799 F.3d 202
2d Cir.2015Background
- Twenty-eight independent retail pharmacies (plaintiffs) sued pharmaceutical manufacturers and certain large purchasers, alleging Robinson-Patman Act price discrimination (discounts/rebates to "favored purchasers" such as HMOs and PBMs) harmed their competitive position and caused lost customers and damages.
- Plaintiffs had earlier opted out of a larger MDL Sherman Act case, settled Sherman Act claims, and proceeded on Robinson-Patman claims in the Eastern District of New York; extended discovery followed, including a court-supervised matching process to identify customers plaintiffs allegedly lost to five favored purchasers (1998–2010).
- The matching process produced very few confirmed lost customers: ~3% of potential lost customers matched to favored purchasers; average per-pharmacy loss ≈ 18 customers and 54 transactions per year—de minimis relative to typical annual prescription volume.
- Defendants moved for summary judgment; the district court concluded plaintiffs failed to show competitive injury (required for Robinson-Patman §2(a)) and antitrust injury (required for damages), and denied injunctive relief as unlikely given lack of past injury; judgment for defendants was entered and appealed.
- The Second Circuit affirmed, holding the de minimis diverted sales rebutted any Morton Salt inference and were insufficient to show competitive injury, antitrust injury, or a likelihood of future injury for injunctive relief; §2(d) and §2(f) claims likewise failed for lack of antitrust injury.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs proved competitive (secondary-line) injury under Robinson-Patman §2(a) | Price discrimination to favored purchasers diverted customers and substantially harmed plaintiffs' competition | Matching data show only de minimis diversion; no substantial effect on competition | Plaintiffs failed to show competitive injury; summary judgment affirmed |
| Whether Morton Salt inference (inference of injury from substantial price differences over time) applies or is rebutted | Substantial discounts over time plus some evidence of diverted sales warrant the Morton Salt inference and a trial | The inference is rebuttable; defendants’ evidence of de minimis diversion rebuts it | Morton Salt inference was rebutted by the matching results; cannot be treated as irrebuttable |
| Whether plaintiffs proved antitrust injury (required for damages) | Loss of customers and sales from price discrimination caused plaintiffs’ damages | De minimis losses do not show the type and causation of injury the antitrust laws protect | Plaintiffs failed to show antitrust injury; damages claim fails |
| Whether injunctive relief under Clayton Act §16 is appropriate | Ongoing discriminatory pricing justifies injunction to prevent future injury | Long-running practice produced no past injury; lack of past injury makes future injury unlikely | Injunctive relief denied because plaintiffs cannot show a reasonable probability of future antitrust injury |
| Whether claims under Robinson-Patman §§2(d) and 2(f) survive given §2(a) failure | §2(d) and §2(f) liability independent or distinct; plaintiffs can prevail even if §2(a) fails | §2(d) still requires antitrust injury for damages; §2(f) depends on seller liability under other sections | §§2(d) and 2(f) claims fail for lack of antitrust/competitive injury |
Key Cases Cited
- Volvo Trucks N. Am. v. Reeder-Simco GMC, 546 U.S. 164 (2006) (hallmark of secondary-line injury is diversion of sales to favored purchaser; small diversions can be insubstantial)
- FTC v. Morton Salt Co., 334 U.S. 37 (1948) (permissible inference of competitive injury from substantial price differences over time)
- Falls City Indus., Inc. v. Vaneo Beverage, Inc., 460 U.S. 428 (1983) (Morton Salt inference restated; inference can be rebutted)
- Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477 (1977) (distinguishing competitive injury from antitrust injury for damages)
- J. Truett Payne Co. v. Chrysler Motors Corp., 451 U.S. 557 (1981) (plaintiff must show antitrust injury to recover damages)
- George Haug Co. v. Rolls Royce Motor Cars Inc., 148 F.3d 136 (2d Cir. 1998) (elements for establishing secondary-line Robinson-Patman claim)
- Boise Cascade Corp. v. FTC, 837 F.2d 1127 (D.C. Cir. 1988) (evidence showing no competitive injury defeats Morton Salt inference)
- H.L. Hayden Co. of New York v. Siemens Med. Sys., 879 F.2d 1005 (2d Cir. 1989) (insufficient proof connecting losses to alleged Robinson-Patman violations defeats antitrust damages)