Monday, April 17, 2006, 11:03 AM

Supreme Court Limits Liability for Price Discrimination

On January 10, 2006, the Supreme Court issued its opinion in Volvo Trucks North America, Inc. v. Reeder-Simco GMC, Inc., which limited the circumstances under which a seller may be liable for price discrimination under the Robinson-Patman Act.

Plaintiff, an authorized dealer of Volvo trucks, sold specialty-ordered trucks through a competitive bidding process. Although Plaintiff complained that Volvo gave other Volvo dealers price concessions greater than the concessions Plaintiff typically received, Volvo's stated policy was to provide the same price concession to dealers competing over the same customer.

Reversing the district court and Eighth Circuit, the Supreme Court held that Volvo was not liable for price discrimination because Plaintiff's comparisons fell short of showing price discrimination for the same customer. The Court noted that Plaintiff did not "even attempt to show that the compared dealers were consistently favored vis-a-vis [Plaintiff]." Rather Plaintiff "simply paired occasions in which it competed with non-Volvo dealers for a sale to Customer A with instances in which other Volvo dealers competed with non-Volvo dealers for a sale to Customer B." The Court "declined to permit an inference of competitive injury from evidence of such mix-and-match, manipulable quality." The Court also noted that the primary purpose of antitrust law is interbrand competition, not intrabrand competition.

Although the full extent of the Court's decision in Volvo Trucks remains to be seen, the decision is a victory for manufacturers and franchisors because it makes it more difficult for a dealer-plaintiff to establish price discrimination, especially in a competitive bidding or special order context.

For a more detailed discussion of this case, see this Client Alert.


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