Document: 59 L.Ed.2d 153 99 S.Ct. 925 440 U.S. 69 GREAT ATLANTIC & PACIFIC TEA COMPANY, INC., Petitioner,v.FEDERAL TRADE COMMISSION. No. 77-654. Argued Dec. 4, 1978. Decided Feb. 22, 1979. Syllabus Section 2(a) of the Clayton Act, as amended by Robinson-Patman prohibits price discrimination sellers, but under § 2(b) seller may rebut a prima facie case showing that his lower was made in good faith to meet competitor's equally low price. 2(f) makes it unlawful "for any person engaged commerce, course such knowingly induce or receive which is prohibited this section." Petitioner, an effort achieve cost savings, entered into agreement with its longtime supplier, Borden Co., would supply "private label" (as opposed "brand label") milk petitioner's stores Chicago area. Petitioner refused Borden's initial offer implementation and solicited offers from other companies, resulting one competitors. At point buyer informed "not even ball park" $50,000 improvement "would not be drop bucket." then submitted new substantially better than petitioner accepted it. Based on these facts, Federal Trade Commission charged violating 5 Act for allegedly misleading during contract negotiations failing inform second competitor's, inducing receiving Borden. The FTC dismissed charge ground issue what amount disclosure required impose duty affirmative "contrary normal business practice" public interest," held had violated 2(f), rejecting, inter alia, defense been competition. Court Appeals affirmed. Held: A who has done no more accept two prices competitively offered does violate provided meeting-competition defense, here where thus could liable petitioner, did offer, cannot 2(f). Pp. 75-85. (a) Since liability limited "prohibited section," since only §§ (b) deal discrimination, buyer, 2(f)'s plain meaning, if established against defense. Automatic Canteen Co. America v. FTC, 346 61, 73 1017, 97 L.Ed. 1454. In either situation, there And legislative history confirms conclusion dependent 2(a). 75-78. To rewrite hold though section" contravene rule "cannot Congress studiously omitted," Simplicity Pattern 360 55, 67, 79 1005, 3 1079. 78-79. (c) Imposition lead uniformity rigidity contrary purposes antitrust legislation. P. 80. (d) requiring bid beaten competition frustrate competitive bidding and, reducing uncertainty, matching anticompetitive cooperation among sellers. (e) effect finding same conduct condemned anticompetitive, practice," dismissing charge. 80-81. (f) test determining when valid whether he can "show existence facts reasonable prudent believe granting fact competitor." A. E. Staley Mfg. 324 746, 65 971, 89 1338. Under circumstances case, act reasonably bid, since, light relationship justifiably conclude statements about first were reliable necessary make another offering substantial concessions avoid losing account petitioner. 82-84. 557 F.2d reversed. Denis McInerney, New York City, Frank H. Easterbrook, Washington, D. C., respondent. Mr. Justice STEWART delivered opinion Court. 1 question presented Great Atlantic Pacific Tea (A&P), 38 Stat. 730, 49 1526, 15 U.S.C. 13(f),1 illegal discriminations (Borden). 2 alleged violation reflected 1965 between A&P undertook 200 area included portions Illinois Indiana. This resulted savings switching sale (milk sold brand name supplying dairy) label). implement plan, asked Borden, submit private label certain A&P's dairy product requirements. After prolonged negotiations, grant discount private-label delivery service. claimed save $410,000 year compared paying products. A&P, however, satisfied dairies. competitor Bowman Dairy, Borden's.2 4 point, contacted chain store sales manager stated: "I have my pocket. You [Borden] people are so far out line funny. park." When representative details, told nothing except faced problem deciding rebid. at time largest customers Moreover, just invested $5 million facility Illinois. loss result underutilization plant. circumstances, decided doubled estimated annual $820,000. presenting emphasized needed keep making order Bowman's bid. after concluding Bowman's. 6 * filed three-count complaint A&P. Count I contract, failed bid.3 II involving conduct, III combining stabilize maintain retail wholesale 7 An Administrative Law Judge found, extended discovery hearing lasted over 110 days, acted unfairly deceptively accepting therefore I. similarly found Finally, burden proof. 8 On review, reversed Judge's Pointing imposition practice we think, interest." Despite ruling, identical part discriminated competitors, injurious competition, known should beneficiary discrimination.4 rejected defenses justified.5 9 petition review Commission's Second Circuit. court evidence supported findings matter law successfully assert because it, unlike Bowman's.6 correctly determined cost-justification 971. Because judgment raises important issues federal law, granted certiorari. 435 922, 98 1483, 55 515. 10 passed response perceived increased market power coercive practices chainstores big buyers threatened small independent retailers. Notwithstanding concern buyers, emphasis 2(a), Indeed, original Patman bill reported Committees both Houses activity, mention liability.7 belated floor amendment near Senate debates.8 As finally enacted, provides: 11 "That shall (Emphasis added.) 12 Liability situations "which While phrase "this refers entire subsections dealing involve meaning therefore, section."9 fully 2(a).10 13 derivative nature recognized stated received within seller's those defenses. 14 "Thus, least, confident reading words 'a section,' reference substantive prohibitions sellers defined elsewhere Act. It apparent discriminatory forbidden include differentials sections . For simply 'discrimination price'; price' must 'which section.' Even differential comprehended term price,' speaks discriminations, read declaring bounds 'defenses' available reflect differences fluctuating conditions, bona fide attempts set provisos 2(b)." U.S., 70-71, S.Ct., 1022 (footnotes omitted). explicitly justified reason 16 relying teaching argues respondent, hand, assuming respondent contends, judged view buyer. knew final beat entitled honestly believed meeting Recognition argues, basic purpose curtail abuses large buyers. 17 short answer contentions provide clear language states receives If discrimination. 18 similar attempt amend judicially There manufacturer dress patterns 2(e) providing larger services facilities smaller customers.11 attempted defend asserting injury justified. 2(e), depend upon absence manufacturer's primary argument "it 'bad bad economics' they accounted injury." 1013 (footnote argument. Recognizing position economic wisdom Congress," "[w]e omitted." Ibid. respondent's present reason.12 B 19 warned interpretations "extend beyond doing, help give rise open conflict legislation." 63, 1019. rigidity.13 20 market, uncertainty will cause them compete prices. evils collusive action, exchange information competitors violates Sherman United States Container Corp., 393 333, 510, 21 526. advanced liability, refuse least him Such almost inevitably sellers.14 Ironically, itself, dangers inherent disclosure: 22 "The disclosure, applicable whenever intended interest. 23 24 "We fear scenario automatically attaches caveat every state meets, beats, loses second, third, perhaps fourth until able ascertain bid." 87 F.T.C. 1047, 1050-1051. 25 Neither nor explanation anomaly. 26 decline adopt construction results. Accordingly, defense.15 IV 27 proceeded assumption accepts bids specific But quite clearly did. 28 759-760, 977, "A good-faith belief, rather absolute certainty, concession being sufficient satisfy defense." Gypsum 438 422, 453, 2864, 2881, 57 854.16 faith, touchstone unknowingly met Id., 454, 2882. 29 despite longstanding dissatisfied subsequent events aptly described Commission: 30 "Thereafter, August 31, 1965, 31 Dairy offer. September 1, Elmer Schmidt, unit telephoned Gordon Tarr, manager, stated, 'I park.' Although Tarr Schmidt some said tell anything 'would bucket.' Contrary usual practice, opportunityto F.T.C., 1048. (Footnotes record citations omitted.) 32 Thus, danger unless came up 33 unable details requested request refused. verify terms competing without risking liability. supra. Faced find precise stating doing virtually inescapable defense.17 34 2(b), 2(f).18 35 36 ordered. 37 STEVENS took consideration decision case. WHITE, concurring dissenting part. 39 concur Parts I, II, Court's opinion, dissent Part IV. thought irrelevant knows neither itself decide here, remand Commission, whose job initially consider matters. 40 Appeals, am also convinced sufficient, unrebutted 41 MARSHALL, 42 agree applied wrong legal standard assessing However, join interpretation precluding sparse justifies enervating determination contrary, disregards congressional Having formulated standard, applies instance remanding Commission. Given numerous ambiguities record, thereby improperly arrogates role trier fact. 43 provides "[i]t interprets italicized "plainly meaning" proved 2(b). Ante, 76, 81. construction, proceedings turn proof claim exonerated. 44 view, compel circuitous method establishing Sections define elements encourage ready means defining prohibition rely already delineated Thus incorporates reference, So construed, available, issue. section require party actually all conditions before considered. Determining independently, believe, places less strain "plain absolutely majority announces today. 45 construing relies Congress' delay adding remark Representative Utterback debates. 75-77, n. 10. little logical justification interpretation; rather, likely reflects late realization halting abusive buyers1 accomplished solely through Utterback's statement, 80 Cong.Rec. 9419 (1936), amounts slight paraphrase way supports standard. 46 suggestion, ante, 80, resolve dilemma confronting properly invites fortuitously obtains expected choose asking increase facing Rather, accommodation yet mean, liable. That solution buyer's enable manufacture own misrepresenting allowing incorrect information. purports reserve "lying buyer" issue, 81-82, 15, adopts today belies reservation. depends seller, absent necessarily irrelevant. 47 sure, obtain different bargaining positions With respect justify "good faith" competitor. 82-83; 450-455, 2880-2882, 854 (1978). defense—independently seller—if price, regardless happens competitor's. induces misrepresentation escape See Kroger 1372 (C.A.6) (Clark, J.), cert. denied, 404 871, 92 59, 115 (1971). definition extricates impossible respects intent prevent abusing their gain advantage.2 48 1454 (1953), entirely consistent concerned allocation "the coming forward Act," 65, 1020, contours determine scope Canteen's general discussion requirements, quoted 77-78, merely explains "available sellers" Far pronouncing derivative, began observation "roughly counterpart, sellers." 1019 (emphasis added).3 judgment, dictate remanded Court, avoids defense.4 usurps factfinding function best performed Commission.5 Judge, suggested opposite, 962, 1021 (1976), 50 very probable demonstrate would, fact, noted, serious doubts concerning legal. Specifically, considered direct costs. By request, acting prudently. indicates, knowledge belief dairies might costs." 1057 (1976) (citations omitted; original). 51 Furthermore, truly intends exception here. Testimony directly raised possibility misled still responded App. 117a-118a, 123a-124a, 141a-142a.6 Both credited testimony, see 979, 1021-1022; 1049 3., material applied, point. elide testimony unsubstantiated unaffected misrepresentation. 15; 6,supra. 52 adoption resolution disputed factual remand. Title 13(f) "It 13(a) pertinent part: "(a) indirectly, discriminate purchasers commodities like grade quality, purchases involved use, consumption, resale Territory thereof District Columbia insular possession place jurisdiction States, lessen tend create monopoly injure, destroy, grants benefit them: Provided, herein contained due allowance manufacture, sale, differing methods quantities .. "(b) Upon made, section, furnished, rebutting prima-facie affirmatively shown, authorized terminating discrimination: furnishing purchaser competitor, furnished produced approximately $737,000 $410,000. 5(a) 719, amended, 45(a), relevant "(1) Unfair affecting unfair deceptive acts declared unlawful." interstate commerce requirement satisfied. establish complete Standard Oil 340 231, 71 240, 95 239. was, counsel going 1454, justified, know not. upheld dismissal complaint. relied (C.A.6), proposition deliberate misrepresentations concessions. misrepresentations, viewed distinction significance. infra. H.R. 8442, 74th Cong., 1st Sess. (1935); S. 3154, (1935). F. Rowe, Price Discrimination 423 (1962). commentators "afterthought." 421; J. McCord, Commentaries 96 (1969). Commentators supra, ("[Section] enforced basis transaction sustain thereto"); 421 ("the status pricing legality Act"); Shniderman, Perspective 136 (1977) (a excused seller"). Conference Report House, summarized stating: "This paragraph [§ 2(a)] amendment." (1936). favor commodity bought resale, processing, contracting furnish furnishing, contributing of, connected handling, purchased accorded proportionally equal terms." 13(e). inconsistent intent. "[T]he whom main sought reach who, knowing full well likelihood nevertheless exert pressure prices." 79, 1027. Here, contrast, More once construed consistently broader policies laws. 854; 74, 1024. difficult enforce. cases quality product, serve manner, required. (1971), Sixth Circuit induced situation. issued "A&P bidder notifying fact." allege buyer," meaningful situation lies keeps quiet 983. background, engage rationale statement "sharpen your pencil bit you there." referred comment note irrelevance, mentioned considering understandable, need right reconciling laws encouraging 249, 249: now reconcile, entirety, theory underlies Acts. enough say seek abolish radically self-defense raid readily distinguishable Corn Products 726, 961, 1320, 1338, witnesses personal transactions question. Similarly, unsupported informants uncertain character reliability insufficient source questioned investigate credible threat termination All factors show do S.Rep.No.1502, 2d (1936); H.R.Rep.No.2287, Sess., 3-7, H.R.Conf.Rep.No.2951, Final Chain-Store Investigation, S.Doc.No.4, Henry Broch 363 166, 168-169, 1158, 1160-1161, 1124 (1960); W. Patman, Complete Guide 7-10 (1963); 8-14 generally Hearings (S. 4171) Subcommittee Committee Judiciary, 4995, 5062 House 3-4, 14-17 7-10, 148-151; 8-23. recently noted 455 30, 2882, (1978), sustained enforcement bolster credibility buyers' representations render reliance thereon secure predicate (Citation "bolster credibility" adopted premise underlying suggestion Gypsum, Note, Supreme 1977 Term, Harv.L.Rev. 57, 288, 291-294 eliminates reassuring representations. preface Canteen, support extent believes resort literal forecloses further inquiry, ignores Canteen. common-sense approach interpreting often ambiguous tempering "merely language" considerations "fairness convenience" purpose. 23, basis, allocated production regarding bear proceeding seller. 75-76, 1025-1026; Morton Salt 334 37, 44-45, 68 822, 827-828, 1196 (1948). today, litigating incompatible holding production. reverses expressly merits 85 18, address either. Considering recent admonition 456, 2883 "[t]he case-by-case elaboration left courts context concrete situations," action particularly inappropriate. undertake question, bore persuasion, understand purporting modify sense last Term creates impression proposals, 81-82 83-84. third proposal, favorable glass gallon containers, whereas bidders supposedly item. Actually, gallons subsequently using containers. 979 (1976); 73a-74a, 116a-118a, 257a-260a, 774a-775a. forcing delete proposal raising overall products covered promised derived cheaper gallons. 979-980. addition, while preparing deletion, reductions, saying " 'sharpen there.' 118a. result, reduced yield additional $5,000 $8,000. incorporated reductions attributable deletion id., 141a-142a.

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