In the case of Phillips Petroleum Co. v. Texaco Inc., 1973, the U.S Supreme Court was asked to determine whether a federal court in Texas had jurisdiction over an antitrust lawsuit filed by Phillips against Texaco. The suit alleged that Texaco conspired with foreign oil producers to fix prices and monopolize markets, causing harm to Phillips' business operations both domestically and abroad. The District Court dismissed the complaint for lack of subject-matter jurisdiction under Clayton Act's Section 4 (which provides treble damages for any person injured in his business or property by reason of anything forbidden in antitrust laws), while the Court of Appeals reversed this decision. The Supreme Court held that domestic injury alone is not sufficient enough to invoke Section 4; it must be shown that such injury resulted from effects on American commerce which were caused by defendant’s anti-competitive behavior violating Sherman Act provisions - something which plaintiff failed to allege adequately here. Thus, affirming District court's dismissal but on different grounds than those relied upon below, they remanded case back down for further proceedings consistent with their opinion.

In the dissenting opinion for Phillips Petroleum Co. v. Texaco Inc., Justice Douglas argued that the majority's decision was a departure from established antitrust principles and precedent, particularly in relation to vertical mergers and acquisitions. He contended that the Court had previously held such transactions to be inherently suspect under antitrust laws due to their potential for anti-competitive effects, including market foreclosure and barriers to entry. In this case, he believed that Phillips' acquisition of Tidewater could have similar impacts by giving it control over a significant portion of crude oil supplies in West Texas - an essential input for its downstream refining operations - thereby potentially disadvantaging other refiners who relied on these supplies. Furthermore, he disagreed with the majority's reliance on efficiencies as justification for approving the merger without requiring proof of actual pro-competitive benefits or lack of less restrictive alternatives.