January 26, 2006

Supreme Court Addresses Application of Robinson-Patman Act in Bidding Markets But Leaves Key Question Unanswered

Arnold & Porter Advisory

In Volvo Trucks North America, Inc. v. Reeder-Simco GMC, Inc., 546 U.S. ___ (2006), the Supreme Court reversed a jury verdict for a plaintiff Volvo dealer claiming injury from Volvo's favorable treatment of other Volvo dealers. In its first foray into the application of the Robinson-Patman Act1 in the context of a bidding market, the Court in Reeder-Simco held that the plaintiff could not prove a claim for price discrimination unless it showed that it competed against the favored Volvo dealers for sales to the same customers. The Court failed, however, to address the most vexing question: whether a bidder who loses an auction to a favored dealer (and who by virtue of the lost bid makes no purchase from the supplier) can ever bring a Robinson-Patman claim based on the fact that the supplier offered preferential terms to the winning bidder.

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