The U.S. Supreme Court case Texaco Inc. v. Fouad N. Dagher, et al., 2005 revolved around a joint venture between two oil companies, Texaco and Shell Oil, who combined their operations in the western United States to form Equilon Enterprises LLC for economic efficiency reasons. The plaintiffs were a group of service station owners who bought gasoline from Equilon for resale under the Shell and Texaco brands; they alleged that this arrangement violated Section 1 of the Sherman Antitrust Act as it allowed price fixing by enabling both parent companies to sell gas at identical prices through Equilon. However, the Supreme Court ruled unanimously in favor of Texaco and Shell Oil stating that there was no violation because once these two firms lawfully integrated their operations into one single firm (Equilon), they were not competitors anymore but one entity which can set its pricing policy like any other undivided company does without violating antitrust laws.

In the dissenting opinion for Texaco Inc. v. Dagher, Justice Stevens argued that the majority's decision to allow a joint venture between two companies to set prices was inconsistent with previous antitrust rulings and could potentially harm competition in the marketplace. He emphasized that even though both companies had formed a lawful joint venture, this did not automatically exempt them from scrutiny under Section 1 of the Sherman Act which prohibits price fixing agreements among competitors. According to him, allowing such behavior would undermine consumer welfare by enabling firms to raise prices above competitive levels without any justification related to efficiencies or integration benefits derived from their collaboration. Therefore, he believed that these types of arrangements should be evaluated on a case-by-case basis rather than being given blanket immunity.