vs. Reeder-Simco GMC, Inc.,1 Kelo vs. City of New London,2 Wal-Mart Stores, Inc. vs. Samara Brothers, Inc.,3 Anderson vs. City of LaVergne,4 Dearborn vs. Real Estate Agency,5 Rhudy vs. Bottlecaps, Inc.,6 and Kain v. Bluemound East Industrial Park, Inc.,7
Reeder-Simco is a business entity that acts as a Volvo dealer in Fort Smith, Arkansas. In February of 2000, it filed suit against Volvo on the allegation that that its (Reeder's) sales and profits declined due to Volvo's price discrimination practices.
Reeder-Simco alleges that Volvo offered to other dealers price concessions that were significantly more favorable that those given to Reeder-Simco. Thus, it filed suit against Volvo for allegedly violating the Robinson-Patman Act (RPA), which prohibits forms of discriminatory pricing that reduce competition.
On this basis, Reeder explained that its business is conducted in the following manner: retail customers take bids from dealers who solicit price concessions from the manufacturers. These concessions are factored into dealer's bids. Reeder accuses Volvo of offering better price concessions to other Volvo dealers bidding for different customers, directly resulting in Reeder suffering losses.
The District Court District Court allowe...
The District Court District Court allowed the case to go to a jury, who held in favor of Reeder and awarded damages. Volvo appealed the decision, arguing a lack of competition was present, which is required by the RPA to apply. Volvo substantiated its contention stating that Reeder was not actually bidding against the Volvo dealers who supposedly were given favorable concessions. The appellate court dismissed the appeal, ruling that even though Volvo dealers do not actually bid against each other, they effectively competed at the same functional level, which would render the RPA applicable. Thus, Volvo brought the case to the Supreme Court on certiorari.
Whether or not a manufacturer offering its dealers different wholesale prices may be held liable for price discrimination proscribed by Robinson-Patman Act in the absence of a showing that the manufacturer discriminated between dealers contemporaneously competing to resell to the same retail customer.
For the reasons stated, the judgment of the Court of Appeals for the Eighth Circuit is reversed, and the case is remanded for further proceedings consistent with this opinion.
The Robinson-Patman Act does not reach the case Reeder presents, because the Act addresses price discrimination in cases involving competition between different purchasers for resale of the purchased product, whereas competition of that character is not involved when a product subject to special order is sold through a customer-specific competitive bidding process. It does not "ban all price differences charged to different purchasers of commodities of like grade and quality", but