Source: http://supreme.nolo.com/us/395/642/case.html
Timestamp: 2019-04-24 02:37:52+00:00

Document:
Petitioner, an independent wholesale and retail distributor of gasoline and oil, brought this treble damage action against his supplier, Standard Oil Co., alleging injuries resulting from respondent's price discriminations in violation of § 2(a) of the Clayton Act, as amended by the Robinson-Patman Act. The evidence showed that, for over two years, Standard's charges to petitioner were higher than those to (1) its Branded Dealers who competed with petitioner, and (2) Signal, a wholesaler, whose gas was sold to a subsidiary (Western Hyway), which, in turn, sold to Western's subsidiary (Regal), a major competitor of petitioner, the lower price being passed on at each stage, so that Regal was able to undersell petitioner. The jury returned a verdict for petitioner. The Court of Appeals, while finding Standard's liability clear for favoring the Branded Dealers, held the "fourth level" injuries petitioner sustained from the impaired competition with Regal too far removed from respondent to come within the Act. Since the jury's verdict did not disclose what amount of the damages awarded was attributable to Regal's conduct, the court ordered a new trial. That court, for the trial judge's guidance on retrial, also noted that any financial losses to petitioner from the inability of two of his corporations to pay him agreed brokerage fees for securing gasoline, for rental on leases of service stations, and for other indebtedness were too incidental to support recovery under the antitrust laws.
1. Section 2(a) of the Clayton Act, as amended by the Robinson-Patman Act, applies to respondent's price discriminations, which are not immunized from coverage under the statute simply because the product involved passed through additional formal exchanges before reaching petitioner's actual competitor. Cf. FTC v. Fred Meyer, Inc., 390 U. S. 341. Pp. 395 U. S. 646-648.
2. The evidence was sufficient to show a causal connection between Standard's price discrimination and the damage to petitioner's business. Pp. 395 U. S. 648-649.
3. Since petitioner was the principal victim of Standard's price discrimination, and not just an innocent bystander, he was entitled to present evidence of all his losses to the jury. Pp. 395 U. S. 649-650.
a lengthy and complicated trial, the jury returned a verdict for Perkins and assessed damages against Standard of $333,404.57, which, after trebling by the court and after the addition of attorney's fees, resulted in a total judgment against Standard of $1,298,213.71. On review, the Court of Appeals for the Ninth Circuit held that the assessment of damages included injuries to Perkins that were not recoverable under the Act, and therefore ordered a new trial. Standard Oil Co. of California v. Perkins, 396 F.2d 809. We granted certiorari to determine whether the Court of Appeals, in reversing the judgment, had correctly construed the Robinson-Patman Act.
one of the major companies in the gasoline business, Union Oil.
"The Branded Dealers purchased gasoline and oil from Standard which they, in turn, sold at retail. With respect to them, Perkins' story is quickly told. Because of Standard's favoritism and discrimination, they were able to and did offer lower prices and better services and facilities than Perkins in marketing at retail."
Appeals held, however, that any harm suffered by Perkins from impaired competition with Regal stations was beyond the scope of the Robinson-Patman Act because Regal was too far removed from Standard in the chain of distribution. A substantial part of the damages the jury assessed against Standard, as the Court of Appeals viewed it, might have been based upon a finding that Perkins suffered competitive harm from the price advantage held by Regal stations. That court, concluding that "the whole verdict is tainted, since the amount reflected in it by Regal's conduct cannot be ascertained, . . ." reversed the judgment and ordered a new trial. 396 F.2d at 813.
"(a) It shall be unlawful for any person engaged in commerce, . . . either directly or indirectly, to discriminate in price between different purchasers of commodities of like grade and quality, . . . where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them. . . ."
("any person who . . . grants . . . such discrimination"), (2) the favored purchaser ("any person who . . . knowingly receives the benefit of such discrimination"), and (3) customers of the discriminating seller or favored purchaser ("customers of either of them"). Here, Perkins' injuries resulted in part from impaired competition with a customer (Regal) of a customer (Western Hyway) of the favored purchaser (Signal). The Court of Appeals termed these injuries "fourth level," and held that they were not protected by the Robinson-Patman Act. We conclude that this limitation is wholly an artificial one, and is completely unwarranted by the language or purpose of the Act.
Regal, however, Signal transferred the gasoline first to its subsidiary, Western Hyway, which, in turn, supplied the Regal stations. Signal owned 60% of the stock of Western Hyway; Western, in turn, owned 55% of the stock of the Regal stations. We find no basis in the language or purpose of the Act for immunizing Standard's price discriminations simply because the product in question passed through an additional formal exchange before reaching the level of Perkins' actual competitor. From Perkins' point of view, the competitive harm done him by Standard is certainly no less because of the presence of an additional link in this particular distribution chain from the producer to the retailer. Here, Standard discriminated in price between Perkins and Signal, and there was evidence from which the jury could conclude that Perkins was harmed competitively when Signal's price advantage was passed on to Perkins' retail competitor Regal. These facts are sufficient to give rise to recoverable damages under the Robinson-Patman Act.
"Section 2(a) of the Act does not recognize a causal connection, essential to liability, between a supplier's price discrimination and the trade practices of a customer as far removed on the distributive ladder as Regal was from Standard."
was proximately caused by Standard's price discriminations, and there was substantial evidence from which the jury could infer causation. There was evidence that Signal received a lower price from Standard than did Perkins, that this price advantage was passed on, at least in part, to Regal, and that Regal was thereby able to undercut Perkins' price on gasoline. Furthermore, there was evidence that Perkins repeatedly complained to Standard officials that the discriminatory price advantage given Signal was being passed down to Regal, and evidence that Standard officials were aware that Perkins' business was in danger of being destroyed by Standard's discriminatory practices. This evidence is sufficient to sustain the jury's award of damages under the Robinson-Patman Act.
"the rule is that one who is only incidentally injured by a violation of the antitrust laws -- the bystander who was hit but not aimed at -- cannot recover against the violator."
and was clearly entitled to bring this suit, he was entitled to present evidence of all of his losses to the jury. Moreover, it is obvious from the opinion of the Court of Appeals that this question was being decided not because there was any reversible error at the first trial, but in order to give guidance for the conduct of any new trial. The record in this case does not show that the jury included an award for any of these minor items in its judgment. It is impossible to say that they were included, because they were not covered in the trial judge's charge to the jury. While the trial judge treated many items of damage specifically, there was no charge -- either specific or general -- upon which the jury could have felt free to include such items in its award. For this reason, the Court of Appeals could not have reversed the jury's verdict in this case on this ground.
Respondent has argued in its brief several minor trial rulings which it contends were in error. Most of these additional arguments were rejected by the Court of Appeals. We have examined the others, and find them without merit. We therefore see no need to prolong this litigation, which began nearly 10 years ago. The jury's verdict and judgment should be reinstated.
"(a) It shall be unlawful for any person engaged in commerce, in the course of such commerce, either directly or indirectly, to discriminate in price between different purchasers of commodities of like grade and quality, where either or any of the purchases involved in such discrimination are in commerce, where such commodities are sold for use, consumption, or resale within the United States or any Territory thereof or the District of Columbia or any insular possession or other place under the jurisdiction of the United States, and where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them. . . ."
Branded Dealers were independent operators of Standard's Signal and Chevron stations who marketed gasoline and oil under Standard's brand names. During the claim period, the Signal Branded Dealers had no connection with Signal Oil & Gas Co., which is involved in this litigation as a wholesaler.
Signal Oil & Gas Co. Through a chain of majority-owned subsidiaries, Signal marketed this gasoline at stations which competed with petitioner's outlets. Since we are dealing with a chain of majority-owned subsidiaries, it seems quite likely that the discriminatory price given Signal would have a vital effect on the pricing decisions of the stations which eventually marketed Signal's gasoline. Even if the lower price were not passed on to the company marketing the gasoline, that company would be more willing to accept losses in a protracted price war if it knew that its "grandfather" corporation were making some extra, and partially offsetting, profits. For this reason, and since, in interpreting the antitrust laws, "[w]e must look at the economic reality of the relevant transactions," United States v. Concentrated Phosphate Export Assn., Inc., 393 U. S. 199, 393 U. S. 208 (1968), I would treat Signal, the beneficiary of the discriminatory price, as if it were directly competing with petitioner's stations. Respondent's price discrimination, on this view, in effect injured competition with a company which "knowingly receive[d] the benefit of such discrimination," Clayton Act § 2(a), 38 Stat. 730, as amended by the Robinson-Patman Act, 49 Stat. 1526, 15 U.S.C. § 13(a), and the case could properly go to the jury for determination of "causation" and damages. Accordingly, I see no reason to intimate, even by indirection, what the result would be if wholly independent firms had intervened in the distribution chain. I would therefore explicitly limit the holding to the facts of the case before us.
view the Court of Appeals would have taken about respondent's other allegations of error had the major prop for its decision been removed. The law under the Robinson-Patman Act is convoluted enough without the addition of numerous explicit and implicit holdings which may come back to bedevil us in future years. I would leave these other problems unresolved, so that the Court of Appeals can look at them anew in the context of this Court's holding on the major issue of general importance presented by the petition for certiorari.

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