Opposition Brief — Volvo Trucks North America, Inc. v. Reeder-Simco GMC, Inc.

In The

Supreme Court of the United States

+

VOLVO TRUCKS NORTH AMERICA, INC.,

Petitioner.

Vv.

REEDER-SIMCO GMC, INC.,

Respondent.

S

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Eighth Circuit

*

BRIEF IN OPPOSITION TO

PETITION FOR A WRIT OF CERTIORARI

+

EDWARD J. KIONKA JOE D. Byars, JR.*

Attorney at Law CHRISTIAN & BYARS

1150 Douglas Drive, Attorneys at Law

MS 6804 502 Garrison Avenue

Carbondale, Illinois 62901 Fort Smith, Arkansas 72901

Telephone: (618) 453-8755 Telephone: (479) 782-9147

*Counsel of Record

COCKLE LAW BRIEF PRINTING CO (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTIONS PRESENTED

Respondent objects to the statement of questions

presented by Petitioner pursuant to S.Ct.R. 15.

The U.S. Court of Appeals for the Eighth Circuit

(“Eighth Circuit”) stated below that “as a threshold matter

Reeder had to show it was a purchaser within the meaning

of the RPA [Robinson-Patman Act] ... [wle agree an

unsuccessful bidder is not a purchaser within the meaning

of the RPA ... mere offers to sell do not violate the RPA

.... Pet. App. 8a, 9a.

Volvo has misstated the Eighth Circuit’s true holding

by asserting that the opinion holds that an unaccepted

offer can violate the RPA.

Section 2 of the Clayton Act, which originally prohib-

ited price discrimination only where its effect “may be

substantially to lessen competition” was amended by

Congress through the Robinson-Patman Act, in an effort to

strengthen the scope of the Act, by adding the following

conjunctive, alternative standard (hence the conjunction

“or”): “or [where the effect may be] to injure, destroy or

prevent competition with any person who either grants or

knowingly receives the benefit of such discrimination, or

with customers of either of them.”

In addition, Volvo’s reasons for granting a petition for

a writ of certiorari rely upon a misstatement of the rele-

vant provisions of the RPA, by seeking to omit the provi-

sions of the Act which provide for the ability of a plaintiff

to establish an inference of competitive injury from evi-

dence of a substantial price difference between purchasers

over time, as announced in FTC v. Morton Salt, 334 U.S.

37 (1948).

ii

PARTIES TO THE PROCEEDING

The Petitioner is Volvo Trucks North America, Inc.,

Defendant-Appellant in the courts below. The Respondent,

Plaintiff-Appellee in the courts below, is Reeder-Simco

GMC, Inc.

CORPORATE DISCLOSURE STATEMENT

PURSUANT TO SUPREME COURT RULE 29.6

Reeder-Simco GMC, Inc. has no parent corporation. It

is a privately held corporation having only the following

shareholders: David Reeder, William E. Heck and Hershel

Cole.

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED ..............cccceccecceeceeeeeeeeees i

PARTIES TO THE PROCEEDING...................c0000000: ii

CORPORATE DISCLOSURE STATEMENT PUR-

SUANT TO SUPREME COURT RULE 29.6.......... ii

TABLE OF CONTENTS. ............cccccccecceescesseesceseeeseees iii

TABLE OF AUTHORITIEG..............:cccceccecceesceeeeeeeees iv

TE 1

RELEVANT PROVISIONG............ccccccccscesceeseeseeeeeeees 1

STATEMENT OF THE CASE ...........cc0cccccceeceeeeeeseeees 1

a _censnsonsoncsonees -

I. The Eighth Circuit Did Not Hold That A

Mere Offer Can Violate The Robinson-

a 8

II. The Eighth Circuit Did Not Err In Holding

That Reeder-Simco Presented Sufficient Evi-

dence Of Competitive Injury Or The Likeli-

hood Of Diverted Sales......................cccccccceeeee

III. The Eighth Circuit’s Opinion Will Not Be

Harmful To Competition............................0066 28

rT 30

iv

TABLE OF AUTHORITIES

Page

CASES:

Ag-Chem Eq. Co., Inc. v. Hahn, Inc., 480 F.2d 482

SGD Bae cccnnnsessemnesnssensenesnennasensnsomngueaninnnnimiinins 16

Allen Pen Co. v. Springfield Photo Mount Co., 653

ob ee 16, 20, 21

American Can Co. v. Bruce’s Juices, Inc., 187 F.2d

919 (5th Cir.), cert. dismissed, 342 U.S. 875

Gael cancecunenssnanmmensncnnseeresenerecieumeeaenminneneenneninnts 12

Best Brands Beverage, Inc. v. Falstaff Brewing

Corp., 842 F.2d 578 (2d Cir. 1987)................. 2, 16, 18, 24

Black Gold Ltd. v. Rockwool Indust., Inc., 729 F.2d

i 25

Capital Ford Truck Sales, Inc. v. Ford Motor Co.,

819 F. Supp. 1555 (N.D. Ga. 1992) ...0.......eccccccceeeeeeeees 25

Chroma Lighting v. GTE Products Corp., 111 F.3d

653 (9th Cir. 1997), cert. denied, 522 U.S. 943

Giri ei cticnnucansnnesanecnsiuatinenenamennsiiaiigisinaiicasaiiniaaiamiaaamaial 27

Eastern Auto Distributors v. Peugeot Motors Amer.,

795 F.2d 329 (4th Cir. 1966)..............c..cccccccossecssseseecerees 24

FTC v. Bordon Co., 383 U.S. 637 (1966) ................cccccccee 25

FTC v. Morton Salt, 334 U.S. 37, 68 S.Ct. 822

Gee cnsemnenssennsessrnntscnnnbeninsinnstatesimiinemenieiinineleaes 2,15

FTC v. Sun Oil Co., 371 U.S. 505 (1963) .................... 16, 24

General Talking Pictures Corp. v. Western Electric

Sg I ED BE cmntentnrcenmeretinennnmnemmmeinessintiiins 9

George Haug Co. v. Rolls Royce Motor Cars, Inc.,

148 F.3d 136 (2d Cir. 1998)..................ccccccceeeesereeees 15, 25

TABLE OF AUTHORITIES - Continued

Page

Henry v. Chloride, Inc., 809 F.2d 1334 (8th Cir.

TI crecunntnesnacammuninerenetmnneineniinsetenemaimmadeinee 2

In re: Boise Cascade Corp., 107 F.T.C. 76 (1986).............. 24

Industrial Burner Systems, Inc. v. Maxon Corp.,

275 F. Supp. 2d 878 (E.D. Mich. 2003)................0cc00000 26

Infusion Resources, Inc. v. Minimed, Inc., 351 F.3d

688 (5th Cir. 2003), cert. denied, 124 S.Ct. 2881

Gi icncccntnentreniisemntimnnsininainonniiiinintaniniiniaenmN 19

J. Truett Payne Co. Inc. v. Chrysler Motors Corp.,

Ge ek re ccrccnntsnntmrnmnentniatnnsiinannnaniins 20, 23

M.C. Manufacturing Co. v. Texas Foundries, Inc.,

517 F.2d 1059 (5th Cir. 1975), cert. denied, 424

SE ITI cnisssnisniniinsenidesisioiaiiinsiniatl passim

Metro Ford Truck Sales, Inc. v. Ford Motor Co., 145

F.3d 320 (5th Cir. 1998), cert. denied, 525 U.S.

EERSTE ners orreeennten cer ena eeee 2,3

Rebel Oil Co. v. Atlantic Richfield Co., 51 F.3d 1421

(9th Cir. 1995), cert. denied, 516 U.S. 987 (1995)......... 14

Richard Short Oil Co. v. Texaco, Inc., 799 F.2d 415

EEE ern 2

Rose Confections, Inc. v. Ambrosia Chocolate Co.,

fe ED en 2

Shaws, Inc. v. Wilson-Jones Co., 105 F.2d 331 (3d

Ee oer eee ee 2

Stelwagon Mfg. Co. v. Tarmac Roofing Systems,

Inc., 63 F.3d 1267 (3d Cir. 1995), cert. denied, 516

ee 16, 22

Terry's Floor Fashions, Inc. v. Burlington Indus.

Inc., 763 F.2d 604 (4th Cir. 1985) .................ccceeee 2, 9, 10

vi

TABLE OF AUTHORITIES -— Continued

Page

Texaco, Inc. v. Hausbrouck, 496 U.S. 543 (1990).... 25, 26, 29

Zwicker v. J. I. Case Co., 596 F.2d 305 (8th Cir.

STI cuticeatanitnteeitantneainneaiiineniimpemnatneneaieaaaastinsimtainiatiitin 25

STATUTES:

es Si I crcieceteicseetethisiasieihinininanstneenibiesiapenlinisiliainiciaeittiianie 1,13

IT aie centahdeihahiilalt initial 26

Ss III A inicicnrsinincmatieciiniininntiiniianinaiinsiiaiasiatas 14, 29

ENTE it Acrricicinireritirsiicininniiniimintinsiataittciiastiinsiaaiitatisa 9

MISCELLANEOUS:

House Report, Report No. 2287, 74th Cong. 2d Sess.

EE ne eR 14

James A. Pikl, The Myth of “Functional

Availability” and the Robinson-Patman Act, 2002

Fed. Cts. L. Rev. 1 (Jam. 2002) ..00........ccccccccceeeeeeeees 26, 27

Jerry S. Cohen, Let’s Retain It, 45 Antitrust Law J.

Sr rriccicsritncnnnninrnsnnttnnnsenneranennatantmerepentermmantisaian 29

Stern and Gressman, et al., Supreme Court

nD SO Se icincincctecncneeneseninicintnnenmenesnats 11

1

OPINIONS BELOW

Petitioner accurately set forth the opinions of the

lower courts in its Appendix.

¢

RELEVANT PROVISIONS

Section 2(a) of the Robinson-Patman Act, 15 U.S.C.

§ 13(a), makes it unlawful “to discriminate in price be-

tween different purchasers of commodities of like grade

and quality, where either or any of the purchases involved

in such discrimination are in commerce... and wh ve the

effect of such discrimination may be substantially to

lessen competition, ... or to injure, destroy, or prevent

competition with any person who either grants or know-

ingly receives the benefit of such discrimination, or with

customers of either of them.”

Petitioner omitted the “meeting competition” defense

provision of the Robinson-Patman Act, which essentially

renders Petitioner’s argument fatally incomplete: “Nothing

herein contained shall prevent a seller rebutting the

prima facie case thus made showing that his lower price

... to any purchaser or purchasers was made in good faith

to meet an equally low price of a competitor.”

¢

STATEMENT OF THE CASE

Contrary to Volvo's assertion, the U.S. Court of Ap-

peals for the Eighth Circuit (“Eighth Circuit”) did not

“extend the reach” of the Robinson-Patman Act (“RPA”).

The court relied upon settled authority consistent with its

prior opinions, the decisions of other circuits, and this

2

Court.’ In fact, the majority below cites with approval

most of the cases claimed by the Petitioner to present a

conflict.’ It is clear that the Eighth Circuit did not create

“new law,” but applied the law, as announced in long-

accepted precedent, to the specific facts in this case.

Petitioner’s statement of the case cannot be accepted

because it omits substantial evidence demonstrating the

diversion of sales and profits to favored Volvo deaiers, and

includes the misstatement that “the alleged discrimination

did not cause, and could not have caused a diversion of

sales or profits to a favored purchaser.” Pet. 7. To reach

this conclusion, Petitioner would have the Court limit its

view of the evidence to a select few of the sales transac-

tions presented at trial. In addition, Volvo’s assertion that

its product pricing practices are “similar in all material

respects” to Ford’s pricing practices is also a misstate-

ment.’

’ The Eighth Circuit denied Volvo's petition for rehearing and

petition for rehearing en banc, in which Volvo asserted that its opinion

was in conflict with its decisions in Henry v. Chloride, Inc., 809 F.2d

1334 (8th Cir. 1987); Rose Confections, Inc. v. Ambrosia Chocolate Co.,

816 F.2d 381 (8th Cir. 1987); Richard Short Oil Co. v. Texaco, Inc., 799

F.2d 415 (8th Cir. 1986); and FTC v. Morton Salt, 334 U.S. 37, 43

(1948). Pet. App. F. Volvo has now chosen a new set-of eases-on which it

claims a conflict.

* The Eighth Circuit majority cited with approval the following:

Terry's Floor Fashions, Inc. v. Burlington Indus. Inc., 763 F.2d 604 (4th

Cir. 1985) (Pet. App. 9a); M.C. Manufacturing Co. v. Texas Foundries,

Inc., 517 F.2d 1059, 1065 n.11 (5th Cir. 1975) (Pet. App. 9a); Shaws, Inc.

v. Wilson-Jones Co., 105 F.2d 331 (3d Cir. 1939) (Pet. App. 9a); and Best

Brands Beverage, Inc. v. Falstaff Brewing Corp., 842 F.2d 578 (2d Cir.

1987) (Pet. App. 11a).

* Volvo cites Metro Ford Truck Sales, Inc. v. Ford Motor Co., 145

F.3d 320 (5th Cir. 1998), cert. denied, 525 U.S. 1068 (1999) (Pet. p. 4),

which is easily distinguished because in Ford, there was no evidence

(Continued on following page)

3

Stripped to its core, Volvo’s true attack on the Eighth

Circuit’s holding is its unsupported assertion that the

Eighth Circuit’s conclusions on the sufficiency of the

evidence are wrong. As such, it presents a purely factual

issue that does not justify this Court’s review. See Opinion,

Pet. App. 7a. The factual issues were determined by a jury,

and therefore can be set aside only if there is a complete

absence of probative facts to support the conclusion it

reached. Id. Accordingly, we will provide an overview of

some of the pertinent evidence related to Reeder’s status

as a purchaser, competitive injury, and diversion of sales

or profits.

Reeder’s evidence of the various actual sales compari-

sons (in which Reeder was, in fact, a “purchaser”), involv-

ing Reeder’s sales to Lane Freight, City of Fort Smith,

New Hi-Way, and Sam Ludington not only establish that

Reeder lost sales as a result of Volvo’s price discrimination,

but also that Volvo’s price discrimination was substantial

and existed over a period of several years. Volvo's dis-

criminatory pricing concessions also damaged Reeder’s

relationship with Lane Freight, which had a 180-truck

fleet, and prevented Reeder from obtaining any more sales

from Lane Freight, resulting in Reeder losing profits on

further sales to Lane. A. 1218-21.

Reeder presented abundant evidence that, over a four-

year period, Volvo continually and repeatedly sold trucks

of like kind and quality to favored dealers at substantially

lower prices than those sold to Reeder, diverting sales and

that the Ford dealer received unequal price concessions. In fact, the

dealer conceded that the discounts were available to it on an equal

basis with other Ford dealers. Jd. at 326. Obviously, Reeder did not so

concede.

4

lost profits from dealers like Reeder to favored dealers

such as Westfall Volvo in Kansas City. For example,

Reeder presented evidence that the Kansas City dealer

known as “Westfall Volvo” was shown to consistently

receive greater discounts than Reeder in at least five

reasonably contemporaneous and comparative transac-

tions spanning from 1996 through at least February of

1999. Tr. 159-61; Pl. Ex. 130, 131; Tr. 173-76; Pl. Ex. 124,

124B, 125, 125A; Tr. 183-85; Pl. Ex. 121, 122; Tr. 231-33;

Pl. Ex. 148, 149; Tr. 253-54, 256; Pl. Ex. 174, 175, 177. The

Westfall dealer in Kansas City was the dealership where

Mike Truta, Reeder’s “district sales manager” spent most

of his time. Tr. 98. Under Volvo’s system of granting

discounts, the dealer initially submits his request to the

district sales manager, who grants a level of discount,

guided in part, upon the number of units and the particu-

lar model truck, but beyond that, the discount is deter-

mined subjectively, based only on the “district manager’s

discretion.” A. 1531. Chris Patterson, Volvo’s Vice-

President of Sales and Marketing, confirmed the fact that

Volvo’s decentralized and subjective system of granting

discounts through district sales managers does, in fact,

result in a disparity of discounts among the dealers within

a district. Tr. 505; Patterson Depo. pp. 99-103. Another

Volvo representative stated that Volvo makes no effort to

attempt to equalize the discounts among dealers, except

when the same end user is identified in a transaction. Tr.

768. Reeder’s representative contrasted the Volvo system

to the system used by GM, where a district sales man-

ager’s discretion does not have an impact on discounts,

and where equal availability of concessions was assured

through a centralized location, without regard to a par-

ticular dealer’s request for concession. Tr. 97. Volvo's

representative also stated that “a very high proportion of

5

our trucks have been sold through a very small number of

our dealers ... making us more dependent on a smaller

number of very good dealers, like ... Kansas City... .” Tr.

505; Patterson Depo. p. 143.

Plaintiff showed diversion of sales and profits result-

ing from price discrimination by comparing Reeder’s sales

and profits to the sales and profits of the favored Volvo

dealers. Reeder also showed that despite its increased

sales efforts, Reeder’s sales decreased substantially and its

profit margins were lower during the period of Volvo's

price discrimination (1996-2000), even though favored

Volvo dealers’ sales and overall market sales were strong

during the same time period. Reeder’s sales of Volvo trucks

historically (prior to the period of price discrimination) had

been good. See P. Ex. 268, a summary of its operating

reports. A. 1360. As shown on P. Ex. 268, and as explained

by Reeder’s representative, total Volvo units sold per year

by Reeder declined from 66 units in 1996 to only 8 units in

2000. A. 1360. Reeder’s gross profits on Volvo truck sales

fell from $165,499 in 1996 to $26,327 in 2000. Pl. Ex. 268;

A. 1044. See also P. Exs. 272, 272a, 277. A. 1044-48.

Reeder presented evidence that its average gross profit

was lower than the average of other Volvo dealers because

Reeder was not able to receive the same pricing conces-

sions. A. 1373. Reeder also introduced various examples of

lost potential sales resulting from Volvo’s illegal pricing

concessions that prevented Reeder from obtaining the

level of concession needed to actually make the particular

sale. A. 1273-1325.

Volvo’s director of dealer development testified that

1998 was a good market for the sale of heavy trucks and

that 1999 was Volvo Truck’s “record year.” A. 1340. Indeed,

Volvo’s senior vice-president for sales explained that the

6

truck market in 1999 was “inflated beyond reason” and

production rates remained quite high through the third

quarter of 2000. Tr. 516, Patterson Depo. p. 116. A Volvo

representative testified at trial that competition in heavy

truck sales has been high since 1996 and profit margins in

the heavy truck business have been relatively low since

1996. A. 1620.

Reeder’s representative testified that the heavy truck

sales market (excluding Reeder’s experience) in 1998 and

1999 was well on its way to achieving all-time record

volume. A. 1357. In addition, it was taking longer for Volvo

to get new orders out of the factory and the lead time

between the time when a dealer ordered a truck and when

the truck was built and shipped was getting longer and

longer because its plant was operating at full capacity. A.

1357. During this time, competition was keen and dealer

profit margins were narrow. A. 1620. Thus, the jury could

find that even small differences in prices or concessions

could adversely affect competition and cause lost sales and

profits.

Reeder’s sales efforts increased dramatically during

the period of Volvo’s price discrimination. In response to

the “Volvo Vision,” Reeder opened a new facility across the

street from the dealership to be devoted exclusively to

Volvo heavy truck sales and hired additional salesmen, all

with the approval of Volvo. A. 1125-27. In addition, Reeder

continued its efforts with respect to his established ac-

counts. A. 1185. Indeed, Reeder presented evidence that it

prepared and submitted bids to customers for the sale of

over 3,300 Volvo heavy trucks from the period of mid-1997

through November 1999. Pl. Ex. 277. Despite Reeder’s

increased sales efforts and the fact that favored Volvo

dealers were selling a record number of Volvo heavy

7

trucks, Reeder’s sales and profit margins declined during

the period of discrimination.

Moreover, Reeder presented testimony that Volvo's

price discrimination actually harmed competition. The

testimony of Chris Patterson, Volvo’s Vice-President of

Sales and Marketing, provides substantial evidence of

diversion of sales from Reeder to other Volvo dealers. Volvo

announced at a dealer meeting in 1997 that “50 percent of

the Volvo truck dealers would not be in business in the

next few years.” Patterson Depo. p. 108-09. Patterson then

confirmed that the “Volvo Vision,” as expressed in an email

distributed to the Volvo dealers (Pl. Ex. 101), was an

accurate statement of the “Volvo Vision.” Patterson Depo.

p. 114-15. The email had a list of Volvo’s challenges, which

included “too many dealers” and “under performing

dealers.” The Volvo Vision called for “fewer dealers, larger

markets.” The email further indicated Volvo wanted to

more than double the average market size of its dealers

and decrease the number of dealer owners from 146 to 75.

Id., Pet. App. 3a.

Patterson explained that the Volvo Vision of reducing

the number of Volvo dealers was what Volvo management

saw as necessary to “secure higher levels of profitability

for a dealership and for the manufacturer,” due to com-

pressed profit margins. Patterson Depo. p. 115. Patterson

acknowledged that the number of dealerships was, in fact,

reduced. Patterson Depo. p. 115. He testified that in 1999

or early 2000, approximately twenty “termination letters”

were issued to Volvo dealers and that another “twenty or

so” were placed on probation. Patterson Depo. p. 142.

Significantly, Volvo sent Reeder a termination letter,

effective March 31, 2000. Pl. Ex. 54; A. 1353-55. The fact

that profits or sales from Reeder were diverted to favored

8

dealers is tied together from Mr. Patterson’s statement

that “a very high proportion of our trucks have been sold

through a very small number of our dealers . .. making us

more dependent on a smaller number of very good dealers,

like... Kansas City... .” Tr. 505; Patterson Depo. p. 143.

The trial court submitted the case on special inter-

rogatories to the jury, which was given ample evidence on

which to base each of its findings, specific to the pertinent

elements of the RPA, and which resulted in the judgment

being entered in favor of Reeder. The Eighth Circuit

opinion affirming the judgment does not conflict with any

relevant precedent. Pet. App. B, C.

¢

ARGUMENT

I. The Eighth Circuit Did Not Hold That A Mere

Offer Can Violate The Robinson-Patman Act.

Volvo is simply in error when it states that the Eighth

Circuit has extended the Robinson-Patman Act by “ignor-

ing” two principles, to-wit:

(a) that “liability cannot arise from a discrimi-

natory offer to sell that does not result in a

purchase”; and,

(b) the RPA protects “competition between fa-

vored and disfavored purchasers.”

Pet. 2. Petitioner’s assertion is clearly a misstatement

when one considers the following statements from the

opinion of the Eighth Circuit: “To prove its claim, Reeder

had to show 1) Volvo discriminated in price between

Reeder and the favored dealers, 2) this price discrimina-

tion substantially affected competition between Reeder

9

and the favored dealers, ....” Pet. App. Sa “[Mlere offers

to sell do not violate the RPA” Pet. App. Ya.

In this case, however, Volvo concedes Reeder

was more than an unsuccessful bidder. Reeder

gave four examples where it actually purchased

trucks following successful bids on contracts.

Reeder compared those successful sales to actual

sales made by other dealers during the same

time period....

Pet. App. 10a.

The Eighth Circuit obviously did not “ignore” the

principles that Petitioner asserts as grounds for granting

certiorari. The Eighth Circuit clearly did not hold that an

unaccepted discriminatory offer, without two consum-

mated purchases at different prices, can violate the RPA.

Instead, the Court accurately stated the law and applied

the facts to the law in a manner that is not in conflict with

any other circuit. In fact, the majority opinion cites most of

the cases relied upon by the Petitioner in asserting a

“conflict.” Petitioner simply cannot establish that the

decision of the Eighth Circuit fits any of the criteria set

out in S.Ct.R. 10 so as to merit this Court granting certio-

rari. This Court will not grant a writ of certiorari merely

to review evidence or inferences drawn from it. General

Talking Pictures Corp. v. Western Electric Co., 304 U.S.

175, 178 (1938). “A petition for writ of certiorari is rarely

granted when the asserted error consists of erroneous

factual findings or the misapplication of a properly stated

rule of law.” S.Ct.R. 10.

The Eighth Circuit’s decision plainly does not rest

upon Volvo’s unaccepted offers to sell alone. Nevertheless,

Petitioner cites Terry’s Floor Fashions, Inc. v. Burlington

10

Indus. Inc., 763 F.2d 604, 615 (4th Cir. 1985), in support of

its position that the Eighth Circuit’s holding is somehow in

conflict with that opinion. However, the Eighth Circuit

opinion actually cited Terry’s Floor Fashions, 763 F.2d at

615, in support of its explanation that “mere offers to sell

do not violate the RPA.” Pet. App. 9a. Petitioner argues

that because the plaintiff in Terry’s Floor Fashions was

once a purchaser of defendant’s products, its holding

cannot be distinguished on the basis of “Reeder’s status as

a purchaser.” Pet. 13. The key difference between this case

and Terry’s Floor Fashions is that in Terry’s Floor Fash-

ions, the plaintiff “had not shown, or even alleged two

comparable, completed sales.” 763 F.2d at 615. Although

the plaintiff in Terry’s Floor Fashions may have shown it

was a previous “purchaser” of defendant’s product, it failed

to compare such prior purchase to a reasonably contempo-

raneous sale of goods of like kind and quality to another

competing purchaser. Reeder obviously alleged and pre-

sented evidence of at least four comparable completed

sales, in which Reeder, and other Volvo dealers were

“purchasers.” As correctly stated by the Eighth Circuit:

“Volvo concedes Reeder was more than an unsuccessful

bidder. Reeder gave four examples where it actually

purchased Volvo trucks. Reeder compared those successful

sales to actual sales made by other dealers during the

same time period.” Pet. App. 10a.

Petitioner next contends that the Eighth Circuit’s

opinion is in conflict with M.C. Manufacturing Co. v. Texas

Foundries, Inc., 517 F.2d 1059 (5th Cir. 1975), cert. denied,

424 U.S. 968 (1976). However, the Eighth Circuit also

cited M.C. Mfg. Co. in agreement with the principle that

“an unsuccessful bidder is not a purchaser within the

meaning of the RPA.” Pet. App. 9a. Again, the Petitioner

ll

claims that because the plaintiffs in M.C. Mfg. Co. had

made a prior purchase, its holding cannot be distinguished

on the basis of Reeder’s status as a purchaser. A conflict

arises for purposes of certiorari decisions when “two courts

have decided the same legal issue in opposite ways, based

on their holdings in different cases with very similar

facts.” Stern, et al, Supreme Court Practice 226 (8th ed.

2002). Simply stated, no conflict exists between M.C. Mfg.

Co. and the Eighth Circuit opinion below. To the contrary,

M.C. Mfg. Co. is readily Ganga on different facts

and a different legal issue.

In M.C. Mfg. Co., the plaintiff made its sole purchase

from the defendant manufacturer under a June, 1970

contract, and was merely an unsuccessful bidder in con-

nection with a December, 1971 contract (over a year and a

half later). These were the only two transactions compared

through evidence at trial. The plaintiff argued that be-

cause it purchased additional parts through a purchase

order from the seller in furtherance of its 1970 contract,

whereby the delivery of such goods would be “reasonably

contemporaneous” to the delivery of goods to a rival

purchaser who won the December 1971 contract, such

purchase would qualify as a purchase “in competition”

with the rival purchaser sufficient to implicate the RPA.

The cour* disagreed, noting that the “legality of price

discrimination between contracts to purchase that con-

template contemporaneous delivery must be evaluated as

of the dates the respective contracts were made,” as

opposed to delivery dates. 517 F.2d at 1066 n.13. The court

also stated that, “each contract represented a separate,

distinct market open only to a single producer.” 517 F.2d at

1067. The court in M.C. Mfg. Co. was careful to note that

its holding was limited to the specific facts presented,

12

stating, “because the particular facts underlying this case

are crucial to our resolution of the controversy, a detailed

review of the events leading to selection of a contractor on

government contract No. |] is warranted.” 517 F.2d at

1062. In addition, the court distinguished its holding from

its own decision in Americar “in Co. v. Bruce’s Juices,

Inc., 187 F.2d 919, 924 (5th Civ}, cert. dismissed, 342 U.S.

875 (1951), recognizing that the specific facts presented

did not conflict with the holding in Bruce’s Juices that an

exception to the two purchase requirement may exist

“where competitors in the same market are engaged in

competitive purchasing and selling at the time of the price

discrimination and where the failure of the plaintiff to

consummate a second purchase of the item discriminato-

rily priced is directly attributable to defendant’s own

discriminatory practice.” 517 F.2d at 1067 n.17.

It cannot be seriously disputed that Reeder was a

purchaser on at least four discriminatory, comparable

sales to other Volvo dealers, meeting all of the criteria to

implicate the RPA. Pet. App. 2a-10a. The Eighth Circuit

recognized and adhered to the law that a discriminatory

offer does not violate the RPA. Petitioner’s first reason for

granting certiorari is without merit.

Il. The Eighth Circuit Did Not Err In Holding

That Reeder-Simco Presented Sufficient Evi-

dence Of Competitive Injury Or The Likeli-

hood Of Diverted Sales.

Distilled of rhetoric, Petitioner’s second point of argu-

ment actually boils down to whether Reeder presented

sufficient evidence of “competitive injury” at trial. Petitioner

begins its argument by first omitting pertinent provisions of

the RPA, and misstating the Eighth Circuit’s holding and

13

analysis concerning Reeder’s proof of competitive injury.

Pet. 15-16. Petitioner quotes only a portion of the RPA,

arguing that the RPA only protects competition “with any

person who ... knowingly receives the benefit of such

discrimination.” Pet. 15.‘ The pertinent provisions of the

RPA (highlighting the parts omitted by Petitioner) are

actually stated as follows:

(a) Price; Selection of Customers. It shall be

unlawful for any person engaged in com-

merce . . . either directly or indirectly, to dis-

criminate in price between different

purchasers of commodities of like grade and

quality, where either or any of the purchases

involved in such discrimination are in com-

merce ... and where the effect of such dis-

crimination may be substantially to lessen

to injure, destroy or prevent competition

with any person who either grants or know-

ingly receives the benefit of such discrimina-

tion, or with customers of either of them .. . .

15 U.S.C. § 13(a) (emphasis added).

* Petitioner continues to repeat and emphasize the part of the RPA

which allows for - but does not require - a showing of competitive

injury by showing that the effect of discrimination may be “to injure,

destroy or prevent competition with any person who ... knowingly

receives the benefit of such discrimination.” (Pet. i, 1, 8, 11, 15). Peti-

tioner fails to cite any authority to support the notion that Reeder was

required to demonstrate that another Volvo dealer knew it received the

benefit of the discriminatory pricing in order to assert its claim against

Petitioner Volvo. Reeder did not sue the other Volvo dealers who may or

may not have known that they were receiving the benefit of Volvo's

discriminatory pricing.

14

Thus, the Petitioner would have this Court ignore two

separate, conjunctive clauses of the RPA, allowing for two,

additional means of showing the prohibited “effect” of price

discrimination. First, examine the meaning of “or with

customers of either of them.” Plainly, this refers to (1)

customers of the person granting the discrimination, and

(2) customers of the person receiving the benefit of dis-

crimination. Here, Reeder is a “customer” of the person

who grants discriminatory pricing - Volvo. The RPA

therefore allows for liability upon a showing that the effect

of the price discrimination “may” injure competition with

Reeder — a “customer” of Volvo. “Fairness and protection of

secondary-line purchasers are the concerns of the Robin-

son-Patman Act, a conclusion that is confirmed by the

language of the statute, legislative history, and judicial

precedent.”* Rebel Oil Co. v. Atlantic Richfield Co., 51 F.3d

1421, 1446 (9th Cir. 1995), cert. denied, 516 U.S. 987

* Section 2 of the Clayton Act, which originally prohibited price

discrimination only where its effect .. . “may be substantially to lessen

competition ... ,” was amended by Congress through the Robinson-

Patman Act, in an effort to strengthen the scope of the Act, by adding

the following conjunctive, alternative standard (hence the conjunction

“or”): “or [where the effect may be] to injure, destroy or prevent

competition with any person who either grants or knowingly receives

the benefit of such discrimination, or with customers of either of them.

“The purpose of this passage was to relieve secondary-line plaintiffs -

small retailers who are disfavored by discriminating suppliers - from

having to prove harm to competition market wide, allowing them

instead to impose liability simply by proving effects to individual

competitors. H. R. Report No. 2287, 74th Cong. 2d Sess. 8 (1936). As the

House Report stated: ‘The existing law has in practice been too restric-

tive in requiring a showing of general! injury to competitive conditions

in the line of commerce concerned, whereas the more immediately

important concern is injury to the competitor victimized by the discrims-

nation’.” Rebel Oil Co. v. Atlantic Richfield Co., 51 F.3d 1421, 1446 n.18

(9th Cir. 1995), cert. denied, 516 U.S. 987 (1995) (emphasis added).

15

(1995). Reeder is clearly the secondary line purchaser.

Volvo’s focus on Reeder’s customer — the end user in the

“tertiary line” — is misplaced.

Petitioner erroneously attempts to argue that the only

method by which competitive injury may be proven is by

direct evidence of diverted sales. Accordingly, it is Peti-

tioner who seeks a holding inconsistent with other circuits

and this Court. For example, Petitioner’s argument

completely ignores this Court’s holding in FTC v. Morton

Salt, 334 U.S. 37, 50, 68 S.Ct. 822, 830 (1948). In this case,

the Eighth Circuit specifically found that Reeder pre-

sented sufficient evidence to meet what has become

commonly known as the “Morton Salt inference” stating:

“The evidence presented by Reeder was sufficient for the

jury to conclude Volvo’s discriminatory concessions re-

sulted in lost profits and sales to Reeder and other dealers,

and that favored competitors received substantial price

reductions over a substantial period of time.” Pet. App.

15a. Morton Salt was a secondary line price discrimination

case where this Court determined that the Robinson-

teen tek oon “especially concerned with protecting

small business,” and therefore Section 2(a) was intended

to justify a finding of injury to competition by a showing of

“injury to the competitor victimized by the discrimination”

(quoting S. Rep. No. 1502, 74th Cong., 2d Sess. 4). “Morton

Salt permits an inference of injury to competition from

evidence of a substantial price difference over time,

because such a price difference may harm the competitive

opportunities of purchasers, and thus create a ‘reasonable

possibility’ that competition itself may be harmed.” George

Haug Co. v. Rolls Royce Motor Cars, Inc., 148 F.3d 136,

142 (2d Cir. 1998).

16

“The existence of [actual] competition is essentially a

fact question which can only be determined by making a

realistic appraisal of all of the relevant competitive facts.”

Ag-Chem Eg. Co., Inc. v. Hahn, Inc., 480 F. 2d 482, 490

(8th Cir. 1973), citing FTC v. Sun Oil Co., 371 U.S. 505,

527 (1963). The Petitioner attempts to compartmentalize

the evidence of competition, separating each discrimina-

tory transaction into a sealed container, hoping to avoid an

open view of the whole picture. While Petitioner tried to

emphasize the evidence of head-to-head competition

(where Reeder and another Volvo dealer attempted to

resell to the same exact customer at the same time) in its

discussion of the “two purchase” requirement, Petitioner

conveniently omits such discussion in claiming that there

is insufficient evidence of injury to competition. Clearly,

the evidence in this case is not limited to the events of

Reeder losing sales to another Volvo dealer in “head-to-

head” competition. However, such incidents are not “ir-

relevant” to the issue of whether Reeder established a

likelihood of injury to competition. One reason for the

introduction of such evidence (among substantial other

evidence’) was to establish that Reeder and the other

Volvo dealers were in actual competition with each other.

Petitioner states that “other circuits have held that a

disfavored purchaser-plaintiff must prove that it competes

against favored purchasers because such competition is an

essential predicate for . . . competitive injury .. . .” Pet. 17.

The Eighth Circuit’s holding in this case is no different, as

shown from the Court’s pronouncement that: “To prove its

* For example, Volvo's representative admitted that Volvo dealers

even outside a given district or region compete for sales with Volvo

dealers within another district or region. Tr. 587-88.

17

claim, Reeder had to show (1) Volvo discriminated in price

between Reeder and the favored dealers, (2) this price

discrimination substantially affected competition between

Reeder and the favored dealers ... .” Pet. App. 8a. Where

is the conflict? The Eighth Circuit properly stated and

followed the same legal principle Petitioner claims to have

been rejected by the Eighth Circuit.

The Eighth Circuit discussed substantial evidence

presented by Reeder to establish actual competition,

competitive injury, and the competitive nexus, which

evidence more than distinguishes the cases cited by Volvo

to assert a “conflict.” Pet. App. 2a-20a. Contrary to Peti-

tioner’s assertion, the evidence in this case went way

beyond the evidence presented in Best Brands, M.C. Mfg.

Co., Allen Pen, and Stelwagon Mfg. The shotgun approach

taken by Petitioner in asserting a conflict with other

opinions necessitates a response as to each case.

The Eighth Circuit’s holding does not conflict with the

Second Circuit’s holding in Best Brands Beverage, Inc. v.

Falstaff Brewing Corp., 842 F.2d 578 (2d Cir. 1987). To the

contrary, the opinion below actually quotes Best Brands,

842 F.2d at 585, with approval in describing the test for

whether a competitive nexus was shown, as follows: “The

standard for showing actual competition is whether, ‘as of

the time the price differential was imposed, the favored

and disfavored purchasers competed at the same func-

tional level, i.e., all wholesalers or all retailers, and within

the same geographic market.’” Jd. Pet. App. lla. The

Eighth Circuit applied and followed the same legal princi-

ples announced in Best Brands, but affirmed the judgment

in favor of Reeder, finding sufficient evidence of actual

competition and competitive injury, in contrast to the lack

of evidence shown by the disfavored purchaser in Best

18

Brands. The distinguishing facts in Best Brands were

succinctly described by the Second Circuit as follows:

Best’s trial evidence regarding actual competition -

was sparse. In fact, some evidence presented by

Best seemed to contradict inferential evidence

that actual competition existed. According to the

weight of the evidence, the markets assigned to

Best and Southland were exclusive, and neither

Southland, nor Best, nor customers of either of

them, engaged in competition within the other’s

territory. Indeed, even [in] . . . the area most sus-

ceptible to interterritory competition — no evt-

dence was presented suggesting that Best,

Southland, or their customers, made purchases

in the other’s territory, or otherwise competed

therein.

Best Brands, 842 F.2d at 585 (emphasis added).

In contrast to the lack of evidence of actual competi-

tion shown in Best Brands, the Eighth Circuit discussed

the substantial evidence presented by Reeder that it was

in actual competition with other, but favored, Volvo deal-

ers, including, without limitation, the situations of head-

to-head competition with other dealers and from the

analysis of Reeder’s sales and bids compared to sales made

by other Volvo dealers in the same geographic territory.

Pet. App. 1la-15a.’

" In addition, unlike the distributors, in Best Brands, which have

“exclusive territories,” the Volvo dealers do not have exclusive territo-

ries, but may, and do sell to customers outside their district or region.

Note 4, supra. Also, unlike many distributors, Volvo dealers purchase

trucks for resale — they are a “customer” and not a mere conduit for

distribution.

19

Petitioner also asserts that the opinion conflicts with

the Fifth Circuit’s holdings in M.C. Mfg. Co. (discussed

supra), and Infusion Resources, Inc. v. Minimed, Inc., 351

F.3d 688 (5th Cir. 2003), cert. denied, 124 S.Ct. 2881

(2004). As previously discussed, the Eighth Circuit cited

M.C. Mfg. Co. with approval; but the result is readily

distinguished on the facts, as is Infusion Resources. The

court in Infusion Resources found that the plaintiff, in

seeking to avoid summary judgment completely failed to

submit any evidence that the alleged competitors of the

plaintiff were “favored purchasers” at the time of the

alleged price discrimination. Reeder, on the other hand,

submitted substantial evidence that it did compete with

favored Volvo dealers. For example, Reeder demonstrated

that it competed in the same sales district as one of its

rivals, Westfall Volvo, in Kansas City. Tr. A. 1221-22: A.

1571. Reeder made several comparisons of its purchases to

the purchases of Westfall Volvo, where Westfall was shown

to have received discriminatory prices. At trial, Reeder’s

representative discussed the invoices reflecting Volvo sales

to Westfall Volvo, which was shown to consistently receive

greater discounts than Reeder in at least five reasonably

contemporaneous and comparative transactions spanning

from 1996 through at least February of 1999. Tr. 159-61;

Pl. Ex. 130, 131; Tr. 173-176; Pl. Ex. 124, 124B, 125, 125A;

Tr. 183-185; Pl. Ex. 121, 122; Tr. 231-233; Pl. Ex. 148, 149;

Tr. 253-254, 256; Pl. Ex. 174, 175, 177.° The Eighth Circuit

agreed that the evidence presented at trial was sufficient

* Evidence that Volvo's discriminatory pricing caused the diversion

of sales or profits to other Volvo dealers, including, for example,

Civersion of sales to Westfall Volvo, is briefly discussed above in

Respondent's Statement of the Case; however, brevity requires the

omission of additional facts.

20

to satisfy the Morton Salt inference, and the diversion of

sales or profits caused by the discrimination.

The Petitioner next claims that the Eighth Circuit’s

decision conflicts with the First and Third Circuits’ hold-

ings, stating that “damages cannot be recovered for a

violation of the RPA without proof that the price discrimi-

nation harmed the plaintiff’s ability to compete agairist

favored purchasers.” Pet. 20. First, the Eighth Circuit did

not hold that damages can be recovered without evidence

of actual injury. Petitioners position is, again, a misstate-

ment, in light of the evidence discussed above, and under

the Eighth Circuit’s analysis of the evidence and clear

conclusion that “here, there was sufficient evidence from

which the jury could infer favored dealers received lower

prices from Volvo than did Reeder, and this price advan-

tage allowed other dealers to undercut Reeder’s prices,

hurting Reeder’s sales and profits.” Pet. App. 19a.

Petitioner first cites Allen Pen Co. v. Springfield Photo

Mount Co., 653 F.2d 17 (1st Cir. 1981), in which the

question was whether a private plaintiff was required to

show actual injury to recover damages. The First Circuit

quoted this Court’s holding in J. Truett Payne Co. v.

Chrysler Motors Corp., 451 U.S. 557 (1981), that a private

treble damage plaintiff “must make some showing of

actual injury attributable to a violation of the RPA.” 653

F.2d at 22. The Eighth Circuit clearly followed the same

principles of law as set forth in Allen Pen and described

the substantial evidence — both direct and circumstantial —

which plainly distinguishes this case factually from the

insufficient evidence presented in Allen Pen. The Eighth

Circuit also followed and cited J. Truett Payne, correctly

stating that the law required Reeder to “make some

21

showing of actual injury to itself to recover treble dam-

ages.” Pet. App. 17a.

In Allen Pen, the defendant argued that the purchaser

produced no evidence from which a jury could conclude

that it was injured by the price discrimination. The court

agreed, finding the following facts particularly significant

(653 F.2d at 21-23):

(a) the purchasers total purchases from the

seller “amounted to no more than 1’ to 2%

of [the purchasers] total sales” — “the af-

fected sales were but a tiny fraction of its

total business”;

(b) the purchaser showed no absolute drop in

sales; and,

(c) the purchaser remained free to buy similar

products from the seller’s competitors.

In our case, however, Reeder established that heavy truck

sales were a very important component of its overall sales.

Instead of the 1'% to 2% in Allen Pen, Volvo heavy truck

sales amounted to approximately twenty percent (20%) of

Reeder’s overall sales at the beginning of Volvo’s discrimi-

natory practices. Tr. 320-36. Also, during the time period

in which the discriminatory conduct occurred, Reeder’s

overall sales decreased substantially and its profit mar-

gins were lower than from before such conduct, in contrast

to favored Volvo dealer’s record sales and higher profit

margins (A. 1360, A. 1044, A. 1340, A. 1357, A. 1370-74, Tr.

516, A. 1185, A. 1125-27); and Reeder’s average gross profit

was lower than the average Volvo dealer’s gross profit

because Reeder was not able to receive the same pricing

concessions (A. 1373). While the plaintiff purchaser in

Allen Pen could readily purchase office supplies from other

22

suppliers, Reeder relied upon Volvo exclusively for its

heavy truck sales. The Eighth Circuit discussed substan-

tial additional evidence in the opinion reasoning that

Reeder did prove actual injury. Pet. App. 14a-20a.

Petitioner incorrectly claims that the Eighth Circuit's

opinion is in conflict with the Third Circuit’s opinion in

Stelwagon Mfg. Co. v. Tarmac Roofing Systems, Inc., 63

F 3d 1267 (3d Cir. 1995), cert. denied, 516 U.S. 1172 (1996).

Once again, the Eighth Circuit opinion does not adopt any

principle of law in contrast to the Third Circuit, but is

faced with the application of facts clearly distinguishable

from the Stelwagon Mfg. case.

In Stelwagon Mfg., the court foud that the evidence

presented at trial was insufficient to show a causal link

between the plaintiff’s decline in sales and the price

discrimination. In fact, the only evidence submitted by the

plaintiff in Stelwagon Mfg. linking the Robinson-Patman

violation to any decline in sales or profits was anecdotal

testimony that should have been ruled inadmissible. The

court noted that “[nJot only did Stelwagon fail to offer any

documentary evidence as to the effect of the discrimination

on resale prices, it also failed to identify a single lost

customer.” 63 F.3d at 1276. The evidence in Stelwagon

Mfg. is sharply contrasted to the evidence in this case,

where Reeder presented substantial documentary evi-

dence on its lost sales and decreased profit margins, in

comparison to the increase in sales and higher profit

margins of the favored Volvo dealers (discussed supra, PP.

3-8). Reeder presented substantial evidence on specific

incidences of lost sales due to the discriminatory prices

charged by Volvo. As recognized by the Eighth Circuit,

“Reeder presented evidence that its own sales and profits

were substantially reduced during this boom in the heavy

23

truck industry despite an increase in its own sales efforts.”

Pet. App. 18a. The Eighth Circuit’s opinion is entirely

consistent with this Court’s explanation of the required

burden of proof of causation under Section 4 of the Clayton

Act as follows:

In the absence of more precise proof, the fact-

finder may conclude as a matter of just and rea-

sonable inference from the proof of defendant’s

wrongful acts and their tendency to injure plain-

tiff’s business, and from the evidence of the de- ~

cline in prices, profits and values, not shown to

be attributable to other causes, that defendant’s

wrongful acts had caused damage to the plain-

tiffs.

J. Truett Payne Co. Inc. v. Chrysler Motors Corp., 451 U.S.

557, 565-66 (1981).

A primary flaw in Petitioner’s argument is that it

misconstrues or ignores the substantial evidence that

Volvo's discrimination in prices did, in fact, cause the

diversion of sales and profits to favored dealers. The

Petitioner proceeds with its argument as if there is a

complete absence of evidence of diversion of sales or

profits, which is absolutely not the case. The evidence in

this case showed that Volvo's practice completely elimi-

nated Reeder’s ability to compete against favored purchas-

ers in that Reeder’s franchise with Volvo was terminated.

Tr. 332.

The RPA prohibits price discrimination between two

purchasers, regardless of the identity of the purchaser’s

customer or “end user,” as long as the sales to such pur-

chasers are “reasonably contemporaneous,” and the

products sold are of “like grade and quality.” Nevertheless,

Petitioner adopts Judge Hansen’s dissent, which would

24

impose a new requirement of purchasers having identical

customers, at the exact same time, instead of the accepted

and logical requirement of similar group of customers (i.e.

the same “customer dollar,” not “same customer”), at

“reasonably contemporaneous” times. Petitioner’s argu-

ment and approach conflicts with the accepted analysis of

actual competition from established precedent and over-

looks the purpose and practicality of the “meeting competi-

tion” defense available under § 2(b) of the RPA.

The Federal Trade Commission and this Court have

concluded that the RPA has a primary basis on one fun-

damental principle: “Congress intended to assure, to the

extent reasonably practicable, that businessmen at the

same functional level would start on equal competitive

footing so far as price is concerned.” Jn re Boise Cascade

Corp., 107 F-T.C. 76, 205 (1986), quoting FTC v. Sun Oil

Co., 371 U.S. 505, 520 (1963). Obviously, as retailers

engaged in the sale of Volvo heavy trucks, the favored

Volvo dealers and Reeder competed on the same functional

level. See Eastern Auto Distributors v. Peugeot Motors

Amer., 795 F.2d 329, 335 (4th Cir. 1986). It is established

and recognized by overwhelming authority that once a

plaintiff makes a showing that it competes on the same

functional level, the next inquiry is whether the competi-

tors also compete in the same geographic territory — an

element beyond dispute in this case. Best Brands Beverage

v. Falstaff Brewing Corp., 842 F.2d 578, 585 (2d Cir. 1987).

The RPA says absolutely nothing about the concept that

the customers must be identical, nor is it found in any

legislative history of the Act. It is not surprising that

neither Volvo, nor Judge Hansen, in the dissent, cite any

authority directly requiring the secondary line purchasers

(Reeder and other Volvo dealers) be involved in a sale to

25

the exact same customer. The Eighth Circuit’s opinion

cannot possibly conflict with non-existent contrary author-

ity. In fact, the overwhelming authority holds that the

plaintiff needs to show only that the sales were “reasona-

bly contemporaneous.” See FTC v. Bordon Co., 383 U.S.

637, 643-44 (1966); Black Gold Ltd. v. Rockwool Indust.,

Inc., 729 F.2d 676, 683 (10th Cir. 1984); Zwicker v. J. L

Case Co., 596 F.2d 305, 309 (8th Cir. 1979); Capital Ford

Truck Sales, Inc. v. Ford Motor Co., 819 F. Supp. 1555,

1572 (N.D. Ga. 1992).

It has been repeatedly recognized that “determining

the presence or absence of functional competition between

purchasers of a commodity is simply a factual process

which focuses on whether these purchasers were directly

competing for resales among the same group of custom-

ers.” George Haug Co. v. Rolls Royce Motor Cars, Inc., 148

F.3d 136, 141 (2d Cir. 1998); see Texaco, Inc. v. Haus-

brouck, 496 U.S. 543, 554 (1990). The fact that Reeder and

other Volvo dealers were involved in competitive bidding

situations does not change the fact that they were con-

tinually after the same customer dollar from the same

group of customers — end users of heavy duty trucks. It

defies logic to impose a requirement of showing that

Reeder and another Volvo dealer must be attempting to

sell to the exact same customer, when accepted precedent

provides that the RPA is implicated when there are rea-

sonably contemporaneous sales (“exactly contemporane-

ous” sales are not required), and that the sales must

involve products of “like grade and quality” (not the

“same” product). Volvo's argument “writes out of the

statute the requirement of ‘reasonably contemporaneous

sales’ and ‘like grade and quality,’ and writes into the law a

requirement that the plaintiff prove ‘coincidental sales or

26

bids’ of the ‘exact same products.’ This Court has already

rejected the equivalent of [Volvo's] ‘equalization’ defense

outright.” James A. Pikl, The Myth of “Functional Avail-

ability” and the Robinson-Patman Act, 2002 Fed. Cts. L.

Rev. 1, p. 113, citing Texaco, Inc. v. Hausbrouck, 496 U.S.

543, 556-58 (1990).

Volvo essentially claims, without citation or authority,

that the RPA is simply inapplicable to all competitive

bidding situations. The problem with Volvo’s argument is

apparent when one considers the “meeting competition”

defense, which was available to Volvo at trial, but which

was rejected by the jury. The meeting competition defense

is established for the purpose of competitive bidding

situations, and allows a defendant such as Volvo to avoid

liability where it can show that its lower price “to any

purchaser or purchasers was eS a ee

an equally low price of a competitor ....” 15 U.S.C.

§ 13(b). If “actual competition” is defined so as to never

include the situation of competitive bidding, then the

“meeting competition” defense becomes mere legislative

surplusage. Clearly, the RPA actually addresses competi-

tive bidding situations by including the meeting competi-

tion defense.

Petitioner’s essential argument was also addressed in

Industrial Burner Systems, Inc. v. Maxon Corp., 275

F. Supp. 878, 886 (E.D. Mich. 2003), in which the court

criticized the case of M.C. Mfg. Co. v. Texas Foundries,

Inc., 517 F.2d 1059 (5th Cir. 1975), stating:

[T]his approach unnecessarily blends the “sepa-

rate purchaser” requirement found in the second

price discrimination factor, with the competitive

injury requirement found in the fourth factor.

More importantly, this interpretation overlooks

the practical impact of the competition in the

ee eee ee er 2 ee

ete tne Ne a Wed al wera GE the a cine nm 8S

27

bidding process — the relevant competitive market

— by focusing on the after-the-matter “purchase.”

In a bid-contract structure, this purchase is, for

the purposes of the competition for the bid, a sec-

ond symbolic purchase.

The Maxon court pointed out additional reasons for

distinguishing the M.C. Mfg. case, which are equally

applicable here, and importantly pointed out that the loss

to the unfavored purchaser is not limited to the situation

where such purchaser has made an after-the-matter

“purchase” of the components. See also Chroma Lighting v.

GTE Products Corp., 111 F.3d 653 (9th Cir. 1997), cert.

denied, 522 U.S. 943 (1997).

Petitioner's argument is premised entirely on the

unsupported assertion that “actual competition” means

that Reeder and the other Volvo dealers with which it

competes must be bidding for the same customer on the

same truck to trigger the Act’s protection. Any such re-

quirement would open a vast loophole in the RPA. It would

enable a manufacturer of any product to establish differ-

ent pricing schemes for different dealers, similarly situ-

ated, with impunity; so long as Dealer A (the disfavored -

dealer) could not point to customers who actually shopped

among those dealers — including both Dealer A and Dealer

B — and chose to buy a given unit from Dealer B who

received a lower price from the manufacturer, there would

be no RPA violation. The result would clearly be to lessen

competition, because Dealer A would be driven out of

business. Dealer A would be without customers, solely

because of the discriminatory pricing. Yet, according to

Volvo, all this is perfectly proper. But, as we have shown,

and as the Eighth Circuit correctly holds, this is not the

law.

28

This point is well made by James A. Pikl, The Myth of

“Functional Availability” and the Robinson-Patman Act,

2002 Fed. Cts. L. Rev. 1 (Jan. 2002), where the author

states:

Where price discrimination is allowed to take

place, suppliers who sell to retailers can dictate

which retailers get lower prices and which pay

higher prices. Over time, such favoritism will

eventually put the disfavored retailers out of

business, all the while harming the disfavored

buyers’ customers who are often paying higher

prices than they otherwise would. The disfavored

retailers go out of business because they cannot

forever resell at the same low price as the fa-

vored retailers. The market is then left with a

monopolist in charge of supply.

Id. at 17. That is exactly what Volvo seeks.

Ill. The Eighth Circuit’s Opinion Will Not Be

Harmful To Competition.

Petitioner argues that the effect of the decision in the

instant case will be to reduce competition and result in

higher prices because manufacturers will choose to estab-

lish uniform prices which will be higher than if they can

“selectively” discount their competitive bids. This argu-

ment conflicts with Volvo’s admission at trial, where

Volvo’s Vice-President of the Southeast Region said that

Volvo’s discounting methodology is used because it allows

Volvo to sell at a higher profit to someone who will pay

more. (Tr. 763) Volvo simply wants to be able to engage in

discriminatory pricing for the sake of its own profits — not

for “consumer welfare.” Nothing in the RPA or the Eighth

Circuit opinion prohibits a seller from offering its products

at different prices to different buyers, so long as the reason

29

for such difference is legitimate (e.g., “cost justification” or

meeting competition”).

| Volvo's final argument not only ignores the availabil-

ity of the “meeting competition” defense, but also seeks a

judicially active determination neutralizing the purpose

and intent of the RPA. Such would be contrary to the

division of labor between Congress and the Court.’ The

purpose of the RPA, as determined from legislative histo

has been described as follows: _ ° =

Now there are some people that think that in or-

der to have competition, you need a few competi-

tors. Not only do a few people think this, but this

is also the opinion of the people that wrote the

[Robinson-Patman] Act in the first place. The

Judiciary Committee report states: “Existing

laws [referring to the Sherman and Clayton Acts]

have been too restrictive in requiring a showing

of injury to competitive conditions in the line of

— involved; whereas the more immedi-

ately important concern is an inj to a com-

petitor victimized by the p wth ad tion. Only

through such injury, in fact, can the larger gen-

eral injury result and that is the key.” ... There

has to be some protection for competitors if, in

fact, you are going to have competition. Other-

wise, there’s nobody left to compete.

room Cohen, Let’s Retain It, 45 Antitrust Law J. 44, 48

+

* As noted by this Court in Texaco, Inc

, Inc. v. Hasbrouck, 496 U.S. 543,

—_ n.27 (1990): “Unlike scholarly commentators, we have a duty to be

aithful to congressional intent when interpreting statutes, and are not

free to consider whether, or how, the statute should be rewritten.”

30

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted,

JOE D. BYARS, JR. EDWARD J. KIONKA

CHRISTIAN & BYARS Attorney at Law

Attorneys at Law 1150 Douglas Drive, MS 6804

502 Garrison Avenue Carbondale, Illinois 62901

Fort Smith, Arkansas 72902 Telephone: (618) 453-8755

Telephone: (479) 782-9147

February 2005