United States v. Borden Company, 370 U.S. 460 (1962)

United States v. Borden Company

No. 439

Argued April 24-25, 1962
Decided June 25, 1962
370 U.S. 460

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

Syllabus

The Government brought this suit to enjoin appellees from selling fluid milk in the Chicago area at prices which discriminate between independently owned grocery stores and grocery store chains, in violation of § 2(a) of the Clayton Act. The District Court found that the pricing plan of each appellee was a prima facie violation of § 2(a); but it concluded that these discriminatory prices were justified under the proviso of § 2(a) which permits price differentials which make only "due allowance for differences in the cost of manufacture, sale, or delivery." In doing so, it relied upon a showing by appellees that the average cost of sales and deliveries to all chain stores was lower than the average cost of sales and deliveries to all independent stores.

Held: the class cost justifications submitted to the District Court by appellees did not satisfy their burden under § 2(b) of showing that their respective discriminatory pricing plans reflected only a "due allowance" for actual cost differences, since there was not a sufficient resemblance of the individual members of each class in the essential cost-determinative factors on which the classifications were based. Pp. 461-472.

Reversed and remanded.