Law, Business and Society 11th Edition by Tony McAdams

Exercise 28

United States Magistrate Judge Gold
This complex, long-pending antitrust litigation has been the subject of numerous written decisions by various courts.…
In short, plaintiffs are a number of individually-owned retail pharmacies. Plaintiffs allege that defendants, five manufacturers of brand name prescription drugs ("BNPDs"), offered discounts and rebates to plaintiffs' competitors but not to plaintiffs, and that this constitutes price discrimination in violation of the Robinson-Patman Act.
BACKGROUND
In 2007, Senior United States District Judge I. Leo Glasser granted defendants' motion for summary judgment"... on the ground that plaintiffs have failed to show they are entitled to damages."
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After Judge Glasser dismissed the claims of the designated parties, approximately 3,700 individual retail pharmacy plaintiffs remained. Confronted with Judge Glasser's decision, these remaining plaintiffs devised a plan to gather evidence in discovery that might show "that specific plaintiff pharmacies lost sales of BNPDs manufactured by defendants to any specific favored purchaser." Pursuant to this plan, which came to be known as the "matching process," plaintiffs compiled lists of specific BNPD customers who no longer purchased drugs from them, and then searched the databases of non-party favored purchasers (and one favored purchaser who is a party) to see whether those same individuals were obtaining the same BNPDs from those favored purchasers.
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[O]nly approximately 3% (5,147 of 164,501) of the potential lost customers plaintiffs culled from their own records could be "matched" to a customer who subsequently filled the same prescriptions with one or more favored purchasers.
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The de minimis nature of these results is further illustrated when they are broken down and analyzed by defendant. According to defendants, when examined in this manner, the results are that approximately 88% of plaintiffs' claims against particular defendants are based on five or fewer lost customers per year This amounts to only slightly more than 1% of the total BNPD transactions conducted by an average retail pharmacy during any one year (252/22,000).
In short, no matter how analyzed, the matching process identified only a de minimis number of lost customers and transactions.
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DISCUSSION
... I now consider whether plaintiffs' evidence, revealing as it does that plaintiffs lost only a trivial number of customers and sales to favored purchasers, is nevertheless sufficient to support a Robinson-Patman Act claim.…
The Robinson-Patman Act
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In enacting Robinson-Patman, "Congress sought to target the perceived harm to competition occasioned by powerful buyers, rather than sellers; specifically, Congress responded to the advent of large chainstores, enterprises with the clout to obtain lower prices for goods than smaller buyers could demand." Volvo, 546 U.S. at 175. The purpose of the Act is to prohibit "price discrimination only to the extent that it threatens to injure competition." Brooke Grp. Ltd. v. Brown Williamson Tobacco Corp., 509 U.S. 209, 220,113 S.Ct. 2578,125 L. Ed. 2d 168 (1993).
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1. Competitive Injury
The Robinson-Patman Act prohibits price discrimination only "where the effect of such discrimination may be substantially to lessen competition." 15 U.S.C. § 13(a).
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[A]fter reviewing all of the pertinent authorities,... I conclude that a Robinson-Patman claim requires a showing of substantial competitive injury and that the de minimis sales identified by the matching process are insufficient to establish such an injury.…
2. Antitrust Injury
... A plaintiff seeking to recover damages on a Robinson-Patman claim must establish an antitrust injury.
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Price discrimination does not entitle a disfavored purchaserto "automatic damages." J. Truett Payne Co. v. Chrysler Motors Corp., 451 U.S. 557, 561, 101 S.Ct. 1923, 68 L. Ed. 2d 442 (1981). Rather,
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Because they are essentially unable to match up a significant number of the customers they lost with those the favored purchasers gained, plaintiffs have failed to demonstrate antitrust injury.…
CONCLUSION
For all these reasons, defendants' motion for summary judgment is granted.
Texaco sold gasoline at its retail tank wagon prices to Hasbrouck, an independent Texaco retailer, but granted discounts to distributors Gull and Dompier. Dompier also sold at the retail level. Gull and Dompier both delivered their gas directly to retailers and did not maintain substantial storage facilities. During the period in question, sales at the stations supplied by the two distributors grew dramatically, while Hasbrouck's sales declined. Hasbrouck filed suit against Texaco, claiming that the distributor discount constituted a Robinson-Patman violation. Texaco defended, saying the discount reflected the services the distributors performed for Texaco, and that the arrangement did not harm competition. Decide. Explain. See Texaco v. Ricky Hasbrouck, 496 U.S. 543 (1990).