Recovery of Robinson–Patman Damages: Confusion and Resolution

• Published date: 01 September 1986
• Date: 01 September 1986
• Author: Shik C. Young,David Bunting
• DOI: 10.1177/0003603X8603100307
• Subject Matter: Article

The Antitrust Bulletin/Fall 1986

Recovery

of

Robinson-Patman

damages: confusion and resolution

BY DAVID BUNTING* and SHIK C. YOUNG**

Introduction

797

In recent years, the Robinson-Patman Act has been heavily

attacked as misguided, anticompetitive, and theoretically un-

sound. According to Elzinga, the act sought to "preserve the

independent retailer, the so-called 'Mom and

Pop'

store" and to

"maintain an atmosphere for skit and whittle."IEconomic

theorists have found more holes in the act than in a screen door

while, for the legal profession, it "provides a full employment

program for antitrust lawyers and professors and provides comic

relief for law students."? Although the act should have been

repealed years ago, florists, candy sellers, liquor dealers, tire

retreaders, bakers, and assorted other "Moms and Pops" have

been able to fill the halls of Congress and block the nation's

Professor of Economics, Eastern Washington University, Cheney,

Washington.

•• Professor of Economics, Eastern Washington University, Cheney,

Washington.

IK. G. Elzinga, The Robinson-Patman Act: A New Deal

for

Small Business, in REGULATORY

CHANGE

IN AN ATMOSPHERE OF

CRISIS

66

(G. M. Walton ed. 1979).

2

[d.

at 67, quoting D. I. Baker, then a recent head of the Antitrust

Division of the Department of Justice.

© 1986by Federal Legal Publications, Inc.

798 The antitrust bulletin

march toward economic efficiency. But despite this outpouring

of

democratic sentiment, the Federal Trade Commission in a rare

instance

of

useful action has simply refused to enforce the act.'

While common, these opinions conceal as much as they

reveal. On the one hand, they implicitly assume that Robin-

son-Patman

cases invariably follow the

A&p4

motif, whereby

small, presumably inefficient buyers use the act to counteract

inherent efficiencies enjoyed by a large competitor as all bargain

with neutral sellers. Dreadful consequences will appear if these

"Moms and

Pops"

succeed: the inefficient will survive, econo-

mies will be denied, and society will be burdened with high prices

and misallocated resources. On the other hand, critics nearly

always base their views on FTC cases and ignore private attempts

and motivations to use the act. While it is correct that federal

enforcement has virtually ceased in recent years, attempts still

persist to use the act for private relief.

It

is in the sphere

of

private cases that many

of

the amusing

comments about the act can be disregarded as irrelevant. Rather

than

small firms seeking protection from the efficiency of some

large competitor, private cases invariably involve small buyers

seeking damages for the unfair actions

of

amonopoly seller who

favored competitors of the complaining buyers. These cases

clearly have their "Mom and

Pop"

aspect, but from another

perspective. On one side of the market is a large seller, usually of

abranded good like beer or gasoline. On the other side are many

small distributors, competing not only among themselves but

with similar, highly substitutable goods. Finally, the element

of

discrimination exists. For some reason, perhaps by design but

possibly by error or changing circumstances, the seller has

favored some buyers to the disadvantage of others.

[d. at 68.

4United States v. New York Great Atlantic and Pacific Tea Co.,

67 F. Supp. 626 (1946), 173 F.2d 79 (1949). For a vigorous and extensive

critique that has influenced ageneration of economists, see M. A.

ADELMAN,

A&P:

A

STUDY

IN

PRICE-COST

BEHAVIOR

AND

PUBLIC

POLICY

(1959).