Opinion ID: 3010860
Heading Depth: 2
Heading Rank: 3

Heading: Robinson-Patman Act

Text: The Robinson-Patman Act, a 1936 amendment to the Clayton Act, provides in relevant part that: [i]t shall be unlawful for any person engaged in commerce, in the course of such commerce . . . 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 . . . or to injure, destroy, or prevent competition . . . . 15 U.S.C. S 13(a).16 To state a claim under the RobinsonPatman Act, a plaintiff must allege facts demonstrating the existence of price discrimination, which the Supreme Court has defined as merely a price difference. Texaco Inc. v. Hasbrouck, 496 U.S. 543, 558, 110 S.Ct. 2535, 2544 (1990); Federal Trade Comm'n v. Anheuser-Busch, Inc., 363 U.S. 536, 549, 80 S.Ct. 1267, 1274 (1960).17 _________________________________________________________________ 16. The Act contains a proviso exempting price differentials which make only due allowance for differences in the cost of manufacture, sale or delivery resulting from the differing methods or quantities in which such commodities are . . . sold or delivered. 15 U.S.C. S 13(a). Because we conclude that Ford did not engage in price discrimination or inflict competitive injury within the meaning of the Act, we need not consider the applicability of the proviso. 17. Anheuser-Busch was a primary line injury case addressing injury to the discriminating seller's competitors, in contrast to this secondary line injury case, which alleges injury in competition among the discriminating seller's customers. See Barr Labs., Inc. v. Abbott Labs., 978 F.2d 98, 106 n.16 (3d Cir. 1992) (discussing distinction between primary and secondary line injury cases). While Anheuser-Busch's broad definition of price discrimination generally is applicable in secondary line 24 The district court dismissed Liberty's claim on the grounds that its allegations challenging the DPS as a form of unlawful price discrimination fail[ ] to demonstrate the existence of a price difference. Slip op. at 12. The court explained that: while it is true that no other . . . dealer was or is subject to a surcharge, this is because no other dealer attempted to enforce the NJFPA. [Liberty] is being reimbursed for warranty parts at seventy-seven percent above cost at the same time that [its] competitors are being reimbursed the standard thirty to forty percent above cost. The surcharge was merely a device to recoup the extra costs [Ford] incurred by reimbursing [Liberty] at the retail rate. Thus, the surcharge eliminated any price difference that existed by virtue of [Liberty's] enforcement of the NJFPA . . . . [Liberty] was placed in the same position as its competitors: all dealers were effectively reimbursed at the standard rate, albeit in violation of the NJFPA. Thus, there was no price difference. Id. at 12-13. Exercising plenary review over the district court's dismissal for failure to state a claim and accepting Liberty's factual allegations as true, see Graves v. Lowery, 117 F.3d 723, 726 (3d Cir. 1997), we agree with the district court's conclusion that Liberty's complaint fails to allege actionable price discrimination.18 _________________________________________________________________ injury cases, see Stelwagon Mfg. Co. v. Tarmac Roofing Sys., Inc., 63 F.3d 1267, 1271 (3d Cir. 1995), cert. denied, 116 S.Ct. 1264 (1996), this court has warned against elevating this isolated passage to an allinclusive definition particularly in secondary line injury cases. Edward J. Sweeney & Sons, Inc. v. Texaco, Inc., 637 F.2d 105, 120 (3d Cir. 1980). 18. Because the district court disposed of Liberty's Robinson-Patman Act claim on Ford's motion to dismiss, we confine our analysis to Liberty's allegations and do not consider matters outside the pleadings. We note, however, that the evidentiary record regarding the operation of the DPS, as discussed above in our analysis of the NJFPA issues resolved on a motion for summary judgment, lends further support to our conclusion that the DPS did not result in actionable price discrimination. 25 According to Liberty's own factual allegations, Ford would . . . recoup the increase in reimbursement [beyond Ford's standard rate] by assessing against Liberty . . . a `dealer parity' . . . surcharge to the wholesale price of each vehicle . . . equal to the incremental credit for parts; that is, Ford would effectively cancel out the additional reimbursement . . . . [and] effectually continues to underreimburse Liberty . . . for warranty work . . . . App. at 17-18 (emphasis added). Thus, the facts alleged in the complaint demonstrate that Ford used wholesale vehicle prices as a method for implementing the DPS policy, the intent and effect of which was to reduce Liberty's reimbursements, not to alter vehicle prices.19 Because the complaint fails to allege any facts demonstrating an actual increase in vehicle prices, we agree with the district court's conclusion that, [a]lthough these actions violate the NJFPA, they do not create a price difference among[Liberty] and its competitors which violates . . . the RobinsonPatman Act. Id. at 13. We therefore will affirm the dismissal of Liberty's claim for failure to allege facts demonstrating that Ford engaged in price discrimination.20 _________________________________________________________________ 19. Similarly, Liberty states in its brief to this court, Ford applied the surcharge to the wholesale price of each vehicle [and] thus canceled out the incremental reimbursement. . . . Once this shell-game maneuver was complete, Liberty did not receive retail reimbursement . . . . Br. at 1516; see also id. at 23 (the `parity surcharge' meant no [warranty parts] payment at retail); id. at 38 ([t]he price differential . . . is expressly a recoupment of the incremental warranty reimbursement). 20. Assuming arguendo that the surcharge could be viewed as a term affecting vehicle costs rather than reimbursement rates, a uniform pricing formula applicable to all customers is not a price discrimination under the [Robinson-Patman] act. Edward J. Sweeney & Sons, Inc. v. Texaco, Inc., 637 F.2d 105, 120 (3d Cir. 1980); accord, FLM Collision Parts, Inc. v. Ford Motor Co., 543 F.2d 1019, 1026 (2d Cir. 1976) (finding no violation . . . in pricing plans which, though varying prices according to different terms of sale, were administered equally to all purchasers). Ford's policy was to recoup through the DPS any reimbursement exceeding Ford's standard rate. The fact that Liberty, as the only dealer to claim incremental reimbursements, was the only dealer to incur charges under this uniform policy does not give rise to a price discrimination claim. 26 Even if the DPS resulted in a vehicle price difference, we would be compelled to affirm the dismissal on the grounds that Liberty's allegations do not demonstrate the existence of the competitive injury required to sustain a RobinsonPatman Act claim. As this court has explained, price discriminations are not illegal per se. . . . [I]n order for a price difference to be illegal . . . [it] must have the proscribed anti-competitive effect. J.F. Feeser, Inc. v. Serv- a-Portion, Inc., 909 F.2d 1524, 1532 (3d Cir. 1990) (citing Anheuser-Busch, 363 U.S. at 533, 80 S.Ct. at 1276). Liberty's complaint did not allege competitive injury resulting from the imposition of the DPS. See app. at 24. While Liberty alleged economic loss . . . as a consequence of . . . underreimbursement, it did not allege that this loss placed it at a disadvantage relative to its competitors who were subjected to the same underreimbursement. Id. at 18. In arguing to this court that the DPS inflicted competitive injury because it was exacted from Liberty and none of its competitors, br. at 38, Liberty ignores the fact that, according to its complaint, the DPS was calibrated to equal . . . the incremental credit that Liberty received while its competitors did not. App. at 18.21 Because any disadvantage arising from the DPS merely offset an advantage conferred uniquely on Liberty, the DPS did not have the anticompetitive effect required to state a claim under the Robinson-Patman Act. See J.F. Feeser, 909 F.2d at 1532. _________________________________________________________________ 21. Liberty suggests, in passing, that the surcharge could exceed the warranty parts reimbursement at any given time. Reply br. at 6. The district court properly rejected any attempt to base a price discrimination claim on discrepancies between the amount of the incremental reimbursement and the amount of the surcharge, as these discrepancies related only to particular surcharges and not to the structure of the surcharge system, slip op. at 13 n.2, which by Liberty's own admission assessed charges that equaled the total incremental reimbursements. See app. at 18. Thus any difference in Liberty's economic position relative to its competitors was temporary and incidental and therefore not actionable under the Robinson-Patman Act. See Craig v. Sun Oil Co., 515 F.2d 221, 224 (10th Cir. 1975) (rejecting price discrimination claim based upon . . . billing errors . . . which were corrected). 27