Document: 390 U.S. 341 88 S.Ct. 904 19 L.Ed.2d 1222 FEDERAL TRADE COMMISSION, Petitioner,v.FRED MEYER, INC., et al. No. 27. Argued Nov. 6, 1967. March 18, 1968. Daniel M. Friedman, Washington, D.C., for petitioner. Edward F. Howrey, respondents. Mr. Chief Justice WARREN delivered the opinion of Court. 1 The Federal Trade Commission, after extensive proceedings, ruled that respondents, corporate owner a chain supermarkets and two its officers, had unlawfully induced certain suppliers to engage in discriminatory pricing sales promotional activities prohibited by §§ 2(a) 2(d) Clayton Act, as amended Robinson-Patman Act.1 63 F.T.C. —- (1963). Court Appeals Ninth Circuit disagreed with Commission's Construction § reversed part ruling section been violated. 359 F.2d 351 (1966). We granted certiorari, 386 907, 87 853, 17 781 (1967), because case presents important questions concerning scope key provision Act. I. 2 Section makes it unlawful supplier interstate commerce grant advertising or other allowances one 'customer' who resells supplier's 'products commodities' unless are 'available on proportionally equal terms all customers competing distribution such products commodities.'2 Although we have limited our review this aspect alleged violations,3 full understanding issues requires brief exposition facts from which Commission concluded respondents violations both 2(d). relevant found were not disturbed Appeals. 3 Respondent Fred Meyer, Inc., operates 13 Portland, Oregon, area retail sale groceries, drugs, variety items, line clothing. In 1957 Meyer's exceeded $40,000,000. According 1960 prospectus, made one-fourth food Portland was second largest seller goods area. Since 1936 Meyer has conducted annually four-week campaign stores based coupon books consumers. usually contain 72 pages, each page featuring single product being sold at reduced price. consumer buys book nominal sum 10¢ must surrender appropriate when making his purchase goods. A often represents reduction one-third more regular price featured item, cover stated use coupons would result total savings than $54. is highly successful. 138,700 121,270 1958. Aside paid consumers books, finances promotion charging fee least $350 coupon-page product.4 Some participating further underwrite giving reductions purchases replacing no cost percentage during campaign, redeeming cash an agreed rate. 4 scheme, years 1956 through 1958, violated following respects: First, four campaigns represented violation similar available proportionately customers. Second, additional value given these form discounts, free replacements redemptions amounted discrimination 2(a).5 held inducing discriminate price, 2(f) Act,6 them allowances, engaged unfair method competition 5(a) Act.7 5 Both before Appeals, argued established suppliers, Tri-Valley Packing Association Idaho Canning Company, purchased directly suppliers. participated paying Tri-Valley's brand canned peaches merchandise every third can coupon's offer three cans two. substantially identical terms, except offered corn wholesalers, Hudson House Wadhams & Co., resold competitors, disfavored transactions but neither wholesalers accorded comparable those received Meyer. Respondents that, purely matter statutory construction, could requirement proportional equality among 'customers distribution' their (1) retailer, 'competing' Wadhams, (2) retailers be resale 'customers' Wadhams. 6 rejected reading 2(d), noting if respondents' view prevailed, retailer buying wholesaler having direct dealings receive protection against competitor supplier. prohibits granting direct-buying also resell retailer's competitors. Accordingly, cease-and-desist order included barring purchasers compete products.' F.T.C., —-. One Commissioner, while agreeing majority violate dissented ground should required rather them.8 Thus, view, within meaning statute. adopted interpretation urged Consequently, set aside portion out above. 7 agree proscription reaches kind Canning. Therefore, reverse judgment point. However, under statute, remand modification order. deal first arguments, II. 8 press upon us leaves buy most unprotected told specific result. To benefit statute's equality, urged, buyer 'competing customer' narrowest sense phrase. they do suppliers' outside For reasons below, case, only between resales same functional level and, therefore, does mandate wholesalers.9 But cannot accept half argument, rests narrow definition becomes wholly untenable viewed light central purpose economic realities framers concerned. 9 Conceding amendments means represent exemplar legislative clarity,10 cannot, absence unmistakable directive, construe Act manner runs counter broad goals Congress intended effectuate. See, e.g., FTC v. Sun Oil 371 505, 516 521, 83 358, 365—368, 466 (1963); Elizabeth Arden Sales Corp. Gus Blass 150 988, 991—993 (C.A.8th Cir.), cert. denied, 326 773, 66 231, 90 L.Ed. 467 (1945). start proposition '(t)he enacted curb prohibit devices large buyers gained preferences over smaller ones virtue greater purchasing power.' Henry Broch 363 166, 168, 80 1158, 1160, 1124 (1960). role scheme well documented history. An investigation store practices undertaken Congress' request,11 indicated inadequate deterrent outright discrimination.12 revealed concessions competitors obtain beyond reach 2.13 It significant congressional concern focused retailers, particularly stores, felt threatening continued existence independent merchant.14 Indeed, acted, some States attempted limit growth chains express prohibitions extensions taxation.15 disclosed allowances.16 draftsman eventually emerged explained even payments actual services, indirect recipient shift costs not.17 That practice sought eliminate demonstrated words used Senate Judiciary Committee recommending enactment section: 10 'Still another favored medium oppressive discriminations demand, sellers grant, special purported payment customer agrees render reference seller's products, sometimes business generally. Such allowane unjust service rendered for, when, rendered, grossly excess value, any deriving own thus enabled vendor substantial portions cost, competitor, unable command so.'18 11 chose deter prohibiting 12 Of course, Report nor parts history so many define include resales. narrower lead anomalous On hand, like quantities therefore find feasible undertake traditional wholesaling functions themselves, protected whose access entitled protection. diametrically opposed clearly intent improve competitive position small eliminating what regarded abusive discrimination. If read excluding buyers, frustrate effectuate holding includes class. III. did Commissioner competed court gave almost consideration construction hold proper one. Citing prior Assn. FTC, 329 694, 709—710 (C.A.9th Cir. 1964), merely way dealt orn traced shelves retailers. F.2d, 359—360, 362—363. requirements compose elements 'indirect doctrine courts impose liability effect supplants intermediate distributors whom favors distributors' accounts others. See American News Co. 300 104, 109 (C.A.2d 824, 44, 64 (1962); K.S. Chemstrand Corp., 198 F.Supp. 310, 312—313 (D.C.S.D.N.Y.1961); Kay Windsor Frocks, 51 89, 95—96 (1954); Rowe, Price Discrimination Under 398—399 (1962), (1964 Supp.). need question validity applied pierce unrealistic claim reseller him actually distributor. Nor whether may succeed private action without proving he fact buyer. us, conceded Moreover, approval ruling, finding Wadhams.19 Given findings, unnecessary resort doctrine. Whether not, can, here did, afford advantage eliminate. product, dealing imposed too Further, disturb finding, misapprehended burden requiring trace IV. 14 impact argument conflicts own. rejecting observed: 15 'The net entire structure 'independent' merchants—including numerous, retailer-customers—are placed completely pale insofar 'chains' 16 'We persuaded either effected passed place, goes squarely well-known purposes itself, namely, give break 'chains."20 concluding, have, Canning, approach deference due agency charged day-to-day administration require wholesalers. 18 believed support language reasoned 'seeking exactly dollars after.' While doubted reasonably employed concept believe word 'distribution' 'resale' clear indication discussion there allowance hearings indicates meant where level. reporting provision, Committees example: 'To illustrate: Where, earlier referred report, manufacturer grants particular distributor amount per month former's sold, number equally able furnish store, conditions basis.'21 20 This illustration others cited conclusive, strongly suggest concerned products. And, above, objective assure sellers, regardless size, evenhanded treatment suppliers.22 noted (1963), wished expand resellers operating level, knew how terms. 'injure, destroy, prevent person knowingly receives discrimination, them.' Id., 514—515, 364; see Morton Salt 334 37, 55, 68 822, 832, 92 1196 (1948). that: 21 'There reason appearing face statute assume invoke omission 2(b) explicitly provided inclusion 2(a); reasonable inference quite contrary.'23 22 present too, think 'the inference' intend board recognize inappropriate unwise attempt formulate allembracing rule applying elusive system might devise getting consumer. But, concrete presented, receiving competes compel pay up distributive pass directly. conclude places responsibility 23 argues take impracticable will always bypass numerous outlets. Our decision necessitate bypassing. gives make Nothing said bars supplier, consistently provisions antitrust laws, utilizing distribute administer program, long takes responsibility, rules guides promulgated regulation practices,24 seeing product. 24 reversed. remanded directions proceedings consistent opinion. 25 ordered. 26 Judgment part, directions. 27 MARSHALL took case. 28 FORTAS, concurring. 29 I join Court's decision, it, this. permits services facilities equivalent handling choose facilities, payment.* result, obviously Congress, best squared device regarding unit section. correct my opportunity participate afforded wholesaler. thrust satisfy obligation arrangement designed transmit participation program chooses accept. 30 HARLAN, dissenting. 31 dissent time come change cases here, decided judicial tour de force. No doubt, protect advantages larger power. implementing purpose, however, imposes hodgepodge confusing,1 inconsistent,2 frequently misdirected3 restrictions. situation seems me wiser course hew closely possible wandering drawn (with expertise enforcing statute) into notions 'little people' 'big people.' 32 company, retailer. provides made, basis involved company themselves turn now holds, time, passage although literally 'broad goals' treated were. 33 Unfortunately, nothing mean 'non-customers thinks protection.' refused suggestion unexpected nonliteral Act's purposes, instance brought bear construction. 34 Furthermore, failure extend explicit dismissed mere oversight. Compelling simple matter. imposing restrictions guarantee 'allowance' running afoul Sherman Act.4 simplify matters retailers: hypothesis, efficient, event constantly risk charge, middle, conspiring restraint him.5 35 addition, circumstances very idea 'proportional equality' meaningless. asked 'equal' presumably carry much load; risks treble damages guess even-handed turns erroneous. Even desirable force submit advance approval, refusal noncustomers indicate experts sanguine about possibility working rational circumstances. 36 resolutely refuse enter programs, effectively avoid favoring distributors. doing so, abandoning fellow disfavor prevail differently situated less timorous assistance. 37 restriction announced today. Since, know, deliberate practical considerations, prefer it. similarly opaque encourage notoriously amorphous thorough overhauling due.6 consider go 38 STEWART, 39 'all commodities.' respondent respondent.1 enforce respondent. certiorari question: 40 'Whether directbuying violates Act.' 781. 41 today Appeals' answer holds nevertheless theory party. somehow never suggested term 'customer.'2 Cf. SEC Chenery 318 80, 454, 626. 42 Because affirm judgment. least, notice defend novel finds violator law. Due process less. Cole State Arkansas, 333 196, 514, 644. Stat. 730, amended, 49 1526, 1527, U.S.C. 13(a), 13(d). pertinent part: '(I)t shall commerce, indirectly, different commodities grade quality, * injure, them: *.' full: contract anything compensation furnished connection processing, handling, sale, offering manufactured, person, n. 1, supra. filed separate petitions rulings contended failed show inducement knowing future broad. petition raised '(w)hether presented reserve granted. denied petition, 908, 853 specifically issue therein presented. (1967). $25,200 covered publishing, distributing, publicizing years. characterized 'clear profit' $13,870 1957. 13(f): 'It induce section.' 719, 632, 45(a): '(1) Unfair methods deceptive acts hereby declared unlawful. '(b) empowered directed persons, partnerships, corporations using commerce.' (Commissioner Elman, concurring dissenting part). posture, label reflects chain. Compare Ruberoid 343 470, 475, 800, 804, 96 1081 (1952); cf. Simplicity Pattern 360 62—63, 79 1005, 1010—1011, 1079 (1959). Automatic Canteen America 346 61, 65, 73 1017, 1020, 97 1454 (1953); (1962). S.Res. 224, 70th Cong., 1st Sess., 69 Cong.Rec. 7857 (1928). Final Chain-Store Investigation, S.Doc. 4, 74th 63—65, 90—91, 96—97 (1935). 57—65. Hearings Special Investigation Retail Federation, Sess. C. Austin, Related Problems 6—11 (2d rev. ed. 1959). presenting bill Committee, Representative Patman stated: 'I everyone studied subject, day merchant gone something done quickly. He possibly survive system. So reached crossroads; grocery country few chains, got laws people, built peace saved war, exist—not rights, privileges, benefits, just deny benefits getting, permitted have.' H.R. 8442, 4995, 5062 Judiciary, 5—6 supra, 12, 78—82. 44—46, 61. Vol. 3, 66—88 Bills Amend Subcommitte 2d 464 (1936) (Mr. Teegarden). S.Rep. 1502, (1936). reported favorably H.R.Rep. 2287, 15—16 findings peaches. regard upholding respect 2(a). (1936); 14, U.S., 515, S.Ct., 365. CFR 1.55—1.56; 'Guides Allowances Services,' CCH Reg.Rep. 3980, 6073—6079. refinements problem—e.g., duty tailor capability retailers; negatively, permit fair types 534; Stedman, Twenty-four Years Wis.L.Rev. 197, 218. Levi, Act—Is Public Interest?, ABA Antitrust 60 (1952—1953). As Professor Levi noted, published criticism unsportingly easy find: literature become contest witticisms relieve otherwise dreary picture.' Ibid. example Eine Kleine Juristische Schlummergeschichte, Harv.L.Rev. 921. Shniderman, Impact Pricing Flexibility, 57 Nw.U.L.Rev. 173; Austern, Presumption Percipience About Competitive Effect 81 773. confusion unfortunate field conflicting objectives many: 'competitive' odds 'protective' purposes; defense traders inconsistent liberty interests Albrecht Herald 145, 869, 998, se absorbing higher prices. Albrecht, difficult why agreement sufficient insure middle absorb constitute combination Friendly, Gap Lawmaking—Judges Who Can't Legislators Won't, Col.L.Rev. 787, 794: tiniest fraction spent lawyers, legal writers, administrators, judges unsuccessful endeavor elucidate obscurities sufficed put house once problems revealed; spent.' 'respondent' refers Inc. vain persuade adopts: 'What illegal, law.'

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