Reeder-Simco Gmc, Inc. v. Volvo Gm Heavy Truck Corporation, Now Known as Volvo Trucks North America, Inc.

HANSEN, Circuit Judge,

concurring in part and dissenting in part.

Although I do not disagree with the court’s resolution of the state law issue, I write separately to express my view that Reeder has failed to make out a claim under the Robinson-Patman Act. Even viewing all of the evidence in the light most favorable to the verdict, I conclude that Reeder cannot prove the necessary elements to recover treble damages in this case. Specifically, Reeder has not proven a violation of § 13(a) because the facts fail to show injury or likelihood of injury to actual competition between Reeder and the “favored” Volvo dealers. Furthermore, even if we assume that Volvo violated § 13(a), there is absolutely no indication that any such violation was the cause of Reeder’s injury, for the purpose of recovering damages under § 15(a). I therefore respectfully dissent from Section 11(A) of the court’s opinion.

There is little doubt that the facts of this case fail to fit neatly into the framework that courts have established in analyzing Robinson-Patman Act secondary-line claims. Much of my disagreement in this case stems from what I perceive as the court’s attempt to fit a square peg into a round hole. Traditional RPA cases involve sellers and purchasers that carry inventory or deal in fungible goods. By contrast, the parties in this case operate in a unique marketplace where special-order products are sold to individual, pre-identified customers only after competitive bidding. By its very nature, this process will never produce the kind of competition the RPA was designed to protect because it will never result in the type of two-purchase transaction that itself creates a market for the goods that are sold. Indeed, where, at the time of the end purchase, only one possible seller and one possible buyer exist, competition is totally absent. It is the nature of competitive bidding, not price discrimination, that makes it so.

The court properly recognizes that a competitive bidding situation will never involve two “purchasers,” and thus always will fall outside of the purview of the RPA. Despite this determination, however, the court goes on to conclude that Reeder’s purchases with respect to four transactions give it “purchaser status” as to separate instances in which it did not make a purchase, and therefore was not in fact a purchaser. I disagree with this proposition. Reeder cannot piggyback nonpur-chaser transactions onto purchaser transactions for purposes of recovering under the RPA. My concern does not stem from a strict adherence to the two-purchase requirement, but rather from my belief that “purchaser status” is inextricably intertwined with the existence of actual competition and the possible threat thereto. Because my primary objection to the court’s opinion is that it overlooked this important aspect of actual competition, I turn next to that issue.

Despite the fact that Reeder operates at the same functional level as the “favored” Volvo dealers and that they may do business in the same or overlapping geographic areas, I nevertheless conclude that *719Reeder has failed to prove that it was in actual competition with the “favored” Volvo dealers. There certainly may exist a national market in which heavy-truck dealers compete to receive the opportunity to bid on potential sales to customers. The Volvo dealers in this case very well may have competed against each other in this market on a regular basis. However, any difference in price that Volvo eventually may quote to a dealer who actually bids on a potential sale has no effect on this market. The evidence shows that an end user’s decision to request a bid from a particular dealer or to allow a particular dealer to bid is controlled by such factors as an existing relationship, geography, reputation, and cold calling or other marketing strategies initiated by individual dealers. Once bidding begins, however, the relevant market becomes limited to the needs and demands of a particular end user, with only a handful of dealers competing for the ultimate sale. Cf. FTC v. Fred Meyer, Inc., 390 U.S. 341, 349, 88 S.Ct. 904, 19 L.Ed.2d 1222 (1968) (Section 2(d) “reaches only discrimination between customers competing for resales at the same functional level.... ”). Thus, although Reeder and other “favored” dealers may have competed generally with each other in the larger market for obtaining bids, there is evidence of only two occasions where Reeder competed with a “favored” Volvo dealer for an actual sale. Reeder’s attempt to compare a sale that it made to one end user to a sale made by a “favored” Volvo dealer to another end user with whom Reeder had no relationship simply is not relevant to proving a violation of the RPA because there was no actual competition between the two dealers at the time of the sales to the separate and different end users.

Without proof of actual competition, Reeder cannot demonstrate a reasonable possibility of competitive injury. Indeed, where alleged lost sales or profits were not diverted from Reeder to “favored” Volvo dealers, but rather to other non-Volvo dealers, it is unclear how any difference in price offered by Volvo to its two dealers could possibly injure actual competition between them. See Falls City Indus., 460 U.S. at 437-38, 103 S.Ct. 1282 (finding competitive injury based on direct evidence of sales diverted away from plaintiff to a favored customer). Even if Volvo’s calculation of concessions caused Reeder to lose profits or sales, there is no violation of the RPA if there is no injury to competition between Reeder and the “favored” Volvo dealers. Furthermore, Volvo can successfully rebut any Morton Salt inference of injury to competition between Reeder and the “favored” Volvo dealers because the evidence clearly establishes that none of the lost sales or profits was diverted from Reeder to those “favored” dealers. Although Volvo’s conduct may have injured Reeder’s ability to compete with non-Volvo dealers, Reeder must look outside the RPA for any relief for this claimed injury. Contrary to the court’s assertion, such an injury is not the type of injury to competition that the RPA was intended to prevent.

It is my view that an injury to competition can be proven only where the factors necessary to state an RPA claim all are present in the same relevant transaction. To the extent that the court looks for the existence of one factor in one transaction and the existence of another factor in a second transaction, I conclude that the proof in this case is too tenuous and requires too many inferences piled atop inferences to reach the court’s result.

Nevertheless, even if we assume that Volvo violated § 13(a) of the RPA, I would reverse Reeder’s RPA damage award because Reeder has failed to prove that it was actually injured by Volvo’s price dis*720crimination as required by § 15(a). See J. Truett Payne, 451 U.S. at 562, 101 S.Ct. 1923 (“To recover treble damages, then, a plaintiff must make some showing of actual injury attributable to something the antitrust laws were designed to prevent”). Although Reeder may have established that it lost sales and profits to other non-Volvo competitors, there can be no inference of actual injury for the purpose of the RPA without some evidence (and there is none in this record) that the discriminatory pricing caused those sales and profits to be diverted from Reeder to another Volvo dealer who received more favorable terms from Volvo.

Reeder relies on four different scenarios to demonstrate actual injury and to calculate its damages. First, Reeder points to instances in which it bid unsuccessfully against non-Volvo competitors because Volvo failed to quote Reeder the same concession that it gave to a “favored” Volvo dealer in a separate sale to a different end user. Second, Reeder cites instances in which it bid successfully against non-Volvo competitors but did not make as much in profit on the successful deal because it did not receive the same concession that a “favored” Volvo dealer received in an entirely separate sale to an entirely different end user. Third, Reeder relies on the transaction involving Tommy Davidson in which Reeder and another Volvo dealer, who allegedly received a better concession quote from Volvo, both lost the ultimate sale to a non-Volvo competitor. Finally, Reeder cites to the deal involving Hiland Dairy in which Reeder and another “favored” Volvo dealer both received equal concession quotes from Volvo and submitted equal bids to the same end user. Months later after Volvo’s prices had increased, Hiland Dairy placed its order with the “favored” Volvo dealer for reasons unrelated to price, but insisted on receiving the original lower price. The other dealer then requested an additional concession in order to offer Hiland Dairy its original quoted price. Notably, Hiland Dairy purchased all of its trucks both before and after this transaction from the same “favored” Volvo dealer. More notably, there is nothing in the evidence to show that had Hiland Dairy made the same request of Reeder that Volvo would not have “favored” Reeder with the same concession in order to get the business.

Although it is possible that Reeder lost sales or profits to non-Volvo dealers because it did not receive a sufficiently high concession from Volvo in the first three scenarios, the difference in concessions offered to Reeder and the “favored” Volvo dealers did not cause the lost sales or profits on those deals. In order to prove that the § 13(a) violation caused its injuries, Reeder essentially must show that absent a price difference, it would not have lost those sales or profits. However, even if Volvo had not offered the “favored” dealers greater concessions, i.e., not discriminated, there still is no proof that Reeder would have made the sales. Furthermore, as to the sales that Reeder did make, it would be improper to calculate lost profits based on what Reeder otherwise characterizes as illegal price discrimination.

The fact that the sales and profits were not diverted from Reeder to “favored” Volvo dealers demonstrates not only a lack of causation of actual injury under § 15(a), but also seriously undermines our court’s conclusion that there is any likelihood of injury to competition between Reeder and the “favored” Volvo dealers. Reeder alleges that Volvo intended to put Reeder out of business. While intent may be relevant to prove a primary-line violation, see Lomar Wholesale Grocery, Inc. v. Dieter’s Gourmet, 824 F.2d 582, 595-96 (8th Cir.1987), cert. denied, 484 U.S. 1010, 108 S.Ct. 707, 98 L.Ed.2d 658 (1988), it offers noth*721ing in this case. At most, the facts show that Volvo acted unreasonably in failing to give Reeder sufficient concessions to allow it to compete with other non-Volvo dealers. While such conduct may very well give rise to some sort of liability under state law, I conclude that it does not support a judgment for treble damages under the Robinson-Patman Act. I respectfully dissent.