Texaco, Inc. v. Hasbrouck

PETITIONER: Texaco, Inc.
LOCATION: California Superior Court, Marin County

DOCKET NO.: 87-2048
DECIDED BY: Rehnquist Court (1988-1990)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 496 US 543 (1990)
ARGUED: Dec 05, 1989
DECIDED: Jun 14, 1990

Michael R. Dreeben - on behalf of United States and FTC, as amici curiae, supporting the Petitioner
Peter M. Fishbein - on behalf of the Petitioner
Robert H. Whaley - on behalf of the Respondent

Facts of the case


Media for Texaco, Inc. v. Hasbrouck

Audio Transcription for Oral Argument - December 05, 1989 in Texaco, Inc. v. Hasbrouck

William H. Rehnquist:

We'll hear argument next in Number 87-2048, Texaco, Inc. v. Ricky Hasbrouck.

Mr. Fishbein.

Peter M. Fishbein:

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

The Ninth Circuit below held Texaco liable for violation of 2A of the Robinson-Patman Act for engaging in an age-old practice, indeed one which is economically necessary, of selling to wholesalers at a lower price than it sold to retailers on the condition... on two conditions:

One, that the wholesale discount was not calibrated just to meet the wholesaler's cost of wholesaling; and--

Two, that the wholesaler, who was an independent business entity, made an independent decision to pass some of that discount on to its retailers; i.e., it sold its retailers at a price that was different from Texaco's direct sale to its retailers.

The plaintiffs who recovered damages for this are 12 retail service stations in Spokane, Washington.

They were awarded treble damages during a period January 1972 through April 1981, based on Texaco's sales to Dompier Oil Company, a wholesaler, at a higher price than it sold directly to the Plaintiff retailers.

The record shows that Dompier purchased gasoline from Texaco at the standard wholesale discount off the retail tank wagon price that Texaco gave to all its wholesalers in the Washington and Oregon territory.

Mr. Fishbein, how many wholesalers were there in the territory?

Peter M. Fishbein:

Well, the record indicates that there were two wholesalers in Spokane and a substantial number throughout the states.

I don't know the exact number, Your Honor.

But does the record show there were any others in the same competitive market?

Peter M. Fishbein:

There was a nonbranded wholesaler in Spokane and one branded wholesaler.

So there are... there are two?

Peter M. Fishbein:

That's correct.

That... that set the standard.

And both of them also sold at retail, didn't they?

Peter M. Fishbein:

No, Your Honor.

Dompier, which is the wholesaler at issue here, during part of the period of damages, sold only at wholesale.

During part of the period and a later period it sold both at wholesale and at retail.

Your Honor, the way the damages were advanced by the plaintiffs here is they took four retail stations in Spokane, and the damages were based exclusively on the effect of the consumer sales from these four stations as they affected the plaintiff stations.

Those four were all Dompier-supplied stations.

The record is clear that during the beginning of the damage period, from January 1972 through July '74, each of those four stations was an independent retailer, had no direct relationship with Dompier, and Dompier bought and then made an independent price decision to sell to those four retail stations.

They, in turn, made an independent price decision as to what price to charge the consumer.

So that for part of the damage period, Dompier acted exclusively as a wholesaler and not a retailer, and the only damages claimed by plaintiffs for that part of the damage period were the sales from Dompier to these four stations.

That is why the district court, in footnote 4 of its opinion, specifically said prior to 1974 Dompier Oil Company did not operate any retail stations but as a distributor sold Texaco gasoline to retail stations.

Now, Your Honor--

Would... would you concede liability for the time when Dompier was acting as a retailer?

Peter M. Fishbein:

--No, Your Honor.