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Khan then sued State Oil claiming that State Oil had engaged in price fixing in violation of Section 1 of the Sherman Act, which disallows restrictions on trade. State Oil claimed that in setting profit margins, they had not prevented Kahn from setting prices and therefore were not guilty of price fixing.\u003C\/p\u003E\n\u003Cp\u003EOn appeal, the U.S. Court of Appeals for the Seventh Circuit found in favor of Kahn based on the logic of \u003Cem\u003EAlbrecht v. 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