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Ftc Vs a E Staley Mfg Co - Citation 97796 - Court Judgment | LegalCrystal
Save as PDF Add a Tag Add a Note Semantics Visualize Ftc Vs. A. E. Staley Mfg. Co. - Court Judgment	LegalCrystal Citationlegalcrystal.com/97796CourtUS Supreme CourtDecided OnApr-23-1945Case Number324 U.S. 746AppellantFtcRespondentA. E. Staley Mfg. Co.Excerpt:.....to the circuit court of appeals
1. the price discriminations involved in respondents' basing-point delivered price system and in certain "booking" practices were prohibited by § 2(a) of the clayton act.
corn products refining co. v. federal trade comm'n, ante
324 u. s. 750
2. the evidence in this case supports the finding of the federal trade commission that respondents' price discriminations were not made "in good faith" to meet equally low prices of competitors within the meaning of the proviso of § 2(b) of the clayton act. p.
324 u. s. 758
(a) the determination from the evidence whether respondents acted "in good faith" to meet a competitor's equally low prices..... Judgment:
FTC v. A. E. Staley Mfg. Co. - 324 U.S. 746 (1945)
(a) The determination from the evidence whether respondents acted "in good faith" to meet a competitor's equally low prices within the meaning of § 2(b) of the Act is for the Commission. P.
(b) Respondents' showing that they adopted and followed the basing-point system of their competitors did not, under § 2(b), justify their price discriminations. P.
324 U. S. 753
(c) That respondents' prices are lower than those they might have charged, but never did charge, does not tend to show the establishment of a lower price to meet an equally low price of a competitor. P.
324 U. S. 755
3. The Commission's finding that respondents failed to meet the burden of rebutting the
case of price discriminations involved in their booking practices, since they had failed to show that their lower prices were "made in good faith to meet an equally low price of a competitor," is supported by the evidence. P.
324 U. S. 759
(a) The appraisal of the evidence and the inferences to be drawn therefrom are for the Commission, not the courts. P.
(b) Section 2(b) requires that the seller who has knowingly discriminated in price show at least the existence of facts which would lead a reasonable and prudent person to believe that the granting of a lower price would in fact meet the equally low price of a competitor. P.
Respondents, a parent company and its sales subsidiary, are engaged in the manufacture and sale of glucose or corn syrup in competition with others, including the Corn Products Refining Company, whose methods of marketing and pricing its products are described in our opinion in
Corn Products Refining Company v. Federal Trade Commission, ante,
. Respondents, in selling their glucose, have adopted a basing point delivered price system comparable to that of the Corn Products Refining Company. Respondents sell their product, manufactured at Decatur, Illinois, at delivered prices based on Chicago, Illinois, the price in each case being the Chicago price plus freight from Chicago to point of delivery.
Commission on stipulations of facts and exhibits, upon the basis of which the Commission ultimately made its findings. Applying the same principles as in the
case, it concluded that respondents had made discriminations between different purchasers in the price of their product, and that respondents were unable to justify the discriminations, as permitted by § 2(b) of the Clayton Act, by showing that they were made "in good faith" to meet a competitor's equally low price. The Commission accordingly made its order directing respondents to cease and desist from the price discriminations.
The Commission found that this inclusion of unearned freight or absorption of freight in calculating the delivered prices operated to discriminate against purchasers at all points where the freight rate from Decatur was less than that from Chicago and in favor of purchasers at points where the freight rate from Decatur was greater than that from Chicago. It also made findings comparable to those made in the
case that the effect of these discriminations between purchasers, who are candy and syrup manufacturers competing with each other was to diminish competition between them.
These findings and the conclusion of the Commission that the price discriminations involved are prohibited by § 2(a), are challenged here. But, for the reasons we have given in our opinion in the
case, the challenge must fail. The sole question we find it necessary to discuss here is whether respondents have succeeded in justifying the discriminations by an adequate showing that the discriminations were made "in good faith" to meet equally low prices of competitors.
We consider first respondents' asserted justification of the discriminations involved in its basing point pricing system. As we hold in the
case with respect to a like system, price discriminations are necessarily involved where the price basing point
"Upon proof being made at any hearing on a complaint under this section that there has been discrimination in price . . . , the burden of rebutting the prima facie case thus made by showing justification shall be upon the person charged with a violation of this section, and unless justification shall be affirmatively shown, the Commission is authorized to issue an order terminating the discrimination:
That nothing herein contained shall prevent a seller rebutting the prima facie case thus made by showing that his lower price . . . was made in good faith to meet an equally low price of a competitor. . . ."
It will be noted that the defense that the price discriminations were made in order to meet competition, is under the statute a matter of "rebutting" the Commission's "
case." Prior to the Robinson-Patman amendments, § 2 of the Clayton Act provided that nothing contained in it "shall prevent" discriminations in price "made in good faith to meet competition." The change in language of this exception [
] was for the purpose of making
the defense a matter of evidence in each case, raising a question of fact as to whether the competition justified the discrimination.
the Conference Report, H.Rep. No. 2951, 74th Cong., 2d Sess., pp. 6-7;
the statement of Representative Utterbach, the Chairman of the House Conference Committee, 80 Cong.Rec. 9418.
But respondents argue that they have sustained their burden of proof, as prescribed by 2(b), by showing that they have adopted and followed the basing point system of their competitors. In the
case, we hold that this price system of respondents' competitor in part involves unlawful price discriminations, to the extent that freight differentials enter into the computation of price as a result of the selection as a basing point of a place distant from the point of production and shipment. Thus, it is the contention that a seller may justify a basing point delivered price system, which is otherwise outlawed by § 2, because other competitors are in part violating the law by maintaining a like system. If respondents' argument is sound, it would seem to follow that, even if the competitor's pricing system were wholly in violation of § 2 of the Clayton Act, respondents could adopt and follow it with impunity.
justify delivered prices which discriminate in favor of buyers in Chicago and at points nearer, freightwise, to Chicago than to Decatur, by a pricing system involving phantom freight and freight absorption. We think the conclusion is inadmissible in view of the clear Congressional purpose not to sanction by § 2(b) the excuse that the person charged with a violation of the law was merely adopting a similarly unlawful practice of another. [
Further, we cannot say that respondents' discriminations in price were shown to have been made in a "good faith" effort to meet competition, as § 2(b) requires. As we have pointed out here and in our opinion in the companion case,
Corn Products Refining Company v. Federal Trade Commission, supra,
the basing point system used by respondents discriminates systematically in favor of buyers in Chicago and at points nearer, freightwise, to Chicago
Congress has left to the Commission the determination of fact in each case whether the person charged with making discriminatory prices acted in good faith to meet a competitor's equally low prices. The determination of this fact from the evidence is for the Commission.
See Federal Trade Commission v. Pacific States Paper Trade Assn.,
Federal Trade Commission v. Algoma Lumber Co.,
. In the present case, the Commission's finding that respondents' price discriminations were not made to meet a "lower" price, and consequently were not in good faith, is amply supported by the record, and we think the Court of Appeals erred in setting aside this portion of the Commission's order to cease and desist.
The Commission found that respondents had not sustained the burden of rebutting the
case of price discriminations involved in their booking practices, since they had failed to show that their lower prices were "made in good faith to meet an equally low price of competitor." The facts as stipulated were only that the discriminations were made in response to verbal information received from salesmen, brokers, or intending purchasers, without supporting evidence, to the effect that, in each case, one or more competitors had granted or offered to grant like discriminations. It is stipulated that respondents, "believing such report to be true, has then granted similar" price discriminations. The record contains no statements by the persons making these reports, and discloses no efforts by respondents to investigate or verify them and no evidence of respondents' knowledge of their informants' character and reliability. It is admitted that, in some instances, respondents made sales upon bookings which they suspected had been made without knowledge of the buyers.
The appraisal of the evidence and the inferences to be drawn from it are for the Commission, not the courts.
See Federal Trade Commission v. Pacific States Paper Trade Assn., supra,
Federal Trade Commission v. Algoma Lumber Co., supra,
. We cannot say that the Commission's inference is not supported by the stipulated facts, or that its inference does not support its order.
"this procedural provision cannot be construed as a
exemption to violate the bill so long as a competitor can be shown to have violated it first, nor so long as that competition cannot be met without the use of oppressive discriminations in violations of the obvious intent of the bill."
80 Cong.Rec. 9418.