Assessing Qualitative Justifications Under Taft's Rule of Reason

Abstract

In his landmark opinion in United States v. Addyston Pipe & Steel Co.,¹ then-Judge William Howard Taft focused on the question of whether the restraint of trade there at issue was the primary motivation for the agreement or “merely ancillary to the main purpose of a lawful contract.”² The doctrine of naked and ancillary restraints that Taft developed in Addyston Pipe marked the origins of the per se rule and rule of reason, which together form the fundamental framework that governs the Sherman Act today. In Taft’s presentation, restraints of trade must be understood in the context of their relationship to the purpose of the primary agreement. Where that purpose is legitimate and the relationship of the restraint is ancillary, courts should be hesitant to invalidate the restraint.