Legal Document

370 U.S. 460 82 Supreme Court Reporter 1309 8 United States Reports Lawyer’s Edition 2d Series KF101.8 U54 627 UNITED STATES, Appellant,v.The BORDEN COMPANY et al. Number 439. Argued April 24 and 25, 1962. Decided June Richard Atlantic Solomon, Washington, D.C., for appellant. Stuart S. Ball, Chicago, Ill., appellee, The Borden company John Paul Stevens, Bowman Dairy Mr. Justice CLARK delivered the opinion of Court. 1 This is a direct appeal1 from judgment dismissing Government's Section 2(a) Clayton Act2 suit in which it sought an injunction against selling fluid milk products by appellees, Company Company, at prices discriminate between independently owned grocery stores store chains. District unreported decision found pricing plan each dairy to be prima facie violation § but concluded that these discriminatory were legalized cost justification proviso 2(a), permits price differentials as long they 'make only due allowance differences manufacture, sale, or delivery resulting differing methods quantities such commodities are purchasers sold delivered.' To review contention had improperly permitted justifications based on average dealing with broad groups customers unrelated costsaving factors,3 we noted probable jurisdiction, 368 924, 361, 7 189, directed parties brief argue case separately 963, 438. However, finding same problem root have dealt both this single opinion. We class submitted appellees did not satisfy their burden showing respective plans reflected 'due allowance' differences. 2 By way background, first point out present appeal merely glimpse protracted litigation began 1951 has yet seen its end. original complaint charged violations §§ Sherman Act, 15 Code Annotated KF65 U5 1, Act. dismissed suit, holding there was no proof alleged Act equitable relief necessary under charge because already restrained consent decree entered private antitrust case. 111 F.Supp. 562. On affirmed dismissal charges held erroneous refusal grant claim solely existence decree. 347 514, 74 703, 98 L.Ed. 903. remand reopened Government introduced recent general schedules illustrated effect sample show appellee still engaged illegal discriminations notwithstanding In defense voluminous studies systems. entire via stipulations, depositions, briefs. There dispute discrimination; sole question whether permissible allowances variances cost. 3 view our disposition, need relate facts detail. Both major distributors malk metropolitan Chicago. sales dairies retail during period handled gave most customers—the stores—percentage discounts off list increased volume purchases specified maximum while granting few chains—a flat discount without reference substantially greater than available offered independent stores. These made effective through appeared cover all stores; however, modified letters chains confirming higher discounts.4 Although two sets never officially labeled 'independent' 'chain' prices, treated, called, regarded throughout record. 4 support disparities independents attributable types customers, will described content analytical approach. 5 system produced classes customers. chains, A & P Jewel, combined total 254 constituted one class. 1,322 stores, grouped four brackets purchases, up other. Borden's built comparisons per $100 relation similar independents. costs considered personnel (including routemen, clerical employees), truck expenses, losses bad debts returned milk. Various allocation utilized: Drivers' time spent directly store; certain expenses allocated classes; susceptible either foregoing various stop, store, basis. 6 Bowman's delivery. It relied heavily upon study minute routemen's time. determined substantial portions devoted three operations, none ever performed 163 operated chain customers.5 added work steps arose method collection, i.e., cash delayed collections connected therewith, performance 'optional customer services.' services, varying frequency depending circumstances, included 'services driver may requested do, deliver order inside, place containers refrigerator, rearrange so any product remaining unsold yesterday today, leave cases different spots etc.' experts conducting calculated elements 'standard' unit delivered: aggregate required perform studies, devided number units delivered. essence, comparison services disparity prices. shown five received services,6 2,500 supplied partook them. basis estimated about two-thirds services' daily 'most pay daily.' facts, stated here rather summary fashion, trial court met requirements theory justified appellees' schedules. doing itself 'the * imperfect some respects *.' 'seemingly arbitrary' nature classification 'in percentage do bear ratio sales.' But 'this mode wholly arbitrary—after all, purchase larger volumes stores.'7 believe permit classifications. burden, course, prove discrimination, claimed present, immunized 2(a). Such mandate 2(b) interpreted Federal Trade commission versus Morton Salt Co., 334 37, 44—45, 68 822, 827, 92 1196 (1948).8 can doubt amended Ribinson-Patman contemplates, express wording legislative history, actual delivered.9 before us how accurate must particular purchaser. 9 language proviso, history,10 literally construction would require discrepancy individually justified, been construed those enforcement. candidly recognizes briefs filed instant '(a)s matter practical necessity when seller deals very large he cannot establish cost-reflecting customer.' vein, practice grouping purposes approval Commission.11 ourselves 'elusiveness data' Robinson-Patman proceeding. Automatic Canteen Comm'n, 346 61, 68, 73 1017, 1021, 97 1454 (1953). short, completely renounce accounting eliminate sellers having purchasers, thereby preventing passing economies seems hardly say result war Congress' purpose. 10 arbitrary classifications even representative numerical majority individual members. At considerations shade into circumvention proviso. balance struck use composed members selfsameness make averaging group valid reasonable indicium specific member.12 High 'musts' groupings close resemblance essential points determine considered. 11 regard find sufficient homogeneity. Certainly, factors necessarily encompassed within manner owned. Turning justification, note failed isolated favored affirmatively revealed utilized unlike saving aspects For instance, favorable part controlled 80-member relegated. allowed stores.' purposes, comparable to, than, created artificial like horse rabbit. As Commission said Matter Champion Spark Plug 50 F.T.C. 30, 43 (1953): 'A difference other accepted discrimination.' gap further widened together raising smaller Nor vice paper upon, attributed many true indicia consumers. illustrate, assigned portion involved collections, although paid fact admitted 'large majority' so. 12 Likewise details failure classification. Only additional made. Its emphasized service' collection 'delay collect.' crucial justification. costs. Yet, lesser indicated took Under circumstances across board calculating possibly allocates whose purchasing does give rise profferer negate possibility, here. If control dealing, then presence absence might more password admission categories.13 13 alternative sufficiently unscrambled remove taint them justify independent. mass underlying statistical data now tied untried theories best evaluated remand, therefore consider sufficiency 14 sum, record shows groupings, apparently ownership event homogeneous joining allocations purposes. schemes, illegal. appropriate continuously 'pass practices defendants.' issuance injunction, years old knowing order. Certainly relevant factor consideration above being followed form. show. matters ascertained presently existing careful application principles enunciated. puprose reversed remanded. Reversed 16 FRANKFURTER 17 DOUGLAS, concurring. 18 involves problems centralized enterprise constituent members, where reduces store. competitor member competing or, if is, one. little, any, management. They main pertain First, payment. Second, degree relieves handling enters stacking storing products, returning empty bottles cartons. 19 changes limit 'instruments favor privilege weapons competitive oppression.' S.Rep.No.1502, 74th Cong., Sess., Page 5; H.R.Rep.No.2287, 9. 'differentials delivered' explained follows: 20 'This limits strictly traceable buyer whom discrimination granted, serving them, buy. 21 'But arise operating overhead must, plainly phrase quoted above, 22 'This, plain meaning, actually concerned, precludes imputation exemption others it, represents facilities activities inseparable seller's business whole concerned discrimination. leaves open urged differential—whether costs—is kind That answers supra, 10. (Italics added.) While issue computed class, irrelevant, applicable bearing formulae presented 23 out, service rendered deliverymen availed themselves not. also expense delays collecting. items though payment always cash, central billings, used who purchased could qualify obtained. resulted treated another payments did; given advantage enjoyed reason billing credit 25 What 43, here: 26 'Respondent's undoubtedly varied among All proportionately equal sound determining proportionate share expense. 27 Where takes place, become where, here, involved, store-by-store criteria problem. Otherwise prestige get largest merchants forced wall. 28 argued natural right should easy. reflects, purpose lead monopoly impoverishment middle N Dec. Immigration Nationality Decisions read preserves much traditional free possible. Free power breed monopoly. unless discounts. thus kin Moore Mead's Fine Bread 348 115, 75 148, 99 145, lush treasury bring local bakery knees. Here, there, obtain 'competitive advantage' 'of skills efficiency' consequence influences.* pricecutting weapon. Here discount. Each leads end aggrandizement ploughing laws, part, designed avert inquest enterprise. 29 HARLAN, dissenting. 30 treats novel disruptive law 'cost justification' 31 adequate credits being, that, below, judged over-all adequacy accordance field. lower indeed carefully refrained giving unqualified set substance (1) conscientiously prepared generally arising (and particularly specifically 'trial' samples); (2) light long-drawn-out history litigation, disposition deny injunctive relief, allowing attention believed justifiable studies. 32 me eminently sensible fair stale courts nearly years. see whatever sending back what presumably amount third trial, especially apparent drastic situation complained taken since 1955. 33 Had reveals fully appreciated Jurisdictional Statement called for.* 34 affirm. Jurisdiction conferred Expediting February 11, 1903, Statutes-at-Large 823, amended, KF62 29, 29. 'Sec. 2. (a) shall unlawful person commerce, course grade quality, lessen competition tend create line injure, destroy, prevent grants knowingly receives benefit them: Provided, nothing herein contained 38 730, 49 1526, 13(a), 13(a). stipulation limited objections include foundation proposed, quite clear stipulating waiving legal proffered 1954 issued following schedule 'be applied fresh milk': Average converted Percent day: 0- 24............................. 0 25- 74............................ 75-149 ............................3 150 over...................... time, sent Great Pacific Tea Jewel Food Stores 1/2% special arrangement discount, 1/2%. [Footnote continued p 464] September 1955, discontinued net scheme 'Resale Store Discount Schedule': 10....................... 3.0 3.4 20...................... 3.8 30...................... 4.2 40...................... 4.6 40 50...................... 5.0 60...................... 5.2 60 70...................... 5.4 70 80...................... 5.6 80 90...................... 5.8 90 100..................... 6.0 100 110..................... 6.2 110 120..................... 6.4 120 130..................... 6.6 130 140..................... 6.8 140 150..................... 7.0 August addition discounts: 200............................. 8.0 Over 200............................... During letter granted Kroger 11% Goldblatt Bros., multi-store operation, 1955 again 1956 percentages schedules, reduced chain, take services. routes overlooks sampling recognized technique offering position, court, Chicago evidenced published lists, addition, appellee's Even unwilling 'stamp policies evidence.' enjoin regulation continually 'to pass defendants,' better proceedings Commission. Sec. 2(b). 'Upon made, hearing section, furnished, rebutting prima-facie section 13(b), 13(b). discussion pertinent well treatises Rowe, Price Discrimination chapter (1962). Chairman Conference Bill reported House: 'The differential him taken.' Cong.Rec. 9417 (1936). Commission's position regard, op. cit., 9, 10.6. Advisory Committee Cost Justification, Report (1956), 8. Another suspect feature frozen—making impossible electing receive cost-determinative services—with practice. See Curtiss Candy 44 237, 267—268, 274; International 138, 153—155, 157; 43. occasioned overcrowded docket issues inadvisability vesting appellate jurisdiction over type Brown Shoe States, 294, 357, 1502, 1542, (dissenting concurring opinion).

Classification Label: 7