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Robinson-Patman Claim Against Nike Survives Motion to Dismiss
Practical Law Legal Update 0-600-9626 (Approx. 3 pages)
Robinson-Patman Claim Against Nike Survives Motion to Dismiss
by Practical Law Antitrust
| Law stated as of 18 Feb 2015 • USA (National/Federal) |
A federal district court in the Eastern District of Texas found that a golf apparel and equipment retailer plausibly alleged price discrimination claims against Nike, Inc. under the Robinson-Patman Act.
A federal district court in the Eastern District of Texas denied in part and granted in part Nike Inc.'s motion to dismiss price discrimination claims brought by a golf apparel and equipment retailer under the Robinson-Patman Act. The court found that the plaintiff plausibly alleged claims brought under Section 2(a) of the Robinson-Patman Act but dismissed claims brought under Sections 2(d) and 2(e).
The plaintiff alleged that Nike violated the Robinson-Patman Act by:
- Selling a brand of golf clubs to a competing golf equipment retailer for substantially less than the price Nike charged the plaintiff for the same product.
- Refusing to supply the plaintiff with brands of golf balls and golf shoes made available to other retailers.
The court found that the allegations concerning Nike's sale of golf clubs at different prices stated enough facts to plausibly allege a claim under Section 2(a) of the Robinson-Patman Act. Section 2(a) requires plaintiff to show that:
- A defendant made at least two contemporaneous sales of the same commodity at different prices to different purchasers.
- The price discrimination injured competition.
By alleging that Nike sold the golf clubs to the plaintiff and the other retailer in the same month, the plaintiff met the contemporaneous sales requirement. The court also found that the complaint sufficiently alleged competitive injury by stating that:
- Due to Nike's actions, the plaintiff lost profits and customers.
- The plaintiff's sales of Nike goods declined by 75 percent in four years and it lost millions of dollars in revenue.
The court found that in order to conclusively determine whether the price difference alleged by the plaintiff harmed competition as a matter of law, it would need to consider sales records at the summary judgment stage. The court noted that summary judgment was the appropriate time to dispose of potentially frivolous claims.
By contrast, the court found that the plaintiff failed to state a claim under Sections 2(d) and 2(e) of the Robinson-Patman Act based on the allegations concerning Nike's refusal to sell certain brands of golf balls and golf shoes to the plaintiff. Sections 2(d) and 2(e) forbid a seller from discriminating between customers in the provision or purchase of services and facilities. The plaintiffs characterized Nike's refusals to sell the golf balls and shoes as discrimination in the provision of promotional services. However, the court found that Nike's actions were simply refusals to deal, which do not violate the Robinson-Patman Act.
The court found that the plaintiff adequately alleged antitrust injury through allegations that it suffered financial loss resulting from the alleged price discrimination. Finally, the court upheld plaintiff's price discrimination claims brought under the Oregon Anti-price Discrimination Law.
For more information on the scope of the Robinson-Patman Act, see, Practice Note, Robinson-Patman Act: Overview.