653 F.2d 17 (1st Cir. 1981), 80-1432, Allen Pen Co., Inc. v. Springfield Photo Mount Co., Inc.

Docket Nº:80-1432.
Citation:653 F.2d 17
Party Name:ALLEN PEN COMPANY, INC., Plaintiff, Appellant, v. SPRINGFIELD PHOTO MOUNT COMPANY, INC., Defendant, Appellee.
Case Date:June 26, 1981
Court:United States Courts of Appeals, Court of Appeals for the First Circuit

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653 F.2d 17 (1st Cir. 1981)

ALLEN PEN COMPANY, INC., Plaintiff, Appellant,



No. 80-1432.

United States Court of Appeals, First Circuit

June 26, 1981

Argued March 4, 1981.

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[Copyrighted Material Omitted]

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Sumner J. Chertok, Boston, Mass., for plaintiff, appellant.

Robert G. Bone, Boston, Mass., with whom John M. Kahn and Hill & Barlow, Boston, Mass., were on brief, for defendant, appellee.

Before COFFIN, Chief Judge, BREYER, Circuit Judge, and WYZANSKI, Senior District Judge. [*]

BREYER, Circuit Judge.

This case presents questions similar to those recently decided by the Supreme Court in J. Truett Payne Co. v. Chrysler Motors Corp., --- U.S. ----, 101 S.Ct. 1923, 68 L.Ed.2d 442 (1981). Can a private plaintiff, like a government plaintiff, win a Robinson-Patman Act case simply by showing that the Act's substantive standards have been violated; or must he show more? The government can win a Robinson-Patman Act, § 2(a) case, for example, by showing that a defendant seller has "discriminate(d) in price between purchasers of commodities of like grade and quality ... where the effect of such discrimination may be to lessen competition substantially...." 15 U.S.C. § 13(a). (Emphasis added). 1 The private plaintiff, however, must also satisfy the test of Clayton Act, § 4, which grants private rights of action only to those "who shall be injured in ... business or property" by a violation of the antitrust laws. 15 U.S.C. § 15. (Emphasis added.) 2 The Supreme Court held that this latter provision imposes a stricter test: A private treble-damage plaintiff "must make some showing of actual injury" attributable to a violation of the Robinson-Patman Act. J. Truett Payne Co. v. Chrysler Motors Corp., --- U.S. at ----, 101 S.Ct. at 1927. Following Truett Payne, and after reviewing the record, we affirm the district court's directed verdict for the appellee seller.


Appellant Allen Pen sued appellee Springfield claiming that it was the victim of several instances of unlawful discrimination involving prices, promotional facilities and other services. 3 After all evidence was presented, the district court did not submit the case to the jury, but, instead, directed a verdict for appellee. On appeal, we view the evidence in a light most favorable to appellant, giving it the benefit of all reasonable inferences without neglecting uncontradicted evidence introduced by appellee. Carlson v. American Safety Equipment Corp., 528 F.2d 384, 385-86 (1st Cir. 1976). Our review of the record under this standard indicates the following.

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Allen Pen is a wholesaler of stationery and school supplies based in Newton, Massachusetts. Springfield manufactures scrap books, photo albums and other similar items. From 1971 to 1975 Allen Pen bought goods from Springfield and resold them. They accounted for a small share about 11/2% to 2% of Allen Pen's total sales.

Springfield used different price lists to sell the same goods. Springfield and its customers usually referred to these price lists by their colors green, blue, yellow and white. This fact makes the evidence hard to follow, for the colors changed over time, price lists were amalgamated, and sometimes Springfield referred to a list by a geographical name instead of color. Nonetheless, there is ample evidence that ordinarily there were at least three lists, a "low" price list, a "medium" price list, and a "high" price list, from which Springfield sold the same goods to different customers.

There is evidence from which a jury might conclude that Springfield charged Allen Pen a higher price for its goods than it charged some of Allen Pen's competitors. Before 1970, Allen Pen bought at prices quoted from the low price list the green list. 4 From 1970 to 1975, however, Springfield quoted Allen Pen prices from its medium list the blue list. 5 These middle prices were about 5% higher than the low prices. There is evidence that at least two direct competitors of Allen Pen United Art Company and Economy Paper Company of Rhode Island received the benefit of lower prices; they may have bought from the low, green price lists between 1971 and 1973. There is testimony that Springfield generally sold from its low price list only to long-established customers and to high-volume purchasers. (And Woolworth's may have received prices lower than on any list.) There is testimony that Springfield sold to small individual storeowner customers from its high price list the yellow list which quoted prices about 5% higher than the middle list.

In addition to the evidence of the different colored lists, there is evidence of other forms of differential pricing. First, Economy and United may have received a 7% discount from their list prices during 1971-1973, while Allen Pen received only a 5% discount from its list price during that period. 6 Indeed, Springfield agreed that it gave a "warehouse allowance" determined on the basis of the volume and frequency of a customer's orders. Kresge, a very large purchaser, may have received a larger discount than Economy or United.

Second, between 1971 and 1975 Springfield required Allen Pen to buy through its sales agent, Duo; Economy did not have to buy through Duo.

Third, Springfield gave a 1% advertising or listing allowance to certain customers, including Allen Pen for the years 1971-1973. During 1974 and 1975, however, Allen Pen did not receive the allowance while its competitors did. This allowance, in the case of its competitor United Art, amounted to $50 for 1974 and $100 for 1975. Other companies received larger allowances, but there is no evidence that they competed with Allen Pen.

There were two other types of unlawful conduct alleged. Allen Pen provided evidence that Springfield gave display racks to some of its competitors but not to Allen Pen. The secretary of one competitor testified that the racks helped it increase its sales of Springfield's products. There is also testimony that the racks supplied Zayre's whose purchases from Springfield may have dwarfed those of Allen Pen had a value of $15,000. Finally, Springfield refused to deal with Allen Pen on April 15,

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1975. Allen Pen claimed that Springfield was retaliating against it because of its price discrimination charges. Springfield claimed that its action was based upon Allen Pen's payment delinquencies. Regardless, either in July or December, 1975, Springfield resumed sales to Allen Pen.


Construing the evidence in a light most favorable to Allen Pen, we assume that a jury could have found that Springfield violated the Robinson-Patman Act § 2(a) by selling similar goods to some Allen Pen competitors at lower prices. Springfield claims, however, that a directed verdict was proper because Allen Pen produced no evidence from which a jury could conclude that it was injured by whatever price discrimination occurred. Indeed, the relevant products sold at low prices; the claimed price differences were small, amounting to between 5% and 8% of list price; only two competitors of Allen Pen were shown to have actually received these lower prices and their competition with Allen Pen was geographically limited; Allen Pen remained free to buy similar products from Springfield's competitors. And, above all, Allen Pen's total purchases from Springfield amounted to no more than 11/2% to 2% of Allen Pen's sales. Proof of price differences so limited in amount, in time, in area, and in importance (from Allen Pen's business perspective) cannot possibly show, Springfield argues, any actual injury to Allen Pen. There is no reason to believe that they could lead the benefitted competitors to lower their prices to the point where they could attract significant numbers of Allen Pen's customers or that Allen Pen's overall profitability could be significantly affected.

Allen Pen responded with three basic arguments. First, it claimed that a showing of a violation of § 2(a) was itself sufficient to show injury. Second, it pointed to other evidence in the record of actual injury. Third, it claimed that Springfield's destruction of relevant records should be considered sufficient to establish injury, or at least sufficient to allow a jury to infer injury. We consider each of these arguments...

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