Opinion ID: 164453
Heading Depth: 4
Heading Rank: 1

Heading: Evidence of Substantial Lessening of Competition

Text: 41 In support of its argument on the lack of evidence on the lessening of competition, Sam's cites to testimony by Alan Wilkerson, Star's chief operating officer, who apparently said that the Oklahoma City gasoline market was competitive before Sam's entered it, and that since Sam's entry, it is even more so. Aplt. Br. at 29 (citing I Aplt.App. at 200). Sam's also points to testimony from its expert witness, Dr. Joseph Jadlow, who also claims that the Oklahoma City gasoline market has not been made less competitive by Sam's pricing. Id. at 30 (citing I Aplt.App. at 271, 279). 42 The district court's findings, however, established that Sam's gasoline sales are by any standard, high volume operations. Star Fuel, 2003 WL 742191, at . At the Memorial Store, Sam's monthly volume of gasoline sold is several-fold the typical volume for a retail gasoline station in Oklahoma City. The court also concluded that such volume was due to Sam's below-cost pricing. Id. This substantial increase in Sam's market share and the corresponding decrease in its competitors' market share, coupled with the fact that the sales achieved by Sam's were achieved through below-cost pricing, provide support for the district court's finding that Sam's sale of gasoline resulted in a substantial lessening of competition. 3 43 Contrary to Sam's contention, the injuries Star claims to have suffered are not those that result from an increase in competition. In Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489, 97 S.Ct. 690, 50 L.Ed.2d 701 (1977), the Supreme Court held that a plaintiff cannot complain of competitive injuries unless those injuries were of the type the antitrust laws were intended to prevent and that flows from that which makes defendants' acts unlawful. Thus, in order to determine whether Sam's pricing practices substantially lessened competition, the OUSA must be viewed in light of its dual purposes, to prevent loss leader selling and to protect small businesses from large competitors capable of driving them out of business by below-cost sales. So-Lo Oil Co. v. Total Petroleum, Inc., 832 P.2d 14, 17 (Okla.1992). 44 Sam's pricing allows it to sell its gasoline below cost, and there is nothing its competitors can do consistent with the OUSA to allow them to compete with it. See Glenn Smith, 704 P.2d at 478 ([A] sale cannot be made below cost to meet the price of a competitor who is selling at... a price below that competitor's cost.); Safeway Stores v. Okla. Retail Grocers Ass'n, 322 P.2d 179, 182 (Okla.1958) ([T]he appropriate remedy [of a competitor's below cost pricing] was ... not by retaliation.). This gives Sam's an unfair advantage, and is exactly what the OUSA was designed to prevent. 45 Sam's also argues that loss of sales by a single competitor does not establish that competition has been substantially lessened. However, the evidence goes further than showing injury only to Star. The district court's findings indicate that because of the volume of Sam's gasoline sales and its below-cost pricing, competition was lessened in Oklahoma City in the much of area surrounding Sam's Club stores. See Star Fuel, 2003 WL 742191, at . Moreover, when increased sales are achieved through below-cost pricing, an analysis into whether there has been a substantial lessening of competition under the OUSA and similar unfair pricing statutes necessarily entails an examination of individual competitors in the aggregate. See, e.g., Cargill, Inc. v. Monfort of Colo., Inc., 479 U.S. 104, 117-18, 107 S.Ct. 484, 93 L.Ed.2d 427 (1986) (pricing below cost is a practice that harms both competitors and competition); Home Oil Co. v. Sam's East, Inc., 199 F.Supp.2d 1236, 1242 (M.D.Ala.2002) (A showing by even one of the defendant's competitors of injury is sufficient to prove that defendant's below-cost sale of gasoline injure[d] competition.); Star Serv. & Petroleum Co. v. State ex rel. Galanos, 518 So.2d 126, 130 (Ala.Civ.App. 1986) ([I]njury to competition ... necessarily includes injury to competitors.). 46