Parish Oil Co. et al v. Dillon Companies Inc.
Our attorneys obtained 10th Circuit Court of Appeals ruling vindicating Kroger's gasoline and grocery promotion against below cost pricing charges. The plaintiffs, who were competitors of Kroger, had filed suit under a unique provision of Colorado's Unfair Practices Act (UPA) challenging the legality of Kroger's gasoline sales and grocery discount program. The program provided shoppers who bought a specified amount of groceries with a special discount on gasoline. The primary issue in the case was a "combined sale" provision of the Colorado law. While our attorneys had initially defeated a preliminary injunction, the judge at trial rejected a defense that he agreed conformed with the literal reading of the statute, causing the jury to rule for plaintiffs. Plaintiff gas stations said that the Kroger gasoline sales were below cost if one ignored the profits on the grocery sales. The Court of Appeals disagreed with the District Court, holding that the court should compare the cost of groceries plus gasoline with the price charged for groceries plus gasoline to determine if defendant is selling below-cost according to the statute. In this case, the Court concluded that Kroger's sale of discounted gasoline did not violate the statute because the price of groceries necessary to qualify for the discount more than paid for the discount on gasoline. The pendency of the case resulted in the Colorado legislature changing the law to clearly allow the types of pro-consumer promotions like Kroger's.