Opinion ID: 385728
Heading Depth: 1
Heading Rank: 2

Heading: Robinson-Patman Claims

Text: 21 Section 2(d) of the Robinson-Patman Act prohibits a supplier from paying allowances for advertising or other sales promotion services or facilities provided by one customer who resells the supplier's products unless the allowances are available on proportionally equal terms to all other customers competing in the distribution of such products. 2 Schoenkopf alleges that the defendants violated section 2(d) of the Robinson-Patman Act because they failed to offer merchandising promotional allowances to all cigarette vending machine operators. He accuses the tobacco companies of failing to take steps to communicate the existence and availability of their display plans to independent vendors competing with professional vendors for sales of cigarettes. Appellant's brief at 35. His theory is that once he showed that the defendants in fact offered promotional allowances to customers, the burden of proof shifted to them to prove that such allowances were made available to all of their competing customers. 22 In rejecting Schoenkopf's claim for injunctive relief against Robinson-Patman Act violations the trial court ruled (1) that he lacked standing, and (2) that, assuming standing, he presented no evidence of a section 2(d) violation. Because we agree with the court's ruling on Schoenkopf's standing to seek injunctive relief, we do not reach the question whether his evidence established a prima facie case of a section 2(d) violation. 3 23 Section 16 of the Clayton Act, authorizing suits for injunctive relief, provides in part: 24 Any person, firm, corporation, or association shall be entitled to sue for and have injunctive relief, in any court of the United States having jurisdiction over the parties, against threatened loss or damage by a violation of the antitrust laws, ... when and under the same conditions and principles as injunctive relief against threatened conduct that will cause loss or damage is granted by courts of equity. 25 15 U.S.C. § 26 (1976). As we have recently noted, unlike actions for treble damages, a claim for injunctive relief does not present the countervailing considerations such as the risk of duplicative or ruinous recoveries and the spectre of a trial burdened with complex and conjectural economic analyses that the Supreme Court emphasized when limiting the availability of treble damages. Mid-West Paper Products Co. v. Continental Group, Inc., 596 F.2d 573, 590 (3d Cir. 1979) (footnote omitted). Accord, Hawaii v. Standard Oil Co., 405 U.S. 251, 261-62, 92 S.Ct. 885, 890, 31 L.Ed.2d 184 (1972); In re Multidistrict Vehicle Air Pollution, M.D.L. No. 31, 481 F.2d 122, 130-31 (9th Cir.), cert. denied sub nom. Morgan v. Automobile Manufacturers Association, Inc., 414 U.S. 1045, 94 S.Ct. 551, 38 L.Ed.2d 336 (1973). Section 16 is further distinguishable from section 4 in that it does not require that the injury already have been sustained, and does not require that the threatened harm be to plaintiff's business or property. Mid-West Paper Products Co. v. Continental Group, Inc., supra, 596 F.2d at 591. 26 These distinctions, in light of the nature of injunctive relief, have prompted the courts to acknowledge a lower threshold standing requirement for section 16 than for section 4. See Bogus v. American Speech & Hearing Association, 582 F.2d 277, 288 (3d Cir. 1978), citing L. Sullivan, Antitrust 772 (1970). Section 16 has been applied more expansively, both because its language is less restrictive than that of § 4, ... and because the injunctive remedy is a more flexible and adaptable tool for enforcing the antitrust laws than the damage remedy .... Bogus v. American Speech & Hearing Association, supra, 582 F.2d at 288-89, citing Hawaii v. Standard Oil Co., supra, 405 U.S. at 260-61; Zenith Corp. v. Hazeltine, 395 U.S. 100, 131, 89 S.Ct. 1562, 1580, 23 L.Ed.2d 129 (1969). 27 By acknowledging this lower threshold for injunctive relief, however, we do not extend a carte blanche to those unaffected and untouched by the substantive violation. Standing under section 16 is dependent on a showing of threatened loss or injury from the alleged antitrust violation. See Jeffrey v. Southwestern Bell, 518 F.2d 1129, 1132 (5th Cir. 1975). Proximity between the plaintiff's injury and the antitrust violation, albeit necessary to a lesser degree, is still required. See, e. g., Mid-West Paper Products Co. v. Continental Group, Inc., supra, 596 F.2d at 591-92 & n.74, citing Jeffrey v. Southwestern Bell, supra, 518 F.2d at 1132. Our primary concern is that we have before us a plaintiff who adequately represents the interests of the victims of the antitrust violation. The existence of some causal nexus ensures that in fashioning relief we appropriately address and remedy the actual violation rather than simply correct an incidental injury. As noted by the Supreme Court in a damages case, but applicable here as well, plaintiff must prove more than injury causally linked to an illegal presence in the market. Plaintiffs must prove antitrust injury, which is to say injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants' acts unlawful. Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489, 97 S.Ct. 690, 697, 50 L.Ed.2d 701 (1977) (emphasis in original). 28 Plaintiff's injury in this case does not result from the unavailability to the small-scale cigarette vending machine operators of defendants' promotional allowances. In fact, we note that for as long as the defendants continued to deal with him, Schoenkopf actually benefitted from the defendants' presumably illegal practices. Had the promotional allowances been otherwise available to the independent operators, there would have been no need for plaintiff's business, at least in the form in which it developed. Plaintiff's injury results, instead, from the tobacco companies' insistence on directly dealing with the vending machine operators. Direct dealing, although perhaps aggravating the unavailability of the allowances to small vendors, is not itself a Robinson-Patman violation. We can only speculate that the cause of the small-scale operators' non-participation is the prohibitive cost of such participation with respect to the minimal returns per machine. It may be as well or even instead the tobacco companies' failure to effectively offer the plans by informing all vendors of their existence. The promotional allowance programs may be objectionable either in their large-scaled cost-benefit balance or in the fact that not all presumably competing customers are informed and aware of them. An injunction directed toward informing the operators would not help Schoenkopf, but might well be the only appropriate relief for the small vendors. The inappropriateness of Schoenkopf's supposed representation of the victims of the defendants' presumed antitrust violation is evidenced by the relief he has requested. His request that the defendants be enjoined to continue doing business with him on his terms is self-interested and, at best, only superficially addresses the problem. So, too, his request that the defendants be enjoined from insisting on directly dealing with all vendors is not necessarily in the vendors' interest. Although we acknowledge the need for representation of aggregated claims which would not otherwise be adjudicated, plaintiff's injury is not so proximately related to the alleged Robinson-Patman violation that he should be recognized as an appropriate section 16 plaintiff.