Court Opinion

ID: 9446348
Source: CourtListenerOpinion
Date Created: 2023-08-03 21:52:43.64313+00
Date Added: 2024-06-11T17:30:37.557698
License: Public Domain

WASHINGTON, Circuit Judge
(dissenting).
The disposition of this case turns on the meaning to be given to Section 2(b) of the Clayton Act, as amended. That section permits one against whom a pri-ma facie case is made to show “justification” for his conduct. But that expression is not left undefined. Far from being all-inconclusive, it in fact covers rather narrow ground. The “justification” referred to in Section 2(b) must he that described in the meeting-competition proviso to that section,1 or such *684justification as may be spelled out from the provisions of the particular section— other than Section 2(b) — creating the offense alleged. This premise is firmly grounded in the decisions.2 No one claims that the proviso in Section 2(b) is applicable to the facts of the present case, Hence we look to Section 2(e), the section governing here, which contemplates as justification for a prima facie violation of that section a showing by the seller that all purchasers were accorded facilities on “proportionally equal” terms. To repeat: Congress provided only two defenses to charges against one engaged in commerce of conduct which prima facie violates Section 2(e): (1) under the proviso to Section 2(b) that the facilities were furnished m good faith to meet the facilities furnished by a competitor; or (2) within the language of Section 2(e) that in fact the facilities furnished were accorded to all purchasers on proportionally equal terms.
The Simplicity Company makes no contention that it has furnished cabinets and catalogs on proportionally equal terms to the Red Fronts and the fabric stores. Presumably if it afforded facilities on proportionally equal terms the Commission would not object. But Simplicity cannot refuse proportional equality and then argue that its refusal is justified by cost differentials — a defense available in a case brought under Section 2(a), but not in one brought under Section 2(e). As a practical matter, “cost justification” in the present context can only mean that Simplicity may “justify” its actions by showing that many of its fabric store customers do not pay their bills, or are unprofitable to deal with because of small volume, or some similar reason. Such factors may explain Simplicity’s desire to discriminate against them in favor of bigger and more profitable accounts, but I see no evidence that Congress has decreed that factors of that sort shall be viewed as legal justification, Quite the contrary, as I see it. In fact, Section 2(e) of the Act becomes almost meaningless if such defenses are to be ál-lowed to prevail.
i would therefore affirm the Commis-ion’s cease and desist order.

. “Provided, however, That nothing [herein] * * * contained shall prevent a seller rebutting the prima-facie case thus made by showing that his lower price or the furnishing of services or facilities to any purchaser or purchasers was made in good faith to meet an equally low price of a competitor, or the services or facilities furnished by a competitor.”

. See Elizabeth Arden, Inc., v. Federal Trade Commission, 2 Cir., 1946, 156 F.2d 132, 135, certiorari denied 1947, 331 U.S. 806, 67 S.Ct. 1189, 91 L.Ed. 1828; Oliver Bios., Inc., v. Federal Trade Commission, 4 Cir., 1939, 102 F.2d 763, 767; Great Atlantic & Pacific Tea Co. v. Federal Trade Commission, 3 Cir., 1939, 106 F.2d 667, 675-677, certiorari denied 1940, 308 U.S. 625, 60 S.Ct. 380, 84 L.Ed. 521.