GTE Sylvania, Inc., 433 U.S. 36 (1977); State Oil Co. v. Khan, 522 U.S. 3 (1997) (tracing the Supreme Court’s shift from per se condemnation to rule-of-reason analysis for vertical restraints).
[9] See generally United States v. Koppers Co., 652 F.2d 290 (2d Cir. 1981) (providing a framework for analyzing bid-rigging conspiracies under the per se rule).
[10] Brewbaker, 87 F.4th at 569.
[11] Id.
[12] Id.
[13] Contracting Levels, N.C. Dep’t of Transp., https://www.ncdot.gov/about-us/how-we-operate/do-business-with-us/Pages/contracting-levels.aspx (last visited Nov. 19, 2025).
[14] Brewbaker, 87 F.4th at 569.
[15] Id.
[16] Id.
[17] Id.
[18] Id.
[19] Id.
[20] Id.
[21] Id.
[22] Id.
[23] Id. at 570.
[24] Id.
[25] Id.
[26] Id.
[27] Id.
[28] Id.
[29] Id. at 571, 578.
[30] Id.
[31] Id.
[32] Id.
[33] Id. A horizontal restraint is defined as an agreement between two competitors at the same level of distribution (retailer vs. retailer), whereas a vertical restraint is an agreement between two entities at different levels in the distribution chain (manufacturer vs. distributor). Thomas B. Leary, A Structured Outline for the Analysis of Horizontal Agreements (2002), https://www.ftc.gov/sites/default/files/documents/public_statements/structured-outline-analysis-horizontal-agreements/chairsshowcasetalk.pdf.
[34] Brewbaker, 87 F.4th at 571.
[35] Id.
[36] Id.
[37] Id.
[38] Id.
[39] Id.
[40] Id. at 572.
[41] Id. at 583.
[42] 15 U.S.C. § 1.
[43] Id.
[44] See, e.g., Texaco Inc. v. Dagher, 547 U.S. 1, 5 (2006).
[45] Standard Oil Co. of New Jersey v. United States, 221 U.S. 1, 87 (1911).
[46] See generally id. at 59–60; Cont’l T.V. Inc. v. GTE Sylvania, Inc., 433 U.S. 36, 49 (1977); State Oil Co. v. Khan, 522 U.S. 3, 10 (1997) (explaining that § 1 applies only to restraints that unreasonably restrict competition).
[47] Brewbaker, 87 F.4th at 572. The only relevant element for purposes of this note concerns the unreasonable restraint of trade. Id.
[48] See United States v. Trenton Potteries Co., 273 U.S. 392, 398 (1927); Bd. of Trade of Chi. v. United States, 246 U.S. 231, 238 (1918).
[49] See, e.g., Standard Oil, 221 U.S. at 60–62; Bd. of Trade of Chi., 246 U.S. at 238; Arizona v. Maricopa County Med. Soc’y, 457 U.S. 332, 343–44 (1982).
[50] Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877, 885 (2007).
[51] Standard Oil, 221 U.S. at 44; Bd. of Trade of Chi., 246 U.S. at 238 (“[T]he court must ordinarily consider the facts peculiar to the business to which the restraint is applied; its condition before and after the restraint was imposed; the nature of the restraint and its effect, actual or probable. The history of the restraint, the evil believed to exist, the reason for adopting the particular remedy, the purpose or end sought to be attained, are all relevant facts.”).
[52] Leegin, 551 U.S. at 885–86.
[53] Id. at 886.
[54] Id. at 885.
[55] Frank H. Easterbrook, Limits of Antitrust, 63 Tex. L. Rev. 1, 15 (1984) (“[T]he economic system corrects monopoly more readily than it corrects judicial errors. There is no automatic way to expunge mistaken decisions of the Supreme Court. A practice once condemned is likely to stay condemned, no matter its benefits. A monopolistic practice wrongly excused will eventually yield to competition, though, as the monopolist’s higher prices attract rivalry.”).
[56] N. Pacific Railway Co. v. United States, 356 U.S. 1, 5 (1958).
[57] See United States v. Trenton Potteries Co., 273 U.S. 392, 397 (1927); United States v. Topco Assocs., Inc., 405 U.S. 596, 608–10 (1972); United States v. Koppers Co., 652 F.2d 290, 294 (2d Cir. 1981).
[58] N. Pacific, 356 U.S. at 5.
[59] Leegin, 551 U.S. at 877–78.
[60] Topco, 405 U.S. at 607.
[61] James F. Ponsoldt, Toward the Reaffirmation of the Antitrust Rule of Per Se Illegality as a Law of Rules for Horizontal Price Fixing and Territorial Allocation Agreements: A Reflection on the Palmer Case in a Renewed Era of Economic Regulation, 62 SMU L. Rev. 635, 638 (2009).
[62] Id. at 639.
[63] N. Pacific, 356 U.S. at 5.
[64] Ponsoldt, supra note 62, at 640.
[65] Id.
[66] Id.
[67] Justice Manual: 7-2.200 – Antitrust Statutes, U.S. Dep’t of Just. (Apr. 2022), https://www.justice.gov/jm/jm-7-2000-prior-approvals.
[68] See generally Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877 (2007); Cont’l T.V. Inc. v. GTE Sylvania, Inc., 433 U.S. 36 (1977); State Oil Co. v. Khan, 522 U.S. 3 (1997) (reflecting the Court’s shift toward incorporating modern economic analysis and reconsidering per se treatment of certain restraints).
[69] Sylvania, 433 U.S. at 59; United States v. Arnold, Schwinn & Co., 388 U.S. 87, 381–82 (1967).
[70] See Sylvania, 433 U.S. at 54–59.
[71] State Oil Co. v. Khan, 522 U.S. 3, 22 (1997); Albrecht v. Herald Co., 390 U.S. 145, 154 (1968), overruled by State Oil Co. v. Khan, 522 U.S. 3 (1997).
[72] Khan, 522 U.S. at 15.
[73] See generally Leegin, 551 U.S. 877; Sylvania, 433 U.S. 36; Khan, 522 U.S. 3 (reflecting the Court’s shift from per se condemnation toward rule of reason analysis for vertical restraints, culminating in the reexamination of resale price maintenance in Leegin).
[74] See generally Leegin, 551 U.S. 877; Sylvania, 433 U.S. 36; Khan, 522 U.S. 3 (culminating in Leegin’s rejection of per se treatment of minimum resale price maintenance in favor of rule of reason analysis grounded in modern economic understanding).
[75] Leegin, 551 U.S. at 907; Dr. Miles Med. Co. v. John D. Park & Sons Co., 220 U.S. 373, 399–413 (1911).
[76] Leegin, 551 U.S. at 882.
[77] Id. at 883.
[78] Id. at 884.
[79] Id. at 885.
[80] Id. at 887–89 (“The reasoning of the Court’s more recent jurisprudence has rejected the rationales on which Dr. Miles was based.”).
[81] Id. at 889 (“[I]t suffices to say here that economics literature is replete with procompetitive justifications for a manufacturer’s use of resale price maintenance.”).
[82] Id.
[83] Id. at 890.
[84] Id.
[85] Id.
[86] Id.
[87] Id.; Thomas A. Lambert, Dr. Miles Is Dead. Now What?: Structuring a Rule of Reason for Evaluating Minimum Resale Price Maintenance, 50 Wm. & Mary L. Rev. 1937, 1952 (2009).
[88] Lambert, supra note 88, at 1953.
[89] Id.
[90] Id.
[91] Id.
[92] Leegin, 551 U.S. at 891.
[93] Id. Early retailers of a new product incur additional costs when distributing a brand unknown to consumers. Id. However, if a retailer is guaranteed a mark-up and later retailers who distribute the product are precluded from undercutting the early retailer on price, early retailers are more likely to recoup their investment and, thus, are more likely to distribute new products under RPM. Id.
[94] Id. at 891–92 (“It may be difficult and inefficient for a manufacturer to make and enforce a contract with a retailer specifying the different services the retailer must perform. Offering the retailer a guaranteed margin and threatening termination if it does not live up to expectations may be the most efficient way to expand the manufacturer’s market share by inducing the retailer’s performance and allowing it to use its own initiative and experience in providing valuable services.”).
[95] Id. at 894 (citing Business Electronics Corp. v. Sharp Electronics Corp., 485 U.S. 717, 723 (1988)). The anticompetitive effects are not discussed and are not relevant for purposes of this note. Id. The economic analysis of minimum RPM’s procompetitive effects is included to help understand the Fourth Circuit’s erroneous reasoning laid out in Brewbaker. Id.
[96]See United States v. Portsmouth Paving Corp., 694 F.2d 312, 325 (4th Cir. 1982).
[97] United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 218 (1940).
[98] Id. at 221.
[99] See generally id. (discussing collusive bidding practices); United States ex rel. Marcus v. Hess, 317 U.S. 537 (1943); United States v. Bensinger Co., 430 F.2d 584, 589 (8th Cir. 1970) (noting that bid rigging agreements are “price-fixing agreement[s] of the simplest kind”).
[100] United States v. W.F. Brinkley & Son Const. Co., Inc., 783 F.2d 1157, 1160 (4th Cir. 1986) (citing United States v. Portsmouth Paving Corp., 694 F.2d 312, 325 (4th Cir. 1982)).
[101] U.S. Dep’t of Just., Antitrust Div., Preventing and Detecting Bid Rigging, Price Fixing, and Market Allocation in Post-Disaster Rebuilding Projects 2–3, 6 (2013), https://www.justice.gov/sites/default/files/atr/legacy/2013/01/31/disaster_primer.pdf.
[102] Id.
[103] United States v. Portsmouth Paving Corp., 694 F.2d 312, 317 (4th Cir. 1982).
[104] Id. Studies have found that collusive bid-rigging schemes contribute to mark-ups of anywhere between 10–20% higher than competitive prices. See generally Luke M. Froeb, Robert A. Koyak & Gregory J. Werden, What Is the Effect of Bid-Rigging on Prices?, 42 Econ. Letters 419 (1993).
[105] United States v. Koppers Co., Inc., 652 F.2d 290, 297–98 (2d Cir. 1981).
[106] Id. at 291–92.
[107] Id. at 292.
[108] Id.
[109] Id. at 291.
[110] Id. at 296.
[111] Id.
[112] Id.
[113] Id.
[114] Id. at 296–97.
[115] Id. at 297–98.
[116] United States v. Brewbaker, 87 F.4th 563, 573 (4thCir. 2023).
[117] Id.
[118] Id. at 574.
[119] Id. at 575.
[120] Id. at 576.
[121] Id. at 580.
[122] Id. at 576.
[123] Id.
[124] Id.
[125] Id. at 576–78. The court first dismissed the argument that the alleged restraint was purely horizontal, stating that classification depends on the overall relationship of the parties, not just the nature of the limitation imposed. Id. The court then dismissed a line of cases the government pointed to where a vertical actor coordinated a horizontal cartel among competitors, finding them to be inapposite to the issue at hand. Id. Finally, the court addressed the government’s argument that bid rigging is simply per se illegal by precedential definition, rejecting it on the premise that bid rigging is defined as an “agreement among competitors,” and for the same reasons the restraint isn’t purely horizontal, it doesn’t allege what has been to be per se illegal bid rigging. Id.
[126] Id. at 580.
[127] Id.
[128] Id. at 580–81. To illustrate this structure, the court analogized to Nike and Footlocker. Id. If you want some new Nikes, you have multiple options/means to purchase them at your disposal. Id. You can order them directly from Nike.com, or you can drive to Foot Locker and buy them. Id. If you go to Nike.com, you are buying directly from the manufacturer, whereas if you go to Footlocker, you are buying from the manufacturer’s dealer. Id. Nike is both supplying Foot Locker with shoes to sell (vertically) while also competing with Foot Locker to sell shoes directly to consumers (a horizontal relationship). Id.
[129] Id. at 581.
[130] Id.
[131] Id.
[132] Id.
[133] Id.
[134] Id.
[135] Id.
[136] Id.
[137] Id.
[138] Id.
[139] Id.
[140] Id. at 582.
[141] Id.
[142] Id.
[143] Id.
[144] Id.
[145] Id.
[146] Id.
[147] Id.
[148] Id.
[149] Id.
[150] Id.
[151] Id.
[152] Id. at 583.
[153] Id.
[154] Id. at 583–85. The Court affirmed Brewbaker’s wire and mail-fraud convictions stemming from the false certifications submitted along with the bids which stated that the bids were submitted competitively and without collusion. Id.
[155] Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877, 890–92 (2007).
[156] See Brewbaker, 87 F.4th at 570–71 (describing coordinated submission of intentionally losing bids and noncompetitive certifications).
[157] Id. at 581.
[158] Leegin, 551 U.S. at 890–92.
[159] Brewbaker, 87 F.4th at 570–71.
[160] Id. at 581–82.
[161] Id.
[162] Id. at 582.
[163] See Leegin, 551 U.S. at 890–92 (explaining that resale price maintenance encourages retailers to invest in services that enhance competition among brands).
[164] See Brewbaker, 87 F.4th at 582.
[165] See id.
[166] See id. at 570.
[167] United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 220 (1940) (explicitly rejecting an argument that price-fixing was necessary to protect from “ruinous competition,” stating that “[t]he elimination of so-called competitive evils is no legal justification.”).
[168] Contracting Levels, N.C. Dep’t of Transp., https://www.ncdot.gov/about-us/how-we-operate/do-business-with-us/Pages/contracting-levels.aspx (last visited Nov. 19, 2025).
[169] Directorate for Fin. and Enter. Affs. Competition Comm., Guidelines for Fighting Bid Rigging in Public Procurement, Org. for Econ. Co-operation & Dev. (July 2, 2025), https://one.oecd.org/document/DAF/COMP/WD(2025)8/FINAL/en/pdf. (“[B]id rigging . . . injures the public purchaser by raising prices, reducing quality, establishing output restrictions or quotas, or sharing or dividing markets, thus making goods and services unavailable or unnecessarily expensive for public purchasers, to the detriment of final users of public goods and services, and taxpayers.”).
[170] Studies have found that collusive bid-rigging schemes contribute to mark-ups of anywhere between 10–20% higher than competitive prices. See generally Luke M. Froeb, Robert A. Koyak & Gregory J. Werden, What Is the Effect of Bid-Rigging on Prices?, 42 Econ. Letters 419 (1993).
[171] United States v. Koppers Co., Inc., 652 F.2d 290, 296 (2d Cir. 1981).
[172] See id.
[173] See id.
[174] United States v. Topco Assocs., Inc., 405 U.S. 596, 607 (1972).
[175] Justice Manual: 7-2.200 – Antitrust Statutes, U.S. Dep’t of Just. (Apr. 2022), https://www.justice.gov/jm/jm-7-2000-prior-approvals.
[176] See U.S. Dep’t of Just., Antitrust Div., Preventing and Detecting Bid Rigging, Price Fixing, and Market Allocation in Post-Disaster Rebuilding Projects 2–3, 6 (2013), https://www.justice.gov/sites/default/files/atr/legacy/2013/01/31/disaster_primer.pdf (educating DOJ employees to look for subcontracting arrangements between competing bidders as it is a red flag for bid rigging conspiracies).