J. Truett Payne Co., Inc. v. Chrysler Motors Corp., 451 U.S. 557 (1981)

J. Truett Payne Co., Inc. v. Chrysler Motors Corp.

No. 79-1944

Argued January 21, 1981
Decided May 18, 1981
451 U.S. 557

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

Syllabus

Petitioner, a former automobile dealer, brought suit against respondent automobile manufacturer in Federal District Court, alleging that respondent’s "sales incentive" programs over a certain period violated the price discrimination prohibition of § 2(a) of the Clayton Act, as amended by the Robinson-Patman Act. Under its programs, respondent paid a bonus to its dealers if they exceeded their quotas -- set by respondent for each dealer -- of cars to be sold at retail or purchased from respondent. Petitioner alleged that respondent set petitioner’s quotas higher than those of its competitors; that to the extent it failed to meet its quotas, and to the extent its competitors met their lower quotas, petitioner received fewer bonuses; and that the net effect was that it paid more for its automobiles than did its competitors. Petitioner contended that the amount of the price discrimination -- the amount of the price difference multiplied by the number of petitioner’s purchases -- was $81,248, and that, when petitioner went out of business, the going concern value of the business ranged between $50,000 and $170,000. Respondent maintained that the sales incentive programs were nondiscriminatory, and that they did not injure petitioner or adversely affect competition. The jury returned a verdict awarding petitioner $111,247.48 in damages, which the District Court trebled. The Court of Appeals reversed, holding that it was unnecessary to consider whether a violation of § 2(a) had been proved, since petitioner had failed to introduce substantial evidence of injury attributable to the programs, much less substantial evidence of the amount of such injury, as was required in order to recover treble damages under § 4 of the Clayton Act.

Held:

1. Petitioner’s contention that, once it has proved a price discrimination in violation of § 2(a), it is entitled at a minimum to so-called "automatic damages" in the amount of the price discrimination is without merit. Section 2(a), a prophylactic statute which is violated merely upon a showing that "the effect of such discrimination may be substantially to lessen competition," does not require, for purposes of injunctive actions, that the discrimination must in fact have harmed competition. Corn Products Co. v. FTC, 324 U.S. 726; FTC v. Morton Salt Co.. 334 U.S. 37. However under § 4 of the Clayton Act, which is essentially a remedial statute providing treble damages to any person "who shall be injured in his business or property by reason of anything forbidden in the antitrust laws," a plaintiff must make some showing of actual injury attributable to something the antitrust laws were designed to prevent. Thus, it must prove more than a violation of § 2(a), since such proof establishes only that injury may result. Cf. Brunswick Corp. v. Pueblo Bowl-0-Mat, Inc., 429 U.S. 477. Pp. 561-563.

2. The rule excusing antitrust plaintiffs from an unduly rigorous standard of proving antitrust injury, see, e.g., Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, will not be applied here to determine whether petitioner, though not entitled to "automatic damages," has produced enough evidence of actual injury to sustain recovery. While it is a close question whether petitioner’s evidence would be sufficient to support a jury award even under such rule, a more fundamental difficulty is that the cases relied upon by petitioner all depend, in greater or lesser part, on the inequity of a wrongdoer’s defeating the recovery of damages against him by insisting upon a rigorous standard of proof. In this case, it cannot be said with assurance that respondent is a "wrongdoer," since the Court of Appeals went directly to the issue of damages after bypassing the question whether respondent, in fact, violated § 2(a). The proper course is to remand the case so that the Court of Appeals may pass upon respondent’s contention that the evidence was insufficient to support a finding of such violation. If the court determines that respondent did violate the Act, it should then consider the sufficiency of petitioner’s evidence of injury. Pp. 563-568.

607 F.2d 1133, vacated and remanded.

REHNQUIST, .J., delivered the opinion of the Court, in which BURGER, C.J., and STEWART, WHITE, and STEVENS, JJ., joined. POWELL, J., filed an opinion dissenting in part, in which BRENNAN, MARSHALL, and BLACKMUN, JJ., joined, post, p. 569.