Court Opinion

ID: 9427454
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:20:51.760377+00
Date Added: 2024-06-11T17:23:07.302459
License: Public Domain

Mr. Justice Marshall,
dissenting in part.
I agree with the Court that the Federal Trade Commission and the Court of Appeals applied the wrong legal standard in *86assessing A&P’s liability under the Robinson-Patman Act. However, I cannot join the Court’s interpretation of § 2 (f) as precluding buyer liability under this Act unless the seller could also be found liable for price discrimination. Neither the language nor the sparse legislative history of § 2 (f) justifies this enervating standard for the determination of buyer liability. To the contrary, the Court’s construction disregards the congressional purpose to curtail the coercive practices of chainstores and other large buyers. Having formulated a new legal standard, the Court then applies it here in the first instance rather than remanding the case to the Commission. Given the numerous ambiguities in the record, 1 believe the Court thereby improperly arrogates to itself the role of the trier of fact.
I
Section 2 (f) provides that “[i]t shall be unlawful for any person . . . knowingly to induce or receive a discrimination in price which is prohibited by this section.” (Emphasis added.) The Court interprets the italicized language as “plainly meaning” that a buyer can be found liable for knowingly inducing price discrimination only if his seller is first proved liable under §§ 2 (a) and 2 (b). Ante, at 76,81. Under this construction, proceedings involving only the Commission and a buyer will turn upon proof of a seller’s liability, and whenever a seller could successfully claim the meeting-competition defense, the buyer must be exonerated.
In my view, the language of § 2 (f) does not compel this circuitous method of establishing buyer liability. Sections 2 (a) and 2 (b) of the Act define the elements of price discrimination and the affirmative defenses available to sellers. When Congress extended liability to buyers who encourage price discrimination, a ready means of defining the prohibition was to rely on the elements and defenses already delineated in §§ 2 (a) and 2 (b). Thus, the phrase “which is prohibited by this section” in § 2 (f) incorporates these elements and *87defenses by reference, making them applicable to buyers. So construed, § 2 (f) simply means that the same elements of a prima facie case must be established and the same basic affirmative defenses available, whether buyer or seller liability is in issue. The section does not require that another party actually satisfy all of the conditions of §§2(a) and 2(b) before buyer liability can even be considered. Determining buyer and seller liability independently, I believe, places less strain on the “plain meaning” of the language of § 2 (f) than does the absolutely derivative standard the majority announces today.
In construing § 2 (f), the Court relies on Congress’ delay in adding the section to the final bill and on a remark by Representative Utterback during the legislative debates. Ante, at 75-77, and n. 10. The delay provides little logical justification for the Court’s interpretation; rather, it more likely reflects Congress’ late realization that halting the abusive practices of buyers1 could not be accomplished solely through imposition of liability on sellers. Representative Utterback’s statement, 80 Cong. Rec. 9419 (1936), amounts to a slight paraphrase of § 2 (f) and in no way supports the Court’s derivative standard.
I agree with the Court’s suggestion, ante, at 80, that we must resolve the dilemma confronting a buyer who properly invites a seller to meet a competitor’s price and then fortui*88tously obtains a lower bid. Congress could not have expected the buyer to choose between asking the seller to increase the bid to a specific price or accepting the lower bid and facing liability under § 2 (f). Rather, it must have intended some accommodation for buyers who act in good faith yet receive bids that beat competition. This does not mean, however, that a buyer should be liable under § 2 (f) only if his seller also would be liable. That solution to the buyer’s dilemma would enable him to manufacture his own defense by misrepresenting to a seller the response needed to meet a competitor’s bid and then allowing the seller to rely in good faith on incorrect information. The Court purports to reserve this “lying buyer” issue, ante-, at 81-82, n. 15, but the derivative standard it adopts today belies the reservation. If “prohibited by this section” means that a buyer’s liability depends on that of the seller, then absent seller liability, the buyer’s conduct and bad faith are necessarily irrelevant.
I would hold that under § 2 (f), the Robinson-Patman Act defenses must be available to buyers on the same basic terms as they are to sellers. To be sure, some differences in the nature of the defenses would obtain because of the different bargaining positions of sellers and buyers. With respect to the meeting-competition defense at issue here, a seller can justify a price discrimination by showing that his lower price was offered in “good faith” to meet that of a competitor. Ante, at 82-83; United States v. United States Gypsum, Co., 438 U. S. 422, 450-455 (1978). In my view, a buyer should be able to claim that defense — independently of the seller — if he acted in good faith to induce the seller to meet a competitor’s price, regardless of whether the seller’s price happens to beat the competitor’s. But a buyer who induces the lower bid by misrepresentation should not escape Robinson-Patman Act liability. See Kroger Co. v. FTC, 438 F. 2d 1372 (CA6) (Clark, J.), cert. denied, 404 U. S. 871 (1971). This definition of the meeting-competition defense both extricates buyers from an impossible dilemma and respects the congressional *89intent to prevent buyers from abusing their market power to gain competitive advantage.2
Automatic Canteen Co. of America v. FTC, 346 U. S. 61 (1953), is entirely consistent with this interpretation of §2 (f). The issue there concerned the allocation of “the burden of coming forward with evidence under § 2 (f) of the Act,” 346 U. S., at 65, not the precise contours of the elements and defenses that determine the scope of buyer liability. Automatic Canteen’s general discussion of § 2 (f)’s substantive requirements, quoted ante, at 77-78, merely explains that the affirmative defenses “available to sellers” must also be available to buyers. Far from pronouncing that buyer liability is derivative, Automatic Canteen began with the observation that § 2 (f) is “roughly the counterpart, as to buyers, of sections of the Act dealing with discrimination by sellers.” 346 U.S., at 63 (emphasis added).3
*90II
In my judgment, the numerous ambiguities in the record dictate that this case be remanded to the Commission. The Court, however, avoids a remand by concluding in the first instance that A&P's seller necessarily had a meeting-competition defense.4 In so doing, the Court usurps the factfinding function best performed by the Commission.5 Neither the Administrative Law Judge, the Commission, nor the Court of Appeals determined that Borden would have been entitled to claim the meeting-competition defense. Indeed, the Administrative Law Judge suggested the opposite, 87 F. T. C. 962, 1021 (1976), and the Commission stated:
“We believe that it is very probable that Borden did not have such a defense. To have a meeting competition *91defense, the record must demonstrate the existence of facts which would lead a reasonable and prudent person to conclude that the lower price would, in fact, meet the competitor’s price. As noted, Borden had serious doubts concerning whether the competing bid was legal. Specifically, it believed that the other bid only considered direct costs. It should have asked A&P for more information about the competing bid. By not making the request, it was not acting prudently. As the record clearly indicates, A&P had knowledge of Borden’s belief that other-dairies might submit bids that did not include all costs.” 87 F. T. C. 1047, 1057 n. 19 (1976) (citations omitted; emphasis in original).
Furthermore, if the Court truly intends to avoid deciding the “lying buyer” issue,-then it should remand the case for determination of whether the exception applies here. Testimony before the Administrative Law Judge directly raised the possibility that A&P misled Borden to believe a still lower price was necessary than Borden had offered when it first responded to the Bowman bid. App. 117a-118a, 123a-124a, 141a-142a.6 Both the Administrative Law Judge and the *92Commission credited that testimony, see 87 F. T. C., at 979, 1021-1022; 87 F. T. C., at 1049 n. 3, but since evidence of misrepresentation was not material under the standard they applied, there were no clear findings of fact on the point. Under these circumstances, this Court should not attempt to elide such testimony by the unsubstantiated conclusion that Borden's final bid was unaffected by any misrepresentation. Ante, at 81-82, n. 15; see n. 6, supra.
Accordingly, I dissent from the Court's adoption of a derivative standard for determining buyer liability and its resolution of disputed factual issues without a remand.

 See S. Rep. No. 1502, 74th Cong., 2d Sess. (1936); H. R. Rep. No. 2287, 74th Cong., 2d Sess., 3-7, 17 (1936); H. R. Conf. Rep. No. 2951, 74th Cong., 2d Sess. (1936); FTC, Final Report on the Chain-Store Investigation, S. Doc. No. 4, 74th Cong., 1st Sess. (1935); FTC v. Henry Broch & Co., 363 U. S. 166, 168-169 (1960); W. Patman, Complete Guide to the Robinson-Patman Act 7-10 (1963); F. Rowe, Price Discrimination Under the Robinson-Patman Act 8-14 (1962). See generally Hearings on Price Discrimination (S. 4171) before a Subcommittee of the Senate Committee on the Judiciary, 74th Cong., 2d Sess. (1936); Hearings on H. R. 8442, H. R. 4995, and H. R. 5062 before the House Committee on the Judiciary, 74th Cong., 1st Sess. (1935).

 See S. Rep. No. 1502, 74th Cong., 2d Sess., 3-4, 7 (1936); H. R. Rep. No. 2287, 74th Cong., 2d Sess., 3-7, 14^17 (1936); Patman, supra, at 7-10, 148-151; Rowe, supra, at 8-23.
The Court recently noted in United States v. United States Gypsum Co., 438 U. S. 422, 455 n. 30 (1978), that “[i]t may also turn out that sustained enforcement of § 2 (f) ... will serve to bolster the credibility of buyers’ representations and render reliance thereon by sellers a more reasonable and secure predicate for a finding of good faith under § 2 (b).” (Citation omitted.) But if neither a buyer nor a seller can be liable when the seller relies in good faith on the buyer’s misrepresentations, then enforcement of § 2 (f) will not “bolster the credibility” of buyers. Thus, the derivative standard of liability adopted by the Court today is inconsistent with the premise underlying the Court’s suggestion in United States Gypsum, see Note, The Supreme Court, 1977 Term, 92 Harv. L. Rev. 57, 288, 291-294 (1978), and it eliminates one means of reassuring sellers that they may rely on buyer representations.

 Given this preface to Automatic Canteen, language in that opinion provides little support for the Court’s adoption today of a derivative standard with respect to the buyer’s meeting-competition defense. Moreover, to the extent the majority believes its resort to literal construction of § 2 (f) forecloses further inquiry, it ignores the broader teaching of Automatic Canteen. That case adopted a common-sense approach for inter*90preting the often ambiguous Robinson-Patman Act, tempering a “merely literal reading of the language” with considerations of “fairness and convenience” when necessary to achieve Congress’ purpose. 346 U. S., at 79, and n. 23. On that basis, Automatic Canteen allocated to the Commission the burden of production regarding a- buyer’s cost-justification defense, even though the Commission does not bear that burden in a proceeding against a seller. Id., at 75-76; FTC v. Morton Salt Co., 334 U. S. 37, 44-45 (1948). Indeed, the Court’s interpretation of § 2 (f) today, which places buyers in the litigating position of their sellers, may also be incompatible with Automatic Canteen’s specific holding on the burden of production.

 Because the Court reverses the judgment without remanding for further consideration and does not expressly reach the merits of the cost-justification issue raised by A&P, ante, at 85 n. 18, I need not address that issue either.

 Considering the recent admonition in United States Gypsum, supra, at 456 n. 31, that “[t]he case-by-case interpretation and elaboration of the § 2 (b) defense is properly left to the other federal courts and the FTC in the context of concrete fact situations,” the Court’s action is particularly inappropriate.
While I question the Court’s decision to undertake resolution of this factual question, without even determining which party bore the burden of persuasion, I do not understand Part IV of its opinion as purporting to modify in any sense what was said last Term in United States Gypsum about the scope of the meeting-competition defense for sellers.

 The Court’s opinion creates the impression that Borden submitted only two proposals, ante, at 81-82, n. 15, 83-84. In fact, A&P induced Borden to make a third proposal, even though the second was already more favorable than Bowman’s.
When Borden initially responded to Bowman’s bid, the A&P representative rejected Borden’s offer on the ground that it included milk sold in glass gallon containers, whereas other bidders supposedly had not included that item. Actually, Bowman’s bid had included glass gallons and A&P had subsequently decided against using glass containers. 87 F. T. C. 962, 979 (1976); App. 73a-74a, 116a-118a, 257a-260a, 774a-775a. The effect of forcing Borden to delete milk sold in glass gallons from the proposal without raising the overall bid, was to increase the savings to A&P on other products stiE covered because part of the promised savings had been derived from the sale of the cheaper glass gaEons. See 87 F. T. C., at 979-980. In addition, whEe Borden was preparing a third proposal to reflect the deletion, A&P suggested that Borden make further price *92reductions, saying “ ‘sharpen your pencil a little bit because you are not quite there.' ” App. 118a. As a result, Borden reduced its prices still further to yield additional savings of approximately $5,000 to $8,000. The bid finally accepted by A&P incorporated these price reductions as well as those attributable to the deletion of glass gallons. See id., at 117a-118a, 123a-124a, 141a-142a.