J. Truett Payne Company, Inc. v. Chrysler Motors Corporation

PETITIONER: J. Truett Payne Company, Inc.
RESPONDENT: Chrysler Motors Corporation
LOCATION: White House

DOCKET NO.: 79-1944
DECIDED BY: Burger Court (1975-1981)
LOWER COURT: United States Court of Appeals for the Fifth Circuit

CITATION: 451 US 557 (1981)
ARGUED: Jan 21, 1981
DECIDED: May 18, 1981

ADVOCATES:
C. Lee Reeves - on behalf of the Petitioner
J. Ross Forman, III - on behalf of the Respondent

Facts of the case

Question

Media for J. Truett Payne Company, Inc. v. Chrysler Motors Corporation

Audio Transcription for Oral Argument - January 21, 1981 in J. Truett Payne Company, Inc. v. Chrysler Motors Corporation

Warren E. Burger:

We will hear arguments next in Payne v. Chrysler Motors.

Mr. Reeves, I think you may proceed whenever you ready.

C. Lee Reeves:

Mr. Chief Justice, and may it please the Court:

I represent Petitioner J. Truett Payne Company.

We filed this secondary line Robinson-Patman Act price discrimination case, resulted in a verdict and judgment in favor of the petitioner.

After a motion for judgment notwithstanding verdict was denied, in the 5th Circuit it was appealed and the 5th Circuit reversed on the grounds that the plaintiff, petitioner in this instance, must prove the specific lost sales or lost profits.

And that is the only method of proving the fact of the injury.

And a second and underlying factor in the reversal was that the petitioner failed to prove a reasonable estimate of the amount of the price discrimination or damage and that the actual amount of the discrimination was not sufficient by which the court could estimate the damage, or by which the jury could estimate the damage.

This Court is faced with the damage issues under the Robinson-Patman Act and Section 4 of the Clayton Act, which bring into focus the 5th Circuit's requirement of a plaintiff proving specific lost profits or lost sales as the only means of recovering under the Robinson-Patman Act, and whether or not that requirement imposes an inflated standard of proof thereby effectively denying private attorney generals the ability to enforce the Act and recover for a wrong; and secondly, whether or not the amount of the price differential is sufficient evidence to give a reasonable and proper estimate of the amount of the damage.

The 5th Circuit in its opinion misconstrues not only the law but I believe in misconstruing the law underlying the problem was misconstruing Payne's position.

It stated that Payne claimed that in a total vacuum price discrimination alone was sufficient to give rise to an injury under Section 4 of the Act, of the Clayton Act.

And I submit that that is the basis upon which the court totally ignored this Court's findings and holdings in Bruce's Juices case, in 1947, and the FTC v. Morton Salt case in 1948.

William H. Rehnquist:

Well, do you concede that findings of discrimination under the Act, without any evidence sufficient to survive a motion for a directed verdict, dealing with causation and damage, would be insufficient to support a monetary award?

C. Lee Reeves:

Mr. Justice Rehnquist, I would say that if price discrimination alone with absolutely no other evidence is the only evidence before the Court, then I would say that that's true; that price discrimination in a vacuum cannot be found to cause injury.

Byron R. White:

Well, what about price discrimination plus the fact that the two customers are competitive?

Is that enough?

C. Lee Reeves:

I think you have got to go farther.

I would not mind that finding.

Byron R. White:

Well, I wouldn't think you would; yes.

C. Lee Reeves:

But I would submit to Your Honor, Mr. Justice White, that in this case there was substantial corroborating evidence supporting an inference of injury resulting from substantial price discrimination taking place, occurring in a market where there was keen competition and in the face of tight profit margins, and where the substantial price discrimination could have been reflected in the retail sales price.

Now, under those circumstances the 5th Circuit didn't address that, it just said, the only way that you could prove injury is to show proof of lost sales and lost profits, but under the circumstances in this case the jury, the fact finder, whether it be a jury or a court, could have inferred injury from the existence of those factors, plus the price discrimination itself.

So, in answer to your question, I think that this Court need not address whether or not price discrimination standing alone in a vacuum gives rise to injury or competitive injury.

Because the facts of this case show a substantial supporting... substantial corroborating evidence supporting not only the proof of actual competitive injury, not just a finding of a likelihood or probability of injury, but testimony that competition itself was harmed, and support an inference that would support the jury's finding which could give rise to an inference of damage to the disfavored purchaser.

William H. Rehnquist:

Do you think that Mr. Payne's testimony itself without the testimony of Dr. Ignatin would have required the district court to submit the case to the jury on the issue of damages and required it to accept an award of damages that was within the range of his testimony?

C. Lee Reeves:

Under the... no other rebutting evidence whatsoever, yes, Mr. Justice Rehnquist, I do.

Because that would then be a case where you would have price discrimination, not in a vacuum, but disregarding Mr. Payne's testimony, which the 5th Circuit discounts by saying that this is a conclusion of one of the injured parties, I still say that it is corroborating evidence which put together with the vast amount of other corroborating evidence would permit at least, at the very least, the jury to determine the fact of whether or not there was damage.

And the 5th Circuit says, it doesn't address these other--

William H. Rehnquist:

Well, what if you have only these two questions on the damage issue, and they're put to Mr. Payne by Mr. Payne's counsel,

"Mr. Payne, were you damaged by this price discrimination? "

Answer: "Yes".