Lead Opinion
OPINION
On June 21, 1996, plaintiff Thomas Schwartz, the franchisee or co-franchisee of several gas stations in the Flint, Michigan area, sued his franchiser, Sun Company, because Sun was selling its Sunoco brand gas to competing stations at prices lower than the price Sun was charging Schwartz. Schwartz asserted that Sun’s two-tiered pricing scheme was anticompet-itive and discriminatory pursuant to the Robinson-Patman Act, 15 U.S.C. § 13(a), violated the open price term provision of the Uniform Commercial Code, Mioh. Comp. Laws § 446.2305, and constituted a breach of Sun’s franchise agreement with him. On February 26, 1998, the district court granted Sun summary judgment on the breach of contract claim. The jury trial began on November 17 and lasted nine days. The December 4 verdict awarded Schwartz damages in the amount of $2,486,138—$2,353,283 (after trebling, see 15 U.S.C. § 15(a)) on the Robinson-Patman claim and $132,855 on the open price term claim. However, the district court subsequently granted Sun’s motion for judgment as a matter of law, see Fed. R.Crv.P. 50(b), vacated the entire award, and dismissed the action on October 21, 1999. We AFFIRM in part and REVERSE in part.
Two separate, although similar, standards of review apply to this appeal. As a federal question, the Robinson Pat-man Act issue is treated as it was by the district court in the first place. See K & T Enters., Inc. v. Zurich Ins. Co.,
This case is extraordinarily fact intensive, and the record thoroughly documents the bulk of those facts. At this juncture, our role is limited to analyzing what Schwartz must have shown at trial in order to prevail and whether he can be said to have done so. We confine our discussion accordingly.
I.
We have previously summarized the Robinson-Patman Act to require proof that (1) the defendant discriminated in price between different purchasers of commodities of like grade and quality, and (2) the effect of that discrimination was to substantially lessen competition or tend to
The parties do not dispute that the so-called “jobbers,” Sun distributors that also operated stations of their own, were receiving gasoline from Sun at lower prices than the ones at which Sun was selling it to Schwartz. Sun defends its practice as a “functional discount,” justified by certain services that the jobbers performed on its behalf. We agree with the district court that Sun failed to satisfy its burden of proof on.this point, and thus that the price difference amounted to Robinson-Patman discrimination. See 15 U.S.C. § 13(b). A private plaintiffs success on Robinson-Patman’s second prong requires both a “competitive injury,” either a potential injury to competition generally or a diminution of the business opportunities of a defined class of competitors, and an “antitrust injury,” a present injury that is actually traceable to the benefits conferred upon the favored competitor. As the district court found, Schwartz proved competitive injury. See FTC v. Morton Salt Co., 334 U.S. 37, 46-17,
It is well-established that proving antitrust injury should not be unduly rigorous. See Stelwagon Mfg. Co. v. Tarmac Roofing Sys.,
Because damage issues in these cases are rarely susceptible to the kind of concrete, detailed proof of injury which is available in other contexts, the Supreme Court has repeatedly held that in the absence of more precise proof, the factfinder may “conclude as a matter of just and reasonable inference from the proof of defendants’ wrongful acts and their tendency to injure plaintiffs’ business, and from the evidence of the decline in prices, profits and values, not shown to be attributable to other causes, that defendants’ wrongful acts had caused damage to the plaintiffs.” Bigelow v. RKO Pictures, Inc.,327 U.S. 251 , 264,66 S.Ct. 574 ,90 L.Ed. 652 (1946); see also Eastman Kodak Co. v. Southern Photo Materials Co.,273 U.S. 359 , 377-79,47 S.Ct. 400 ,71 L.Ed. 684 (1927); Story Parchment Co. v. Paterson Parchment Paper, Co.,282 U.S. 555 , 561-66,51 S.Ct. 248 ,76 L.Ed. 544 (1931); J. Truett Payne Co. v. Chrysler Motors Corp.,451 U.S. 557 , 565-66,101 S.Ct. 1923 ,68 L.Ed.2d 442 (1981) (quoting Zenith Radio Corp. v. Hazeltine Research, Inc.,395 U.S. 100 , 123-24,89 S.Ct. 1562 ,23 L.Ed.2d 129 (1969)). [Still,] although the proof requirements ... are “less than stringent,” J.F. Feeser, Inc. v. Serv-A-Portion, Inc.,909 F.2d 1524 , 1540 (3d Cir.1990), there must be some direct evidence of injury to support an award of damages. See id.
Where there is evidence, as in this case, which tends to show that Schwartz’s losses were a result of Sun’s conduct, as well as evidence which tends to show that his losses were attributable to other factors, it is normally up to the trier of fact to decide which is the case. See Costner v. Blount Nat’l Bank Maryville, Tenn.,
If nothing else, Schwartz showed that the volume of gasoline sold at his stations decreased when the jobbers opened Sun stations nearby that sold the same gas at a lower retail price. It was reasonable for the jury to infer from this that Schwartz customers became customers of the job
II.
The contract for gasoline between Schwartz and Sun included an open price term that the seller, Sun, would fix at the time of each sale. The Uniform Commercial Code permits this if the ultimate prices are set “in good faith,” a concept which “includes observance of reasonable commercial standards of fair dealing.” Mich. Comp. Laws Ann. § 440.2305 (1994). On this issue, Schwartz introduced only the naked fact of Sun’s price discrimination. We agree with the district court that Schwartz failed to introduce any background evidence against which the commercial reasonableness of the prices Sun had charged him could be assessed. Such evidence is critical: a jury may not decide in a vacuum whether a particular price for a particular item in a particular industry is appropriate. See, e.g., TCP Indus., Inc. v. Uniroyal, Inc.,
III.
For the reasons stated herein, we AFFIRM in part and REVERSE in part, and REMAND to the district court for further proceedings consistent with this opinion
Dissenting Opinion
dissenting.
I dissent from the majority’s conclusion that there was enough evidence produced at trial to support the jury’s finding of liability on the antitrust component of the alleged Robinson-Patman violation. The district judge set aside the jury’s verdict after examining the record and finding that there was not enough evidence for the jury to conclude by a preponderance of the evidence that the lost sales at Plaintiffs’ service stations were caused by the difference between the rack price and the DTW