Opinion ID: 755341
Heading Depth: 3
Heading Rank: 3

Heading: The Los Angeles Rack Price

Text: 48 Rebel alleges that ARCO's wholesale prices in Las Vegas were below the wholesale rack price in Los Angeles, and were therefore predatory. 49 Rack prices are the prices charged by marketers for gasoline deliveries at the rack, sales in small tanker-truck quantities at loading-rack distribution points. Leffler acknowledged that ARCO doesn't post a rack price or make sales at a rack price, [SER p. 219] but stated that the cost of buying gasoline at the Los Angeles rack plus transportation costs (over the Cal-Nev pipeline) equalled the cost an efficient seller would face in Las Vegas. Rebel contends that this rack price is an adequate proxy for ARCO's marginal cost, and because ARCO sold wholesale gasoline in Las Vegas below that price/cost, ARCO's price was predatory. 50 The district court concluded that Rebel's comparison of wholesale prices in Las Vegas and Los Angeles showed only that ARCO charged a lower price in Las Vegas. Because Rebel has made no showing of ARCO's actual costs of producing gasoline, however, Rebel still had not created a factual issue regarding whether the Las Vegas price was below ARCO's costs. Rebel II, 957 F.Supp. at 1203-04. 51 Using the rack price as a measure of cost would substitute a market price for ARCO's actual costs. We affirm the district court's conclusion that the evidence of rack price was insufficient to create a material question of fact whether ARCO's Las Vegas prices were predatory.