*1 CANTEEN COMPANY OF AUTOMATIC AMERICA v. FEDERAL TRADE
COMMISSION. Argued 12, 15, No. 1953. December 1952. Decided June petitioner. the cause Howrey argued F. Edward Levin Gravelle, Emil N. A.L. were him the brief With M. Leesman. Elmer *2 respondent. for the cause argued B. Dawkins Robert Cummings, General were Solicitor him on the brief With Corkey. E. Kelley and James T.W. opinion delivered the Frankfurter
Mr. Justice Court. against primarily directed Act,
The Robinson-Patman
large buyers,
includes
in favor
who discriminate
sellers
against
had
may be
proceedings
under which
provision
discriminatory
or receive
knowingly induce
who
buyers
for con-
(f)
Act,
is here
provision, §
That
prices.
complaint
of a
issued
time as a result
for the first
struction
against petitioner,
Trade Commission
by the Federal
for
confectionary products
candy
and other
large
vending machines
through 230,000-odd automatic
resale
Peti-
of Columbia.
operated
33 States and the District
rapid growth
incorporated
enjoyed
has
tioner,
position
a dominant
attained,
told,
so we are
has
through vending machines.
confectionary products
sale of
petitioner
evidence that
The Commission introduced
prices it knew
received,
solicited,
and in some instances
other
prices quoted
were as much as
lower than
33%
attempted to
purchasers, but
the Commission has not
show that
sav-
any.
differentials exceeded
cost
enjoyed
petitioner.
sales to
ings
may.
sellers
have
ground
Petitioner
on the
complaint
moved
dismiss
prima
had not made a
case.
Commission
facie
that a
denied;
This motion was
the Commission stated
by proof
had been established
prima facie case of violation
goods
on like
than
prices
received lower
that it was
over
buyers,
knowing
being
“well
favored
competing purchasers,” under circumstances where the
had been shown. The
requisite
competition
effect
more than
made
question whether
differentials
did
need to be
due
cost differentials
de-
allowance
petitioner’s
stage
proceeding.”
cided “at
On
failure to
the Commission made find-
evidence,
introduce
were
ings
petitioner
knew the
induced
below
list prices
inquiry
and that
it induced them without
seller,
or assurance from the
cost differ-
seller, as to
might
entials
justify
which
differentials. The
thereupon
entered a cease
desist
order.
46 F. T.
On review,
Appeals
C. 861.
the Court of
af-
firmed,1 holding that
prima
the Commission’s
facie case
(f)
under
does not
require showing
absence
justification.
Section roughly Robinson-Patman *3 the counterpart, as to of buyers, sections of the Act deal- ing with by sellers, prohibition discrimination is a vital in the enforcement In scheme Act. situations may where in buyers difficulty have their sellers’ proving costs, 2 if (f) could, in the Commission’s view this case prevails, major simplified become a reliance for en- forcement of the Act not only by by the Commission but plaintiffs suing for damages. treble enforcement, Such however, might readily beyond extend prohibitions the of in the Act and, doing help give price uni- so, rise to formity rigidity and in open purposes conflict with the of legislation. thought antitrust We therefore it nec- essary to grant certiorari. S. 809. U. granted The Court also of cross-peti enforcement the on a order by tion the Commission. impro The Commission concedes the
priety of this action under our decision in Federal Trade Commission v. Co., Ruberoid 470, 343 U. S. rendered after decision of the Appeals Court of in the case now before us. of this In view conces sion, we Appeals, assume that the Court of of on the remand case, will, direction, without further reconsider its order for enforcement. declaration original Act’s Clayton
Enforcement
in-
frustrated
was so
price discrimination
against
in
Congress
language that
statutory
in the
adequacies
that Act con-
sweeping amendments
1936 enacted
Act.
Robinson-Patman
is known as
tained in what
the in-
among
13. Chief
C.
S.
49 Stat.
U.
of
discrim-
exemption
express
had been
adequacies
goods,
like
of
quantities
in
sales of different
ination
leaving quantity-
interpreted
that was
exemption
an
buyers
quantity
discounts
grant
free to
discount sellers
buyers.
selling
to such
any
savings
that exceeded
C.,
F.
We here asked to a controversy settle of simply burden forward under coming with evidence of in- record, Act. The so in its abundant of stances individual the Commission transactions that itself felt bound to on undue proliferation animadvert by evidence lawyers,3 may Government be taken as tion of right the seller’s condi- to select his customers certain under tions, exemption response changing changes of made in market conditions.]
“ (f) any That person engaged commerce, it shall be unlawful for commerce, knowingly course to induce or receive discrimination prohibited by which is section.” recognized need, The litiga common in antitrust tion, part prosecuting for care on officers to overburden the record. “The record this case does not disclose the reason plethora such a cumulative evidence as was adduced Govern ment litigants counsel the instant matter. Neither harassment nor the through waste Government funds in needless reiteration cumulative countenanced, evidence should be nor does it seem that necessary it was typical name sellers as from group *5 pressure exerted bargaining of degrees varying presenting quoted those below prices on a seller to obtain by buyer a instances, so the In some purchasers. “inform prospective was to method found, petitioner’s would of which and sale terms suppliers in- or without consideration [petitioner] acceptable to such a justify could supplier to whether such quiry as cus- to other being it was offered a or whether on cost basis A typical atC., F. T. supplier.” tomers of the by found the Commis- pressure maximum instance of the representatives which negotiations a series sion was prospective supplier to a sought explain petitioner might enjoy petitioner in sales to savings the kind of he In such differential. might make basis supplier esti- gave instances, petitioner sometimes percentage “representative” it mates what considered freight, costs, pack- sales savings various costs such as aging, and returns and allowances.4 negativing the ex- finding
The Commission made no sav- savings stating istence that whatever cost price, respondents which had induced or received discriminations in certainly the records of not more than 5 of such sellers would supplied ample dif have evidence of such discriminations America, In T. C. ferentials.” re Automatic Canteen Co. F. way typical 892. Failure to limit the evidence in some such especially heavy proceeding transactions create burden in a would an discriminatory against here, such as that under where alleged buyer’s sales were been have made about suppliers. 4Although instances, did relate Commission recited not them to what the should have known as costs. It did find provoked from such instances circumstances should have inquiry prudent short, in the mind of businessman. In we do judgment not have a case in which the Commission in its informed knowing acceptance led to conclude circumstances preference justified or inducement of a an inference of as to costs.
ings there were at equal price did not least differentials petitioner may have received. It did not make any find- ings as to petitioner’s knowledge of actual savings cost particular sellers and found only, knowledge, pe- as to titioner knew what list prices buyers to other were. Petitioner, for its part, filed offers of proof many sellers would testify that had they petitioner never told that the differential exceeded cost An savings. offer proof inwas turn made the Commission as to the testimony of these sellers on cross-examination; proof would brought have petitioner out that never in- quired of its suppliers whether the differential was in excess of savings, cost never asked for a written state- ment or affidavit that the differentials did not exceed such savings, and never inquired whether the seller had made up “any exact cost figures” showing savings in serving petitioner.
Petitioner claims that the Commission has not, record, prima made a facie case of knowing inducement ” of prices that “made more ‘than due allowance for’ cost differences, while the Commission contends it has established a prima facie case, justifying entry cease and desist order where fails to introduce evi- dence. Before proceeding an examination of the stat- utory provisions, is desirable to consider the kind of evidence about dispute which this centers. Petitioner is saying that, effect under the view, Commission’s burden of introducing evidence as to the seller’s cost sav- ings and the buyer’s knowledge thereof put on the buyer; this burden, petitioner insists, is so difficult to meet that it would be unreasonable to construe the lan- guage Congress has used as imposing it. If so construed, the statute, petitioner contends, would presump- create a tion so lacking rational connection with the fact estab- lished as to violate process. due in this connection to consider invited have been
We to show attempt inherent intricacies some The elu proceeding. Act in a Robinson-Patman costs be ob cannot apparently which data, of cost siveness records, pro is reflected ordinary business from tained us make proceedings Such ceedings against sellers.5 this record are, but problems how these aware of difficult problems us examine cost require does not happily have that, to note whenever costs It is detail. sufficient has not been content the Commission issue, been in required, study seems accounting estimates; spent by of time some volving stop-watch studies perhaps *7 drivers, truck numerical as salesmen and personnel such bills in some instances and counts invoices other such records, number of items or entries on such business.6 operation of a quantitative measurement secondary For relevant and material a collection of authorities Note, showings Act, under see Harv. L. Rev. available cost Requirement Fuchs, The 1011. See also Exactness in the Justifica tion of Price and Differentials under the Robinson-Patman Service Act, 1; Haslett, 30 Tex. L. Price and their Rev. Discriminations 1936, Justifications Act of Mich. L. under the Robinson-Patman 472; 450, Sawyer, Accounting Rev. and Proof in Price Statistical Cases, Discrimination 36 Iowa L. Rev. For discussion specific Aronson, Act, cost cases under the see Defenses under Act, Robinson-Patman in Business and the Robinson-Patman Law (Werne ed.), 212, 227; Taggart, Principle The Cost in Minimum 151, Regulation, 110, (1938); Price 8 Mich. Bus. Studies War- mack, Accounting Act, Cost Problems Under Robinson-Patman (1947) Symposium 105; Comment, CCH Robinson-Patman Act Ill. L. Rev. 60. rulings Federal Trade Commission in some “demon cost cases testimony expert strate that and evidence extrinsic to an actual analysis given by weight will be little The FTC Commission. apparently objectivity rele believes that materials lack analysis.” Note, approved vance of the method of L. Rev. 65 Harv. supra, Warmack, Compare 1013-1014. See also note 5. In re Regulator Co., Minneapolis-Honeywell 351, 394, 44 F. T. C. a case proof What kind of would buyer do required we not know. The argues that knowledge gen erally available to the buyer published from data or ex perience the trade could by petitioner be used to make a showing reasonable of his sellers’ costs. There was no suggestion in the opinion, Commission’s that it however, would take different showings attitude toward cost by than it has taken with respect sellers, “general knowledge of trade,” to use the Commission’s phrase, unsupported by analysis factual has as yet been far from acceptable, and indeed has been strongly re proved by Commission accountants, the basis for cost showings in other proceedings before the Commission.7
No doubt the placed burden on petitioner to show his sellers’ costs, under present Commission standards, is heavy. Added to the considerable burden that a seller himself may have in demonstrating costs is the fact that the data only are not the buyer’s hands but are ordinarily by obtainable even seller after de- tailed investigation of the business. A subpoena of the seller’s records is not likely to be adequate. It not a question of obtaining information the seller’s hands.8 It is a matter of studying the seller’s business afresh. Insistence on proof of costs might *8 thus have other it implications; would almost inevitably require a degree of cooperation between buyer and seller, against as other buyers, that may offend other antitrust policies, and it might also expose the seller’s cost secrets to prejudice the of arm’s-length bargaining in the future. Finally, not one but, as here, approximately 80 different sellers’ costs in may be issue.
in which study” “an extensive cost resulting from “sincere and exten- sive part efforts” was accepted. 7See, g., Warmack, e. supra, 5, 107, 110. note at 8Cf. Longman, Analysis, 250, Distribution Cost and articles cited supra, note 5. dispute present the that background against
It is congressional setting indicates legislative The arises. respon- a charge buyers with recognition the need so far comparable, sibility price discrimination least, the Thus, at on placed to that sellers. possible, “a (f), in § the words reading confident in we can be by this sec- prohibited is price which discrimination prohibitions a substantive tion,” as reference the defined elsewhere by sellers against discrimination discriminatory that apparent It is therefore Act.9 (f)2 induce can- by forbidden price buyers that are forbidden to that are not price not differentials include pertinent Act, and, what is sellers in other sections a inducing from case, precluded in this a is not provide differences that would price lower based cost reading indeed, This is, the seller with a defense. we not deal- disputed by parties. For are seriously ing with a the “dis- simply price”; “discrimination 9 See, g., Cong. 9419; Rep. 2951, 6428, e. No. Rec. H. R. 74th Cong., 2d Sess. 8. case, might strictly argued the seller’s Were that the is proceeding are a 2 “defenses” not relevant in what prohibited knowing receipt is than inducement or lower ambigu competing buyers. interpretation has an accorded Such legislative Congressman Utterback, submitting support. ous report House, stated, . is more conference to the .a discrimination Underlying meaning a is the than mere difference. of the word relationship parties idea some exists between to the discrimi equal whereby treatment, the difference nation which them to entitles granted disadvantage upon one the other.” casts some burden or Plainly statement, Cong. enough, Rec. a discrim under this price may in sales to two ination mean either a differential which, competitors, competitors sales differential in to two puts justification, because of an absence the unfavored competitor Haslett, supra, 5, disadvantage. Compare at at note States, 453-466, McAllister, Price Control Law in the United event, controversy Contemp. any Law & 291. In over Prob. meaning phrase price” beside the isolated “discrimination in point here. *9 “which is be one (f) in must § in price” crimination differential any price Even if by this section.” prohibited the term “discrimination within comprehended were to be discrimina- prohibited (f), speaks which in price,” § price out bounds declaring as be read cannot tions, avail- the “defenses” or more of within one differentials reflect that differentials price sellers, able to such conditions, or bona market differences, fluctuating cost are as those defenses competition, attempts fide to meet 2 (b). (a) in provisos §§ set out follows, however, that converse say, This is not to buyer receipt all (f) does not reach cases § It limits itself prices. discrimination prohibited receipt prices. of such The Commission knowing cases of argue, part, that the substantive violation seems that are lower if the knows occurs not buyers. reading than offered other Such those would word language but leave the only distorts entirely significance almost without “knowingly” A no whatsoever of facts (f). differences were not indicating possibility if in they differences would be liable fact based were not. We have seen above does But we not think that refer to all differentials. do impres- price differentials, even as matter uncritical range often within sion, prohibited come so any way discriminations that the be read language can way one for some another in relation to the purposes and “knowingly.” word
The Commission’s to limit the attempts this case word “knowingly” prohibi- to a more area of reasonable not, tion are think, justified Congress we language has argues used. The Commission Congress attempting buyers through reach who their own ac- tivities obtain a special price and “knowingly induce or receive” charging can read as buyers *10 72 prices unlawful result. for whatever responsibility
with who buyer argument comprehend any would But that If price. the engages bargaining in over argument pressure, who undue the buyers means exert background greater support legislative find in the might Congress employed. has Such language but less in the opens up word reading only ignores not the “receive” but interpretation with of entangling even more difficulties pressure.11 what is undue legislative explana- from urges,
The Commission also language (a), tion of similar in 2 that the word “receive” § in way systematic can some be limited to continued and prices lower could receipt fairly charge of that the re- cipient knowledge illegality.12 with of we need While not whether systematic receipt decide of prices itself again recognition Congress Time and there was a freedom. adopt pass buyers proc benefits of on the more economical esses, g., see, Rep. 2287, e. H. R. Cong., 10, 17; No. 74th 2d Sess. Cong. 9415, 9417; buyer pressure Rec. the obtain benefits of savings certainly pressure. such could not be undue Cf. Edwards, Maintaining Competition, findings 161. The Commission’s do not suggest discrepancy bargaining position such a buyer this between suppliers characterizing buyer and his as to “bludg warrant the as eoning.” The greatest Commission did those find on whom the “pressure” candy was exerted were not inconsiderable manu Candy facturers as Curtiss Corp. the Co. and W. F. & Schrafft Sons Rep. 2951, Cong., 5-6, See H. R. No. explaining 74th 2d Sess. (a) language quoted the supra, prevent competition note “or § any person grants knowingly with who either receives the benefit discrimination,” of such purpose as The follows: of the addition of “knowingly” the exempt meaning word “is to from the sur rounding incidentally discriminatory clause those prices who receive special routine course of solicitation, negotia business without tion, arrangement or other part them seller, justly and who are chargeable therefore they receiving are benefit such discrimination.” The con explanation text which this given, precise as well as language, so differs from 2 interpretation does not present a reading (f). contradiction and our between it of § give requisite be sufficient to could ever think, argument recognizes, we itself knowledge,13 buyer’s knowledge must be into the inquiry illegality. only arguments Not are the of the Commission unsatis reading language but we think a fairer fying, legislative points what limited elucidation we have to reading (f) making ward a it unlawful prohibited induce or receive known to be discrimi- *11 For 2 in (f) explained Congress nations.14 was as a § provision seller, by informing buyer under which a the Act, that a unlawful under proposed discount was the could undue from the Of discourage pressure buyer.15 for of the Act course, private such devices enforcement fear of well have through prosecution equally could providing buyer been that the would achieved otherwise, the he learned if, through liable seller price sought he was lower than that received unable, but we competitors, accorded are in light congressional policy expressed as other anti legislation, ambiguous language put trust to read this as at his ting buyer peril engages whenever he bargaining. reading must be rejected Such view 13 post. pp. 80-81, See 14 not, reading (f), 2 purport pass We of course do in so to § question price” pro whether a “discrimination in includes the (d) (e). hibitions in such other sections of the Act as and 2 §§ 15Congressman Utterback, presenting report the conference House, spoke quite clearly indicating provi in terms (f) buyer contemplated sions of who knew that the justified by (f) was not costs. Section “makes it easier [for coming for sacrificial resist demand cuts manufacturer] mass-buyer customers, charge from since it him enables them with illegality discount, equal liability it, for by informing any is his them that it in excess of differential which justify compared difference in cost would his other customers.” with Cong. Rec. 9419. between bargaining might sturdy have on the effect left presumably scope for which seller Al regulated.16 not otherwise economy the areas of our administra is to be accorded to though due consideration fairly is interpretation where alternative tive construction except interpretation, open, duty it is our to reconcile such to, told us not with the broader Congress where has by Congress. laid down policies antitrust that have been has, by if the virtue of the Rob Even given develop Act, authority inson-Patman been some in order policies conflict those of Sherman Act special problems by price to meet the created discrimina say we cannot the Commission here has ade tion, manifest quately engendering made reasons such a accept to enable us to conflict so as its conclusion. Cf. States, Motor Carriers Assn. v. Eastern-Central United 211-212. U. S. therefore that a We conclude liable under if the lower he induces are either within one justification of the seller’s defenses such as the cost or not himby known not to be within one of those defenses. *12 This is of a only necessary preliminary conclusion course in earlier, this case. As we have noted the precise issue in the case before us is the burden of introducing evi- separate issue, though dence—a of course related to the prohibition. issue, involving substantive This it does as some of considerations, requires the same us further light consider a balance of convenience the of whatever evidentiary Congress proceedings rules has laid down for Assuming, found, under the Act. as we have that there is no substantive if violation the did not know prices that the cost-justi- induced or received were not fied, we must in this case determine whether proof that
16 Adelman, Competition Cf. Laws, Effective and the Antitrust 1289, 1331; Edwards, Maintaining Competition, Harv. L. Rev. lower is sufficient price the buyer knew that the buyer. to the introducing evidence burden of shift the that it need position its Commission, support The were the buyer’s the only show tools without familiar employs interpretative lower, It serviceability. regard to their immediate adequate justification, as the cost defense, labels a seller’s and from this general prohibition” to the “exception an rules of evidence that under conventional argues forward with evidence of viola- need come Commission This interpreta- “general prohibition.” tion of the readings many commonsensical tion has foundation the burden of put as to comparable prohibitions so its benefits. on the one who claims showing justification a part with that have said as much even connection We attempts Act which (b) Robinson-Patman That lay down the rules of evidence under the Act.17 sec- . provides, “Upon proof being tion made . . that there . . . burden of price has been discrimination rebut- Co., 37, v. 44- Federal Trade Commission Morton Salt 334 U. S. (b)2 Rep. Cong., 45. Cf. S. No. 74th 2d Sess. 3. Section “(b) any entirety Upon proof being made, its reads as follows: at section, hearing complaint there has been dis on a under this furnished, burden crimination in or services or facilities by showing justification rebutting prima-facie case thus made section, charged upon person with a violation of this shall be shown, affirmatively justification and unless shall be terminating order the discrimination: authorized to issue an Provided, however, prevent nothing herein shall a That contained by showing rebutting that his prima-facie seller case thus made any purchaser furnishing of or facilities to lower or the services equally purchasers good meet an low was made in faith to competi competitor, furnished or the services or facilities (b) pro is to the Throughout opinion, reference to tor.” language proviso, language preceding proviso; cedural *13 Comm’n, v. Trade Co. Federal which we construed in Standard Oil “proviso only speak of the 231, is referred to when we 340 U. S. (b).” 2§ justifica- showing thus made prima-facie the case
ting with a violation charged upon person the tion shall that it was un- points out The Commission this section.” in the Morton Salt case that that we held der this section justification is on the seller showing a cost the burden of that same burden argues and (a) proceeding, a § “prima-facie It case buyer. argues on the “proof discrimina- clearly made” refers back to thus [of] Salt, in Morton thus, from our decision price” tion and discrimination prima prohibited facie case of proof of a differ- (b) refers consists § to which having requisite goods ence in the sale of like from (f) differs competition. Saying § effect on requirement (a) “only containing express § or received such 'knowingly’ shall have induced to hold price discriminations,” the Commission asks us prima that a out with a facie case under is made § showing prima “plus 2 (a) § facie case of violation having additional element of induced received made discrimination with of the facts which 2 (a).” violative Section We need not concern ourselves with the Commission’s interpretation “prima-facie of the words case thus made” in 2 (b) and resulting (a) § that if and § conclusion 2 (f) § are to be read as counterparts, the elements neces- sary for prima 2 (a) facie case under are sufficient for § a prima showing facie in price “discrimination prohibited which is by this section” in 2 (f). § However that may be, the Commission recognizes that there is an “additional element” resulting from the word “know- ingly” in 2 (f), and, § of course, it is that element about which the controversy here centers and to which we must address ourselves. may, however, We note passing that consistency between 2 (a) 2 (f) both as to what prohibited constitutes the “discrimination in price” toas the elements of a prima facie showing of the
77 dis- would not be price” prohibited “discrimination case, in this the Commission by holding against turbed showing prima with the facie are here for we concerned separate and admittedly independent an knowledge, of 2 beyond (a). § 2 that of of above requirement § facie case argues prima The that the it is that knowledge is made out when shown differential violative making knew the facts it must now show (a). point urges 2 At another that § to obtain- buyer affirmatively “that contributed only solicitation, nego- ing discriminatory prices by special him.” However the tiation or other action taken is, record, on this argument phrased, is the Commission insisting that of a differential is once shown,18 introducing the burden of evidence shifts to the buyer. argument The main reliance this Commission’s 2 (b), which, above, interpreted as we we § have stated the Morton Salt case putting coming as the burden of forward with justification seller, evidence on the one, is, that who claimed the benefits justification.
To (b) speak this it is 2 although § answered does not of the but of “person charged seller with a viola- tion of section,” (b) and its language § proviso seems mainly sellers,19 legisla- directed that the chronology tive provisions ultimately various re- sulting 2 (b) Robinson-Patman Act indicates that § was drafted with in mind, sellers and that the few cases so far decided have dealt only sellers. connection, supra, post, In this see note note 24. example, language (b) For proviso concerning of 2§ competition seller”; differentials made to meet refers to “a further, authority given (b) the Commission under when §
justification terminating is not shown is “to issue an order the dis crimination,” usefully buyers. an order that could not be directed to Cong. But cf. 80 Rec. 9418. must answer given; be some answer cannot
A confident lan- the infelicitous must read think we given. We its take to be what we enacting (b) § guage ordinary rules making it clear purpose, proceed- Act in Robinson-Patman apply were to evidence we do (f), although to 2 apply If ings.20 (b) is we reach the same it does because not decide *15 must be read. Con- it, we think it so result without in other operative of fairness and convenience siderations think, controlling been proceedings must, we have 2 far clearer drafting (b), require for it would § contrary we here to reach a result. language than have Co., Holly v. Hill 322 S. 617-618. Addison U. Cf. so, striking If that is decisions the balance however, proceedings against convenience for Commission sell- ers think point.21 are beside the And we the fact that buyer does not the required information, have for good required reason should not be to it, obtain controlling importance has in striking the balance this case. nearly This result most accommodates this case to the given reasons that have been by judges and 20Congressman Patman, describing (b) rule as to the § proof, exactly burden of said: “It means today. the rule of law It is existing a restatement you law. So far as I am concerned can strike it out. It makes no difference. It is the law of this land exactly Cong. as it is written there.” Rec. 8231. 21It does understanding suggest not aid has the § significance, same knowing buyer, as to a as other sections of the knowing Act buyer knowing have as to a receiving seller. A he is a lower position cannot be said to be in the same as a seller granting price. language a lower The of the statute bars such a buyer construction. Even if the seller, has the “same” burden as the the fact that a seller has the burden to show his costs does not auto matically, by (f), buyer’s virtue of become a burden to show § Staley Mfg. Co., has Federal Trade seller’s cost. Nor v. 746, 759-760, any helpful 324 U. problem S. relation to the of this case, if for no other reason than that that case did not for call procedural (b). portions detailed consideration of the of § 2 (b), is, for the rule of that the burden legislators on one justifying ought differential who at the cost and other peculiar “has his command justify record data which to such discriminations.” Where, here, inapplicable, such considerations are we think we disregard contrary must whatever indications may be drawn from a literal lan- merely reading of the guage Congress give has used. It would not fair effect (b) to 2 to say coming that the burden of forward with buyer’s knowledge evidence as to costs23 and the thereof shifts to the as soon as is shown that the knew the differed. Certainly Commission with power investigation its broad subpoena, prior filing complaint, a better to obtain footing this information than the buyer. Indeed, though it is course not us to enter the domain of the Commission’s discretion the Commission matters, may many join offending instances find it not inconvenient *16 proceedings. seller the
If requirement the in 2 knowledge any sig- § of has function, buyer nificant it is to indicate that the whom Congress sought who, the main to one reach the knowing full well of a that there was little likelihood for seller, proceeded pres- defense nevertheless to exert sure for lower prices. provisions Enforcement of the of 2 (f) against a buyer § should not be difficult. Proof justification being is, cost what it too often no one can price ascertain whether a cost-justified. But trade ex- 22 Cong. Moss, Rec. 3599. H. Inc. v. Federal Trade Samuel Commission, 378, 379; Cong. F. 2d Rec. 8241. (b)2 permits Our view that of consideration conventional rules requires of fairness application and convenience of course of those particular question. Evidence, example, rules to the evidence in for price competing that the seller’s was made to meet a seller’s offer buyer charged (f) might to a buyer under be available more to a readily even than to seller. afford a sufficient situation can particular in a perience prosecution. a basis knowledge provide to degree buys that he who knows buyer By way example, by the and is served competitor as his quantities same ex- amount or with the same manner seller the same notice charged fairly be buyer can ertion as the justified. cannot differential price that a substantial prima its show, to establish only need The Commission by methods knew case, facie purchased he in which and quantities which he was served If the competitor. his in the case of were the same as must the Commission differ, or quantities methods to rise sufficient give could not show such differences delivery to manufacture, sale savings the cost knowing buyer, differential, and that justify price known that have only differences, these were the should savings. The they give could not rise sufficient depend to some knowledge, course, will showing between cost dif- discrepancy extent on the size of the questions that the two price differential, ferential and so A differences are showing are not isolated. that the cost with the differential and could very compared small reasonably thought justify not have been should be sufficient. difference shown to other circumstances can be indicate What part cannot be buyer’s on the attempt illustrate;24 need not now but justified we weight need case consider the that can be We at seller tached to affirmative statements that a cost-justified, were was or was not since there no such supra, p. statements in this case. See 67. We need not now *17 may appropriate consider whether in an case the Commission find necessary scrutiny. it subject Thus, such statements to careful instance, may stating the Commission consider that a seller might a would be puffing unlawful in some situations be rather stating anything rely than which a can charged on or should be hand, may with. On the other the Commission in some circumstances it not burden to surely will be an undue administrative explain proof justify other be sufficient to shift why may ing introducing burden evidence that the or unsuspecting recipient prohibited is not an discrim- in it think, any event, inations. We is for the Commis sion spell imposition out the a harsh need for of such burden of introducing appears evidence as it to have sought in Certainly this case. we a should have more solid an unexplained basis than conclusion we before sanc tion a rule evidence that contradicts antitrust policy ordinary requirements fairness. While this Court ought scrupulously to abstain from requiring of the in particularization Commission findings exacting its so as to make Court a court effect of review on the facts, it is no less important, since we are with the charged duty of reviewing the correctness the standards which applies and the essential fairness of the mode which it conclusions, reaches its the Com mission not do shelter behind generalities uncritical of expression looseness as to make it im essentially possible for us to really lay determine what behind the States v. conclusions which we are to review. Cf. United M., Co., Chicago, St. P. & P. R. S. 510-511. U. our Because of view of the balance convenience circumstances, these petitioner’s we do reach claim saying Commission is effect of a a presumption difference creates of knowl- edge that the unlawful, presumption claims would fall for lack of rational connection under Tot v. States, United U. S. Cf. Note, E[dmund] accept buyer’s wish to refuse claim that he an relied on affidavit other assurance from the seller that differentials were cost- justified; furnishing might, together of such an assurance circumstances, arm’s-length indicate a sufficient absence of bar- gaining weight to raise serious doubts as to the the assurance should given support buyer’s claim. *18 seemed It has L. Rev. 56 Harv. M[organ], M. and presumptions, of speak in this case unnecessary us case, that in this fact to the attention only call we need burden with the dealt we have case, Tot as in the per- the burden not with and introducing evidence may apply. considerations different suasion, as to which is accordingly, Appeals, Court of the judgment The complaint II in Count charges as to reversed is remanded and the case us), I not before is (Count Federal it to the to remand with instructions that court open is further action as for such Trade Commission opinion. this under
It so ordered. is Black Douglas, Justice with whom Mr. Mr. Justice Mr. Justice Reed concur, dissenting. and inway illustration graphic is a This decision enervating effect. read with a statute can be which as Act, 730, 38 Stat. Clayton (b) Section Act, 49 Stat. Robinson-Patman by amended made proof that where (b), provides 13§ U. S. C. or services been “discrimination there has rebutting prima the burden furnished, facilities showing justification shall be thus made facie case section, charged with a violation upon person affirmatively shown, the justification shall be and unless terminating to issue an order Commission is authorized added.) (Italics . . . .” discrimination any person” unlawful en- Section makes it “for gaged “knowingly to induce or receive commerce by this prohibited which is discrimination added.) (Italics section.” in 2 (b) used person charged”
The words “the as include (f) plainly “any person” the words used buyers as well sellers.
The nature of the discrimination condemned is made (a). clear It outlaws discrimination “in §2 purchasers different grade between of commodities of like quality” where the is substantially prevent effect *19 competition lessen or tend to a monopoly create as re- spects any person “who either grants knowingly receives the benefit of such discrimination.” But permits price differentials “which make only due allow- ance for differences the cost of manufacture, sale, or delivery resulting from the differing methods or quan- tities” in which the commodities are sold or delivered.
In the present case, the Court determines that even a though “buyer knew that lower,” was knowledge is insufficient to “shift the burden of introduc- ing evidence to buyer.” But 2 (b) requires the person shown to have practiced a discrimination to estab- a justification. lish Section 2 was intended to make clear that the same bans and knowing burdens are on a buyer obtaining discriminatory prices as we held Federal Trade Staley Mfg. Co., Commission v. 324 U. S. 746, 759-760, approved in Standard Oil v.Co. Federal Commission, Trade S. 231, knowing U. are on a seller who grants them.
The record persistent shows and continuous efforts of large buyer in wheedling and coercing suppliers into granting it discriminatory prices. The Commission sum- petitioner’s marized in far activities more sedate terms than their justified: bizarre nature
“Respondent used various methods to its induce suppliers grant to discriminatory prices. One of these was to inform prospective suppliers prices and terms of sale which would acceptable to the respondent without consideration or as to inquiry whether such supplier could justify such a price on a cost basis or whether it was being offered to other times the re- At other supplier.
customers to it unless buy to refused spondent sup- particular at which below reduced In other others. the same merchandise sold plier pro- to the sought explain respondent instances would alleged savings that certain spective supplier or that selling respondent supplier to the accrue be elim- supplier’s cost could certain elements opinion, justify would, respondent’s inated, which In out this form of induce- carrying price. lower supplier pro- ment, respondent would advise it considered supplier which spective In Curtiss price’. ‘standard letters written to the F. Candy Company 15,1939, on November and W. February 15, 1937, Corporation Schrafft & Sons alleged savings to these respondent summarized *20 companies follows: Curtiss Schrafft
“ Alleged Corp. Savings Co. (1) Freight savings of. to 6% 5% 7% (2) savings Sales cost of. 7% 7% (3) savings 24-count cartons of. 5% 5% (4) savings to Return and allowances of... 2% 1% 1% (5) samples savings Free deals and of... to X% 8% 2% (6) Shipping savings containers of. 1% 2%
Total deductions. 27% 21% 25% “Respondent companies advised these alleged savings be made of the method could because by respondent purchases which made and because certain it.” selling services could be eliminated There is no wield clubs large buyers doubt give mer- powerful them the small advantages over chants. Often large gain advantages merchants over other sellers of by obtaining price the same merchandise by pressure concessions suppliers. on their The evil was v. acknowledged in Federal Trade Commission Morton Co., 37, Congress plainly Salt U. S. The en- deavored to curb the the kind activities Report disclosed this record. As the House reveals, sought the line to be drawn was between those who incidentally receive discriminatory prices those who actively negotiate Rep. solicit and them. H. R. No. Cong., Sess., pp. 74th 2d 5-6.
The disregards Court The history. Court’s con not only requires struction the Commission to show that discriminations justified; were not it also makes prove what lay buyer’s mind. I would let of the buyer the acts speak themselves. Where, as here, the bludgeon undertakes to sellers into prices that him give a competitive advantage, there making no unfairness in him show that the privileges he demanded cost justifications. had This buyer over again held out itself as a I expert.* would hold it to professions. its Since it was the coercive influence, there is no unfairness making it forward go with evi dence rebut prima the Commission’s facie case. *21 reading *A petitioner record leaves no doubt that knew in numerous instances squeezing from the seller which was less than the seller’s costs.