June Antitrust Bulletin - June 2, 2015

Unique Robinson-Patman Suit Based on Different Package Sizes Allowed to Proceed

Two recent decisions by the U.S. District Court for the Western District of Wisconsin reached back decades for precedent to allow a novel price discrimination suit under the Robinson-Patman Act to proceed. Woodman's Food Market, Inc., an employee-owned chain of 15 grocery stores in Wisconsin and Illinois, sued household products manufacturer Clorox, alleging that Clorox discriminated against Woodman's by discontinuing its sale of "large pack" sizes of certain products to Woodman's while continuing to sell those sizes to warehouse club retailers. Woodman's complaint sought declaratory judgment and injunctive relief.

Clorox moved to dismiss. The court denied that motion earlier this year, relying on a pair of administrative decisions by the Federal Trade Commission (FTC) from 1956 and 1940, as well as the FTC's Guides for Advertising Allowances and Other Merchandising Payments and Services (commonly known as the "Fred Meyer Guides"), for the proposition that special product packaging or package sizes fall within the scope of Sections 2(d) and (e) of the Robinson-Patman Act.

Clorox subsequently attempted to moot Woodman's complaint by unilaterally ending all business dealings with Woodman's, and again moved to dismiss the case, claiming that Woodman's now lacks standing to bring the claim. In denying that motion, the court turned to the U.S. Supreme Court's seminal decision in FTC v. Fred Meyer, Inc., 390 U.S. 341 (1968), concluding that Woodman's potentially still could have standing as a "customer" and "purchaser" under the Robinson-Patman Act by purchasing Clorox's products indirectly through wholesalers. The parties currently are briefing a motion by Clorox for interlocutory appeal of the court's decisions to the U.S. Court of Appeals for the Seventh Circuit.

DOJ and FTC Tout Recent International Competition Network Guidance on Investigative Process

In parallel May 1 press releases, the U.S. Department of Justice Antitrust Division (DOJ) and FTC announced that the...