Federal Trade Commission v. Fred Meyer, Inc.

PETITIONER: Federal Trade Commission
RESPONDENT: Fred Meyer, Inc.
LOCATION: Connecticut Welfare Department

DOCKET NO.: 27
DECIDED BY: Warren Court (1967-1969)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 390 US 341 (1968)
ARGUED: Nov 06, 1967
DECIDED: Mar 18, 1968

Facts of the case

Question

Media for Federal Trade Commission v. Fred Meyer, Inc.

Audio Transcription for Oral Argument - November 06, 1967 in Federal Trade Commission v. Fred Meyer, Inc.

Earl Warren:

Number 27, Federal Trade Commission petitioner versus Fred Meyer, Incorporated, et al.

Mr. Friedman.

Daniel M. Friedman:

Mr. Chief Justice and may it please the Court.

This case here on a petition for certiorari -- writ of certiorari to the Court of Appeals for the Ninth Circuit, presents an important question under Section 2(d) of the Robinson-Patman Act.

That section prohibits a seller from giving a promotional allowance for a customer unless he makes that promotional allowance available on proportionately equal terms to all other customers competing in the distribution of the seller's goods involved in this allowance.

The question in this case is whether a seller violates that provision.

When he makes a -- gives a proportional allowance to a retailer who buys directly from him but refuses to make the allowance available to wholesalers whose own retail customers compete with the direct buying retail or to put the question a little differently within the statutory term, the question is whether those circumstances that this private wholesaler is a customer competing in the distribution of goods.

The case comes before this Court in a somewhat unusual factual posture and that the respondent, Fred Meyer is not the supplier who was given the discriminatory promotional allowance but the purchaser who has received.

The Commission on this case found, that the respondent had violated Section 5 of the Federal Trade Commission Act by knowingly inducing a discriminatory promotional allowance that violated Section 2(d).

Abe Fortas:

Are you -- are you asking us to consider this case in terms of the limitation of Section 5?

That is to say Section 5 is -- the purpose of this case has not been violated unless there is a violation with 2(d)?

Daniel M. Friedman:

That is correct.

That is the issue under this Court's limited grant of certiorari.

That's the issue before the Court because the validity of the Commission, Section 5 violation directly depend on whether the giving of this allowance violated Section 2(d).

Abe Fortas:

Well, if that's -- and you agree that Section 5 could not be violated unless there is some technical terms in violation of 2(d) of the Robinson-Patman Act.

Daniel M. Friedman:

That is correct.

We make no contention that there's any violation to Section 5, unless there is a violation by the seller of Section 2(d).

Now, the facts that are in dispute are relatively simple.

The respondent operates a chain of 13 supermarkets in the Portland, Oregon area in which it sells groceries, some clothing items, drugs and various miscellaneous goods.

It's a large firm.

Its sales in 1957, one of the two years involved in this case totaled more than $40 million.

And it also is the second largest seller of goods in the area.

The Commission's case, the discriminatory allowances involved here, turned primarily upon certain things that was done by the respondent in connection with an annual promotion plan that runs a so-called “coupon book promotion”.

Since 1936, each for four weeks, the respondent has conducted this coupon book promotion.

I have here from the record just to be wise with the purposes of one of the coupon books.

This is a little book which the respondent sells to its customers for $0.10.

It contains 72 pages.

Each pages of coupon advertising a particular product, I just open this at random coupon worth $0.56, amends a 100% (Inaudible) regularly up to a $1.25 a pair, $0.69 a pair.

And 72 different products are involved and in each instance, the customer takes the coupon, turns the coupon in and gets some bargain.

This has been a rather substantial campaign on the part of the respondent and the two years involved approximately a sale of $140,000 in one year, a $120,000 in the other year.