On July 25, ABA joined a number of retail and dealer trade groups in submitting an amicus brief to the U.S. Supreme Court in support of the Robinson-Patman Act (RPA) -- a federal law enacted in 1936 that protects individual competitors from price discrimination in favor of large chain stores by their suppliers. ABA submitted its friend-of-the-court brief in support of the Arkansas-based truck dealer Reeder-Simco GMC, which claims Volvo violated RPA by favoring other truck dealers. The amicus argues that the outcome of the case could have significance for independent retailers, including booksellers. The case is scheduled to go before the Supreme Court in October.
"Although this case involves price discrimination in the truck industry, the Supreme Court's decision in the case could have serious ramifications for the way that lower courts will interpret the law in other Robinson-Patman Act cases," said David Walker, ABA's director of special projects. "The outcome of the case could therefore affect smaller retailers in all industries, which is why ABA felt it was important to join with an amicus brief in this case."
In 2000, Reeder filed a lawsuit against Volvo Trucks North America in U.S. District Court for the Western District of Arkansas saying the truck manufacturer unfairly granted better price concessions to other truck dealers, thereby reducing the dealer's profits. After the District Court ruled in Reeder's favor, Volvo appealed to the Eighth Circuit Court of Appeals, which upheld the District Court's ruling, according to Northwestern University's On the Docket. Now, Volvo is appealing to the Supreme Court, and contends that since the purchase of trucks usually involves competitive bidders, not purchasers, it does not implicate RPA, as reported by The Lawletter.
In the amicus brief submitted to the Supreme Court in support of Reeder, the groups wrote:
"Volvo's view of RPA would ... have devastating consequences outside the competitive bidding context. Under Volvo's novel transaction-specific view of competition, in order for a plaintiff to make out an RPA claim, the plaintiff would have to prove that it competed with favored purchasers on a customer-by-customer basis. Simply proving that it sold the same products into the same geographic area as a favored purchaser would not, under Volvo's approach, be sufficient to prove that the plaintiff competed with that favored purchaser. Requiring such proof would raise the evidentiary bar for RPA claim so high that it would be extremely difficult for a plaintiff to prove such a claim -- an outcome plainly inconsistent with the prophylactic nature of the RPA."
The groups also noted: "Any rollback of the RPA would have dire consequences for distributors and retailers and, in turn, for consumers and society in general. Sellers would be largely or entirely free to blatantly discriminate among purchasers, giving them near total control over the downstream distribution of their products. Sellers could use price discrimination to 'punish' purchasers who engaged in price discounting and other pro-consumer practices that were not looked upon favorably by the seller."
It is expected that the Supreme Court will issue a decision in the case sometime in the late winter or early spring of 2006.
In addition to ABA, the amici include: the North American Equipment Dealers Association; Service Station Dealers of America and Allied Trades; National Distribution Contracting, Inc.; Grogan's Healthcare Supply; Claflin Company; American Medical Depot; All Med Medical Supply, LLC; and Midland Medical Supply Co. -- David Grogan