Court Opinion

ID: 9442945
Source: CourtListenerOpinion
Date Created: 2023-08-03 19:05:00.017413+00
Date Added: 2024-06-11T17:29:17.881990
License: Public Domain

JOHNSEN, Circuit Judge
(dissenting in part).
A few observations as to my concept of the nature of the injury and the damages possible under the Robinson-Patman Act, 49 Stat. 1526,' 15 U.S.C.A. § 13, should perhaps be made.
*61We recognized in Elizabeth Arden Sales Corporation v. Gus Blass Co., 8 Cir., 150 F.2d 988, that two kinds of injury “in his business or property”, 38 Stat. 730, 15 U.S. C.A. § 15, were possible from discriminations under the Act — one direct or immediate and the other indirect or consequential, Thus, we held in that case that, discriminations in favor of one dealer in a seller’s products as against an immediate competítor, in granting allowances for services or facilities furnished by the dealer in marketing the seller’s products, or in providing contributions of services or facilities to the dealer for such marketing, which were violative of section 2(d) and (e), 49 Stat. 1527, 15 U.S.C.A. § 13(d) and (e), of the Act, were recoverable as direct or immediate damages, to the extent of the illegal difference, where that difference represented money which the dealer would have saved in expense or for which he would have been reimbursed in contribution, if the seller had accorded him equal treatment with his competitor.
This rule of direct damages as between immediate competitors also clearly, I think, has application to price discriminations, violative of section 2(a) of the Act, 15 U.S. C.A. § 13(a), and it seems to me that the Supreme Court has so indicated by its statement in Bruce’s Juices, Inc., v. American Can Co., 330 U.S. 743, 757, 67 S.Ct. 1015, 1021, 91 L.Ed. 1219, that “If the prices are illegally discriminatory, petitioner has been damaged, in the absence of extraordinary circumstances, at least in the amount of that discrimination.
Since the Robinson-Patman Act was intended primarily to afford the small business man a means of realistically protecting himself against discriminations in his competitive position, Federal Trade Commission v. Morton Salt Co., 334 U.S. 37, 49, footnote 18, 68 S.Ct. 822, 92 L.Ed. 1196, it is only natural that much, if not most, of the litigation arising under the Act should involve discriminations between immediate competitors under subsections (a), (d) and (e) of section 2, and that the damage in such cases normally will consist of the amount which would have been saved in price or expense or restored through reimbursement, if there had been equal treatment. I cannot think of any plainer injury to a man in his business or property than for him to have to pay out of his treasury money which he ought not to have been required to do or to fail to get back money therein for which he should have been reimbursed. Damages in the cash amount or cash value of such illegal discriminations seem to me therefore virtually automatically to follow under the Act as between immediate competitors, i. e., those engaged in the same line and area of trade,
j do n0^ however, mean to imply, that £he extent of the discrimination necessarjjy marks the limit of the possible injury or damage in this type of situation, as Sun Cosmetic Shoppe v. Elizabeth Arden Sales Corporation, 2 Cir., 178 F.2d 150, 153, may appear to intimate, at least as to the instance dealt with in the opinion. It is possifoie for illegal discriminations between immedjate competitors to have consequential effects also, of such a nature as can properly, j think, give rise to a recovery right beyond the amount or value of the discrimination. Thus, price discriminations, in addition to the direct pecuniary injury to a dealer in his business treasury from being required to pay more for his purchases than his immediate competitor, also conceivably, if sufficiently continued, could operate to destroy or impair his business in the seller’s products or the business conducted by him resting upon a collateral use of such products.
Again> as we pointed out in the Arden case, supra, 8 Cir., 150 F.2d at page 996, even between immediate competitors, discriminations obviously are possible of a nature which would not involve the direct taking of money out of a dealer’s treasury in extra cost or expense or the failure to make direct additions thereto in reimbursing allowances, so that no direct or immediate damage could exist but only consequential injury could be claimed to have been produced. Thus, we cited in the opinion, as an example, the granting of a discriminatory allowance for use by a dealer in advertising or promoting his trade in the seller’s goods, where the expenditure was one which would not have been made by *62such a dealer except for the allowance; and where the result had been to take away the trade of his competitor. - I am now only giving theoretical examples, without attempting to consider where in a particular situation the factor of remoteness might have to be regarded as controllingly entering in on the recovery right. .
To go still further, since injury under the Robinson-Patman Act can only exist in relation to competition, when the alleged discrimination has not been one between primary' or immediate competitors but has occurred simply on the broad horizon of secondary or unimmediate business competition — such as would be involved in the trial court’s theory of a canner of spinach and a canner of some other vegetable being competitors, in that they both are bidders for the housewife’s food dollar — I am of the opinion that the amount .of the discrimination can not be regarded' as a direct or automatic damage and that the only injury capable of being recognized would be one of consequential effect, with the burden necessary in such a situation of establishing proximateness and reasonable certainty as to the fact of injury as a basis for any recovery because of the discrimination.
Thus, in the matter of the Morgan runway allowance, discussed in the majority opinion, since Morgan and appellee were not immediate or specific competitors, in view of their different kind of food products, the damages, if any, recoverable by appellee because of the allowance made to Morgan could in my opinion only be consequential in nature, from such invasion of the-market for canned spinach and green beans as the'allowance’had made it possible for Morgan’s different products , to make •and as-appellee could be shown, to have suffered loss by reason thereof. -The discrimination could not give rise to direct or automatic damages, because appellee’s treasury would not be affected in relation to its immediate competitors, and in- the field of general competition the position of the spinach and green beans industry and that of appellee as a part of it might not even be affected at all. If, howeyer, there.were consequential effects from- the discrimination, which were entitled to-be recovered, I cannot agree with the majority, in their adoption of the view of Sun Cosmetic Shoppe v. Elizabeth Arden Sales Corporation, 2 Cir., 178 F.2d 150, that such consequential damages would have to be limited to “the amount, if any, by which the allowance exceeded the cost savings of the defendant resulting from the runway delivery.” The statute imposes no limitation on the amount of actual consequential damages and none exists otherwise legally except as a'matter of remoteness. Neither in relation to immediate competitorship nor to secondary competition, is there any basis under-the Act for imposing such a limitation upon the amount of damages recoverable for consequential injuries from illegal discriminations.
On the principles which I have discussed above, I further feel that the trial court was entitled to treat the so-called freight equalization with Fort Smith as a price discrimination in favor of the two Fort Smith canners against appellee and, because they and appellee were engaged in immediate competitorship, to allow appellee direct or automatic damages for the difference in the amount which appellee was required to pay appellant for its cans over them.
What appellant did was to include delivery at Fort Smith in its price to the Fort Smith canners and to make appellee pay 36^ per cwt. of the cans above this amount. The 36 cents represented the amount of the freight rate from Fort Smith to Russellville. But appellee’s cans did not come from Fort Smith. Those for appellee, as .well as those for the Fort Smith canners, were shipped direct from appellant’s factories in Indiana and Illinois to their separate destinations and the shipping cost to Russellville was no more than to Fort Smith. And beyond this, there was admittedly no legal basis for any purported use of Fort Smith as a point for freight equalization.
In this situation, appellant could not properly make a charge to appellee greater than' its price to the Fort Smith canners. If it wanted to make- any freight absorption for. its purchasers at Fort Smith, it *63had to make an equal absorption for their immediate competitor at Russellville — unless some other basis for distinction between such purchasers existed under the Act and was used, which was not here the case. I do not believe that it is of any materiality in these circumstances that the cans had cost appellee less than appellant could have required it to pay under its contract, which called for freight equalization with St. Louis. The contracts of the Fort Smith canners similarly called for freight equalization at St. Louis.
Appellant chose to depart from all of these contracts in order to give the Ozark canners a cost benefit or allowance. It gave the Fort Smith canners a bigger benefit or allowance than it gave appellee at Russellville. The extra 36^5 per cwt. which it made appellee pay was money which the Fort Smith canners saved and which appellee would not have been out-of-pocket if it had received equal treatment with them. In appellee’s position as an immediate competitor of the Fort Smith canners, this represented direct or automatic damage to its business treasury for which the trial court was entitled to allow a recovery as such.