Court Opinion

ID: 9410287
Source: CourtListenerOpinion
Date Created: 2023-07-20 18:01:08.639112+00
Date Added: 2024-06-11T17:20:56.558281
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

U.S. WHOLESALE OUTLET &                   No. 21-55397
DISTRIBUTION, INC.; TREPCO
IMPORTS AND DISTRIBUTION,                    D.C. No.
LTD.; L.A. INTERNATIONAL                  2:18-cv-01077-
CORPORATION; CALIFORNIA                      CBM-E
WHOLESALE; YNY
INTERNATIONAL, INC.; EASHOU,
INC., DBA San Diego Cash and                OPINION
Carry; SANOOR, INC., DBA L.A.
Top Distributor,

              Plaintiffs-Appellants,

 v.

INNOVATION VENTURES, LLC;
LIVING ESSENTIALS, LLC,

              Defendants-Appellees.

       Appeal from the United States District Court
           for the Central District of California
      Consuelo B. Marshall, District Judge, Presiding
2      U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC

                 Argued and Submitted June 7, 2022
                        Seattle, Washington

                           Filed July 20, 2023

    Before: Ronald Lee Gilman,* Sandra S. Ikuta, and Eric D.
                    Miller, Circuit Judges.

              Opinion by Judges Miller and Ikuta;**
    Partial Concurrence and Partial Dissent by Judge Gilman;
                 Partial Dissent by Judge Miller

                             SUMMARY***

           Robinson-Patman Price Discrimination Act

     The panel affirmed in part and vacated and reversed in
part the district court’s judgment after a jury trial and a bench
trial in favor of the defendants in an action brought under the
Robinson-Patman Price Discrimination Act by U.S.
Wholesale Outlet & Distribution, Inc., and other California
wholesale businesses.

*
 The Honorable Ronald Lee Gilman, United States Circuit Judge for the
U.S. Court of Appeals for the Sixth Circuit, sitting by designation.
**
     Judge Ikuta authored Part III.
***
   This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
    U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC      3

           Parts I and II, authored by Judge Miller
    Defendant Living Essentials, LLC, sold its 5-hour
Energy drink to the Costco Wholesale Corporation and also
to the plaintiff wholesalers, who alleged that Living
Essentials offered them less favorable pricing, discounts,
and reimbursements in violation of the Robinson-Patman
Act. On summary judgment, the district court found that the
wholesalers had proved the first three elements of their
section 2(a) claim for secondary-line price discrimination.
At a jury trial on the fourth element of section 2(a), whether
there was a competitive injury, the jury found in favor of
defendants. At a bench trial on the wholesalers’ section 2(d)
claim for injunctive relief, the court ruled in favor of
defendants.
    Affirming in part, the panel held that the district court
did not abuse its discretion in finding that there was some
factual foundation for instructing the jury that section 2(a)
required the wholesalers to show, as part of their prima facie
case, that Living Essentials made “reasonably
contemporaneous” sales to them and to Costco at different
prices.
     The panel further held that the district court did not abuse
its discretion in instructing the jury that the wholesalers had
to prove that any difference in prices could not be justified
as “functional discounts” to compensate Costco for
marketing or promotional functions. The panel concluded
that the functional discount doctrine was legally available to
defendants regardless of whether the wholesalers and Living
Essentials were at the same level in the distribution chain,
and that there was some foundation in the evidence to
support the jury instruction.
4   U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC

              Part III, authored by Judge Ikuta
     Section 2(d) of the Robinson-Patman Act provides that
it is unlawful for a seller to pay anything of value to or for
the benefit of a customer in connection with the sale of a
product unless the payment is available on proportionally
equal terms to all other customers competing in the
distribution of this product. As to whether Costco and the
wholesalers were in competition, it was undisputed that they
both were customers of Living Essentials and purchased
goods of the same grade and quality. The panel held that the
district court did not clearly err in finding that the
wholesalers’ businesses were in geographic proximity to the
Costco outlets that sold 5-hour Energy. The district court,
however, committed both legal and factual errors in finding
that Costco and the wholesalers operated at different
functional levels and therefore competed for different
customers of 5-hour Energy. The district court erred as a
matter of law in concluding that when the jury found in favor
of Living Essentials on the section 2(a) claim, it made an
implicit factual finding that there was no competition
between Costco and the wholesalers. And the record did not
support the district court’s finding that Costco and the
wholesalers operated at different functional levels.
    The panel vacated the district court’s holding as to
section 2(d) and reversed and remanded for the district court
to consider whether Costco and the wholesalers purchased
5-hour Energy from Living Essentials within approximately
the same period of time in light of the record, or whether the
wholesalers otherwise proved competition.
   Concurring in part and dissenting part, Judge Gilman
wrote that he agreed with the majority that the district court
did not abuse its discretion in giving the “functional
    U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC   5

discount” jury instruction, but he would reverse and remand
for a new trial on the section 2(a) claim because the district
court abused its discretion in giving the “reasonably
contemporaneous” instruction. As to the section 2(d) claim,
Judge Gilman agreed with the majority that the district court
abused its discretion in finding that Costco and the
wholesalers operated at different functional levels.
    Dissenting in part, Judge Miller wrote that he would
affirm the judgment in its entirety because he agreed that the
district court did not abuse its discretion in instructing the
jury on the section 2(a) claims, but he did not agree that the
district court erred in rejecting the section 2(d) claims.

                        COUNSEL

Eric F. Citron (argued), Gupta Wessler PLLC, Washington,
D.C.; Randolph Gaw, Victor Meng, and Mark Poe, Gaw Poe
LLP, San Francisco, California; Thomas C. Goldstein and
Erica Oleszczuk Evans, Goldstein & Russell PC, Bethesda,
Maryland; for Plaintiffs-Appellants.
Daniel G. Bird (argued), David Charles Frederick, and
Collin R. White, Kellogg Hansen Todd Figel & Frederick
PLLC, Washington, D.C.; Gerald Edward Hawxhurst,
Hawxhurst Harris LLP, Los Angeles, California; E. Powell
Miller and Martha J. Olijnyk, The Miller Law Firm PC,
Rochester, Michigan; for Defendants-Appellees.
6   U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC

                         OPINION

MILLER, Circuit Judge, as to Parts I and II:

    This appeal arises out of an action under the Robinson-
Patman Price Discrimination Act, 15 U.S.C. §§ 13–13b, 21a.
The jury returned a verdict for the defendants, and the
district court denied the plaintiffs’ requested injunctive
relief. The plaintiffs challenge various jury instructions as
well as the denial of injunctive relief. We affirm in part and
vacate, reverse, and remand in part.
                               I
    Living Essentials, LLC, produces 5-hour Energy, a
caffeinated drink sold in 1.93-ounce bottles. Living
Essentials sells 5-hour Energy to various purchasers,
including wholesalers, retailers, and individual consumers.
    This case concerns Living Essentials’ sales of 5-hour
Energy to two sets of purchasers. One purchaser is the
Costco Wholesale Corporation, which purchases 5-hour
Energy for resale at its Costco Business Centers—stores
geared toward “Costco business members,” such as
restaurants, small businesses, and other retailers, but open to
any person with a Costco membership. The other purchasers,
whom we will refer to as “the Wholesalers,” are seven
California wholesale businesses that buy 5-hour Energy for
resale to convenience stores and grocery stores, among other
retailers. The Wholesalers allege that Living Essentials has
offered them less favorable pricing, discounts, and
reimbursements than it has offered Costco.
    During the time period at issue here, Living Essentials
charged the Wholesalers a list price of $1.45 per bottle of
“regular” and $1.60 per bottle of “extra-strength” 5-hour
    U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC   7

Energy, while Costco paid a list price of ten cents per bottle
less: $1.35 and $1.50, respectively. Living Essentials also
provided the Wholesalers and Costco with varying rebates,
allowances, and discounts affecting the net price of each
bottle. For example, the Wholesalers received a 7-cent per
bottle “everyday discount,” a 2 percent discount for prompt
payment, and discounts for bottles sold from 5-hour Energy
display racks. Meanwhile, Costco received a 1 percent
prompt-pay discount; a spoilage discount to cover returned,
damaged, and stolen goods; a 2 percent rebate on total sales
for each year from 2015 to 2018; payments for displaying 5-
hour Energy at the highly visible endcaps of aisles and
fences of the store; and various advertising payments.
    Living Essentials also participated in Costco’s Instant
Rebate Coupon (IRC) program. Under that program, Costco
sent monthly mailers to its members with redeemable
coupons for various products. About every other month,
Costco would offer its members an IRC worth $3.60 to $7.20
per 24-pack of 5-hour Energy—a price reduction of 15 to 30
cents per bottle. The customer would redeem the IRC from
Costco at the register when buying the 24-pack, and Living
Essentials would reimburse Costco for the face value of the
5-hour Energy IRCs redeemed that month. Over the course
of the seven-year period at issue here, Living Essentials
reimbursed Costco for about $3 million in redeemed IRCs.
    In February 2018, the Wholesalers brought this action
against Living Essentials and its parent company, Innovation
Ventures, LLC, in the Central District of California, alleging
that by offering more favorable prices, discounts, and
reimbursements to Costco, Living Essentials had violated
the Robinson-Patman Act, which prohibits sellers of goods
from discriminating among competing buyers in certain
8   U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC

circumstances. The Wholesalers sought damages under
section 2(a) of the Act and an injunction under section 2(d).
    Section 2(a)—referred to as such because of its original
place in the Clayton Act, see Volvo Trucks N. Am., Inc. v.
Reeder-Simco GMC, Inc., 546 U.S. 164, 175 (2006)—bars a
seller from discriminating in price between competing
purchasers of commodities of like grade and quality. 15
U.S.C. § 13(a). One form of prohibited discrimination under
section 2(a) is secondary-line price discrimination, “which
means a seller gives one purchaser a more favorable price
than another.” Aerotec Int’l, Inc. v. Honeywell Int’l, Inc., 836
F.3d 1171, 1187 (9th Cir. 2016). To establish secondary-line
discrimination, a plaintiff must show that (1) the challenged
sales were made in interstate commerce; (2) the items sold
were of like grade and quality; (3) the seller discriminated in
price between the disfavored and the favored buyer; and
(4) “‘the effect of such discrimination may be . . . to injure,
destroy, or prevent competition’ to the advantage of a
favored purchaser.” Volvo, 546 U.S. at 176–77 (quoting 15
U.S.C. § 13(a)). The fourth component of that test, the
element at issue in this case, ensures that section 2(a) “does
not ban all price differences,” but rather “proscribes ‘price
discrimination only to the extent that it threatens to injure
competition.’” Id. at 176 (quoting Brooke Group Ltd. v.
Brown & Williamson Tobacco Corp., 509 U.S. 209, 220
(1993)).
    Section 2(d) makes it unlawful for a manufacturer to
discriminate in favor of one purchaser by making
“payment[s]” to that purchaser “in connection with
the . . . sale, or offering for sale of any products . . . unless
such payment or consideration is available on proportionally
equal terms to all other customers competing in the
distribution of such products.” 15 U.S.C. § 13(d). To prevail
    U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC   9

on a claim for injunctive relief under section 2(d), the
plaintiff must establish that it is in competition with the
favored buyer, but it need not establish an “injurious or
destructive effect on competition.” FTC v. Simplicity Pattern
Co., 360 U.S. 55, 65 (1959).
    On summary judgment, the district court found that the
Wholesalers had proved the first three elements of their
section 2(a) claim—that the products were distributed in
interstate commerce, of like grade and quality, and sold at
different prices to Costco and to the Wholesalers. The parties
proceeded to try to a jury the fourth element of section 2(a),
whether there was a competitive injury, and to try to the
court the section 2(d) claim for injunctive relief.
    At trial, the parties focused on whether the Wholesalers
and Costco were in competition. The Wholesalers
introduced numerous emails from Living Essentials
employees discussing the impact of Costco’s pricing on the
Wholesalers’ sales. Additionally, they presented the
testimony of a marketing expert who opined that the
Wholesalers and the Costco Business Centers were in
competition. The expert based that opinion on the
companies’ geographic proximity and on interviews he
conducted in which the Wholesalers’ proprietors stated that
they lost sales due to Costco’s lower prices. Living
Essentials primarily relied on the testimony of an expert who
reviewed sales data and opined that buyers of 5-hour Energy
are not price sensitive and do not treat the Wholesalers and
Costco Business Centers as substitutes; for that reason, he
concluded that the Wholesalers and Costco Business Centers
were not competitors.
   The district court instructed the jury that section 2(a)
required the Wholesalers to show that Living Essentials
10   U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC

made “reasonably contemporaneous” sales to them and to
Costco at different prices. The Wholesalers objected. They
agreed that the instruction correctly stated the law but argued
that “[t]here is literally no evidence to suggest that Living
Essentials’ sales of 5-Hour Energy to Costco and Plaintiffs
occurred at anything other than the same time over the entire
7-year period.” The court nevertheless gave the proposed
instruction, telling the jury that “[e]ach Plaintiff must prove
that the sales being compared were reasonably
contemporaneous.” The instruction directed the jury to find
for Living Essentials if it determined “that the sales
compared are sufficiently isolated in time or circumstances
that they cannot be said to have occurred at approximately
the same time for a Plaintiff.” The instruction also listed a
number of factors for the jury to consider in its evaluation,
such as “[w]hether market conditions changed during the
time between the sales.”
    The district court further instructed the jury that the
Wholesalers had to prove that any difference in prices could
not be justified as “functional discounts” to compensate
Costco for marketing or promotional functions that it
performed. The Wholesalers again objected. As with the
instruction on reasonably contemporaneous sales, the
Wholesalers agreed that the instruction was a correct
statement of the law, but they argued that there was “a
complete absence of evidence” of any savings for Living
Essentials or costs for Costco in performing the alleged
functions justifying the discount. Rejecting that argument,
the court instructed the jury that Living Essentials claimed
that “its lower prices to Costco are justified as functional
discounts,” which the court defined as discounts “given by a
seller to a buyer based on the buyer’s performance of certain
functions for the seller’s product.” The instructions
    U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC    11

explained that while the Wholesalers had “the ultimate
burden to prove that defendant’s lower prices were not
justified as a functional discount,” Living Essentials had the
burden of production and so “must present proof” that
“(1) Costco actually performed the promotional, marketing,
and advertising services” it claimed to perform and “(2) the
amount of the discount was a reasonable reimbursement for
the actual functions performed by Costco.” The instructions
told the jury to find for Living Essentials if it found that the
price discrimination was “justified as a functional discount.”
    The jury returned a verdict for Living Essentials on the
section 2(a) claim. The court then denied the Wholesalers’
request for injunctive relief under section 2(d). The court
reasoned that “the jury implicitly found no competition
existed between [the Wholesalers] and Costco, and the Court
is bound by that finding.” In addition, the court concluded,
based on its own independent review of the evidence, that
the Wholesalers had “failed to prove by a preponderance of
the evidence that they competed with Costco for resale” of
5-hour Energy.
                               II
    We begin by considering the jury instructions on
reasonably contemporaneous sales and functional discounts.
Our standard of review of a district court’s decision to give
a jury instruction depends on the error that is alleged. Yan
Fang Du v. Allstate Ins. Co., 697 F.3d 753, 757 (9th Cir.
2012). We review legal issues de novo, including “[w]hether
a district court’s jury instructions accurately state the law.”
Coston v. Nangalama, 13 F.4th 729, 732 (9th Cir. 2021)
(quoting Hung Lam v. City of San Jose, 869 F.3d 1077, 1085
(9th Cir. 2017)). Here, however, the Wholesalers do not
argue that the challenged instructions misstated the law.
12   U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC

Instead, they argue that the evidence did not support giving
them. “Whether there is sufficient evidence to support an
instruction is reviewed for abuse of discretion.” Yan Fang
Du, 697 F.3d at 757. In conducting that review, we give
“considerable deference” to the district court because we
recognize the “district judge’s proximity to the trial and
intimate knowledge of the record.” United States v. Heredia,
483 F.3d 913, 921 (9th Cir. 2007) (en banc).
    Sufficient evidence necessarily requires some evidence,
and it has long been “settled law that it is error in the court
to give an instruction when there is no evidence in the case
to support the theory of fact which it assumes.” Tweed’s
Case, 16 Wall. (83 U.S.) 504, 518 (1872); see Avila v. Los
Angeles Police Dep’t, 758 F.3d 1096, 1101 (9th Cir. 2014).
But sufficient evidence does not require convincing
evidence, or even strong evidence; rather, “a party is entitled
to have his theory of the case presented to the jury by proper
instructions, if there be any evidence to support it.”
Blassingill v. Waterman S.S. Corp., 336 F.2d 367, 368 (9th
Cir. 1964) (emphasis added) (internal quotation marks and
footnote omitted). “The district court could not have abused
its discretion unless there was no factual foundation to
support . . . an instruction.” Desrosiers v. Flight Int’l of Fla.
Inc., 156 F.3d 952, 959 (9th Cir. 1998).
    The question before us is whether the district court
abused its wide discretion in finding that there was any
foundation for giving the instructions. We conclude that it
did not.
                               A
    The Wholesalers argue that the district court abused its
discretion in instructing the jury on reasonably
contemporaneous sales because “there was no legitimate
    U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC   13

dispute” that the Wholesalers carried their burden on that
requirement.
    To establish a prima facie case under section 2(a), a
plaintiff must show that the discriminating seller made one
sale to the disfavored purchaser and one sale to the favored
purchaser “within approximately the same period of time.”
Texas Gulf Sulphur Co. v. J.R. Simplot Co., 418 F.2d 793,
807 (9th Cir. 1969) (quoting Tri-Valley Packing Ass’n v.
FTC, 329 F.2d 694, 709 (9th Cir. 1964)). In other words, it
must establish “[t]wo or more contemporaneous sales by the
same seller.” Rutledge v. Electric Hose & Rubber Co., 511
F.2d 668, 677 (9th Cir. 1975). That requirement ensures that
the challenged price discrimination is not the result of a
seller’s lawful response to a change in economic conditions
between the sales to the favored and disfavored purchasers.
Texas Gulf Sulphur Co., 418 F.2d at 806.
    As we have explained, the Wholesalers do not argue that
the district court’s instructions on reasonably
contemporaneous sales misstated the law. Instead, they
contend that they so clearly carried their burden on this
element that the district court should have found the element
satisfied rather than asking the jury to decide it. In the
Wholesalers’ view, “there was no dispute . . . that [Living
Essentials] had made thousands of contemporaneous sales to
Costco and to all seven Plaintiffs.”
    The Wholesalers’ position appears to be that when the
plaintiff has the burden of proving an element of its case, a
district court should decline to instruct the jury on that
element if the court determines the plaintiff has proved it too
convincingly. We are unaware of any authority for that
proposition. To the contrary, our cases that have rejected
proposed jury instructions have done so because the party
14   U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC

bearing the burden presented too little evidence to justify the
instruction, not too much. See, e.g., Avila, 758 F.3d at 1101
(affirming the denial of an instruction on a defense for which
the defendant lacked evidence); Yan Fang Du, 697 F.3d at
758 (affirming the denial of an instruction on a theory of
liability for which the plaintiff lacked evidence). If the
Wholesalers believed that their evidence conclusively
established liability, the appropriate course of action would
have been to move for judgment as a matter of law. See
Unitherm Food Sys., Inc. v. Swift-Eckrich, Inc., 546 U.S.
394, 396 (2006). But although the Wholesalers did move for
judgment as a matter of law, they have not challenged the
denial of that motion on appeal. The Wholesalers may not
bypass that procedure by challenging a jury instruction on an
element of their prima facie case.
    Even if it could be error to instruct the jury on an element
that a plaintiff obviously proved, the proof here was far from
obvious. The Wholesalers might be right that the evidence
established reasonably contemporaneous sales, but during
the trial, they did not explain how it did so. In their written
objection to the instructions, the Wholesalers stated that
“[t]here is literally no evidence to suggest” that the
compared sales were not contemporaneous, and in their oral
objection, they similarly declared that there was “no dispute”
on the issue. The first and last time the Wholesalers
mentioned the requirement to the jury was during closing
argument, when they said that the “[t]he sales were made
continuously to Costco and to plaintiffs over the entire seven
years.” Despite those confident assertions, the Wholesalers
did not direct the district court to any evidence to
substantiate their claim.
    The Wholesalers did not point to any evidence of
reasonably contemporaneous sales until their post-trial
    U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC     15

motion for judgment as a matter of law. Because that motion
was not available to the district court when the court
instructed the jury, it cannot be a basis for concluding that
the court abused its discretion. In any event, the motion did
not clearly identify any reasonably contemporaneous sales.
Instead, the Wholesalers merely referred to Exhibit 847, a
series of spreadsheets introduced by Living Essentials that
spans more than 100,000 cells cataloguing seven years’
worth of Living Essentials’ sales to all purchasers, including
Costco and the Wholesalers. The motion presented a
modified version of that exhibit that included only Living
Essentials’ sales to Costco and the Wholesalers, omitting
sales to other purchasers. But that (relatively) pared-down
version—itself more than 200 pages long—was never
presented to the jury. Even that version is hardly self-
explanatory, and the Wholesalers made little effort to
explain it: They did not point to any specific pair of sales that
were reasonably contemporaneous.
    Indeed, even on appeal, the Wholesalers have not
identified any pair of sales that would satisfy their burden.
The most they have argued is that the column entitled
“Document Date” reflects the date of the invoice, so in their
view the spreadsheets speak for themselves in showing
“thousands of spot sales to Costco and Plaintiffs.” At no time
have the Wholesalers shown that there were two or more
sales between Living Essentials and both Costco and each
plaintiff that were reasonably contemporaneous such that
changing market conditions or other factors did not affect the
pricing. See Rutledge, 511 F.2d at 677; Texas Gulf Sulphur
Co., 418 F.2d at 806.
    The Wholesalers complain that they are being unfairly
faulted for not more thoroughly arguing “the incorrectly
instructed point to the jury.” That complaint reflects a
16   U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC

misunderstanding of their burden. To take the issue away
from the jury, it was the Wholesalers’ burden to make—and
support—the argument that the sales were reasonably
contemporaneous. Perhaps, when it developed the jury
instructions, the district court could have reviewed all of the
evidence, located Exhibit 847 (the full version, not the more
focused one the Wholesalers submitted later), and then
identified paired transactions for each Wholesaler from the
thousands upon thousands of cells it contained. But “a
district court is not required to comb the record” to make a
party’s argument for it. Carmen v. San Francisco Unified
Sch. Dist., 237 F.3d 1026, 1029 (9th Cir. 2001) (quoting
Forsberg v. Pacific Nw. Bell Tel. Co., 840 F.2d 1409, 1418
(9th Cir. 1988)). There may have been a needle—or even
many needles—in the haystack of sales data. It was not the
district court’s job to hunt for them.
    Significantly, the district court identified factors that
might have influenced the pricing between sales, including
that “the overall sales of 5-hour Energy in California were
declining.” That trend could potentially explain why two
differently priced sales resulted from “diverse market
conditions rather than from an intent to discriminate.” Texas
Gulf Sulphur Co., 418 F.2d at 806. The timing of the
disputed sales is unclear, so it could be that the Wholesalers
bought the product during periods of higher market pricing
that Costco avoided. The possibility that sales were not
reasonably contemporaneous has “some foundation in the
evidence,” and that is enough. Jenkins v. Union Pac. R.R.
Co., 22 F.3d 206, 210 (9th Cir. 1994). With only the
Wholesalers’ conclusory assertions, an unexplained mass of
spreadsheets, and Living Essentials’ evidence of changing
market conditions before it, the district court did not abuse
    U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC    17

its discretion in instructing the jury on this disputed element
of the Wholesalers’ prima facie case.
                               B
     The Wholesalers next argue that the district court abused
its discretion in giving the functional-discount instruction.
    The Supreme Court has held that when a purchaser
performs a service for a supplier, the supplier may lawfully
provide that purchaser with a “reasonable” reimbursement,
or a “functional discount,” to compensate the purchaser for
“its role in the supplier’s distributive system, reflecting, at
least in a generalized sense, the services performed by the
purchaser for the supplier.” Texaco Inc. v. Hasbrouck, 496
U.S. 543, 562, 571 n.11 (1990). For example, the Court has
held that a “discount that constitutes a reasonable
reimbursement for the purchasers’ actual marketing
functions will not violate the Act.” Id. at 571.
    Separately, the Robinson-Patman Act contains a
statutory affirmative defense for cost-justified price
differences, or “differentials which make only due allowance
for differences in the cost of manufacture, sale, or delivery.”
15 U.S.C. § 13(a). The functional-discount doctrine is
different because it requires only a “reasonable,” not an
exact, relationship between the services performed and the
discounts given. Hasbrouck, 496 U.S. at 561 & n.18. Also,
in contrast to the cost-justification defense, it is the
plaintiff’s burden to prove that the price discrimination was
not the result of a lawful functional discount. Id. at 561 n.18.
But the doctrine applies “[o]nly to the extent that a buyer
actually performs certain functions, assuming all the risk,
investment, and costs involved.” Id. at 560–61. And it does
not “countenance a functional discount completely
18   U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC

untethered to either the supplier’s savings or the
wholesaler’s costs” Id. at 563.
    The Wholesalers do not dispute that the jury instructions
accurately stated the law governing functional discounts.
Instead, they argue that the district court should not have
given a functional-discount instruction because the doctrine
does not apply “as between favored and disfavored
wholesalers” and because the discounts given to Costco bore
no relationship to Living Essentials’ savings or Costco’s
costs in performing the alleged functions. We find neither
argument persuasive.
     The Wholesalers provide no support for their assertion
that purchasers at the same level may not receive different
functional discounts if they perform different functions. If
Costco performed marketing functions and the Wholesalers
did not, then Living Essentials could provide Costco with “a
reasonable reimbursement for [its] actual marketing
functions.” Hasbrouck, 496 U.S. at 571. The Wholesalers
are correct that selective reimbursements may create liability
for the supplier under section 2(d) if the supplier fails to offer
them “to all purchasers on proportionally equal terms.” 15
U.S.C. § 13(d). But for purposes of section 2(a), we see no
reason why the doctrine would be unavailable solely because
the allegedly disfavored purchaser, who did not perform the
additional services, and favored purchaser, who did perform
those services, are at the same level in the distribution chain.
    The Wholesalers also argue that even if the functional-
discount instruction was legally available to Living
Essentials, the district court still abused its discretion in
giving the instruction because there was no foundation in the
evidence to support it. In fact, Costco performed a number
of marketing and other functions that no Wholesaler appears
    U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC   19

to have performed. For example, Costco promoted 5-hour
Energy by giving the product prime placement in aisle
endcaps and along the fence by the stores’ entrances; it
created and circulated advertisements and mailers; it
provided delivery and online sales for 5-hour Energy; and it
contracted for a flat “spoilage allowance” rather than
requiring Living Essentials to deal with spoilage issues as
they arose. In addition to providing those services, Costco
allowed Living Essentials to participate in its IRC program,
in which Costco sent out bi-monthly mailers with coupons
for 5-hour Energy, among other products, to its members.
The member would redeem the coupon at the register, and
Costco would advance the discount to the buyer on behalf of
Living Essentials, record the transaction, and then collect the
total discount from Living Essentials at the end of each
period.
    Living Essentials testified to the value of Costco’s
placement services, explaining that Costco received
“allowance[s]” because Costco was “performing a service
for us, which is worth a value to us to get the product out in
front of the consumer.” As to Costco’s advertising and IRC
services, Living Essentials testified that they allowed it to
reach some 40 million Costco members, whom it could not
otherwise reach “with one payment.” Living Essentials
further testified that it “evaluate[s] every promotion,” and,
although it did not memorialize the evaluation, it
“[a]bsolutely” thought it was “getting a value for these
programs.” Finally, in the case of the spoilage discount,
Living Essentials explained that by providing a flat, upfront
discount in exchange for Costco’s assumption of the risk of
loss and spoilage, Living Essentials avoided having to
negotiate case-by-case with Costco over product loss.
20   U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC

    The Wholesalers argue that the functional discount
defense is unavailable because Living Essentials separately
compensated Costco for promotional, marketing, and
advertising services, so “the entirety of the price-gap cannot
be chalked up to a unitary ‘functional discount.’” They cite
spreadsheets showing that Costco was paid for endcap
promotions, advertising, and IRCs. But those spreadsheets
do not show that Living Essentials’ separate payments to
Costco fully compensated it for those services. They
therefore do not foreclose the possibility that some
additional discount might have reflected reasonable
compensation for the services.
    More generally, the Wholesalers argue that even if
Costco’s services were valuable, “Living Essentials
introduced zero evidence that its lower prices to Costco bore
any relationship to either” Living Essentials’ savings or
Costco’s costs. In fact, there is evidence in the record from
which it is possible to infer such a relationship. For instance,
Living Essentials presented testimony that Costco’s
performance of advertising functions—especially the 40-
million-member mailers as well as endcap and fence
placement programs—gave it “a tremendous amount of
reach and awareness,” which Living Essentials would
otherwise have had to purchase separately. The record thus
supported the conclusion that Living Essentials provided
Costco “a functional discount that constitutes a reasonable
reimbursement for [its] actual marketing functions.”
Hasbrouck, 496 U.S. at 571.
    To be sure, the evidence did not establish a particularly
precise relationship between the discounts and Costco’s
services, and it was open to the Wholesalers to argue that the
discounts were so “untethered to either the supplier’s savings
or the wholesaler’s costs” as not to qualify as functional
    U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC   21

discounts. Hasbrouck, 496 U.S. at 563. But it was the jury’s
role, not ours, to decide which party had the better
interpretation of the evidence. The only question before us is
whether the district court abused its discretion in
determining that there was enough evidence to justify giving
an instruction on functional discounts. Because at least some
evidence supported the instruction, we conclude that there
was no abuse of discretion.
    The Wholesalers separately argue that the district court
erred in denying their pre-verdict motion for judgment as a
matter of law to exclude the functional-discount defense.
Because the Wholesalers did not renew that argument in
their post-verdict motion under Federal Rule of Civil
Procedure 50(b), they failed to preserve the issue for appeal.
See Crowley v. Epicept Corp., 883 F.3d 739, 751 (9th Cir.
2018) (per curiam).
                             III
    Finally, the Wholesalers challenge the district court’s
denial of injunctive relief under section 2(d). We review the
district court’s legal conclusions de novo and its factual
findings under the clear-error standard. FTC v. Consumer
Def., LLC, 926 F.3d 1208, 1212 (9th Cir. 2019). We review
the denial of a permanent injunction under the abuse-of-
discretion standard. Or. Coast Scenic R.R., LLC v. Or. Dep’t
of State Lands, 841 F.3d 1069, 1072 (9th Cir. 2016).
                              A
    Under section 2(d), it is unlawful for a seller to pay
“anything of value to or for the benefit of a customer” for
“any services or facilities furnished by or through such
customer in connection with the . . . sale” of the products
unless the payment “is available on proportionally equal
22   U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC

terms to all other customers competing in the distribution of
such products.” 15 U.S.C. § 13(d); Tri-Valley Packing
Ass’n, 329 F.2d at 707–08. In enacting the Robinson-
Patman Act, “Congress sought to target the perceived harm
to competition occasioned by powerful buyers, rather than
sellers; specifically, Congress responded to the advent of
large chainstores, enterprises with the clout to obtain lower
prices for goods than smaller buyers could demand.” Volvo,
546 U.S. at 175 (citing 14 HERBERT HOVENKAMP, Antitrust
Law ¶ 2302 (2d ed. 2006)). In other words, Congress meant
to prevent an economically powerful customer like a chain
store from extracting a better deal from a seller at the
expense of smaller businesses.1
    The key issue in this case is whether Costco and the
Wholesalers (both customers of Living Essentials) are
“customers competing” with each other as to resales of 5-
hour Energy for purposes of section 2(d). The FTC has
interpreted the statutory language in section 2(d) to mean
that customers are in competition with each other when they
“compete in the resale of the seller’s products of like grade
and quality at the same functional level of distribution.” 16
C.F.R. § 240.5.2
   Our interpretation of “customers competing,” as used in
15 U.S.C. § 13(d), is consistent with the FTC’s. We have

1
  To avoid confusion, we refer to the seller or supplier of a product as the
“seller,” the seller’s customers as “customers,” and those who buy from
the seller’s customers as “buyers.”
2
   Although the FTC Guides that “provide assistance to businesses
seeking to comply with sections 2(d) and 2(e),” 16 C.F.R. § 240.1, do
not have the force of law, “we approach the [Guides] with the deference
due the agency charged with day-to-day administration of the Act,” FTC
v. Fred Meyer, Inc., 390 U.S. 341, 355 (1968).
    U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC   23

held that, to establish that “two customers are in general
competition,” it is “sufficient” to prove that: (1) one
customer has outlets in “geographical proximity” to those of
the other; (2) the two customers “purchased goods of the
same grade and quality from the seller within approximately
the same period of time”; and (3) the two customers are
operating “on a particular functional level such as
wholesaling or retailing.” Tri-Valley Packing Ass’n, 329
F.2d at 708.        Under these circumstances, “[a]ctual
competition in the sale of the seller’s goods may then be
inferred.” Id.; see also Infusion Res., Inc. v. Minimed, Inc.,
351 F.3d 688, 692–93 (5th Cir. 2003) (holding that “[t]he
competitive nexus is established if the disfavored purchaser
and favored purchaser compete at the same functional level
and within the same geographic market at the time of the
price discrimination,” which indicates that each customer is
“directly after the same dollar”) (citing M.C. Mfg. Co. v.
Texas Foundries, Inc., 517 F.2d 1059, 1065 (5th Cir. 1975)
(internal quotation marks omitted)). We reasoned that this
interpretation was consistent with “the underlying purpose
of section 2(d),” which is to “require sellers to deal fairly
with their customers who are in competition with each other,
by refraining from making allowances to one such customer
unless making it available on proportionally equal terms to
the others.” Tri-Valley Packing Ass’n, 329 F.2d at 708.
Because sellers, in order to avoid violating section 2(d), must
“assume that all of their direct customers who are in
functional competition in the same geographical area, and
who buy the seller’s products of like grade and quality within
approximately the same period of time, are in actual
competition with each other in the distribution of these
products,” courts must make the same assumption of
competition “in determining whether there has been a
24   U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC

violation.” Id. at 709.3 Applying this rule, Tri-Valley held
that two wholesalers that received canned goods from the
same supplier and sold them in the same geographical area
would be in “actual competition” if the wholesalers had
purchased the canned goods at approximately the same time.
If this final criterion were met, then “a section 2(d) violation
would be established” because the canned-good supplier
gave one wholesaler a promotional allowance, but did not
offer the same allowance to the other wholesaler. Id.
    In considering the third prong of the Tri-Valley test—
whether the two customers are operating “on a particular
functional level such as wholesaling or retailing,” id. at
708—we ask whether customers are actually functioning as
wholesalers or retailers with respect to resales of a particular
product to buyers, regardless of how they describe
themselves or their activities. See Alterman Foods, Inc. v.
FTC, 497 F.2d 993, 999 (5th Cir. 1974) (upholding the
FTC’s determination that two customers were “functional
competitor[s]” on the wholesale level based on market
realities); see also Feesers, Inc. v. Michael Foods, Inc., 498
F.3d 206, 214 (3d Cir. 2007) (“[T]he relevant question is
whether two companies are in ‘economic reality acting on
the same distribution level,’ rather than whether they are
both labeled as ‘wholesalers’ or ‘retailers.’”) (citation
omitted).

3
  The “direct customer” requirement in Tri-Valley no longer remains
good law after Fred Meyer, in which the Supreme Court held that a
seller’s duty to provide proportionately equal promotional services or
facilities, or payment thereof, extends downstream to buyers competing
with each other at the same functional level, even if one set of buyers
purchases directly from the defendant while another set purchases
through intermediaries. See 390 U.S. at 352–53; see also Tri Valley
Growers v. FTC, 411 F.2d 985, 986 (9th Cir. 1969) (per curiam).
    U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC   25

    In listing the factors to consider in determining whether
customers are competing, Tri-Valley did not include the
manner in which customers operate. It makes sense that
operational differences are not significant in making this
determination, given that the Robinson-Patman Act was
enacted to protect small businesses from the harm to
competition caused by the large chain stores,
notwithstanding the well-understood operational differences
between the two. See, e.g., Innomed Labs, LLC v. ALZA
Corp., 368 F.3d 148, 160 (2d Cir. 2004) (explaining that
chain stores have a more integrated distribution apparatus
than smaller businesses and are able to “undersell their more
traditional competitors”). Thus, courts have indicated that
potential operational differences are not relevant to
determining whether two customers compete for resales to
the same group of buyers. In Simplicity Pattern Co., the
Supreme Court held that competition in the sale of dress
patterns existed between variety stores that “handle and sell
a multitude of relatively low-priced articles,” and the more
specialized fabric stores, which “are primarily interested in
selling yard goods” and handled “patterns at no profit or
even at a loss as an accommodation to their fabric customers
and for the purpose of stimulating fabric sales.” 360 U.S. at
59–60. The Court noted that the manner in which these
businesses offered the merchandise to buyers was different,
because the variety stores “devote the minimum amount of
display space consistent with adequate merchandising—
consisting usually of nothing more than a place on the
counter for the catalogues, with the patterns themselves
stored underneath the counter,” while “the fabric stores
usually provide tables and chairs where the customers may
peruse the catalogues in comfort and at their leisure.” Id. at
60. Nevertheless, the Court held there was no question that
26   U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC

there was “actual competition between the variety stores and
fabric stores,” given that they were selling an “identical
product [patterns] to substantially the same segment of the
public.” Id. at 62.
    Similarly, in Feesers, the “different character” of two
businesses that bought egg and potato products from a food
supplier did not affect the analysis of whether they were in
actual competition. 498 F.3d at 214 n.9. Although the
businesses operated and interacted with their clients in
different ways—one was a “full line distributor of food and
food related products” while the other was a “food service
management company”—the court held that “[t]he threshold
question is whether a reasonable factfinder could conclude
[the two customers] directly compete for resales [of the food
supplier’s] products among the same group of [buyers].” Id.;
see also Lewis v. Philip Morris Inc., 355 F.3d 515, 531–32
(6th Cir. 2004) (noting that there was a genuine dispute of
material fact as to whether companies that use vending
machines to resell cigarettes were in actual competition with
convenience stores for the resale of cigarettes to smokers
under the Robinson-Patman Act).
    An assumption underlying the Tri-Valley framework is
that two customers in the same geographic area are
competing for resales to the same buyer or group of buyers.
However, the Supreme Court has identified an unusual
circumstance when that assumption does not hold true and
customers who resell the same product at the same
functional level in the same geographic area are not in
competition because they are not reselling to the same buyer.
See Volvo, 546 U.S. at 175; see also 14 PHILLIP E.
AREEDA & HERBERT HOVENKAMP, Antitrust Law
¶ 2333 (4th ed. 2019) (noting that the holding in Volvo
regarding the same buyer is “quite narrow,” and would
    U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC         27

“appear not to apply in the typical ‘chain store’ situation
where dealers [] actually purchase and carry substantial
inventories” for sale to all comers).
    In Volvo, Volvo dealers (customers of Volvo, the car
manufacturer and seller) resold trucks through a competitive
bidding process, where retail buyers described their specific
product requirements and invited bids from selected dealers
of different manufacturers. 546 U.S. at 170. Only after a
Volvo dealer was invited to bid did it request discounts or
concessions from Volvo as part of preparing the bid. Id.
Volvo dealers typically did not compete with each other in
this situation.4 Because the plaintiff in Volvo (a Volvo
dealer) could not show that it and another Volvo dealer were
invited by the same buyer to submit bids, there was no
competition between Volvo dealers, and therefore no section
2(a) violation (which requires competition and potential
competitive injury). Id. Moreover, because the plaintiff did
not ask for price concessions from Volvo until after the
buyer invited it to bid, id., (and no other Volvo dealer had
been invited to bid, id. at 172) there could be no section 2(a)
violation, id. at 177. Recognizing that the fact pattern in
Volvo was different from a traditional Robinson-Patman Act
“chainstore paradigm” case, where large chain stores were
competing with small businesses for buyers, id. at 178, the
Court “declin[ed] to extend Robinson-Patman’s
governance” to cases with facts like those in Volvo, id. at
181; see also Feesers, 498 F.3d at 214 (suggesting that there

4
  In the rare occasions when the same buyer solicited a bid from more
than one Volvo dealer, Volvo’s policy was “to provide the same price
concession to each dealer competing head-to-head for the same sale.”
Id. at 171.
28   U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC

may be no actual competition where customers are selling to
“two separate and discrete groups” of buyers).
                              B
  We now turn to the question whether Costco and the
Wholesalers were in actual competition.
    It is undisputed that Costco and the Wholesalers were
customers of Living Essentials and purchased goods of the
same grade and quality. Further, the district court found that
the Wholesalers’ businesses were in geographic proximity to
the Costco Business Centers, the only outlets that sold 5-
hour Energy. It held that there “was at least one Costco
Business Center in close proximity to each of the
[Wholesalers] or their customers.” Living Essentials and
Judge Miller’s dissent seemingly argue that this finding is
clearly erroneous, because the maps in the record are
ambiguous and the Wholesalers’ expert, Dr. Frazier, is
unreliable, because he “did not calculate the distance or drive
time[s] between the stores” and did not conduct customer
surveys. We disagree. “Where there are two permissible
views of the evidence, the factfinder’s choice between them
cannot be clearly erroneous.” Anderson v. City of Bessemer
City, N.C., 470 U.S. 564, 574 (1985). Therefore, we defer
to the district court’s fact-finding notwithstanding the
alleged ambiguity in the evidence. Further, the district court
could reasonably reject Living Essentials’ critique of Dr.
Frazier’s methodology.
    We next consider whether Costco and the Wholesalers
operated at different functional levels with respect to resales
of 5-hour Energy. The district court found that they did
operate at different functional levels, and therefore competed
for different customers of 5-hour Energy. In so holding, the
     U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC               29

district court abused its discretion because its ruling was
based on both legal and factual errors.5
    First, the district court erred as a matter of law in
concluding that, because the jury found in favor of Living
Essentials on the section 2(a) claim, the jury made an
implicit factual finding that there was no competition
between Costco and the Wholesalers. As we have explained,
to prevail on a section 2(a) claim, the Wholesalers had to
show that the Wholesalers and Costco were in competition
with each other, and that discriminatory price concessions or
discounts caused a potential injury to competition.
Therefore, in rejecting the Wholesalers’ claim, the jury could
have determined that the Wholesalers and Costco were
competing, but there was no potential harm to competition.
Because the jury did not necessarily find that the
Wholesalers and Costco were not competing, the district
court erred by holding that the jury had made an implicit
finding of no competition.6

5
  The Wholesalers do not challenge the district court’s holding that they
are judicially estopped from seeking an injunction on the ground that the
IRCs are promotional services in connection with resale under section
2(d). Therefore, any challenge to this finding is waived, and potential
injunctive relief under section 2(d) excludes relief related to IRCs. See
Officers for Just. v. Civ. Serv. Comm’n of City & Cnty. of San Francisco,
979 F.2d 721, 726 (9th Cir. 1992).
6
  Contrary to Living Essentials’ assertion, the Wholesalers did not waive
this argument. Although a party that agrees to the use of a general verdict
form waives a future challenge to the verdict as insufficiently specific,
see, e.g., McCord v. Maguire, 873 F.2d 1271, 1274 (9th Cir.), opinion
amended on other grounds on denial of reh’g, 885 F.2d 650 (9th Cir.
1989), the Wholesalers do not raise such a challenge. Rather, the
Wholesalers argue that the district court made a legal error in interpreting
the verdict, and that argument is not waived.
30   U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC

    Second, the district court erred in holding that Costco
and the Wholesalers did not operate at the same functional
level. The district court stated that Costco was a retailer and
made the vast majority of its sales to the ultimate consumer.
This finding is unsupported by the record, which contains no
evidence that Costco sold 5-hour Energy to consumers.
Rather, the evidence supports the conclusion that Costco
sold 5-hour Energy to retailers. First, Living Essentials’
Vice President of Sales, Scott Allen, testified that from 2013
to 2016, only Costco Business Centers, which target
retailers, and not regular Costco stores, which target
consumers, carried 5-hour Energy.             Another Living
Essentials employee, Larry Fell, testified that 90 percent of
all Costco Business Center clients were businesses, and that
Costco Business Centers targeted mom-and-pop
convenience stores and small grocery stores. Allen also
testified that Costco Business Centers sold 5-hour Energy in
24-packs, which Living Essentials packages for sale to
businesses rather than to consumers. This evidence supports
the conclusion that Costco sold 24-packs of 5-hour Energy
to retailers, and there is no evidence supporting the district
court’s conclusion that Costco sold 5-hour Energy to
consumers. Therefore, as a matter of “economic reality,”
both Costco and the Wholesalers were wholesalers of 5-hour
Energy. The district court clearly erred by holding
otherwise.
    Because the evidence shows that Costco and the
Wholesalers operated at the same functional level in the
same geographic area, if the Wholesalers and Costco
purchased 5-hour Energy within approximately the same
period of time, this confluence of facts is sufficient to
establish that Costco and the Wholesalers are in actual
    U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC   31

competition with each other in the distribution of 5-hour
Energy. See Tri-Valley Packing Ass’n, 329 F.2d at 708.
                              C
    Judge Miller’s dissent argues that Costco and the
Wholesalers are not in actual competition because they did
not compete in the resales of 5-hour Energy to the same
buyers. The dissent bases this argument on evidence in the
record that Costco and the Wholesalers had “substantial
differences in operations” and that buyers did not treat
Costco and the Wholesalers as substitute supply sources of
5-hour Energy. We disagree with both arguments.
    First, the differences in operations that Judge Miller’s
dissent cites, such as differences in the availability of in-
store credit, negotiated prices, or different retail-oriented
accessories such as 5-hour Energy display racks, are not
relevant to determining whether Costco and the Wholesalers
are “customers competing” under 15 U.S.C. § 13(d). As
explained above, customers may compete for purposes of
section 2(d) even if they operate in different manners. Cf.
Simplicity Pattern Co., 360 U.S. at 59–62 (holding that a
variety store and a specialized fabric store were in
competition for the sale of clothing patterns even though
they carried different inventories and presented the
merchandise in different manners). Our sister circuits have
taken a similar approach. See Feesers, 498 F.3d at 214 n.9
(holding that, for purposes of determining whether two
businesses were in competition, it was irrelevant that one
was “a full line distributor of food and food related products”
and the other was a “food service management company,”
with very different operations); see also Lewis, 355 F.3d at
531–32 (holding that companies using vending machines to
resell cigarettes can be in competition with convenience
32   U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC

stores that resell cigarettes); Innomed Labs, 368 F.3d at 160
(holding that chain stores in competition with smaller
businesses often offer lower prices than smaller businesses).
    In addition to precedent, FTC guidance indicates that
customers are in competition with each other when they
“compete in the resale of the seller’s products of like grade
and quality at the same functional level of distribution,”
regardless of the manner of operation. 16 C.F.R. § 240.5.
For example, a discount department store may be competing
with a grocery store for distribution of laundry detergent.
See id. (Example 3).
    Second, Judge Miller’s dissent argues that Costco and
the Wholesalers may not be in actual competition because it
is not clear they sold to the same buyers. In making this
argument, the dissent and Living Essentials primarily rely on
Living Essentials’ economic expert, Dr. Darrel Williams,
who testified that Costco and the Wholesalers were not in
competition because their buyers did not treat Costco and the
Wholesalers as substitute supply sources. Dr. Williams
based this conclusion on evidence that the Wholesalers’
buyers continued to purchase 5-hour Energy from the
Wholesalers regardless of changes in relative prices between
the Wholesalers and Costco. This argument fails, however,
because the question whether one business lost buyers to
another does not shed light on whether the businesses are in
competition, but only on whether there has been an injury to
competition, meaning that the seller’s price concessions
caused buyers to switch from one business to another.
Although a plaintiff must show potential injury to
competition to make a claim under Section 2(a) of the
Robinson-Patman Act, see supra at 8, such a showing is not
necessary to make a claim under section 2(d). See Lewis,
355 F.3d at 531–32 (holding that to establish that two
    U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC   33

businesses are in competition, the plaintiff is not required to
show that the seller’s discrimination between the businesses
caused buyers to switch to the favored business, because
evidence of customer switching “goes to injury, and the
element at issue on this appeal is the existence, not the
amount of damage to, competition”); see also Volvo, 546
U.S. at 177 (determining that the “hallmark” of competitive
injury is the diversion of sales). Therefore, Dr. Williams’s
testimony about a lack of switching between Costco and the
Wholesalers does not undermine the Wholesalers’ claim that
they are in competition with Costco for resales of 5-hour
Energy.
    Finally, Judge Miller’s dissent relies on Volvo for the
argument that even when the criteria in Tri-Valley are met
for actual competition, a seller can show that the two
customers are not in actual competition because “markets
can be segmented by more than simply functional level,
geography, and grade and quality of goods.” But Volvo is
inapposite. In Volvo, the customers (Volvo dealers) did not
offer the same product to buyers in the same geographical
area (i.e., the Tri-Valley scenario). Rather, it was the buyer
who chose the customers from whom it solicited bids for a
possible purchase. Since the buyer at issue in Volvo did not
solicit bids from competing Volvo dealers, they were not in
competition, and so a section 2(a) violation was not possible.
In short, Volvo tells us that there may be circumstances
where the evidence shows that each customer is selling to a
“separate and discrete” buyer, as in Volvo, or to a separate
and discrete group of buyers, eliminating the possibility of
competition between customers. But there is no evidence
supporting such a conclusion here. Instead, this case is a
typical chainstore-paradigm case where the Wholesalers and
34     U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC

Costco carried and resold an inventory of 5-hour Energy to
all comers.
    Because the district court erred by finding that Costco
and the Wholesalers operated at different functional levels
and competed for different customers with respect to 5-hour
Energy, it abused its discretion in denying injunctive relief
to the Wholesalers on that basis. See Or. Coast Scenic R.R.,
841 F.3d at 1072. We therefore vacate the district court’s
holding as to section 2(d) and reverse and remand for the
district court to consider whether Costco and the
Wholesalers purchased 5-hour Energy from Living
Essentials “within approximately the same period of time”
in light of the record (the only remaining Tri-Valley
requirement), Tri-Valley Packing Ass’n, 329 F.2d at 709, or
whether the Wholesalers have otherwise proved
competition.
  AFFIRMED IN PART; VACATED, REVERSED,
AND REMANDED IN PART.7

7
    Each party to bear its own costs on appeal.
    U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC   35

GILMAN, Circuit Judge, concurring in part and dissenting
in part:

    Contrary to the majority’s decision, I am of the opinion
that the district court abused its discretion in giving the
“reasonably contemporaneous” instruction to the jury. I
would therefore reverse the judgment of the court and
remand for a new trial on the Wholesalers’ Section 2(a)
claim with a properly instructed jury. On the other hand, I
agree with the majority that the court did not abuse its
discretion in giving the “functional discount” jury
instruction. Finally, I agree with the majority that the court
abused its discretion in finding that Costco and the
Wholesalers operated at different functional levels. In sum,
I concur in vacating the court’s denial of the Wholesalers’
Section 2(d) claim for injunctive relief and would go further
in granting a new trial on the Wholesalers’ Section 2(a)
claim.
    The Wholesalers’ secondary-line price-discrimination
claim under Section 2(a) requires them to show that: (1) the
challenged sales were made in interstate commerce; (2) the
items sold were of like grade and quality; (3) the defendant-
seller discriminated in price between favored and disfavored
purchasers; and (4) “‘the effect of such discrimination may
be . . . to injure, destroy, or prevent competition’ to the
advantage of a favored purchaser.” Volvo Trucks N. Am,
Inc. v. Reeder-Simco GMC, Inc., 546 U.S. 164, 176–77
(2006) (quoting 15 U.S.C. § 13(a)).
    Secondary-line price discrimination is unlawful “only to
the extent that the differentially priced product or
commodity is sold in a ‘reasonably comparable’
transaction.” Aerotec Int’l, Inc. v. Honeywell Int’l, Inc., 836
F.3d 1171, 1188 (9th Cir. 2016) (citing Tex. Gulf Sulphur
36   U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC

Co. v. J.R. Simplot Co., 418 F.2d 793, 807 (9th Cir. 1969)).
To be reasonably comparable, the transactions in question
must, among other things, occur “within approximately the
same period of time,” such that the challenged price
discrimination is not a lawful response to changing
economic conditions. Tex. Gulf Sulphur, 418 F.2d at 807
(quoting Tri-Valley Packing Ass’n v. FTC, 329 F.2d 694,
709 (9th Cir. 1964)); see also England v. Chrysler Corp.,
493 F.2d 269, 272 (9th Cir. 1974) (observing that the
“reasonably contemporaneous” requirement “serves the
purposes of the [Robinson-Patman] Act” by helping to
ensure that price differentials “have some potential for
injuring competition”). A plaintiff must show at least two
contemporaneous sales by the same seller to a favored
purchaser and a disfavored purchaser to make a Section 2(a)
claim. Airweld, Inc. v. Airco, Inc., 742 F.2d 1184, 1191
(9th Cir. 1984) (citing, inter alia, Foremost Pro Color, Inc.
v. Eastman Kodak Co., 703 F.2d 534, 547 (9th Cir. 1983),
overruled on other grounds as recognized in Chrona
Lighting v. GTE Prods. Corp., 111 F.3d 653, 657 (9th Cir.
1997)).
    The Wholesalers challenge as discriminatory thousands
of sales of 5-Hour Energy that Living Essentials made to
Costco over the course of seven years. Living Essentials
also made thousands of sales to the Wholesalers over the
same time period, many of which occurred on the very same
day as sales to Costco. Trial Exhibit 847, a spreadsheet of
all of Living Essentials’ sales during the relevant time
period, documents each of these transactions (approximately
95,000 transactions in total).
    Although the spreadsheet is extensive, it is fairly self-
explanatory, not an “unexplained mass” as it is characterized
by the majority. Each transaction appears on a separate line,
    U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC   37

with the date, the name of the buyer, the type of buyer
(“wholesaler” or “Costco,” for example), the number of
bottles purchased, and the price all clearly indicated. This
evidence establishes that thousands of sales to Costco and to
the Wholesalers occurred in close proximity over the course
of the entire seven-year period, which more than satisfies the
Robinson-Patman Act’s requirement that the challenged
sales be reasonably contemporaneous. Cf. Airweld, 742
F.2d at 1192 (“Airweld never proved when the sales actually
occurred and therefore that they were contemporaneous to
its purchases.”).
    Yet the majority concludes that the Wholesalers failed to
meet their burden to establish contemporaneous sales
because they “did not direct the district court to any evidence
to substantiate their claim” until their post-trial motion for
judgment as a matter of law, and even then the Wholesalers
failed to “clearly identify any reasonably contemporaneous
sales.” The majority concedes that “[t]here may have been
a needle—or even many needles—in the haystack of sales
data.” But the majority concludes that “[i]t was not the
district court’s job to hunt for them.” In fact, however, there
were many thousands of needles (contemporaneous sales
data) in the evidentiary haystack of Trial Exhibit 847, so the
court did not have to “hunt for them”—the data was staring
the court in the face for all to see.
    Moreover, by focusing only on whether the Wholesalers
“identified any pair of sales that would satisfy their burden,”
the majority fails to account for the full record in the trial
court. The comprehensive sales data was referenced
frequently at trial—indeed it was the centerpiece of much of
the proceedings. To offer just one example, Living
Essentials’ expert witness, Dr. Williams, engaged in an
38   U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC

extensive analysis of the “sales data” by “look[ing] at every
single day between 2012 and 2018.”
    In light of this evidence, I see no justification to
characterize the transactions in this case as anything other
than reasonably contemporaneous. And I am not aware of
any authority supporting the proposition that the sufficiency
of the evidence for a jury instruction turns on how
thoroughly counsel discussed certain evidence at trial, so
long as it is properly admitted (which is the case here). Nor
did Living Essentials offer any contrary evidence to place
the issue back in dispute. In other words, giving the
contemporaneous-sales instruction was unwarranted
because the Wholesalers introduced unrefuted evidence that
the sales were in fact contemporaneous. Cf. Desrosiers v.
Flight Int’l of Fla. Inc., 156 F.3d 952, 959 (9th Cir. 1998)
(“The district court could not have abused its discretion
unless there was no factual foundation to support . . . an
instruction.”). As the Wholesalers rightly pointed out,
“[t]here is literally no evidence to suggest that Living
Essentials’ sales of 5-Hour Energy to Costco and Plaintiffs
occurred at anything other than the same time.”
    The majority disagrees, holding that the district court
properly ruled that the price differential could be explained
(and therefore rendered lawful) by the fact that sales of 5-
Hour Energy were declining overall. They further speculate
that the Wholesalers might have “bought the product during
periods of higher market pricing that Costco avoided.” But
declining overall sales is a market condition that would have
affected all purchasers for resale and, more importantly, the
price differential remained consistent throughout the seven-
year period over which the Wholesalers and Costco bought
5-Hour Energy from Living Essentials. The record provides
no basis to support the proposition that fluctuations in
    U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC     39

demand could account for price differentials between
transactions that occurred on the same day.
    Parties are “entitled to an instruction about [their] theory
of the case if it is supported by law and has foundation in the
evidence.” Clem v. Lomeli, 566 F.3d 1177, 1181 (9th Cir.
2009) (quoting Dang v. Cross, 422 F.3d 800, 804–05
(9th Cir. 2005)); see also Mayflower Ins. Exch. v. Gilmont,
280 F.2d 13, 16 (9th Cir. 1960) (holding that when “no
evidence warrant[s] the giving of the instruction in
question[,] the giving of that instruction must be held to be
error”). Faced with the evidence outlined above, no
reasonable juror could conclude that the transactions in this
case were other than contemporaneous. No separation in
time between transactions can account for the difference
between the higher price offered to the Wholesalers and the
lower price offered to Costco. That is what matters for the
purposes of the Robinson-Patman Act, which targets price
discrimination         between     “competing       customers,”
England v. Chrysler Corp., 493 F.2d 269, 272 (9th Cir.
1974), in “comparable transactions,” Tex. Gulf Sulphur Co.
v. J.R. Simplot Co., 418 F.2d 793, 806 (9th Cir. 1969)
(emphasis in original) (quoting FTC v. Borden Co., 383 U.S.
637, 643 (1966)), in order to combat “the perceived harm to
competition occasioned by powerful buyers,” Volvo Trucks
N. Am., Inc. v. Reeder-Simco GMC, Inc., 546 U.S. 164, 175
(2006).
    The Wholesalers clearly objected to the “reasonably
contemporaneous” instruction, and I find no evidence to
support giving that instruction. I am therefore of the opinion
that so instructing the jury was an abuse of the district court’s
discretion. See Clem, 566 F.3d at 1181. And the
Wholesalers need not have challenged the district court’s
denial of their entire post-trial renewed motion for judgment
40   U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC

as a matter of law in order for us to remand for a new trial
on the basis of this instructional error; the very fact that they
“objected at the time of trial on grounds that were
sufficiently precise to alert the district court to the specific
nature of the defect” is sufficient. See Merrick v. Paul
Revere Life Ins. Co., 500 F.3d 1007, 1015 (9th Cir. 2007)
(internal quotation marks omitted); see also Fed. R. Civ. P.
51.
    Nor was the district court’s error harmless. In the event
of instructional error, prejudice is presumed, and “the burden
shifts to [the prevailing party] to demonstrate that it is more
probable than not that the jury would have reached the same
verdict had it been properly instructed.” BladeRoom Grp.
Ltd. v. Emerson Elec. Co., 20 F.4th 1231, 1243 (9th Cir.
2021) (quoting Clem, 566 F.3d at 1182). In this case, the
jury was told to “find for the Defendants” if it determined
that Living Essentials’ sales to the Wholesalers and to
Costco were not reasonably contemporaneous. And Living
Essentials highlighted these instructions in their closing
argument, calling the Wholesalers’ failure to present
evidence of contemporaneous sales “fatal to their claim.”
There is “no way to know whether the jury would [have]
return[ed] the same [verdict] if the district court” had not
given the “reasonably contemporaneous” instruction. See id.
at 1244–45. I would therefore reverse the judgment of the
court and remand for a new trial on the Wholesalers’ Section
2(a) claim with a properly instructed jury.
    U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC     41

MILLER, Circuit Judge, dissenting in part:

    I agree that the district court did not abuse its discretion
in instructing the jury on the section 2(a) claims, but I do not
agree that the district court erred in rejecting the section 2(d)
claims. I would affirm the judgment in its entirety.
    Under section 2(d), if two or more customers of a seller
compete with each other to distribute that seller’s products,
the seller may not pay either customer “for any services or
facilities furnished by or through such customer in
connection with the . . . sale” of the products unless the
payment “is available on proportionally equal terms to all
other customers competing in the distribution of such
products.” 15 U.S.C. § 13(d); see Tri-Valley Packing Ass’n
v. FTC, 329 F.2d 694, 707–08 (9th Cir. 1964). Unlike section
2(a), section 2(d) does not require “a showing that the illicit
practice has had an injurious or destructive effect on
competition.” FTC v. Simplicity Pattern Co., 360 U.S. 55, 65
(1959). But it does demand that the favored and the
disfavored customer be “competing” with each other. 15
U.S.C. § 13(d).
    The district court did not clearly err in finding that the
Wholesalers failed to establish by a preponderance of the
evidence that they were competing with Costco. (The district
court was wrong to suggest that the jury’s verdict compelled
this conclusion, but the court expressly stated that its finding
also rested on an “independent review of the evidence,” and
we may uphold it on that basis.) We have previously held
that “customers who are in functional competition in the
same geographical area, and who buy the seller’s products
42   U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC

of like grade and quality within approximately the same
period of time, are in actual competition with each other in
the distribution of these products.” Texas Gulf Sulphur Co.
v. J.R. Simplot Co., 418 F.2d 793, 807 (9th Cir. 1969)
(quoting Tri-Valley Packing Ass’n, 329 F.2d at 709). We
have not set out a definitive definition of “functional
competition,” and the Wholesalers argue that they need only
show a “‘competitive nexus,’ whereby ‘as of the time the
price differential was imposed, the favored and disfavored
purchasers competed at the same functional level, i.e., all
wholesalers or all retailers, and within the same geographic
market.’” (quoting Best Brands Beverage, Inc. v. Falstaff
Brewing Corp., 842 F.2d 578, 585 (2d Cir. 1987)).
    Such a capacious understanding of competition is
foreclosed by the Supreme Court’s decision in Volvo Trucks
North America, Inc. v. Reeder-Simco GMC, Inc., 546 U.S.
164 (2006). There, the Court clarified that a common
position in the supply chain in a shared geographical market
is not sufficient, by itself, to establish actual competition. Id.
at 179 (“That Volvo dealers may bid for sales in the same
geographic area does not import that they in fact competed
for the same customer-tailored sales.”). Thus, it is not
enough to point to evidence of “sales in the same geographic
area.” Id. Instead, the evidence must show that the
disfavored buyer “compete[d] with beneficiaries of the
alleged discrimination for the same customer.” Id. at 178.
Consistent with Volvo, other circuits have held that “two
parties are in competition only where, after a ‘careful
analysis of each party’s customers,’ we determine that the
parties are ‘each directly after the same dollar.’” Feesers,
Inc. v. Michael Foods, Inc., 591 F.3d 191, 197 (3d Cir. 2010)
    U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC   43

(quoting Feesers, Inc. v. Michael Foods, Inc., 498 F.3d 206,
214 (3d Cir. 2007)); see also M.C. Mfg. Co. v. Texas
Foundries, Inc., 517 F.2d 1059, 1068 n.20 (5th Cir. 1975)
(“Competition is determined by careful analysis of each
party’s customers. Only if they are each directly after the
same dollar are they competing.”) (quoting Ag-Chem Equip.
Co., v. Hahn, Inc., 350 F. Supp. 1044, 1051 (D. Minn. 1972),
aff’d in part, vacated in part, 480 F.2d 482 (8th Cir. 1973)).
    In this case, Living Essentials presented evidence of
substantial differences in operations that suggests that the
Wholesalers and Costco were not competing “for the same
customer.” Volvo, 546 U.S. at 178. For example, unlike
Costco, most of the Wholesalers sold 5-hour Energy only in
store, negotiated pricing with their customers—offering in-
house credit and different prices for 5-hour Energy—and
sold only to retailers, not to end-consumers. Meanwhile,
Costco Business Centers sold both in store and online at set
prices to any consumer with a Costco membership, some of
whom were end-consumers; in addition, they carried fewer
than half of the 5-hour Energy flavors carried by the
Wholesalers, and they did not sell 5-hour Energy display
racks or other retailer-oriented accessories for Living
Essentials. It is true that Costco Business Centers sold most
of their 5-hour Energy to retailers. But it is far from clear
that Costco sold to the same retailers as the Wholesalers. The
Wholesalers’ distinct features, such as their credit and wider
inventory, may well have appealed to different customers.
    Expert testimony corroborated that evidence. The parties
offered dueling experts on the issue of competition. For the
Wholesalers, Dr. Gary Frazier, a marketing expert, opined
44   U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC

that the purchasers did compete based on his review of
emails sent by Living Essentials’ employees discussing
sales, the testimony of six of the seven Wholesalers, and
maps showing the locations of the Wholesalers, their
customers, and the seven Costco Business Centers. But on
cross-examination, Dr. Frazier acknowledged that he did not
speak with any of the Wholesalers’ customers, and that the
maps on which he relied included all of the Wholesalers’
customers in a cluster of unlabeled dots without regard to
whether the customer ever purchased 5-hour Energy or the
actual travel time for the customer to get to a Wholesaler
versus one of the seven Costco Business Centers. The district
court found that the Costco Business Centers and the
Wholesalers were in close proximity to each other, and I do
not question that finding. But the court was not required to
accept Dr. Frazier’s inference that their 5-hour Energy
customers were the same.
    For Living Essentials, Dr. Darrel Williams, an expert in
industrial organization and economics, testified that a
“necessary condition for competition is that the buyers
consider the two sellers substitute[s],” and he opined that this
“necessary condition” was absent. After analyzing Living
Essentials’ sales records, the sales data provided by four of
the Wholesalers, and the Wholesalers’ customer data, Dr.
Williams concluded that the Wholesalers did not compete
with Costco for sales of 5-hour Energy. His analysis showed
that even though some Wholesalers priced 5-hour Energy
above the prices of other Wholesalers and Costco, the
Wholesalers’ customers did not switch to the seller with the
cheapest product; from the lack of any economically
significant customer loss, he inferred that the Wholesalers’
    U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC   45

customers did not treat Costco as a substitute supplier of 5-
hour Energy. He determined that the maximum level of
customer switching across the Wholesalers and Costco was
ten times lower than the switching attributable to ordinary
customer “churn,” and that even the opening of three new
Costco Business Centers had no statistically significant
effect on the Wholesalers’ 5-hour Energy sales. Dr. Williams
posited that operating differences between the Wholesalers
and Costco might explain why their customers differed. He
reasoned that the Wholesalers might draw customers
interested in buying on credit or in the unique products the
Wholesalers offer. In its ruling on the Wholesalers’ motion
for judgment as a matter of law, the district court
summarized this testimony by explaining that “[b]ecause
customers are presumed to purchase a product at the lowest
available price, the jury could reasonably conclude this
evidence tended to show Costco and Plaintiffs did not
compete for the same customers.”
    The Wholesalers respond that Dr. Williams’s testimony
goes only to whether there was competitive injury, not
whether there was competition in the first place. But that is
a misreading of the testimony. Based on his conclusion that
the Wholesalers’ customers were not sensitive to the price of
5-hour Energy, Dr. Williams opined that the Wholesalers
and Costco did not compete “for the same customer.” Volvo,
546 U.S. at 178; see Lewis v. Philip Morris Inc., 355 F.3d
515, 531 (6th Cir. 2004) (explaining that studies of price
sensitivity are helpful for assessing competition).
   To be sure, the district court was not required to credit
Living Essentials’ evidence and Dr. Williams’s economic
46   U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC

analysis of the sales data over the Wholesalers’ evidence and
Dr. Frazier’s examination of emails and maps. But it did not
clearly err in doing so and in finding that the Wholesalers
failed to carry their burden. See United States v. Frank, 956
F.2d 872, 875 (9th Cir. 1991) (“Clear error is not
demonstrated by pointing to conflicting evidence in the
record.”).
    In reversing the denial of an injunction, the court deems
all of the evidence of lack of actual competition—and the
district court’s findings based on that evidence—to be
irrelevant. It relies on our decision in Tri-Valley Packing, in
which we said that where two direct customers of a seller
both “operat[e] solely on the same functional level,” if “one
has outlets in such geographical proximity to those of the
other as to establish that the two customers are in general
competition, and . . . the two customers purchased goods of
the same grade and quality from the seller within
approximately the same period of time,” then it is not
necessary to trace the seller’s goods “to the shelves of
competing outlets of the two in order to establish
competition.” 329 F.2d at 708. Instead, “[a]ctual competition
in the sale of the seller’s goods may then be inferred.” Id.
    As the court reads Tri-Valley Packing, the “confluence
of facts” of operating on the same functional level, being in
geographic proximity, and reselling goods of like grade and
quality is sufficient to conclusively establish competition,
making any other evidence irrelevant. But what we said in
Tri-Valley Packing is that actual competition “may . . . be
inferred,” 329 F.2d at 708, not that it “shall be irrebuttably
presumed.”
    U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC   47

    Nowhere in Tri-Valley Packing did we say that a
defendant is barred from rebutting the inference of
competition by presenting evidence that two resellers at the
same functional level and in the same geographic area are
not, in fact, in actual competition with each other. If we had,
our insistence in Tri-Valley Packing on a showing of
“functional competition,” which I have already discussed,
would have been superfluous. 329 F.2d at 709. Reading Tri-
Valley Packing in that way is contrary to the economic
reality that markets can be segmented by more than simply
functional level, geography, and grade and quality of goods.
Some differences in operations may not matter to customers,
but others are undoubtedly significant. (In the New York
geographic market, you can order a Coke both at Le
Bernardin and at McDonald’s, but no one thinks they are
engaged in actual competition.)
    The court’s approach is also contrary to Volvo, which
says that section 2(d) requires competition “for the same
customer.” 546 U.S. at 178. It is contrary to the decisions of
other circuits that have recognized that finding competition
requires “a careful analysis of each party’s customers,” not
the application of a categorical rule. Feesers, Inc., 591 F.3d
at 197 (internal quotation marks omitted). And it is
unsupported by the Federal Trade Commission’s
interpretation of section 2(d). In regulations defining
“competing customers,” the FTC gives the following
illustrative example: “B manufactures and sells a brand of
laundry detergent for home use. In one metropolitan area,
B’s detergent is sold by a grocery store and a discount
department store.” 16 C.F.R. § 240.5. Under the court’s
reading of Tri-Valley Packing, the grocery store and the
48   U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC

discount department store would necessarily be in
competition with each other. But that is not how the FTC
sees it. Instead, the agency says, “If these stores compete
with each other, any allowance, service or facility that B
makes available to the grocery store should also be made
available on proportionally equal terms to the discount
department store.” Id. (emphasis added); see also FTC v.
Simplicity Pattern Co., 360 U.S. 55, 62 (1959) (emphasizing
the FTC’s factual finding that the putative competitors were
indeed “retailing the identical product to substantially the
same segment of the public” (quoting Simplicity Pattern Co.
v. FTC, 258 F.2d 673, 677 (D.C. Cir. 1958), aff’d in part,
rev’d in part, 360 U.S. 55 (1959)). The presence or absence
of competition must be assessed based on the facts.
    The district court appropriately reviewed all of the
evidence in making a finding that Living Essentials had not
established competition. Because that finding was not
clearly erroneous, I would affirm the judgment in its entirety.